All posts from: November 2011
Put the Autumn Statement and the housing strategy together and we’re left with a mystery.
Put simply it’s this, if housing is so important that it merits a strategy of its own, why was there nothing more in George Osborne’s statement a week later than the end of the stamp duty holiday for first-time buyers?
Because, as the National Housing Federation points out, investment in housing is easily the best way to deliver the ‘biggest bang for the taxpayers’ buck’.
The NHF argues that a public investment of £1bn could be matched by £8bn from housing associations to build 66,000 shared ownership homes, create 400,000 jobs and save the taxpayer £700m in job seeker’s allowance into the bargain.
It might have added that housing schemes could be ‘shovel ready’ far quicker than the other infrastructure projects that the government wants pension funds to finance (they won’t be ready to start until 2013/14).
So you have something that’s ready to go quicker, is more labour-intensive (though a good case can be made that housing repair and maintenance or energy efficiency or empty homes work would create even more jobs) and yet does not merit anything beyond what was in the strategy last week.
As I blogged earlier this month, the government could have been even more radical with a quantitative housing scheme funded by buying bonds in a public interest company that could fund construction of new homes for future sale to the social and private sectors. Even a modest programme would deliver jobs and growth.
But the government does not appear to see housing as ‘infrastructure’ and appears to be leaving growth to an untried arrangement with pension funds to deliver a list of big road and rail schemes that make handy soundbites.
Instead you can already see the writing on the wall for the next spending review. The detail of the Autumn Statement reveals that the squeeze on public sector gross investment will continue to fall into the next spending review period. Brian Green has more on the construction funding gap on his Brickonomics blog.
Perhaps the solution to the mystery is that unspecified further spending cuts are looming to go with the two extra years or public sector real terms pay cuts because the recession is costing more than the Chancellor thought?
To give just one example, the independent Office for Budget Responsibility says that a higher claimant count means that housing benefit will cost £1.9bn more over the next five years than it was forecasting in March this year (£200m this year rising to £600m by 2015/16).
What price more housing benefit cuts to come? And what price the next affordable homes programme - if there is one?
Perhaps it’s not such a mystery after all.
As he gears up for the Autumn Statement, George Osborne is facing the usual pleas for more stamp duty concessions at the bottom end of the market. He’d be better off concentrating on evasion at the top end.
Reports over the weekend estimated that one in three buyers of homes worth more than £1m are evading the 5 per cent rate of stamp duty and that the avoidance could be costing the taxpayer up to £1bn a year.
According to the Mail, most of the transactions involve Central London properties that are seen by the super-rich as a safe haven for investment - and now, it seems, as a tax haven too.
And it’s not just stamp duty. The Observer reported that only nine of the 60 apartments in the exclusive One Hyde Park development are registered for the council tax.
Both scams appear to involve buying the property through offshore companies that are out of reach of the UK taxman and the hapless local authority. According to the Mail, ownership of all of the homes in up-market Cornwall Terrace in North London has been transferred to a company registered in the Isle of Man.
What Rinat Akhmetov and Tamara Ecclestone get up to may seem to belong to a different planet but the flood of investment into London property is a major reason why house prices and rents in the capital remain so high and unaffordable for the rest of the capital’s inhabitants - and by extension why the housing benefit bill is so high for the taxpayer.
The evasion is said to have got worst since the introduction of the 5 per cent rate on £1m homes in April. However, there is also believed to be widespread evasion further down the scale.
Could the government be doing more to stop it? Osborne signalled a clampdown in the Budget in March and may try and do more today but the super-rich and their accountants have been lighter on their feet than HM Revenue and Customs so far.
The new 5 per cent rate was meant to pay for the the stamp duty holiday for first-time buyers on homes worth between £125,000 and £250,000 and the usual suspects are calling for this to be extended beyond March 2012.
The CML points out that only 13 per cent of the £4bn raised from stamp duty in 2010/11 came from properties worth £250,000 so a longer holiday would not make much difference. The fall in the yield from £6.7bn in 2007/08 is mainly down to a slump in transactions.
However, that £4bn yield last year reveals the true impact of the evasion - if that estimate of £1bn on homes worth over £1m is anywhere near accurate. So perhaps Osborne could look at two more radical reforms.
