House of Commons Hansard Debates for 2 Jul 1991

Mr. Hind : Will my hon. Friend give way?

Sir George Young : I shall give way once more, but then, in fairness to those who wish to speak in the debate, I must make some progress.

Mr. Hind : My hon. Friend has made a good point. He will be aware that in the new town of Skelmersdale, which has 25 Labour councillors, it took the Conservative-controlled district council to recognise the need of two of

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the most run-down estates in Digmore and Tanhouse and produce imaginative estate action plans. The first of them has now been implemented. Before the estate action plan, there were 3,000 requests for transfers from the estate ; now there is a waiting list of those who want to be housed on it. The second estate action plan, in Tanhouse, is also making good progress. That is a credit to my hon. Friend's Department and to imaginative Conservative housing policy.

Sir George Young : I am grateful to my hon. Friend for his glowing tribute to the work of my Department. I hope that local authorities will realise the potential of estate action and put in bids when we invite them for next year.

Mrs. Elizabeth Peacock (Batley and Spen) : Will my hon. Friend give way?

Sir George Young : For the last time.

Mrs. Peacock : My hon. Friend will be aware that my local authority, Kirklees, took a long time to be shamed into using the estate action programme. When my hon. Friend the Under-Secretary visited the area recently, he saw that the authority had not made such a good job of it. The authority is now saying that it is almost too much trouble to bother with estate action, thus condemning its tenants to a future without help. Is that not a disgrace?

Sir George Young : I very much regret that the authority has taken that narrow approach. My hon. Friend the Under-Secretary and I would like to take a further look to see how we can rescue the tenants from their plight.

One strand of our efforts to improve the quality of life on run-down estates is an initiative, under the auspices of Professor Coleman, in which the impact of the physical redesign of such estates is tested. I am pleased to announce today the seventh scheme to be included in the experiment, which is on the Durham estate in Sandwell. Some £2.9 million of Government resources are being devoted to the scheme which will ensure the transformation of 261 homes. The hon. Member for Dagenham did not touch on the policy of large-scale voluntary transfer. That policy is releasing resources tied up in council housing, part of which can then be reinvested. Sixteen local authorities, none of them Labour, have balloted their tenants and subsequently transferred their stock to a housing association. That has brought in more than £1 billion of entirely private-sector finance. It has enabled repairs to be carried out more quickly than if the stock had remained in council ownership. Independent research into the results of the first transfers has revealed a high level of satisfaction with the new landlord and greater tenant participation in management. In the two years since the first transfer, the New Chiltern housing association has succeeded in reducing both rent arrears and the volume of empty dwellings. At the same time, part of the capital receipt has been used to finance a substantial new-build programme carried out by the association. That shows how local authorities, tenants, housing associations and private investors can come together to fund better homes and more homes without increasing public expenditure. It is an approach that Labour, with its slavish adherence to the drab policy of municipalisation, has so far rejected.

Mrs. Currie : Will my hon. Friend give way?

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Sir George Young : For the last, last time.

Mrs. Currie : Does my hon. Friend agree that housing associations deserve tremendous congratulations on the first class way in which they are now running a great deal of the country's private rented housing? Is my hon. Friend aware that housing associations take over property not only from councils? Not long ago, housing associations in my constituency took over a substantial number of properties that used to belong to British Coal. They have modernised the properties and are looking after tenants much better than the previous landlord. I should, therefore, like to put on record my appreciation of the housing associations concerned.

Sir George Young : My hon. Friend is absolutely right. The key point about resourcing housing associations, as opposed to local authorities, is that housing associations can go to the City. They can top up the resources that the Government make available to provide more units. A local authority cannot do that. The direction of funds in that way not only helps the housing association movement ; it ensures that there are more houses for people who need them. I should like to press the Labour party on the question of capital receipts. Labour housing spokesmen seem to think that they can increase spending on housing, without incurring the displeasure of the shadow Chief Secretary, by spending capital receipts. That will not do. Capital receipts are used to reduce the level of debt. Under the new regime, we have allocated part of the spending power from those areas with receipts to those without receipts. If capital receipts are to be spent again, the money will have to be borrowed--as is the case with any spending commitment not covered by higher taxes--with the usual impact on interest rates and the PSBR. The key question in the debate on housing is not the rather narrow one that the hon. Member for Dagenham asked : how many rented houses can the local councils build? The debate should be much broader than that. We should ask ourselves how we can maximise total investment in housing of all tenures. The question does not revolve around public investment alone. As I have said, the housing associations are increasingly borrowing from the City to complement what we allocate. That does not score as public expenditure. Private builders are building low-cost homes on land owned by councils or on land secured by the exceptions policy.

