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8.59 pm
Mr. Nick Raynsford (Greenwich): I declare an interest. I act as a consultant to HACAS Ltd., the social housing consultancy.
It is right that the House should have an opportunity to consider the important issue of housing need. In introducing the debate, my hon. Friend the Member for Denton and Reddish (Mr. Bennett) spelled out lucidly and very well the main concerns that were identified by the Select Committee, which he chairs, in its report on housing need that was published earlier in the year. Several hon. Members have contributed very useful insights, largely drawn from a range of differing constituency experiences. It is a comment on the natural ingenuity of hon. Members, not least the right hon. Member for City of London and Westminster, South
(Mr. Brooke), that those constituency interests have managed to embrace Russian generals, Philadelphia planners, cavemen and Stonehenge. It is remarkable what can be brought into constituency interests.
I was intrigued by the speeches of my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson) and the hon. Member for Sheffield, Hallam (Sir I. Patnick), both of whom spoke about the much-hated Kelvin flats. I had the pleasure of being in Sheffield a year or so ago when they were in the process of being demolished. I can testify that the community shared that pleasure at the disappearance of an utterly loathed blot on the Sheffield landscape--a monument to the kind of housing that we should never allow to be built again.
The hon. Member for Shoreham (Mr. Stephen) raised the issue of capital receipts. Since I was unable to intervene, he may like to think about this question: if it is financially irresponsible for a Chancellor to allow the release of capital receipts, why did he support his right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), then Chancellor of the Exchequer, in releasing 100 per cent. of capital receipts between November 1992 and March 1994? Indeed, during that period, the Government allowed local authorities to use 100 per cent. of their capital receipts for housing investment.
Mr. Stephen:
The answer is that the limited release of capital receipts was consistent with the Government's economic strategy at the time.
Mr. Raynsford:
I am delighted that the hon. Gentleman said that. He will know that that release of capital receipts encouraged recovery in the housing market and achieved a level of output of social housing that was within the range that most experts believe is necessary to meet housing needs. Since the Government reversed that policy in April 1994, the housing market has once again been in extreme difficulties and social housing output has fallen to levels far below every reasonable estimate of need--a point to which we shall return. I am grateful to the hon. Gentleman for that intervention.
I congratulate my hon. Friend the Member for Denton and Reddish, all members of the Select Committee and their advisers on an excellent report. It makes an important and significant contribution to our understanding of the many complex issues involved in assessing the demand for housing and the scale of housing need.
Few people can feel comfortable about the state of housing in England today. Our country's performance in responding to the many housing problems that we face has in recent years been woefully inadequate. To summarise: we face an acute problem of homelessness. Local authorities in England last year accepted 120,000 households as homeless, but that includes only those officially recorded. It is a sobering comment on the official statistics that the vast majority of people who sleep rough, huddling in doorways under blankets or in cardboard boxes, never feature in the official statistics because they have not approached the local authority and have therefore not been recorded.
With repossessions continuing at a rate of 1,000 per week, the problem of homelessness is clearly impacting on the owner-occupier market as much as anywhere. That contributes to the continuing problem of insecurity that overhangs the market.
Although there have been some encouraging signs of recovery in the first six months of 1996, the market remains in a fragile state. Recovery is patchy, and is certainly not feeding through into any substantial nationwide increase in housing starts. The figures for the three months ending May 1996 show new starts 9 per cent. down on the equivalent period last year. While the output of new homes for sale is down, the comparable figures for new output of rented homes for those in social need is nothing short of catastrophic.
Councils have to all intents and purposes ceased to be able to build homes, and housing association output, down by 22 per cent. over the first four months of this year, shows the drastic impact of two successive steep cuts in the Housing Corporation's budget. Consequently, over the past five years the annual output of new social housing has fallen to the lowest level since the end of the second world war.
At the same time, 1.5 million homes in England are still unfit for human habitation, with many others sub-standard in one way or another, with many desperately hard to keep warm in winter. The problems are found in all tenures. While there are especially acute concentrations of properties in poor condition in the local authority and privately rented sectors, the largest number of sub-standard homes are owner-occupied. That fact was brought out well by my hon. Friend the Member for Hyndburn (Mr. Pope) when he spoke of the many owner-occupied properties in poor condition in his constituency.
That necessarily quick snapshot of housing conditions in Britain in 1996 is shocking enough, but even more shocking is the inadequacy of current Government programmes designed to tackle the problem. By international comparison, our performance is nothing short of disgraceful. We lag right at the bottom of the list of Organisation for Economic Co-operation and Developmemt countries in terms of housing investment. We spend only about 3 per cent. of our GDP on housing, whereas comparable European countries of a similar size, such as Germany, France and Italy, are spending between 5 and 6 per cent. of their GDP on housing investment.
