Speech

Deputy Prime Minister’s speech to National House-building Council

Deputy Prime Minister Nick Clegg gave a speech on housing to the National House-building Council on 22 November 2012.

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First, let me thank the National House-Building Council for inviting me to your annual lunch in this, your 76th year.

There are many reasons why the NHBC has been such an enduring force in British house building, not least your ferocious defence of quality, the trust you inspire among both the industry and homeowners and, very simply, because you’ve always understood that house building is about more than bricks and mortar - it’s about homes.

Our homes are where we grow up, where we raise our own families, where we grow old.

They tell the story of our shared, national experiences - you can plot our history by our houses: the UK’s industrialisation, two world wars, the technological revolution, the population boom. Events that have been embodied in the kinds of houses we have built, and which have directly shaped the ways our towns and cities have grown.

Our homes equip us for the future. They are the key to vibrant, diverse communities where people can live, work and prosper. And, in perhaps our greatest modern challenge, the fight against climate change, homes that save energy will be absolutely crucial too.

That’s why the Coalition remains committed to the target for all new homes to be zero carbon from 2016 - and we’re grateful to the NHBC for their support for the Zero Carbon Hub.

So the houses we build allow us to be who we are. They remind us of the nation we once were. They are critical to the country we intend to be. And I’d like to pay tribute to the industries represented here today for the part you play in that.

It’s that last part I want to concentrate on: the country we intend to be.

I came into this Coalition Government to build a stronger economy in a fairer society, so that everyone can get on in life.

That has meant immediate action to pay down the deficit and pave the way for growth - of course. But it also means looking further ahead, too: 10, 15, 20 years down the line. And that’s where Britain’s house builders could not matter more.

Think about where lasting prosperity is going to come from. We need to create an economy that doesn’t rely so heavily on our big banks, where growth is driven by a much more diverse private sector filled with entrepreneurs and small and medium sized firms, spread across the country.

An economy where people with good ideas have a real chance of starting a business.  Where firms seeking to grow can find the staff. Where young men and women can fulfil their potential.

Everything this Coalition does is geared towards that vision. Whether that’s investing in education and skills, prioritising infrastructure, cutting red tape, reforming tax and welfare to make work pay, giving local areas much more power to drive their own prosperity - the list goes on.

But, bluntly, no matter what we do, Britain will not finish this journey unless we build enough houses. That’s the absolute basics.

Our communities will only sustain strong local economies if they can attract and house the employers, high-skilled workers and consumers they need.

And right now, the numbers are not looking good.

We’re already building 100,000 fewer houses than we need each year. Over the next decade, each year, the UK’s going to grow by around 230,000 households. Last year we managed to complete 117,000 - just over half.

The credit crunch has certainly exacerbated the problem - with mortgages and deposits harder to come by.
But this housing crisis has been a long-time in the making: we’ve been under-building for decades.

Unless we take radical action, we will see more and more small communities wither, our big cities will become ever more congested as we continue to pile on top of each other,  and the lack of supply will push prices and rents so high that unless you or your parents are very rich, for so many young people, living in your dream home is going to be a pipe dream.

We’re already at the point where, on average, if you don’t get help from your parents, you can’t afford to buy your first home until you’re thirty five. The risk is that’s going to get even worse.

And what’s most staggering about all of this is: everybody knows it. Every political party agrees this is a problem. Every Government promises to fix it. But, until now, the political establishment has been overwhelmed by the scale of the challenge, tinkering round the edges and responding with timidity, where only ambition will do.

It’s not hard to understand why. The local politics of new development can be very tricky, and we face some challenging misperceptions.

A few years ago the Barker Review found that if you ask people how much of the country they think is built-up, most say over half. The same study found that it’s actually more like 13. 5%.

And now, with very little money around, it’s an even bigger challenge to work out how to build more homes at a time of fiscal restraint.

But the hard realities can no longer be ignored. There’s only one way out of this housing crisis: we have to build our way out.

And, just as the urgency should propel us to act, the politics of house building is, in my view, shifting - and that should embolden us too.

New development will always make some people uncomfortable. It’s absolutely right that we are vigilant against environmental damage, and we always strive for development that is sympathetic to its surroundings.

