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House of Commons

Tuesday 18 November 2008

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Communities and Local Government

The Secretary of State was asked—

Housing Policy

1. Sarah Teather (Brent, East) (LD): What assessment she has made of the impact of the current economic climate on her Department’s housing policy. [236262]

The Minister for Housing (Margaret Beckett): The Government recognise that the current market conditions pose significant challenges. We are responding by helping those at risk of repossession, bringing forward money for affordable housing this year and next, and establishing new programmes to help first-time buyers and support the construction industry. While responding to the immediate challenges that we face, the Government remain committed to meeting the long-term housing needs of an ageing and growing population.

Sarah Teather: Is the Minister aware that 1.7 million families are languishing on housing lists waiting for homes? Why will she not allow councils the same borrowing rights as registered social landlords, so that they can buy land now while it is cheaper? Surely the Government should be trying to make the best of the current economic downturn, and using it to plan for the future.

Margaret Beckett: We are trying to make the best of the current economic downturn, and we are indeed considering what can be done. In some circumstances councils have more freedoms than they have exercised, or in some cases been aware of, in recent years, but I assure the hon. Lady and the House that we are considering all circumstances and all options in order to do what we can to ease people’s problems through the present difficulties.

David Wright (Telford) (Lab): I welcome my right hon. Friend’s commitment to affordable housing, but may I caution her against returning to the days when we built large mono-tenure housing estates? It is crucial for us to retain mixed-tenure estates. One way of investing in affordable housing to liberate the supply in the social rented sector is to build more affordable housing schemes for supported housing, which shakes people down through the tenancy stream and frees up social housing tenancies. Will she look again at our supported housing strategy, particularly for older people, but also for young people?

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Margaret Beckett: My hon. Friend is entirely right, and has shown remarkable prescience. I am indeed taking a great interest in the possible opportunities for social housing, for precisely the reasons that he has given. Social housing can be beneficial and offer a better option to some who are seeking housing, but it can also help to solve the problem of under-occupation, which does sometimes arise.

Mr. Ian Taylor (Esher and Walton) (Con): The current market conditions are actually making housing more affordable, while also providing lower mortgage rates. We need more social housing in my constituency, but I am not sure that we need the Government’s long-term housing targets. The south-east draft plan refers to possibly allowing for overspill from London, and targeting us as a growth area. That causes the real worry of whether we can accommodate those people, given that much of the constituency is green belt.

Margaret Beckett: I understand the anxieties that the hon. Gentleman has expressed, but we still have substantial unmet housing need. We cannot as a country, let alone as a society, afford to ignore that and hope that somehow it will vanish, because it will not. I have some sympathy with his concerns, and I know that there can be problems if people are anxious about these matters, but we have to put homes somewhere.

Ms Karen Buck (Regent’s Park and Kensington, North) (Lab): While demand for affordable housing is rising, does my right hon. Friend share my disappointment at the fact that my local authority, Westminster, managed to ensure that only 11 per cent. of the area’s housing built last year was affordable? Given that the Mayor of London now appears to be set on tearing up the target of half all housing built in London being affordable, will she take whatever steps are necessary to ensure that we meet the growing demand for social and other affordable housing across the country?

Margaret Beckett: I entirely understand my hon. Friend’s point, and share her disappointment that more was not achieved last year in her constituency and her area. She says that the new Mayor does not propose to continue with the targets set by his predecessor. She may be pleased to learn that the Mayor has assured me that he expects to be able to deliver as much, perhaps even more, through agreement with the boroughs, and I am sure the whole House will wish to hold him to that.

Sir George Young (North-West Hampshire) (Con): The target of 3 million new homes by 2020 was a very challenging one when it was announced many months ago, before the economy entered its downturn. Does the right hon. Lady believe that it is still attainable?

Margaret Beckett: My understanding is that that was an ambition, whereas some of the more short-term numbers in the programme are definitely targets. Of course I appreciate that, owing to the present difficulties, people will consider whether and on what trajectory we should meet the need, but I am sure the right hon. Gentleman agrees that because the need is not going to go away, the targets cannot just disappear either.

Paddy Tipping (Sherwood) (Lab): In a difficult economic situation, there may be a tendency for developers to build on greenfield or green-belt sites before moving to
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the more expensive and difficult brownfield sites. The Government have an excellent record in the east midlands, where 75 per cent. of development is on brownfield land. Will my right hon. Friend continue to make her policy “brownfield before greenfield”?

Margaret Beckett: I take my hon. Friend’s point. He is right that the Government have an excellent record, and this is one of the many targets that others said we could not possibly meet but we have met; in fact, we have exceeded the targets on building on brownfield. I understand his concerns, and I feel sure that all Members will agree with him that we should do this, rather than, as the hon. Member for Esher and Walton (Mr. Taylor) mentioned, go for greenfield development.

