House of Commons Hansard Debates for 2 Jul 1991

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quarter to minus 70 per cent. That is the lowest figure on record. The industry predicts that 150,000 jobs will be lost this year. Skills will be lost, never to return. Business failures are at record levels and they include long-established family firms.

They are the facts about the supply of new housing. The facts about the cost of housing are no less powerful. Home owners were lured into home ownership by the boom, which was helped by the shortage of supply and they were then trapped by soaring interest rates. As a result, home ownership has become an impossible dream for many and an impossible nightmare for many more.

The number of repossessions, which stood at 46,940 in the year to March, has doubled in a year and it is predicted to double again in the coming year. Few would quarrel with that prediction. A Bank of England study which was recently published shows that 784,000--or one in 12--loans are two months or more in arrears. It is not surprising that homelessness due to arrears increased by 58 per cent. in the first quarter of 1991, and it is a major factor in the increasing burden placed on local authorities.

Tenants have found housing costs no easier to face. Private rents have risen sharply, reinforcing the evident truth that the private sector cannot meet the demand for affordable housing. Due to a deliberate Government decision, council rents have risen by an average of 12.3 per cent., although that average conceals much more extreme rises such as the successive rises imposed in Ealing. It must also be remembered that it was the unfairness of the burden placed by Government policy on the housing revenue account and, therefore, on the tenants and their rents which led the Tory councillors in West Oxfordshire to resign last year. The unfair pressure requiring some tenants to pay for the subsidies payable to others continues.

Housing associations have also had to respond to high interest rates by raising rents. In 1990, new lets were at an average rent per week for a three-bedroomed house of between £46 and £54, beyond the reach of most low-income families. That was the conclusion of the joint report by the House-Builders Federation and the Association of District Councils entitled "Bridging the Affordability Gap in 1990". The report found that fewer than half all young people under the age of 30 could afford to buy their own homes and it called, not surprisingly and with our support, for 100,000 houses to be built each year for rent or shared ownership.

With the supply of housing drying up and the costs of housing rising sharply, it is little wonder that homelessness is increasing rapidly. No fewer than 145,790 households, or almost 400,000 people, have been accepted as homeless in the past year--a doubling of the number with which the Tory Government began the decade. Some 12,170 homeless households are in bed-and -breakfast accommodation at an average cost of £15,440 per annum. That figure was described in May by the Public Accounts Committee as "bad value for money". The average cost per year of building those families a new home would be just half the cost of bed-and-breakfast accommodation at £8,200.

Mr. Steve Norris (Epping Forest) : On the topic of the availability of housing for families in need, will the hon. Gentleman comment on the fact that the 10 councils with

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the highest number of vacant dwellings-- incidentally also the 10 councils with the highest amount of unpaid rent arrears--are under Labour control?

Mr. Gould : If the hon. Gentleman reads the report of the Public Accounts Committee, he will find that by far the greatest culprits in the matter--I defend no one who has a high proportion of housing stock empty-- are the Government. The Public Accounts Committee want to hear the truth of the matter about the 31,000 houses that are currently empty.

Mr. Richard Tracey (Surbiton) : Will the hon. Gentleman give way?

Mr. Gould : No.

The position is worst in London. The report of Single Homeless in London estimates that 3,000 people are sleeping on London's streets. That is enough to make it difficult for even the most fastidious Minister to avoid stepping on them as he leaves the opera. The report puts the total of homeless in London--

The Minister for Housing and Planning (Sir George Young) rose --

Mr. Gould : I may give the Minister a chance to intervene a little later. The report puts the total of homeless in London--living in squats, in bed-and-breakfast accommodation, in hostels and on the streets--at 52,500. The Salvation Army says that 75,000 people in London are what it describes as "visibly homeless". It says that the situation is as bad as it was in 1904.

The facts are depressing and damning and they cannot be gainsaid. The Government's excuse is that demand for housing has risen as the baby boom of the 1960s has taken effect and as a higher divorce rate has split families. That makes the failure to prevent the fall in supply even more culpable.

