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Currently, the mandatory licensing scheme covers only homes with three or more storeys. The regime does not cover 80 per cent. of houses in multiple occupation, including the vast majority of those in my constituency. Having discussed that, albeit briefly, with the mayor of my borough, I understand that he would not welcome additional powers unless they were
accompanied by severe penalties. The financial reward for cramming small houses with large numbers of people is so great that paltry fines do nothing to deter the practice; rather, they reinforce contempt for the law and those who seek to enforce it. I hope that the Minister will consider extending the threshold to all houses of five or more occupants, and ensure that penalties are severe enough to act as a real deterrent.
I welcome measures to increase the regulation of social housing landlords, adding vital additional protections for tenants of housing associations. As I know from listening to my hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry), I am not the only MP who gets frustrated by the lack of responsiveness to constituents’ needs on the part of some housing associations. I am sure that the Office for Tenants and Social Landlords will allow tenants far greater opportunities to hold their landlords to account and encourage them to up their game. I hope that the Minister ensures that the new office has real teeth and the ability to penalise or break up associations if they are considered to be completely unresponsive to the needs of their tenants, or to be too large and unwieldy.
Finally, English Partnerships has been a key player in the regeneration of east London. It has demonstrated the capacity to turn unloved wastelands into attractive developments for people who wish to buy on the riverside. However, it has not always developed the social rented homes that my constituents desperately need. The Housing Corporation used to be criticised for what was seen as a rather cold and unsympathetic attitude—an assessment that was always a little unfair. However, in recent years we have seen a new mentality take hold within the corporation that is focused more on the homeless people and overcrowded families who desperately need the homes that it funds. Bringing the two agencies together is a logical move, but my final plea to the Minister is that when the time comes for the merger, the ethos of the Housing Corporation should prevail.
In conclusion, I believe that the Bill can significantly improve the circumstances of many in my constituency. However, the Government’s efforts must surely focus on providing the homes that are needed most, to those that need them most. In West Ham, that means providing affordable family homes, for rent and owner-occupation.
8.16 pm
Mr. Austin Mitchell (Great Grimsby) (Lab): My speech follows a succession of very good and powerful speeches on this side of the House, all of which have drawn attention to the problems that have arisen from 30 years of disinvestment in social and council housing, and from 10 years of low build levels of social housing. The inevitable consequences that follow—the powerful and terrible effects on people—featured in the brilliant speeches that we heard from Islington and West Ham.
The only answer is a bigger build programme. Fortunately, we are now getting that—belatedly perhaps— from the Government. As my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher) said, perhaps the build programme is not big enough.
The Cambridge study certainly indicated that it needs to be bigger, but at least we are starting along the road. However, I want to question whether we are doing enough to regenerate existing council estates and to improve the situation that they have been put into by the right to buy. This is a regeneration Bill as well as a housing one, and I want to emphasise that point.
I should begin with the inevitable mantra of welcoming the Bill. I have to say, in welcoming it, that I have some reservations. First, I cannot accept the introduction of a means test for housing. We would be saying that low-cost rental housing is for people who cannot afford to buy or rent at market rates. That means a means test, which is unacceptable to the Labour party or, I think, the people. A basic principle of Labour policy on council and social housing will be revoked by the clause in question. I do not know why it is there; I hope that the Minister will explain it to us. It should not be there, and we should not have any truck with such a policy. A means test for admission would mean that low-cost housing became a transit camp, not a permanent settled place of residence where people could build communities and settle their lives. They would have to be moved out when they reached a certain level, just as they had moved in because they had sunk to a certain level.
Secondly, I am concerned that local authorities, which must drive local housing developments because they know the needs of the people in the area and see what the problems are, are not in the central position that they should be. In fact, we are giving more power to the private sector by allowing private builders to register as social landlords, and by allowing registered social landlords to turn themselves into limited companies driven by a profit motive. Those seem to be retrograde steps and the emphasis should be on the councils. However, the impact assessment for the Bill says that the provisions for allowing them to build will allow the building of only 2,500 houses. That is after 300 houses had been sold in the last year.
Councils’ first choice is to build 2,500 out of their own resources. If they do not do that, they must register—there is a procedure for examination and ratification—as ALMOs or special purpose vehicles. That will give them access to social housing grants. However, they will compete with the private sector and RSLs for limited funds. The Bill will therefore not put local authorities in the strong position that they should occupy. Local authorities should be the main providers of social housing. A much higher proportion of the housing that we build must be public housing for rent and the best way to provide that is through councils.
I am worried that that discrimination against councils is carried through to the local housing companies, of which there are 15. Councils are asked to give up land to the private sector and private developers.
David Wright (Telford) (Lab): My hon. Friend talks about local authorities being the main providers of social rented housing. I do not disagree that we need more council housing. Does he agree that it is crucial to enable councils to bring in private finance by changing the accounting system? One of the benefits of RSLs is that they can secure private finance. Surely we should give councils more power to bring in private finance so that they can build more homes.
