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perhaps elderly people, who often do not have transport to get them into town centres. I was proud to have promoted that policy long before the Government took it up and I was especially proud recently to have been able to open a scheme of that sort, as the housing spokesman for the Liberal Democrats, in my constituency in the centre of Newbury. Now that the scheme has been launched, it will encourage other people to open similar schemes. That scheme was for six flats and it has already been indicated that we may be able to get 12 more flats next door in the near future.

The second aspect of Government policy that deserves some praise is mentioned specifically in the Select Committee report. It said : "We believe that, if and when there is a depressed property market, the Corporation should be ready to put in place a programme for acquisition of existing, unsold houses . . . The housing of homeless families in property integrated into the community as a whole may represent a more constructive approach than the growing concentration and segregation of such families on newly-built estates." I certainly agree. The Government's response was :

"The Government believes that the Housing Market Package in 1992-93 was very successful."

There were faults with that package. It involved no new money. Money was simply brought forward from future years--that was a pity--and involved mainly the purchase of new homes on large estates which could otherwise not find a buyer.

However, there are many benefits to the scheme. It makes purchase under the right to buy less risky. Many people are unwilling to purchase their own homes because they fear that they may never be able to sell them again. If that scheme were renewed, it would clearly give housing associations a chance to take back those homes and thus make it less risky for tenants to purchase their own homes.

Mr. Clifton-Brown : May I correct the hon. Gentleman on the housing market package about which he was so disparaging ? It enabled 18,000 homes to be purchased in 93 days, admittedly at a cost of £577 million brought forward from future years, when the housing market was especially depressed. Therefore, surely it encouraged the housing market to recover quicker.

Mr. Rendel : The hon. Gentleman cannot have been listening. I was saying that that was one of the two aspects of the Government's housing policy of which I approved. Perhaps if he had listened more carefully, he would not have bothered to intervene.

Mr. David Alton (Liverpool, Mossley Hill) : Does my hon. Friend agree that, in a city such as Liverpool, where there are some 13,000 empty properties--some 7,000 in the private sector--there is a desperate need to use such properties to assist people who will not only drift away from that city to the south of England, but who are homeless ?

Mr. Rendel : I entirely agree. Indeed, it was one of the benefits that I was about to mention. One of the benefits of that system is that it allows housing associations to spread their properties throughout a community and thus leads to less of a ghetto-type situation, which we are moving towards.

It is also true that it is a quick way in which to bring more cheap, rented accommodation into the housing association sector. In spite of the difficulties of buying a house in this country, it takes a lot less time to buy a house

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that is on the market than to build a house from scratch. At present, housing is comparatively cheap and we need to use that sort of a scheme before the housing market takes off again. How sad that the Government's response went on the say :

"The Government has no plans at present to repeat the initiative."

When they do something right, it is a pity that they cannot carry it through for a longer period.

In housing, the Government are their own worst enemy. Failure to invest in housing leads to rising homelessness, to fears about queue jumping--the cause of their latest document--to increases in housing benefit, which is a cause of worry to the Treasury, to a deepening of the poverty trap and to lower work incentives. The answer is two-fold. First, we must release the receipts from council house sales for further council accommodation and secondly we must have more direct Government investment in housing. Housing investment often pays for itself. Poor housing can lead to families breaking up ; indeed, it is one of the most common causes, with all the involved costs to the Government.

Housing investment can lead to lower benefit costs, better social conditions, less vandalism and other crime and more stability, especially for families with children, whose education will benefit as a result. We are discussing the level of housing investment by the Government. To use the words of Newbury district council's manager, which are echoed by almost all those professionally involved in housing and by councillors of all parties in local authorities throughout the country, the present level of Government investment in housing is simply not enough.

5.4 pm

Mr. Barry Field (Isle of Wight) : Without wishing to be a founder member of the mutual admiration society, it should be incumbent on myself or at least somebody on the Committee to pay a tribute to the chairmanship of the Committee which produced the report. Many pundits in housing and in politics generally thought that the subject was a minefield and my hon. Friend the Member for Hertfordshire, West (Mr. Jones) guided us through it excellently. In our press release when the report was published, we said that it showed that a controversial subject, such as housing, need not necessarily lead to a Select Committee being bogged down in some of the problems that we have seen elsewhere in the House. It is certainly a long- held tradition of the Environment Select Committee that it strives for some consensus in its reports because it believes that they pack a greater punch as a result when they arrive on the Minister's desk.