The facts are the record of a decade of failure of a Government who had the huge benefit of riches from the North sea, but who have ended the decade with the shameful spectacle of young people begging on our streets by day and sleeping on our streets by night. The facts are the record of a Government who proclaimed an economic miracle, but who failed to provide the most basic of human needs--a roof over one's head--for many of their citizens. The facts are the record of a Government who have provided great benefits to some via tax cuts, capital gains and salary increases-- including those that we shall debate later today--but who have left hundreds of thousands, perhaps millions, of the most vulnerable people in our society in overcrowded slums or without homes at all. The facts are potent, but they conceal more than they tell.

The official statistics measure only the statutory definition of homelessness ; they do not tell the full story. They certainly do not tell the story of the individual tragedies which are now occurring on a huge scale. Surely Conservative Members cannot be unaware of the tragedies, such as the young families divided, the young mothers driven to despair and mental illness and the fathers who have lost their families and therefore their homes, and who end up, as in the case of one of my constituents, sleeping in a car for two years. How did that happen?

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Mr. John Carlisle (Luton, North) : Will the hon. Gentleman give way?

Mr. Gould : No, I will press on for the time being.

The first part of the answer lies in a fundamental mistake in Government economic policy. That assertion is hardly controversial any longer, as even Ministers now concede, in their more honest moments, that a huge consumer boom was unwisely unleashed on the basis of a surge in private sector credit which inflated property values and thereby created a new, though unstable, basis on which to construct a further edifice of credit. That tottering structure inevitably collapsed and the penal interest rates which were then put in place destroyed the private property market on which the Government had pinned all their hopes. Those who live by the market die by the market. Today's property market has killed not only the hopes of millions of families, but the illusions of the Government. Mistakes are one thing, but deliberate prejudices carried into policy are another. The greater part of our housing failures have arisen because we have been saddled with a Government driven not by common sense but by ideology.

Mr. Robert G. Hughes (Harrow, West) : Will the hon. Gentleman give way?

Mr. Gould : That is why we have had almost total reliance on the private market and when it failed, consumed by the very forces that it unleashed, the Government had nothing on which to fall back. That is why we have had the tunnel vision that meant a total and exclusive emphasis on home ownership. Ministers could not and still cannot conceive that, for many people, renting is the preferable or possibly the only option.

Mr. Tracey rose --

Mr. Gould : Many of those persuaded by the prospect of an endless property boom to buy their homes must now bitterly regret that choice.

Ministers are still at it. They offer rent-into-mortgage schemes when the immediate need is to help with mortgage-into-rent schemes those for whom home ownership has become a short-cut to home loss.

Mr. Tracey : Will the hon. Gentleman give way?

Mr. Gould : No, I will press on in the interests of the debate as a whole.

The ideological tunnel vision has produced the blind spot on the need for social housing and especially the need for housing for rent. The free market ideologues were content for everyone to take his or her chance in the marketplace. If that meant treating the homeless as a commodity to be traded in the marketplace and paying others to deal with them, as Westminster has tried to do, so be it. If that meant that the market created victims, it was their fault, not the Government's. If it meant that Ministers had to step on the homeless as they left the opera, what was that but a demonstration that the policy was working, however many tiny hands may have been frozen?

Sir George Young : No one who listened objectively to what I said last week about rough sleepers could have written the article to which the hon. Gentleman has

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referred. It was a disgraceful, biased piece of journalism, ascribing to me views on rough sleepers which I have never held.

Mr. Gould : If the Minister claims to have been misreported, I sympathise with him. I imagine that no one was more shocked than he by the insensitive statement he was reported as making. The nature of insensitive remarks is their power to cast a spotlight on the dark places of Ministers' minds and of Government policy. The spotlight recorded a contempt for the homeless and a total lack of understanding of their plight and the Government's contribution to it.

The Government's attitude has led to a wholly irrational antipathy to public sector provision, with local authorities forbidden to spend their own money on housing and deliberately squeezed out by Government policy from any responsibility of meeting housing need. Ministers have learnt nothing from a decade of failure in that respect. Even those such as the Minister who have a reputation for more liberal views have been content to reinforce the ludicrous injunction against local authorities using their land, their money and their political will to meet a desperately required housing need.

