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14 Jan 2009 : Column 83WH—continued

The hon. Gentleman was absolutely right in much of what he said and in some of his recommendations. It is refreshing to hear a Conservative Member talk about the positive side of rented accommodation and the need
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for it, as one rarely hears that from that party. However, I was left with the impression that what he had really done was to give a justification of the previous Mayor’s housing policies, rather than the current Mayor’s. I cannot understand from what he said what could possibly have been wrong with a target of 35 per cent. social rented housing, 15 per cent. intermediate housing and 50 per cent. market housing. That seems exactly the right discipline for London at the moment.

The emphasis on social rented housing is based on the fact that, notwithstanding what is said about intermediate housing, it is clearly the area of most pressing need. We know that the past Mayor hopes to come back. If he is looking for a housing adviser, perhaps that job will be available, but the reality on the ground is very different. Housing policy in London is different, because it is now largely in the hands of mainly Conservative boroughs and a Conservative Mayor. I do not want to be a party pooper, but I want to reflect that reality for a moment.

The first point is that the abolition of targets is a very cynical move to ensure that less social rented housing is built in the capital. That process operates to the extent that one of my local authorities—Hammersmith and Fulham—judicially reviewed the Government to reduce the target that was set. Then, having won that judicial review as recently as last week, the authority was crowing over the fact that it now has much lower targets on social housing. It says, as the Conservative mantra has it, that that is because these targets create artificial boundaries. As I often remind colleagues on these occasions, under a previous Labour administration, it was possible to build 80 per cent. affordable housing, split almost 50:50 between intermediate and social rented housing. I would have thought that that was the paradigm for what the Conservatives say they wish to achieve, so I do not know why they should engage in the business of spending public money to go to court to reduce those levels, because not only are targets for affordable housing going but the definition of affordable housing is substantially changing.

The target for what is called “affordable housing”, as far as my local Conservative council is concerned, is for people with a per annum income between £50,000 and £72,000. Previously the range was £50,000 to £60,000, but under the Mayor’s housing strategy, the range is for people with a per annum income between £50,000 and £72,000. I do not know whether that is what the hon. Member for Cities of London and Westminster had in mind when he was talking about intermediate housing, but that is not what I call intermediate housing. When I talk about intermediate housing, I am talking about people on perhaps £20,000 to £40,000, who are the majority of people in housing need and looking for housing, but who may be able to access a level above social rented housing.

Those people are entirely excluded from my local authority’s plans, but it goes much further than that. There are three pillars of housing policy in Hammersmith, the first of which relates to disposal. The reason why the council is unlikely to reach its targets on temporary accommodation is that, for example, it has just sold off by public auction large, good-quality properties for £1 million to £2 million each that provided more than 60 flats for homeless families in the centre of the borough, with family networks, schools and everything that goes
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with good-quality temporary accommodation when it is necessary. That sale happened so that those families can be moved, probably out of the borough and certainly into private sector leased accommodation, at a cost to the taxpayer that is three or four times greater than the cost was previously.

As I have already alluded to, the second plank or pillar of policy in Hammersmith is to build no new social rented housing at all in the borough. Again, that is a question of going back, renegotiating with and putting pressure on housing associations not to include any social rented housing at all in new developments.

Most provocatively, the third pillar of policy is to look at the demolition of existing social housing. If all the council’s plans came to fruition, up to a third of all social housing in the borough—up to 5,000 units—would be demolished for redevelopment, either as commercial units or as private housing units. I do not have to explain any further; clearly, far from improving things, that policy will make the housing situation locally far, far worse.

Perhaps the hon. Member for Welwyn Hatfield (Grant Shapps), the Opposition spokesman, may wish to allude to this matter, but what must underlie a policy that is stated as reducing the percentage of social housing in Hammersmith and Fulham is a Conservative policy that was mooted last year; I do not believe that it is yet formally official policy. That policy is to relegate the status of social housing effectively to temporary accommodation, to remove security of tenure. I say that because that can be the only conclusion. It is certainly the stated policy of the Conservative administration of Hammersmith and Fulham council that it believes that social rented housing should be available only for emergency housing or for temporary provision. That idea was something that fed into the Conservative party’s policy review. As I say, that can be the only conclusion of a policy that says that they wish to see a substantial percentage reduction in the availability of social housing over the next few years, when waiting lists and overcrowding are the highest for a generation.