Home ownership is the ambition of most people, and we have enabled 1.5 million former local authority tenants to buy their homes. Our recent research has shown that96 per cent. of them felt that, taking everything into account, they were pleased to have bought. Few of those people would have achieved that ambition if the Labour party had had its way. Of those who bought between 1985 and 1987, 90 per cent. carried out significant repairs and improvements.

Not only has the policy helped those who bought ; it has helped those who have not. The local authorities have been relieved of the burden of maintaining and managing these homes, and the amount spent on capital renovation and on management and maintenance of the remaining stock has increased. Spending on capital renovation increased from £150 per dwelling in 1980-81 to £450 this year--a real increase of more than 50 per cent. Spending on management and maintenance increased from less than

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£300 per dwelling to £800 per dwelling--a real increase of 40 per cent. There is scope for promoting home ownership yet further, perhaps by building more properties for shared ownership--for those who can afford a council rent but cannot afford the full costs of home ownership.

Mr. Allen McKay (Barnsley, West and Penistone) rose--

Sir George Young : I give way for the last, last, last time.

Mr. McKay : I am grateful to the Minister for giving way--I had been waiting to intervene. My authority does everything that the Minister has been talking about. It uses every means to finance its housing but now, for the first time in its history, its housing policy is ruined. That is the result of the Government's policies. Furthermore, for the first time in its history, it now has homeless people. On home ownership, will the Minister consider a problem that is occurring in my area? I refer to the people who bought council houses but who can no longer afford them. Those people have found that they cannot get out and that there is nowhere for them to go. They have to rely on the local authority, which no longer has any houses for rent. Could not a scheme be introduced to allow local authorities to buy back such properties from those who can no longer afford them?

Sir George Young : That brings me straight on to the problem of repossessions, which has already been referred to. It is untrue to claim that the Government are doing nothing to help those who face difficulties with their mortgage. In 1989-90, £350 million was paid in income support to help people who were eligible to pay their mortgage. There has been some comment, in the light of one case, that the system is too generous, rather than too tight.

Nor do I accept the gloomy forecasts that are made of future repossessions. Over the past three years, people have had difficulty maintaining payments, as interest rates rose faster than their incomes. This put pressure on their budgets, leading in some cases to greater arrears. But, with base rates falling 3.5 per cent. in less than a year, and incomes for those in work rising by 4.5 per cent., that source of pressure is clearly reducing. Those who coped during the period of rising interest rates should be able to cope as they fall. I would, therefore, hope to see fewer repossessions because of that imbalance.

The pressure in future may come from rising unemployment, but it is important to understand that redundancy or long-term illness no longer means the loss of a home. If there is an entitlement to income support, that will pay half the reasonable mortgage interest for the first 16 weeks and all the interest thereafter, including any interest on any arrears that have accrued during the 16 weeks. So if someone loses his or her job, claims income support, contacts his or her building society to put it in the picture, and then pays over the income support to the building society, the building society would be most unlikely to contemplate possession proceedings. So although I am, of course, concerned at the information coming through--there are many repossessions in the pipeline--the changing circumstances to which I have referred may mean that some forecasts are too gloomy. Other options are available to minimise the trauma of repossession. I understand that, through a housing association, Mole Valley council is offering shared

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ownership to owner-occupiers who cannot afford the full cost, leaving them in their homes as part-owners, part- renters. The hon. Member for Barnsley, West and Penistone (Mr. McKay) may find that point relevant. Some building societies may be willing to allow owners to rent out their homes for a while or to roll up some interest until things improve. Surprisingly, only a minority of mortgage payers with repayments set annually have taken advantage of the chance to have their repayments reviewed to reflect the recent cuts in mortgage rates.

I had intended to say something about the private rented sector and our plans for it but, out of respect to the many hon. Members who wish to speak, I shall skip that and turn finally to rough sleeping. In the past six months, we have witnessed in our capital city the most concerted and best resourced attempt ever to help rough sleepers. The front-line agencies, whose work I applaud, have in the first six months reduced by about half the number of people sleeping rough in central London. The programme of investing £96 million in direct access hostels and move- on accommodation is only one third of the way through--with about 1,000 of the planned 3,300 places available. The Bull-Ring, by Waterloo station, known as "cardboard city", is closed, with all of those who were sleeping there being offered alternative accommodation--although some have refused it. I recognise that we have some way to go. I am concerned about the numbers of people in Lincolns Inn Fields, but we have plans for more hostels nearby which should be open this autumn. I also welcome the help from the Department of Health, which is providing high-care hostels and outreach teams with medical skills to help those rough sleepers who suffer from mental illness and drug and alcohol problems. I am determined that the momentum we have built should be maintained and the policy seen through.