We have an ideologue in action. At the conference of the Institute of Housing only last week, the Minister was at it yet again, telling local authorities that they were not to provide new housing and that they would have to put housing contracts out to compulsory competitive tender.

That heavy burden of ideology, which has so prejudiced our housing programme, brings me to the Secretary of State--or at least it would if he were present. The right hon. Gentleman is becoming the invisible man of the Department of the Environment--the ghost at the feast, or, in the case of housing, the ghost of famine. The right hon. Gentleman seems curiously reluctant to come to the Dispatch Box to defend what his Department is doing. It is true that he popped up only last week in a Liberal Supply day debate to do a spot of electioneering, but when it comes to the hard grind, the real responsibility and the true business of the Department--the council tax or the housing crisis--he is curiously not in evidence. Why is the right hon. Gentleman so shy and so unwilling to face the music? On housing, the reason is not hard to find. He is, after all, a man with a record--a man with previous form. In being sent to the Department of the Environment, and to housing in particular, he is required to return to the scene of the crime. It is not only us who say that ; let us see what the House-Builders Federation said in the January issue of House Builder. Mr. Roger Humber, director of the House-Builders Federation, reviewed the 1980s in the light of the Secretary of State's reappointment. He said that it was

"a decade of muddle and myth, of one step forwards, another sideways, followed by two backwards. And central to this muddle and myth was Michael Heseltine."

Mr. Kenneth Hind (Lancashire, West) : Will the hon. Gentleman give way?

Mr. Gould : I have not finished this interesting article.

Mr. Hind : After that?

Mr. Gould : I make no promises.

Mr. Humber continues :

"Probably the most important contribution to undermining the proper purpose of planning was Heseltine's refusal to permit any strategic evaluation of housing requirements

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This was quite the most catastrophic stance any Minister could possibly have taken the outcome of the Heseltine policy was not record levels of housebuilding ; just the opposite On average, new private sector housebuilding output was around 150,000 pa ; exactly the same as in the 1970s. And public housing continued to fall." I am delighted that the Secretary of State has arrived just in time for the coup de grace. Mr Humber says :

"The 1980s therefore was a decade of failure in housing policy". The Secretary of State

"left us with a decade at the end of which we have to start trying to deal again with the same issues he refused to face In 1852, Marx said that history does repeat itself. The first time as tragedy, the second time as farce. We've had the tragedy : can we avoid the farce, now that he's back?"

Mr. Gregory rose --

Mr. Michael Latham (Rutland and Melton) rose --

Mr. Hind rose --

Mr. Gould : I am glad that the Secretary of State has so many ardent defenders.

There can seldom have been a more savage indictment of the record of a Minister or Government, and that from a source--the House-Builders Federation--which, at the very least, is not a natural opponent of a Tory Government.

Mr. Hind : Will the hon. Gentleman give way ?

Mr. Gould : I shall not give way at the moment.

The way out of this mess is to escape from the ideological dead-end in which the Government have trapped themselves. First, we must acknowledge that whatever the strengths of the market the provision of social and affordable housing is a community responsibility. The homeless are not only of concern to opera-goers but a blot on all our consciences.

Sir Michael Neubert (Romford) : On a point of order, Madam Deputy Speaker. When a Minister has made a personal declaration that reported remarks attributed to him were untrue, and when it has been accepted by the Opposition's spokesman, is it in order or within the conventions of the House for that spokesman to continue to read from a prepared text and to prosecute the allegations that have been disclaimed ?

Mr. David Winnick (Walsall, North) : Further to that point of order, Madam Deputy Speaker. You heard the Minister's intervention. Not once did he deny that he used those words. What are all the complaints about ? He may not like their interpretation, but he used those words about the homeless.

Madam Deputy Speaker : Order. There are a couple of hours to go and I hope to call as many hon. Members as possible who can refute, deny or agree with those allegations.

