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Hywel Williams (Caernarfon) (PC): It is interesting for me as a Welshman to hear some of the difficulties that we have struggled with in rural Wales for a long time being discussed on a far broader stage. The housing crisis in Wales and in the regions of England is as acute as that in the south-east. I refer hon. Members to early-day motion 1107. Housing in Wales is not immune to market effects from England, as we have seen over the past three or four years, with the Welsh tail being very much wagged by the English dog.

Markets in Wales are very local, however. The Halifax reports today that UK house price inflation last year was 19 per cent, but the figure in my part of the UK, in Gwynedd, was 57 per cent. I hardly need say that wage levels scarcely rose anything like 57 per cent, so affordability spiralled downwards. The rise in Gwynedd was the highest in the UK, but in West Glamorgan there was a rise of 56 per cent, and in the north-east of England and in Scotland the figure was 40 per cent, which means that ordinary houses are being put way beyond the reach of ordinary families on average earnings. My local authority surveyed houses for sale on the Lleyn peninsula earlier this year, and found that no one on an average income, with the usual multiplier applied by the building society, could buy any of the houses on the market. Those 26,000 people are effectively locked out of the housing market.

A terraced house in the Roath area of Cardiff that is on the market for £164,950 was going at £65,000 two and a half years ago. Roath is a pleasant area, but it is not exceptional. That house is clearly out of the reach of ordinary people living in the area. Housing is getting out
 
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of the reach of local people in Wales in general, and the stock that we have is not of a fit standard. It is estimated that 50,000 children in Wales live in unfit housing.

In the Ely ward of Cardiff—in the constituency, incidentally, of Wales's First Minister, Rhodri Morgan—36 per cent. of the households are in unfit housing. It is hardly surprising that there is a great deal of unhappiness in the ward. In the Riverside ward, there is a 7.1 per cent. shortfall in new affordable housing: 428 houses are needed. Houses in Riverside are the most likely in Cardiff to be unsuitable, and households there are the least likely to be able to afford to move. It is hardly any wonder that a popular and diligent councillor, Neil McEvoy, has taken the obvious step of coming over from new Labour to Plaid Cymru.

Wales has the oldest housing stock in western Europe; a third of its houses are pre-1919, and many of them are in very poor condition. House building rates are so low that today's new houses would have to last for 2,000 years before their turn came for replacement. We are not building the houses that we require. In fact, 4 per cent. too few houses are being built each year to fulfil our unmet need—we are short of 32,000 houses.

In Wales, 8.5 per cent. of the housing stock is unfit, and the repair bill would be £1 billion. At the other extreme, we have some very good housing. In parts of my constituency, houses are priced at £300,000, £400,000 or even £500,000, but unfortunately they tend to be holiday homes. There are communities in the constituency where more than half the housing is in the holiday homes sector, and local people, usually on low wages, have no hope whatever of partaking in the housing market—essentially, they are locked out. Many are emigrating. The more economically active and energetic young people tend to leave. The average age of first-time buyers in Wales is the highest in the UK, at 36.

There are many problems, and it has been demonstrated in many of the speeches today that there is no easy answer to the housing crisis. We need many solutions. My party set up a rural taskforce in 2001 to look into possible answers, and I commend our document to hon. Members, and especially those from rural areas, such as the hon. Member for Ludlow (Matthew Green). It contains many positive suggestions. The taskforce considered the many difficulties that people experience in the simple task of getting a decent roof over their heads.

The report makes many recommendations, not least new build where that is appropriate, but as housing provision and markets are essentially local, new housing must be very carefully targeted. Unfortunately, in the past few years in Wales we have had policies that led, for example, to a minimum build of 50 houses in very small villages. Public money was not available for smaller developments, which would have been more appropriate.

The rural taskforce also considered part-ownership schemes. The hon. Member for Ludlow made some interesting points about that. My local authority is considering similar schemes under section 106. A crucial aspect of that is a proper assessment of local need. It is all very well saying that we will provide housing for local people, but we need an objective measure of what they need. That is a matter of equity for anyone who is trying to get in on the local housing market. People must know
 
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what they face. Gwynedd is currently constructing an instrument to measure local need on a highly localised basis. I hope that the measure will prove useful to other local authorities. We need proper research in rural areas, based on an appreciation of their particular needs. I am glad that my local authority is taking that on.

The needs of people in my area, in rural Wales, throughout Wales, and in rural areas of England and in the north-east are similar to those in the south-east of England. I ask the Government, and the Government in Cardiff, to apply themselves with equal vigour to the housing problems of those other areas.

2.59 pm

David Wright (Telford) (Lab): It is a pleasure to speak in another Commons debate on housing. I should perhaps declare my interest as a member of the Chartered Institute of Housing. As I have told the House on several occasions, I must be getting it wrong somewhere, because I pay the CIH to be a member and I receive no financial benefit whatever. However, it is a superb organisation that contributes effectively to the housing debate in the United Kingdom.

