Rt Hon Lord Lilley

    Mr Peter Lilley (Hitchin and Harpenden) (Con): I want to discuss a subject that strangely we often shrink from discussing in any depth: the housing shortage in this country, its consequences, its causes and its cures. Reflecting over the years on both the social and the economic problems of this country, it strikes me that almost all the social problems and many of the economic ones are either caused by or aggravated by a shortage of housing. This is true not just of homelessness, overcrowding and the huge housing benefits bill—the fastest rising benefit bill and one of the largest components of the Department for Work and Pensions budget; it is also true of the benefit trap and the resultant disincentive to work, in that so many people have housing benefit even if they are in work and consequently suffer a loss of benefit when their earnings go up, and of family breakdowns, single parenthood, declining home ownership, and the inability of young people to leave home. All these problems are aggravated by the housing shortage. Now the average age of first-time buyers in London is the late-30s, which is dramatically different from a generation ago.

    There are also economic problems: the level of debt, the diversion of lending from business to mortgages, and the mortgages cycle. They, too, are all aggravated by this housing shortage.

    The causes of our having the highest prices and the highest rents in Europe and ever-longer waiting lists are simple enough: the number of households is outstripping the pitiful level of new house building. There are two main factors accounting for that. First, there are smaller households. Over the years, the average size of households decreases by roughly 0.5% as people live longer; often there is one of a couple living in the home; or the children might have left home so there are just the parents living in the home. The average size of households is declining, therefore, and, sadly, family breakdown adds to that trend. We would have to build a 0.5% addition to our housing stock every year just to cope with that factor, and we are barely doing that.

    The other factor we are strangely reluctant to discuss is the fact that we are now a country of mass immigration. Since Labour took the brakes off immigration in the late ’90s, between 2 million and 3 million additional people have come to this country. For centuries this country was a net exporter of people. Rather bizarrely, now that we are one of the most densely populated countries in Europe, we are a net importer.

    I find it strange that many people argue that immigrant numbers are not the problem so long as we have the right sort of immigrants. They say that so long as we exclude scroungers and the unskilled and so on, numbers do not matter. The situation is almost the reverse, however, because the sort of people we have had are overwhelmingly decent, hard-working, law-abiding people who come here to make better lives for themselves. The idea that they are qualitatively wrong is nonsense, insulting and racist. It is numbers that matter. It is numbers that have contributed and added to, and aggravated greatly, the housing shortage in this country. Very few people come to this country to claim benefits, although that is the focus in the discussions we have in this country, but all of them need homes, and all of them are going to occupy homes that otherwise would be available for the people already here.

    I wrote a pamphlet back in the early part of this millennium entitled "Too Much of a Good Thing?" I hope that title makes clear my view of immigration: immigrants are basically decent, nice people—fellow human beings, children of the same God, people we should love as our neighbours when they live next to us. But we are foolish to invite too many people into this country. I was caused to publish that pamphlet by looking at the housing shortage and the reason for the rising demand for house building in this country, and I was immediately labelled a racist and an attempt was made to shut off the debate. I hope we can stop doing that, because we will never solve the problem if we do not understand its cause.

    Mr Andy Slaughter (Hammersmith) (Lab): I agree absolutely with the right hon. Gentleman that this subject is important, and it is the subject I am going to speak about, but I disagree with everything he is saying about it. There are 50,000 new homes being built in my constituency—a small, densely populated constituency—over the next 20 years. The majority of them will be sold off-plan to overseas investors, not to immigrants to the UK—not to people who now have British citizenship or are acquiring it. They will be sold in that way for a profit because mainly Conservative councils do deals with developers to sell them in that way. That is the root of the housing crisis, in London at least.

    Mr Lilley: The hon. Gentleman is simply factually wrong. It contributes to the housing problem, but to a small degree. I advise him to read an article in City A.M. last week which got the figures for the number of such new unoccupied houses in London, and it is very small. It contributes to the problem, and if it is bigger than I think, I entirely agree with him that we ought to tackle it , but to suggest that it has anything like the impact of allowing 2 million or 3 million extra people, and every year an extra 200,000 or quarter of a million, into this country is simply to try to divert people’s attention from the self-evident realities. Let us deal with all the problems, including the problem the hon. Gentleman identifies, but we should not try to pretend that there would not be a problem if that issue were to go away.