I have recently spoken critically not of rough sleepers but of professional, aggressive beggars, who prey on passers-by, tourists in the west end and young homeless people, who, when arrested, turn out to have fixed addresses and substantial sums of money on them. That group would like us to confuse them with young vulnerable people with no homes. We must make sure that we do not.

In conclusion, our policy is based not on a massive municipal expansion programme, but on diversity of provision, on encouraging the public sector to work closely with the private sector, on bringing in fresh funds to deal with the worst of the problems, and on offering choice and diversity to as many people as possible. Old prejudices and preconceptions must be overturned. The best local authorities are already working with housing associations, using their urban renewal powers and their planning powers, working up proposals for city challenge, estate action, priority estates projects, housing action trusts, large-scale voluntary transfer, and promoting rural trusts in our smaller villages. I ask the House to endorse that approach by voting for the amendment.

Several Hon. Members rose--

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Madam Deputy Speaker : Order. The Minister was absolutely right : many hon. Members wish to participate in the debate, so brief speeches would be appreciated by all of us.

5.35 pm

Mr. Keith Bradley (Manchester, Withington) : Thank you for calling me so early in the debate, Madam Deputy Speaker. It is an outrage that the Government should have sought to make a statement today, thus leaving less than an hour for Back-Bench Members to speak on this important topic. However, I shall be brief, as you have requested, Madam Deputy Speaker, because many of my hon. Friends wish to speak in this important debate.

The motion encapsulates the Government's abject failure throughout the 12 years of their administration to provide a coherent and meaningful policy that would give everyone in this country the right to a decent home. Listening to the Minister's speech was like hearing an echo from the past. He simply rehearsed all the arguments that were advanced by one of his predecessors during the Second Reading of the Housing Act 1988. The Minister rehashed those earlier policies although any objective analysis and the panic measures that the Government have recently undertaken on homelessness prove that the Government have no real understanding of people's need and right to live in a decent home.

In that Second Reading debate in 1987, the Government outlined what they viewed as their flagship policies for housing in the 1990s. The Government were proud of their Bill and its main initiatives, some of which the Minister referred to, such as the housing action trusts, the ability of local tenants to opt out of local authority control of housing, the market rent system and the introduction of assured tenancies. As my hon. Friend the Member for Leeds, West (Mr. Battle) has already said, ably led by our spokesman on housing, the hon. Member for Hammersmith (Mr. Soley), the Opposition Members who served on the Standing Committee that considered the Bill made it clear then that the Government's policies had no relevance to people's needs and that they would not work.

If we look at the way in which those policies have affected my city of Manchester during the past four years, we can see that we were right to oppose them and that we are right to say today that they still do not have any relevance to or meet the housing needs of cities such as Manchester. First, how many housing action trusts have been welcomed and introduced throughout the country? Very few. One of the first to be suggested in the first tranche of housing action trusts for Manchester was rejected out of hand by the people of Manchester.

Secondly, how many council tenants in Manchester have requested a ballot because they want to leave local authority control, and how many ballots have taken place? There has been not one ballot and not a single request for one because the people of Manchester know that their landlord--the council--is trying to deliver a service and that the only reason that it cannot is that it has been starved of resources.

Thirdly, in the Government's terms, have market rents in the private rented sector delivered a massive expansion in the number of homes that people can afford? Again, the answer is no because, although there has been an increase in the private rented sector in Manchester, it has been only

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in the luxury private rented sector where rents are at levels that most people cannot afford. People can afford such rents only if they are rich or if the private landlord has ripped off the housing benefit system and tried to increase the rent at the expense of public subsidy. I welcome and applaud Manchester city council's initiative to drive out such landlords by saying, "We are not prepared to sanction the rent levels that those landlords are trying to charge on the back of housing benefit." The Government should condemn that practice also because that is not the way to create affordable rents in the private rented sector.

The Minister wants us to consider public expenditure on housing in conjunction with allocations made to housing associations. More important, we must examine bids for resources made by councils such as Manchester for their housing investment programmes, because they clearly identify, both in the public and private sectors, the money that is needed to provide decent houses in their areas.