I finish, as I always do on these occasions, with a plea to the Minister: in relation to London housing, only the Government can wave the stick to ensure that, far from being reduced, the amount of affordable social housing is increased, which I believe is Government policy. That applies not only to local authorities, but to housing associations, and on that point I agree with my hon. Friend the Member for Islington, North (Jeremy Corbyn).

Again, it is partly the fault of the Conservatives that public land sites that previously would have been transferred to housing associations at nil value are now being auctioned to the highest bidder. Of course, once the housing association is saddled with more debt and more expense, it can build only a lower percentage of affordable housing. However, many of the culprits in this situation are precisely the chief executives of the G15 group of major housing associations, who, almost as a matter of pride and policy now, see the future in housing for sale, rather than in housing for rent. That is a complete subversion not just of the function for which they were established, but of what, frankly, they are paid and instructed to do. The Government must come to terms with that, because those people are unaccountable, either
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to their paymasters in Whitehall or to their tenants, who are primarily the people whom they deal with. That is a matter that we must address.

Grant Shapps (Welwyn Hatfield) (Con): Does the hon. Gentleman share my concern that the Housing and Regeneration Act 2008 specifies that public land cannot easily be sold for anything other than its market value, which sometimes leads to the wrong type of development?

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): That is not true.

Mr. Slaughter: I will let the Minister respond in detail to that point, but it is something of a canard. There is a problem at root there, although the hon. Gentleman always finds a lateral way of avoiding his responsibilities as a housing spokesman to make what I often think are rather petty points. As I say, there is a problem with disposal for best value with all public assets, but there are also ways round that problem. However, I agree with him that we often hear from the Government about plans to dispose of unwanted public assets for the benefit of social housing in particular, yet I do not see much of that happening. That is perhaps another area where the Government can pay more attention.

10.27 am

Simon Hughes (North Southwark and Bermondsey) (LD): I am very grateful to the hon. Member for Cities of London and Westminster (Mr. Field) for securing this debate. I will be very brief, because I am sure that the hon. Member for Regent’s Park and Kensington, North (Ms Buck), who is very knowledgeable and helpful in these debates, would like to say a word. I will therefore be really quick, taking two minutes to outline the state of play in Southwark and another two minutes to put questions to the Minister.

Southwark has the largest local authority housing stock in London and probably the largest leasehold stock, given the number of people who have bought property. In my constituency, we have the smallest owner-occupation rate in London, so we depend on local authority housing and housing associations—both the traditional housing associations, such as the Peabody and Guinness associations, and the newer ones. I want to reinforce the last point but one that was made by the hon. Member for Ealing, Acton and Shepherd’s Bush (Mr. Slaughter) about housing associations. The intention was that they should build property for rent. They should do so, and I hope that Ministers will tell them that that is what their purpose is, not suddenly to do other things.

I also want to reinforce the point made by my hon. Friend the Member for Carshalton and Wallington (Tom Brake) and other Members that housing associations are far less accountable than they should be. As an MP, four out of 10 constituency issues that I deal with are related to housing, and I generally find it far more difficult to obtain good responses from housing associations than I do from the local authorities—Southwark and the City of London—that own the housing stock. That issue needs to be addressed.

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I want to put on record the latest official figures, which the Minister will know. The average local authority rent is £76 a week; the average housing association rent is £81; and the average private sector rent is £193. Obviously, things are moving a bit at the moment. Equally, the average house price in London is £315,000; average earnings in London are £25,000; and the income needed for a mortgage is nearly £100,000. Furthermore, there has been a much greater increase in house prices than in earnings. Therefore, most people cannot afford to buy and are dependent on local authority and social housing stock. The most recent figures that I have seen show that in London, private sector completions were 12,800; housing association completions were 9,100; and local authority completions just two—I repeat, two. That is complete nonsense if we wish to respond to need.

