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House-building Programme

My Lords, I join all noble Lords who have spoken in congratulating the noble Baroness, Lady Scott of Needham Market, on securing the debate. It has been an astonishingly good debate. Speakers from all parts of the House have covered most of the aspects of housing that affect most people, whether they are tenants, aspiring owner-occupiers or people preparing to approach the housing market. I congratulate the noble Baroness on the way in which she opened the debate and the spread of ideas that she offered and which have been taken up. I do not think that I have heard a debate in which a Minister has been offered so much advice and so many good ideas or has been challenged in principle and in detail to the same extent. That may be because I am relatively new to housing. I am pleased about the range of common ground; the emphasis that everyone has put on finding innovative solutions; and the overwhelming consensus between us that, as my noble friend Lady Wilkins said, we cannot run away from the problem. We disagree about how we do it, what priorities we have and what protections we provide and about how we organise the way in which we analyse, provide, plan and fund. That seems to be an optimistic way forward, although I should say that I heard some extremely gloomy prognostications, which I will try to address if I can. As I say, we all agree that the challenges that face us are unavoidable, urgent and extremely diverse. It is true that housing has—for the first time for many years, I think—become a salient part of social and economic policy. We could debate why it has taken so long for that to happen, but I think that we agree that it has. We agree on the demographic pressures, and I am grateful to the noble Baroness, Lady Greengross, for giving us such a wonderfully clear and imaginative account of the way in which we need to think about an ageing population not simply in terms of housing but in terms of all the social constructs within which we will all have to live. Today, figures were released which show that the population will grow by 7.2 million by 2031. As the noble Lord, Lord Best, said, it is the pressure and challenge of an ageing population which is making the urgent need for different sorts of housing. I hope to talk about lifetime needs later. That is only one socio-economic change. The other is smaller households. The number of new households is outstripping population growth. Between 1996 and 2003, there was a 5 per cent growth in the number of households, compared with a population increase of just 2 per cent. We can also agree that the housing market is extremely unbalanced. The noble Baroness, Lady Hanham, concluded her remarks by talking about the north west and regions of the country where we have a different economic challenge. How can we link up regions which have been relatively neglected? We are trying to address both jobs and homes at the same time. There are places where houses have been changing hands for less than £10,000, while, in the south east with our over-stressed market, we have seen average prices rise from £91,000 in 1999 to £170,000 in 2004. Many noble Lords have raised issues about rural areas and the complexity of the challenge and the tension between wanting to keep our villages and market towns alive and thriving, while, at the same time, there are all the difficulties of providing for those within the constraints of our beautiful countryside. Those pressures have to be put against the stark fact that in the past 30 years the demand for new housing has increased by 30 per cent. House building has dropped by 50 per cent. As the noble Baroness said, over the past five years, the average price for first-time buyers has risen by 86 per cent and incomes have risen by only 30 per cent. That leads me to my final fact in this introduction. Housing is not just a social need, which most noble Lords have addressed in different ways. It is an economic imperative. Unless we build the houses that people need in the places where they are needed, so that the skills, services, jobs and incomes are there for the next generation, we put at risk our economic prosperity now and for the future. We have spent a great deal of time today thinking about the future because we are thinking about future house buyers and what their choices and chances are. When the powerhouse that is London and the south east, for whatever reason—historic or geographic—begins to falter, the whole economy will suffer, because it has not been growing in recent years; it has been constrained. In the four southern regions—the east, London, the south east and the south west—we may already be close to a tipping point. Quite simply, over the past 30 years we have built 350,000 homes, but the number of households has increased by 500,000. The Halifax survey reported that over the past three years, the percentage of towns in the UK classed as unaffordable has risen from 55 per cent to 93 per cent for nurses; from 34 per cent to 77 per cent for teachers; from 34 per cent to 71 per cent for police officers; and from 56 per cent to 90 per cent for firefighters. The noble Lord, Lord Hanningfield, talked about care workers in Essex. Against the background that Essex is facing, we should remember the fact that care workers need homes and that they are not well paid. One in three households is now outside the housing market. As house prices increase, first-time buyers are increasingly concentrated in higher income groups; that is, young people with high incomes or parents with high incomes or young people who can turn to their parents for help. We have to think about the others. Do we turn to those who cannot turn to their families and say, ““Well, tough, you should have chosen your parents more wisely””. They would be shut out from what my noble friend Lord Graham of Edmonton described as the basic securities of life. Do we turn to those people and say, ““Well, I am very sorry. It is very hard, but we cannot do anything about it””. As the noble Lord, Lord Best, said, if we merely build social