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I do not wish to embarrass the right hon. Gentleman, who is as a former Environment Minister, but could not much of the increased housing numbers he seeks could be found by local authorities doing far more to deal with their voidswith their empty propertiesand by their releasing them back
into the rented sector? The fact is that some of the worst offenders in terms of not releasing such voids are Labour authorities. [Interruption.] Yes, they are.
Mr. Meacher: I entirely disagree with that. Of course voids are a problem, but the hon. Gentlemans suggestion that one should release more of those properties to the private sector is not the answer at all. The reason that they are voids is that there has been low investment and a low level of repairs. Let us not forget that, under the Conservative Government, repairs and improvements plummeted. The cost of the repairs that had been accumulated by 1997 was estimated in a report of that year to be about £20 billion. That is the fundamental problem and that is what the Government are taking their first steps to try to deal with.
More particularly, within the total, the number of additional affordable houses for renting, which is the epicentre of what we have to attend to, needs to be considerably higher. The Government propose an extra 15,000 houses a year, which is very good. It is 50 per cent. above the current output. But is it enough? I think the centre for housing and planning research at Cambridge has done the most recent and thorough work on this matter. It has updated the Barker analysis and has used the latest population forecast. It has estimated that an additional 60,000 social rented homes are needed by 2011above the planned outputs in the Billto meet urgent newly arising need and to do what the Government rightly intend to do: halve the total in temporary accommodation, which is currently about 100,000. What we are seeing is a good first step, but we need to address the issue.
Tim Farron (Westmorland and Lonsdale) (LD): Will the right hon. Gentleman acknowledge that, even though the figures that he refers to may be insufficiently ambitious, they will not be met in parts of the country such as mine, which include national parks, where the restrictions are such that often housing need is not taken fully into account?
Mr. Meacher: We will have to see whether those targets are met. With regard to national parks, there is a serious environmental issue to consider. That is not to say that there should not be house building in national parks. However, as was referred to a few moments ago, as a former Environment Minister, I would want those needs to be reconciled with the need to preserve the landscape and amenity value of the parks. I do not believe that those things contradict each other, as the hon. Gentleman said.
Where are the extra houses to come from? I feel strongly that local authorities should be able to borrow on the open market exactly as RSLs can, against the security of their own housing stock. However, the only movement in the Bill on this matter is that a few councils will be able to access housing grantthat is welcomebut through an ALMO, or what is called a special venture vehicle, which seems an odd euphemism for a wholly owned private company. Even where those things exist, it is proposed that there should be a pre-qualification process before the councils are allowed to bid. It is likely that only a small number of councils will actually get to access grant. It is helpful and right that the Government are saying that local
authorities should be able to keep the income and capital returns from new housing supply where the capital subsidy is provided by them. However, frankly that is of little use if councils cannot access the capital subsidy in the first place. We need to look again at that.
In addition to the adequate supply and funding of new housing on the scale requiredparticularly social homes for rentthere are a number of new policy developments in the Bill that cause some concern. As many others have said, the Bill establishes a new quangothe Homes and Communities Agencyto take over key functions such as the compulsory purchase of land and the granting of planning permission. However, if those functions are not to be left with democratically elected councils, which is what I would expect, at the very least the Bill should state that those decisions must be taken in co-operation with local councils.
The Bill creates an unaccountable regulator, Oftenant, and transfers key responsibilities from elected Ministers and Departments, including responsibility for such sensitive issues as the criteria for allocating accommodation, the nature of housing demand to be met, the extent to which housing demand is to be supplied, the terms of tenancies, the level of rent, the procedures for addressing tenant complaints, and even antisocial behaviour. Those are extremely sensitive matters of policy. I recognise that the powers will apply in the first instance to RSLs, but it is clearly the intention that they should be extended to council housing. In effect, after stock transfer, RSLs, ALMOs and the right to buy have shifted vast quantities of council housing away from local government, the latest proposal could go a long way to removing the rest from local democratic control and ministerial supervision.
This is a very far-reachingI would even say breathtakingproposal and it needs to be examined extremely carefully. It could well undermine ministerial responsibility for one of the most fundamental needs of citizens, which many hon. Members have spoken about eloquently. I am talking about the provision of good quality, high standard accommodation for all, and particularly for the poorest 20 per cent. in society, whose income and employment are so precarious that they are inevitably dependent on public subsidy.