First, he could look at the ‘slab’ structure of stamp duty which means that a huge increase in tax is triggered once the price of the house reaches the £250,000, £500,000 and £1m thresholds. The duty on a home worth £249,999 is £2,499 but on £250,000 it is £7,500. On £999,999 it is £40,000 but on £1m it is £50,000. Threshholds like that create a huge incentive for evasion.
Second, he could order a much more serious crackdown on evasion through offshore companies - and a complete review of the taxation of UK property owned by foreign nationals and non-doms. For starters, any property owned by an offshore company is not a home but an investment and it should be taxed like one.
EDIT 17:25: Today’s Autumn Statement confirms that the stamp duty holiday for first-time buyers will end as planned in March. Research to be published soon will apparently show that ‘the stamp duty land tax relief for first time buyers has been ineffective in increasing the number of first time buyers entering the market’. And the housing strategy provides ‘more effective measures which provide better value for money”
That rather begs the question of why the government went ahead in the first place with something that has turned out to be a waste of money.
Meanwhile the mortgage indemnity fund which was the main feature of the strategy has been attacked by the free market think-tank the Adam Smith Institute as ‘immoral’.
‘Using taxpayers’ money to underwrite 95% mortgages is immoral – it will draw people into home ownership who will be unable to afford their loans when interest rates eventually rise again,’ it says. ‘And it risks setting off the same sub-prime events that got us into this pickle in the first place.’
As for the massive tax evasion at the other end of the stamp duty scale, the Autumn Statement had nothing to add.
When Grant Shapps and David Cameron told us on Monday that ‘builders aren’t building’ I hadn’t realised that they meant it quite so literally.
I thought I’d said my piece about the housing strategy but I just can’t resist the latest development (or lack of it).
Everyone was expecting a fall in affordable housing starts as Labour’s programme ran down and affordable rent got going but hands up who expected a fall of 97 per cent?
The figures are so extraordinary that they made me wonder more than once if they were a hoax. Between April and September 2010 there were 13,626 affordable home starts. Between April and September 2011 there were just 454. That’s not a misprint: 454 (259 for social rent and 195 for low-cost home ownership).
The HCA explains that the figures were impacted by the closure of three Labour programmes (the NAHP, Local Authority New Build and Kickstart) and that the new Affordable Homes Programme will deliver starts on site in the second half of 2011/12. In other words, I’m guessing part of what we’re seeing is the effect of delays in signing Affordable Rent contracts.
Yes, there are all the usual caveats about the stats on starts and completions - exactly the sort that have led to claim and counter-claim from Jack Dromey and Grant Shapps over the last few days. Yes, starts will pick up in the second half of the year (even though they will not really deserve the tag “affordable”).
But a fall of 97 per cent?
Is it just coincidence that these figures were released the day after that ‘radical and ambitious’ housing strategy? That the pre-release access list for the HCA statistics includes several people at the DCLG including the special adviser to Eric Pickles (under Cabinet Office rules pre-release means a maximum of 24 hours before)? That a figure that would have been quoted again and again in Monday’s news coverage only emerged 24 hours later?
I frankly don’t know. But I do note that all of this came a day after Grant Shapps found himself on the House of Commons naughty step over the way that details of the strategy were revealed in the media before parliament was informed. The issue was raised not just by Labour’s Hilary Benn but by Tory MP Peter Bone as well.
Shapps blamed the leaks on ‘third parties’ who had been given advance copies. ‘We always encourage them not to send out details of what is inside the documents, but unfortunately we are not always successful,’ he said.
But the speaker John Bercow told him that despite the tendency in cases like this for there to be ‘smirking on the Front Bench’ this was ‘not a satisfactory excuse’ for a minister. ‘It is not good enough - it is a rank discourtesy to the House of Commons and an abuse of parliament. That is the reality.’
The question that now arises is this: if some information was leaked before the launch of the strategy, was other information delayed until after it?
It must be trebles all round in the boardrooms of the major housebuilders as they celebrate the details of today’s housing strategy. Where does that leave the rest of us?
The document had been so well trailed in the papers over the weekend that there were very few surprises when it actually appeared this morning - and very few answers to the obvious questions begged by the advance publicity.
First up there is the big new idea to help housebuilders, sorry, home buyers, with a government-backed mortgage indemnity scheme. The idea is that this will be enough to persuade lenders to give 95 per cent mortgages on new-build homes to up to 100,000 buyers. Housebuilders would also pay 3.5 per cent of the sale price into the indemnity fund.
