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10 May 2006 : Column 80WH—continued

We must invest more in tools that will help us to identify under-occupation, promote the cash incentive scheme and make mutual exchange work effectively. That will help us to make better use of existing housing stock. We have been extremely complacent about the effectiveness of such programmes. They can help, but are not sufficient and will not solve the problem on
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their own. They need proper incentives to match those offered by the right to buy and they need to case manage individuals through the system to encourage them to downsize and exchange.

An estimated 160,000 households living in the social sector could buy in the intermediate market if that sector were providing family-sized accommodation. Intermediate housing tends to concentrate on one and two bedrooms, which is not what families need. The sector could provide this, and it should.

I plead with my hon. Friend the Minister that we must not load the burden on to rents, as London already has the highest rates of child poverty in the country and research clearly shows that higher rents are a factor in work disincentives and poverty. Rising rents in London have already contributed almost£90 million back to the Treasury, which is grossly unfair given the pressures London tenants are under.

We should expand the pilot for turning temporary accommodation into permanent, which would be good value for money and hugely important for unsettled families. The £20 million scheme that is in place is a drop in the ocean. Also, let us find alternatives to the property market as a means to develop assets for those who cannot realistically afford to buy.

Finally, I wish to say something on council leaseholders. Hundreds of relatively low-income council leaseholders in my area, such as on the Warwick, Amberley, Church Street and Lisson Green estates, face major works bills, which can be as high as £68,000 and which in some cases are substantially more than the purchase price of their property.

Home ownership has turned out to have an enormous sting in the tail for many such families, and while right-to-buy discounts and rising property prices have to be seen as part of the context, the reality is that the bills are arriving now and many lessees are devastated by them. There is a further shift towards sub-letting, as families decide that the £425 a week that they could make in housing benefit for renting their properties to homeless families might help to get them off the financial hook, but that does not make sense for the public purse or the wider community.

It is essential that the Government find ways to support initiatives to help the lower-income households now getting caught in this trap and that they recognise that there are costs involved, such as in the form of funding cost caps, interest-free loans, deferred payments, tax breaks on savings schemes for major works, or in some cases funds for buy back.

I apologise for my speech taking so long, although I hope that Members recognise that I have taken a number of interventions. I conclude by saying that social housing is the public service that has been left out in the cold for a quarter of a century, and in my view we are reaping the whirlwind. Please let us take this opportunity to start making radical reparations.

Several hon. Members rose—

Mrs. Janet Dean (in the Chair): Order. May I remind Members that we have until 10.30 for general debate, before I call the Front-Bench spokespeople? There
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should be ample time for all who wish to speak to do so, if Members moderate the length of their speeches.

9.52 am

Tony Baldry (Banbury) (Con): The hon. Member for Regent’s Park and Kensington, North (Ms Buck) has made a powerful case for her constituency and for inner London. Also, it is good to see the Minister in her place, although I am a little concerned about her health and I hope she will last out the debate. As one who is still traumatised by Tottenham Hotspur being poisoned at the weekend, I am a bit concerned about everyone.

The hon. Member for Regent’s Park and Kensington, North rightly talked about inner London, as that is where her constituency is, but may I take the House on to a shire district? In my district, we estimate that we need 700 new social homes each year just to keep up. The biennial Government grant—the grant under the 2004 comprehensive spending review—has meant that we in Cherwell can build only 288 new homes, which is a long way short of what is needed.

We know from parliamentary questions and answers that delivery of affordable housing after 2007-08 will depend entirely on the 2007 comprehensive spending review and the future bidding round held by the Housing Corporation.

David Taylor: Will the hon. Gentleman give way?

Tony Baldry: I want to be brief and many of the hon. Gentleman’s colleagues wish to speak. I do not want to get castigated for taking up time, and the points I want to make are of reasonably narrow compass.

Let us look at what happened in respect of the 2004 comprehensive spending review. A press release issued by the former Office of the Deputy Prime Minister in July 2004 stated that this was one of the most generous spending deliveries ever, providing an extra 10,000 homes a year for social rent and, on top of that, delivering more than 40,000 homes for essential public sector workers and low-cost home ownership in areas of higher housing demand over a four-year period. The fact of the matter is that although that was a£1.5 billion award, it did barely anything for shire districts such as mine.

Ministers have recognised that there is an aspiration for home ownership. In a constituency such as mine, where we fortunately have zero unemployment, pretty much everyone who comes to see me at my constituency surgery and looking for housing is on a low income. They are in work and have almost always lived in the area all their life: having gone to school in Banbury and grown up there, they now work there. They want to get into housing and would aspire to own their own home if they could.