That’s why, when the Government reformed planning law last year we listened to campaigners and made sure important protections were kept in place.

But we’re also witnessing a kind of generational shift in this debate.

The babyboomers of the 50s and 60s, people who were largely catered for by the massive housing expansion after the Second World War, are now watching their children struggle.

The plight of the next generation is making what was an abstract housing shortage increasingly tangible and real.

Parents don’t want their sons and daughters frozen out of the property market. They want them to have safe, affordable options, close to work, close to public transport, close to hospitals and schools.

Rural areas don’t want to become dormitories for the rich and retired. They want young families to stay in the area to help keep the community alive.

And as we, as a society, become more open to development, that creates the space for politicians to be bold. 

So now is the moment for politicians of all stripes to get behind a major housing push.
This will need to span more than one parliament. We need to work together, and we need to be ambitious in our approach.

And we need to recognise the constraints of conventional policy-making.

The Coalition Government has already taken major steps to boost the housing market:

We’ve massively streamlined planning regulation to encourage sustainable development.

We’re helping buyers. Under FirstBuy, for example, we’re partnering with developers to provide loans for first-time owners. 7,000 homes have now been sold. Under NewBuy, we’ve reintroduced the 95% mortgage. There’s always a time lag with new products, but Newbuy’s already helping with over 2000 sales and the numbers are picking up each month.

Despite the clear fiscal pressures, we’re putting up huge sums to boost supply, guaranteeing up to £10bn of investment in homebuilding - in the private and rented sectors. We’ve set aside £1bn of New Homes Bonus to encourage local delivery.  We’re bringing over 15,000 empty homes back into use. We’re delivering more affordable homes than the previous government and we’re on track to build 170,000.

And I can also confirm today that the European Investment Bank will be injecting £400m into the UK affordable housing sector. That money will be allocated by next March at the latest and will help deliver new energy efficient affordable homes - as well as improving the energy efficiency of existing homes too.

Together, that’s a big and comprehensive package, but we also understand that we need to do more. Because no matter how much we deregulate, no matter how many empty homes we help convert, no matter how much we help with mortgages, these interventions cannot deliver homes at the scale we need. They are geared to stimulate today’s market - and that’s important - but today’s market cannot anticipate tomorrow’s need.

And our planning system, as it is, simply isn’t producing enough homes.

When my officials looked, they couldn’t find any records of a single new development of over 13,500 homes in this country since the 1970s.

We simply don’t have the right incentives and levers to drive sustainable development at scale - and that needs to change.

When the need for houses is so great, it’s not enough to have a planning system.
You have to have a plan - and you have to think big.

So, I can announce that the Coalition has identified major housing projects that have hit a wall - and we are intervening directly to unblock them.

We are working with a number of large locally-led schemes, ranging from 4000 to 9,500 units in size, which in total will deliver up to 48,600 new homes. 

Including, among others, in Cranbrook, Fairfield, Northstowe, East Kettering.

These sites have been held up for various reasons - cash-flow problems following the banking crash, bureaucracy and licensing issues, a lack of upfront investment for infrastructure - some for up to ten years.

And while all of them have strong local supporters, their communities are, understandably, becoming frustrated by these delays.

So we will unlock the barriers to investment.

We will make sure that bureaucracy does not hold back these developments: bringing partners together to get action on the ground.

And, where investment is required, I can announce new funding: we will provide £225m of government money, which will also leverage private investment to effectively de-risk these projects and get them moving.

We will work with prospective developments and ensure that any public sector investment secures value for money from the taxpayer.

And once these developments are complete, the taxpayer will get that money back.

That’s a first step. But we need to go further. We need to go back to our roots.

In the early 20th Century the great planners of the time - Ebenezer Howard, Raymond Unwin - were tasked with housing Britain’s workers following industrialisation, and they realised they would have to build anew as the Victorian slums were cleared away.

They drew up plans for modern, self-contained, green cities. Places which offered the dynamism and opportunity of urban living but maintained the harmony and natural beauty of country life as well.

Where industrial hubs, green spaces and residential areas would be carefully connected by cutting edge transport and infrastructure - everything meticulously thought through.