The obvious issue picked up on by the national media is that the taxpayer will be guaranteeing private mortgages - and potentially open to any losses if house prices fall. After all, the reason why the government has to guarantee mortgage indemnity insurance in the first place is that insurance companies will not (they lost more than £2bn in the housing market crash of the early 1990s). However, any loss would come first from the buyer’s deposit, then from the housebuilder and only then from the government.
But that begs several more questions. Is it really such a good idea to encourage people to take out 95 per cent mortgages? If house prices fall they will be left in taxpayer-funded negative equity. If they rise, the taxpayer will have propped up prices for them (and all other existing owners) at the expense of others further back in the queue.
What guarantee is there that housebuilders will not simply use the existence of the guarantee to raise their prices and increase their margins? None that I can see - and that is the stated strategy of all the major firms. What’s to stop that feeding into higher land prices?
What about the rest of the market? Imagine you stretched yourself to the limit to buy a tiny starter home. You now want to sell and move on. Suddenly all of your prospective buyers disappear to the new housing development up the road.
As research for HSBC revealed last week, there are up to 360,000 people who have bought a home since 2007 who are in negative equity. If those potential second-time buyers can’t move, neither will the market as a whole.
And the help for housebuilders does not stop there. A £400m Get Britain Building ‘investment fund’ will help unlock progress on up to 133,000 homes on stalled sites. Up to 90,000 of these are on sites that have not started and another 43,000 on sites where work has started but not finished.
Again the questions come thick and fast. Is this government money or investment from elsewhere? What’s to stop builders taking the money for these sites and stopping work elsewhere with no net increase in output?
And there’s a related boost for housebuilders that carries a nasty sting in the tail for housing associations too. The government will consult on a proposal to ‘require’ local authorities to reconsider Section 106 agreements on the stalled sites ‘agreed in more prosperous market conditions prior to April 2010’. Bye-bye affordable homes?
There is more of the same wherever you look in the strategy, much of it already announced but gathered here in one place. Builder-friendly planning changes. The government committed to reducing the regulatory burden on housebuilders in last year’s spending review. There’s the revised definition of zero carbon, the removal of centrally imposed standards on homes built on central government land and in January 2012 the launch of the Red Tape Challenge for housing, planning and construction to put all existing regulations under the spotlight. Bye-bye more affordable homes?
As for the rest of us, the document has plenty of reheated announcements interspersed with a few good ideas like the £30m fund for custom homes (the new name for self-build?) and another £50m for empty homes and yet another review of investment in private renting.
There’s a raft of consultations to come next month on things like Right to Buy 2. The document claims that initial modelling shows there can be one for one replacement despite 50 per cent discounts and the Treasury taking a 75 per cent share of the receipts. Effectively what’s left after paying off the debt would be added to borrowing against future income and free land to fund a replacement on affordable rent.
In the meantime, the Welfare Reform Bill continues to make its way through the House of Lords and peers will discuss the potentially disastrous household benefit cap this afternoon.
On top of all that the document has plenty to say about the problems caused by high house prices in the past without confronting the fundamental problem that they are still too high now.
It’s good to see that the government sees housing as a priority. But does what David Cameron claims is ‘radical and unashamedly ambitious’ and Grant Shapps says will challenge ‘the lazy consensus’ really deserve to be called a ‘strategy’ at all?
Instead it’s more a case of giving builders what they want and hoping for the best. Can they fix it? I don’t think they can.
EDITED NOV 22: The indemnity scheme is for all buyers of new-build homes (except buy-to-let investors and second home owners) and not just first-time buyers.
When an organisation as influential as the CBI calls for radical action to tackle the housing crisis it should be time to welcome a powerful new ally to the cause. I’m not so sure this time.
In a report published on Friday, the employers’ organisation said that ‘the government and businesses must adopt a two-pronged approach to deliver both short and long-term solutions to the housing crisis’.
In the short term it calls for measures to help first-time buyers by allowing them to access savings locked up in their pensions for a deposit and introducing introduce a mortgage indemnity guarantee (MIG) insurance scheme.
In the longer term it calls for a reduction in ‘regulatory drag’ on housebuilders and a pro-growth planning system to support the construction of new homes.
CBI director-general John Cridland said: ‘In the short-term, boosting activity in the housing market and construction sector could be a major game-changer for growth. Housing makes a significant direct contribution to economic output and job creation, and also has a big impact on business and consumer confidence and spending.