The Government have put forward shared equity schemes, which are really exciting. My only concern is that under the proposals made by the Deputy Prime Minister and the Chancellor in their pamphlet “Extending Home Ownership”, the aspirant owner has to take on a mortgage of 75 per cent. of the value of the property. Hometrack has worked out that in Oxfordshire as in London, only about 2 per cent. of those on low incomes could afford a shared equity
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property on that basis. Practically none of the people on low incomes will be able to take up shared equity.

In my patch, notwithstanding that we are likely to have it trumpeted that the settlement will be generous and so on, if it is anything like the 2004 settlement, practically nothing will happen. We will then be told that there is to be shared equity, but that will also be a false dawn because no one will be able to access it.

I do not understand the economics of housing. Huge numbers of people in my patch are going into the private rented sector, so the state is paying private landlords considerable sums through rent and housing benefit. Housing benefit is still money from the taxpayer and I do not understand why more of the benefit cannot help to ensure that families can access home ownership. The proportion that a family on low income have to put up would be reduced and far more of those hard-working families in my constituency—often with husband and wife both working on low incomes—could access housing of their own rather than being trapped, as many of them are, in permanent shorthold assured tenancies.

Many of my constituents are confronted by a dilemma: they either go to the district council and are told that they can be put in temporary accommodation for an indefinite period, and eventually one of the few new, affordable social homes might become available, or are told to go to the private sector. As soon as they go to the private sector, they are told that they are by definition adequately housed and they fall off the list.

I make my plea to the Minister: over the next year or so, may we perhaps have a gathering of the Council of Mortgage Lenders, Ministers, the Housing Corporation and others to see how we can make shared equity schemes more accessible to a larger number of people? The Treasury should not simply, under a different pot, spend more and more on housing benefit and lock people into private rented tenancy in permanent shorthold assured tenancies that they really do not want.

In a constituency such as mine, if we could make the finances of shared equity work better, we could lever in a lot more money from individuals, families and mortgage lenders. There seems to be a disconnect that I do not entirely understand, but something tells me that we could do a lot better.

9.59 am

Jeremy Corbyn (Islington, North) (Lab): I shall be as brief as possible because it is important that all colleagues are able to get into the debate. It cannot have escaped your notice, Mrs. Dean, that the majority of Labour Members participating in this debate represent London constituencies; that is because of the nature of the housing crisis in London which my Friend the Member for Regent’s Park and Kensington, North (Ms Buck) outlined very well indeed.

I represent an inner-London constituency where property prices are going through the roof all the time. Anyone wishing to buy a property in my constituency, such as a two-bedroomed flat above a shop on a main road, would need about £200,000. I saw an ex-council, three-bedroomed flat on an estate advertised yesterday for £350,000. So-called “shared ownership” properties are so expensive that the possibility of anyone on less
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than a head teacher’s income getting one is remote. In reality, there is a massive housing crisis. Little is being built and some council property is still being sold, fortunately at a slightly lower rate than in the past.

As my Friend said in relation to the choice-based letting scheme, people on the housing waiting list go into a bidding frenzy every Thursday when the local paper comes out. Most of them are sadly disappointed. People come to my advice bureau in tears saying that in two years they have managed to visit one property with 20 other families and did not even manage to get an offer at the end of that process. Such cruelty goes on week in, week out.

To some extent, I welcome the choice-based letting system. However, we should be careful because those who are not computer literate, whose first language is not English and who do not feel confident or comfortable using telephones often simply do not bid. Such people just wait, but they will wait for ever because they have no opportunity at all. While I am not against choice-based letting, we should be cautious because those whose first language is not English are, in my experience, in danger of losing out as a result of it.

The Member for Banbury (Tony Baldry) mentioned some of the problems in his area, and I have much sympathy with those, particularly the point he raised about the perverse levels of cost and the way in which investment can deal with the situation. I suspect that my local authority, Islington council, like most other London bodies, houses few people off the waiting list into any new development or vacant property. People tend to be directed into the private sector or into leased properties where the council or housing association take on the lease. Such leases are phenomenally expensive.

Ex-council properties that have been sold under the right to buy are then bought up by property companies or housing associations, or they are leased. The rent for such properties is often up to £300 a week. People in desperate housing need are put into them and the rent is paid by housing benefit; usually 100 per cent. of it is paid in that way, although that is not true in all cases. The family involved then often live in a poor quality property that is badly managed, very unsuitable and, in some cases, downright dangerous in my view. A huge rent is paid by the public sector.

If any member of such a family then manages to get a job—clearly we want people to get jobs and careers—they cannot afford to take it, because they are suddenly saddled with a bill of £15,000 a year in rent alone, and they have lost income support and other benefits. We are building a mad benefit trap that costs the public a huge sum to prevent somebody from working and keep them in a grossly substandard and inadequate form of accommodation. A lot of that money could be spent far more effectively on building new homes for rent for the people in desperate housing need throughout London.