Many of us have experience of housing and for some of us it has been a great joy. I share the happy distinction with the Prime Minister of having chaired a housing committee, although he seems to have done rather better than I have. One of my happier housing stories was that of the archetypal little lady who had several piles of rubble outside her back door and her front door, which seemed to be alarming her neighbours. The housing manager of the local authority went to see what was the problem and discovered that, single-handedly, she had knocked down all the internal supporting walls in her house so that when one opened the front door, one could look straight through to the back door and the kitchen. When asked why she had done it, she said that it was to give the budgie more room when she let it out of its cage to exercise.

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There is nothing more personal to all of us than our homes and that is why the report and the work of the Housing Corporation is so important. My hon. Friend the Chairman of the Committee has already welcomed Sir Brian Pearse, whose deputy chairman, Peter Cook, was appointed the other day by the Secretary of State. I questioned the outgoing chairman, Sir Christopher Benson, on a particular point. I made the point in Committee that there would not be a company with which Sir Christopher was associated which would not introduce an age debtor scheme to the board of directors. I was therefore rather surprised that Corporation does not require or report to the Minister the length of time that housing associations hold on to cash, liquid assets, without reinvesting them. I ask the Minister to consider that specific point. I know that it was something of a soap box issue of mine during the compilation of the report, but if the housing association movement stands for anything, it is for the provision of low-cost housing, as my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) said. It is essential to make assets work hard and to invest in housing stock. There are a few housing associations--not many--who seem to accumulate the loot but do not invest it.

Mr. Roy Thomason (Bromsgrove) : Does my hon. Friend agree that that point is indicative of an attitude, which some Select Committee members noted, of the Housing Corporation--that its audit role is seen as being more that of accountant than of adviser ? Perhaps in future the Housing Corporation should consider putting more effort--it already makes some-- into the dissemination of good practice and giving guidance to housing associations on better management practice.

Mr. Field : I hear what my hon. Friend says. I recall that, in the evidence that we heard in Committee, several housing associations felt that Sir Christopher's regime in respect of financial reporting--of which there was very little or none before his arrival at the Housing Corporation--was rather onerous.

My experience as a chairman of a housing committee and as a director of a building society and of various other financial posts tells me that if we do not get the finances right or the debits and credits in order, nothing else flows. In respect of taxpayers' money, we must get the finances right and the debits and credits in order. I know of no business or organisation that got into trouble when its finances were properly managed and reported upon. I slightly disagree with my hon. Friend the Member for Bromsgrove (Mr. Thomason) in that regard, but that brings me to my next point. There is no doubt that Sir Christopher did a great job reforming the reporting structure and tightening up the way in which associations operate generally. My next point was not included in the Select Committee report-- we could not include everything that we wanted to. However, I believe that the Chairman shares my view that there should be three levels of audit function on the part of the corporation, depending on the size of housing associations.

I have referred to three levels, but that number is arbitrary. Perhaps there should be four or five levels. However, if we consider the example taken by the Department of Trade and Industry for auditing companies, it is clear that there are various points with which they must

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now comply in the way that they report. The smallest companies can even dispense with the services of their auditors. Companies of the next size up can have abbreviated accounts. Full-sized companies must have the full works. There should be a small, medium and large structure for housing associations' requirements.

Some of the smaller associations made a fair point when they told the Select Committee that there was a feeling that a sledgehammer was being used to crack a nut. I hope that that point might yet commend itself to my right hon. Friend the Minister for Housing, Inner Cities and Construction.

My next point has already been referred to by the Chairman of the Select Committee. During Environment questions the other day, I paraphrased Shakespeare to my right hon. Friend the Minister for Housing, Inner Cities and Construction, saying that we want "Sir George for England and for housing tenants."--[ Official Report , 16 February 1994 ; Vol. 237, c. 937.]

We want a right to buy for housing association tenants. I have been working with the North British housing association which, to recap briefly, took over the Greater London council's seaside homes when the GLC was quite rightly abolished. It was a moribund and useless organisation if ever there was one. In those days, the Liberal Democrats on the Isle of Wight concentrated entirely on politics and not on progress.

Mr. Tony Banks : Will the hon. Gentleman give way ?

Mr. Field : I will give way to the hon. Gentleman in a moment if he will allow me to finish this point.