‘Despite five million people languishing on waiting lists because of the housing shortage, house building is at its lowest peacetime level for 90 years. A quarter of a million new homes are needed each year for at least the next twenty years to make up the shortfall.’
That had me turning eagerly to the full report to see what the bosses had in store. What I found instead was something that completely missed the point and, if the CBI has had the influence I suspect, makes me doubt just how much difference the growth and housing strategies due in the next two weeks will really make.
The document is almost entirely focussed on the housing market. Private renting gets one mention with a call for encouragement for institutional investment.
Affordable rent is welcomed as an improvement on social renting (‘a drag on our labour market flexibility’) with some concern expressed about the funding structure beyond the current spending review. And, apart from a call for more tenants to get the chance to buy, that’s it.
The rest of the report is devoted to the shrinking tenure of home ownership, with calls to free up the mortgage market and deregulate the development environment for housebuilders.
The CBI says first-time buyers should get more help and that the government should be prepared to back mortgage indemnity guarantee insurance if lenders, insurers and housebuilders cannot find commercial solutions. This would enable buyers to get more mortgages at up to 95 per cent loan to value rather than the current average of more like 80 per cent.
Meanwhile, first-time buyers should also be able to use up to 25 per cent of their pension pots as a loan to themselves to pay for a deposit.
Both measures would help some people get on to the housing ladder - but at what cost? Despite dutiful mentions of the need to avoid a repeat of the lending excesses pre-2007, the combined effect will surely be to make house prices even more unaffordable and increase personal indebtedness (a report by HSBC yesterday estimated that 360,000 people who bought in 2007 now cannot afford to move).
Unless of course there is a massive expansion in new supply to bring down prices (and rents) in the longer term. The CBI supports government action to ensure the planning system is pro-growth, release public sector land and allow more ‘build now, pay later’ schemes. It calls for reform of stamp duty and a block on any new financial regulations that will restrict the supply of mortgage funding.
But the CBI also wants a block on a drive to ‘reduce the regulatory burden on housebuilding’. It says the government has made a start in reducing regulation at the national level but that ‘the approach to deregulation looks to be even more fragmented and far less effective when considering local red tape, which must be addressed with equal resolve’.
Prominent on the list of those local demands are, of course, community infrastructure and affordable housing. There is an argument to be had about whether it is better for development to go ahead without an affordable element if the alternative is no development but it’s not at all clear how this will help the ‘five million people languishing on waiting lists’ in whose name the CBI calls for action.
And where are the guarantees that reduced regulation will actually lead to more housebuilding as opposed to the increased margins which all of the major housebuilders say are their priority?
All in all, this is a plan that seems likely to make housing more unaffordable and could even reduce the supply of affordable homes without any guarantee of the major increase in new supply that is so desperately needed.
The Localism Bill will just about have got Royal Assent when councillors in Wandsworth meet this week to discuss the council’s plan to evict new tenants who refuse to look for work.
The Conservative-controlled South London borough is looking to put itself in the forefront of local moves to get rid of the idea of ‘something for nothing’ in social housing with a ‘housing into work’ plan for new tenants.
In a press release published on Saturday, Wandsworth says that the new fixed-term tenancies will be conditional on finding work or enrolling on a training course. ‘New tenants who are able to work but refuse will forfeit their right to a home,’ it says.
Under the plan all new applicants will be on fixed-term tenancies and subject to periodic reviews to ‘ensure they receive continued support to help them find employment or engage in other worthwhile activities like voluntary work’.
It goes on: ‘Tenants who failed over the course of that fixed term to take steps to find work or improve their employment prospects would face the prospect of losing their council home. They would then need to secure their own accommodation.’
Housing spokesman Cllr Paul Ellis explained: “We are effectively creating a contract with selected new tenants to support and help them find a job or gain new skills. In return we expect them to take up these opportunities. People who refuse to meaningfully to look for work without good reason will forfeit their right to a council home.
“This isn’t about punishing people who are made redundant or cannot find a job. It is about having a way to penalise those who can’t be bothered to make the effort.”
It’s no surprise to see Wandsworth in the vanguard of councils looking to exploit the new flexibilities. The plan has been in development for some time and it fits entirely with the ‘hand up, not a hand-out’ rhetoric used by Conservatives.
It’s also planning to join the growing number of councils - Labour as well as Tory - that are planning to give higher priority on the waiting list to people in work).
