Skip to main content


Volume 745: debated on Thursday 6 June 2013

Motion to Take Note

Moved by

My Lords, I am delighted to have this opportunity to open this debate on what is in effect the whole range of housing policy. Unmet need means people without homes, as I shall develop. Far too many of our people are badly housed, homeless or struggling to pay their high rents and avoid becoming homeless.

We have a real housing crisis in this country. There are currently more than 1.8 million households on waiting lists in England. There are currently more than half a million households living in overcrowded conditions. In 2012-13, 108,000 homes were completed in England. The evidence from Shelter, which has been very helpful in providing information for this debate, is that we have an annual need of 240,000 new homes to meet current and future demand. We are building at less than half that rate so the problem is going to get worse.

For far too many people in our country, their housing situation leads to misery and damage to health; it holds back the education of children, damages family cohesion and generally causes a great deal of human unhappiness. Anybody who has been a Member of Parliament or local councillor and has had a constituency surgery will know about the number of people who come along seeking help on one aspect or another of their housing difficulties.

I will turn briefly to private rented housing, which has had to increase. One-third of private renters are now families with children. What is alarming is that for so many of them, short-term tenancies are the norm and they keep having to move. Government research shows that renting families are nine times as likely to have moved in the past year as families who own their own homes. We know what sort of dislocation there can be for families with children if they have to move, and how it affects their schooling and their general well-being. Rents in the private sector are rising and eating savagely into household finances. Perhaps even more damaging, one-third of privately rented homes fail to meet the Government’s own decent homes standard.

Surveys of public opinion show that the public would welcome more borrowing if it led to better housing and more housing being built. The surveys I have seen say that supporters of all parties believe that this would be a good idea. Of course, more building has other economic benefits, which I shall come on to. At the moment we have too few housing starts and virtually no social housing. There has to be a better way of managing our affairs.

I was given a number of examples. Let me just cite one. Oxford City Council is a Labour council and an example of good practice. It has a planning application for the development of about 900 homes at Barton West, which is in the Oxford City Council area. That will produce much-needed housing in an area where there are housing shortages. However, Oxford City Council has also identified land outside the local authority area in adjacent local authorities, which are mainly Conservative-controlled. It is finding it very hard to get the go-ahead to develop the land because the Conservative authorities do not want more housing there. Perhaps the Minister will have more information on that, but that is a rather sad state of affairs.

Although some people say that there are shortages of land, there are also allegations that developers in this country have large land banks which they are holding off until they can make more money than they can at the moment. Does the Minister know the extent of the land banks? I am not talking about developing the green belt, I am talking about land banks that the developers have, on which they could legitimately build if they decided to go ahead.

I want briefly to mention the difficulties of under-occupation. Yes, of course, there are people who are under-occupying their homes. For owner-occupiers, it is easy. They sell and move to a smaller property, make money in the process and someone else gets a larger property. That is easy for owner-occupiers, but we have an entirely different system for those who are in public housing. Now that they have the bedroom tax, families will have to move, but they have nowhere to move to because there are not enough smaller units available for them to move to—at least, not without a move, let us say, out of London into the suburbs or even further. That is hardly a humane way of dealing with under-occupation. There has to be a method to deal with that.

I remind the House of the dislocation to families and children if they have to move to different areas and different schools and have to make different friends. It can be very upsetting and can damage schooling and the happiness of the family. It is not surprising that there has been a rise in homelessness. Statutory homelessness is increasing, and local authorities are under pressure to find temporary accommodation to stop families having to sleep on the streets. Of course, that is a temporary measure, and councils have had to put homeless families in hotels and bed and breakfast accommodation. We know that a number of them are breaking the law because they are leaving families there for longer than the six-week legal limit. A large proportion of local authorities are now in that position.

Of course, the benefits cap is aggravating that. Without getting into a long debate about social welfare at the moment, the benefits cap should surely take account of differences in housing costs from one region to another. We know the enormous differences between London and the south-east and other parts of the country. Shelter has demonstrated that local authorities which cannot source emergency housing in their areas are increasingly having to send homeless families further away.

I turn briefly to the situation of young people looking for housing. It is bleak for them. There is a massive housing shortage in properties that would be suitable for young people. They are increasingly priced out of buying or renting a home of their own. That is a struggle for people from all walks of life and particularly difficult in London and the south-east. From personal experience, I talk about mortgages and easy or difficult lending. Many years ago, when I got a mortgage before the first house that I bought, my wife and I had to demonstrate that I was asking to borrow only two and a half times my salary, I could borrow up to only 70% of the equity of the house and I had to produce an employers’ reference that I was good for my salary and was not likely to be fired quickly.

What has happened in more recent years? Mortgages went up to 120% of equity and 10 times the salary. It is no wonder that we had the terrible crash and the housing bubble. The danger is that we are moving back again. If borrowing money to buy houses is too easy and there is no increase in housing stock, it does not take an idiot to realise that prices will go up. That is what has happened in Britain over many years. Unless there is an increase in supply, making borrowing easier does not help. It may help the lenders of the money, but it does not help the people who want to be housed. That is why I am worried that the Chancellor of the Exchequer’s Help to Buy scheme—it has gone through a number of different names—will be no help at all if there is no significant increase in supply, but it will help some people who want to be second-home buyers. That is a sign of inequity.

In a more general sense, I say this about owner-occupation. Owner-occupiers in our country have managed to make enormous capital gains through holding a property. I have benefited in that way. It is quite unfair that the process of owner-occupation in our housing market has led to an enormous increase in inequality in this country. Okay, I cannot sell my house and move into a tent, but, at some point, somebody—a family or whoever—will benefit from that. It seems quite unfair that that has happened. It has happened partly because financial services have made it so easy to borrow, and the danger is that we are going back there. Of course I want people to be able to borrow money for their homes, so there has to be a balance, but the danger is that if the money is too easy to come by, there must be more houses, otherwise prices will rise.

Of course, we all know that on top of that there are significant north-south differences in this country. We have much greater housing stress in London and the south-east than elsewhere. The trouble is that in the parts of the country where houses are incredibly inexpensive, there are no jobs. There is no economic base, so there is no demand to live there because people cannot earn money. I know that because I am lucky enough to have a home in Cumbria, but looking at the property prices on the Cumbria coast in places such as Workington and Maryport, I can get you a three-bedroom house for less than £100,000—in fact, for quite a lot less than that, but there are no jobs.

The north-south differences are important because they affect our perception of housing and what should be done to help. There is another problem, particularly in London and the south-east. If it will be increasingly difficult for relatively poor or not very well paid people to live—I am talking about the C2s and Ds; about people who keep many of our public services going; about local authority workers, cleaners, nurses, other NHS staff and teachers—or they cannot find anywhere to live, how are those services to be continued? It will be very damaging. It is all very well saying that you can get these people at the moment, but it is getting harder and harder for them to find somewhere to live. They do not earn enough to buy into the housing market, and they cannot get accommodation. I find that a very serious situation indeed.

The future for London and the south-east will be even bleaker if we do not do something to make more housing available so that we have a proper social mix, and so that various jobs can be filled. I know that we have people from other EU countries who come here, but some of their housing conditions are intolerable and they do it only temporarily while they try to keep their families going in their home country. That does not mean that the housing is there; it means that they are willing to accept standards in which one would hope that they did not have to live.

We have to build more homes. I do not believe that doing nothing is an option. We have to change our policies dramatically. The lack of housing construction is holding the whole economy back. We know that an active construction programme has knock-on benefits throughout the economy in jobs, further investment and so on. However, at the same time, we are seeing a generation who are finding a decent home of their own out of reach. As I said earlier, we are building about half of what we need.

Lending more and more is not the answer unless there is an increase in supply. Whereas I welcome, up to a point, making the planning system more efficient—there are arguments against it as well—that will not open the doors to a great deal of building. We need to look forward. Fundamentally, I believe that we need to get local authorities building again—and if not local authorities, then local authorities in tandem with housing associations. We need to ensure that we can develop a proper public housebuilding programme. That would give people an opportunity and boost the economy. I am afraid that I missed some of the discussion in Questions today about garden cities—I apologise, but I was working on this speech and I did not switch my screen on in time to hear what the Minister said about it—but that certainly has to be an option when looking at ways in which we can deal with the desperate housing situation.

To cite a well-known Conservative to support my argument, in the 1950s Harold Macmillan said that he would build 300,000 homes a year. He said he would ensure that there were that many built in the country, and he did it. If he could do it, that is a lesson to us all. Mind you, he is a different sort of Conservative from the ones that they have nowadays but he knew that housebuilding was important. It was important then and it is important now in terms of the economy, jobs and human happiness.

I believe that we need real political will on housing. Frankly, if the coalition will not provide that political will, the next Labour Government will. I very much hope that housebuilding and increasing housing will be a key feature of Labour’s manifesto, with which we shall win the next general election.

