Housing is the great challenge facing all of Britain, including Wales. The post-war period in terms of housing can be broken down into two periods. First, the period of 1945 to 1980—during that period, we saw a huge growth in council estates and the building of a large number of new estates in urban areas. We also saw the growth of owner occupation and the start of the building of large private estates, again predominantly in the larger urban areas.

Council housing has declined through the sale of a large number of houses and the failure to build new ones. There has also been a substantial growth in housing association properties, but not enough to make up for the decline in council-house building. For those people taking a deep interest in politics and elections, if you go and look at 'The British General Election of February 1974', the book by Butler and Kavanagh, you will see it looked at the number of houses that were social housing—or 'council housing' was the term they used then, because nearly all the housing was that—and there were a large number of constituencies where over half the housing was council housing, and, in Scotland, and you had constituencies where between 80 per cent and 90 per cent of the housing was council housing. It was the norm.

Council housing has declined—the sale of large numbers and the failure to build new ones. There has also been a substantial growth in housing association properties, but nowhere near enough to fill the gap of the decline in council house building. As a consequence of benefit changes, demand has increased for smaller-sized accommodation. Since 1980, we have seen almost a complete end to council house building, the growth of owner occupation, which now appears to have stalled, and the growth of housing associations into major landlords. For those people who remember back in the past, housing associations used to be small, local organisations providing housing. Now, one stretches from Newport down to Pembrokeshire, one stretches from Cardiff down to the edge of Wales, and one covers almost the whole of north Wales and mid Wales. 

We've seen a reduction in the average number of adults living in each property. There's been a large growth of single-person households and a huge reduction in family sizes. The sale of council housing had a serious effect on the housing market. It reduced the supply of council housing and increased demand for both housing association properties and for privately rented properties. That's gone into a vicious circle. There's money to be made in privately rented accommodation: people buy it, it pushes up house prices, it makes people less likely to be able to get accommodation.

There have been two periods in the twentieth century when housing supply did a reasonable job of meeting housing demand and need. The first was between the wars, when cities expanded horizontally into the suburban development of green fields and, assisted by Government incentives, builders could offer affordable home ownership to people on middle to low incomes. If we were to do the same, it would involve ending all planning rules. I don't think anybody in this room would want to see the end of all planning rules.

The second was the decades after the second world war, when publicly funded council housing accounted for roughly half of all homes built. What we've now got is a situation where we need to go back that—to building large numbers of council houses. Housing associations aren't going to meet the gap. When people talk about social housing, too often they're talking about housing associations. We need councils building houses. We've seen the beginning of it in places like Swansea. There has been some small-scale development of council housing, but nowhere near what was happening between 1945 and 1979. I don't think the equivalent of one year's development in Swansea has been built in the whole of Wales in any year since the last 10 years.

There are large obstacles to a renaissance of council-house building, including the obvious one of money. Claire Bennie, an architect and housing developer, formerly of the housing association Peabody, said that councils should be allowed to borrow more against the long-term value of their developments, and I fully agree with her. That's what we do. When you go to buy a house, you borrow against the long-term value of your house, and that's what a mortgage is. Why can't councils be allowed to do the same?

Unless we have large scale council-house building, we will not solve the housing crisis. House prices will go up. It's in the interest of developers not to build enough houses, because it keeps prices high. Housing associations can help in developing social housing, and I would like to see a role for housing associations in bringing empty properties back into use. But, really, there's only one answer: substantial building of council houses.