An examination of the bid compared with the allocation finally granted shows that the Government have had no commitment to the provision of resources for decent housing in our cities. In Manchester, for example, £189 million was sought in 1988-89 and £29 million was allocated. In 1989-90, £210 million was sought and Manchester received only £19 million. There was an increase in 1990-91, because £100 million was sought and £52 million received. Even so, in that year, Manchester received only half of what it really needed to deal with its housing stock. In the current year, from a bid of £127 million, the city received £61 million. It is clear from the figures that the council has not been able to improve, modernise, install heating and so on for the houses that are required by Manchester families. The result is that we have a record number of homeless, with over 7,000 people in the city seeking their first decent home.

We must examine the implications of that situation on the private sector and renovation grants. In the last year, the city of Manchester received an allocation from the Exchequer of £3.405 million, a 75 per cent. allocation, to enable the private sector to renovate its stock. Out of that sum must be funded disablement grants, to enable people with disabilities to adapt their homes, and so on. So in the last year, 1,250 applicants wanting about £8 million have had to get what they can from the paltry allocation of £3 million or a little over.

With the rundown in the public and private sectors of housing, we are storing up problems for future generations. As our private stock of housing falls into disrepair, the people of the future will not have their housing needs met. We have heard enough about the rundown in the house building programme to know that in the future there will be greater demands on the public sector to house people, but homes will not be available for them.

I have some suggestions for the way in which we, including the Labour party, should be examining the housing issue for the future. We can have a coherent housing policy only if we tackle root and branch the problem of housing finance and the ways in which, in the future, we fund the public and private sectors.

I welcome the report published last week by the Rowntree trust, chaired by the Duke of Edinburgh, which advocated such a root and branch review of housing finance. Until we equalise subsidies between the different

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sectors, and conduct a thorough examination of mortgage tax relief and the amount available through subsidy and benefits to the private rented sector, we shall not free the resources necessary to expand the different tenures in the housing market.

That report rekindled a debate that has been going on for many years. I made a modest contribution to that debate over 12 years ago in a research project at York university with Professor Jonathon Bradshaw, in which we advocated the development of a universal housing allowance. In an article in Roof magazine entitled "Can a housing allowance work?" we examined the first stage of such an allowance, which was the integration of what was then supplementary benefit housing payments with rent rebates.

We moved from there to look at the possibility of integrating all subsidies, whether in the owner-occupied sector through mortgage tax relief or through the public or private rented sectors, to see whether we could contribute modestly to a debate allowing for the easier transfer of people between and within tenures.

We accept--I hope that the Labour party will examine this seriously ; I appreciate that it could not be done overnight--that the phasing out of mortgage tax relief, if it became policy, would take many years. That was said by the Duke of Edinburgh's study. But unless we start heading in that direction, with a massive explosion in subsidy, £9 billion will be spent in the next couple of years on mortgage tax relief. That money would be better spent on providing decent housing.

We must have a subsidy arrangement providing a housing allowance that can be cashed in to enable people to move into any form of tenure, at any stage, in the owner-occupied or rented sectors. Such a step would achieve greater mobility because people would not be locked into mortgages in areas from which they cannot move because of fluctuating house prices. Such a housing allowance would free the market and give people the opportunity to move and have different tenures at different times of their lives. They would do that when it suited them, instead of being financially penalised by having locked themselves into mortgages at an early stage.

Bearing in mind the proposals of the Rowntree trust, I hope that the Government will take action along the lines that have been recommended. I feel sure that the Labour party will take the matter seriously, for unless we have a root and branch study of housing finance in Britain, and find ways to free resources to ensure the right of everyone to a decent home, we shall never make progress. We will tackle the problem of homelessness not by initiatives that resemble panic measures and not by examining incoherent policies, the long-term implications of which cannot be foreseen, but by accepting that a thorough examination of housing finance is the key to housing in the future. The next Labour Government will take the issue seriously because my hon. Friends and I appreciate, as the motion says, that the mark of a civilised society is the provision of decent homes for its people.

If we do not put housing high on the political agenda, future generations will not forgive us. The citizens of Manchester understand that, and because they put housing high on the agenda, they will vote accordingly at the next general election.

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5.46 pm

Mr. Douglas French (Gloucester) : I am grateful for having been called early in this short debate and I wish at the outset to congratulate the Minister on the knowledgeable and constructive way in which he dealt with the subject. He is increasingly recognised among housing practitioners as a person who appreciates the difficulties that they are endeavouring to overcome, and I congratulate him on his efforts so far.