My Lords, I am delighted to be part of this debate. There was a very impassioned debate earlier this week in this House. When 538 people voted on Tuesday, I was not able to because I had to attend a rather important and long-standing event in the north of England. However, the passion that I heard on Monday and the sense of urgency expressed again and again from all the Benches around this House is something that I would wish to conjure up for the issue before us. I wish that we could sense the passion that is invested in this question of housing and feel the urgency for meeting the needs that are undoubtedly there.

I am aware that in speaking in such a debate, I am surrounded by people who are experts in their field, who have been or are in government and who have run big organisations and the rest of it. I come to most of the debates in which I speak in this House simply as a hands-on operator—a street-level worker. I work in communities with people; in their surgeries, Members of Parliament frequently refer some of the cases to which the noble Lord, Lord Dubs, has just mentioned to people like me. I must thank the noble Lord for bringing this matter to our attention today on two grounds. The first is that he gave me a respectable excuse for leaving the conference for which I was in the north of England, since I prioritised being here, and the second is the importance of the issue before us.

Over the years, I have been involved in meeting housing need in a variety of ways. I have served as director of two or three housing associations. For a while, I was responsible for a day centre in west London at the time when, as some Members of the House may remember, local authority housing was being exchanged and dealt with for political purposes in the City of Westminster. An awfully long shadow fell from that. I was also part of the London homelessness network of organisations meeting housing needs, largely but not entirely for the street homeless. One-to-one referrals have also been part of what I have done.

The economy, they say, is starting to build up again. What do I see in the part of London where I live? There is lots and lots of building going on. From the roof of my house, I think I have counted eight large cranes, busily building for the future. Someone is investing in the future, which they think is rather rosier than the present. What kind of building am I talking about? First, obviously, there are premises to house the burgeoning businesses coming to what they call Silicon Roundabout. It is happening all around us with the start-up companies and their technology, and it is good to see that business in this sector will bring new life to the community I live in. Then there is student accommodation. There are large amounts of it with, we have to say, its limited usefulness. Nevertheless, I am glad for the students. Then there are hotels of various kinds. The final category is that of luxury flats.

I am the chair of an education foundation. We sold a piece of land at Old Street roundabout and could not believe the figure. We thought that if we got £20 million, we would really be doing well; we got £41 million. There have sprung up these great big sails—that is what they look like—on the roundabout, with these luxury flats in them boasting at street level that their prices started at £750,000. A building that once belonged to the Methodist church just the other side of the roundabout, and which we sold in 1989, is selling its luxury flats at roughly the same price. I see all that building and none of it would I really object to as long as there were certain other things happening in the world of construction. What I do not see is a real and systematic programme to build affordable and social housing, although there are some units. Do not get me wrong: there is a policy in the inner city to make it a requirement on developers to put a certain percentage of the units into what are called affordable categories. However, even that does not begin to scratch the surface of the need of which I am aware.

Within the church community that I look after, we have some truly outstanding young people. They are all British-born and mainly from ethnic minority backgrounds. Our work is intended to widen their horizons and raise their aspirations to help them see that one day they might become the Chancellor of the Exchequer, a leading journalist or barrister or, indeed, a Member of your Lordships’ House. Why not? We find scholarships and financial help for them at university. We try to open up some kind of new future for them. Sometimes, when I push them, asking them to consider things they had not even imagined before, they come back to me and say, “Why should I bother? Even if you help us with £1,000 or £2,000, we will still have to incur serious debts—and when we come out, how can we hope to live in these neighbourhoods where we have grown up, where our friends are and where our lives have been lived?”, and they are right.

It is impossible to imagine young people having a realistic hope of achieving that simple objective of continuing to live in a part of the world that suits them. Even if they get a job there, it will not lead easily to them getting a mortgage or an opportunity to live there and get their property. Yesterday’s Evening Standard indicated that the average price of a home in London is £421,395 and that if you took out an 85% mortgage on that, you would have to earn £96,000 per annum. Let me say that since I have never earned more than £25,000 in my life, if it were not for the fact that the church provides me with what I have to admit is a very nice house, I do not know how I would be able to cope at all. How can these children whose horizons we are widening, whose hopes we are raising and whose gifts we want to value stand a hope of getting into that sort of league when they do not have any capital behind them, or any parental wealth or clout? It really is serious.

Let me tell your Lordships about the conversations that I have had since the riots in Tottenham two years ago with these very same young people. Mercifully, they were not involved in what happened then but they are able to tell me very eloquently about the degree of alienation they feel, about the “outsideness” of their experience and about the difficulty of getting through certain doors of opportunity to which they might aspire. There is a tinderbox building up in the city centre in London. I do not want to be alarmist or dramatic but I think that there is. We saw an outburst of it two years ago. We simply have to address the needs of poor, aspiring, able and competent young people whose only difficulty is that they want to live in London.

There is some social housing, as I have said, and the Government’s Help to Buy scheme, which the noble Lord, Lord Dubs, mentioned. I do not deplore that, but these do not address the area of primary need and will not get near meeting the demand. When I left this Chamber on Monday to return home and listen to Radio 4, as I always do, a serious discussion programme was going on about how the economic circumstances in our country are leading to joblessness in the north and certain regions and provinces around the land, while there might be the prospect of jobs in London. So we can anticipate a population drift from the north-east and the north-west, where the noble Lord, Lord Dubs, has his nice home in Cumbria—all those areas where, as he said, there is no housing—towards London, which the programme said would become a megacity, with all that that does to complicate a regional social development programme in which the regions, as well as London, can enjoy their proper life as part of our society.

While the qualified jobless from around the country are coming to London, certain boroughs in London are buying cheap property as far away from London as they can in order to meet their obligations to house homeless people by, basically, exporting them. That is what in cricket you call a “reverse swing”. It is moving people against the climate. I invest a lot of my time in the needs of Haiti. We have become accustomed since the earthquake of three years ago to seeing pictures of people living in tented villages; there were 1.5 million of them at one time, although there are now only 250,000. We call them IDPs—internally displaced people. There are going to be an awful lot of IDPs in the United Kingdom if present trends continue.

I shall tell noble Lords what one of my young people who dropped out of university, although he got three As at A-level, said when I asked him, “Why on earth have you done that?”. He told me the usual things that I have already shared with your Lordships about the burden of debt and the inability to get into the housing market and start a life properly and with dignity, but went on to say that at street level the talk was that you did not go down the conventional routes to career-building but looked for quick money in order to bypass a lot of the painstaking work that normally goes into building a career and the shaping of the future. What are those quick paths? Crime, drugs, music, football and fame—all of them, according to the argument, capable of producing quick fixes and rapid promotion into the world of haves, as opposed to have-nots.

I agree with the noble Lord, Lord Dubs, that as our economy needs a lift, a serious attempt should be made to prioritise the creation of infrastructure for the building of homes. It just seems to make sense. The construction industry gets on with things, homes are built and, within homes, security, well-being and health automatically flow. I do not see why we cannot see that; it is a no-brainer. The eight millennium development goals have preoccupied me for the past 15 years or so, and I have always wondered why housing—a shelter, a roof over your head, somewhere you can raise your family with dignity and create an environment that is yours—was not one of them. The noble Lord does us a great favour by bringing this matter to our attention just now.

I began by referring to Monday and Tuesday’s debate, when 538 people went through the Lobbies. I might have been the 539th if my wretched conference had not got in the way. However, the words that I heard repeated most frequently in the speeches that I was party to while in the Chamber were “justice” and “equality”. If ever there was a subject where those ringing words needed to be heard again, it is on the question of addressing the housing needs of ordinary people, whose only hope is that they have somewhere to live their lives with dignity with their families and contribute to the society around them. It does not seem much to ask. Where, ask I with no political background at all, is the will of Governments to address this in a focused and systematic way?

My Lords, I, too, thank the noble Lord, Lord Dubs, for this debate and the way in which he introduced it. It is so easy sometimes to fall into the trap of partisan politics, when indeed I think we will learn through the debate today that many of us actually share concerns and indeed many views about how to address them. I know that the noble Lord has long had an interest in and concern about housing issues, not least, I believe, when he was Member of Parliament for Battersea during the gentrification of Wandsworth. Perhaps that should be the subject of a debate at another time.

We are now a little further down the road, and throughout that period I have been a councillor in a town centre ward for 39 years. When I started, housing issues were of considerable concern at our weekly surgeries. We then went through a period when that was perhaps of less concern, but now it is rising again at our weekly surgeries—not particularly because of the welfare reform changes, which I suspect are yet to bite really seriously, but more because of the economic situation in which many people find ourselves. In my ward we have, for an outer London borough, a relatively high proportion of social housing. Much of the ward’s housing was built in late Victorian times. When I first became a councillor in 1974, much of that was privately rented, by predominantly older people. As they moved on, they were replaced by first-time buyers buying from landlords who were getting out of the rented sector. Now it has a fairly mixed population.

I think that we will hear today quite a lot about the causes of the housing crisis, but I hope that we will spend some of our time on the solutions. The simple facts on which we can all agree are that, for each of the last 30 years at least, not enough new homes have been provided to meet the demand. I was struck when the noble Lord, Lord Dubs, referred to Harold Macmillan’s commitment in 1950 to build 300,000 houses a year—obviously as part of the post-war recovery. Remarkably, although I am not sure why, I still have a boyhood memory from the 1950s of hearing the annual announcement of how many new houses had been provided. I do not know why, but clearly it was of far greater significance then than it is now, otherwise as a child I would not have been aware of such things.