When he announced this change over the summer Cllr Ellis was quick to draw comparisons with Labour’s ‘something for something’ policy as outlined by leader Ed Miliband and other shadow cabinet members.
And the new idea of a commitment to look for work carries more than a passing resemblance to the commitment contracts controverisally championed by Labour’s Caroline Flint when she was communities secretary in 2008 (even though Flint’s stress was on incentives rather than sanctions).
However, I wonder if a policy that sees the world in such black and white terms will survive an encounter with messy realities.
That after all is what happened with Wandsworth’s controversial pledge over the summer to evict the families of convicted rioters. As I blogged at the time, even before getting into the legal and moral objections, the policy was too much for right-wing columnist Peter Hitchens and even the Daily Mail thought twice about the policy when it discovered that the first family involved were active Christians.
As Inside Housing reported last month, the 18-year-old involved in that particular case has since pleaded guilty to buglary and comes to trial on a separate charge on December 12. It remains to be seen what will happen to Wandsworth’s notice seeking possession on the home where he lives with his mother and eight-year-old sister. With human rights organisation Liberty set to represent the family, it promises to be quite a battle.
The issues promise to be almost as messy with the new policy. For starters, who judges whether someone is ‘meaningfully’ looking for work? The council? Job Centre Plus? The private company that gets a bonus if they find one? If someone loses their disability benefits under controversial tests of their ability to work, should they also lose their home? If they do get a job, how much can they earn before they risk losing it because they are judged to be earning too much to need it?
How does it fit with other government plans to force people to do community work or lose their benefits? Or to penalise people who don’t work enough hours or earn enough?
As with the riots, why should people in council housing face a sanction not applied to people in other tenures? And why should housing be singled out as a sanction? Why not education or healthcare?
And with councils like Wandsworth be so busy looking for tenants to evict for not looking for work, or earning too much, or because someone in the household committed a crime, how will they have time for anything else?
As the Bank of England monetary policy committee meets to consider its next move, how about some quantitative housing to go with the quantitative easing?
Last month the MPC added another £75bn of QE to the £200bn it committed in 2009 and 2010. Broadly speaking, the idea is to buy UK government bonds to lower the yield, bring down long-term interest rates, make borrowing cheaper and get the economy moving again.
The side effects are an increase in inflation in general and asset prices in particular. Lower long-term interest rates means cheaper mortgages which feed through into house prices higher than they would otherwise have been - amplifying the effect of an artificially low base rate.
The winners from QE are bankers, London and the South East and people with shares and houses. The losers are savers who continue to get miserable returns, people about to retire whose pensions will be worth much less, would-be first-time buyers who cannot afford to get on to the housing ladder and private tenants facing soaring rents. Anyone on benefits will lose out too if the government goes ahead with plans to abandon the automatic uprating of benefits to inflation (CPI last month was 5.2 per cent).
So, with the MPC due to announce its decision on interest rates and QE later today, what’s the alternative?
To state the blindingly obvious, how about something that creates jobs and growth, stimulates the supply of something that is desperately needed and holds down house prices too?
Take last month’s £75bn. One month’s QE would be enough to build 750,000 homes at an average cost of £100,000 per home.
The idea of an alternative QE is not new. The left-leaning think- tank Compass suggested QE for a Green New Deal in its economic Plan B at the end of last month with investment in job-creating energy efficiency measures for existing buildings (in contrast to the FiTs fiasco).
The economic historian Lord Skidelsky has proposed developing the government’s existing idea of a Green Bank into a full-fledged National Investment Bank able to borrow money to invest not just in green projects but housing, transport and small business too.
Brian Green has been quietly pushing the idea of QE for housing on his Brickonomics blog for the last three years. Last month, he refined it with a £50bn plan to build 500,000 homes and net £10bn for the Treasury into the process.
The idea is a new form of QE where the Bank of England buys bonds in a time-limited Public Interest Company with a remit to build homes that it will in future sell on to the private or social sectors.
The £10bn for the Treasury comes from the jobs created. Every unemployed construction worker put back to work nets the Treasury £25-£30,000 in benefits saved and taxes generated. The Home Builders Federation estimates that every home built creates 1.5 jobs directly and twice that number in the supply chain, so £10bn (£20,000 x 500,000 homes) is a fairly conservative estimate.
