Housing
Iain Wright MP

 Iain Wright MP

Parliamentary Under Secretary of State

Parliamentary Under Secretary of State

Northern Regeneration Summit 2008

Date of speech 23 Октябрь 2008
Location Manchester Centre, Manchester

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

Thank you very much for the opportunity to speak with you today.

It's always a real pleasure to be in Manchester - home of creativity, innovation and industry over the last two hundred years. Those characteristics, and an ability to adapt and renew, are qualities replicated right across the north.

Conferences like this, drawing together people from across the regions; from the public and private sector; with a variety of skills and backgrounds; are vitally important in helping to form the partnerships which are so essential to delivering results.

These kind of partnerships are going to be crucial to help steer us through these turbulent times.

But it's also these partnerships which account for a proud record of success in regeneration over the past ten years.

Despite the negative mood at the moment, its worth reflecting on where we've come from over the past decade.

Where once you had derelict streets and empty buildings, now we have places where people have decent homes and good jobs, improved schools and better public services.

You have places with a genuine sense of community. Places where people are proud to live. Places with confidence and optimism.

Places like New Broughton in Salford or Walker and Benwell in Newcastle. Or neighbourhoods I can think of in my own constituency, which have been transformed through sustained investment, commitment and sheer hard work.

This has not always been a smooth or straightforward journey - but the scale of change has been impressive.

But of course, we are now working in a very different economic climate.

It's no exaggeration to say that the scale and reach of the shocks is profound and unprecedented.

The Prime Minister said in the House of Commons yesterday that this impact and shock upon the global financial markets has not been seen since the First World War.

A crisis which started in the sub-prime mortgage markets far across the Atlantic has now spread - not just to our own financial institutions in the Square Mile or Canary Wharf but to economies right around the world.

Huge instability is understandably causing major worries for;

  • the elderly concerned about their pensions
  • parents worried about their jobs
  • small business owners apprehensive about their prospects
  • young people anxious about their mortgage repayments, or even being able to afford a home of their own

This is the first truly global crisis - but the effects are local.

And clearly, the housing industry is among those hardest hit.

As mortgage lending plummets, people can no longer afford to move, and potential first time buyers are finding it even more difficult to finance their first home.

This has knock-on effects for all of us working in housing and regeneration.

HMR partnerships are reporting fewer sales. Section 106 receipts are declining. Some regeneration projects are stalling. I've no doubt that many of you are concerned about the way forward.

Our first priority has been to address the exceptional instability in the financial markets.

With measures to recapitalise the banks and restore saver confidence.

This should help to address the underlying issues - the lack of credit which has frozen the mortgage markets.

As banks begin to lend again, the housing market should start to feel the benefit.

But that won't happen overnight. It will take time to rebuild trust between the banks. The government action on recapitalisation has been pivotal, but broader action is also needed. And so we've put in place a package of measures to offer extra support to those affected.

More support for vulnerable householders to meet their mortgage payments and free legal advice for those at risk of repossession.

Additional guidance so that repossession is always the last resort, rather than the first action considered by the banks.

New schemes to help first time buyers get their foot on the ladder, and a stamp duty holiday.

An offer to housebuilders to buy up new properties that they are finding hard to sell.

And we have looked again at how flexible we can be with our investment in social housing and regeneration programmes - to support those projects which may be at risk; to stimulate activity in the construction industry; to maintain momentum and prepare for the upturn.

We have brought forward £400 million to invest in new social housing over the next two years.

We have given the Housing Corporation greater flexibility over the grant rates that they pay. So that we balance the need for value for money, with the need to secure delivery of vulnerable projects.

And we are working with the Regional Development Agencies to look at how we can get projects which have stalled back on track.

It has also been encouraging to see the local response. Regional housing boards and their partnerships are putting together proactive measures to support local delivery.

The board in Yorkshire and the Humber has put together an action plan to address current challenges and prepare for market recovery.

The board in the North West is redoubling their efforts to tackle worklessness.

Housing market renewal pathfinders are concentrating on maintaining momentum - looking to take advantage of lower land or property values.

It is extremely positive to see you out there showing real leadership.

Now, I am sure that there will be those critics and cynics who will say that in these more difficult times, regeneration and renewal will be straight out the window.

That planning will be sacrificed in favour of panic.

That we'll focus all our attention on the short-term rather than the long term.

And even that we should abandon the North and all go to live in the South.

But I think exactly the opposite.

I think it's about getting the balance right between ambition and realism.

Between mitigating the short-term effects of the downturn and planning for recovery and growth in the longer term

Let me make this clear: in these more difficult times tightening our belts should not, and must not, mean abandoning the communities and people who need us the most. The people who may well be affected by rising unemployment or repossession.

This happened in previous downturns - the North was neglected and whole communities deserted.

A large part of why we've needed such comprehensive regeneration and renewal programmes in the North over the past decade has been to address this legacy.

And today, many of our regeneration and renewal programmes will be more critical than ever.

As a government absolutely committed to promoting social justice, opportunity and fairness; regeneration and renewal will remain a central priority in these more difficult times, just as it has been over recent years.

But neither can we afford to neglect our longer-term responsibilities. Waiting lists for social housing continue to grow. First time buyers are still struggling to get on the property ladder.

And the underlying demographic trends remain the same. Longer lives, changing lifestyles and a legacy of under-supply mean that there is still a profound need for more homes.

The demand for housing is still strong. Although clearly it is more difficult for people to find the mortgages they need.

So we must continue to work towards steady and sustainable growth.

These ambitions are reflected in the growth point programme, which for the first time, now also covers the North.

This programme is all about supporting the development of strong communities - with the utilities, social infrastructure and green spaces to go alongside the housing.

In the short-term, this may be more difficult.

But over the longer-term, it must remain a priority.

Local authorities and their partners should be looking for opportunities and solutions where-ever they arise.

That could mean taking greater advantage of the social housing grant. Or using the flexibility in the growth fund to do some longer term planning.

There may be well be difficult decisions to make in the future. Squeezing maximum value for every penny will be more important than ever. And we will need to take every opportunity to do things differently, more effectively.

Certainly I think that the launch of the Homes and Communities Agency (HCA) in December will be one such opportunity.

With responsibility for both land and money, with clear leadership and an end to fragmented funding, it will be a more effective partner for all those working in housing or regeneration.

For any of you who've been frustrated at having the same conversation with numerous different people, I'm sure that this will make a big difference to your work.

But more importantly, it will make a big difference to communities themselves.

It will ensure that housing developments always go hand-in-hand with investment in facilities and infrastructure - the shops and schools, businesses and public services which make a community tick.

And it will get things done.

We've also recently been consulting on our regeneration framework. Setting out the principles which will guide future investment in regeneration, drawing on the lessons of the past ten years, and making sure the taxpayer gets maximum value.

With a focus on job creation, community involvement and quality design.

This is perhaps more important than ever. We know that well-designed homes on well-planned streets will hold their value far better than cheap designs driven by false economy.

Those principles will inform the work of the HCA - and also, I hope, will be reflected in your efforts too.

Let me just conclude by saying that despite the understandable anxieties and the scale of the challenge ahead, I am confident that we are facing these difficulties from a strong foundation. Building upon a legacy of success.

And the wealth of experience and creativity from those working in housing and regeneration will be invaluable in helping to steer a steady course.

I started off by mentioning the creativity, industry and innovation we see across the North. It has faced previous downturns with character and resolve. And today, I am certain that many of the most imaginative ideas and effective solutions will come from people like you.

Thank you very much.

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