We can probably also agree that, on coming into power in 2010, the coalition Government faced both a housing crisis and a financial crisis—not really the best circumstances in which to reverse a trend of 30 years or more. For the Liberal Democrat part of the coalition, tackling that crisis is a very high priority. I am sure that that is equally true for our coalition partners. Our priorities in tackling it may be slightly different but nevertheless the determination to tackle it is the same, and perhaps the combination of the two different priorities may turn out to be more effective. I assume that the Minister will elaborate on the many measures that the coalition Government have already taken to tackle the crisis—investment in affordable homes, investment to support the increasingly important private rented sector, tackling the scandal of so many empty homes, Help to Buy and so on. Much has been done, in spite of the very difficult financial circumstances, but there is much more that we could and should be doing if we are to get anywhere near succeeding in reaching the target of 240,000 new homes that we need each year.

I make no apology for returning yet again to the need to remove, or at least raise, the borrowing cap to allow local authorities to increase investment in new homes. The LGA estimates that that alone could deliver 60,000 new homes over the next five years as well as a boost to the nation’s GDP. This is a measure strongly supported by pretty well every organisation involved in any way with housing as well as by all political parties in local government. Indeed, most recently the leader of the largest local authority in Europe, Labour-run Birmingham, has made exactly that call, illustrating what it could mean for his city alone.

I know that I do not need to convince the Minister, nor indeed her ministerial colleagues in the CLG; it is really the Treasury to which I am speaking. Why is the UK the only EU member state not to adopt internationally recognised rules to measure government borrowing that regard extra housing investment as a trading activity that does not count as adding to government borrowing levels? Indeed, financial market players have confirmed that the increase in public sector borrowing which would result from the removal of the cap is insignificant in the wider financial picture and the sums involved fall well below the size of the OBR’s forecasting errors on local government debt. I understand very well that the Minister will not be able to make any commitment today in advance of the comprehensive spending review announcements to be made on 26 June, but the lifting of this cap would do more than any other single measure to demonstrate the coalition Government’s strong commitment to tackling the housing crisis.

While we all understand we will have to wait another three weeks for the Government’s view, I remain unclear about the view of the Opposition. I know it is strongly supported by my Labour colleagues in local government and personally supported by many Labour parliamentarians in both Houses. I hope that in replying to the debate today for the Labour Opposition the noble Lord, Lord Collins of Highbury, will be able to say that the Official Opposition would support the lifting of this cap. That might give some encouragement to the coalition Government and even to the Treasury.

There are, of course, other measures that the Government could and should be taking. The speedier release of land by the Government themselves, by government agencies and, indeed, by local government, is one of them, but we must recognise that housebuilders will not build unless they know they can sell what they build.

The planning system is often quoted as an inhibitor of development, in my view usually incorrectly. It would be helpful if the Minister could give us an update on the progress being made in the review of planning guidance being led by my noble friend Lord Taylor of Goss Moor. Similarly, I hear that the problem is not so much the speed of decision-making on planning applications, which is probably now taken care of anyway by the provisions of the Growth and Infrastructure Act. The delays come subsequently in the setting of planning conditions and the determination of Section 106 agreements.

The other complaint I heard yesterday evening when I met a number of the larger housebuilders, which I must admit was new to me, was about the widely differing building standards set by local authorities, which inhibit standard design for bigger builders. For instance, they told me that there are 32 different standards in London alone, presumably for each of the 32 London boroughs. As I heard this only last night, I do not know to what extent it is correct, but it is what the big housebuilders believe. As a localist, I am clearly not calling for central government intervention, but it seems to me that local government should be talking with the bigger builders about this issue, especially in London where London Councils plays such a useful role in representing all the London boroughs. It is right that local authorities should be able to decide for themselves but, speaking as a London borough councillor for 39 years and a council leader for 13 of those years, I very much doubt that each London borough knowingly and deliberately decides to adopt different standards from its neighbouring boroughs.

Next, I feel strongly, as I am sure we all do, that we must not sacrifice quality for quantity. We need well designed, energy-efficient homes fit for the 21st century and more needs to be done to help the public to value such energy efficiency.

We also need to be providing homes that meet needs. Here I will single out specifically the needs of young people and older people. Young people are increasingly being priced out of not only the buying market but the renting market, particularly in London. Local authorities and housing associations could and should be doing more to provide new or adapted homes suitable for young people, who are sometimes a transient population. I am not talking about student accommodation but about accommodation perhaps on similar lines for those who simply do not want to buy or simply cannot buy or who do not want or need a long lease because their tenancy is likely to be short. I may be wrong, but the only authority I know of in the country that has such a scheme is the City of Westminster, and we should look at it and learn from it.

I particularly want to make some reference to older people in the time available to me. I have the privilege of being a member of your Lordships’ Select Committee on Public Service and Demographic Change which in March published its report Ready for Ageing?, which I commend to noble Lords, if they have not already read it. Annexe 16 deals with housing provision for older people. I shall not deal with this at any length as I hope later speakers may do so.

Paragraph 270 of the report states:

“Despite growing demand for specialist housing and the substantial wealth held by some older people … there is a gap in the market. There are just 106,000 units of specialist housing for home ownership and 400,000 units for rent in the UK as a whole … In 2010, just 6,000 units for rent and 1,000 for ownership were built, whereas in 1989, 17,500 units for rent were built as well as 13,000 for ownership”.

The report goes on to recommend that:

“Central and local government, housing associations and house builders need urgently to plan how to ensure that the housing needs of the older population are better addressed and to give as much priority to promoting an adequate market and social housing for older people as is given to housing for younger people”.

The conclusion was:

“Central and local government should jointly review how the National Planning Policy Framework’s suggestions might be clarified and tightened to do more to ensure sufficient housing provision for older people”.

I hope that when the Minister comes to reply, no doubt with very many points to reply to, she will be able to give us some indication of how the Government are responding to that useful report.

I have said very little about the private rented sector, and now I have not left myself time to do so. It is clearly increasingly important and receiving increasing attention, but much more needs to be done.

I shall end not by predicting the green shoots of recovery, as I am neither that wise nor that foolish, but I was encouraged to hear last night at a meeting with a number of the bigger housebuilders that they are seeing signs—perhaps faint signs, but some signs—of improvement in the supply. The NHBC reported that it had seen a 35% increase in registrations year on year. It rightly made the point that registrations are not completions, but nevertheless, it is an encouraging sign. We all know that we face a crisis. It is not a new crisis, but a long developed crisis that this Government, and certainly my party, are determined to tackle long before the next Labour Government get an opportunity to do so.

My Lords, I declare an interest as I have just taken over the chairmanship of a large housing association. I am the chairman of the Orbit Group board.

We face a worsening housing crisis due to a very serious lack of public investment over recent years, the absence of a long-term strategy and, more recently, the financial crisis. As my noble friend Lord Dubs said in his excellent speech, around 230,000 new households form annually, but in the 12 months to March 2013 there were fewer than 102,000 new home starts. Housebuilding has dropped to its lowest level since the 1920s. Housing completions in England fell from 175,000 in 2007 to 115,000 in 2012, an astonishing 34% drop. Instead of proposing credible ways of reversing this decline, the coalition Government reduced the budget for the provision of affordable housing by 63% in the 2010 comprehensive spending review. That is the biggest single cut to any capital budget right across the Government.

We need to consider the social and economic effects of the housing crisis that we now face. Millions of people are being priced out of owning or renting a home. House prices increased from 3.6 to 6.5 times the average salary between 1997 and 2011. Home ownership is in decline. It now takes 22 years for the average low to middle income family to save for a deposit. Some 1.3 million families are struggling to pay their mortgage or rent, spending over 35% of their net income on housing costs.

There are 1.8 million families on waiting lists for social housing. In 2011-12, more than 643,000 households were living in overcrowded accommodation, and a quarter of homes—5.4 million—failed to meet the decent homes standard. Poor housing conditions have a direct impact on residents’ health outcomes and on their educational attainment, particularly for children and young people but also for older people, limiting access to lifelong learning.

In 2011-12, 108,720 households in England applied to their local authorities for homelessness assistance, a 22% rise from just two years earlier. Last autumn there were 2,300 rough sleepers on any one night in England, a rise of 31% from 2010. This is utterly deplorable. One of the measures of a civilised society is that it provides decent accommodation for people, somewhere they can be proud to call home. A failure to do so is deeply damaging to the quality of life of those affected and it is inexcusable in a country as rich as ours.