At this stage it is difficult to speak of a debate, because much of the ground has already been covered, but I want to focus on three broad themes: affordable housing; promoting choice across the housing sector; and housing market renewal. First, however, I should comment on the Conservative party's lack of a housing policy. The hon. Member for Meriden (Mrs. Spelman) made a good fist of a very difficult job, but her speech was a completely policy-free zone. She came across like a character in a western, wandering on a desert plain with tumbleweed blowing around.

Like the Minister, I visited the Conservative party's website yesterday to have a look at the policy document "A Home of Our Own." After three attempts during which the search engine crashed, I finally managed to get on to the site and to examine the document. It consists of 61 pages with one policy idea—an idea that the Conservatives have been clinging to for many years—which is the right to buy. I shall return to that issue a little later.The Conservatives' consultation process seems to have no end in sight. What is their housing policy? We do not know.

I returned to the Conservatives' website to have a look at a speech by the right hon. Member for Skipton and Ripon (Mr. Curry). Again, it was a completely policy-free zone, apart from a comment on right to buy for housing association tenants. I suspect that their policy is very similar to ours in large part, but there is of course a sting in the tail. The shadow Chancellor's announcements on Conservative spending plans, made in February of this year, would mean £18 billion of cuts over two years, and a £400 million real-terms cut in housing investment in 2007–08, compared with 2005–06. I am more than happy to take an intervention on that issue.

Mrs. Spelman: I thank the hon. Gentleman for inviting an intervention. Does he accept that the savings identified by the shadow Chancellor—indeed, they were agreed to by the Chancellor—in large part recognise the over-burdensome level of bureaucracy that was
 
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introduced by this Government, and which the Chancellor himself says could be successfully stripped away after seven years in office?

David Wright: I welcome the hon. Lady's intervention, but our spending proposals already take into account the level of bureaucracy, as well as continuing growth in housing investment and the policy platform of the Office of the Deputy Prime Minister over the next five to 10 years. What she needs to do is to produce costed practical proposals for new housing investment, as the Liberal Democrats have done. In that regard, credit is due to the hon. Member for Ludlow (Matthew Green), who made a very good contribution to the debate. So far as the Conservatives' proposals are concerned, there is a policy vacuum and a public spending vacuum. That would mean less money for social housing development, less money for councils to renovate homes, and less money for registered social landlords to invest in local communities such as mine.

There is nothing new in this. Let us consider the Conservative party's social housing policy in the 1980s, and programmes such as "estate action". That programme's guidelines contained a specific requirement to reduce the number of social housing units. I should know, because unfortunately, while working for a local authority I administered a number of those schemes on behalf of the then Conservative Government. Specific guidance was given to seek reductions in social housing numbers. That is no surprise, given the broad policy platform pursued by the Conservatives during the 1980s and 1990s.

On promoting affordable housing, the bravest decision that this Government took was giving independence to the Bank of England early in our time in office. That decision was crucial in terms of providing stability for owner-occupiers and for people in the broader housing market, and it gave the country confidence in interest rates. The Barker review builds on that, envisaging a partnership between the Treasury and the ODPM in the development of housing policy. Although the Treasury has a key role to play in influencing the economy, giving independence to the Bank of England was an important step in building public confidence.

We remember the Conservative years. Between 1990 and 1997, nearly 500,000 homes were repossessed, and in 1992 1.2 million households were suffering from negative equity. The Minister has already told us about the continuing growth in owner-occupation under Labour, but we must remember that base rates averaged more than 10 per cent. between 1979 and 1997 under the Conservatives, hitting a peak of 17 per cent. Mortgage rates are now the lowest since the 1950s—nearly half their average under the Conservatives—saving home owners some £3,500 a year. Repossessions have fallen from 75,540 in 1991 to 11,970 in 2002. That is 11,970 repossessions too many, but it remains an incredible improvement on what the previous Conservative Government delivered.

The Minister has talked in great detail about ongoing housing spending commitments, and I am proud to note that the Government are increasing housing investment. I want to give a few examples from my constituency of
 
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how the Government's regeneration agency English Partnerships is working with the local authority and local communities. In the past year or so, EP has produced significant new housing proposals. I should point out that it did not function particularly well in the preceding three or four years, but significant progress has been made in the past 12 months. Projects are being undertaken in areas such as Lawley and Lightmoor. In the latter, a new Bourneville village—the first one to be built outside Birmingham—will come on stream in the next three to five years.

In terms of new housing development, a major mixed tenure and mixed development scheme in Lawley will secure an affordable housing level of between 20 and 25 per cent. That is a significant level of affordable housing; indeed, most of the housing in Lightmoor will be affordable housing. That is a very positive step and a major contribution on the part of English Partnerships, which is working in partnership with the local authority on regeneration programmes in Woodside, and with the millennium community scheme in the constituency of my hon. Friend the Member for The Wrekin (Peter Bradley).

