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Mr. James Gray (North Wiltshire) (Con): I am glad to hear that the Government have plans to start building some houses in the future. How does the Minister account for the fact that in the last six years of the Conservative Government, we built an average of 31,274 houses per annum, while during the first six years of this Government, the figure was 18,000?

Keith Hill: The hon. Gentleman ought to bear in mind the fact that in that period, funding for social housing new build declined by half—a decline that we are now putting right. We took a clear decision that the priority needed to be dealing with the colossal £19 billion backlog of refurbishment and modernisation of social housing stock. We are now investing seriously in the building of new social housing, but there are problems, as I shall explain. There will always be a need for new houses everywhere, and we want that need to be met, but new build housing on the largest scale is required only in certain parts of the country.

That is why the Housing Corporation's approved development programme is increasingly targeted at the areas that need it most: London and the south-east. I have to tell the House, and the hon. Member for North Wiltshire (Mr. Gray), that the blunt truth is that those areas are also the areas of highest cost generally and of mounting construction and land costs, which means that the number of housing units completed for any given input has tended to decline.

Nevertheless, we are resolved to accelerate new building where it is most needed. The sustainable communities plan, published in February 2003, announced the development of four growth areas in London and the wider south-east, which have the potential to deliver an extra 200,000 homes over the next 10 to 15 years. Affordable housing is a key part of that development.

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Jeremy Corbyn (Islington, North) (Lab): The Minister will recognise, as I do, the enormous need for more social housing in London. Is he prepared to introduce legislation or amend the Bill to ensure that 50 per cent. of all developments are for social housing developments? Will he also prevent local authorities and public corporations from selling off existing buildings and land that could be used to meet the terrible housing crisis that many of poorest people in London face?

Keith Hill: I know that my hon. Friend has a long-standing and distinguished record for expressing concern about housing issues. I have to tell him that the Government have set out indicative guidelines on the proportion of social housing that we expect to be delivered in any major housing development. He will also be aware that for large-scale housing developments, the Mayor has laid down clear criteria that are, in most cases, being fulfilled. We are happy about that, but it is essentially a matter for local authorities and for local decision-making. We want to encourage local authorities to respond to the challenges in a way that best meets the needs of local communities.

I want to make some progress. The communities plan sets out the policies, resources and partnerships necessary to deliver a new approach to how and what we build—an approach that connects housing with transport, jobs, public services and improving the local environment. However, the communities plan goes wider than the particular challenges of the south-east: it represents a step change in our approach to development, in order to deliver decent affordable homes and a good quality local environment in all regions. It aims to tackle the challenges of rapid demographic and economic change, the legacy of poor health and conditions, serious housing shortages in areas of high demand, and the impact of housing abandonment in places, in the north and midlands.

We are continuing to find other ways of increasing housing supply and securing better value for money. For example, we are encouraging modern methods of construction and widening the scope of those who can receive Housing Corporation funding.

Ms Joan Walley (Stoke-on-Trent, North) (Lab) rose—

Mr. Anthony Steen (Totnes) (Con) rose—

Mr. Michael Jack (Fylde) (Con) rose—

Keith Hill: I give way to my hon. Friend, whom I noticed first.

Ms Walley: On that point, does the Minister agree that the current research in north Staffordshire, which is about using the most up-to-date and sustainable construction methods, will be essential to deliver his agenda? Does he agree that Burslem urgently needs funding from Advantage West Midlands to construct a construction skills centre? There is a real fear that the money will not be available in this financial year. If it is not, it could undermine the Government's intention to have a new construction skills centre there as quickly as possible.

Keith Hill: I am delighted to hear about the commitment being made in my hon. Friend's locality

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towards modern methods of construction. I know that there are major regeneration issues there. She mentioned Advantage West Midlands, which I am sure will have heard her observations—and of course, I undertake to look further into the matter myself.

Mr. Steen rose—

Keith Hill: How can I resist the hon. Gentleman?

Mr. Steen: May I put the real problem to the Minister? The Deputy Prime Minister said that 3.75 million houses would be needed by 2011, but the former Conservative Minister, my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), mentioned 4.25 million. We are not building that many houses. PPG3 said that they should be built on brownfield sites, but we are running out of them, so we have to build on greenfield sites. We are not building on greenfield sites, so the price of houses is going up as a result of a shortage. It is all a question of how we are going to build more houses. Until we build more houses, prices will not go down. If prices do not go down, we will not build more affordable houses unless the Government invest much more money. That is the problem.

Keith Hill: The hon. Gentleman presents a far-reaching and comprehensive analysis, much of which I agree with—but let me reassure him about one point: as he is aware, the Government have adopted a policy of "brownfield first", and we have set a target of 60 per cent. new build on brownfield sites in London and the wider south-east. That target has been exceeded considerably, the figure now standing at 75 per cent. We are therefore making very serious progress, but part and parcel of the solution to further build on brownfield sites is our commitment to greater density of build. That gives rise to separate issues in respect of higher and greater build density, and I am delighted to say that recent statistics show that progress is also being made in that direction.

Several hon. Members rose—

Keith Hill: I am being inundated with requests to give way, but perhaps I can reassure Members on both sides of the House by pointing out that I have a lot more to say, and that there will be ample opportunity for me to give way and to listen to their remarks later. First, I should at least set out the Bill's context.

I was talking about the need to increase housing supply, a subject on which there is common ground on both sides of the House. I remind Members that it is for that purpose that we asked Kate Barker to review the issues underlying the lack of supply and responsiveness of housing in the UK. We welcomed her interim report and its analysis, and we look forward to her spring report.

We have achieved a great deal, but we do of course need to do more. That is why, in the next three years, we shall back the communities plan with a massive £22 billion worth of investment in housing and communities. That is why we are increasing the total resources devoted specifically to housing to £11 billion

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by 2005–06—a 30 per cent. increase on last year's spend. And that is also why, over the next three years, we are committing at least £1 billion to key worker housing—more than three times the rate of spend in the current year—tackling low demand and transforming failing housing markets through nine pathfinder projects, backed by a £500 million market renewal fund. We have already announced the £125 million pathfinder scheme for east Manchester and Salford, and we expect to make more announcements shortly.

Mr. Jack: Does the Minister agree that the private sector—particularly smaller-scale private building companies—also has a contribution to make in helping to meet the objectives that he has clearly explained to the House? Is he aware that the way in which current housing policy is being applied, particularly in respect of the number of houses that can be built in the north-west, is inhibiting the contribution that those private builders can make to achieving his objectives? Can he assure me that he will look into that matter in the context of the Bill, and subsequently?

Keith Hill: I am listening to the right hon. Gentleman carefully and with interest, and I am happy to assure him that I will consider his assertions and endeavour to respond to him in due course.

In addition to our commitments in respect of new build of houses, key worker housing and renewing failing housing markets, we have extended the decent homes target to the private sector, and we expect to make steady progress in increasing the proportion of vulnerable households living in decent homes in the private sector. In order to sharpen our housing delivery mechanisms, we are targeting housing investment on regional and local priorities through the regional housing boards, which we established to integrate housing with regional, economic and planning strategies.

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