Despite all the main political parties acknowledging this housing crisis, the lack of a political solution suggests that the Government have not fully grasped its scale. The first fundamental policy change that is needed is a shift from subsidising rents to capital spending. Housing benefit is currently costing £23 billion a year. That is unsustainable and does nothing to address the root cause of the housing crisis, which is that demand for housing far outstrips supply. In 1975, more than 80p in every £1 of public spending on housing was on supply-side capital funding, with only about 20p going on cash benefits to help people pay their rent. The composition of spending has changed dramatically since then. At present, for every £1 spent on housing, only 5p is spent on capital funding, while 95p goes on housing benefit. This is a ridiculously inefficient use of public resources. Without a rebalance, the Government risk fundamentally undermining their own aspirations, which I fully acknowledge, for a housebuilding-led recovery. Perhaps the Minister will comment on how the Government intend to reach a more sensible balance between capital and revenue expenditure.

So far, their main solution—perhaps the Minister will say that it is not their main solution—looks pretty inept. Help to Buy allows anyone, not just first-time buyers, to access a government loan of up to 20% of the value of a property and is available for existing properties, not just new-build ones. The IMF has raised concerns that, by boosting demand without addressing the supply side, Help to Buy may actually drive up prices and put home ownership further out of the reach of most renters. One high-profile City strategist, quoted in yesterday’s Guardian, said that the scheme will artificially prop up the market and prevent prices falling to affordable levels. He said that buyers need cheaper homes, not just available debt to inflate house prices even further. His quip was, “This is madness”, and I cannot disagree.

Moreover, many commentators have questioned why this scheme has a cap as high as £600,000. Perhaps the Minister can tell your Lordships’ House why there is not a much lower cap, consistent with helping first-time buyers from middle and lower income groups who will never be able to afford mortgage repayments on such expensive housing. Does the Minister accept that this scheme will do very little to create additional affordable housing? After all, the NewBuy scheme, which preceded it, led to only 1,500 completions in its first nine months of operation. Have we learnt anything from the housing bubble that helped to create the financial crisis? The Governor of the Bank of England clearly thinks not. The £3.5 billion invested in Help to Buy could have been much better spent delivering 175,000 affordable homes and creating £19 billion gross value added to the economy. Will the Government therefore now look at how they could develop new schemes to support the delivery of affordable housing rather than just home ownership?

While I accept that there is a need to find ways of reducing the large bill for housing benefit, there has also been justifiable criticism of the so-called bedroom tax. This was referred to by my noble friend Lord Dubs but I want to underline what he said. There is concern over the impact and likely hardship that some households will suffer as a result due to no fault of their own. Even if a household wants to move, as my noble friend said, there is often very little prospect of doing so due to the unavailability of suitable smaller properties. Where people move into the privately rented sector, the cost to the Government in housing benefits is simply likely to go up because of higher rents there. Does the Minister accept that a full evaluation of this policy is needed, and that, if it confirms that not only are the savings from it negligible but it is causing hardship to households that are unable to access alternative accommodation and cannot meet their additional costs, the Government should then withdraw the scheme?

Tinkering around in this way does not address the real causes of the vast increase in spending on housing benefit. While unemployment and low incomes clearly contribute, the root of the problem lies in the failure to increase the supply of affordable housing, which drives people into the more expensive privately rented sector. What is needed is a new commitment to a long-term housing strategy, which focuses on at least a five-year programme, giving both local authorities and housing associations a chance to plan their capital expenditure. The IPPR’s recent paper proposes a new affordable housing grant for local authorities, with a legal duty to use these resources to improve access to affordable homes. Its goal would be to increase local authority scope to get housebuilding going, with a longer term outcome of keeping rents more affordable, which would, in turn, reduce the cost of housing benefit. I do not know whether the noble Lord, Lord Tope, who is a great advocate for local authorities, and has just demonstrated that in his speech, has seen this report, but I recommend it to him and other Members of your Lordships’ House.

Nick Pearce is the director of IPPR, and I want to quote him because, although I cannot go into the detail of what is proposed, what it is suggesting is a very interesting solution. He says:

“Combined with local control over planning, social housing allocation and regulation of the private rented sector, this new strategy would be a far more ambitious institutional reform than the coalition’s half-hearted localism. Councils would be required to forge a consensus for their spending plans and housing strategy among a balance of local interests represented on an affordable housing panel—made up of providers, landlords, tenants and owners”.

I hope that the Government, too, if they are not yet aware of that report, will consider it.

Investing in affordable housing is not just socially necessary but, as my noble friend Lord Dubs said, economically sensible. The Centre for Economics and Business Research has calculated that every affordable home built creates 2.3 jobs in England and generates an additional £108,000 in the wider economy. For every £1 of gross value added as a result of investment in new affordable homes, an additional £1.41 of gross value added is generated in the wider UK economy. The IMF and the OECD have both recently called on the Government to boost infrastructure investment and drive economic growth in doing so. The coalition seems hell-bent on ignoring this advice.

My criticisms are not just of current housing policy. I do not simply want to be politically partisan. Many of the problems go back a very long time. They are deeply embedded, with demand outstripping supply for many years. There needs to be some radical new thinking in Whitehall to get away from the lack of a joined-up approach across several departments. We need a medium to long-term strategy with a very strong focus on supply. For too long, central government has believed that it holds all the keys—and noble Lords will forgive me the metaphor. Can we now move towards more local solutions as proposed by the IPPR and touched on by the noble Lord, Lord Tope, while focusing on making home ownership a real possibility for the many who aspire to it but currently cannot attain it? We need to be careful not to neglect those who rent, whether in an under-regulated private sector or in social housing, which should be seen as a genuine alternative and not just a fallback for those who cannot own. Above all, we must now focus on increasing supply to reduce the unmet need to which my noble friend Lord Dubs has so rightly drawn attention.

My Lords, I, too, thank my noble friend Lord Dubs for securing this very important and timely debate. As chair of Midland Heart housing association, I declare an interest.

In any introduction, formal or informal, the first two questions are nearly always the same: “What do you do?” and “Where do you live?”. Sadly, for an increasing number of our fellow citizens, the answer to those two questions is very simple: “I do nothing, I am unemployed, and I live nowhere because I am homeless. I can’t get a job because I don’t have a home, and I can’t get a home because I haven’t got a job”. We can therefore conclude that the unmet needs of housing and indeed employment are the twin barriers to social and economic progress for many.

Housing and employment defines the individual. Those two essentials of life influence where we live, the choice of schools for our children, access to public transport and, of course, access to good healthcare. But I accept that we cannot all move to Chipping Warden. They would not let me in anyway. Perhaps they think that I would frighten the horses.

A recent report from Shelter and KPMG established that we are simply failing to build enough houses to meet demand. The House will forgive me for any repetition; a lot of the figures that we have heard from the noble Baroness, Lady Blackstone, are also available to me, because we both chair housing associations and our source of information is broadly common. We know from our individual experience that house prices almost doubled between 1995 and 2007. In recent years, we have seen no significant increase in new-build housing. While I note the Government’s Funding for Lending scheme, the only visible outcome is the incentive for lenders and the creation of a possible financial bubble in the housing market. Indeed, the noble Baroness drew attention to the comments of the Governor of the Bank of England, who warned against making policies designed to boost the housing market artificially. Boosting the housing market is important, but we also want to boost housing build.

Everyone except the Government accepts that social housing providers have a critical role to play, particularly at a time of austerity when demand continues to outstrip supply. Reports of homelessness have increased, and the Department for Communities and Local Government recently recorded that in 2011 there were more than 48,000 homeless families, with the number of households in temporary accommodation standing in excess of some 60,000. Social housing providers accept that they have a role to play, but why are they unable to meet the demands of their customers? The DCLG report shows that nearly 2 million families and more than 4 million individuals were sitting on waiting lists.

In 2012, the National Housing Federation estimated that in the West Midlands metropolitan region alone waiting lists stood at nearly 99,000. In my organisation, Midland Heart, there are more than 20,000 on our waiting list, with our lettings at no more than 2,000 per annum. The problem for social housing providers is insurmountable unless we get real action and a positive and active partnership with government.

Among housing professionals it is common ground that the Government have not taken any real, effective measures to satisfy the increase in demand in the social housing sector. Indeed, the building of new social housing has dropped during the past 12 months. The magazine Inside Housing quotes the DCLG as showing that between January and March the associations built only about 4,800 houses. That is a fall of approximately 9% on the previous quarter. However, the really bad news for those on the waiting list is that completions have decreased. The reality is that families and individuals are simply unable to access affordable housing, and existing tenants are unable to move. To cap it all, the recent welfare reforms will bring more instability and fear to thousands of families.

My organisation works with some of the most deprived and financially excluded families in the country. Unlike many other social housing providers, it knows that the welfare reform cuts will bring real hardship to many of the people we serve. While providers are taking measures to help people through changes, many of those we serve are struggling to maintain their existing tenancies due to the rise in housing costs, which has been exacerbated by the bedroom tax, as well by the increases in the cost of living due to austerity.

The latest figures available to us indicate that we are seeing a possible 2% increase in homelessness, and indeed overcrowding, for the year ahead. There is no argument or debate on current trends: overcrowding and homelessness can go only one way, and that is upwards. The housing crisis is not coming—it is here; it has arrived—and because of the bedroom tax there is no room to which Cathy can come home.

