Ken Livingstone – 2004 Speech on Housing

Below is the text of the speech made by Ken Livingstone, the then Mayor of London, on 25 May 2004.

I am delighted to have this opportunity to speak at the second conference the Guardian has organised about housing for key workers. So much is now not just being written and said, but actually done about this important issue that it is easy to forget that just four years ago it was hardly on the agenda as a priority for policy makers.

I would like to pay tribute to the work of Chris Holmes, the former Director of Shelter, who chaired the London Housing Commission I established immediately after the first Mayoral election. It was Chris’s Commission and their report which identified just how critical this issue was for London.

The Commission rightly said: “The economic importance of London to the whole country means that the capital’s housing problems are not just a parochial matter. If London begins to fail economically there will be serious implications for the national economy…..The evidence in the Commission’s report demonstrates that there is not just a housing justification for a major increase in the rate of provision of affordable homes but also an economic justification and a public service justification.”

Another central conclusion of the Commission was that “the definition of affordability must work both for people in traditional housing need and for people on moderate incomes who cannot afford market housing.”

Over the last four years since the publication of that report we have carried that analysis through into the statutory London Plan. This now sets a requirement for new developments to contain not just traditional affordable housing, but also what has become known in the jargon as “intermediate housing”, catering precisely for the needs of those on moderate incomes up to £40,000 who are priced out of London’s housing market.

And we have secured new backing from Government for this policy approach. Government has endorsed and agreed the London plan and its housing targets; they have accepted my view that we need to support homes for rent as well as for sale for the intermediate market; and most importantly of all they have backed the policy with the funding that it – needs especially the new £700 million programme announced in March. This programme will give new affordable homes to more than 8,000 key workers in London in the next two years alone. And we have secured 62% of the national pot of resources for London.

A vital element in the approach has been to set new, higher targets for affordable housing. When I gave my backing to the Housing Commission proposal for an overall 50% target for London there was a predictable outcry from some in the housebuilding and development industry. It was claimed that setting higher targets would hold back housing production and supply.

Well now we are getting the evidence which shows that the Jeremiahs were simply wrong. The latest ODPM figures for housebuilding completions released this month show that overall housebuilding in London is up 52% since 1999/2000 and private sector housebuilding up by 55%. These welcome increases have coincided precisely with the period in which tougher affordable housing policies have been put in place because of my London Plan. And we have achieved this with the support of greatly increased public resources secured for London from government – the Housing Corporation programme up from £260 million in 199/2000 to £886 million. At the same time the housebuilders have been earning more than reasonable profits.

And we are on course to deliver 10,000 new affordable homes this year up from 6,000 in 1999/2000. More to do, of course, but we have built a really solid track record of progress. Now there is much more widespread acceptance of the policy approach from the private sector.

Given this record it is remarkable that during the current election Steve Norris should now be suggesting cutting back on the 50% target. The only consequences of this would be fewer affordable homes for Londoners and higher windfall profits for developers.

Steve is also completely wrong to claim the target is inflexible. I am inflexible about getting the maximum possible number of affordable homes for London But I promised that site by site the new policy would be implemented flexibly to ensure development was not held back. And that is what I have done on the major developments that come to me, such as on Greenwich Peninsula where we agreed 41% as part of an overall package of transport and other social infrastructure.

Had our policy starting point at Greenwich been Steve Norris’s 35% rather than 50% we would have lost at least 600 affordable homes on that one site alone. And over the next four years we would lose 20,000 affordable homes right across London.

One other important lesson from the Housing Commission is that key workers are not just nurses, teachers and police, vital though they are. The people who clean and porter at London’s hospitals are just as essential as the doctors; the people working in hotels who keep London’s tourism industry going are key workers; and so are the lower paid office workers who support London’s back office finance sector.

I agree with the Commission that our longer term objective must be to create an intermediate housing market in London that caters for the needs of all these people on moderate incomes, not just for narrowly defined occupational groups. And, of course, many of London’s key workers on the lowest incomes need more social housing. The idea that you help key workers by cutting social housing is an illusion.

But it is good news that we are now creating more low cost home ownership opportunities in London than ever before. And I am delighted that many of these schemes are also at the cutting edge of high quality design and the best environmental and energy efficiency standards.

There are fantastic examples of this built or being built in London by the private sector and by housing associations. One of the earliest housing schemes to come to me for a planning decision was the Grand Union Village scheme on the canal on the borders of Ealing and Hillingdon. When I first saw the scheme I asked my planning officers couldn’t we get more homes on the site while still having a really well designed and attractive development. If that could be done, the scheme should be more profitable which would allow the developer to provide more than the 25% affordable housing on offer.