The very first housing committee and council committee meeting that I attended as candidate on the Isle of Wight, debated the transfer of the GLC's seaside homes. As committee chairman, I had done a deal with the GLC for the transfer of the GLC homes in Horsham. Those homes were financed for a very nominal increase in nomination rights.

The Liberals on the island went on and on about the fact that if the Government wanted them to acquire those properties, the Government should make the money available through the Housing Corporation or whatever. If the Liberals had concentrated less on the politics and more on progress, they could have had those houses for the benefit of the people of the Isle of Wight.

Those houses went to the North British housing association, which has not commended itself to its island tenants. I have had some strong correspondence with its chief executive, Eric Armitage, who has tried to bamboozle me about the nomination rights for the properties concerned and on the opportunity for those tenants to purchase their properties. I will give way now to the hon. Member for Newham, North-West (Mr. Banks).

Mr. Tony Banks : I shall pick up on that later.

Mr. Field : I am much obliged to the hon. Gentleman. I like it when he picks up points from my speeches.

The North British housing association had refused to allow several tenants to purchase their properties. Let us be quite clear about this. We are not talking about the right to buy in terms of discount. We are talking about the fact that the Minister has legislative power to allow those tenants to purchase their properties where those properties do not have specialist functions and are not warden assisted, but are stand-alone properties. A small number of the tenants

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have the money to buy their properties and it is quite wrong that my hon. Friend the Minister and the North British housing association should stand in their way.

Of 41 tenancies that have been allocated over the past five years, 29 went to London borough nominations, six went to internal transfers within the seaside and country homes lettings, and the Isle of Wight received just five nominations--which is why I say that the Liberal Democrats sold the Isle of Wight so badly down the river by not taking up that opportunity-- and the housing association nominations for tenants living in the Greater London area amounted to just one. I am concerned about the way in which the North British has operated because, on its estate in Wootton, there is a small ransom strip of land which gives way to a quite valuable building plot. The association consulted its tenants about whether to sell that ransom strip which would have accommodated only two dwellings. The tenants said no, so the plot remains growing weeds in the middle of that housing estate.

I have no objection to that. However, I cannot marry up the housing association consulting its tenants on the sale of that ransom strip with the fact that it obdurately refuses to allow some of the tenants to purchase their properties, which they would dearly like to do. I do not wish to finish on that sour note, particularly in view of the plaudits received by the Environment Select Committee's report on the Housing Corporation. I will finish on a more positive note. In Committee, we were assured that a housing ombudsman would be established as soon as possible and we felt strongly that the ombudsman should be independent of the Housing Corporation. However, the Minister told us that primary legislation is required to make the ombudsman independent, so as a pro tem measure, and to ensure that the housing ombudsman was available very quickly, it was set up under the aegis of the Housing Corporation.

One of the great difficulties in the housing association world was the liquidation of the Legion Leasehold housing association. I am told, although I have not had this confirmed, that the ombudsman has taken up those concerns and worries and the tenants of Birch close at East Cowes are pleased about that. That good news story has arisen from our report. I am absolutely delighted and, may I say--not in a trite way--very proud to have been associated with the report because I believe that it is a major contribution to the housing debate in our country.

5.17 pm

Mr. Tony Banks (Newham, North-West) : I should tell Conservative Members that it is a pity that there is a Pavlovian response or knee-jerk reaction whenever someone mentions the Greater London council-- [Hon. Members :-- "Hear, hear."] There it goes again--as if its abolition was all good. If one consults Londoners, one would find that two thirds of Londoners, according to the latest opinion polls, have said that it is a great pity that the GLC was abolished and that London needs a strategic authority.

If Conservative Members do not want to believe me, they should believe the hon. Member for Falmouth and Camborne (Mr. Coe), who made it clear, in respect of London's Olympic and Commonwealth games bids, that there is no way in which London will ever acquire international events like that because there is no one to sign

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on the dotted line on behalf of London as a whole. The hon. Member for Isle of Wight (Mr. Field) should not assume that it has all been gain so far as London is concerned. That is not how we see it. The hon. Member for Isle of Wight referred specifically to the seaside and country homes initiative of the GLC and the London county council. Only a strategic authority could have carried out such an initiative. That initiative gave elderly Londoners, particularly those in the east end, the opportunity to go to a part of the country where they could breathe the air rather than chew it first to enjoy their retirement. No one does that now. When the GLC was being abolished, we warned the Minister who is now Minister for Housing, Inner Cities and Construction that transfer to the North British housing association was likely to prove to be a bad thing for the former GLC tenants. The hon. Member for Isle of Wight is now proving that point.