Mr. Gould : I make the point again : the homeless are not only of concern to opera-goers but a blot on all our consciences. If a wealthy country cannot put roofs on the heads of its citizens, that is a failure of political analysis and will. Government intervention is necessary because, as all the survey evidence shows, the market will not provide the social housing that is desperately needed. It is a question not just of money but of things that do not cost

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money, such as the availability of land. That is why we propose, for example, a new use class for land for social and affordable housing.

Secondly, we should forget the ridiculous dividing line between public and private-sector providers. Those who need decent accommodation at affordable rents simply do not care whether the providers are politically correct in the view of the Secretary of State or anyone else. What they need are homes. Surely all the evidence shows that if we are to meet that need the public sector must be involved. It simply does not make sense to exclude its resources, expertise and political will. What matters is that houses are built, and as local authorities have up to £5 billion in capital receipts, why not, subject to suitable safeguards, let them spend part of it? The need is too great for us to worry about picking and choosing on ideological grounds between the various instruments that are available to us. We should use every instrument that is at our disposal. That means housing associations and the private sector but also local authorities.

Mr. Robin Squire (Hornchurch) rose --

Mr. Gould : I give way to my neighbour.

Mr. Squire : I am grateful to my geographical neighbour. As the hon. Gentleman is, I hope, dealing with the private sector, will he stress his party's commitment and non-ideological approach by giving its attitude to the private sector? In particular, will he confirm for how long it has not been Labour party policy to offer private tenants the right to purchase?

Mr. Gould : My hon. Friend the Member for Hammersmith (Mr. Soley), who will wind up the debate, made an excellent speech to the Institute of Housing in which he set out extremely interesting and imaginative policies on the private sector and how we shall treat private landlords. The effect of that will be to reverse the 80,000 per year loss of private rented accommodation from the housing stock. That is our objective.

We should be considering the possibility of collaborative partnership arrangements between local authorities and the private sector. If borrowing to build houses to meet housing need is a good idea for the private sector, why is not the same borrowing of equal benefit if done by the public sector?

Thirdly, we should not be too preoccupied with the lawyers' consent of tenure, and I speak as a person with legal training. Home ownership appeals to many people and will continue to do so, but there will always be others who prefer to rent, and there may be many more whose preferences, for family and financial reasons, may change from one part of their lives to another.

Instead of trying to compress everyone into the same mould, why not work on providing as much flexibility as possible and on achieving the most level playing field between different forms of tenure? We should encourage building societies and housing associations to devise, as they would like to, mortgage-into-rent schemes, part-rent, part-buy schemes and shared ownership schemes and we should provide the funding arrangements to make that possible.

Mrs. Edwina Currie (Derbyshire, South) : Will the hon. Gentleman give way?

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Mr. Gould : No, I am about to finish.

Above all, if we are serious about tackling the housing crisis, as we must be, we must build more houses. I call on the Government even now to put the unused resources, skills and capital to work--to release some of the money currently held by local authorities so that, with the help of the construction industry, they can build immediately 50,000 homes in a crash programme, so as to make a start on housing the homeless. That would be only a start, but a start already too long delayed.

If the Minister will not commit himself to that simple, direct and humane step now, the homeless and all those whose housing needs are not met will, along with the rest of the country, draw only one conclusion : they need a Labour Government to provide them with the houses that they need. We shall do that job for them.

5.11 pm

The Minister for Housing and Planning (Sir George Young) : I beg to move, to leave out from "House" to the end of the Question and to add instead thereof :

welcomes the policies being pursued by Her Majesty's Government to put a decent home within the reach of every family by promoting owner occupation, by securing greater private sector investment in housing and by directing public expenditure effectively towards those people and areas that most need support.'.

I welcome the opportunity to set out the Government's housing strategy. I believe that our broad-based approach is right. We are maximising investment from all sources, not just the public sector. We are developing new forms of tenure, such as rent-to-mortgage and shared ownership, and new forms of social landlord, such as the housing action trusts. We are introducing new partnerships with the housing associations, and a new regime for private landlords. That approach is the right one.