Ominously, that proposal is further buttressed by two other proposals in the Bill. One is that profit-making companies will be allowed for the first time to register as social landlords under a lighter burden of regulation. That must inevitably chip away at social responsibilities. The other is that, for the first timeas I think that my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) saidmeans-testing is included in the definition of social housing. That inevitably abandons one of the fundamental founding principles of council housing in this country. Council housing was based on local authorities providing high quality housing for all sections of society, not just housing of last resort for those who cannot afford something better.
According to Professor John Hills, only 30 years ago, 20 per cent. of the richest 10 per cent. lived in social housing. Now, if the Bill goes through, council estates will further concentrate deprivation and council housing will be further stigmatised. The Government, as the champion of choice, ought to promote council housing as a tenure of choice for those who wish it. A great deal in the Bill is to be welcomed, but those issues need to be examined much more fully.
Adam Price (Carmarthen, East and Dinefwr) (PC): If people want to find the devolution dividendthe social gains from devolutionthey should look no further than the Bill. Many of the objectionable, more nefarious proposals that the right hon. Member for Oldham, West and Royton (Mr. Meacher) has just referred to do not apply to Wales. The introduction for the first time of eligibility based on means-testing and the creation of profit-making social landlordssurely an oxymorondo not apply to Wales, nor does the creation of a new quango. We got rid of quangos in Wales some years ago and we have no appetite for creating new ones.
Having said that, I agree with the right hon. Member for Leeds, West (John Battle) that there is something positive at the heart of the Bill. It is implicit that the Government have at long last recognised the scale of the housing crisis, or challenge as they may call itcertainly it is a huge social problem that we had better find some answers to quickly. At long last, there is finally an acknowledgement from Members not just on the Government Back Benches, but on the Front Bench, that the social rented sector, and particularly council housing, has to be a core element of the response. If there is to be a benchmark by which we judge the success of the Bill in years to come it should be the extent to which it has resurrected the council housing sector.
Unfortunately, over the past decade there have been more false dawns in Government policy on council housing than in the revival of the Welsh rugby side. In 1997, when the Government were first elected, they said that they would release the capital receipts that had been held by the Tory Government. Between 1980 and 1997, those receipts could not be touched by local authorities that wanted to build houses to replace those that they had lost as a result of the right to buy. The Labour Government did release the capital receipts in full, but only for debt-free local authorities. That is less than 10 per cent. of all local authorities. In particular, the most disadvantaged areas, where need was highest, could not get access to capital receipts, and about £3 billion of that money still lies in a fund. Those capital receipts, which were built up between 1980 and 1997 from the right to buy, are still held out to local authorities as a carrot; if they transfer their stock, they will get those capital receipts to beef up their general fund.
As I say, there have been false dawns. Take the prudential borrowing ability for local authorities. There was talk of an investment allowance on the part of the Office of the Deputy Prime Minister. That would have been based on need, and local authorities could have used the prudential borrowing requirement intelligently to build up their local authority housing stock. Unfortunately, the Government rejected the investment allowance route, and instead chose the method proposed in the Bill. As we know, post-1997, local authorities get only 25 per cent. of capital receipts from properties sold. The money goes into a pool system. Quite fairly, that is partly to redistribute some of the right-to-buy receipts across the country. I understand the reason for that, but it means that the local authority sector does not get the entirety of the right-to-buy receipts returned to it, even under a
Labour Government. That surely cannot be right to any of us who want to support and defend the principle of publicly owned housing.
We hope that we will be able to amend the Bill as it goes through its stages in the House, and on that basis we will support it tonight. In the Bill, there is some acknowledgement of the problem. In the impact assessment, the Government admit that local authorities and the council housing sector have faced two problems. The first problem, as the Government admit, is that they channelled the money through registered social landlords. The second problem is that the housing revenue account subsidy system not only does not provide the entirety of the capital receipts, but does not even give local authorities back the entirety of their rent income. Only 74 per cent. of rent is returned to local authorities. How on earth can they keep up the quality and fabric of their existing stock, let alone build new social housing, given the iniquities of the system?