Mr. Barry Field : My point is that the Greater London council was the greatest piece of political gerrymandering that the nation has ever seen, costing millions of pounds of taxpayers' money to reinforce the Opposition vote in a number of Conservative-held borough councils such as Hastings.

Mr. Banks : If we are talking about political gerrymandering, we need look only at Westminster to see what it has been doing.

Mr. Deputy Speaker : Order. We are debating the report of the Select Committee on the Environment on the Housing Corporation. Perhaps we could come back to that now.

Mr. Banks : Indeed, Mr. Deputy Speaker, but I am only responding to the points made by the hon. Member for Isle of Wight in his speech.

Mr. Deputy Speaker : Order. I have now blown the whistle, so we should get back to the debate.

Mr. Banks : Mr. Deputy Speaker, I say with the greatest respect that it is a great pity that the whistle was not blown a little earlier. However, I understand what you are saying.

I welcome the report. In Newham, we are particularly dependent on housing associations. The London borough of Newham, works very closely with the East London housing association, London and Quadrant, the Family housing association and Circle 33. As more and more pressure is put on the local authority's housing stock, we are especially indebted to the housing associations for their ability to provide for single people when there is no statutory obligation on the part of the local authority.

Mr. Peter Ainsworth : The hon. Gentleman speaks with knowledge and some feeling about his constituency. In what way would his constituents be better off if the £11 million of council rent arrears in Newham were collected and redistributed to the people whom he represents and the councillors were elected to serve ?

Mr. Banks : I suppose one could suggest that that question is not relevant to the report, but I shall answer it because Mr. Deputy Speaker has not ruled it out of order. The answer is that they would be much better off.

It is not as though the London borough of Newham is not taking all measures to get the rents. No one wants rent arrears. We do not encourage rent arrears in the London borough of Newham. However, the hon. Member for

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Surrey, East (Mr. Ainsworth) should realise that, for example, 69 per cent. of all council tenants in Newham are in receipt of housing benefit, which shows the level of poverty in my area. In 1992-93, 97.2 per cent. of all rents were collected by the London borough of Newham. If the Government were 97.2 per cent. successful in terms of running the country, I suspect that they would have a much better standing in the opinion polls than they do at present.

Mr. Peter Ainsworth rose

Mr. Banks : I shall give way if the hon. Gentleman wants me to, but there are other hon. Members who want to speak.

Mr. Peter Ainsworth : Of course, rents cannot be collected from vacant properties. Does the hon. Gentleman have any comment to make about the 400 empty properties which are currently standing idle in Newham and which could be serving local people ?

Mr. Banks : Of course there are empty properties in the London borough of Newham. A much greater proportion of them are in the private sector than in the public sector. In the London borough of Newham, we do not deliberately encourage people not to pay rent, or deliberately set out to keep properties empty. I do not know what point the hon. Gentleman is trying to make, because I can assure him that in my borough we take all the steps we possibly can to, first, collect rent and, secondly, ensure that there are no void properties.

One of our problems is the inability to spend the sort of money that we want to spend on bringing unfit properties up to a state of decent habitation. There are many empty properties in the London borough of Newham with which I am sure the hon. Gentleman would not soil his hands. He certainly would not want to go and live in them and therefore we should not expect other people to do so. The hon. Gentleman touches me on a raw nerve.

I return to the point that I was trying to make with regard to the report. Paragraph 157 states :

"We recommend that assessments of housing need--whether expressed as a range or as a precise figure--should be published by the DoE, using widely accepted methodology, on a regular basis."

The Government's response, which I thought was very disappointing, was that there is no single accurate figure estimating the potential demand for social housing.

One of the things that the Government should do is take far more pains to discover the extent of homelessness in my borough and, indeed, in London as a whole. We do not know the accurate figure with regard to homelessness in London. We do not know how many people are sleeping rough on the streets. The Greater London council used to collect the figures. However, now that it has gone, the Department of the Environment is not particularly interested in doing so. The Department always works on the assumption that if the statistics are not collected, ergo the problem has gone away. Of course, we must now rely on organisations such as the Salvation Army to know how bad the problem is.