Even if all of the homes were at market rents, or all of them were eventually sold, the gains would be huge at a time when there seems little prospect of the market delivering enough new homes to meet demand. Rents could pay any interest in the short term and future sale proceeds could go back to the Bank of England.
Compare that to what we have now: housing starts at half the level required to meet demand; a generation of young people priced out of the housing market; soaring rents and a soaring housing benefit bill.
It seems such a no-brainer that you think there must be a catch. Wouldn’t it just increase the deficit? No, because it wouldn’t count as public borrowing - and in any case the package of homes could be designed to deliver a rental income in the short term and more than repay the bonds in the long term.
The Bank of England would object to moving outside of its financial comfort zone. The government would object to anything that smacks of a Plan B and financial sleight of hand but will it come up with any better ideas in its growth strategy later this month?
What stands in the way of this idea this is not money but a mind-set. And it has to be a better bet than the Plan A-Plus advocated by the CBI yesterday to land people with more expensive mortgages just as we go into a double dip recession.
Some might say about time too but it’s still good to see some Lib Dem influence on housing at last.
This week has already seen signs of the party’s influence within government (with the announcement of council tax changes on second homes and empty property) and on the backbenches (praying against cuts to the shared room rate).
Unfortunately, it has also seen the Lib Dems accused of sabotaging amendments to the Legal Aid Bill that would have helped people facing repossession.
It’s a pattern that has become familiar under the coalition with Lib Dem ministers emerging from near invisibility to nudge things in their direction or put a questionable gloss on government policy and and backbenchers promising principled opposition only to melt away when it comes to the crunch.
Those council tax changes first. At first glance, the plans announced by Eric Pickles on Monday actually look like like a real achievement for Lib Dem housing minister Andrew Stunell. A consultation paper proposes that councils should have the option to charge full council tax on second homes and empty homes and seeks views on whether councils should be able to levy an empty homes premium on homes empty for more than two years. At the moment second homes get a 10 to 50 per cent council tax discount and empty ones a 100 per cent discount.
Both are Lib Dem priorities, as Stunell was not slow to argue in his speech to the party conference in September or in a piece on Tuesday for the Libdemvoice website. They will not go far enough for many party members - at CLG questions on Monday Pickles squashed a suggestion by Lib Dem MP Stephen Gilbert that councils should have the power to limit the number of second and holiday homes in their area as ‘rather difficult and open to abuse - but, hey, that’s the nature of coalition.
More troubling for the party in the long term may be the spin that sources close to Pickles applied to the announcement in advance: that the coalition’s decision not to conduct a council tax revaluation effectively rules out the Lib Dem case for a mansion tax on homes worth more than £2 million. That also scuppers the party’s fairness argument that if the Tories want to scrap the 50p tax rate they should replace it with the new property tax.
The opposition to the shared room rent cuts emerged in an early day motion sponsored by Lib Dem backbenchers John Leech and Adrian Sanders plus Labour’s Jeremy Corbyn and Alan Meale and the Green Party’s Caroline Lucas. Since signed by five more MPs including two more Lib Dems (Gilbert and Andrew George) it’s a technical move to ‘pray against’ or oppose a cut that will otherwise be introduced by secondary legislation. Gilbert tells Inside Housing that he hopes it will make the government think again.
It remains to be seen whether it will make any real difference. Time after time in the Commons over the last year Lib Dem backbenchers have spoken out against other housing benefit cuts in the Welfare Reform Bill or housing changes in the Localism Bill only for most of them to melt away when it actually comes to a vote.
And that seems to be what happened in the Commons on Monday night in the report stage debate on the Legal Aid Bill. The Lib Dems had put down amendments preserving legal aid in cases including earlier advice for people facing repossession.
However, a furious Labour justice spokesman Andy Slaughter told The Guardian: ‘Several times last night Liberal Democrats made speeches lauding legal aid, but when asked if they would push their amendments to the vote, declined and said they hoped the Lords would intervene.
’They then voted against Labour amendments that had the same effect as their own amendments. As the day drew to a close, they further allied with their Tories to filibuster so we wouldn’t reach social welfare legal aid. It’s all part of a disgraceful new set of tactics designed to allow Liberal Democrats to have their cake and eat it too.’
A Lib Dem spokesman said they may have been probing amendments to stimulate debate and that their MPs may have taken the view that the government might change its mind once the legislation reached the House of Lords.