My Lords, I thank the noble Lord, Lord Dubs, and all the speakers who have preceded me, because many of us are covering the same ground and have similar statistics—if I repeat any, please forgive me. However, all of us who are speaking care about this issue, otherwise we would not be speaking here today. I also declare an interest as a long-term councillor on the London Borough of Barnet. Unlike my noble friend Lord Tope, who has been a councillor since 1974, I am a much more recent addition, having been a councillor for only 27 years.

I will talk first about the supply of council housing. Council housing demand was outstripping supply towards the end of the 1990s. Even the hardest to let high-rise properties were taken by families in desperate circumstances. The national figures bear this out. By 1997 the number of families on housing waiting lists had reached just over 1 million. Sadly, in the years of the previous Labour Government—which the noble Lord, Lord Dubs, referred to as the next Labour Government—the waiting lists rose to around 1.8 million while the number of affordable homes fell by some 420,000.

A big help towards solving this will be the housing investment programme promised by the coalition Government. Over the lifetime of this Parliament, the coalition Government are investing to build some 170,000 affordable homes—a much needed increase that will benefit those most in need. Overall, if this is met—and I believe it will be—this will be the first Government in more than 30 years to deliver a net increase in social housing stock.

With regard to investment in social housing, investment in the condition of stock was linked arbitrarily by the Labour Government to ownership and management models instead of need. Decent Homes funding was restricted to boroughs able to persuade their tenants to transfer out of direct council ownership and management, either to other stock transfer or to an arm’s-length management organisation, or ALMO. I was a founder member of Barnet Homes and for many years a director of that company. Barnet Council took the money and improved the property under the Decent Homes schedule. Many other local authorities did not want to do this and kept their housing, so by the end of the Decent Homes programme, more than a quarter of national council housing had not been improved to meet government standards.

Large transfers of council housing to housing associations, together with a programme of mergers, have led to much larger housing associations in recent years. The best of them have developed their governance to engage and involve their tenants and residents, and this good practice must be spread across the whole sector. Many of us perhaps come across housing associations where the governance is not as good as that. When I, as a local councillor, seek to speak to someone in some of these local housing associations, the staff have all changed from top to bottom, and I cannot use the contacts I used when just talking to the borough housing department.

One of the biggest problems faced at the end of the 2000s was the grinding to a halt of the housing market and the building of new homes. Some estimates say that there has been an annual shortfall of more than 100,000 properties being built despite the growing number of households in Britain. Turning around the mortgage market has been a challenge to reversing this crisis. This was referred to by other noble Lords. The Government have been innovative in promoting schemes to kick-start mortgage lending. However, I worry about this policy. It will increase the prices of homes because the money will be chasing fewer properties, and this will mean that the properties are more expensive in London—more expensive than anyone at the lower end of the scale can afford. It will also mean that if the housing market does not keep rising, the owners of those properties will have negative equity and find it difficult to sell them. If there is a shortfall—of 20%, or the 120% referred to by noble Lords—that risk will be covered by the Government rather than by the banks, because that part of the loan has been financed by the Government. That is not a sensible policy, and I ask the Minister to comment on how we can ensure that this boost to mortgages does not mean a big rise to existing properties without any security if there is a downturn in the housing market.

I turn to what is called a bedroom tax, which seems to be what we have to call it nowadays, although it is the extra bedroom in people’s properties. While there are understandable concerns from tenants—which I have heard from tenants in my own ward who are affected by the changes in housing benefit—the debate about subsidies for spare rooms might be improved, or better understood, if we were prepared to accept that the Labour Government first introduced this measure for private sector tenants claiming housing benefit as far back as 2007. You got the benefit for only the number of rooms that you needed, so that concept was there before. They did not make any exceptions to that policy, for example for disability, carers, military families and so on, which are at least in the present policy. However, that policy is not quite right and, in particular, while it is all very well to introduce the policy, it is completely wrong to say, as my Government did, that it should all come in on 1 April, which it did, when there are no one-bedroom properties for those people to transfer into. Such a policy should have been graded in and we should try to make some exceptions for people who would be willing to live in a one-bedroom property, if only there was such a property to which they should be transferred.

On the impact of universal credit, it is understandable that people, while welcoming the principles behind universal credit, are nervous about some aspects of the detail. However, I think I speak for many people who support the aim of making work pay and making the transition from benefit to work manageable. Converting benefits to a monthly payment from which we will ask people to budget sensibly would seem to be a necessary conclusion. However, if housing landlords cannot continue to collect housing benefit directly from the Government, we will see that some tenants, strangely, will decide that their priorities are buying food and other things rather than paying their rent, and we will get back to a stage where there are large underpayments of rent because the money is being paid directly to tenants.

As I said, we are building 100,000 fewer homes than we need each year. Over the next 10 years, approximately 230,000 more households a year will need properties, and we are not meeting demand. As my noble friend Lord Tope said, there is a housing crisis—but it is not new. There has been a crisis for a long time, and we have to build our way out of it. All noble Lords have said this in one way or another. However, the proposed reforms to planning law to permit sizeable extensions without planning restrictions are a recipe for neighbour strife. The idea that you can build over the larger part of your garden and not have to go through the normal planning regulations, and that your neighbour will have only a certain amount of time to object, is a recipe for disaster. Under the present planning system, in my borough the majority of planning decisions for houses—we are not talking about big developments—are delegated to officers, so the resident who needs an extension is already dealt with pretty swiftly. Very few applications come to the housing committee.

I have not found a record of a single new development of more than 13,500 homes in the UK since the 1970s. In the latter part of last year, the Deputy Prime Minister said that we should re-examine garden cities. I was somewhat pre-empted earlier today by the Question about garden cities that was asked, but I will develop the subject a bit more than one can do in a Question and Answer. Letchworth was the first garden city in 1903. Then came Welwyn, and in 1946 the New Towns Act was passed. As a very young chartered accountant, I decided on my own initiative to go and audit Basildon new town development. It was a rude shock to the developers and contractors when the young accountant came up and said that he was from the external auditors. I thought that they were going to die on the spot. They fed me very well as they gave me a tour. This massive Basildon development was built during my professional career. It was not that long ago.

Do we continue to try to satisfy housing need by building higher and denser, and by permitting haphazard urban sprawl? Apparently we already build the smallest homes in western Europe. My noble friend Lord Tope talked about the 32 standards in London. In my early involvement in housing, we talked always about the Parker Morris standards. We should have a uniform system of housing so that everybody knows the minimum—not the maximum—standards. That system has long been forgotten. We should ask where the next Milton Keynes will be. People there do not just live in the city but commute into it, which is a sign of its success.

Other noble Lords talked about acquiring more land for building, both from local authorities and from government, but the big issue is how developers hold land banks because they increase in value. There should be a penalty system, however one describes it, so that if you hold land for a longish period and do not develop it, you should be taxed in some way on the holding of that land, to encourage you to build properties that people can live in. The Government should promote or encourage this way forward, which will take longer to achieve but will be needed to tackle the deficit in housing.

We need to pursue the proposal for further garden cities. I hope that the Minister will say how this will proceed in a proper, organised manner—not piecemeal, by looking at one possibility and then perhaps taking a long time over it—with a national plan so that we can decide where the new towns and cities will be. Without large-scale development we will not satisfy the deficit in housing from which this country suffers.

My Lords, I, too, thank my noble friend Lord Dubs for initiating this important debate. I was prompted to speak by reading Alan Johnson’s book about his childhood in Notting Hill, and the poor housing conditions that he and his family had to suffer. I remembered my own childhood, too. We might think that things are a lot better now, but, sadly, for many people that is not the case. Today there are still families living in one room, or sharing a kitchen and bathroom, or perhaps living in bed and breakfast accommodation, or a hostel, or in the unregulated private sector. On reading Alan’s book, I thought: I hope that we as a Parliament do not forget, from our privileged position on the red or green Benches, that there are still many thousands of people not adequately housed and living in very poor circumstances. We must never forget that in our deliberations.

There are still unscrupulous landlords who know that people on poor incomes will put up with squalor, damp and disrepair, and so it goes on. My noble friend Lord Morris said that the days of “Cathy Come Home” are still here and he is absolutely right. Although it is 50 years since that programme was made, in some parts of our country we are still no closer to making sure that everyone has a decent place to live, let alone a place to live in a garden city. We need to remember that.

As many noble Lords have said, things are generally getting more difficult for people as regards housing. As if things were not bad enough, the Government have decided to insist that poor people who are adequately housed should give up their rights and privileges and that those with a spare bedroom, possibly measuring eight feet by 10 feet—which is probably smaller than the people who frame their legislation would keep their dogs in—should give it up to a lodger or another family or pay extra for it. Stephanie Bottrill was so upset that she would be charged £80 a month for her two spare rooms that she walked into the path of a lorry and was killed.

Notting Hill Housing, of which I was the chairman for a number of years, has drawn my attention to the impact of universal credit on some of its larger families who are particularly hard hit. In one case, a single mother with eight children will lose over £350 a week. She is desperately worried about what will happen to her and her family. Housing associations, such as Notting Hill, and councils want to do more but the cuts in capital funding for new build restrict what can be built. There are 1.8 million households on the waiting list. Many private landlords are exploiting the situation by raising their rents or neglecting to do repairs. Often tenants have to compete with sealed bids over the asking rent just to get into a home, or have to offer to take a much longer contract to get occupancy of a flat or house. Can noble Lords believe that? I did not know about it myself until this week.