The GLA planners were able to negotiate successfully for more homes and an increase in the amount of affordable housing to 35% with a big key worker component. I was delighted to go and open the scheme and see how not only were we housing local teachers and newly recruited police community support officers. But the scheme also met the highest standards of energy efficiency and recycling provision and had created new high quality open space and restored the canal basins.

As so often the quality of the scheme which is low rise – and the experience for people living there – was so much better at the higher density.

This month has also seen two London shared ownership schemes built by housing associations winning awards. in Haringey Circle 33 have worked with the Council and Primary Care Trust to turn an unpopular local eyesore into another award winning scheme of 71 shared ownership and rented homes, a healthy living centre and a CAB.

And in Barking Tower Homes won the national Affordable Home Ownership award for its top quality scheme of 69 shared ownership and rented homes which again meets my aspirations for more sustainable housing – photovoltaic cells in roof panels, low energy fittings, all meeting the lifetime homes standards now required by the London Plan and all with private rear gardens. This was also a scheme which tackled affordability in the right way – the average share bought was 41 per cent and the average income of the main owner £18,850.

Right across London there are more and more schemes like this underway – showing it is possible to produce genuinely mixed tenure developments – market and discounted sale, shared ownership and housing for rent – and with all the tenures pepper-potted, indistinguishable and built to the same standard. This is the right and only way forward for London’s new homes programme.

So for the future we need to keep up the pressure to hit the targets for supply and affordable supply – this year a minimum of 10,000 new affordable homes; next year closer to 15,000 and keeping at least at that level. Maintaining the overall 50% target is absolutely vital; and delivering the target will mean that we need to achieve more than 50% on some sites. Obviously housing association developments will help with that – and so will the exciting new initiative by English Partnerships to assemble land for affordable homes, especially for key workers. This should produce at least another 4,000 affordable homes over the next two to three years.

Another approach I want to encourage is securing more key worker housing without the need for public subsidy. More developers and builders are now coming forward with schemes of this sort and these should be encouraged through planning policy. On suitable sites particularly in areas where there are already high levels of social housing we should encourage developments of 100% key worker housing for rent and shared ownership. Increasingly there are signs that big financial institutions are interested in investing in this type of development opening up a minor new sources of finance for more key worker homes in London.

And we must continue to be imaginative in the way we use land – encouraging high quality mixed use development and looking for new capacity to build more homes. We have worked with the major supermarket firms to encourage them to build more housing above and around their new stores. Again this month we have seen another big scheme coming forward with Tescos planning to build 104 new homes above a new store in Clapham.

I believe there is further major potential to build new homes – and especially affordable homes – on and around rail and Underground stations and I will be asking London Underground to work with partners such as English Partnerships, housing associations and house-builders to develop a strategy to maximise these opportunities.

I will continue to work with and support other new initiatives to provide more key worker homes. Later at the Conference you will be hearing about the ‘More than Halfway There’ scheme which brings together big employers and trade unions in London to support building more key worker homes in London. I was delighted that the GLA was able to work with Britannia Building Society and other partners to support this scheme with feasilbility money, and look forward to these and other similar initiatives bearing fruit and housing London workers.

The other major challenge we face is to make sure that we deliver the new infrastructure that is essential for building London’s new homes and communities. New public transport schemes are vital to connect new homes to jobs and allow better quality and more intensive development. Cutting back on proposed transport schemes would seriously damage the drive for new homes for Londoners.

Just as important as transport is delivering more high quality schools, health care and other community facilities. These are needed for London’s growing population but will also improve services and facilities for existing residents. I have been working closely with the NHS and the Department for Education to plan together how to make these extra investments in London’s public services.

We now have much better co-ordinated policy to support the new homes Londoners need – and we have started to make real, demonstrable progress on delivering more homes and serving a much wider range of people in housing need, especially key workers. The new office of Mayor has made a decisive difference in bringing planning, housing and transport policies together, securing extra resources, supporting new initiatives and setting the right targets for new affordable homes.

The Barker Review – on the heels of the Sustainable Communities Action Plan – was the latest and perhaps most significant sign of the greater political priority the government is now giving to building new homes. Particularly significant because it comes with the backing of the Treasury.

The Treasury have accepted Kate Barker’s important recommendation about the need to bring together responsibility for strategic housing and planning policy at the regional level. We have already made big strides in that direction in London and shown the approach delivers real results, more homes. I will work with government to implement the Barker proposals in London which should mean giving the Mayor important new responsibilities for strategic housing policy and investment.. Given the right powers, more public and private investment, working in partnership, but not relaxing our targets we can deliver more and more of the high quality affordable homes London’s public and private sector workers aspire to.