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6 Nov 2008 : Column 157WH—continued

I agree with that, which might surprise those who accuse me of being an old-fashioned socialist dinosaur. The right to buy had potential to be a great ladder to enable people to enter a property-owning democracy. When I was elected as a councillor in Chesterfield in 1987, the Labour councillors who ran the town then—no longer—were all in high dudgeon about Mrs. Thatcher’s right-to-buy policies. I used to say to them in discussion, “I cannot understand why you as a socialist party did not introduce this when you were in government. Surely, you use taxpayers’ money to build socially rented houses; people who have lived in those houses for a good length of time buy them at a discount and get on to a housing property ladder that they would never have been able to afford in normal circumstances—or even dreamed of or aspired to.” I thought that it had a lot to offer. I have discovered since I entered Parliament—or I am told, and hon. Members may be able to tell me whether it is true—that the Labour Government of 1974-79 considered such a policy for the 1979 manifesto, but that Tony Benn, the Member of Parliament who preceded me in Chesterfield, who was at the time rather powerful in the Labour party, stopped it because it smacked too much of capitalism. I think that it would have been a sensible socialist or social democratic policy to adopt.

The huge caveat of course is what has happened with the right to buy, both in the 1980s and in recent years. One problem is that the money has not gone back into
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building new social housing, to replace what has been taken. It has not been recycled into providing more for people who need it.

Secondly, although the discounts are lower now, they were ridiculously high when they were introduced. They were massive, and from a purely selfish, personal point of view people would have been foolish not to take up the opportunity to buy their properties. I noted at the time that all the Labour councillors who used to object so bitterly in 1987 bought their council houses over the next few years. The discounts were so big that it was not economic reality. A Conservative Government were giving away taxpayers’ money and public investment and property on a massive scale—a scale that we did not see again until the banks were bailed out recently. The discounts were too large and the money was not recycled into building new properties. Local authorities were given no say and no flexibility, and the situation is still the same.

A local authority in one part of the country, even today in our current state, might say, “Yes, we have a place for the right to buy in certain areas of the town and certain types of property. We have more than we need, and we would like to get some properties sold and recycle the money into building new social housing in another part of town.” Another local authority might not, because as the hon. Member for Stroud (Mr. Drew) said in an intervention, the scheme has been a disaster in rural areas.

Surely very few local authorities representing rural areas such Cornwall, Devon, the Lake district or the glorious Peak district in Derbyshire, on Chesterfield’s doorstop, are happy with the fact that they have virtually no social housing. The council houses that used to exist in the Peak national park and other highly desirable rural areas have all been bought, then sold on at a massive profit and are now second homes and holiday homes. Local people such as farm labourers, low-paid workers and the children of people who settled in those areas cannot get into the property market. I am sure that my hon. Friend the Member for St. Ives (Andrew George) will talk about that in more detail if he makes a speech later.

Andrew George: It is certainly true in my area that a lot of former council properties are now second homes. My hon. Friend has said that he agrees with the right to buy, but does he agree that rented housing in the intermediate market is also important? We cannot consider one in isolation from the other. It is important that the Government help by enabling shared equity, mutual housing and other means of constructing a new rung on the housing ladder. That will enable them to get into the market without having to make the stratospheric leap that is currently required in many parts of the country.

Paul Holmes: Absolutely, and before people misquote me and say that I support the right to buy, I did give three massive caveats. I certainly do not support it as it was introduced in the 1980s and as it has operated so far, because the discounts were too great—that has been tackled—because the money is not recycled and because local authorities have no freedom to express an opinion on local decisions and on what is right for their area.

As my hon. Friend points out, we must consider the whole package of what is happening in the housing market. One success of the housing associations in
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recent years has been some flexibility in the offer of shared purchase, with houses being partly rented and partly bought. However, there tends to be a brick wall for people in such schemes. A young couple in my constituency were hit by last summer’s floods in Chesterfield. They had just started a family and had gone up to the limit in buying part of their house from a housing association. They could not afford contents insurance and when the floods happened, hitting about 500 houses in Chesterfield badly, all their contents were wiped out. They could not replace them, and they could no longer afford to pay their part of the mortgages. They came up against a cliff face, and it was all or nothing, as my hon. Friend points out.