housing, we will not sort out the problem. We will simply create a greater problem. We have a major challenge. Our notion of affordability and our evidence suggests that unless we take necessary steps, the percentage of 30 year-old couples who are able to afford their own home is likely to fall from 50 per cent today to below 30 per cent in 20 years. That is the challenge we have to meet. It is against that background that we commissioned the Barker report to explore the links between economic growth and housing supply. It was on the basis of very robust evidence that she came to stark conclusions about the need for a step-change in the provision of houses. Her work has been reinforced by other work that ODPM and DfT have commissioned since then. We agreed with her analysis, and we are now in an intensive, thoughtful and evidence-based process of exploring the right balance of what we need, what we can afford and where growth can most sensibly, coherently and organically be encouraged and sustained with the greatest benefit. We will be setting out our response to the Barker report before Christmas. But let me assure the noble Baroness, Lady Falkner, that we shall take a broad view. It has to be put in the context of many other things that we are thinking about regarding housing supply to balance the economic case with the social and environmental cases. But we had to make choices in the interim. We have been following the blueprint for sustainable communities for a better balance of housing supply. We identified four growth areas: Milton Keynes/south midlands; Ashford; London-Stansted-Cambridge-Peterborough; and London and the Thames Gateway. Noble Lords have raised the spectre of centralisation in many different ways. The noble Baroness, Lady Hanham, talked about ““not organic”” communities. Let me stress that the reason these areas were identified was that they are building around existing communities, some of which—Corby, for example—were in urgent need of regeneration. This was not a frivolous or casual choice. We know that there are difficulties. There are genuine tensions and I look forward to exploring them with the noble Lord, Lord Hanningfield, at another time. We also know that within those regions we have to provide for affordability. I shall say something about the commitment to sustaining not just cities but countryside communities. So many noble Lords raised this: my noble friend Lord Whitty, the noble Baronesses, Lady Maddock and Lady Miller, and the noble Lords, Lord Cameron and Lord Cobbold. Some of the challenges are the same, but some are very different. It is because of that mix of tensions that we set up the Affordable Rural Housing Commission. I hope that many of the things that noble Lords have said this afternoon will be referred to that commission. Regarding rural housing enablers, I can tell the noble Lord, Lord Cameron, that the proposed new rural and social community programme is designed to develop the capacity of the rural voluntary, community and parish council sectors. If proposals are agreed, programme funding will be available to support rural housing enablers in some regions where there is an agreement that it is a priority. Perhaps I should write to the noble Lord at more length about that in due course. Our aim is to improve affordability within those regions. We have positive policies: for example, dedicated land is kept for rural housing under the rural exception, councils can reduce the discount on second homes and, from April 2007, key workers will be able to take advantage of the key skills package in rural areas. We are doing quite a lot of things, but we are looking to the Affordable Rural Housing Commission to help us to frame some other options that we may not have explored. We are also working in areas of housing market stress. The noble Baroness, Lady Hanham, is right that we need to join up jobs and housing. One of the privileges of this job is that I am seeing what is happening on the ground in areas such as south Yorkshire, where I saw long-term unemployed young people being trained in skills for the construction industry and being placed in jobs building the houses and infrastructure that is needed in the region. Many things are happening to the credit of those schemes. There is a bit of mythology about how we are doing this in the Pathfinder projects. It is very important that we achieve the sort of revival and regeneration that we want to within the regional plan to reduce regional inequalities. The Pathfinder projects are not dedicated to demolition. That is a minor option. So far, we have demolished 10,000 houses for good reasons, but we have refurbished 20,000. As the market is changing, we are looking at the pattern of provision and the choices that the Pathfinder authorities have to make sure that those are the right choices for those communities. I turn now to speak briefly about the social benefits. Many noble Lords more eloquent than I have described what it is like to be able to afford a home. There is a feeling of security and safety, not only for individuals but for communities—a great benefit and feeling of content which makes communities sustainable. Affordability is at the heart of this. By ““affordability”” we mean different things, but the Government are committed to increasing affordability. We have invested £5 billion over the past three years to 2005–06, double the level of 1997. We have built 230,000 affordable homes and we have had some conspicuous successes. My noble friend Lord Graham was quite right to prioritise homelessness. At the very sharp end, when we came into government in 1997 there were thousands of people on the streets; there were 457 at the last count. We have virtually abolished families living in bed and breakfast. There are still many people living in temporary accommodation but we are working on that problem. We want them in settled accommodation; which is better for them and better for the communities. This year we have set the Housing Corporation the target of delivering 33,000 new social housing units and a very ambitious target of 75,000 social rented housing