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John McDonnell:
There is no accountability for many of my constituents, because they are so desperate in their homelessness that they are forced into private lets—buy-to-let properties garnered by profiteering
landlords on a Rachmanite basis to exploit the housing benefits system. When housing is in such desperately short supply, democracy, competition or co-operation do not work. This is about housing supply. The numbers that we are supplying at the moment are clearly inadequate. Tonight, we are offering one of the vehicles that could meet that housing supply need. Whether or not there is plurality of provision, we know of one area in which we can develop housing with one vehicle. It can provide an acceptable form to the people who will then eventually be housed and it has delivered for us in the past: council housing.
Adam Price: I fully agree with the hon. Gentleman. I have seen the figures for England. I do not believe that a single council house was built in Wales last year. If Plaid Cymru is successful in regaining control of the authority in Caerphilly, we will be committed to having at least some council housing built next year. It would be great to have some positive competition from the Labour party on that—perhaps we could have a bidding war on the number of council homes we will build. That is the kind of political competition from which people would benefit.
By accepting the new clauses, the Minister would signal that the regime under the new premiership is serious about its commitment to having a council house building programme that would matter and make a visible and significant impact—
Mr. Paul Truswell (Pudsey) (Lab): Is that not the crucial point? Even if we are talking about a plurality of provision, 2,500 council houses a year is a pathetically small share of that plurality.
6.45 pm
Adam Price: The hon. Gentleman is right. As the hon. Member for Great Grimsby said, the Government’s study, based on the pilot for self-financing, has laid the facts bare for us. Unless a new system of finance is in place, even the Bill’s new rules will not allow us to transform the parlous lack of investment in the council housing sector that we have seen for so many years. The Minister and a new Prime Minister have the opportunity to put right the mistakes made by a previous Administration and a previous incumbent.
David Taylor: The hon. Gentleman was talking about accountability. Is not a pitiable deception often peddled during the run-up to coerced stock transfer ballots? It is said that there will be accountability from or to the new housing associations, which are typically comprised of the great and the good, some nominated local authority members and some nominated tenants, but in practice people are hobbled, silenced and constrained by what they can say in public because of the fear of ejection from the housing association for bringing it into disrepute. That is the sort of accountability that people are promoting.
Adam Price: I agree with the hon. Gentleman. Clearly there are means of deepening tenant participation in all different models of tenure, but there is a model of accountability that people readily understand—the ballot box and local elections—and we should retain it.
We are entering into a different phase in more general terms. After the Northern Rock fiasco, the ideological position that public sector equals bad and private sector equals good is completely tarnished. We are also entering into a new financial era. People in the United States of America are talking about 10 days that have changed capitalism, because the private sector is no longer awash with the kind of money to which the right hon. Member for Greenwich and Woolwich referred. There was a demand for bonds and asset-backed securities, and that is one of the reasons why stock transfer and the kind of financial instruments that it could create were attractive to investors at one point. We are now in an entirely different era—the credit crunch—and we should not put our faith in the private sector when the money in it is drying up. We must examine other models that have served us well in the past. When facing such a housing crisis in this country we would be unwise not to grasp this political opportunity, given that there is such a consensus in this Chamber on the fact that council housing needs to be a far larger part of the solution than it has been for the past 10 or 15 years.
Paul Holmes: The fact that I wish to address my comments to new clauses 1 and 8 will come as no surprise, given that almost everyone who has spoken has done the same. Those new clauses have dominated the debate. This group contains more than 21 new clauses and amendments, and those two alone have taken up well over 90 per cent. of the discussion. That shows just how strongly people feel about this matter.
The right hon. Member for Greenwich and Woolwich (Mr. Raynsford) discussed dogma about tenure and whether people should be buying houses or living in council houses, saying that that was not the key issue. One of the key issues is that the 11 years of dogma from this Government, saying that council housing is bad and that it must be forced into privatisation or stock transfer, has caused huge harm. I shall return to that in a moment.
