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Housing and the Credit Crunch

We all want to ensure that housing is built, and that we have as much affordable housing as possible, but the means of achieving it is a matter for debate. The Government's insistence on particular targets for various local authorities does not seem to have worked. They have been unable to deliver. Whether we will be able to deliver more through negotiation I do not know. I like to think that negotiation and consensus are a better way of delivering more housing, but we shall have to see what happens. As the hon. Lady would expect, however, I do not join her in condemning Islington Liberal Democrats. Indeed, she was most unwise to invite me to do so—but it was a nice try. I was trying to make a serious point. I attend many housing debates in Westminster Hall, and they are usually more thoughtful. Sadly, however, a lot of straw men were built this afternoon and then knocked down. The Committee's report helpfully focused on the need to maintain skills in the building and construction industry. If we lose those skills, it may take a decade to regain them, but there is a desperate need to continue building. I accept that there are problems with continuing to build as a result of the unavailability of private finance and so on, but if those skills are lost in the long term it will create a massive bubble in house price inflation. That will have a knock-on effect for a decade or more. Unless we focus on maintaining the industry's capacity, we shall regret it for a long time. I realise that the Government have brought forward finance for the HCA and that the agency has been trying to be more flexible in working with housing associations, which have struggled to continue building with the cross-subsidy model. That finance has taken time to filter through, however, and housing associations are still concerned about Treasury targets on subsidy per unit. Even if the finance is brought forward now, they may find a hole later and be unable to achieve the Government's targets. The most obvious thing that the Government could have done earlier—it would have made a significant difference—was to give councils the power to build. Unfortunately, the House rises next week, and the Government will not produce their consultation on the housing revenue account until Thursday 23 July. Giving councils the power to build would have made more difference than anything else that the Government could have done, and it is frustrating that it has taken them so long. If councils are to build more property, they will need access to HCA grants; they will also need to be certain of their revenue stream, their rental income and their asset base. I do not know what will be in that consultation document, or what mechanism the Government propose in order to deal with the question of negative and positive subsidy. However, there is no legislation in place to enact it in the short term, so I see no prospect of it being introduced in this Session.