units—that is 10,000 a year—by 2008. These figures will not be easy to achieve but we are serious about this. We have put £1 billion into key-worker housing and we aim to help around 80,000 key workers and first-time buyers to own their own home by 2010 through the Homebuy schemes. We are looking for innovation in funding, management and organisation. I can tell my noble friend Lord Sawyer that the RSL sector is very important now as a way of buying as well as renting. Renting is extremely important. It is not wrong to rent because it is right to buy. My noble friend Lord Whitty will know that rent restructuring is designed to achieve a fairness which has been denied us so far. But I take the point he has made and I will meet with him to talk about it. As to decent homes, we have placed a priority on improving homes in which people are currently living. A million fewer people now live in homes without bathrooms, decent kitchens, insulation and all the things that they have a right to expect. The role of the local authority is essential: it is to be the strategic authority at the heart of the community and the custodian of housing, not only social housing but across the range. Local authorities are now involved in building new social housing through expanded PFIs, funding building by housing associations and working with the Housing Corporation. I turn now to the final aspect of sustainability—that is, the environmental challenge. We cannot deny that building for future generations has environmental implications, but we can anticipate and manage it. By planning for community needs in a more open way at a regional, spatial level, we can avoid the unplanned urban sprawl; we can avoid the soulless housing estates which marred so much house building in the past. The noble Baroness, Lady Greengross, referred to the requirement to build around the needs of the community. Let me deal with some of the issues that have been raised. The noble Lord, Lord Cobbold, and the noble Earl, Lord Caithness, between them demonstrated the difficulty of the green belt. I should say to the noble Earl that we have no intention of diluting the planning controls which surround the openness of the green belt. I take the point made by the noble Lord, Lord Cobbold, and we will consider it. As to greenfield sites, I should say to the noble Baroness, Lady Hanham, that the latest figures show that we are currently exceeding our targets for brownfield usage. We are now building on 70 per cent of brownfield sites. Indeed, in the Thames Gateway, the figure rises to 80 per cent. We are also increasing the total area of green belt land in England—indeed, it has increased by 19,000 hectares—and we have set a target for each English region to maintain or increase the current area. But we want to go further because we want to increase the quality of the green belt. In places such as the Thames Gateway we are considering how to create a network of green spaces which are generally available and of good quality. The noble Baroness is absolutely right that design—whether of public space, the public realm, or of houses—is absolutely essential. I have seen some wonderful examples of how the public realm is being transformed, not least in the north-west. There is increasing confidence that we can build at higher densities without losing—indeed, with enhancing—design. I am confident, having talked to the many planners and architects involved in these partnerships, that they see this as a major challenge but also as a major possibility. I think we can have confidence in the way in which people are coming forward, including private developers, to deal with the volume house market. Noble Lords have referred to water, power and transport. How could I possibly answer the questions about the A34 asked by the noble Lord, Lord Bradshaw? I shall have to defer to his long experience and simply say that the Department for Transport is putting £3.5 billion into infrastructure. We will commit a great deal more as we go through this process. The noble Lord is right in that it has to be a proper partnership. Things have to be done in the right order and planned properly. There is nothing to argue about. Through the demands we are putting on the environment, we are creating infrastructure. On planning, although I cannot defend the document’s prose, it makes it clear that we have methods of making land available in novel ways. The noble Baroness, Lady Miller, should take some comfort from the fact that we have delivered a 40 per cent upgrade in the energy efficiency of all new buildings in three years and brought that forward. We have recently signed a concordat with the Environment Agency to identify as early as possible where the pressures are, to work more closely with the water companies, to plan the new reservoirs and ensure that we have the new technologies for the new build. In terms of energy, we are looking at the existing as well as the new housing stock. My noble friend Lady Wilkins spoke about the needs of disabled people in the context of what the noble Baroness, Lady Greengross, said. We must build for a lifetime: we must build to the highest standards and the highest technical quality. I shall write to her about Part M and the lifetime standards. We are making progress, we intend to make further progress, and I understand her sense of urgency. We have an opportunity to meet social needs and economic challenges. For the first time, I believe, there is a consensus that we can build differently; we can build more responsibly through a new planning system which is more responsive, proactive and transparent. And because it has a statement of community involvement, building at local level, is not centralised but more local and regional than before. We may not be doing everything right. I have taken great heart from the ideas put forward by noble Lords today. I look forward to continuing this debate at a different time and in a different context. I again congratulate all noble Lords who spoke, apologise to those whom I have not answered—I shall write to them—and congratulate the noble Baroness, Lady Scott, once again.