We must consider the whole package of housing measures, not just certain things in isolation. There must be a lot more flexibility for people to step up and down in the percentage of their house that they own and the percentage that they rent. They must not be allowed to fall off a cliff because they cannot maintain their mortgage payments on the 25 per cent. or 55 per cent. that they own.

Extending such a scaled system to the right to buy would be fantastic if a local authority thought that the scheme was sensible in its area, if the discounts were of a sensible level and if the money all went back into building social housing. So far, none of that has happened. I am therefore utterly against the right to buy as it has been practised, but not as a principle if it were done in the right way. The Select Committee report states that the Government should revisit that matter, perhaps examining examples such as those in the Netherlands, from which we could learn something. Let us examine the matter seriously, not just cherry-pick the bits that particular parties want at particular times.

The report mentions allowing more flexibility for tenants to downsize, and we have heard the example of pensioners living in family houses. They may have brought up a family, but their children have left home. Perhaps it is a single pensioner whose partner has died. Plenty of people in those circumstances have come to me over the years. They want to downsize, and by and large they want to move to an old folks’ bungalow. Occasionally they want to move to a flat, but most are not keen on flats because there tend to be noisy youngsters living upstairs, who have a different lifestyle and come in at 1 o’clock in the morning.

If Chesterfield borough council were able to build old folks’ bungalows and decamp pensioners who are rattling around in family houses with gardens that they cannot maintain and stairs that they cannot climb, we would get two houses for the price of one. However, it is one of the evil councils that followed their tenants’ wishes when they voted against privatisation, so it still manages the housing stock directly. It is not allowed to borrow money to build, or to get new social housing—it is not allowed to do anything, basically. We therefore cannot offer such downsizing.

A matter that is not covered in the report is one about which various Ministers have speculated in the past couple of years. They have leaked to the press suggestions that we ought to force on some council tenants the reverse of that downsizing. They suggest that we ought to force tenants out of their council houses when they start to earn a bit more money, because they can afford
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to buy or rent privately and social housing should really be only a last resort. That is addressed in one of the report’s first points, as I mentioned earlier.

Ministers have floated that idea as a stalking horse a number of times in the past couple of years. We thought that it had died, but we understand that it is perhaps being floated again at the moment. However, I have not come across that problem in Chesterfield, which is a fairly poor constituency with a large number of council houses. I cannot think of anybody in Chesterfield who earns large sums but chooses to stay in a council house on a council estate instead of buying a house somewhere else. They are not exactly bed blocking, as we would say about the NHS. People who could easily go and buy a nice, luxury house in the private sector are not blocking the valuable, limited, scarce resource of social housing for which another family is desperate. It is not really a big issue, as far as I am aware, yet the Government seem to have been rather hung up on it in the past two years. They seem to think that perhaps they ought to alter the letting system and tenure rules to force people out of council houses if they earn a little too much. How can the Government say on one hand that they want social housing estates to be mixed and pepper-potted, and to cover the whole range of society rather than be ghettoised areas, and on the other hand that as soon as people earn a bit more than average, they will be forced out to buy a house somewhere else?

The report discusses allowing councils to be more flexible in introducing choice-based letting schemes. Who can argue with that? Of course tenants should have choice in where they go to live, but in Chesterfield, as in every council area around the country, there is a very long waiting list, and only people who are desperate and in dire social need reach the top of it. Then their choice is pretty limited, because the council does not have much to offer them.