New clause 8 concentrates on effectively establishing the fourth option—or a level playing field for councils alongside housing associations—and has two parts to it. The first is about equal access to resources to maintain existing housing stock. The second is about equal access to funding and borrowing and being allowed to build new houses. Like new clause 1, new clause 8 stands in the name of the hon. Member for Great Grimsby (Mr. Mitchell), who does an excellent job as chair of the all-party group on council housing. The second name listed is mine, as I am vice-chair of that group. Given the excellent speeches that we heard from the hon. Members for Poole (Mr. Syms) and for Carmarthen, East and Dinefwr (Adam Price), I look forward to having two new vice-chairs for the group so that we can turn it into a fully fledged all-party group.
I have no doubt that at the end of the debate we will hear from the Minister that all these issues are being considered and are under review. There is a review of the housing subsidy system, to which I shall return shortly. We have heard that from Ministers and the Government before. Members of the Labour party have heard it at conference. They heard it in the run-up to the 2005 election. They heard it last summer, in the run-up to the general election that never was. They heard promises that the Government were looking at
the problem and would sort it out, and that they would allow councils to have a level playing field and to build. As many hon. Members have pointed out, that is nonsense, and that has been the case for the past 11 years. The dogmatic thrust of Government policy is to bring an end to council housing. Those council tenants who vote against Government policy—that is, more than half the social housing tenants in the country—are penalised and punished.
It is no good the Minister saying that he is looking into the matter, that there is a review and that the Government will come up with some answers next year, the year after that or maybe the year after that. We have heard it all before and it has not happened. The crisis is now. We all know what is happening in the private housing sector: repossessions are soaring and have almost reached the levels they were in 1990 during the last big negative equity crisis. People who bought in the sub-prime market or who are on three-year fixed interest mortgages and will come off them on to a much higher interest rate will begin to hit problems. The crisis will be much worse than the one in 1990 to 1992. After that crisis, the Conservative Government altered the regulations so that the benefit system no longer paid the interest on a mortgage for the first six months of unemployment. More people will be pushed straight into repossession, homelessness and seeking help from councils.
Councils will not be able to provide that help because of the lack of council house building over the past 11 years. For the 50 years following world war two, the average number of council houses built was 150,000 a year, as we have heard. Last year, fewer than 300 were built, the lowest number since before world war one. Councils are not in a position to meet the high demand, which will grow over the next year or two because of the problems that are hitting the private housing market.
As we have heard, waiting lists have soared over the past 11 years. Homelessness is up from 40,000 to 80,000. Waiting lists for council housing are up from 1 million to 1.6 million. In Sheffield and Chesterfield, waiting lists have trebled since this Government came to office. When the all-party group held its second evidence session a couple of weeks ago, a Labour councillor from Bolsover told us that someone who applies for council housing in Bolsover has to wait an average of 10 years before they can get any sort of quality accommodation. The old lady rattling about in a family house, whose husband is dead and whose children have grown up and left home—that is the normal pattern that I see in my surgery most Friday afternoons—cannot cope with the house, the stairs or the garden and wants to move out to a bungalow, but no bungalows are available because councils are not allowed to build any more. They cannot provide that replacement accommodation.
Every Friday at my surgeries I see young families who live in poor private accommodation and are being exploited, who are sleeping on relatives’ sofas or who live in upstairs flats that are council property. They say that they have one or two children and ask when they can move into a house with a garden. The answer in Bolsover would be that they have to wait 10 years. The situation is much the same in Sheffield, Chesterfield and hundreds of other local authorities.
The crisis is here now. It is bad, but it will get much worse as we encounter further problems with the private housing market. In 1990, councils still had some capability to respond to such situations, but now they will not be able to respond to the growing problem. That is why the Government must do something today. They should accept the new clauses, rather than tell us that the subject is under review and make promises for the future. We have heard that for 11 years but nothing ever happens.
The housing associations, to which the right hon. Member for Greenwich and Woolwich referred in such glowing terms, have not filled the bill. They were supposed to be the alternative and to meet the shortfall in what councils provided before. Over the past 11 years, housing associations have built 22,000 social housing units a year. The Government’s reports have said that at least 46,000 are needed a year simply to allow the situation to stand still. That would not improve the 1.6 million waiting lists, but would simply keep up with right-to-buy losses, for example. The housing associations, which were supposed to be the great answer to all our problems, have managed to provide a pathetic 22,000 social houses a year, which does not even keep up with the right-to-buy losses.