We want to work with the grain of people's aspirations and with the grain of market forces. The Government's approach is more likely to succeed than is the more narrowly based approach advocated by the Labour party, which leans more heavily on local authorities and public finance which might not be available. As we have just heard, that approach turns its back on some of the more radical conclusions that we are developing and would lose the possibility of contributions from institutional finance.

The Labour party's approach has not changed over the years. There is an over-reliance on public expenditure, but this time it is based on public finance which will not be there. I ask the hon. Member for Dagenham (Mr. Gould), who, as I understand it, has just given a commitment to enter a crash programme for building 50,000 extra homes, whether he has the authority of the shadow Chief Secretary in making that commitment.

Mr. Gould : That commitment has been on the record for at least a year. The Minister made a statement about private institutional finance which had no basis in anything that I have said or in any document that the Labour party has produced. As I categorically stated the opposite, I invite him to withdraw his remark.

Sir George Young : The hon. Gentleman should examine some of his party's proposals for the private rented sector. He will find it more difficult to raise respectable institutional funds for investment in the private rented sector if he adheres to his proposals for rent control. There is a direct trade-off. We want to maximise

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the contribution that the private sector can make. We do not have the Labour party's dogmatic approach to the private sector.

Mr. Winnick : Will the Minister give way?

Sir George Young : No. This is a short debate and I want to make progress.

Not only can the Government's approach promote better housing, it can help bring down some of the barriers in our society and eliminate some of the fault lines that demarcate too many of our inner-city areas. We all know of estates designed by people who do not have to live in them and occupied by people who do not want to live in them. We want to turn those estates round, with the help of the residents and of private funds. We want the yeast of home ownership to raise the standards on those estates and transform the lives of those who live there. I should like to say a word in a moment about housing action trusts, whose potential the Labour party discounts. The guilty men are not those accused in the hon. Gentleman's speech. They are local councils, such as those mentioned by my hon. Friend the Member for Epping Forest (Mr. Norris), that leave properties unlet while families wait in bed and breakfast, that leave rents uncollected and plead shortage of money for maintenance. In London, the 10 least efficient local authorities had not collected £135 million in rent by the end of March 1990, and on 1 April 1991 owned 21,200 empty properties. That compares with 12,000 families in bed and breakfast at the same time. None of those authorities was controlled by my party. All but one were controlled by the Labour party. Profligacy and inefficiency are the hallmark of Labour in government. It is no response for Labour Members to refer to properties owned by the Ministry of Defence. Those properties are needed as soldiers and their families return to this country from west Germany and the middle east.

Mr. Clive Soley (Hammersmith) : Let us get the facts right. Committees of the House have pointed out that local authorities of all political complexions have specific problems with some empty properties and have suggested, rightly, that something be done about it, including Government action. We cite not Ministry of Defence properties, but those owned by the Home Office and the Department of the Environment, 16 per cent. of whose properties are empty. Many of those properties are kept empty for sale or demolition. I challenge the Minister to make those properties available for homeless people now.

Sir George Young : Most of the properties are owned by the Ministry of Defence and are needed for the purposes that I have just described.

Before I tackle the problems raised by the hon. Member for Dagenham, let me put them in focus. The total housing stock has increased by nearly 2 million since we came to office. The population has risen less fast, so there are now more homes per thousand of the population than when we started. In 1979 there were 377 dwellings per thousand of the population whereas in 1990 there were 406 dwellings per thousand.

Professor Duncan MacLennan, in a report entitled "Affordable Housing in Europe" published by the Joseph Rowntree Foundation, said :

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"By international standards, Britain is well -housed. It has a well-developed and efficient set of private housing finance institutions and a complex, expensive set of government subsidy measures".

Professor MacLennan outlines areas of concern to which I shall return, such as homelessness, affordability and the private rented sector, but he finished with the following warning :

"one of the major realisations of the British Housing sector in the last two decades has been that a massive, monopolistic social housing provision can move rapidly from solution' to problem'."