Noble Lords have asked what can be done. It is right that we talk about what can be done, with the caveat I mentioned earlier that we never forget what it is like for people today planning for their future. We need to be aware of this big problem and be motivated to tackle it. We have all talked about the housing shortage. That must be a given, particularly in London and the south-east. In Brighton—where I have cause to live on occasion—the council is using shipping containers to house the homeless. That may be considered a solution by some people but it is not really a solution at all. What is really needed is a unifying national campaign. We do not need a strategy but a campaign which will unite all parties and all sectors of society to build enough homes to meet the need.

I have taken part in many housing debates in the House where we have talked about Parker Morris standards, garden cities, quality versus quantity, high rise versus low rise and green belt versus brown belt. These are debates that have to be had but sometimes in the past we have become bogged down in the arguments and missed the big picture. The picture people care about out there is getting homes. If there was a drive to house people adequately, there would be diversity of provision. People who love quality might be disappointed and people who want quantity might be disappointed and the various interest groups might not always agree but we need to cut through some of this stuff and get on to build the homes that people need. If we do not do so, we will be standing here in 15 years’ time talking, as I have done, about the same issues and making slight amendments and improvements here and there but not actually tackling the big picture. We need a big picture approach and to pull people in who have new ideas. We need to get outside the box and think about converting shops and offices into housing and encourage development through the planning and tax systems. We need to think about new towns, garden cities and new cities. However, none of this will happen unless we have strong political will.

The deep conservatism of many communities against new homes should be challenged by those of us who want to build more housing for the people who need it. The homeless, the badly housed, the priced-out people, the overcrowded families, the oppressed immigrants at the mercy of disreputable landlords, the frightened council tenant with a spare room, all these people—who are mostly in London and the south-east, but wherever they may be—need us in Parliament to raise our voices and heads and say that we must build more homes, and we must have the political will to do it.

There is also another group of people who may not be in that category, who had it very easy 50 years ago, as I did. These are people with a steady job earning a good wage, such as teachers and nurses; although today the problem affects even accountants and highly paid professional people, unlike in my time. Without parental help it is just about impossible for these people to buy in London or in some of our more expensive cities. Those from ordinary backgrounds with university debt and other commitments struggle to afford a big deposit and huge monthly mortgages. This group needs government help. Schemes like shared ownership help quite a few families, and some other initiatives might help, but I am afraid that for many their only option for the foreseeable future is long-term renting in the private sector. These people will not get mortgages or on the house-buying ladder, as did their parents and grandparents. They will be in the private rented sector for a long time. Sometimes the private sector is good but sometimes housing in it is badly maintained with insecure homes, managed by buy-to-let landlords, which are not good enough.

All parties when in power must drive up standards in the private rented sector as more and more people will come to depend on it. We need houses in that sector with economic rents. We could achieve this through planning and tax incentives rather than rent control, which would probably reduce supply. I would like civil society and the wider community to get involved in this sector. I would like trade unions, building societies, local authorities, churches and all kinds of people to get involved and ask themselves, “Can we make a contribution to the private housing sector? Can we build something? Can we club together with others to build something? What can we do to make this a better place to live in for the people who have to live in it?”.

Finally, I should like to say something about my generation. We are the generation who had it all. We have heard about the increases in house prices and the cheap university education that I did not personally have but many colleagues and friends did. Many of those who had the financial capital decided to become private landlords. I hope that there will be new thinking in a world where we can create a more viable private rented sector whereby individuals who want to invest in the sector join others in doing so. Some of those in my generation who invest in buy-to-let properties are not investing in properties for people but in investment vehicles and are looking to realise their capital gains and rental benefits from private houses. They do not care about the young people, even their own children, who have to pay these rents. We have to talk about that question. Why is our generation charging our children such enormous rents to live in houses because we have been so lucky? I am not saying that such people are bad or immoral but there ought to be other ways to make sure that people who want to invest in the private rented sector join others in doing so.

We must get across to all our friends, colleagues and close associates in this society that houses are not for capital gain or vehicles for profit; they are homes, and we do not have enough of them for people to live in. We cannot afford to turn them into vehicles for capital accumulation, and we should talk about this much more.

My Lords, I am grateful to my noble friend for introducing a debate on this important subject and for the comprehensive manner in which he did so.

We are facing a housing crisis for poorer people, not only in London but more generally. On 4 March, I asked the Minister in this House what the Government would do to assist families who face homelessness as a result of the housing benefit changes introduced last April. I said that it had been reported that 600,000 households would be affected by the changes, and those unable to meet the requirements under the changes would get into arrears and face eviction. The changes involved the so-called bedroom tax. The Minister, however, insisted that there should not be an increase in homelessness as a result and that local authorities could make discretionary payments to deal with any serious cases. It would now seem that the worries that many of us had were quite justified.

All over the country, tenants in social housing have been receiving letters threatening them with eviction. This has happened to tenants in Brighton and Leeds. In Nottingham, Bradford, Portsmouth and other cities, notices of arrears have been sent to tenants. Housing associations in Manchester and Glasgow say that large numbers of tenants cannot pay the increases required. The discretionary fund that the Government have said would cover the more extreme cases of deprivation was insufficient to cover the shortfall.

Tenants recognised as disabled have also been affected by this change in benefits. The National Housing Federation has said that if £30 million of discretionary housing payments were to be distributed equally among the claimants of disability living allowance who are affected, they would receive only £2.51 per week. Of course, the increases required, I understand, are £14 extra for an additional room and £25 a week for more than one room. The sizes of the rent increases are large for very poor people.

Of course the Government will say that people who cannot afford the increase should downsize and leave the accommodation freer for a family needing it. Unfortunately, as we have heard in this debate, insufficient smaller properties are available. The introduction of the so-called bedroom tax has created a new set of problems and does little to deal with the present problem of a lack of sufficient social housing.

This is occurring at a time when benefit changes are already beginning to affect many poor and vulnerable people. As a result of the current fiscal policies, Citizens Advice is obliged to close some offices, resulting in massive queues at the offices that remain available. I am told that in my area, people have to wait for two or three hours before they can get in to get the advice they need. This applies to disabled people who have been reassessed by Atos and are seeking advice. In addition, legal aid is not available, as we know from when recently we discussed the LASPO Bill in this House.

The right to buy was fine for some people but social housing that became privatised as a result of that policy was not replaced. Nor will the Government’s new policy in that area assist in large parts of London. Private sector rents are too high and salaries too low. One problem—in my opinion as a former trade union official—is that in the private sector trade union organisation has been weakened as a result of successive government policies and therefore people are not paid enough for the jobs they do. There is also the awful shortage of social housing.

We have been told by the Mayor of London that he intends to build some affordable housing within the next few years. However, that of course is in the future and there should be plans to deal with the present crisis. If there is an expectation that the private sector will provide housing, there has to be some form of regulation—some means of controlling rents—as existed in the years following the last war. In the mean time, the Government should rethink their policy on the so-called bedroom tax. I understand that a review is to be published in 2015. However, that is too long to wait for vulnerable disabled people who are facing possible downsizing or further impoverishment. As for the right-to-buy policy, as has already been indicated by a number of contributors to this most interesting debate, this is unlikely to get poorer, younger people on to the housing ladder; it will simply add to debt. Cheaper housing is required, not more young people in debt. In an era of insecure employment, it is likely to leave us with yet more problems.

The Government need to rethink the policies along the lines suggested by a number of contributors to this debate and ensure that, somehow or other, we manage to work our way out of the appalling situation that now faces many poorer and vulnerable people, who simply cannot afford somewhere to live. That is a disgrace in a country as wealthy as ours.

My Lords, I, too, thank my noble friend Lord Dubs for initiating this debate. He has a terrific and proud record of raising housing issues and developing housing policy.

We face the biggest housing crisis in a generation, and the Government’s housing and economic policies are not helping. The first priority must be to address, by building more homes, the housing shortages that are the underlying cause of homelessness, overcrowding, high rents and low standards of accommodation.

Housebuilding is crucial to economic recovery and to helping families to get on to the housing ladder. Young people today are increasingly being priced out of buying or renting a home of their own. People from all walks of life struggle to get the housing they need or want, and it holds them back in life. Meanwhile, our economy is held back by the lack of construction.

History tells us that a major programme of housebuilding has always been at the heart of economic recovery in our country—public and private—and that it is not possible to have a sustainable economic recovery without a major programme of housebuilding. The CBI rightly makes the point that the 100,000 affordable homes will see 1% added to GDP. As has been highlighted in this debate, housebuilding fell by 11% in 2012, the number of housing completions has fallen in both years since the general election, and homelessness is up by a third. As my noble friend Lord Dubs reminded us, in 2012-13 a total of 108,000 homes were completed in England, yet Shelter’s report, Homes for the Future, identified an annual need for 242,000 new homes to meet current demand.

