Shadow Housing Minister Dromey tells RICS: Housing needs greater focus
By Tim Wainwright, Parliamentary Affairs Officer
Mike Newey FRICS, RICS Vice President opened the 2012 RICS Housing Conference held on Thursday 19th January and introduced the keynote speaker Jack Dromey MP, Shadow Housing Minister. Mr Newey said RICS, in the public interest, has a role to agree, challenge and partner with parliamentarians to develop policy which has a real impact on the housing market. RICS looks forward to informing the work of the Labour Party who continue to welcome expert advice from RICS members. RICS held a productive roundtable discussion with Dromey’s predecessor Alison Seabeck MP at the Labour Party Conference last October. In advance of Dromey’s speech Mr Newey had taken a look at his tweets. Twitter is quickly becoming a good gauge of a politician’s key focus! (Parphrased) Tweet 1: Let’s build Britain out of recession. Tweet 2: Collapse of housing not due to old people not downsizing but lack of housing. This was a reasonable prediction of what was to come.
Dromey opened stating that decent homes for everyone is a basis of the Labour Party. Central to his speech was that he felt that housing hasn’t been a high enough priority for more than 25 years through both Labour and Conservative administrations. He was looking forward to working with RICS, feeling there was a need to be optimistic despite the current problems, and hoped a partnership could be formed to move housing up the agenda. He paid tribute to RICS’ contribution to land, property and construction.
Dromey highlighted the current crisis has seen a decrease in housing starts and growing gap between need and the number of homes built. Currently first time buyers are unable to access homes, access mortgage finance and are forced to confront soaring rents in the PRS. There is a general consensus that there needs to be 240,000 new homes built each year however demand, equivalent to the size of Birmingham, is set to outstrip supply by 2015. The gap on home supply and demand could potentially reach 750,000.
As we have often heard the Labour Party believes that the current policy of cuts by the coalition government is too far and too fast and is choking the economy. Whilst welcoming some aspects of the Housing Strategy, Dromey did not welcome the overall direction of travel from DCLG and sees the strategy as over ambitious. He pointed towards an Inside Housing study into the ineffectiveness of the New Homes Bonus (NHB). Dromey felt the strategy is a one Parliament policy because DCLG didn’t make the case for long term housing need during the spending review period. Furthermore he felt there is currently a lazy housing consensus from government.
In contrast the Labour Party plan is to place housing further up the agenda not just in Parliament but amongst wider society. Labour is to put housing in its wider context and form coalitions of interest to make the case for better housing. They will link housing and its effects to education, crime, health and the broader economy. On the wider economy, Dromey highlighted the statistic that for every £1 spent in the construction industry it creates a wealth to the economy of around £3.50 and would be a huge boost to the growth agenda. On health, he discussed the evidence that poorly insulated houses result in more cases of flu and hypothermia with overcrowding spreading disease. On educational attainment, Jack posed the question where does a child do their homework when they are forced to share a room and their parents use the lounge as a bedroom?
The Labour Party is set to create a national movement on the housing crisis through a coalition of actors. In a few weeks time the Labour Party are set to release research into the multiplier effect of £1 billion worth of public investment and the benefits it would give to the housing market and the construction sector. Labour is continuing to call for a temporary reduction in VAT of refurbishment to 5% plans to kick start the economy and something RICS supports. RICS will work with Dromey to examine the opportunities for long term capital investment in homes.
In conclusion the current direction of travel is wrong. Labour has a two stage process; 2012-2013: developing dynamic partnerships, working with industry and local authorities and looking at innovations for new build and the PRS; 2014-2015: shaping policy for a Labour government in 2015. Above all the Labour Party is going to put housing centre stage. RICS will be there to provide independent advice to aid their policy development.