As the hon. Member for Altrincham and Sale (Sir. F. Montgomery) said, it is distressing to walk round London and see so many more people living rough on the streets. That is the important point. It is not anecdotal evidence-- it is the evidence of one's own senses. Tory Members know that to be a fact. I know that some of them are very young and wet behind the ears, and know very little about

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what goes on in London, but surely even they must have appreciated, when they were brought up to London in their earlier years, how many more homeless people are on the streets of London now. Whatever the figure, it is greater than it was in 1979, and that is the indication that I go by. It seems that the Government

Mr. Thomason rose

Mr. Banks : I think that it would be best if I did not give way. I am more than happy to give way to Tory Members, but I appreciate that other hon. Members want to speak and I do not want to fall foul of the Deputy Speaker. [Interruption.] If the hon. Member for Bromsgrove (Mr. Thomason) thinks that I am afraid of him, I shall give way.

Mr. Thomason : I am grateful to the hon. Gentleman. I am especially grateful when he refers to some of us as being young. I hope that that included me, as I think that I am roughly the same age as the hon. Gentleman.

Earlier, the hon. Gentleman referred to the problems of vacancies in the private sector in his constituency and housing pressures. Can he tell us what action his party would propose which would bring into greater use some of the private sector accommodation to remove the very straits about which he is complaining ?

Mr. Banks : As the House knows, I do not speak as a party spokesperson, so my comments are without authorisation. There is much that we could do. We could go into compulsory purchase in the private sector, especially with properties that have been vacant for a considerable period. It is offensive for homeless people or those living in particularly straitened circumstances to see houses that have been empty for such a long time, whether they are publicly or privately owned. That is one thing that could be done, and I would be very much in favour of doing it. Of course, I am sure that my hon. Friend the shadow Chancellor would say that it could be done only when resources allow.

I return to the report. It is a great pity that the Government are not prepared to look more closely at housing problems in London and collate figures and statistics in such a way as to make them understand the difficulties that people face. The right hon. Member for Ealing, Acton (Sir. G. Young) is often given the reputation as a decent, humane and warm- hearted Minister. That is a fairly rare accolade for anyone on the Government Front Bench these days. However, he should pay perhaps a little more attention to what is going on in Tower Hamlets at the moment, which is under the control of the Liberal Democrats. [Interruption.] I hope that the hon. Member for Newbury (Mr. Rendel) will pay a little attention to what I am saying.

My late and much-lamented dear colleague, Ron Leighton, who died recently, wrote a letter to the Secretary of State about Tower Hamlets adopting the policy of placing its homeless families in private rented accommodation outside the borough. The council was doing that to fulfil its statutory duties under the homelessness legislation. Ron Leighton made four points to the Secretary of State, including the fact that the London borough of Tower Hamlets "are predominantly using this for Bengali families."

He said that Tower Hamlets

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"are exporting' their homeless families and expecting the receiving authority to pick them up in future years, as well as provide education and social services support.

Families placed in this way were being charged up to £250 for a 3 bed house in Newham, an obviously inflated and unrealistic rent." Of course, because such rents are above housing benefit levels, they lead to rent arrears and the problem then of people being evicted and made homeless, but homeless in the London borough of Newham. I quote :

"Families are being given no choice in this exercise." The Minister received a letter from the Bengali National Association in Newham which made precisely the same point. Mr. Osman Gali, the president of the association, said that up to

"3-4 hundred families have been forced out of Tower Hamlets. The Council have adopted a policy of misleading the families by offering short-hold tenancies, and evidently the families were given false hopes of permanent rehousing by the Council. Most homeless families who were already living temporarily in Newham, Waltham Forest, Hackney, Dagenham and other areas have been subjected to intense pressure by the Council officers."

The letter goes on to refer to instances of harassment from Liberals in Tower Hamlets. One does not need to look at the racism of the British National party in Tower Hamlets--the Liberals can provide all the racism one would need in that part of east London. Mr. Gali also referred to "ethnic cleansing". That is an emotive phrase, but I get his point.