I am the first to acknowledge that the biggest housing crisis in a generation does not date back to May 2010. Having said that, I should point out that in 2010 we warned what the consequences of the crisis would be. The £4 billion cut in affordable housing investment in the Chancellor’s first Budget resulted in a 68% collapse in affordable house building and a 97% collapse in council house building at the worst possible time.

The impact of these cuts in public investment has been extremely serious. The number of housing association starts has fallen by 23% to 19,500 in the past year, and the uncertainty created by changes in the planning system has not helped. As noble Lords have pointed out, it is not necessarily a problem of planning.

Currently there are more than 1.8 million households on waiting lists and more than 500,000 households living in overcrowded conditions in England, as highlighted by my noble friends Lord Morris and Lord Sawyer.

There is no doubt that the planning system was in need of reform but it is clear that it was never as big a problem as some have pretended. Indeed, there is land with existing planning permission capable of sustaining 470,000 homes. Those homes are simply not being built. The Government have launched four major housing schemes in three years and made more than 300 announcements on housing, yet all of these schemes have so far completely failed to tackle the housing crisis. By simply stimulating demand through plans for Help to Buy, mortgage guarantees and equity loans rather than directly boosting supply, there is a danger, as my noble friend Lady Blackstone has pointed out, that it will simply push up prices.

As my noble friend Lord Griffiths put so well, the property market is becoming out of reach for many renters. Research in a Scottish Widows report published last month found that at people’s current saving rates a first-time buyer will take almost 13 years to save the £27,984 required for the average deposit. With property ownership seeming a distant dream, its research suggests that many renters may have given up on property ownership, with only 29% actively saving to put a deposit on a home.

Although I accept that we may have a small positive sign with the news from Nationwide a few weeks ago that first-time buyers are beginning to get on to the housing market, we also need subsidised housing for those who cannot afford to purchase or to pay full market rents. Action on affordable housing is needed and the announcement that an extra £225 million will be available is welcome news. However, only £125 million will be spent before 2015, according to the OBR, and that is dwarfed, as I have said, by the £4 billion cut in funding for affordable housing.

As my noble friend Lady Turner has said, and many noble Lords in today’s debate have highlighted, while one government department introduces measures to support housing another exacerbates the problem. The bedroom tax, the levy on housing association and council tenants deemed to have a spare room, penalises those in work as well as those who must find money from their other benefits by cutting back on essentials.

Not only does it have a human impact, as highlighted by many noble Lords in the debate, it will also have other perverse outcomes. If people are pushed into the private rented sector, there is the potential for rents to be higher, which increases the housing benefit bill and the potential for greater homelessness. There is growing and disturbing evidence of the potential of this now to have an impact on new builds—on supply—because of the write-off of bad debt and the burden of cost being imposed on housing associations and local authorities. As chair of a credit union myself, and as the noble Lord, Lord Palmer, highlighted, I am only too aware that many housing associations whose tenants are being hit by the welfare changes anticipate major problems with rent arrears.

While scrapping this measure would be best, can the Minister say whether, when the Government review its impact, they will consider the current discretionary housing payment that local authorities need to deploy in the many cases of hardship where tenants cannot be offered a suitable smaller property? All of this means that housing bodies must cut back on spending on new housing investment just when the Government need them to do more. Also, they will be less able to undertake broader community work such as addressing those with special needs, tackling anti-social behaviour and supporting young people into training and jobs.

With the huge squeeze on living standards and a faltering economy, the Government’s failure to provide affordable housing means that millions of families are being priced out of living in a decent home. Not only have affordable housing starts collapsed from 49,363 in 2010-11 to only 15,698 in 2011-12, we have the added problem that many of the homes under the Government’s affordable homes programme, let at 80% of the market rent, are not affordable in many parts of the country. I would also point out to the noble Lord, Lord Palmer, that it is a bit cheeky to claim that the proposal to provide 170,000 affordable homes was realised as a consequence of this Government’s actions when the National Audit Office has made the very good point that 70,000 of those homes were commissioned and paid for by the previous Government.

Statutory homelessness rose from 10,000 at the end of 2010 to 13,570 by the end of 2012. As a result, as has been highlighted by some of my noble friends, local authorities are placing a worrying number of families in temporary accommodation. Some 53,130 households were living in temporary accommodation at the end of 2012, 9% higher than the previous year. The failure to tackle this problem is devastating for many families and, according to new research by the Bureau of Investigative Journalism, it is proving to be incredibly costly. Over the past four years, the UK has spent almost £4 billion housing vulnerable homeless families in short-term temporary accommodation. Again, in the past four years, £1.88 billion—enough to build 72,000 homes in London and house all 53,000 households that are currently homeless—has gone on renting temporary accommodation in 12 of Britain’s biggest cities.

I hear what the noble Lord, Lord Tope, says and I will not be tempted by his kind offer to make a spending commitment. Like the Minister, I am not in a position to do so. However, the noble Lord is absolutely right to recognise that over and above what we commit by way of grant and investment, we need innovatory forms of funding the housing supply. The Communities and Local Government Select Committee of the other place was right to advance a debate that we badly need to have about a housing investment bank. Last summer, the leader of my party proposed a British investment bank with a focus on manufacturing and housing. Labour has previously called on the Chancellor to use the money raised by the 4G mobile spectrum auction to build 100,000 affordable homes. Ed Miliband has also called for an immediate tax on bankers’ bonuses to fund 25,000 affordable homes.

My noble friend Lady Blackstone highlighted the issue of housing benefit—the rising cost and the proportion of costs accounted for by benefits. Today, Ed Miliband, in tackling the rising cost of housing benefit, committed the Labour Government to giving councils the power to negotiate over housing benefit on behalf of tenants, to get greater savings than an individual can get on their own. Ed Miliband said that not only would they be able to create those savings but to retain some of them, as long as the money was used to build new homes.

People should have a decent home at a price they can afford to rent or buy. The crucial point is how we locate that in the context of economic recovery in our country. Sustainable economic recovery will not happen unless we have a major programme of public and private housebuilding. We have the biggest housing crisis in a generation and an economy that is bumping along the bottom. As my noble friend Lady Blackstone said, the Government badly need to come forward with a serious long-term strategy for getting Britain building.

My Lords, the contributions to housing debates in this House always come from experienced people. It has been an extremely wide-ranging debate and I thank the noble Lord, Lord Dubs, for having introduced it because it is good for us, every so often, to be able to rehearse the issues. I do not think there is any disagreement between us that we need more houses and more housebuilding. We are all in accord with that. It would also be fair to say that it is recognised that this did not start in 2010 and that this is a long, historical problem. It may even go back as far as Harold Macmillan and his 300,000 houses following the war. We have never seriously caught up in all that time. We are not going to reverse history within a decade but there is a general expectation and understanding that we need to make solid progress where we can.

I recognise at once that housing is inextricably linked to the wider health of the country. We know that it is linked to the economy and the financial markets, and leads to confidence in the economy and the confidence of housebuilders. There is a huge pot here of things that need to be done to get the bricks built on the ground. This Government are committed to seeing a major increase in the supply of new homes where they are needed and wanted. We all recognise that this is a local problem in many respects. Local authorities know where they need housing and have in their hands—through their housing strategies, their local development plans and the arrangements they come to with developers on what affordable housing is provided under Section 106 requirements—a certain amount of power.

We need also to provide the confidence that housebuilders need, which is very gradually coming to fruition. We are beginning to see that housebuilders are more confident about moving forward. I accept that the economy has held some of this back but, once again, that did not start in 2010. I also recognise that the hopes and plans of young people, families and older households across the country are affected by all of this. Our aim is also to help people achieve their aspiration to live in a home that gives them security to plan for their future. I agree with the noble Lord, Lord Griffiths, that there is a particular problem in London. We are all seeing investment in very expensive properties that are not immediately available to other people. But I go back to my point about Section 106: where permission is given for these rather grand glass buildings, which are then sold off for horrific sums of money, within that there has to be a Section 106 agreement that recognises that affordable housing is required.

The Government are already committed to investing more than £11 billion in housing programmes during this spending review period. Concerns have been raised about a bubble being created by giving help to the private sector—if only. If there were a bubble of anything we would be quite grateful. We have to ensure that the movement is there and that housing continues to be provided in all sectors: social housing, affordable housing, the private rented sector and assistance with mortgages. The Government are doing all of that. One noble Lord said that we had made 300 announcements over the past three years. That ought to indicate that we are doing a very great deal to try to ensure that this sector is motivated and action is generated.

We believe that this action is starting to have an effect. As noble Lords have said, we have reformed the planning system to support the delivery of new housing. There are early signs of progress; for example, 20% more new homes were given the green light in 2012-13 compared to the previous year. We are all trading figures here. They may come from slightly different angles. I am going to give noble Lords mine and if they do not totally accord we can argue that out afterwards. Housebuilding starts in England were 15% higher in the March quarter of 2013 than in the same period of the previous year. As the noble Lord, Lord Palmer, said, in the first 18 months of this affordable homes programme, we have delivered almost 63,000 affordable homes of the 170,000 we expect to provide within the spending review period.