I cannot say the same about the speech of the hon. Member for Dagenham (Mr. Gould), who wove a tale of gloom and woe. I listened in vain to that part of his speech in which I thought he might produce some constructive proposals, but what little his remarks contained was unspecific and he did not answer any questions.

The hon. Gentleman said that his party and others should forget the ridiculous dividing line between public and private providers. I shall concentrate on that initially, particularly the question of voluntary transfers, to which the Minister referred. Regrettably, there has been no significant example of a voluntary transfer to a pre-existing independent housing association. Twenty nine specially formed housing associations have been created for specific local authority areas, of which 16 have been successful at ballot while 13 have been unsuccessful. About 70,000 houses have been transferred so far. While I do not belittle that achievement, it is a smaller number than had been hoped for, and certainly fewer than the merits of such transfers justify.

Where there has been a willing local authority and a willing housing association, often the stumbling block has been the way in which the campaign preceding a ballot has been undertaken. There are a number of examples of how entrenched interests against a transfer taking place have been ill-informed. Arguments have often been presented to tenants in a highly distorted way and tenants have been led to believe that penalties would ensue should they support a voluntary transfer. Believing in the argument that better the devil they know than the devil they do not know, tenants have accordingly voted against the proposed transfer.

Mrs. Peacock : Does my hon. Friend agree that local authorities such as Kirklees, which is my authority, have taken an ideological view on that matter and, over the past four years, have lost about £12 million in housing development money because of their silly socialist principles?

Mr. French : I entirely agree with my hon. Friend. Her council is one of many where opportunities to bring more resources into the sector have been missed or rejected for ideological reasons. My constituency of Gloucester has had a similar experience. The arguments deployed against transferring to an independent housing association were grossly distorted and ill-informed. One of the difficulties is that the prospective housing association is obliged to put forward a firm proposal, with reliable figures for the projection of future rents and an explanation of how the financial package will hold together. But those who wish to oppose the proposal can refute those figures without, in turn, having to demonstrate that what they say is correct. Although they may have criticised the prospect of increased rents and argued that the local authority could secure lower rent levels over a particular period, in the

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event it may not prove to be the case. However, by the time that becomes evident the arguments against voluntary transfer have prevailed.

The voluntary transfer to a local housing association--one that emerges from a local authority--is akin to a management buyout. It suits some people but does not necessarily suit everyone. However, those who are unwilling to go down that route seem to me to have another option. Self- governing trusts have been introduced in respect of hospitals and the equivalent in education is grant-maintained status. By the same token there is a sound argument for local authority housing departments becoming charitable trusts. Those who are persuaded towards trust status, whether they are in schools or hospitals, are attracted to the opportunity to provide better internal management, a more productive use of resources and a better capacity to deliver the service to consumers. Those who run the services have a better opportunity to find the right solutions to solve the problems facing them.

That principle can easily be adapted to local authority housing departments. A charitable trust emerging from a local authority housing department would be the recipient of the local authority department's assets and liabilities, but the authority would continue to act as banker and would retain the debt profile serviced by the trust and secured on the properties. Like other trusts, the trust could appoint outsiders to manage it and inject private sector expertise into its operations.

I do not claim to be the originator of that idea. Some housing practitioners have already put it forward and explained it far more eloquently than I have. However, I urge my hon. Friend the Minister to consider the principle carefully because it has great merits. Other examples of ingenious housing initiatives can be drawn from international experience. One such example is rather confusingly known as the correlation insurance indemnity. Anyone who mentions the word "insurance" in a housing debate is quickly shouted down, but I refer to the experience in New South Wales-- [Laughter.] The hon. Member for Monmouth (Mr. Edwards) laughs. It so happens that the housing profile in New South Wales is remarkably similar to the housing profile in a number of areas in this country. The housing department there has made an especially useful arrangement through the National Bank of Australia. Without going into the details of the system, which is complex, it boils down to a cost efficient way to obtain private finance to build substantially more houses than would otherwise be built through conventional methods. I urge my hon. Friend the Minister to consider that example as it could be adapted to the United Kingdom's experience.

One of the difficulties has been to persuade financial institutions that housing associations are appropriate organisations in which to place funds. That was well illustrated three years ago, when North housing association endeavoured to raise money in the City. At that time, it said that the biggest two difficulties were the two words in its name--"north" and "housing"--which put off many institutions that might otherwise have been persuaded to lend money. It overcame that difficulty and convinced the financial institutions that it was a viable haven for their funds. However, housing associations have often failed to present their case effectively to financial institutions. Housing associations executives have often failed to distinguish between what the financial institutions

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seek in terms of equity and where they would place fixed interest loans. One is suitable for risk and the other clearly is not. The packages put together by housing associations have not always recognised that.