In the Bill, the Government provide two new options. One is for local authorities to exempt themselves from the housing revenue account system. The problem is that they must buy themselves out with a massive one-off payment to the Treasury. In their own analysis, the Government accept that the vast majority of local authorities, and particularly the ones that need the resources the most, will not be able to buy themselves out. That is part of the problem with Government policy on council housing. If an authority wants to be self-sufficient and wants the receipts of sales and income in order to invest, it has to buy itself out, but if it wants to transfer its stock, the Government write off its debt. That shows that, unfortunately, there still is not a level playing field under the Governments policy on council housing. The other option offered is to exempt new properties from the subsidy system. At least there is partial recognition that the subsidy system has worked against local authorities, but why not offer that exemption across the whole local authority sector? Why confine it to new build?
I have to tell the Minister that as the so-called flexibilities stand, they will be of very limited benefit to most of the local authorities in Wales. That is probably the case in England, too, and it is certainly the case for the authorities that we should care about mostthose in areas where social housing need is greatest. Although the acknowledgement of the problem is welcome, the proposition that the Government present in the Bill will do nothing. It will get us nowhere near the level of new council housing build that we need.
I do not oppose targets; in fact, it is important that a Government of the left have targets when we are faced with a huge social need. Why is there no target for the number of council houses that we want, as part of the overall target? The Government refuse to say. There was reference to a figure of 300 new council houses a yearit is even less than that in Wales. That is appalling. All that the Government will say is that probably, as a result of the proposed changes, the figure may increase to several thousand a year. Again, that is a drop in the ocean, if we consider what we really need. Why are the Government not prepared to say that there should be an overall target for the
number of new council houses, as part of the entire figure? Then we can judge the effect of the new policy against the target.
On clause 259, I sympathise with local authorities that have gone down the stock transfer route. It is unfortunate that local authorities feel that they have no other option because of the way in which the cards are stacked against them. Recently, Conwy thwarted an attempt to take it down that route by the thinnest of marginsby 50.8 per cent. to 49.2 per cent. Tenants feel that they have no option. A number of local authorities in England and Wales, including Wrexham, have voted against such a change. However, it would appear that the Government are not satisfied when tenants vote no. Under the clause, a piecemeal approach is effectively created. Even when tenants and local authorities decide not to go down that route, there is the potential for landlordseven for predatory private-sector landlords, in Englandto try to persuade tenants with inducements, and to cherry-pick the best estates, which eventually vote in favour of stock transfer.
How will it be possible for local authorities in England and Wales to plan for their council housing stock if they do not know, year by year, which estates will be part of that stock, or if the parts of the local authority housing stock that bear the highest income are transferred to the private or independent sector? That is the Tory Governments housing action trust policy of the 1980s: cherry-picking estates. If a whole local authority cannot be won over, the aim is to pick off individual estates. The Government need to think carefully about that.
Finally, in Wales, the Essex review on social housing regulation is due to report by the spring. Will it be possible to incorporate some of the reviews recommendations in the Bill? In Wales, there is consensus that we would like to move to a single social tenancy. We certainly want to make sure that where tenants are pushed into the hands of the private or independent sector, there is no diminution of their rights. Scotland has already done that, and there was talk of a single common tenancy in England, although I am not sure what has happened on that proposal. In Wales, there is consensus: we want a single social tenancy across all sectors. Will the Minister allow us to bring such a proposal forward, if the review finds in its favour, in the framework of the Bill?
Emily Thornberry (Islington, South and Finsbury) (Lab): I have been advised that I should declare an interest before participating in the debate. I refer hon. Members to the Register of Members Interests. When my brothers and I left home my mum was living on her own in a three-bedroom council house, so I helped her to buy a flat. The house was therefore released back to the council so that another family could live in it. When my brother resettled in England after working for nearly 20 years in central Africa as an aid worker, I gave him the money for the deposit on his one-bedroom flat. My husband owns a house that is rented out to some young people whom we know, who are on low incomes.
Until I was elected, I had no particular interest in housing, except perhaps from my own experience of
how desperately we need to provide social housing. When I was seven, the bailiffs came. I remember that they wore bowler hats and they chucked us out of our house. We had nowhere to go. Thankfully, we were given a council house. I do not know what would have happened to us otherwise. I hate to think.
