Address to the National House Building Council

The Rt Hon Margaret Beckett MP

Minister of State

Minister for Housing, attending Cabinet

• View Margaret Beckett's profile
• View speeches, statements or articles by Margaret Beckett

Address to the National House Building Council

Draft text of the speech - may differ from the delivered version.

Due to Parliamentary business, Mrs Beckett was unable to attend this event; and the speech was delivered by Nick Raynsford MP.  This is the text of the speech as drafted.   

Thank you very much for the opportunity to address you today. 

I know that NHBC is a real champion for the consumer; a consistent advocate for better quality and higher standards throughout the housebuilding industry.  It is a pleasure to meet with such a constructive partner.  

Since I took over responsibility for housing in this country, I've made it clear that I want to be ambitious as well as realistic.  

Today, I want to talk about what that means in practice. 

How I think that we can strike a balance; responding to immediate challenges while continuing to work towards our longer term goals.  

As you'll know, eighteen months ago, we set out a programme for housebuilding on a scale not seen since the 1960's.   

While many people were benefiting from rising house prices, far too many others were missing out. 

Supply and demand just didn't add up, pushing prices way beyond the reach of ordinary families and first time buyers. 

With all the evidence behind us, there was broad agreement - not just across the political spectrum and between stakeholders - but among the general public too - that the country needed more homes. 

But more than that, we all came to the realisation that it was not enough to build more.  We also had to build better.   

We set world-beating targets for sustainability and greener building.  And we made a real commitment to raising standards in every sense - improving design, more suitable for growing families and the elderly - the kinds of homes that 21st century families need.

Now, of course, the economic context could not be more different. 

The recent international turbulence and intense pressure in the banking industry are being felt in every country, and in every industry. 

There isn't a family or a business in England which isn't feeling the pinch.  But nowhere are those effects more visible or more dramatic than in housing. 

Mortgage lending has, to be frank, plummeted. 

First time buyers are among those worst affected - with inevitable knock on effects through the rest of the market.  House prices have fallen sharply in response.   

Undoubtedly, there is pressure to resort to panic measures. 

Some people would like to see me scrap housing targets, zero-carbon housing, eco-towns - everything that we've been working towards.    

It might make a good headline.  But it would be a cheap and irresponsible move - contrary to the long-term interests of the country.       

So I don't see last year's green paper as water under the bridge, no longer relevant.  

It remains the clearest analysis of the longer term trends - the aging, growing population, the changing lifestyles - that are driving the underlying demand for housing. 

And there is no evidence that these fundamental trends are changing. 

Demand for housing remains strong - though because of lack of credit, people cannot realise it.

While delivery of our longer term goals is clearly now more difficult, that doesn't mean they should simply be scrapped. 

In fact, if we fail to press on with the programme, we will only store up even more substantial problems for the future. 

Demand will continue to grow - and if unmatched by increases in supply, prices will rocket once again.   

Housing will become even more unaffordable.  Waiting lists will grow.  There will be an increasing gap between those who can beg, borrow or steal a deposit from their friends and family - and those who cannot.   

Of course, I'm not suggesting that we carry on regardless, blind to the bigger picture.  It's important that we proactively respond to the changing circumstances.

Our first priority has been to address the underlying financial issues, the lack of liquidity and credit which has frozen the mortgage markets. 

This was an unprecedented package.  But I think you will agree that the extraordinary circumstances require extraordinary measures. 

We have also taken steps to intervene in the housing market. 

With support and advice for the most vulnerable homeowners, especially those at risk of repossession. 

A stamp duty holiday and new routes onto the property ladder for first time buyers. 

And extra help for the housebuilding industry during these more difficult times.

It's absolutely essential that we learn the lessons of the past. 

In previous economic downturns, housebuilders and developers have been hit quickly and sharply, but recovery has been slow and difficult. 

This time, I want to work with the industry to help maintain capacity, so that it is ready and able to respond when the upturn comes.   

We have already brought forward spending on social housing, securing income while private sector demand is weak. 

