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We must be honest about the fact that we, as a country, and the Government are providing a subsidy. We must choose whether to continue to do that, largely through housing benefit which, as the hon. Member for Islington, North has said, effectively goes into the pockets of private landlords, or whether we should return to the provision of social housing in a far bigger way. We should look at making social housing available to a range of people, not necessarily those who have, in the words of the letting service in my area, “emergency status.” We have had bronze, silver and gold bands for people to move through on a points system. Even those on the gold band who are greatly in need of housing might have to wait up to 18 months for a property to become available. There are people with medical emergencies who come in above them.

The Tenants Services Authority has a great deal of work to do, and I look forward to seeing how its role will develop. I have been able to meet a representative to talk about what it plans to do. That is important, as is how the authority will interact with local authorities. There are options for it to take an enhanced role.

The hon. Member for Milton Keynes, South-West referred to “residualisation.” That returns to the point about who social housing is available for and whether it should be available for a broader cross-section of people. Recommendation 31 in the report focuses on that and the fact that we should be having a broader discussion on how social housing can be used. I have already referred to family housing, but we need to revisit that. Of course, that debate interacts with the planning system, the regional spatial strategy process and interactive local development frameworks. Arguably, sometimes, in areas where there are higher housing targets, those things empower developers more than local authorities in the negotiations to come up with the right solutions.

The report also talks about the private rented sector. Some very complicated housing benefit issues need to be resolved, as many hon. Members have been keen to point out, but most people agree that we are not really achieving the best value for money in using the private rented sector as a tool to deliver for our constituents.

Tenure is a key issue, especially in relation to families, as my hon. Friend the Member for Chesterfield has said. Recommendation 36 relates to what the Law Commission had to say. Some valuable work needs to be done on that, and hope that the Minister has the opportunity to do it.

The Rugg and Rhodes report asks why tenancies fail, as the hon. Member for Milton Keynes, South-West has said. It is not necessarily that they fail, but smaller investors in buy-to-let do not take the long-term point of view; because they want a shorter-term profit. Recommendations 65 and 66 address real estate investment trusts. There could be many benefits from making a residential REIT work, in that it could provide a more structured way for people to invest, which would hopefully encourage a longer-term investment and allow better-quality private rented accommodation, and accommodation that could be targeted at more specific groups. Some hon. Members have discussed studentification in their constituencies, meaning when terraced housing or whatever has largely gone over to students, and the effect that that has had. Quite often, it is not appropriate
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accommodation for students and their interests are not best looked after. There is a lot to be won from investigating the possibility of private tenancies targeted at particular groups.

I welcome the Minister to her position—I apologise for not doing so at the beginning of my remarks. She has a huge amount to do and, given the economic circumstances that we face, she has only a short period in which to get to grips with it and to have a real effect. My party wants an attractive rented sector to get over the problem of people being pushed into home ownership, when that is not appropriate. We want the sector to be responsive to the different needs of different regions, people and families, and we want it to provide people with decent, affordable places to live with a sufficient length of tenure.

4.52 pm

Grant Shapps (Welwyn Hatfield) (Con): May I begin by saying how much I welcome the Committee’s work and how interesting it was? I congratulate both the Chairman of the Committee and other Members who worked on the report. I agree with an awful lot of the report—the vast majority—and it is a good, thoughtful piece of work on the private rented sector.

I also welcome the Minister to her new position. It is the first opportunity that we have had properly to debate a housing issue, and I look forward to many other occasions. Indeed, I hope that our debates continue longer than they did with her two predecessors—she is third Housing Minister that I have faced in 2008 alone. I hope that they give the Minister a greater chance to get used to the portfolio.

The scope of the review, and the detail in the Government response, mean that it is impossible to cover many of the interesting recommendations and responses in the short time that I have available. I therefore thought that I would simply pick out a few things on which there should be greater clarity, particularly on the Government response to the Committee’s excellent work. When we look at any area of housing, but especially the private and public rented sectors, we find that the overall supply of housing is the critical thing—it is the driver for everything else that happens in the sector. That was mentioned several times today.

I wonder whether, actually, this afternoon is a useful point at which to clear up an area of confusion. Comments by the new Housing Minister last week rather set the cat among the pigeons. She told a recent meeting of the Committee:

homes by 2020. There is no doubt about that, but she added:

The Minister for Housing (Margaret Beckett) indicated assent.