There is also an urgent need for housing associations to rethink how they present their accounts. Some hon. Members will know that they have a curious way of presenting them. It is largely misunderstood, or not understood at all, in the City and it puts many City institutions off. A little effort to reconsider the presentation of those accounts would go a long way.

A viable rented sector needs willing landlords for whom renting is worth while, tenants who can afford to pay the rents, an arithmetic that stacks up, and a political framework with some continuity. Those are obvious requirements, but there are obstacles preventing their achievement. I refer in particular to housing benefit. The hon. Member for Manchester, Withington (Mr. Bradley) said that landlords--I am not sure whether he referred to "wicked" landlords but has perhaps done so on other occasions-- were "ripping off" the housing benefit system. I do not believe that the blame rests exclusively with landlords. The housing benefit system does not operate as well as it might for two reasons. First, landlords and tenants cannot generally risk signing a contract until housing benefit is confirmed. Conversely, housing benefit officials often will not confirm the availability of housing benefit until the landlord and tenant have signed a contract. That is a Catch-22 situation which it should be possible to sort out. Again, I urge my hon. Friend the Minister to consider that problem.

My second point relates to the attitude adopted by the hon. Member for Withington. Sometimes landlords provide accommodation for people in receipt of housing benefit only to discover part way through the tenancy that the eligibility for housing benefit has ceased. The landlord has no means of knowing that until he is asked by the housing benefit office to refund some of the money paid on behalf of the tenant who is no longer eligible. That is a quick and sure way of discouraging landlords from offering accommodation to recipients of housing benefit. The procedure needs tightening up ; if it is not improved people will fail to find accommodation that they need. Finally, I urge the Minister to take another look at circular 7/91 published on 10 May, in which he announed his intention to allow public subsidy to go into shared ownership schemes even when there is some restriction on the availability of staircasing. Before the circular was issued the right to full staircasing was a strict requirement but the circular modified that requirement. The message coming from the Housing Corporation seems to contradict the contents of the circular--a matter of particular concern to people in rural areas. I urge my hon. Friend to tidy up this incompatibility. 6.1 pm

Mr. Ronnie Fearn (Southport) : I believe that everyone should have the right to a decent and affordable home. It is a national disgrace that in 1991 thousands of people are sleeping on our streets, hundreds of thousands are registered as homeless and countless more are living in cramped and unhealthy accommodation.

I accept that far more people now own their homes, but I cannot accept the cost at which that has been achieved. Government ideology, Government policy and the

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legislative changes of the past decade are major contributory factors to the appalling state of the nation's housing stock. Britain's housing is in crisis. The immediate response should be the removal of restrictions on local government finance to allow the greater use of capital receipts for new build, maintenance and improvement. But that is not the whole answer, since many local authorities do not have large capital receipts or stocks of housing to sell.

I should like some of the £23 billion that the Treasury has pocketed from the sale of council houses in the past 10 years to be reinvested in the housing market. Any Administration under our control would want substantially to increase direct public support for housing for people, however low their incomes. Our aim is to allow people maximum choice in how they house themselves and to gain maximum value for every pound of public money that we spend. This can be achieved by stimulating new investment to meet housing needs, by increasing the total amount of subsidy available and by dispensing it in a way that matches resources more closely to needs.

We need to increase the money available for housing associations and local authorities to build, acquire, improve and maintain housing so as to provide for people on low incomes.

We should introduce partnership housing, using a new and limited form of subsidy to enable a serious gap in the housing market to be filled--housing for people on middle incomes who for one reason or another prefer renting to buying. Measures such as these would need a new form of support, which we suggest would come from a housing cost relief, which will have the effect of making high rents more affordable and of enabling more people to cope with the difficult early years of buying a home.

We hear a great deal about affordable housing, but what does it mean ? What is affordable rented housing ? There can be no precise definition of an affordable rent ; each household has different incomes, needs, priorities and skills for coping with its budget. At the moment the country relies on housing benefit to implement affordable rents, but the steep withdrawal of that benefit with increasing income has a damaging effect on incentives for people on low incomes to increase their earnings.

Ideally we should like a tax and social security system that shifts so much of the burden away from the low-paid that they can without hardship make a bigger contribution to their housing costs-- Mr. Gregory rose --

Mr. Fearn : I have no time to give way.

We recognise that there would still be a need for a closely targeted housing benefit system, but we think that targeting could be less severe than it is now. Even a modest rate of withdrawal, at between 65p and 55p in the pound, should make life easier for many people.