Mr. Mitchell: I am grateful to my hon. Friend for the point, with which I shall deal—at perhaps inordinate length—later, depending on the time.
Local housing companies are a way to get councils to hand over land to private developers. Council houses will not be built on that land under the rules as I understand them. That, too, is a retrograde step.
My third reservation is that the Bill continues the campaign to cajole, pressurise and bully councils into privatising their housing stock. Indeed, it extends that campaign by allowing a group of tenants to get together—however manufactured that might be and even if it is a contesting group of tenants—to demand a large-scale voluntary transfer in their area. That is a terrible reversion to the 1988 Nicholas Ridley idea, which was barmy then and is barmy now, of housing action trusts. The proposal produced a massive tenants’ revolt and was withdrawn shortly after having a comparatively minor effect. Why are we, a Labour Government, reverting to Conservative party policy, which failed in 1988? The question deserves an answer.
David Taylor: Is my hon. Friend as surprised as I am by the proposal to give the new regulator powers to transfer compulsory management or even ownership of council housing without consulting all the tenants, without a tenants’ ballot and without the express permission of the Secretary of State? Is that not going too far?
Mr. Mitchell: I am not surprised but amazed that that is happening. There is no reason for it.
However, my main argument is that we should not continue the campaign of cajoling and bullying councils into privatisation. At least the ballots should be better regulated because most of them are an affront to democracy. The Department accepted a rerun of a ballot in Sefton—as if Sefton were Denmark—which produced a different verdict with a lower poll. I am amazed that the Government do not take the opportunity to tighten up such matters. The campaign to privatise weakens councils when we need to mobilise their energies and concern for housing to get behind the building drive.
The three faults that I have outlined are basic. The Bill’s big idea is a new super-quango, constructed by merging the Housing Corporation and English Partnerships. That may produce a new synergy, but it will not do it quickly because such mergers take much time, create many difficulties and can be destabilising. Their consequences can also be messy.
The housing crisis is happening now. I put it to the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hartlepool (Mr. Wright), that the sort of discontent that housing and transport problems generated and that helped damage the Labour party in the south-east in 2005 will be much worse at the next election. We need the house-building programme now; we should not wait for a new super-quango to get its act together. The strains will grow—they are increasing all the time, as my hon. Friends the Members for Islington, North (Jeremy Corbyn) and for West Ham (Lyn Brown) have shown. I am worried about that.
I am not sure what to make of the ability that the Bill grants to councils to opt out of the housing revenue account. The impact assessment contains an incredible endorsement, which states that the arrangement
“would not be viable for most councils. This settlement would create an opening debt level within those councils higher than could be supported by their income”.
We offer an opportunity yet tell councils not to accept it. That is crazy. I do not understand it. If councils opt out, it breaks up the housing revenue account, and that will have an adverse effect on those that are left in. The provision is gobbledegook, which does not achieve what the Bill’s main purpose should be—to implement the decisions of the Labour party conference. I personally regard those decisions as Labour party policy because the Labour party conference passed them three times, yet the Bill does not implement them.
The Labour party conference argued for a fourth option, which is a level playing field between housing associations—RSLs—and local authorities and the ability to raise money and to write off historic debt. Why should councils struggle on with historic debt when it is written off—simply as a bookkeeping transaction—for RSLs? Councils should be able to borrow—the Housing Act 2004 allows them to do that. However, the management and maintenance grant that the Department pays them is not adequate. The Government’s business research establishment has told them that it is far lower than it should be. If they paid 100 per cent. of the grant that they should pay for management and maintenance, that would provide a revenue stream on which councils could borrow to build, renovate and improve. Why have we not done that?
We should end the £1.5 billion deduction every year, about which the hon. Member for Chesterfield (Paul Holmes) complained. There is no justification for that deduction. It should be left for local authorities to use for housing. It is a failing not to include in the Bill the intentions—indeed, the principles—that the Labour party conference enunciated and put councils on a level playing field with RSLs.
I want a return to the mixed communities that council estates were. In 1947, we changed the principle on which council estates were built from accommodation for the working class and manual workers to accommodation for anyone. As Professor Hills’s research showed, a substantial proportion of the better-off tenth of society lived on those council estates in 1979. Since then they have become social dumping grounds, and that has broken down all sense of community. We must rebuild that, and that means making council estates mixed communities again, and refurbishing and regenerating them. All that is part of the problem of regeneration, which I hope that we can tackle through the Bill. There are faults in the measure and I look forward to improving it in Committee and on Report.
8.28 pm
Andrew Gwynne (Denton and Reddish) (Lab): I should like to draw hon. Members’ attention to my entry in the Register of Members’ Interests, as a member until May of one of the housing authorities in my constituency.