Grant Shapps: The Minister indicates that it was always an ambition, but that is not what the Prime Minister said on 11 July 2007, when he announced the draft legislative programme. He said that there would be 3 million homes by 2020 and that:


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It was clear that the Prime Minister thought that it was a target. The Secretary of State for Communities and Local Government, on the 27 November 2007, when she was talking about the planning White Paper, very specifically mentioned achieving the target for 3 million homes—there was no ambiguity about it. The Minister’s immediate predecessor, the right hon. Member for Don Valley (Caroline Flint), said:

and, what is more,

Margaret Beckett: To save the hon. Gentleman from reading another 15 examples of where the word “target” was used, may I just say that my understanding was that it was always an ambition? Most people use the words “ambition” and “target” relatively interchangeably. My main point to the Committee was that nothing has changed, in that we are not abandoning the desire to press on to provide greater social housing, which a number of people argued we would have to do because of present economic circumstances.

Grant Shapps: I do not think that we have time to get into a lengthy discussion about whether the words “target” and “ambition” are interchangeable. If they are as interchangeable as the Minister says, I invite her to use the word “target”, if that is what she means, when she responds.

Emily Thornberry: Will the hon. Gentleman inform the House whether his party supports the Government’s target or ambition to have that number of houses built in that period of time?

Grant Shapps: As the hon. Lady knows from sitting opposite me for hours in Committees, we want to see more homes built. In fact, we have a very proud record of building more homes. We do not think that the way to do that is to set a top-down, centrally driven, Whitehall-dictated target to build homes. She has heard me say this before: if I were to ask the appropriate Minister what the tractor building target was by 2016 or 2020, the Minister would look at me as if I was mad. Governments do not have those types of targets. They do not have targets for car production, for example, but, for some reason, they have a target—which now turns out to be merely an ambition—for house building, which makes no sense.

If one wants to know why it makes no sense, one has only to look at the situation in the year since the target was set. The simple fact is that it will not be reached and it turns out in fact not to be a viable approach to house building. With the benefit of hindsight, we can see that the housing shortage was being promoted not only by the severe lack of house building, especially in the past 10 years and, I concede, previously—I will return to that in a moment—but by the excess credit that was allowed to build up. That enabled people to take out mortgages and do all sorts of things related to private rented sector, such as take out buy-to-let mortgages at 125 per cent. and four, five or six times salaries. The Treasury and the man who is now Prime Minister failed to call time on those banks and took the ability to do so away from the Bank of England. It is not only a question of total housing targets, but of demand that was built at an expanded, bubbled price.


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Mr. Betts: May I help the hon. Gentleman to understand the difference between homes and tractors? Could it be that in law, many people have a right to a home—everyone ought to have a right to a home—but it is not quite so necessary for people to have a right to a tractor?

Grant Shapps: That is a better explanation than I have had from any Minister so far, so I certainly accept it.

The fact is that fewer homes have been built every single year in the past 10 years—let us leave out the credit crunch, which constitutes exceptional circumstances—than in the previous 18 years. I will give the figures to hon. Members. Something like 145,000 homes have been built in each of the past 10 years. That compares rather unfavourably with the 175,000 that were built every year during the previous 18 years. As if that is not bad enough—and I was seeking the views of the hon. Member for Islington, North (Jeremy Corbyn) on this earlier—the number of affordable homes has collapsed compared with the previous 18 years. The Government have not built as many homes in the affordable bracket in a single year as we did every single year in the previous 18.

I do not want to get buried in a debate about the past and claim that everything was rosy. The report makes some very intelligent remarks about the impact of right-to-buy schemes when the money was not reinvested, and the impact now of such schemes when the money is being spent on things such as the decent homes standards, which will not be met. In any case, we know that the amount of housing, particularly council housing, that has been built has crashed. Just before we left office, we built 1,550 council houses a year. Last year, 263 were built across the country. The big macro picture shows us that there is not enough rented housing. I estimate that the number of homes built over the past 10 years has dropped by about a third of a million.

I want to use the rest of my time focusing on the specifics of the report, and asking questions of the Minister. I notice a bewildering array of different targets in the Government response. For example, it says that

in increasing the supply of affordable housing. As we have just discussed, that is completely untrue. The report then goes on to discuss targets. It says that 70,000 “new affordable homes” will be built per year by 2010-11, of which 45,000 will be social homes. The next paragraph says:

In that context, long term means about a year and a half. I am confused as to which of those figure we should be relying on. Will the Minister tell us when she responds? Moreover, will she tell us whether they are aspirations or targets as the figures seem to fall into both camps?

The report refers to the national mobility scheme, which collapsed and was never put back into place. Will the Minister tell us what steps are being taken to set up a national mobility scheme, because that is not mentioned in the response?