Perhaps it is asking too much to expect the Government to admit those failings openly and publicly, but at least we have the right to expect a realistic and informed appraisal of the extent of unmet housing needs.
Mr. Thomason:
Am I to understand that the hon. Gentleman is telling us that his party's policy is to release the capital receipts held by local government to address all those alleged ills? If so, can he confirm that it is also his party's policy at least to maintain the level of housing investment at its current level, so he is thereby making a substantial spending pledge? Does he have the agreement of his colleagues in the shadow Cabinet in that pledge?
Mr. Raynsford:
I am pleased to tell the hon. Gentleman, who must have been asleep for much of the past four years, that the Labour party has made a clear commitment and pledge to release on a phased basis the capital receipts estimated by the Chartered Institute of Housing at £5 billion--money that is currently unavailable for investment because of foolish Government restrictions. That commitment is shared by my right hon. Friend the shadow Chancellor, and it will enable an incoming Labour
Mr. Elletson:
Will the hon. Gentleman give way?
Mr. Raynsford:
No, I will make some progress first. But I shall give way to the hon. Gentleman in a moment.
It will come as a considerable surprise to those unfamiliar with the Government's neglect of housing to learn that between 1977, when the Labour Government published their comprehensive housing policy review, and 1995, there was no official published estimate of the scale of housing need in this country.
I always believe that it is right to give credit where credit is due, and the Minister now responsible for housing, the Minister for Local Government, Housing and Urban Regeneration, should be congratulated because, unlike any of his Conservative predecessors, he has at least allowed departmental estimates of housing need to be brought into the public domain. That may have required a certain amount of pressure; it may have required repeated parliamentary questions to prompt that outcome. Nevertheless the figures were published, and we welcome that fact.
I wish that I could be as positive about the figures themselves, but they are far from adequate in most respects. Indeed, they revealed a process almost diametrically opposite to that which should inform policy making. Instead of starting with an impartial, objective appraisal of the full range of needs as a basis of reaching decisions on the necessary scale and type of investment, clearly the Government's objective has been to legitimise the current inadequate levels of investment by tailoring the figures to meet the anticipated level of new construction.
The Select Committee effectively demolished that charade. Its carefully considered and cogently argued report draws on evidence from leading experts to demonstrate conclusively that the Government's estimates are out of line with those of all other recognised authorities. Nor can the Government question the credentials of those authorities as foremost among them was Alan Holmans, research fellow at Cambridge university and until recently chief housing economist at the Department of the Environment.
Mr. Holmans' evidence, which clearly impressed the Select Committee, demonstrates a need for new housing provision for social needs of around 117,000 homes a year over the 20-year period to 2011 if we are to provide adequately for the backlog of unmet needs, as well as the needs that will arise through normal demographic and social changes over the same period. That contrasts with a Department of the Environment estimate of a need of between 60,000 and 100,000 new lettings a year over the decade to 2001.
To add insult to injury, Government policy is predicated on a requirement to meet only the bottom end of that range--60,000 new lettings per year.
I regret to say that the Government's response to the Select Committee report published in May this year is simply inadequate. Its failure to address fundamental issues and its repeated use of feeble excuses for not
responding to the Select Committee's recommendations have rightly prompted disappointment and derision throughout the housing world. Its weakness is revealed as early as paragraph 5, where it becomes crystal clear that--as with the estimates of housing need published a year earlier--the Government are interested not in an objective and truthful picture of the expected scale of need, but rather in a cosmetic exercise designed to legitimise current levels of investment.
Paragraph 5 states:
"The Government in deciding how much social housing to provide has to consider not just estimates of need for social housing, but also the appropriate balance between public and private provision for housing and the impact that a higher or lower level of provision may have on private supply of housing. Higher levels of provision of social housing could crowd out the reviving private rented sector and suppress growth in home ownership. The Government's aim therefore remains as stated in the Housing White Paper to provide additional social lettings in line with the lower end of the Government's range of estimates. Overall, there are choices to be made about how public money is spent, and estimates of need for social housing have to be balanced against competing demands for resources."
Let us analyse the three lines of defence offered by the Government. First, a value judgment about an appropriate balance between public and private sector provision is given greater importance than estimates of the need for social housing. That is little more than an admission that the Government's ideological prejudices are being allowed to override objective assessments of need.
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