The pressures of the past 12 years have been in the direction of home ownership and the right to buy, but many people on average incomes would prefer to rent if rented accommodation were available and affordable. With the housing market in its present condition I understand that there is a discernible move away from buying and into renting.

We see our proposals for housing cost relief and partnership housing as the only reasonable and economic way forward to encourage new housing for rent. Housing

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cost relief would differ from housing benefit in three ways. It would apply to rent and mortgage payments above a certain level, say, £30 a week, and up to a ceiling of, say, £100 a week, with regional variations. It would cover only a proportion, perhaps 50 per cent., of the rent or the mortgage interest. The rate of withdrawal with increases in income would be gentle--probably about 20p in the pound. The threshold above which relief would be withdrawn would stand at about the median level of net income for a single earner : at the moment, about £150 a week.

The introduction of such a housing cost relief would make possible the introduction of a new rented housing sector based on a lower subsidy than that applied to the provision of housing for low-income households. We call this new sector partnership housing. It would be based on a capital subsidy that would depend on market conditions of house prices relative to income. The level of subsidy would fall as land and house prices fell relative to income. The rent on a home costing £75,000 would be about £80 a week. Housing cost relief would reduce the cost to the tenant by up to £25 to a minimum of £55 a week. By this method we think that as many as 50 per cent. more dwellings could be provided through a partnership housing scheme, for a given amount of public spending.

Mr. Den Dover (Chorley) : Will the hon. Gentleman give way?

Mr. Fearn : I have not given way so far, and I will not now. Thus far I have spoken only about homes for rent, but if we are true to our aims of maximising choice the option to buy a home must extend down the income scale. The right-to-buy policy has made that possible for some, but it applies only to people living in council housing and we are well aware that the supply of stock is dwindling. Housing cost relief will give people on modest incomes about twice as much help as they would receive from mortgage tax relief, which is a less effective way of helping people. Indeed, I believe that many of the parties in the House are thinking again about it.

The ceiling of £30,000 is half the cost of an average home and because of its across-the-board nature it does not target public money where it is most needed.

Another scheme with the potential to help people on modest incomes to buy their homes is shared ownership. We welcome the arrangements for that brought in by the Government--they are not dissimilar to our partnership housing proposals. Our system of housing cost relief will offer a great deal of help and make shared ownership possible for a wider range of people.

The provision of housing will mean little if that housing is of poor quality or if it is not maintained adequately. Investment in maintenance and repair is essential, and it makes economic and social sense to ensure that there are enough funds to maintain the existing stock. To allow property to fall into disrepair and rack and ruin merely adds to the housing and homeless crises.

The erosion of local authority responsibility for building control must have a detrimental effect and has caused hardship to many home buyers. Full responsibility for the inspection and approval of building works should be restored to local authorities. There must be a review of

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all aspects of building regulations and codes of practice with a view to improving the long-term durability of construction and economy in the use of energy.

We would promote the standards that are recom-mended in "Homes for the Future", which was published jointly by the Institute of Housing and the Royal Institute of British Architects, and would consider legislative backing for the essential standards in that document. I favour legislation to widen the definition of unfitness. That is relevant to the private rented sector in which conditions are often appalling. People who rent in the private sector are entitled to decent, good-quality accommodation.

In 1989, we said that we would encourage local authorities to take the initiative in developing agency schemes to help improve and maintain privately owned housing stock. We have been pleased with developments since then at national and local level, although we share doubts as to whether the £3 million allocated by the Government is enough to keep those agencies going. While we welcome the funds allocated to inner-city projects for improving estates, we would like to see all councils being able to improve the quality of life on their estates and, where necessary, being able to redevelop. Another issue requiring attention is the number of empty properties under local government control. When waiting lists are long, that should not be tolerated. Many of the properties are empty because councils do not have the money to bring them up to standard. Others are empty because of mismanagement and inefficiency. Councils must find ways to turn over property between lettings at a much quicker rate. One way may be to involve the tenants, and I was pleased to hear the Minister speak about that. Tenants could carry out redecorating and minor repair work. More funds should be provided to enable local authorities to bring empty properties back on to the rent market, and a relaxation of capital controls could provide some such funds.