I am pleased to be called to speak in this debate, which I consider to be vital to many of my constituents and to the people of this country as a whole. It is a pleasure to follow my hon. Friend the Member for Great Grimsby (Mr. Mitchell), who spoke quite a few words of wisdom—I hope that the Government are in listening mode.
I welcome the Bill because if we get it right—I believe that the broad thrust is right—it will greatly improve housing. We all know what the problem is, as it has already been mentioned by other speakers. There are just not enough houses to meet the demand out there for people, and families in particular, to be housed. For the past 25 years or more, we have taken our eye off the ball, although we are all to blame to some extent. There is a substantial problem in my constituency and, from what we have heard, those of other hon. Members, too.
Whatever the rights and wrongs of right to buy—I do not intend to go over those today—without building houses to replace those that were sold off, let alone additional houses to meet the growing demand of an expanding and changing population, we have created a severe shortage in socially rented accommodation in parts of the country. That is certainly the case in my constituency, as an average advice bureau in any of the seven venues in the Stockport and Tameside parts of my seat would bear out.
How did we get where we are today? As we know, not only have local authorities been stripped of their financial ability to build more homes for rent, but they have struggled adequately to maintain the ever-diminishing stock that they managed, to the extent that billions of pounds of repair backlogs built up over the years. The investment made in those houses after 1997, bringing them up to the newly defined decent homes standard, was definitely the right focus for the Government initially. The work done by Irwell Valley housing association and the New Charter housing trust group in Tameside and by Stockport homes in Reddish is a testament to the massive investment in stock renewal that the Government have permitted and pursued.
New windows, doors, bathrooms and kitchens are fantastic, but only if people have a roof over their heads in the first instance. For too many people coming through the door of my advice bureau, there is no realistic prospect of being offered a home in the socially rented sector in the first place, because there are just not enough to go around. Like other hon. Members, I find it disheartening that, because of how the system works, younger couples—working but on low wages, struggling to do their best and bringing up families—just do not have enough points ever to be allocated anything.
Those are the very same kinds of families who after the second world war could expect a nice new council house—a semi-detached house, with a front and back garden for the children to play in. That provision was also there, just about, for their children, but sadly not for their grandchildren or their great-grandchildren. The reality today is that some of those young couples are forced to split up because of the lack of any prospect of being housed as a family. Some live in cramped conditions, with a friend or at mum’s and dad’s house, in the hope that the letter from the housing department offering them a house will come through the letterbox. That is far from ideal, but it is sadly a common occurrence I hear about at my advice surgeries.
The situation is made worse in that some of those families would previously have had the option of
buying a small terraced property, of which there is a plentiful supply throughout my constituency. In the past, such a property was an ideal starter home for those who could just about scrape enough together to cover a small mortgage. However, over the past 10 years the property market in Denton and Reddish has boomed—excellent news for those with their feet already on the property ladder, but not good news for those starting out today.
The property market in my constituency has seen a 398 per cent. increase in a decade, albeit from a low starting point. The average cost of that small terraced house in Denton and Reddish is now £140,000. Some hon. Members might think, “£140,000? Wow—affordable housing!”, but what is affordable to some is out of the price range of others. The average wage of my constituents is £16,800 a year, although for many it is much less than that, placing even terraced housing firmly beyond their reach. So the social rented sector is no longer an option and, for many now, neither is buying. At present, therefore, the only option seems to be the private rented sector.
Let me put it on record that there are some very good, honest, decent private landlords. I do not wish to tar all private landlords with the same brush. However, in my constituency and elsewhere rogue landlords are operating. They do not care a jot about their tenants or about the conditions in which they are forced to live. I have seen squalid conditions over which the local authority has few powers to intervene.
Lyn Brown: Does my hon. Friend agree that we need to modernise the whole of the private rented sector and to find ways of incentivising landlords, particularly those who are on the cusp between being good and bad? Perhaps we could offer to take them into a different tax bracket, but only if they were prepared to be decent landlords in the private sector.
Andrew Gwynne: I agree with my hon. Friend. As always, she has some imaginative ideas, and I hope that we shall be able to pursue some of them in Committee. Who knows?
As I was saying, it is obscene that people, especially children and the elderly, should be expected to live in squalid conditions. Furthermore, they are often being subsidised by the taxpayer to do so. Sadly, some of the properties involved are ex-council, bought under the right to buy, then sold on or passed down to people who rent them out without a thought of reinvesting in the property.
Emily Thornberry: Do we not also need to strike a balance between ensuring that there is sufficient provision of private rented housing and giving certain rights to the tenants in such housing? If we give the tenants too many rights, the sector will diminish. Given that the private rented sector is now expanding, however, does my hon. Friend agree that this might be the time to start improving the rights of private tenants?
Andrew Gwynne: Indeed I do. We talk a lot about rights and responsibilities, but unfortunately the tenants in the private sector often do not have the rights and the landlords do not fulfil their responsibilities.
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