Thank you so much for your introduction.
I am absolutely delighted to be in Wakefield tonight for the HBF’s Yorkshire Region AGM and dinner.
It is particularly enjoyable to get out of London and see so many people here. My thanks to all of you who have come along after what I am sure has been another busy working day.
The number of people in this room says a lot, I think, about both the strength of the home building industry here in Yorkshire and the crucial importance of the sector to the regional economy. And I hope it is also a reflection of the value you place on HBF membership.
I am delighted that Chris Martin is here to speak to us. As you know, Chris is Director of Planning and Transport at the Yorkshire and Humber Assembly.
Few people are as well qualified to talk about housing in the region, not least as we enter a particularly important phase with the recent conclusion of the Examination in Public of the regional spatial strategy.
I am sure we are all looking forward to hearing Chris’s insights.
Yorkshire
Too often, I think, the national housing debate is framed around southern England and the South East in particular.
The HBF has always resisted a London-centric view of the country, and while our head office is situated in London, we are acutely aware of the dangers of operating only within what's affectionately known as the Westminster Village. I am very glad to see that the HBF – through the excellent work of our team of Linda Wright and Gina Bourne here in Yorkshire, supported by the policy team in London – is able to deliver strong regional representation. Being an effective regional voice is a crucial part of the way the HBF is structured and operates on behalf of all our members – both large and small.
I am extremely pleased – on the back of hard HBF lobbying - that early indications seem to suggest that Yorkshire’s housing figures within the RSS will be revised upwards. It is particularly crucial that housing supply supports the regions economic success.
We will certainly be continuing to lobby very hard on this point until the report comes out in February or March next year.
The changed debate
It is worth reflecting just how far the housing debate has shifted. A year ago, the battle lines were drawn between the industry and Government on one side, and the Opposition and anti-development lobby’s ranged against us on the other.
There has since been a sea-change in attitudes and a new consensus has emerged on the need for more homes.
Even that bastion of NIMBY-ism – the Campaign to Protect Rural England – now agrees that there is a shortage of new homes.
It is a telling fact that every region outside the South East is now proposing to increase its own housing targets in Regional Spatial Strategies. This was certainly not the case when regional figures were debated in the last round of Regional Planning Guidance.
The reasons for this, I think, are two-fold:
The weight of Britain’s housing shortage, and its social and economic consequences, have become too pressing to ignore;
The HBF – with the support of all its members and others – has been forcefully making the case for increasing home building – making that case through the media, through meetings with Ministers and senior Conservatives, through submissions to Government on a range of key policy issues and through giving evidence to Select Committees.
The terms of the debate have shifted.
This does not mean, of course, that the job is done. Far from it. Converting the new found reality at Central Government and Opposition level into faster and more sensible planning decisions at local level is still a distant dream in far too many local authorities. Perhaps that demonstrates that whilst we may have won peoples minds we have not yet won their hearts.
CRUCIAL TIME
As I am sure you know, this is a particularly critical time for the home building industry. Just yesterday we had the Queens Speech, including the announcement of a major new Climate Change Bill which will I am sure have far reaching consequences for our industry.
We also await imminent announcements on both Planning Policy Statement 3, and the proposed Planning-gain Supplement, both of which will most probably come at or around the time of the Chancellor’s Pre-Budget Report on Dec 6th.
And as if that isn’t enough pre Christmas reading expect announcements as well on new water efficiency standards, a tougher Code for Sustainable Homes and a PPS on Climate Change.
The HBF I want
I have been HBF’s Executive Chairman – for my sins – for almost a year now. After a career at the home building coal-face, I have moved from being in the industry, to having the somewhat daunting task of representing it and you.
My experiences over the last year have given me a very clear insight of how I believe the HBF should operate and how we can best serve your interests.
My main priority has been to develop and improve relationships with Ministers, Opposition leaders and other key influencers so that our voice and views are both respected and listened to. To make sure our industry carries the weight that it should – after all some 7% of the workforce works directly or indirectly in Construction or related activities.
The HBF – through you, our members - serves as a conduit to the very best our industry has to offer – both with regards to ideas and talent. It is in itself a unique repository of industry knowledge and information. As our industry’s trade body, I want the HBF to be both a think tank and a “do” thank.
I want us to be exploring new concepts, drawing on industry innovations, developing new ideas. Above all, we need to be providing Government and others with workable, practical solutions to the gritty policy problems they – and we - face.
I want the HBF to be in on policy formation early; finding solutions and shaping outcomes.
That’s why we have appointed a group to look into the complex area of affordable housing policy – a major issue here in Yorkshire, as it is in just about every region of the country. We do not dispute the need for affordable housing, clearly, but we do object to the long delays the current S106 system creates, delays which benefit no one, least of all those people who badly need new homes.
That’s also why we have formed a working group to look more closely at the equally difficult issues of PGS. Frankly it would have been all too easy to join the chorus of voices who dismissed PGS out of hand as unworkable. We resisted the temptation to follow that somewhat natural knee jerk reaction because I was keen to help inform and educate the debate.
As a result in September, we published detailed research carried out by Knight Frank for us and a number of other organisations. The results give real substance to our initial fears that the levy will not help bring forward more land for development, nor indeed speed up the planning process.
The recent publication of the House of Commons Communities and Local Government Committee Report into PGS – to which we were invited to give both written and verbal evidence – also backs our view that much more work is needed.
And a week or two back our Working Group met with senior Treasury Officials to present our evidence and discuss our concerns and the Treasury very much welcomed the discussion.
We wanted to be at the centre of this debate, both fighting the industry corner, and crafting appropriate solutions and we are.
For those who could make our national AGM last April, you will remember that I spoke of the need for us as an industry to have a place at the table, working with the Government, and making our views count.
