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House of Commons

Wednesday 9 February 2005

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Deputy Prime Minister was asked—

Housing (Wales)

1. Huw Irranca-Davies (Ogmore) (Lab): What discussions he has held with the National Assembly for Wales Government on housing policy. [214868]

The Minister for Housing and Planning (Keith Hill): Ministers and officials in the Office of the Deputy Prime Minister liaise with the devolved Welsh Assembly Government at regular intervals. In particular, we held wide-ranging discussions with National Assembly officials in the preparation of our Housing Bill.

Huw Irranca-Davies: I welcome the fact that my right hon. Friend has given that answer. I shall deem him an honorary Welshman for the next few minutes by virtue of his having studied at Aberystwyth university back in 1966.

In housing policy, we often look far afield to try to find solutions, but does my right hon. Friend agree that Wales and England have much to learn from each other and that the innovative use of such things as starter tenancies, community housing mutuals and home buy schemes will provide useful icebreakers in his next chat over a cappuccino with his counterparts in the Welsh Assembly at Cardiff bay?

Keith Hill: Well, Duw, Duw. I am delighted to be named an honorary Welshman by my hon. Friend, and delighted of course with the high level of co-operation between my Department and the Welsh Assembly Government in pursuit of the Labour party's aims of expanding both the supply of homes for social renting and low-cost home ownership for first-time buyers. I welcome in particular the big improvements to homes in my hon. Friend's beautiful Ogmore constituency, resulting from the housing stock transfer in the Bridgend area. Of course, my hon. Friend and I know that in Wales and in England the James review would mean massive cuts in housing investment if the Tories ever got back to power.

Mr. Win Griffiths (Bridgend) (Lab): Has my right hon. Friend had an opportunity to look at the green
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pastures scheme run by Pastor Peter Cunningham in Southport? In The Times yesterday, it was claimed that there were no homeless people in the Southport area because of his scheme. He has bought some houses in Flint in north Wales, so can my right hon. Friend discuss with his counterpart in the Welsh Assembly whether there is something in that scheme? If so, it will certainly make a huge contribution to dealing with homelessness.

Keith Hill: I am grateful to my hon. Friend for his question. I did not spot that article in The Times yesterday, because my eye was caught by the front-page report of Labour's massive lead over the Conservatives in the opinion polls. Nevertheless, I undertake to follow up on the matter and find whether, working with the Welsh Assembly Government, benefits could be derived from that scheme.

Social Home Buy

2. Iain Wright (Hartlepool) (Lab): If he will make a statement on social home buy. [214869]

The Deputy Prime Minister (Mr. John Prescott): Our new home buy scheme will offer more social tenants the choice to own a home. Tenants will be able to buy as little as half their existing home at a discount, with the opportunity to increase their share and become full owners over time. Home buy will put home ownership within the reach of up to 300,000 more social tenants. Unlike right to buy, the social home stays in the public sector and the local authority will be able to invest the full 100 per cent. proceeds in new housing, rather than 25 per cent. under the present right to buy scheme. We will consult on the details of the scheme before Easter.

Iain Wright: I welcome the Deputy Prime Minister's comments because social home buy provides people on low incomes with a real stake in their home and their communities. It provides a great opportunity to regenerate areas of low demand and exclude unscrupulous and profiteering private landlords. Does he agree that the siting of such schemes and homes is vital? I am thinking particularly of previously run-down town centre areas. Social home buy needs to ensure that such areas once again become vibrant places to live and that the doughnut effect of all new homes being located in the suburbs is avoided.

The Deputy Prime Minister: I very much agree with my hon. Friend. Indeed, our policy since 1997 has been to achieve greater growth in towns. Our first job was to reverse the increase in out-of-town shopping, which we have done, and for the first time more retail shopping is now being done in town centres than outside towns. That has brought a new lease of life to the centres of cities and towns. The home buy policy, which is our current housing policy, as well as the brownfield policy and sequential testing have all led to exactly what my hon. Friend wants—the rebirth of towns, for which he is a doughty champion, especially in Hartlepool.