I now represent an area that has one of the worst housing crises in the country, and for me housing has become a passion. I do what I can. Sometimes it is hard, and I am willing to admit that some of my housing cases keep me awake at night because sometimes all I can give my constituents is tissues.
Last month a woman came to see me. I shall call her Jackie. She has two little children. She was going to be evicted the next week. The rent that she had to pay on her flat was far too much. She could not possibly afford it, so she had got behind and was about to become intentionally homeless. Islington council therefore had no obligation to rehouse her and would not do so. She was desperate to stay in the borough where her children were at school, but she has had to move many miles away to a private rented flat. I could not help her and her family get affordable housing in Islington.
I cannot say that that is the hardest case that I have had to deal with, but I raise it now because it reminded me so much of the situation that my mother was in 40 years go. The position has not got any better over 40 years. The overcrowding is worse and homeless families continue to face terrible crises. In Islington there are 13,000 families waiting for housing. Two thirds of those are living in overcrowded conditions. It is estimated that in the next two years 7,000 more households will be created, but the houses will not be built. Islingtons housing crisis is desperate. The market cannot and will not provide.
The median income in Islington is about £25,000 a year. The entry level price for a two-bedroom flat is about £300,000, which is 12 times the median income. In this weeks paper, the cheapest one-bedroom flat, an ex-council flat, is £250,000. That is 10 times the median income. What about the private sector and private rented homes? Unfortunately, there is nothing there approaching an affordable rent. The cheapest one- bedroom flat in this weeks local paper is £210 a week. The person on a median income, £25,000, is taking home £320 a week, so paying £210 in rent leaves only £110 for food, bills, travel, council tax and so on.
Our median person, one of the 7,000 new households, cannot rent or buy in Islington. What will happen to them? Many of my constituents are poorer than the median person. The average household income of people on council estates in my constituency is £15,000 a year, and nearly half of my constituents live in social housing. Many of those households include children.
That brings us back to social housing and the 13,000 families on the council waiting list. Allocations are managed by a system that is laughably called choice-based lettings. There is no choice and there are hardly any lettings. Only those in the top half of the waiting list are even allowed to bid for properties. The bottom half, 6,500 families, have to hang on until things get better, and they are not getting better.
Perhaps the Opposition Members, none of whom is still in the Chamber, who campaigned so actively to
ensure that we do not build any more affordable homes would like to guess where the woman whom I am about to describe is on the waiting list. She came to see me a year ago. She is a single mother with one child. She is homeless through no fault of her own and is living in a hostel provided by the council. Let us call her Fatima. She has one room in the hostel. That is no place to bring up a child. Hostels should be for emergencies.
Where is Fatima in the list of 13,000in the top 1,000, who might have a chance of getting a home in the next year? No, because she is not seriously ill and nor is her child. Is she in the top 2,000, who could reasonably expect to be rehoused in the next two years? No. Fatima is in the bottom 6,500those who have no chance of ever getting an affordable house in Islington. She came to see me again in my surgery recently. She still does not have enough points to bid for a home, so she is stuck in the hostel with a larger toddler now. She is on income support. Should she go to a one- bedroom flat in the private market at £210 a week? What would happen if she got a job? How would she feed herself and her child? Surely it makes sense for us to build enough affordable housing for rent so that my constituent has a chance of a home for herself and her child.
My Lib Dem Islington councils record on the matter is a disgrace. Councillors must be disconnected from real life in Islington. I cannot believe that they are intrinsically evil or wicked people, but they do not seem to understand the crisis. They will not stand up to developers and they will not refuse planning permission unless half of it is affordable housing that my Islington families can afford. Instead, only one in seven of all new homes that are being built in Islington is affordable rented housing. It is not good enough. I am pleased that the Government will step in.
Mr. Hancock: The hon. Lady obviously knows a lot about affordable rents. I would be grateful if she could tell us what the affordable rent is in those properties that have been developed for affordable housing in her constituency.
People buy up council housing and rent it out at extraordinarily high prices as temporary accommodation. We are expected to foot the bill by way of housing benefit. That is how people get caught in a poverty trap and we must do something about it. The only solution in the end is to build more. In Islington, where land prices are so high, the council could take advantage of that and say to developers, You cant build here unless half of what you build is for local people. You can make your great big profits on the other half. That takes backbone, which my Liberal council does not have, and it ought to.
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