I shall just quickly make two or three points because I recognise that many other Members wish to speak. First, on planning issues, the Mayor of London has rightly said that he wants 50 per cent. of all major developments given over to what he terms “affordable housing”. I understand that aspiration, and I support it with one or two reservations. I do so because I want far
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more homes for rent to be available, but I do not like the use of the word “affordable” because the definition of it is loose. It means whatever anyone wants it to mean. Developers seem to think that something is very affordable when I do not think that that is the case. I would much rather say that we desperately need “places for rent at a fixed level in the public sector”.

My local authority, Islington council, was controlled by the Liberal Democrats until last Thursday. Sadly from their point of view it now has no overall control, which represents an enormous step forward for Labour. One issue in the election was the Liberal Democrats’ persistence on the policy that they would demand a proportion of social housing only on development sites of more than 14 units. In my borough there are few large development sites; most are very small. The Labour proposal was to go right down to the bottom and insist that all development sites have a proportion of social housing, which is eminently sensible. I hope that that is the new council’s policy.

With major developments, developers do not think about the housing needs of people who are desperate to be rehoused; they think of their profits. Arsenal stadium sadly closed last week and the football team is moving to the new stadium. The old stadium site is being redeveloped as Highbury square. The developers, with the agreement of the Liberal Democrat council, are going to put 711 one-bedroomed private flats on that site. That is crazy. There is a desperate need for family housing to keep communities together. What happens is that single people and couples move to one-bedroomed flats and then cannot move to anywhere else in that community, so we end up with a community of either childless couples or old people. Those with children are forced to move out of inner London. I am sure that that occurs in other inner-London constituencies.

My last point is about the need to invest in development. The Library produced an interesting briefing for today’s debate, which makes grim reading. The number of new council properties being developed throughout the country this year is somewhere around the zero mark, and the number of housing association properties being developed in the whole of London, which is at a record high for the past 10 years, is just 6,000. We need major investment in housing for rent either by housing associations or local authorities. We should give local authorities the freedom to invest in building properties for rent if that is what they want to do, not skew Government financing of housing investment so that it is impossible for local authorities to build for affordable rent.

If we do not tackle this crisis in London—and it is a crisis—what will be the long-term effect? More homeless people, more people living in grossly overcrowded accommodation, and more children growing up in grossly overcrowded flats. Is it surprising that young people and teenagers who are forced to share bedrooms with their siblings—often siblings of different sexes—do not like to spend time at home because there is simply no space? Is it surprising that families break up? Is it surprising that those young people hang around in the streets because they do not
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want to be at home in the evening, and encounter all kinds of problems as a result? If we do not deal with the housing crisis in London urgently and invest in the needs of the people, we will be exporting the poor out of London, and creating social divisions and misery for those people who manage to find somewhere—often somewhere expensive and inadequate—to live.

I hope that the Minister fully understands the crisis facing us in London, and the pain that we see across our desks at advice bureaux every week when people ask, “Is it so unreasonable to want a decent flat with a bedroom for each of my children so that they can grow up like all the other children do?” It is heartbreaking to hear what people go through. I hope that the Government will skew investment into new building rather than frittering it away on the profits of private landlords and property companies, which is what we are doing through the perversity of the housing benefit system.

10.9 am

Mr. Andrew Slaughter (Ealing, Acton and Shepherd’s Bush) (Lab): I congratulate my hon. Friend the Member for Regent’s Park and Kensington, North (Ms Buck) on securing the debate. She is an acknowledged expert in this field, and her constituency neighbours mine. I do not intend to repeat much of what she said, but I welcome the return of her forensic skills to this issue. The loss to aviation policy is great, but the gain to social housing in London is greater still.

I also compliment my hon. Friend on the timing of the debate, which comes after a series of contentious local elections, for which many of us have spent the past six months knocking on doors in our constituencies. Actually, some of us have spent 18 months continuously doing that—to the extent that many of my constituents are probably seeking an injunction to stop my doing it again in the near future. Along with the cases that we hear of in weekly constituency surgeries, that brought home the real human tragedy caused by housing problems in inner London, particularly as we saw at first hand the conditions in which people live in London in the 21st century.

My hon. Friend gave several examples of the problem. I shall not give details of cases but simply say that they range from the extreme—the consequences of a mother with four children living in a one-bedroomed flat are traumatic and almost unimaginable—to the more common situation, which is perhaps worse because of its chronic nature, in which a whole generation has grown up in overcrowded housing.

It is normal in social housing in my constituency for parents to bring up two or three children in a two-bedroomed flat. The issue that they raise with me is the availability of housing now that their children are leaving college and want homes of their own. In other words, an entire generation has become accustomed to using living rooms as bedrooms, to children of different sexes sharing a bedroom, to daily life, whether it involves doing school work or enjoying recreation, in a space that is so confined that it does not allow for normal living.

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