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The housing benefit issue, which is mentioned on page 9 of the report, is that, in so many cases, it is much better not to work. I had a very memorable trip to an area in Hastings, which has an horrific problem—in common with a lot of our seaside towns—of poor- quality houses in the private rented sector. People were being paid housing benefit when they desperately wanted to work instead. I met people who were accepting the pay cut and going out to work. In the response, the Government say that they are undertaking a review which they expect to conclude next month. Will the Minister tell us whether that review will report on time?

The housing reform Green Paper has also been promised by the end of the year. I imagine that it will come in the Queen’s Speech. Will the Minister confirm whether we can expect to see that, because I think that we have all heard rumours of a delay?

I understand that the report was started in 2006, reported in May and responded to in September. Since that time, we have had a tremendous crash, to which many hon. Members have referred. Will the Minister confirm whether she has had the opportunity to inspect housing association books or to discuss with the Homes and Communities Agency the significant financial pressure that a number of associations may be under because of the crash in the value of their portfolios?

The issue of the right-to-buy receipts is very contentious. Every time the matter is raised, people take very specific positions. We have seen that in today’s debate. However, it is pretty obvious that we must ensure that right-to-buy receipts are recycled to pay for more affordable or social house building.

The Government response mentions a review that has been set up to consider the right-to-buy receipts and how they should be spent. After talking to my own council in Welwyn Hatfield and to many others across the country, we know that 75 per cent. of those receipts are returned to central Government, which means that there is no way in which local authorities can continue to invest and build affordable housing.

Dan Rogerson: We welcome this move from the hon. Gentleman’s party. Will he concede though that the horse has bolted on this one? So many places have already gone through the right to buy. Given that property prices have increased so much, the numbers taking on the right to buy are so much lower now that it will not have such a significant effect.

Grant Shapps: There is still a significant number of council-owned homes. My council has about 9,500 such homes. The figures elsewhere are still pretty big. There are also right-to-buy schemes in housing associations and in other situations. If we are to get sustainable, long-term, affordable social housing built, we have to have the money reinvested. I take a pragmatic view on the matter. We should do whatever is necessary to get new homes built. There has been a complete and utter failure to get new house building going, which has had a huge impact on the social and private-rented sector, and we need to fix that position.

Paul Holmes: Will the hon. Gentleman clarify whether his party—should it have the power—would allow local authorities to decide whether a right-to-buy scheme is correct for their area rather than imposing it from the
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centre? The Conservative party has suggested extending right to buy to all housing association properties. Is such a policy on or off the agenda?

Grant Shapps: Localism is the way forward. Areas need to develop in a way that suits them. The response says that community land trusts—or something that sounds like that—are a very good way of ensuring that individual areas can do their own thing and invest in the way that they want and keep the land in public ownership or in a trust ownership in perpetuity for the benefit of people in the future. None of us can deny that there is a big debate over right to buy. If one did not believe that public housing had seized up, that there was a record waiting list of 1.7 million families and that some of the reason is that people are not moving out of homes that are no longer suitable for them and their families, one would not have grasped the scale of the housing problems in this country. We know that 1.7 million families—perhaps 5 million people—are on a public waiting list, and that that has to be tackled. I think that right to buy has a part to play and that could extend into registered social landlords. However, we have to ensure that when such properties are sold, the money is reinvested in producing more affordable and social housing. That makes perfect sense.

Emily Thornberry: The hon. Gentleman has caused a degree of confusion. Is it the Conservative party’s policy to have right to buy with no subsidy, so that the money can be reinvested in building? In other words as one house is sold, another is built. Is that Conservative party policy, or does the hon. Gentleman believe that there should be a substantial subsidy as well?

Grant Shapps: Realistically, we cannot sell one property and then build another. The maths do not work out. The Homes and Communities Agency has an £8.4 billion budget over three years. That money is supposed to be spent on affordable housing. Will the Minister tell us how much of that money has been allocated and how much of it has been spent?

Perhaps we can find out at the same time when the three-year period for that £8.4 billion started and at what point it will end. I have been in conversation with the chair and the chief executive of the new Homes and Communities Agency, and it is clear that they do not understand the budgets and cannot get their heads around the figures. I have requested detailed financials from the agency—a body that will spend some £15.5 billion in public money a year, £8.4 billion of which will go towards affordable housing over three years—and it does not know how the numbers are made up. Will the Minister be kind enough, either to tell me today or to send me a note in future—I understand that this is unexpected—to explain how the budgets will be separated?


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