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House-building Programme

My Lords, I, too, thank my noble friend Lady Scott of Needham Market for the opportunity to discuss these issues. The reason that this debate is important has been illustrated by the wide-ranging issues that have been covered by so many noble Lords. Of course, I thank all noble Lords who spoke in the debate. The noble Baroness, Lady Wilkins, spoke so knowledgeably about the housing need for the disabled and, in particular, reminded us about the dramatic increase in accessible homes in the light of age-related visibility and infirmity. The noble Lord, Lord Hanningfield, was concerned about the Government’s general approach to expanding into the green belt and spoke about the impact that that will have in Essex, with its costs on infrastructure. The noble Lord, Lord Cobbold, spoke of the concept of the green belt being eroded and sought changes to planning in that regard. The noble Lord, Lord Whitty, with years of ministerial experience, spoke of improvements to the quality of local authority housing stock, especially energy efficiency. He noted the problem of affordable housing and spoke with vast knowledge of the problems of rent restructuring and its impact on mixed communities. We hope that the Minister will take up his suggestion positively. The noble Earl, Lord Caithness, covered the shocking impact of the Deputy Prime Minister’s plans for housing development and the environment and the step change by which increased centralisation is removing local decision-making—a sentiment with which we have much sympathy. My noble friend Lady Maddock spoke of the quality of the housing stock and of the high number of houses that do not meet the decent housing standard. She spoke about how the tax system does not take into account the value of repair and maintenance and we hope that the Government will also be sympathetic on that issue. The noble Lord, Lord Cameron, spoke of the unaffordability of rural housing for local young people and the need to retain affordable stock under the right-to-buy policy. The noble Lord, Lord Brooke of Alverthorpe, spoke of the lack of ambition of the public service transfer programme, whereby pressure on housing in London and the south east could be much reduced if public sector workers could be reallocated to other regions where housing supply and infrastructure can accommodate their needs. The noble Lord, Lord Lucas, spoke with enthusiasm of the Barker report. It will not surprise him that we do not share his analysis; I hope to touch on why later. My noble friend Lady Miller spoke of the need for rural housing, as well as the impact of climate change and not prioritising energy efficiency. As my noble friend knows, it costs just £5,000 to bring a house up to Eco-home excellence status and we should be doing more about that. The noble Lord, Lord Best, noted that at least one third of extra homes built needed to be publicly subsidised to be affordable and called for more measures to assist those in need of intermediate housing. My noble friend Lord Bradshaw, who knows more about transport and the problems of rail and railway infrastructure than most of us, brought home to us the real problems of the planning system and its mismatch with transport policy. The noble Lord, Lord Sawyer, saw owner-occupied housing as a top priority for the Government. The noble Baroness, Lady Greengross, spoke of the inclusive housing approach that we need to cover housing needs across the ages of one’s life. The noble Lord, Lord Graham of Edmonton, wanted to increase measures to deal with homelessness and covered the Government’s various strategies to deal with it. He spoke passionately about how housing affects all of life’s chances. As the debate has shown, housing and the way that public policy in that area is developed will have an impact on the well-being in old age of the current generation. It will, and does, have an impact on the robustness of our economy. But above all, it will impact in both the long and short term on the very social fabric of our society and in particular the life chances of the next and future generations. Housing and housing need is the thread that runs through discussions to do with health, wealth, quality of life, education and jobs, to mention just a few. The Government’s response to the Barker Review, which we understand to be forthcoming, will be critical to the discussion. We hope that, in assessing their priorities for response, the Government will not interpret solutions to housing need in the way that the review suggests; that price stability is the objective and the way to achieve it is through supply-side measures such as changes to planning through which building on green belt and the countryside will be promoted. Covering up more of the countryside with new homes neither renders communities sustainable in terms of local schools, hospitals, shops and jobs; nor does it remove the burden on infrastructure where transport links are overstretched in any event and private car journeys have to increase. It makes a mockery of environmental sustainability where building is on flood plains and where water and natural resources are overstretched. Ultimately, relying on building new communities on greenfield land is not even about choice. If there were genuine choice, most people would wish to live in pleasant surroundings near their place of work, close to their families and friends, and with good amenities to hand. Low-density suburban sprawl is not usually the mechanism to achieve that. The ODPM’s consultation paper, Planning for Housing Provision, which my noble friend Lady Scott has already mentioned, gives the illusion that the need for housing can be satisfied if only the housing market mechanism can be made to work. The objective of government policy, according to this paper, is to ensure that land is allocated in plans to provide for an appropriate level of housing supply that better meets the need for housing. Ergo, if only developers could build with fewer constraints, the supply of housing would soon catch up with demand, thus delivering price stability—that Barker aim—and we would all be well-housed. The evidence does not support the analysis. We know that new-build contributes just 10 per cent per year to the supply of owner-occupier housing. We also know that this emphasis on the market and on market solutions fails to address the central problem, which is a demand for affordable housing, both to buy and to rent, as many noble Lords have said. That need exists across the board in both urban and rural areas. We also know that it has been exacerbated by a growing demand for key workers by demographic changes, whereby we are living longer, independently in our own homes, which are not becoming available for our children at the rates they might have in the past. Housing need is also affected by changes to our lifestyles whereby we live in smaller units. We know that the housing market, and therefore the supply of housing, is influenced by a range of economic considerations: tax incentives, interest rates, return on capital and a host of other considerations. Many noble Lords have spoken about SIPPs—self invested personal pensions. We have seen recent moves through changes to SIPPs whereby those who wish to invest in second homes will now receive a tax break to do so. We understand that this change is partly designed to assist the flagging housing market. On the one hand, we have ODPM calling for price stability in the housing market, and on the other hand we have the Treasury—with its infamous black hole looming—which is seeking to boost the housing market by providing breaks for second homes. As my noble friend Lord Oakeshott of Seagrove Bay has warned the Chancellor of the Exchequer, if, for example, a high-earning, top-rate taxpayer bought a £215,000 flat from his SIPP for a child to live in while at university, he would have £86,000 of the purchase price paid for by taxpayers. He could then sell his flat in a few years’ time at full market price and pay no capital gains tax whatsoever because the property is held within a tax-free fund. Although the relaxation in pension investment rules helps the better-off, what of acute housing need? The support for second homes will, as a minimal effect, reduce housing stock, as well as affordable housing, in rural and urban areas. It will push those with a genuine housing need even further from the bottom of the property ladder, whereas what is needed for them is investment in social housing, both rented and owner-occupied, so that they can live and work in mixed communities. We would encourage the Government, in preparing a response to the Barker review, to concentrate on bringing empty homes into use. In the areas of greatest need—London, the south east and the eastern region—are one third of all the empty homes in the country. In fact, there is a surplus of empty homes to households in every region of the land—some 700,000. We also wish to see a more level playing field for brownfield developments through changes to the VAT regime and to the consultation process of the planning gain supplement that is foreshadowed, but only if it were carefully drawn up not to discourage development and to allow an element to be retained for local authority usage. A holistic approach to regional development is needed. Instead of accepting the assumption that all economic growth is focused on the south and the south east, we should ensure that all regions of the UK get their share of infrastructure and regeneration. That will be the only lasting solution to environmental and social sustainability for all communities. If it is achieved, it will be a lasting legacy for this Government.