    The only answer in the long run is to build more homes. We cannot pretend that we can solve the housing shortage by manipulating house prices or house rents or mortgage interest rates. Whatever the price of a bottle, we cannot get a quart into a pint pot. If we have more people here, we have to build more homes here. I am not suggesting that we undo history. The history means there are more people here, and we have got to build more homes if we are to overcome the social and economic problems that result from a housing shortage.

    If there are 2 million or 3 million more people here, we have to build a corresponding number of additional homes, because those people by and large are of child-bearing age, they will want to form households and we have to accommodate that. We also have to avoid the excuses that are often given for not building homes, not least in my constituency. I have a Hertfordshire constituency, and Hertfordshire is the most densely populated county outside central London. None the less, we have to build more homes there and avoid the excuses for not doing so.

    The first excuse for opposing any proposal that gets planning permission is, "They’re the wrong type of houses." In Hitchin people say, "They’re too small. There are too many flats, and we don’t want to build any more flats. Any new proposal must be stopped because it is for small homes or flats." Elsewhere they say, "They’re too big. We don’t want those. If we have got a housing shortage, we should be building the small homes for first-time buyers and flats." We must avoid seeking refuge in excuses. We probably need more of all kinds of property, including flats, small starter homes and larger family homes.

    The second excuse that people use in Hertfordshire is that immigrants do not come to our area. By and large, that is true: the vast majority go to central London or to areas with an existing large immigrant population, including Luton. I see my distinguished neighbour, the hon. Member for Luton North (Kelvin Hopkins), nodding in agreement. Immigrants tend not to come to Hertfordshire, but the people who would have lived in the homes in central London that are now occupied by people from abroad—or kept empty by people from abroad, as the hon. Member for Hammersmith (Mr Slaughter) says—do move out to the home counties. We cannot pretend that that does not happen. We cannot just shut the gates and pull up the drawbridge and pretend that we are not going to accommodate them. We have to accommodate more people.

    The third excuse that people use is that we cannot build new homes because there is no infrastructure to support them, and if we build, it will just create a demand for such infrastructure. However, it is not houses that create that demand for more schools, hospitals, roads and water; it is people, and the people are already here. It is people, not houses, who consume water and who need hospitals and schools. The people are here, and we need to provide the infrastructure and the homes for them. We cannot pretend that the lack of one is an excuse for not providing the other.

    The housing shortage creates problems for people like me who represent densely populated constituencies whose distinctive feature is the green belt. When I was first elected, I made the defence of the green belt a feature of my maiden speech. I pointed out that the one thing that united the diverse settlements in my constituency was the desire to remain separated from each other by strips of green belt. They should indeed remain separated in that way: the green belt is a vital and valuable part of our planning law, and we should attach enormous importance to keeping it. However, that means that we must build elsewhere, on brownfield sites or using infill development, unpopular though that often is.

    New towns will also have to be built, not too far from London. We cannot pretend that this can all be done in the north of England. We cannot tell people to go and live in the north, or give them incentives to do so. There are already enormous incentives to move out of London and the home counties to the north. Anyone who sells their house in Harpenden can buy an equivalent property in the north of England for a fraction of the price and live off the investment income from the rest of the money. There are therefore already enormous incentives, but if people still have a desire to live in London and the home counties, that reflects the reality of economic and other forces that have to be taken into account.

    We must do everything we can to stimulate and promote growth in other regions, but let us not pretend that we can avoid the need to build homes in and around London. We must do that, and we must avoid the excuses that have been used to prevent us from doing it. We must defend the green belt, but we must not be so hypocritical and bigoted as to pretend that we can have no housing at all elsewhere. I hope that enough of us will have the courage to say that, so that we can at least double the rate of house building in this country, as we must do if we are to tackle the underlying economic and social problems. If we do not do that, we will continue to suffer indefinitely.