Queen’s Speech — House of Lords, 2015-06-04
Topic: Macroeconomics
Benjamin Stoneham (Liberal Democrats, Centre to centre-left): My Lords, I declare my interest as chair of Housing & Care 21, the housing association. I also welcome the noble Lord, Lord O’Neill, and wish him well in building on the crusading work of the noble Lord, Lord Heseltine, in reviving our northern cities. He will have our fullest support from these Benches in this endeavour. I also welcome back the noble Baroness, Lady Neville-Rolfe, and look forward to scrutinising the Government’s business and skills agenda in the coming months I also congratulate the noble Lord, Lord King, on his maiden speech. All the published histories of the coalition formation quote him as warning the negotiators at the time that whoever entered government would be out of power subsequently for the next generation. If he did say this, he was evidently only half-right. As for the other half, I take it that our resilience and defiance on these Benches still have five to 10 years to prove him, and the noble Lord, Lord Finkelstein, wrong As part of this resilience, I want to thank the nine of my colleagues who spoke in this debate and to welcome my noble friends Lady Kramer and Lord Newby to the Liberal Democrat Front Bench after their outstanding service in the coalition Government. We quietly hope that the Government will miss them and that the country will notice. While I thank my colleagues for their contributions today, I think that it is a requirement also to express thanks and appreciation for the work of Vince Cable, Danny Alexander, Jo Swinson and Ed Davey, who played a big part while they were in government in helping the economic recovery after the recession in 2010 It has been an excellent debate with some remarkable contributions, so I will not hold the House up by repeating them, but I want to draw three fairly concise conclusions which I think the Government need to focus on. As labour markets tighten, living standards will be improved in a sustainable way only if we can improve productivity, but we must be wary of top-down initiatives to improve overall productivity. Overall productivity improvement depends on tens of thousands of small businesses taking decisions to invest more. They simply require stability, confidence, the wherewithal and the encouragement to invest I share the view of the noble Baroness, Lady Wheatcroft, that better management is needed. As our motor industry and our sporting teams show, better foreign managers are transforming these sectors. We need to develop more skills at home. Getting the talent out of the City to run things may help and I hope that the noble Lord, Lord O’Neill, will show the way Economic growth is not yet balanced enough to be sustainable and to avoid some of the pitfalls of the past. The coalition made huge steps forward in the jobs market but economic growth still remains too reliant on rising consumer expenditure financed on credit and encouraged by rising house prices. We all know where that leads. Business investment is still too low and the deficit in the current trade account matches the deficit on public expenditure as a major problem. The worry is that stronger growth and the net trade deficit may well worsen unless we make more of what we consume as a country During this debate I was pleased to go back 30 years and find myself agreeing with my old friend and colleague the noble Lord, Lord Horam, about making housing the number five priority for the Government and about its importance to the economy. I wish to draw attention to the importance of housing because it impinges on the performance of our economy Rising property prices due to shortages still encourage overinvestment in property rather than investment in business, particularly at the top end. The Government’s preoccupation with encouraging owner-occupation is simply stoking demand rather than addressing supply. I disagree with the noble Lord, Lord Skidelsky—we do need to concentrate on supply: "supply, supply, supply" should be the Government’s focus in housing. Like any other sector, it needs a plan, a partnership between all the housing sectors, private, public and voluntary It would be a tragedy if this Government got waylaid by a pointless political debate on the right to buy from housing association stock. I hope they have the sense to step back from this issue. I further hope that Greg Clark will recognise the need to act quickly if we are to approach a figure of 1 million new homes in this Parliament. The right to buy from housing associations will undermine efforts on the supply side. It is not the same as selling council houses. Housing associations build for sale and for shared ownership; they build affordable houses. There is a compromise if the Government will stop and think. If we cannot have a coalition deal to get rid of this ridiculous policy I hope that Greg Clark will have the good sense to find a way through It was noticeable in the early years of the coalition Government that the Conservatives had a blank spot on social housing. Housing associations make a huge contribution and can do more if we utilise their balance sheets better, improve their efficiency and involve them in major regeneration schemes. I urge the noble Lord, Lord O’Neill, to look carefully at the recent publication by the noble Lord, Lord Adonis, on the concept of city villages and how we can use the old council estates for regeneration by turning them into a partnership where we sell some houses, build some houses for rent and build affordable housing for people in social need. These are the measures that we need to increase housing supply. We can use that land and those estates to generate more housing These are the kinds of measures by which we, on these Benches, will judge the Government on their one-nation approach. As it did for Macmillan, housing played a vital role in strengthening the economy in the 1950s as well as having important social effects and benefits. It should do so again.