Intergenerational Fairness in Government Policy — House of Lords, 2017-10-26
Topic: Housing
John Warren Shipley (Liberal Democrats, Centre to centre-left): My Lords, I too thank my noble friend Lady Smith of Newnham for enabling us to have this debate. It is a particular pleasure to follow the noble Lord, Lord Bird, and to listen to his experience, because that experience is of such enormous value to this House, particularly that relating to the prevention of poverty and ill health. I wish him very well with his campaigning. I, too, am a baby boomer. I was born into a very different world, with very limited opportunities for travel, for example, and many more limits in terms of consumer goods and communications. I entered married life when we saved up to buy things, and we had no credit cards. I noted the comments of the noble Lord, Lord True, about the fact that we are simply in a very different world. It is not necessarily a better world or a worse world: it is simply a different world. I had the benefit of a final salary pension, which I obviously still enjoy. I went to university with my fees paid and I had a grant towards living costs. Of course, in those days, very few people went to university; these days, many people go to university, and, as we have learned, there is now a huge national debate taking place about issues of student support I thought that my noble friend Lady Smith of Newnham was right to say that this is a long-term issue that needs vision and inclusive thinking. I also think that the contribution of the noble Lord, Lord Willetts, was particularly important, partly because he is a member of the Intergenerational Commission. He reminded us that the equitable distribution of resources should be at the heart of government policy, and I concur with what he said. If our debate today helps that national debate, we will have done the issue a service. I emphasise that I, too, do not see the debate on this issue as being about conflict between generations. It is, rather, about being aware that today, average pensioner household incomes exceed those of non-pensioners after housing costs are taken into account. That is evidence of intergenerational unfairness The latest facts on housing are of great concern. In July this year, the average price of a domestic property was £226,000. It had risen by £11,000—or 5%—over the previous year. The number of new affordable homes —that is, the sum of those at affordable rent, social rent, intermediate rent and affordable home ownership—fell in England from 66,000 in 2014-15 to just 32,000 in 2015-16. The English Housing Survey tells us that, on average, households in the private rented sector had higher housing costs than those with a mortgage The Government have undertaken a number of measures in an attempt to alleviate some of the problems relating to housing. They have introduced Help to Buy, which was needed to help those facing high prices with limited incomes. It has helped people to buy some 135,000 properties, which in turn has helped to boost housing supply in a limited way. There is, however, also evidence that it has encouraged an increase in house prices and supported the speculative development model which results in builders paying high prices for land and subsequently land banking it. As I have said on a number of occasions, we need taxation to be levied on those who deliberately sit on land on which they have secured planning permission but not built The Government have undertaken a number of measures, such as the housing infrastructure fund and the homebuilding fund, which have only tinkered with the problem of demand vastly outrunning supply—for the big problem in housing is supply. The Government have published a White Paper about it and are about to publish a Green Paper on the future of social housing. Then, last weekend, the Secretary of State intervened to say that the Government should borrow more to build homes, something that these Benches have regularly called for. Although he was right to do so, the Treasury is being difficult. We therefore now have an unhelpful public disagreement within government. The Government have a problem with their commitment to build 1.5 million new homes by 2022, but it is essential that those homes get built to reduce the impact of the shortage of homes not only over that period but in succeeding years. Doing so will require public support for direct government intervention in further measures that will directly help young people The evidence of inequalities is becoming pretty stark. The OECD recently said that the Government have allowed regional and intergenerational divisions to worsen, leaving millions outside the south-east in low-skilled jobs. The Financial Conduct Authority has said that one person in six would not cope with an increase of £50 in monthly bills. Many of those are young. The Institute for Public Policy Research this month reported that young people were being left further behind. Half our country—many of them young—have average household wealth of £3,200, whereas the richest 10% own 45% of the country’s wealth. The International Monetary Fund said very recently that it is time to tax the rich to help the poor. I concur with that. When we read that 15 million people of working age in this country are not paying into a pension, we should be very worried As an example of what the Government are doing wrong, we could look at the changes made earlier this year in housing benefit entitlements for 18 to 21 year-olds, when the age of majority is 18. It is a form of discrimination as it takes money away from younger people. Let the Government build more houses by direct intervention and let us now lead a national debate to ensure that we improve intergenerational fairness and not simply think about who can secure the most votes at the next election.