Mrs. Caroline Spelman (Meriden) (Con): At the heart of the Government's plans to solve the housing crisis is the provision of cut-price houses for £60,000 each. The Swedish retail giant, IKEA, has a name for properties of
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that sort: it calls them Bokloks. Given that the land that they would be built on has already been earmarked for sale by the Chancellor and the definition of "key worker" is at best muddled, does the Deputy Prime Minister agree that the term "Bokloks" just about sums it up?

The Deputy Prime Minister: Once again, the hon. Lady shows her ignorance of what is actually happening. If she had gone to the sustainable development conference, she would have seen the £60,000 house on display. It was a wow at that conference. The industry told me that it could not be built. We not only built it and displayed it at the conference, but it has now gone to Allerton Bywater and will be part of the development of a pit site of houses available at £60,000. It is a reality, and a lot of people who want to buy their homes welcome the fact that we have thought of new ways to provide affordable homes. That contrasts very well with the press report that I have seen in Kent on Sunday that the hon. Lady's first statement on housing arising out of the James review was that she would cancel the plans to build 130,000 new homes in Kent. That kind of message to the people in Kent and the south-east who are desperate for homes shows quite a contrast with what we are trying to do.

Mr. Edward Davey (Kingston and Surbiton) (LD): The Deputy Prime Minister knows that the size of the discount for social home buy is crucial in understanding what that policy means and how it will operate, and he is rightly consulting on that. However, will he say now who will pay for the discount? Will it be the housing association or the taxpayer? If it will be the housing association, does he accept that social landlords will end up building fewer affordable homes, when we need more? If it will be the taxpayer, what provision did the Treasury make for that in the spending review?

The Deputy Prime Minister: The financing is the same as we had before. If the housing association pays, it will be compensated by the Housing Corporation, whose funds come from the Government. There are varying amounts of subsidies, as the hon. Gentleman knows. The right to buy subsidy can range up to £40,000, which is the reason why we have lost 1.8 million houses from the public housing sector. The right to acquire subsidy is down to £16,000. As he rightly says, we are consulting on the subsidies involved, but it is important that by allowing people to buy equity in such situations, they can afford the mortgage price, and that is available to about 300,000 more people, whereas if I had extended the right to buy to the right to acquire situation, it would have benefited only 60,000 people. We are giving more choice to more people and meeting their demands.

Lawrie Quinn (Scarborough and Whitby) (Lab): Will the consultation that my right hon. Friend has announced on this welcome policy also allow people who live in rural areas who are equally under pressure in trying to get the first foot on the ladder and very much in need of good social housing to be included in the roll-out of the policy?

The Deputy Prime Minister: Yes, those people certainly will be included. In fact, one of the great
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difficulties of the previous Administration's policy on rural housing was that they limited it in certain circumstances where they believed that there was a housing crisis. The houses were supposed to be available to people in the local area. The trouble was that the younger people usually did not have the money to buy the houses, which usually went to people who lived in the area who used them for holiday lets. That is not acceptable. The opportunity extends to rural areas, but I go further and call on all local authorities to do the same. Indeed, to be fair, my mate the Mayor of London has just discovered an awful lot of plots of land that he can build on. Local authorities and Government agencies could go round looking for those plots of land and take this opportunity to build good, high-quality houses—by the way, the £60,000 house is up to the highest standards, saving energy and water—and give a real opportunity to people in rural areas.

Dr. Howard Stoate (Dartford) (Lab): My right hon. Friend knows that one of the main issues that affects public sector recruitment in areas just outside London, particularly in Kent Thameside, is the cost of housing there. Will he show how his policies will make more houses available, particularly to those key workers in nursing, teaching and the police whom we so desperately need if we are to continue the regeneration of areas outside London?

The Deputy Prime Minister: Absolutely critical for sustainable communities is, first, that we should not cancel all the houses that are being built, which seems to be the Opposition's policy.

Mr. Edward Davey: It is not the Liberal Democrat Opposition's policy.

The Deputy Prime Minister: I mean the real Opposition.

We will keep to the building programme. The second thing that we would do is to provide the opportunity for key workers to buy using that form of equity. Under the present key worker policy, we pay up to about £100,000 in subsidy to provide a house to maintain a hospital or teacher service. Frankly, that is not the best way to use money. With the equity shares that we are now using or by separating the construction price from the land price and using the Government land that we keep to our advantage, we allow key workers to have a mortgage price that they can afford.

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