Different parts of the Government and various pieces of legislation are rightly telling councils to give priority to people who have been in the armed forces. People who went into the armed forces 10 years ago, for example, may have moved around the country or lived around the world. When they come out of the armed forces, they are not on the housing ladder because they have been in military establishments. They want to go back and live in their home area, but the council says, “You’re not on our waiting list, which is already three times longer than the number of houses we have, and you have no recent link to this area, so you’re not a priority.” It is right that councils should give priority to such people, and I have signed up to that.

The Select Committee on Children, Schools and Families, on which I serve, is currently examining the subject of looked-after children. We are considering the situation for children leaving care—they used to be aged 16, but now it can be pushed on to 17, 18, 19 or even 20, which is good. All too often they used to end up in the worst council flat, because that was all that was available. A child who has been in care and gone through traumatic times and had a bad deal educationally because of their disturbed background should be given some priority in getting decent, supported housing. Who can argue with that? I am pushing for that in the Children, Schools and Families Committee.

There are all sorts of similar examples. Prisoners coming out of jail all too often end up in poor accommodation and go straight back into crime because
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of their circumstances. Councils ought to provide decent housing for released prisoners. Again, who can argue with that as a sensible policy to reduce offending?

I have given four reasons why councils should be doing more and more to give good housing to people in various categories. But what have the Government done for the past 11 years? They have halved the number of council houses and prevented councils from being able to do any of those things. Yet they keep on heaping on the requests, saying that councils should give priority to one group or another. The councils cannot do that if the Government cut the amount of social housing all the time. A huge social crisis is being created, and we are starting to reap a whirlwind.

The report goes on to deal with the private sector. It has already been discussed, so I will not make any comments on it apart from saying that, of course, as with council and housing association social housing, there will be more and more demand for private rented sector housing because of the massive, soaring repossessions that we now face.

The report states that the Government must remove impediments to local authorities exercising their place-shaping role to build on land that they own, and to provide the housing that is needed. That is a polite way of saying that the Government must reverse their entire policy of the past 11 years. As the hon. Member for Stroud said, if tenants vote against privatisation—if they say that they want to stay with the council—as they have done in more than 100 authorities in this country, they are penalised.

In Chesterfield, as in the example that the hon. Gentleman gave, a percentage of the rents—it was 14 per cent. but is climbing year by year—is taken away by the Government to spend somewhere else in the country. When tenants come to me and ask why they cannot have something done to their house, why they cannot have fencing to stop criminals nicking and selling all the garden ornaments and so on, the answer is because 14 per cent. and rising—I know of another council where it is 48 per cent.—of the rents in Chesterfield is taken away to be spent in another part of the country. The money is not spent on the council housing of the people who are paying the rent—it is stolen and spent elsewhere.

On right-to-buy, 25 per cent. is kept by the council, and 75 per cent. goes to the Government. Because the council manages its own properties, it cannot get access to Government money through what was the Housing Corporation—it is now changing—because it is for arm’s length management organisations and housing associations.

The hon. Member for Sheffield, Attercliffe (Mr. Betts), who is planning to speak later, made the point when we were debating this matter on the BBC in Yorkshire that the disgraceful division between housing associations and ALMOs, and council housing should be ended. That was in response to something that I said. I absolutely agree: we should end it, because, at present, people in council-run council houses in Chesterfield are utterly and disgracefully discriminated against by this Government. They cannot get access to money for modernisation, repairs or building new houses that ALMOs in Sheffield have had access to in the past and that housing associations get.

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On a level playing field, taxpayers’ money should go to the people who need it rather than to the ones who signed up to the Government’s agenda. If people say through the ballot box that they do not want to go down that road, they should not be penalised.

If a housing association took over Chesterfield’s 10,000 houses tomorrow, it would not have any of its rent taken away. It would keep it all. It would get 75 per cent. of right-to-buy money, not 25 per cent. It would be able to borrow money for more building and investment, and it would have access to Government money—taxpayers’ money—for more building and modernisation. All of that is denied to tenants in Chesterfield and more than 100 other authorities where tenants have said that they do not want to privatise. The report uses polite language to say that the Government must reverse the discriminatory and punishing regime that attacks tenants who have the cheek to vote against what the Government want.