Kelvin Hopkins: I agree with hon. Gentleman. Does he accept that many housing associations now amalgamate into larger groups and no longer have a local, specialist focus? At least one big housing association has a chairman who aspires to be quoted on the stock exchange. He wants the association to be a property company and a big private landlord.
Paul Holmes: I thank the hon. Gentleman for that point, which was next in my scribbled notes. In the shotgun wedding ballots about which we have already heard, which are the subject of new clause 1, people are told that their friendly local housing association will come in and provide many wonderful innovations—many of which do not happen—and that the housing association is small, local and friendly. What happens? That process is followed by constant amalgamation. We can see from the experience of the past 11 years that those housing associations are not in the business of building houses or providing a friendly local service. It is one constant story of amalgamation.
The business plan of housing associations—I will be corrected if I am wrong—seems to be based on constant merger and on taking over council housing stock and smaller housing associations. Two or three housing associations operate in my constituency, and their head offices are in cities that are miles away. They have little local offices that are open a couple of afternoons a week, if we are lucky. If I contact them, as an MP, or a councillor contacts them, we get answerphones or end up ringing through to Rotherham, Bradford, Leeds and all sorts of places. They could be on the other side of the moon as far as the tenants of Chesterfield are concerned.
When those properties belonged to the council, all people had to do was walk for 10 minutes or take a bus for a few minutes into the town centre. They could then bang on the door and go to see the council housing department. They could also vote the council out, as we were reminded earlier. That enabled those tenants to get some sort of response.
A large chunk of this Bill—the clauses that we might not get on to because of the time constraints—sets up the housing regulator, Oftenant. Most people agree with that because, contrary to what the right hon. Member for Greenwich and Woolwich said, housing associations have a poor record of relating to their tenants and being accountable. Housing associations have not delivered the alternative in the wonderful mixed market that we have heard so much about. They have almost completely failed to fill the gap.
New clause 8 asks for a level playing field. All we want is the same treatment as housing associations have. If the 10,000 council tenants in Chesterfield were to switch to a housing association, that association would immediately get to keep all the rents. If they vote to stay with the council in Chesterfield—tenants in Camden did that four times last year—the council loses millions of pounds in rent: £3 million last year, £4 million this year, and £5 million next year. The sum is going up constantly by inflation plus, but the plus goes straight to the Government and not into housing in Chesterfield.
Tenants who are with the council rather than the housing association have no access to the social housing grant. They cannot borrow money. The Minister is very pleased about that. In the letter to the hon. Member for Great Grimsby, which has already been referred to and which was dated 29 February, the Minister makes a big point on the first page:
“A public body borrowing from a bank is still taking on new public borrowing.”
The Government do not want public bodies borrowing. No one has explained that theory of economics to me, whether it concerns hospital wards, new schools or housing. Why do council tenants have to pay higher rents so that people can borrow money in the private sector to build a house? Why is that good, whereas if the council borrows the money more cheaply as a large public institution, that is bad? I do not understand the logic.
We are asking for a level playing field. The fourth option, which is a short-term provision, does not give councils special privileges. It merely stops discrimination against nearly 2.5 million council tenants who have voted no, sometimes three or four times, and want to stay with the council. If the Government are in favour of mixed tenure, diversity and democracy, surely they want to offer a level playing field rather than condemning 2.5 million council tenants in Conservative areas such as Poole, in Plaid Cymru areas, in Labour areas and in Liberal Democrat areas—in areas across the country and the political spectrum—to a constant spiral of decline. The only answer that the Government ever come back with is that there will have to be another ballot, and another £500,000 blown on a failed ballot intended to force people to opt for a transfer. That is simply not acceptable.
7 pm
The hon. Member for Great Grimsby went into some of the details of new clause 1, so I shall not repeat them. It is essentially about tenants’ ballots, and the fact that they should be fair, open and democratic. One question asked from the Conservative Front
Bench was whether, if we support the new clause, it means that we are aiming to prevent stock transfer. It means that only if having a fair, open, democratic free ballot stops stock transfer.
The right hon. Member for Greenwich and Woolwich said that a couple of million tenants have voted for stock transfer, but in most cases that was only because they had a shotgun to their head. They had no choice, because they were being told, “You either transfer or your houses fall apart around your ears, and you will not get any new ones built. If you transfer, it will be the land of milk and honey.” The ballots that took place were often rigged, as I shall explain in a moment.
