Jack Dromey: Housebuilding holds key to constructing a better future

I recently read an article in this newspaper about residents in places like York and Harrogate who are falling on really hard times and no longer have a place to call home. Many never thought that homelessness would affect them or their communities, a clear sign of how far the housing crisis now reaches.

Why? Because the Government’s housing and economic policies are failing and families with children are paying the price. Affordable housebuilding has collapsed, rents are soaring and ill-thought through benefit changes like the bedroom tax, which cost more than they save, are driving up homelessness. Taken together, all this is placing a huge strain on local authorities who simply do not have the accommodation to house families in need.

We have just learned that the number of affordable homes is down by a third on David Cameron’s watch compared with the last year of the Labour government. And the number of homes built over the past year is down even compared with their own dismal record, with affordable home completions falling by 29 per cent compared with last year, and number of social homes being built collapsing by 58 per cent.

Shamefully, there has been an 800 per cent increase in families with children and pregnant women living in bed and breakfast accommodation for months on end. These thousands of families are paying the price of the uncertainty which affects them and their families’ lives on a daily basis. Where will they send their kids to school? What GP they can register with? How will they even get correspondence to show their proof of address?

To add insult to injury, the Government’s ill-conceived policies are not just causing desperate hardship for those affected, they’re also costing taxpayers millions of pounds every week. A staggering £2bn has been spent in the last few years alone on temporary accommodation for the homeless.

Everyone now knows that George Osborne was wrong to irresponsibly cut £4bn from investment in affordable housebuilding in 2010, leading to a collapse in the number of new, affordable homes being built. And he was wrong then to reject Labour’s proposals for a stimulus package to build 100,000 homes to get our economy moving again, creating much-needed jobs and apprenticeships.

As ever when supply decreases and demand increases, prices rise. What this simple principle of economics has meant for thousands of families in work is that they are struggling to pay ever rising rents in the private rented sector, pushing up the benefit bill yet further.

The billions of pounds we are now pouring into supporting low income households – both in and out of work – is the result of a flawed and decades-old policy of subsiding rents with housing benefit rather than investing in building new homes.

Thirty years ago, for every £100 pounds we spent on housing, £80 was invested in bricks and mortar and £20 was spent on housing benefit. Today, for every £100 we spend on housing, just £5 is invested in bricks and mortar and £95 goes on housing benefit.

We need a new approach now. A real plan to turn our economy round, to tackle the biggest housing crisis in a generation and build a stronger country. And that is exactly what Labour leader Ed Miliband and Shadow Chancellor Ed Balls have set out in recent speeches.

When I first took the job of Shadow Housing Minister, I said that Labour would put housing centre-stage in a way that it has not been in a generation. Why? Because housing affects all aspects of our daily lives; our family life, the communities in which we live, our health and our economy. And both Ed Miliband and Ed Balls have sent out the message loud and clear that Labour is putting housing front and centre so we can build badly-needed homes to buy or rent and re-build Britain.

Investment in housebuilding is the quickest way to get a sluggish economy moving. And history tells us that a major house building programme, public and private, is essential to sustainable economic recovery from recession.

As Ed Balls has outlined, if the infrastructure boost recommended by the International Monetary Fund was spent now on housing it would allow the building of 400,000 affordable homes in Yorkshire and across the country, creating over 600,000 new jobs in construction, including 10,000 apprenticeships. Ultimately, it is a matter of political will and priority.