It’s hard being the junior partner in a coalition. You have to negotiate things in the background and it’s hard to make rebellions in parliament count when half of your MPs are on the government payroll and bound to vote for it.
Sometimes you retreat into self-delusion about your real achievements (as with Stunell’s glossing over of the difference between social and affordable rent and Steve Webb’s claim that criticism of housing benefit cuts is ‘exaggerated’).
But the strategy of waiting for the government to change its mind does not seem to be a great success so far.
It was debut day yesterday for Labour’s new team at communities and local government (CLG) questions yesterday. Can they do better in challenging the Tory dominance of the debate on housing?
As I blogged a couple of weeks ago, the Conservatives have been very successful in advancing an agenda that looks remarkably similar to the one put forward by think-tanks like Localis and Policy Exchange. That’s been due in part to a lack of effective opposition from a Labour party still recovering from election defeat. Was it also due to a lacklustre performance from Caroline Flint and Alison Seabeck?
Fair or unfair? Yesterday was the first big opportunity to find out as Labour’s new CLG team - Hilary Benn captaining the side from the back, Jack Dromey promoted to play up front and Roberta Blackman-Woods, Helen Jones and Chris Williamson drafted in to harry the Tories in midfield - went head to head with Eric Pickles and Grant Shapps and their water-carriers Andrew Stunell and Greg Clark.
With Benn, Jones and Williamson asking local government questions, it was Blackman-Woods who got the first chance to put a tackle in on housing (in this case the NPPF). Were the fears of the National Trust and the CPRE likely to be allayed, she asked Greg Clark, ‘by the revelation that Treasury officials were much more involved in writing the national [planning] policy framework than were enviornmental planners’.
It was predictable stuff from an opposition looking to embarrass the government but depressing for anyone who believes in the need for more homes. There are plenty of problems with the NPPF, especially on affordable housing, but it remains an essential counterweight to some of the nimbier elements of the Localism Bill.
In any case Clark neatly eluded the tackle by claiming that the report was incorrect: officials from many different departments, including the environment ministry DEFRA, had taken part.
Next up was the big clash between Dromey and Shapps. The Labour man went on the attack accusing the government of mismanaging the economy so that house prices and housebuilding are falling and people cannot get mortgages. The housebuilding industry would be on its knees without the 60,000 homes commissioned and paid for by the Labour government.
‘Will the housing minister now back Labour’s call to repeat the bankers’ bonus tax in order to build 25,000 homes and create tens of thousands of jobs and apprenticeships? Will he also work with lenders and the house building industry to introduce a mortgage scheme that will offer hope to those who wish to buy their own home that they will be able to realise their dream?’
The response from Shapps was the equivalent of a player who stops and puts his foot on the ball to taunt the opposition. He welcomed Dromey as ‘the eighth housing spokesman or deputy on the Labour side whom I have faced in government or in opposition. I hope he stays there longer than the previous incumbents.’
Shapps went on: ‘I think the main questions are about the new homes bonus, the HomeSwap Direct scheme, the opposition to £100,000-salaried tenants in council homes and whether the gap in policy and the constant switching of Ministers are going to come to an end, because without that the Opposition have nothing to say about housing policy at all. We are starting to get homes built in this country for the first time in years.’
Over on twitter Shapps and Dromey have been involved in a lengthy dispute on twitter about HomeSwap, leaving many to wonder if this is really the big issue facing housing at the moment.
And Dromey was back on twitter later with a barb about the latest house price figures from the Land Registry: ‘Government mismanagement of economy pushes house prices ever downwards. 2.8% fall,’ he tweeted. ‘The 1980s negative equity spectre haunts Britain again.’
Again, this is predictable but depressing. Does anyone seriously believe that a gradual fall in house prices that makes homes more affordable again is a bad thing?
Shapps can, and should, be accused of many things but he still deserves credit for admitting the fundamental problem that house prices (and rents) are too high. By attacking him over that 2.8 per cent fall Dromey seems to be indicating that he has learned very little from the boom and bust under the last government.
Rather like a football team that surges forward and gets picked off on the break, Labour seems to have got its tactics badly wrong. It has got itself into a place where it is opposing the wrong things at the same time as Ed Miliband’s stance against ‘something for nothing’ appears to endorse further Conservative attacks on the most vulnerable.
As its policy review continues, has Labour got anything new to say about housing? Or is Shapps right?