We advocate a regular analysis of repairs that are required and those that have been carried out, and we want to see regular monitoring of performance with contractors expected to reach high standards of tenant satisfaction. For example, the Liberal Democrat-controlled council of Berwick has a four- year rolling programme for repairs using a number of small agencies. The condition of the council's stock and the efficiency of its programme was recently given an excellent report by the Audit Commission. Our councils are committed to tackling the deterioration in the private sector by running an efficient improvement grant system and by working with agencies and the voluntary sector to ensure that those in most need are getting the assistance that they require. The Government's improvement grant means test is far too restrictive, and we should like to see it removed for the disabled and the elderly. The elderly are particularly relevant because they disproportionately have homes which lack basic amenities and they cannot afford repair and maintenance.

There is an obvious need for more direct investment of public money in the grants system. That would be imperative if the definition of unfitness were broadened and standards were strictly enforced. Enforcement is rather lax at the moment. However, when providing direct funding we must look at other ways of providing incentives to save and repair.

Private sector tenants who do not have a repair obligation in their contracts are, of course, not entitled to

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an improvement grant, yet the private rented sector contains some of the worst disrepair. We should tackle that by giving tenants the right, with local authority approval for works and cost, to call in contractors to carry out essential repairs. In that context I am sure that there is a role for agencies. The local authority would be responsible for payment in the first place, but would be entitled to register a land charge against the property until the cost had been paid. When the repairs had been completed the landlord would be entitled to a rent increase, but that would be paid to the council until the debt was discharged. We expect that most tenants would have the extra rent increase largely covered by housing benefit. Local authorities should have a statutory duty to ensure that housing, public health and fire regulations are observed in all multiple occupation premises and that properties with three or more households sharing essential living accommodation should be registered with the local authority. Properties not up to standard should be priority targets for acquisition by councils, housing associations and co-operatives and, where appropriate, we would use compulsory purchase orders.

I spoke about empty Government properties, but there are more than 600,000 empty properties in the private sector. Thousands of people are sleeping rough or in inadequate, cramped accommodation and it is obscene that so many properties are allowed to lie empty and fall into disrepair. We are willing to find ways of giving owners greater incentives to bring their properties up to standard and back on to the market, but when a property is intentionally left vacant we are prepared to introduce a new mechanism by which local authorities can serve a notice of intention to let, with appropriate right of appeal. Then, if necessary, we will extend compulsory purchase powers to enable local authorities to buy private homes which, I repeat, are intentionally left vacant for a significant time.

I have outlined some of the policies that should have been put in place during the past 12 years. The disaster area of housing has gone on for far too long. It should be tackled now.

6.19 pm

Mr. Hugo Summerson (Walthamstow) : I shall concentrate on housing action trusts, not because I want to, but because of the short time that is available. There is a proposed housing action trust in the borough of Waltham Forest in my constituency, and it is greatly welcomed. If the tenants vote in favour of the trust, it will cost about £160 million to £170 million, which is a considerable investment of public money. The trust would cover four estates in the borough : Chingford hall, Boundary road, Oliver close and Cathall. Boundary road is in my constituency and all four estates share the same characteristics. They are 1960s designed and built tower blocks and they are horrendous. It is dreadful to think that they could ever have been conceived, and it is appalling that they were so badly built and have been disgracefully managed. Tower blocks breed unemployment, despair and misery, and the sooner that they are taken down the better. The only people who will regret their passing are the criminal fraternity, who engage in stripping stolen cars, and the owners of pit bull terriers. I do not know where those people will go when the blocks

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are demolished, but with any luck they will all make their way to Hammersmith. I am delighted to say that, if the housing action trust goes ahead, there will be tenants on the board, which will allow their voice to be heard. This is a great improvement over the housing action trust mark 1, which did not permit tenants any say in the running of their estates.

Safeguards are built in for the tenants on, for example, rents, which will be frozen while the housing action trust is in operation. Once the tenants have moved to their new homes, the new rents will be set at levels similar to those for comparable council properties. Moreover, tenants will have the right to choose their own landlord. Once they have moved into their new homes, under the housing action trust, if tenants wish to keep the local authority as landlord, then they have the right to do so. If, on the other hand, they choose to have a housing association as their landlord, or if they choose to set up a tenants' co-operative so that they can run their homes themselves, or if they wish to exercise their right to buy, all these options are open to them. There is no question of privatising these estates --a slanderous and disgraceful suggestion that has been made by such bodies as the Socialist Workers party. I urge the tenants to take no notice of what these people say.

There is no doubt but that this is the way forward. It is the way to deal with dreadful estates of this type. I hope that the tenants on such estates in the London borough of Waltham Forest will turn out in great numbers for the vote on 13 July. I hope that there will be a clear-cut, decisive vote.

6.21 pm

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