We have, I believe, a stronger engagement with Government now than ever before.
It was perhaps best demonstrated in September when I was invited to accompany Yvette Cooper on a fact-finding mission of the Netherlands and Scandinavia.
It is absolutely essential that we play a central role in helping the Government both understand our industry and frame policy accordingly.
Being heard matters, but being listened to matters more
It’s as simple as that. I really don’t believe a year ago I would have been invited on that trip to Europe with the Minister.
And the benefits are already paying dividends
The environment
Few of you will have failed to notice the new primacy of the environment and sustainability in both politics and policy development.
All three political parties are wrestling to be the best champions of the environmental agenda. Just yesterday, we saw the announcement of a new Climate Change Bill as a major plank of the Government’s legislative agenda.
Not wanting to be seen as soft on the subject, the Conservatives now sport a new green-washed oak-tree logo; while the Lib Dems have kept their orange “bird spirit”, but are no doubt quick to argue that it needs a tree to nest in.
Note however how little there is to choose between the attitudes of the main political parties – the differences are mostly about pace of change and whether targets should be annual or more medium term
In short, the writing is on the wall. The terms of the debate have fundamentally changed.
We are therefore, I believe, at a cross-roads
The vision thing
On returning from our visit to the Netherlands and Scandinavia, Yvette Cooper set down a challenge to the industry – she called on us to meet and beat Scandinavian environmental standards within ten years.
Now, frankly I don’t know yet whether that can be done but I do have a vision of how we can most effectively deliver real and lasting progress, whilst at the same time not losing sight of the fact that both we and the Government want to increase production levels to 200,000 new homes each year.
I believe that the time has come for a new policy framework, whereby the government sets targets in consultation with us which we then set out to achieve.
For this to succeed It must be a wide, holistic framework, encompassing all stakeholders - from regulators to suppliers, from NGOs to utility companies. And above all, it must be acceptable to the people who really matter, your customers.
To work the targets need to be expressed as clearly and simply as possible – so that both industry and consumers can understand them and so that we can find the best means of delivering results in partnership with the supply chain, with the energy providers and for the benefit of our customers. And the targets must be seen to be achievable.
On that point, we need to help manage the friction between Government and some local authorities on target-setting. I understand the drive towards localism in many areas of Government, but as an industry, we will be far less effective in delivering meaningful results if we are attempting to conform to a multitude of different targets and agendas.
Once this new framework has been agreed, its success will also rest on the ability of the Government to do what traditionally it has been very poor at - stepping back, and allowing industry to do what it does best –change adapt and innovate.
The Government can monitor progress, and call us to regular account through interim targets, but it has to agree not to constantly interfere, not to intervene, and not to keep shifting the goal posts by constantly revisiting Building Regulations.
And as I have already said, our customers must be with us.
Changes and innovations need to be practical and desirable. While we know that consumer opinions are steadily shifting, as the magnitude of the climate change agenda gradually seeps into the consciousness of the nation,we must retain the same customer focus that has been delivering higher customer satisfaction levels across our industry in the past few years.
The best and shortest route
This, I believe, is the best and shortest route to delivering results.
Now I know the traditional industry arguments that new homes are just a side issue and that if the Government is serious it should focus on the existing homes. I totally agree – much more should be done in this area and there are undoubtedly some big quick wins here.
However this does not remove us from our responsibilities. Thirty years from now new homes will account for almost a third of all homes in this country. So what we do has a massive cumulative benefit over time.
By acting now in the right way, we can potentially harness the pressing need to deliver more new homes as an opportunity to make a real contribution to tackling climate change.
And therefore instead of being seen as part of the problem, home building can actually become part of the solution.
Just as importantly, the climate change issue does not have to be a threat to our industry.
It is an opportunity – an opportunity to innovate, lead and build shareholder value.
And if we can persuade government that our approach, this new framework, is the right solution then it will enable change to be managed sensibly over time which in turn will effectively mean that additional costs will be borne largely through land values adjustments and not at the expense of margins or returns.
Such a framework will therefore allow more certainty, more predictability in business planning, two of crucial ingredients for commercial success and which will help guide the decisions made in Board rooms of home builders and suppliers.
So we have a choice on the Environment agenda – we can choose to embrace it, lead it and shape a regulatory environment that is both effective and more business friendly …….
Or we can choose to cover our heads with our hands and await the crude, blunt strikes of government regulation with the inevitable short term consequences that will bring.
I know which route I prefer, which route I believe builds greater shareholder value and will enhance our reputation with both the public and the government.
I am pleased to say that Yvette Cooper has been very supportive of our approach, both publicly and privately and we are planning as a next step to hold a high level environmental summit in the New Year to take this idea forward.
Conclusion
So as I said at the beginning, this is policy crunchtime. Developments over the next few weeks and months will help shape the type of industry in which we operate.
Let’s make no mistake, when it comes to change, it’s not just the industry that needs to adapt. As we re-align our future direction in order to meet the realities of the times, so must the Government.
This means, of course, sorting out the planning system, dealing with unnecessary regulation and bringing more land forward for development.
However, I believe that if we can persuade government that we can deliver on the environmental agenda within the new framework I have described then the HBF and therefore our industry will be in a very new and much stronger position.
The Government will be able to make significant progress in delivering its environmental objectives and helping us meet housing need.
The industry will be able to grow shareholder value by delivering higher volumes to higher standards in a predictable business climate
Customers will be able to live in better quality and more affordable homes that meet their increasing environmental expectations.
And the people of Britain will see a steady amelioration of the social and economic consequences of the current housing crisis.
Whether in London or Leeds, Wakefield or Doncaster, I hope you will all agree that is an outcome to which we can all aspire.
Thank you for listening and I hope you have a very enjoyable dinner.