Those projects integrate housing development with mixed-use development, including shops, community facilities and schools. That has to be the way forward. They adopt a tenure-blind approach, so that on walking down a street one cannot tell whether a house is for rent or for sale. That is particularly important. Under the Conservatives and programmes such as "estate action", we witnessed the virtual ghettoisation of social housing. Groups of housing units built by registered social landlords were clustered together on the worst parts of sites, instead of being integrated into wider housing schemes. That was the wrong approach, and I am glad that we have amended it. We should see more sustainable communities as a result.

My second theme is the promotion of choice across the housing sector. In my view, during the 1980s and 1990s, far too much emphasis was placed on owner-occupation; indeed, too much emphasis is still placed on it. That is not what happens elsewhere in Europe, where there is a much wider mix of housing and a greater acceptance that the rented sector—be it the social or private sector—has a major role to play in housing people.

The problem with right-to-buy policy that was pursued during the 1980s was that it did not secure the replacement of social housing units. I always supported right to buy. I thought that it was fundamentally right that people should have the opportunity to buy their own home. I am pleased that that is our broad position as a party, but we did not foresee the replacement of that housing stock using the capital receipt. A twist of hand or financial deceit took place in respect of the resources going into new investment from right to buy. Most of the money that became available to local authorities had to be used to pay off debt; only a small percentage of the cash could be reinvested by the local authority. It did not work, so we should re-examine the right-to-buy policy and perhaps come to a new consensus.

The Conservatives want to extend the right to buy to housing association properties. I believe that that will lead to even greater housing shortages and could cost up to £1 billion in extra public subsidy. Since its inception, right to buy has cost more than £40 billion in public
 
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subsidy and I am not sure that we want to continue to put that level of subsidy into such a scheme. I am also concerned about the Conservative party's proposals because smaller registered social landlords will be endeavouring to balance their accounts. They have a small amount of stock available to them and my concern is that the proposal may destabilise some of our better, smaller RSLs. I know that that is a matter of concern within the sector.

Choice means allowing communities to decide who owns and runs the social housing in their area. As I said in an intervention on the Minister, the Conservatives offered only housing transfer—nothing else. I was proud when we extended the options available to social housing tenants to include the private finance initiative, arm's-length management organisations and the retention of stock within local authority ownership. It always puzzled me that those options were not on the table previously, particularly given that they draw in significant private sector investment. I can only conclude that the Conservatives believed that transfer was the only feasible model and that they wanted to remove social housing from the council-related sector completely. That was the policy—transfer or nothing.

On social housing, it is important to remember that in 1997, the repairs backlog amounted to £19 billion and there was a cut in investment in new affordable housing. In 1996, more than 2 million homes in the social housing sector were in a sub-standard condition. As we heard from the Minister earlier, we celebrate the fact that we have met our initial targets and are moving towards our decent homes targets for 2010 by improving the condition of 1 million homes. That benefits people across the country with better housing conditions and better standards. It has been achieved by offering more choice for people living in social housing—as I said, through PFI, transfer, ALMOs and the retention of stock with local authorities.

Under the Conservatives, there was a year-on-year decrease in housing investment, and in 1997, council funding for homes was halved to £750 million. Since then, we have trebled council funding for homes to £2.5 billion. Indeed, under the Conservatives, local authority housing debt rose by £500 million between 1992 and 1997, but it has since fallen by £3 billion. That is a positive record on the part of the Labour Government and I am very proud of it.

My final theme relates to housing market renewal. Housing markets are complex and localised, so we need a process that responds to those aspects. I greatly welcome the Government's initiative on "the northern way", which looks into how to sustain and regenerate housing markets across the north of England. We need to go further and build on the experience of the nine housing market renewal pathfinders. I would like to see us develop—I am looking at the Under-Secretary—"a midlands way" as well, so that we can see sustained investment across the midlands to promote housing market stability. We need to create balanced housing markets. Clearance, along with mixed tenure and mixed use redevelopment, will be particularly critical.

As the National Housing Federation, the Chartered Institute of Housing and the Local Government Association commented in their recent submission under the comprehensive spending review, it is time to develop a national strategy for housing market
 
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restructuring. It should take into account—I partly agree with the hon. Member for Meriden—several aspects of providing a comprehensive approach to housing market renewal and stability. That is the way forward and I commend those organisations for the work that they have done. We need to integrate best practice from the pathfinders into our wider housing strategy, and mainstream that approach.

I welcome this opportunity to debate housing issues. I am disappointed to find that the Conservative party is not offering a more comprehensive approach. I am sure that it will try to develop one in the coming months. We will continue to enjoy the debate. On our side of the House, we have a lot to be proud of.

3.15 pm

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