I now turn to paragraph 157 and how it relates to paying attention and collating statistics, which is why I am disappointed with what the Government have said in response to the Select Committee report. Baroness Denton of Wakefield, the Minister responsible in the House of Lords, replied to my late colleague Ron Leighton in terms of the letter that he had written to the Secretary of State. She said : "Authorities should look carefully at the terms on which the accommodation is being offered, and in particular at the landlord's intentions once the minimum period for a tenancy has passed. They should assure themselves that accommodation will continue to be available for a reasonable period, and should consider every case on its merits in light of the circumstances of the household they are placing. Where a household is placed in such accommodation in the area of another authority, this should be done in liaison with that authority . . . I would be concerned if one authority was consciously adopting a policy of transferring homeless households into another authority's area in the expectation that this would off-load any future responsibility."

That is precisely what Tower Hamlets is attempting to achieve, particularly with the Bengali families. The council is exporting them into other parts of the east end and transferring what they see as a problem to other areas.

The noble Lady went on to say :

"we are watching developments with interest. We will consider whether there are any problems for us to address when we reform the homelessness legislation."

I hope that the Minister will say something about paragraph 157 and how he is responding in terms of monitoring the situation. The leader of Newham borough council, Councillor Timms, has written on number of occasions to Councillor Peter Hughes, the Liberal Democrat leader of Tower Hamlets council, and he has not even had the courtesy of a reply. That is how rude the Liberals in Tower Hamlets are, so on top of racism they add on a large dollop of rudeness. That is typical of Liberals, who like to come here and pose as decent people when the reality on the ground is completely different. The word hypocrisy comes immediately to my mind when I think of Liberal Democrats here and in Tower Hamlets.

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Mr. Robert B. Jones : As a resident of Tower Hamlets, I entirely share the hon. Gentleman's views about the racism of the Liberals in Tower Hamlets and the appalling management of the council. However, exporting the problem of homeless families beyond a council's boundaries is not limited to Tower Hamlets. In my constituency, through both housing associations and local authority housing, that is precisely what the old GLC did, and what agents of some Labour authorities in London are still doing.

Mr. Banks : We are going back to the GLC, Mr. Deputy Speaker. Under the mobility scheme, the GLC was able to give people a wider range of opportunities or a choice in terms of the location. It was, after all, the GLC and the London county council which provided substantial estates outside the Greater London area and on the periphery of that area. No one ever said that the GLC was exporting its problems, unless one thinks that giving a senior citizen the opportunity to move into a seaside or countryside home was exporting problems. If someone desperately wants that, why should they not have the opportunity when they retire ? That can hardly be described as exporting problems. It was giving them the sort of opportunity which unfortunately they do not now enjoy and certainly will not enjoy until we have a strategic authority restored once again to the citizens of London.

In conclusion, I hope that the Minister will respond to the following points. I think that it is now necessary to have a ministerial inquiry into what is going on in Tower Hamlets. We have tried hard to work with the Liberal authority and we know they have housing problems. We all have housing problems in the east end, but we do not expect councils to take the dogmatic, disgraceful and racist attitude which Tower Hamlets has been taking in terms of its housing and the question of homelessness. I hope that the Minister will be able to announce that he intends to look critically and urgently at the terrible racist housing policies in Tower Hamlets. 5.35 pm

Mr. Charles Hendry (High Peak) : I am grateful to have an opportunity to speak in the debate and particularly to follow the wide- ranging remarks of the hon. Member for Newham, North-West (Mr. Banks). I shall start by declaring an interest, in that I am a newly appointed chairman of a company called Home Rent 16 to 23 plc, which is a private rented sector company.

I congratulate the Select Committee on the report and on the thoroughness with which it has gone about tackling a detailed and complicated subject. I particularly welcome the fact that the Committee decided to look into it in the first place. The basic fact is that this year some £1.5 billion of public money is going to the Housing Corporation, which will enable some 58,000 new houses to be built for letting. The Government's reduction of the housing association grant rate, and thereby the bringing in of money from the private sector, has enabled the building of a significant number of new houses that would not have been built had we relied purely on public sector funding. During the past five years, the increase is estimated at some 55,000 additional units of housing.

We must look at the balance between the number of houses that we want to achieve and the rent that is to be charged for those houses. The Government are absolutely right to say that we should be shifting the way in which

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funding is contributed from subsidising bricks and mortar to subsiding the individuals who live in the houses. In other words, just because someone has a local authority or housing association house, it should not be built and provided for him at a below- average rent if he can afford to pay the realistic market rent. Those who cannot afford to pay that rate should be helped through the housing benefit system.