Garden cities: the town in the country; the best of both worlds.

Letchworth was the first in 1903, then Welwyn.

Then came garden suburbs - extensions to established urban centres which followed the same principles, like Hampstead Garden Suburb - not far from here.

A movement was born, and it swept across the world. 

You can still see its influence in America, South Africa, Australia, Canada;
The Netherlands, Ireland, Hong Kong, Brazil.

Here in the UK, post-war governments were guided by the garden city philosophy as they sought, literally, to rebuild Britain following the ravages of war.

And in 1946 the New Towns Act was passed, and dozens of New Towns and urban extensions followed, from Corby to Cumbernauld, from Basildon to Bracknell.

It’s time to rediscover that proud tradition of creating new places.

We can either condemn ourselves to haphazard urban sprawl - the surest way to damage the countryside.

We can cram ever more people into existing settlements, concreting over gardens and parks - and bear in mind we already build the smallest homes in Western Europe.

Or we can build places people want to live. Places which draw on the best of British architecture and design, which have their own identity and character.

Which, rather than destroy the countryside, actually have a crucial role in keeping it intact.

Places put together in a way that makes sense for modern British families.

People who want gardens, who want to live sustainably, who need to be able to move easily between work and home. Garden Cities and Suburbs for the 21st Century.

Stevenage, Peterborough, Milton Keynes. These places didn’t spring up of their own accord.

People got together and made them happen: through imagination, ambition, leadership.

Not every New Town was perfectly designed - but the fact is, people like living in these places.

More people now commute into Milton Keynes than out of it: it’s economically independent and still growing strong.

We need to learn from the success stories and replicate them once more.

So while the Coalition won’t deliver whole new cities overnight, in the Housing Strategy that the Prime Minister and I launched last year we committed to running a competition to promote a wave of larger-scale projects where there’s clear local support and private sector appetite.

We committed to publishing a prospectus setting out more detail on what we expect from local authorities and developers and what we can offer in return.

We’re hammering out the detail of that now - and there’s some fairly lively debate happening in government about how to do this.

But I’m very clear: I want the prospectus to offer real and meaningful incentives so that it encourages projects that are big and bold.

Government needs to get better at encouraging these kinds of developments, which, by definition, take time and need certainty.

Departments aren’t used to thinking beyond the next Spending Review, or beyond the next Parliament - but we need to shift our sights to the horizon.

Of course, we can’t start making decisions for the next spending round now and we need to be realistic about the pressure on the public finances, which will continue for some time.

But we can and we must ensure local areas have the time and the direction to prepare their bids.

I want us to make the best offers to the most ambitious proposals. So not just 5,000 new homes, but 15,000, 25,000.

I want us to encourage projects which are sustainable and socially diverse.

Where it makes sense I want us to designate more new greenbelt around new settlements - that’s something no government has really done for a generation.

We’ll need to find ways to create more certainty for large scale projects.

And, in general, I think we need to move to longer timeframes in the way we budget for capital. 

And I want us to offer these projects and communities real financial freedoms.

The Coalition has created a new power for local areas to borrow against future business rate revenues- tax increment financing, or ‘TIF’.

Councils tell me that is a massive help in raising investment for local infrastructure and, personally, I’m very keen that we look at these kinds of financial freedoms in the context of new garden cities and suburbs too.
So we’ll be saying more shortly, setting out the precise process.

And what will be crucial in all of this is that while central government provides support, incentives and encouragement, that process will be locally-led.

I lead a party that is localist to its core. We now have a chance to show that localism can deliver in a big way. 

I want us to prove that, when it comes to major development, we don’t need to revert to central planning, we can embrace a new era of community planning instead.

I urge the people in this room to help make this a success.

Garden Cities and Suburbs for the 21st Century: we can rise to this challenge, but only if we see the opportunity.
 
This isn’t just about bricks and mortar. it’s about giving British families the homes they need. Giving children new communities to grow up in. Creating places that will grow and thrive and become part of the fabric of this great country.

This is the moment to revive the ambition of those who came before us in order to create a better future for those who will follow us.

In keeping with our great British traditions: it’s time to think big.

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