I could say much more about the report, but other Members may make many of the points. The report states that it

As I said, it was a crucial time in April. As the report points out, Oftenant and the Homes and Communities Agency had just been set up under the Housing and Regeneration Act 2008. That was a crucial time, but, since then, the economy has entered recession. Since then, the warnings that some of us were giving last year about the early signs of negative equity and repossession have been hitting newspaper headlines every couple of weeks as the figures get worse and worse.

Where will people go when they are repossessed and homeless? They will go to the council and say that they desperately need rehousing, but, in Chesterfield, for example, the council will say, “Sorry, but our waiting list has trebled in the 11 years since the Labour Government came to power, and our social housing has halved over the past 20 years because of right to buy taking properties out of the system and not replacing them. Although we sympathise enormously, our hands are tied behind our back as far as helping you out.”

If the report was superb and timely in April, it is now being debated at a time of utter crisis. The Government must read it and reverse their entire policy of the past 11 years.

3.34 pm

Emily Thornberry (Islington, South and Finsbury) (Lab): I represent a constituency in inner London where it is difficult to understand the claims that there is anything wrong with being in rented accommodation. One has to be very rich to live in Islington. Indeed, as house prices have gone up, people who move to Islington have to be increasingly rich, so the rich in Islington get richer. On the other hand, those in social rented accommodation—we have had very little private rented accommodation until recently—have to be poor and desperate, and, as the crisis deepens, they have to be increasingly poor and desperate. One has to be very rich, very poor or just lucky to live in Islington. I represent a constituency that is becoming increasingly divided—I see it happening before me.

Many of our problems begin and end with housing. My hon. Friend the Member for Islington, North (Jeremy Corbyn) and I, along with many other inner-London
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MPs, speak with huge passion because every week and every day people come to us with housing problems. If they come with other problems, we can help, but if they come with housing problems, often all we can offer them is tissues. They sit and weep, and we feel as though nothing can be done.

Over the past 10 years, social housing in Islington, which represents about one half of the housing in my constituency, has been done up, and that has been fantastic. We should be extremely proud of the decent homes programme. When I first went around estates in Islington some 10 years ago, they were disgusting. The public spaces were appalling and the roofs leaked—they were dreadful. Now, the estates are something to be proud of.

The difficulty is inside the flats, where people are desperately overcrowded. The problem is that it is not possible for people in social housing in Islington to move out of Islington into other social housing, because the transfer systems that were supposed to be available do not really work. That means that once someone is in social housing in Islington, they are stuck, and always will be stuck.

Whenever I speak about housing in Islington, I talk about the last housing case. I do not want to be guilty of exaggeration, or use a case that is not representative. Sitting on my desk at the moment are two cases involving young women with similar problems. Both are teenage daughters who live in housing association accommodation in my constituency. Both girls have babies and share bedrooms with younger sisters. They cannot get rehoused because the housing associations of which their parents are tenants have sons-and-daughters systems, but they will not allow those girls to move into one-bedroom flats, because, if they did, they would automatically be overcrowded.

We have choice-based lettings in Islington, but there is no choice, and there are no lettings. The girls do not have sufficient points to get a two-bedroom council flat. They are not able to move into a one-bedroom flat because they have a baby and ought to have a two-bedroom flat, but there are no two-bedroom flats available, so they live with younger sisters—one sister is 10 years old and the other is 12 years old—who are fed up with having to share with their older sister. They are even more fed up now that there is a baby in the bedroom as well.

That is the reality. Those are the two cases sitting on my desk now. I do not ever want to exaggerate how bad the housing crisis is in Islington, but I do not need to. I just need to talk about present circumstances. Therefore, it is of great importance to me that I have the opportunity to serve on the Select Committee that has produced this report. For the majority of my constituents, the increase in the supply of rented housing is of vital importance.

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