Grant Shapps (Welwyn Hatfield) (Con): Now that the new Minister for Housing has, we understand, dumped the Prime Minister’s 3 million by 2020 target for house building and has stated instead that it was only ever an ambition—it certainly was a target according to the quotes of the Prime Minister that I have to hand—can she tell us whether eco-towns were also only ever an ambition, or does the faltering eco-town project for 10 new eco-towns remain on target?

Margaret Beckett: The eco-towns programme is totally on course. As I think the hon. Gentleman will know, we have only recently published the draft planning guidance and the sustainability appraisal. I am not committed to any specific number. It is certainly the case that under the programme that was previously put forward, one site has met the “generally suitable” criterion, and we believe others can meet it. They all have ambitious and difficult targets to achieve, however, which will be different for each one. What is important is that every site in that programme achieves the standards that would be required for eco-town status, and I have said—clearly, I hope—to those who are ambitious to take part in such developments, of whom there remain many, that they will be required to meet those standards. The standards will not be lowered, and that is why I say that I am not—neither are the Government, and nor have we ever been—fixed to any specific number. That will depend on which of those involved meets the targets, but I shall be extremely disappointed if there are not substantially more than the hon. Gentleman is trying to pretend.

Local Authority Housing Revenue Account

2. Mr. Philip Hollobone (Kettering) (Con): If she will hold discussions with Treasury Ministers to ensure that revenue from the local authority housing revenue account is directed to social housing. [236263]

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): The current review of council housing finance is a joint review between my Department and the Treasury. It includes a thorough exploration of the housing revenue account—HRA—subsidy system. DCLG and Treasury Ministers regularly discuss the progress of the review.

Mr. Hollobone: Council tenants in the borough of Kettering pay £12 million a year in council rent, £3 million of which goes into the Treasury coffers and is not reinvested in council housing in Kettering. Why should council tenants in my constituency pay £1 in extra stealth tax for every £4 they pay in council rent?

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Mr. Wright: I know that the hon. Gentleman and his constituents are concerned about this, and the Government recognise that the current system can be unpopular and perceived as unfair. That is precisely why we undertook the review of council house financing. The review of the HRA subsidy system will look at how local authority housing is financed. It will cover such issues as the recycling of rental income subsidies and the concept of negative subsidy, and I hope that that will address the concerns of the hon. Gentleman and his constituents.

Mrs. Claire Curtis-Thomas (Crosby) (Lab): After years of neglect by the previous incumbents in government, there has been substantial investment in social housing in my area. Slum houses have been removed and new buildings have been put up that are far more suitable for the people in our community, and we thank the Minister and this Government for that— [Interruption.] It needs to be said— [Interruption.]

Mr. Speaker: Order. It is best to thank the Minister privately but to ask the question publicly.

Mrs. Curtis-Thomas: Thank you, Mr. Speaker. On this point, can my hon. Friend reassure me that in the current investment in social housing, which is part of a massive rolling programme, young people who are doing skilled work at college are employed in local projects, so we can take full advantage of that significant investment?

Mr. Wright: I thank my hon. Friend for that challenging question; I agree with her completely on this. When we came to power in 1997, some £21 billion of spending was needed to refurbish the council housing stock. That was disgraceful, and a terrible legacy of the previous Tory Government. By the end of 2010, we will have spent in the region of £40 billion—a once-in-a-generation opportunity to refurbish a generation of council housing. My hon. Friend will be pleased to hear that in the next comprehensive spending review about £8.4 billion—a 50 per cent. increase—will be provided in order to provide the social and affordable housing that this country needs.

Mr. David Curry (Skipton and Ripon) (Con): Is the Minister aware that social housing depends hugely on the health of the private sector? A huge part of social housing is a by-product of housing that is in the marketplace. Given the recession that we are entering, is he aware that the Housing Corporation is permitted to finance only up to 40 per cent. of social housing developments, and that the rest must come from sale-for-market properties or from borrowing? Given the dependence of social housing on the private sector, would it not be intelligent to raise the 40 per cent. limit so that the Housing Corporation could make a proportionately bigger contribution to social housing? Would that not be a good recommendation for the Treasury’s pre-Budget statement?

Mr. Wright: I thank the right hon. Gentleman for his question. He is a former housing Minister, and I know that he is well versed in these arguments. His point is well made, and my response to his question is twofold. First, we are aware of the need for a vibrant construction industry. The £1 billion package that my right hon. Friend the Secretary of State announced in September is part of a package to help the construction industry prepare for the upturn and manage the current difficulties.