We have also been buying up unsold stock to use for affordable and social housing schemes.  So far, we have spent £90 million on almost 2600 properties. 

But that is in no sense the last word. 

On land supply, for example, there may be ways in which we can reduce the risk of new developments, by bringing forward public sector land for development. 

And in particular, we need to work closely together on investment in training and skills, to attract and retain talented people to the industry. 

I recognise that when times are tough it looks like a quick and easy save to let people go.  But ultimately, it's not in the interests of the business. 

Once you lose good people, they are unlikely to come back - and so aren't around to help the business flourish and grow when the upturn comes.    

We saw this in the 1990's - a missing generation lost from the industry, with profound effects on capacity that lasted well into this decade.  

We've already set up a service which will help employers retain apprentices - or which will use their skills in big construction projects like the Olympics. 

And we will shortly be bringing together big players across government and the industry to agree a way forward.  So we can both keep good people in the industry now; and invest in major improvements in skills for the future.

But we will be looking to the industry to live up to their responsibilities too.

We need those skilled and talented people not just to deliver the housing numbers - but also dramatic improvements in quality. 

It is very positive to see the renewed industry commitment to quality and customer satisfaction, in the light of the recent OFT report. 

I particularly welcome the role NHBC is playing in leading and co-ordinating the industry response.  It's great to see that you are now inviting homeowners to sit on your council - giving them a clear voice in the organisation. 

These are important steps in the right direction.  But I would argue that these are only the beginnings - that we need far more significant improvements in quality and consistency. 

I know that there are some who'd like to see me argue for exactly the opposite - those who'd like to see me rip up the regulation rule book.
 
It might be the easy thing to do.   But it's not the right thing to do. 

Nye Bevan famously argued that "In the next year or so we will be judged by the number of houses we have put up. But in ten years we will be judged by the quality of those homes."

That remains true today.  There is no sense in a desperate rush to building something; anything; in order to get the numbers. 

This housebuilding programme is nothing less than an investment in the future of the nation; and to cut corners is a false economy.   

Clearly, there's an economic argument here.  Well designed homes, efficient to run, attractive to live in, part of a properly thought out community will always be in high demand. 

In contrast, badly designed homes will be hardest hit, and slowest to recover.   

But there is also an environmental argument.  The threat of climate change hasn't gone away.  And since housing is such a major contributor to our carbon emissions, there is still an urgent imperative to take action.

The case for zero-carbon housing remains as compelling as ever. 

The question is not "can we afford to do this?" but rather "can we afford not to do it?"

Of course, I recognise that this was an immensely challenging goal even at the best of times.   And in these more difficult times, there are genuine concerns about capacity to deliver.

So let me say this.  It is in both of our interests to work together towards this long-term objective.  But there is no sense in being dogmatic about how we get there. 

I will work with the industry to determine the priorities and where there might be scope for flexibility.

We will shortly be launching the consultation to shape the definition of zero-carbon - so there is greater clarity about exactly what we're aiming to achieve. 

I would like to say that it's extremely encouraging to see the depth of commitment across the industry, despite these more challenging circumstances.

I know the NHBC is a driving force behind getting the zero-carbon hub up and running - that is great to see. 

I also do think there is something to be said for making a virtue out of necessity. 

This pioneering programme is going to require dramatically different ways of doing things.  And there is tremendous potential to develop new business and create new jobs based around greener technologies and sustainable building. 

We must work together to maximise that potential.  

Let me finish by saying that no-body is pretending this is business as usual. 

It's absolutely right that we need to be pragmatic and adaptable in response to the changing economic climate.  

Across government, we will continue to review our priorities and available resources, making sure that they are being used to greatest effect.    

But when circumstances are changing so rapidly, it is not the time to make snap judgements.  It is important that we reflect as well as act. 

And it is essential that any action takes account of our longer-term challenges as well as our immediate concerns.  While we may need to adapt the means, the ultimate ends must remain the same. 

Thank you very much.