I am sorry that the hon. Member for Norwood (Mr. Fraser) has left the Chamber, because he refused to take interventions during his speech. He was fundamentally wrong to look at the number of new houses that are built when we should be looking at the number of new lettings every year. We are concerned about the number of people who are able to move into social housing who would not otherwise be given that opportunity. The combined number of housing association and local authority lettings last year is the highest ever and is significantly higher than the number that applied in 1979 when the Government came to power.

Mr. John Battle (Leeds, West) : If the Government's policies for access to local authority and housing association housing go through, and as a result of that landlords use shorthold assured tenancies or six month lets, if the same family is in a place for two years, will not that count in the Government's statistics as four lettings, although no other family has been housed ?

Mr. Hendry : I am more than happy to divert from the debate on the Select Committee report into the consultation document to which the hon. Gentleman refers, if you will allow us to do so, Mr. Deputy Speaker.

If the private sector is to be used--most of my hon. Friends agree on that as an absolute principle--inevitably we shall see greater use of short-term assured tenancies. The hon. Gentleman does not understand that a short-term assured tenancy can provide in many cases a better quality of accommodation than local authority housing and can also provide security. Many of us live in short-term assured tenancies and, according to the statistics that the hon. Gentleman has bandied about, we are considered to be homeless.

We must move from the negative attitude that the Opposition have continually taken towards the private rented sector and accept that it has a much more important role to play. One of the benefits that will result if the proposals in the consultation document are enacted is that there will be a better use of the private rented sector. In terms of the Housing Corporation and the money that is allocated to that, we must be certain that every penny of public sector money is being used to the best effect. The only way to do that is to squeeze the resources from time to time.

To make sure that they are lean and efficient and use their resources sensibly and effectively, private companies, from time to time, clamp down the hatches and tighten their belts. That applies equally to the Housing Corporation. If we are to continue to be sure that every year we can put more money into the Housing Corporation, we must first be satisfied that every pound and every penny that go into it and into housing associations are used to best effect. If hon. Members on both sides of the House ask themselves honestly, they cannot say with their hand on their heart that that is the case.

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We have concerns about the administration and running costs of the Housing Corporation. The squeeze that it is going through will make it look carefully at how its money is used. As my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) said, we can reduce the current grant rate in view of two factors that he outlined clearly. First, interest rates are lower than we have seen for a considerable time so the money that the housing associations are expected to borrow can be borrowed much more cheaply. Secondly, the difficulties that the building industry has faced in recent years have made it possible to build houses much more cheaply than for many years. That means that we can expect the housing associations to continue to provide a significant number of houses for letting. Indeed, there is no doubt that the 153,000 houses in the next three years to which we committed ourselves in our election manifesto will be comfortably exceeded, conceivably by as much as 25, 000.

Mr. Peter Ainsworth : My hon. Friend makes an extremely good point. Does he agree that the fact that the Housing Corporation exceeded its targets last year has a great deal to do with the points that he has just made ? Does he also agree that that will continue to play an important role in the funding and development of that part of the market in the years to come ?

Mr. Hendry : My hon. Friend is undoubtedly correct. The other element, to which tribute has already been paid, is last year's housing market package. It did much to bring back into use some of the empty properties available in the private sector. I am glad to see that the package has the backing of the Liberal Democrats. I understand the concern expressed by my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) about housing benefit. We need to be careful that we do not create ghettos that are the only places in which people on housing benefit can afford to live. If we are to have a balance and if the amount of money that goes into bricks and mortar is to be squeezed, we have to accept that there is a limit on how much we can squeeze housing benefit. That point emphasises that there must be a right to buy for housing association properties.

It is proper that the increasing number of people who live in housing association properties should have the same right to buy that they would have in local authority housing, if they wish to exercise it. Of course some sectors such as warden-controlled properties or properties specifically for the elderly need to be excluded. However, increasingly housing association developments are suitable for a much wider range of population. It is proper that they should also be bought under the right-to -buy scheme.

I am also pleased to see that more attention is being paid to rehabilitation programmes. I have banged on endlessly in the House about the need to bring back into use the 850,000 empty properties in Britain. I am astonished by the recommendation from the hon. Member for Newham, North- West (Mr. Banks) for bringing back into use properties in the private sector.

There are 750,000 empty houses in the private sector. We all accept that that is too many. However, the new policy initiative suggested by the hon. Member for Newham, North-West would involve taking the properties

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