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The right hon. Gentleman mentioned the grant regime. The Housing Corporation—as of 1 December, the Homes and Communities Agency—is looking at that issue, and Sir Bob Kerslake, the chief executive designate, is keen to have increased flexibility to ensure that delivery can happen on the ground so that we can help the industry to provide more houses, particularly social and affordable housing.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab): I am sure that my hon. Friend will agree that problems with the housing revenue account, among other difficulties, lead to a great deal of uncertainty about financial wherewithal for organisations such as Sheffield Homes, the ALMO—arm’s length management organisation—that runs homes in Sheffield. It also leads to a disconnect between the rents charged and services provided to tenants collectively and individually. Is he committing the Government in principle to a reform of the housing revenue accounts system, and could he give us some idea for his timetable on that?

Mr. Wright: I thank my hon. Friend. He is a former housing portfolio holder in Sheffield, and is well versed in these matters. He is absolutely right: there is a great deal of volatility with regard to planning, particularly in the repair and maintenance of council houses, which we need to address. He is also right that in the current national system, there is a disconnect between rents paid for by tenants and the services provided. I am not in the business of tinkering around the edges of the housing revenue accounts system; it needs wholesale, fundamental change. My hon. Friend asked about the time scale, and the review will report to Ministers in the spring of 2009, with a hope to introduce some sort of legislative vehicle in 2010.

Bob Spink (Castle Point) (UKIP): Can the Minister do more as a matter of urgency to help local authorities and even housing associations to buy up unsaleable flats and other developments for social housing? That would help the economy, the housing market, which needs a lot of help at the moment, and our constituents who need social housing.

Mr. Wright: I absolutely agree with the hon. Gentleman, but that is happening already. Throughout the country, £200 million has been provided to allow it to happen. We have said that more is possible; the Homes and Communities Agency will be actively engaged in the process. I would temper that by saying that the public sector does not want to buy inferior quality. We need high quality, so it is important that the public sector is well provided for with adequate space standards.

Affordable Accommodation (Private Rented Sector)

3. Andrew Gwynne (Denton and Reddish) (Lab): What assessment she has made of the future prospects for the private rented sector as a provider of affordable accommodation. [236264]

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): Julie Rugg’s review of the private rented sector, which the Government commissioned in January, includes an assessment of how well the sector caters for those on
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low incomes and in housing need. The review reported last month. We are currently considering the report’s findings, including its suggestions for delivering new and affordable property supply, improving rental property quality and professionalising rental housing management.

Andrew Gwynne: I thank my hon. Friend for that answer. One of my main concerns about the impact of the credit crunch on the housing market is that it could push even more people into the private rented sector. While there are some good private landlords out there, there are also some rogue ones. The Rugg review suggested an independent procedure for complaints and redress, particularly for long, drawn-out complaints. Can my hon. Friend confirm whether the Government are looking at implementing that suggestion?

Mr. Wright: I pay tribute to my hon. Friend, who has been championing the idea of tackling unprofessional landlords in his own patch. There is a similar problem in my area, particularly with regard to more vulnerable households. We need to do more. The Rugg review provided a range of options on how we can increase the professionalism of landlords. We are considering those options, and hope to respond in the housing reform Green Paper some time in the new year.

Greg Mulholland (Leeds, North-West) (LD): The House was delighted when the Government introduced deposit protection for people renting under assured shorthold tenancy agreements back in April 2007—I believe that the whole House supported that. The threshold for the scheme remains at £25,000, but if it had been index-linked, it would be £52,000. The reality is that many young and vulnerable tenants are simply not covered and need to be, so will the Minister urgently examine the issue?

Mr. Wright: I thank the hon. Gentleman for his comments, and I shall take them away and examine the matter. He will be aware that under the tenant deposit protection scheme about £1 billion of tenant money has been protected. We are anxious to build on that to ensure that further protection is provided for vulnerable tenants.

David Lepper (Brighton, Pavilion) (Lab/Co-op): My hon. Friend will be aware that Brighton and Hove city has one of the highest proportions of private rented housing in England outside London, and that it is also a successful university city. It has two successful universities, whose students not only contribute to the economy and the vitality of the city, but put pressure on the private rented housing sector. When will guidance be issued to councils stemming from the ECOTEC report, which I know his Department recently received?

Mr. Wright: I would like to pay tribute to my hon. Friend, who is a strong Brighton Member of Parliament, but I do not want to do so because Hartlepool United are playing Brighton and Hove Albion in an FA cup replay this evening. He makes an important point; Brighton is a fantastic place, but its large proportion of private rented properties creates an issue. On studentification and its associated problems, he will be aware of a range of possible planning proposals and non-planning proposals. He also mentioned the ECOTEC report, on which I am hoping to consult later this year.

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