I mentioned housing action trusts, which I believe are a solution that we can offer to estates such as those to which I referred. There is a growing gulf between the dogma of the Front-Bench Labour party spokesmen and the more realistic approach adopted by Labour councils in touch with reality. The Labour party is officially against housing action trusts. The housing spokesman is on the record as saying that he would wind up the Hull HAT and return it to the city council. That is an extraordinary commitment. The tenants have just voted two to one to leave Hull council control and to go to a housing action trust. The Labour party is for ever asking for local ballots on Government initiatives. It now proposes to overrule them when the results do not conform to its prejudices.

Nor is it just Hull that backs our proposals for a HAT. The leadership in Liverpool--a regime which apparently has the full backing of the Labour party--is now actively investigating the feasibility of a HAT for its tower blocks. Other Labour-controlled local authorities are also recognising that a housing action trust may be the right solution for some of their estates. The Labour party is divided.

Mr. Winnick : Does the Minister not recognise in any way that much of the appalling misery of so many people--not only the homeless or near- homeless and families living in bed-and-breakfast accommodation, but many of our constituents who have young children yet who have to live with their parents or their in-laws--is because since 1979 there has been an 85 per cent. reduction in local authority starts? What sort of dogma forces so many people to live in misery because the Government will not allow local authorities to do their rightful job?

Sir George Young : That argument will not hold. The hon. Gentleman makes the same mistake as did the Labour Front-Bench spokesman, who referred to the reduction in local authority spending without mentioning the growing budget of the Housing Corporation. That budget is growing from £1.1 billion last year to £2 billion for 1993-94. One must put that fact on the table, too, and examine overall expenditure rather than focus on one part of the market.

Mr. Tracey : I am grateful to my hon. Friend for giving way. It makes a pleasant change from the behaviour of the hon. Member for Dagenham (Mr. Gould). My hon. Friend has been talking about public funds and public housing. Instead of going round the edge, will he answer the question : when will the Government do something to force the hands of local authorities that refuse to collect rents and that keep properties empty although people are homeless? It is a public disgrace. My hon. Friend spoke of £135 million in uncollected rents and he knows as well as

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I do that in London alone there are tens of thousands of empty properties. We must get those properties back into use, because people are on the streets.

Sir George Young : One way in which to deal with the problem that my hon. Friend has identified is to give more power to tenants and to enable them to take responsibility for their estates, which I suspect they would run more effectively and competently than many local authorities. I assure my hon. Friend that we are considering the matters that he has raised to see whether we can protect tenants from the incompetence of their local authority landlords.

Housing action trusts are not just about public money. They represent a fresh approach to difficult-to-let estates by setting up a single-minded agency--not encumbered with other responsibilities, and with tenants on its board--which can bring in private funding, produce a five-year strategy for modernising the properties and improving the management, and then give tenants a choice as to who manages their homes thereafter. The tenants can go back to their former landlord if they want to.

Mr. John Battle (Leeds, West) : I served on the Committee that considered the Bill under which the trusts were set up. The Government rejected an amendment that we tabled which would have allowed those houses to return to local authority control. Are not the hon. Gentleman's officials now going round the country informing local authorities that, after the period of the trust has elapsed, the tenancies will return to them ? Has not the hon. Gentleman changed the terms of the offer ?

Sir George Young : The hon. Gentleman confirms what I have just said. The trusts will then give the tenants a choice as to who manages their homes. If the tenants want to go back to the local authority landlord at the end of the period, they will be free to do so. I suspect that many of them will prefer to buy their homes after they have been improved. They may prefer to choose a housing association to manage their homes or they may want to manage their homes themselves through an estate management board. The point is that, at the end of the day, the decision will rest with the tenants.

Estate action is another policy that is relevant to those who live on difficult estates. Some 600 schemes up and down the country have been implemented, renovating 300,000 units, improving management, diversifying tenure, providing training opportunities and making the estates places where people want to live. In the past year, we have built on our success, increasing resources from £190 million to £268 million, of which £126 million will be available for new schemes. I shall shortly be inviting local authorities to bid for estate action resources next year. I wonder how many Labour Members acknowledge that as the contribution of a Conservative Government.

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