Mr. Hancock: During my hon. Friend’s comments, the former Housing Minister, the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), was shaking his head in disbelief, as though he did not believe my hon. Friend when he said that tenants have been forced into voting for stock transfer by the options put before them. I assure him that for us in Portsmouth, the options were very much as my hon. Friend described. I am delighted to say that the tenants did not fall for it, and I would be delighted if my hon. Friend allowed the right hon. Member for Greenwich and Woolwich to intervene on him to say where tenants have embraced transfer wholeheartedly, because they have been so disappointed.
Paul Holmes: I would be delighted to do so. Of course, it is hard to prove in some ways, because if tenants have voted to transfer, how can we prove why they did so? In one case, the district auditor examining such a ballot said:
“I find the publicity material in question was unbalanced, one sided and misleading. I find as a fact that the publicity material constituted persuasion and was issued for the improper purpose of persuading the recipient to a particular viewpoint.”
In another case, a judge came to much the same conclusions about how misleading and unfair was the result of the public money spent by the council on the ballot. He said that although it contradicted what the Department said should be good practice, there was not actually any law to make councils follow good practice, so they could continue to carry out one-sided shotgun ballots.
New clause 1 is intended simply to establish a fair, open, democratic ballot in which people who oppose transfer get an equal say. We should have no more one-sided ballots and no more lack of money to support tenants against councils and housing associations that spend £500,000 or £1 million, using DVDs, videos, roadshows, sandwiches and all the rest, trying to persuade people how wonderful it would be to switch. There should be some equality. Public money should not be spent in such a one-sided way, as the district auditor and the judge to whom I referred agreed.
We have heard about snap ballots suddenly being brought forward to pre-empt planned publicity by people who were going to campaign against an opt-out. We do not have ballots on arm’s length management organisations, and why not? Because once there is an ALMO, there is no going back to direct management and direct council responsibility. We have heard about tenants being barred from meetings at
which the only people allowed to speak were those in favour of opt-outs. Tenants’ posters campaigning against opt-out, for example in blocks of flats, have been ripped down by council employees, while posters in favour of opt-out have been left up on the same notice board. There is a huge catalogue of such things. If we end all that, will it prevent stock transfer? If free democracy, fair play and free speech prevent stock transfer, that is the democratic decision of the tenants, and we should respect it.
As I said on Second Reading and in other debates, I am not wedded to the idea that everything must be provided by councils. If people want to buy their house, I have no objection so long as the money goes to providing replacements, which it has not over the past 20 years. That has caused a large part of the problem that we now face. If tenants vote to change their landlord, I have no objection. I have the sneaking feeling that, as Members have said, at least if people vote to switch from one political party to another as their landlord, they can vote to switch back later. That is called democracy. Once they are with a registered social landlord such as a housing association, it is a one-way route. The only way to go from there is into bigger and more remote housing associations, through amalgamations and mergers. That is not democracy.
Lembit Öpik: Does my hon. Friend therefore agree that it was ironic that the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) promoted the Government’s legislative direction as improving competition? In fact, it will remove the democratic competition that my hon. Friend has just described. We will end up with a monopoly unless we accept new clauses 1 and 8. The only way we can maintain competition is by providing the opportunity for democratic contests, to ensure that the best interests of the voters, who also happen to be the tenants, are at the heart of the matter.
Paul Holmes: Absolutely. We keep being told that we should empower people to take control of their own lives, yet we are telling half the social housing tenants in this country, “You have to take a decision about one of the central things in your life—the house you live in—and if you vote the wrong way, we’re going to punish you, penalise you, take your money away, stop your houses being repaired, punish the council that does it” and so forth.
If we believe in democracy, we must accept new clause 1, and vote for it if we must have a vote. It is about having a fair, level playing field and open and honest ballots, rather than the rigged disgrace that we have now.
Mr. Hancock: My hon. Friend is being extremely generous in giving way. Has he ever seen the Government’s indication of what they consider best practice should be, and is it clearly identified? If local authorities have failed to deliver best practice, why have the Government allowed sham ballots to persist and take effect? I am sure my hon. Friend will accept, as I do, that the Government find it difficult to explain the housing subsidy rip-off, but they should at least be able to explain what they consider best practice in ballots.
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