Our large sites programme is already being successful, with investments of £76.7 million of recoverable loans to accelerate developments, contributing to bringing forward up to 42,000 new homes, boosting the construction industry and stimulating local growth. Several noble Lords referred to the lack of land. I will just draw attention to something that I have spoken about in this House before, which is that public sector land is being released, pretty quickly now, to enable more than 100,000 new houses to be built on that land. Work is starting on large sites. I drew attention earlier today to Cranbrook in Devon but there are other examples across the country of larger-scale developments taking place. Some of those developments, particularly in Cranbrook, are already completed and people are moving in. So there is an expectation not only of small developments but large developments of much needed homes.

It may be a good moment to say to the noble Lord, Lord Palmer, that we had a Question on garden cities this morning. He may not have heard me say so but the principles of garden cities are being built in to these large new developments so that they do not all end up as amorphous and uninteresting new developments.

Mention has been made of the Help to Buy equity loan scheme launched in April. It has already boosted 1,500 reservations on new homes in the first month alone. That demonstrates that there is not only an appetite to go forward—the money is available—but there are now people making clear that they want to use it. No one has mentioned today the new homes bonus. More than £1.3 billion has already been allocated through the new homes bonus. That demonstrates that there are either houses built or empty homes brought back into use, because the money is not paid unless there is evidence of that. We know that more than 400,000 homes have been provided as a result of the new homes bonus and that 55,000 long-term empty homes have been brought back into use.

We have tried to help not only homes to own but the private rented sector. We appreciate that the private rented sector has a big role to play. We have the Build to Rent fund, announced last September, which was so oversubscribed that in Budget 2013 we were allocated a further £800 million on top of the original £200 million, so that we could support as many projects as possible.

We are committed to tackling the long-standing gap between housing supply and demand and addressing market failures where intervention is needed. It is important that we do not step in where the market can do it itself, but where it needs a nudge or help, we must find the policies to do that. We all have to recognise that this approach will require patience at times, but also a bit of ingenuity and an ability to move where necessary when we see that things need to be given a bit of a push.

Things are moving in the right direction. Housebuilding starts in the quarter to March were 4% higher than in the previous quarter, but there is a long way to go before we reach the levels of growth that we need. We recognise that. On affordable housing investment supply, there has been a £19.5 billion investment—that includes investment from the private sector and, as I said, 170,000 new homes will be built by March 2015. The noble Lord, Lord Tope, asked about the housing cap. We have had discussions on the housing cap before when he, his noble friend Lord Palmer and the noble Lord, Lord Shipley, have promoted the removal of the cap from local authorities to give them the head room to provide social housing. It is worth remembering that local authorities already have £2.8 billion head room within the cap, much of which they could use to help those housing needs. Many local authorities have land that they could use already.

The noble Lord, Lord Tope, referred to the expansion of the rented sector. We have provided funding to support that. We have also commissioned and received the report from Sir Adrian Montague identifying barriers to institutional investment in the private rented sector. That is being considered at present. As a result of that report, we set up the Build to Rent fund to stimulate building in the rental market.

The large sites programme, to which I have already referred, is beginning to demonstrate that lots of housing can be built on those sites and can be supported by both public and private finance. The empty homes policy and the decent homes policy have been successful. There is much evidence for that.

A number of noble Lords raised what they call the bedroom tax, and what I call the spare room subsidy. The noble Lords, Lord Tope and Lord Palmer, and the noble Baronesses, Lady Blackstone and Lady Turner, all referred to this. Public housing is not something where we can be cavalier about ensuring that it is properly used. The situation is that there are more than 1 million spare bedrooms in the social housing sector at present. Housing benefit for the social rented sector is being paid for accommodation regardless of its size, even when considered too large for a household’s need. This is really about the fairness of the use of social housing stock and fairness to people. It is not expected that they should be forced to move. We expect that some people may want to move. They may get a job or increase the hours that they are working, while some may, for example, take in a lodger. However, by and large we do not think that this will displace a huge number of people. As I say, additional affordable homes are being built.

However, there are exemptions and we ought to be clear about them. The additional room is allowed for foster carers and for an adult child in the Armed Forces who is living at home but on deployment. It does not apply to supported exempt accommodation. Children unable to share due to disability may also be allowed the extra room at the local authority’s discretion. In addition, as noble Lords have said, the discretionary housing payment is available to help support it.

In his introduction the noble Lord, Lord Dubs, talked about homelessness. This is where I worry that we trade figures as our estimate is that homelessness still remains low. Despite all the economic challenges we face, it is still less than half the level that it reached under the previous Administration. There are strong safety nets in place. There is the No Second Night Out project in Greater London, which is being extended, while all local authorities are required to ensure that they do not have homeless people for any length of time.

We have committed to tackling homelessness and rough sleeping. More than £400 million is being invested in homelessness prevention, which is extremely important. On top of that, we announced an additional £70 million to tackle and prevent homelessness in 2011-12. That includes the homelessness transition fund to support No Second Night Out, £20 million to help ensure that single homeless people get access to good housing advice, the preventing repossessions fund to enable local authorities to intervene early, £5 million to boost the homelessness change programme, and £5 million for the social impact fund. We do not expect temporary accommodation figures to go up very much. The bed-and-breakfast rate is a challenge but there should be no reason for any local authority to leave people in bed and breakfast, or indeed for having to use temporary out-of-area accommodation.

If I may, I will briefly go through some of the questions. I think I have covered some of the points that the noble Lord, Lord Dubs, raised in his excellent introduction. He said that the welfare benefit cap should take account of different rent levels in different parts of the country. Average earnings, by definition, determine the level of the cap. People receive benefit according to the cost of the property they are in. We think that there has to be a maximum level of support which benefits will pay. Indeed, it is good to note that in the past couple of days the party in opposition has at last been able to recognise that welfare payments have to be controlled in some way.

The noble Lord, Lord Dubs, also raised the issue of Oxford City Council. This is a matter between local authorities, but it is perfectly possible now for local authorities to have developments that go across boundaries. The Growth and Infrastructure Act enables developers to submit major planning applications and, as I say, they can straddle local boundaries if the will is there. It may be that there is a bit of a problem about the will, but there is nothing to stop them.

I hope that I have dealt with most of what the noble Lord, Lord Griffiths, said. I agree with quite a lot of it, including the concern about young people. That is at the bottom of what we are all worried about—the future and future generations. Even if we can manage, they are finding it very hard. That is why we are working hard with all these policies to try to ensure that we get over this terrible difficulty in the not too distant future.

The noble Lord, Lord Tope, asked about the planning review of the noble Lord, Lord Taylor. We accept the key recommendations in the main and our response to both the review and the subsequent consultation has just been published. The noble Lord, Lord Tope, highlighted the European Union and the prudential borrowing regime. We agree that that regime has proved an effective control on council borrowing, but that is really all I can say. Most particularly, the noble Lord, Lord Tope, referred to housing for older people. I know that a number of very influential reports have been issued recently. The National Planning Policy Framework requires local authorities to plan for a mix of housing based on demographic trends, and that includes people of different ages. The reports that have been issued recently are being taken into account. The Government have announced a housing care and support fund of up to £350 million to promote more specialist housing.

There were other matters that I do not think I can cover by name in my reply, although I hope I have covered them by topic. I am just about to go over time. Again, I thank noble Lords for this extremely interesting debate, and I hope that I have managed to convince them that the Government are fully aware of the problems and are investing large sums of money to try to bring about change to that situation, with our policies and our commitment to finance.

My Lords, I thank all Members of the House who have contributed to the debate. It has been characterised by contributions made on the basis of knowledge and experience. I thought that it was a particularly well informed debate, and I hope that it has added to the thinking about and understanding of the housing difficulties that we face. I do not want to take time in mentioning individual colleagues. That would not be appropriate in what should be a very short contribution at the end of a debate.

I will just say this: the tone of the debate has been utterly reasonable, and the Minister has been utterly reasonable in the way that she has sounded. I always feel that the harder the policy is to defend, the more reasonable the Minister you put forward to defend it, and the Government have chosen just the right Minister on this occasion. I felt that, with one of two minor exceptions, everyone who spoke agreed. All of us, even the Minister, agreed on the difficulties and the problems. The Minister also put forward some solutions but they were very small solutions, couched in the most moderate and reasonable language—almost persuasive but not quite.

We face a serious housing crisis, and the Government have a bit of a policy for each bit of the housing difficulty, but the trouble is that they are not going to make enough difference. My fear is that in two or three years’ time we will be having a similar debate with the same absolutely charming and reasonable contribution from the Minister and will not be any further forward. I fear that the Government have a policy for this, but there is not enough of it and it does not have enough impetus, commitment or money.

I hope I have not added too discordant a note to what has been a very even-tempered debate. I thank the Minister for her reasonable way of putting it over. All I would say is this: if I were in her position—it sounds arrogant of me—I would go back to the department and say, “Go through this debate. There must be more we can do”.

Motion agreed.