I therefore have a number of questions for the Minister. First, what is the policy on empty homes? Should registered social landlords be able to buy or lease them? I am aware of the controversy, but there are a lot of empty homes around and they should be used. What is Government policy and what should housing associations be doing? Secondly, will Ministers consider suspending the right to buy from today, or as soon as possible, for anyone who moves into social housing, to stop the drain that has, sadly, taken too much away? Thirdly, will Ministers consider lowering the starting rate, with shared ownership, for the percentage that one needs to buy? There could be a 5 per cent. purchase with 95 per cent. rent rather than a 10, 15 or 20 per cent. purchase. Fourthly, can we have a response to the question that the hon. Member for Islington, North (Jeremy Corbyn) and others made about single people and couples, key workers and people returning from the services? Such people need to be provided for in all our communities. It is not sufficient to provide only for those who are elderly, vulnerable or have children, because that does not allow us to service the economy, get jobs done and keep communities together.

Fifthly, what is the deal between big and small housing associations? Are the big ones in a position to finance the smaller ones that are in difficulty? I have read in the housing press that some of them are coming to the rescue. Is that satisfactory, or will the Government need to come in and give support? Sixthly, does the new Homes and Communities Agency have the money that I am told it has to release now? Is it waiting to give that money out? If so, can the money be released so that schemes on the drawing board can be delivered? Lastly, there are big developments in my constituency that the Government support, such as the Heygate and Aylesbury redevelopment. I understand that the deals have been agreed but are not being signed up to because the housing associations are nervous that they cannot deliver. Will the Government take an active interest so that the plans that everyone has agreed should happen—this is not a party political matter—can happen? Then people will not be so nervous that new housing is not being built.

10.31 am

Ms Karen Buck (Regent's Park and Kensington, North) (Lab): I have just one or two points to make. First, let me congratulate the hon. Member for Cities of London and Westminster (Mr. Field) on securing the debate. I
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agreed with almost all of his analysis of the current crisis, including the cash-flow problems facing registered social landlords and the G15 group talking about having more than £1 billion-worth of unsold shared ownership on its books. The underlying problem of the grant regime must also be addressed.

We all need a little more honesty if we are to find a way forward. On the Conservative side, there is the fundamental problem of resolving the issue without resources or due attention to social housing. That was entirely absent from the Mayor of London’s strategy. There are also all the reasons that my hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) gave, which I shall not repeat. We need a little more honesty from the Government, too, about the way out of the immediate crisis. One issue that I want to pick up is the desperate importance of taking a more relaxed attitude to the target to reduce the use of temporary accommodation by 50 per cent., because the transfer and movement of people who are in chronic housing need and suffer from overcrowding is being backed up to an alarming degree. The target was based on projections of new housing supply that have since been rendered totally invalid. The London councils inform me that the projection on which it was based was for 7,263 social homes to be constructed this year, whereas there will be about 5,000, and we all agree that the numbers will almost certainly fall off a cliff in 2009.

Even on the basis of previous projections, almost two thirds of all housing nominations are going to homeless households, although I understand why. Everyone in the Chamber, including me, deals with huge numbers of homeless households who are in a desperate situation. No one is suggesting that their needs should be abandoned, but all other housing needs are being squeezed to a catastrophic degree. That squeeze is having an impact on community cohesion in all parts of London, in addition to the problem with housing need. It is time to be flexible about the target and to use the HCA’s £17 billion budget to ensure that we provide settled, long-term accommodation for homeless households in the thousands of privately rented accommodation properties that are mainly ex-right-to-buy. Otherwise, £400 a week a more is paid in rent for such households.

My final point is about an issue that the Minister has addressed and has heard me raise before, but which still goes on: the exporting of homeless households from areas where they have strong local needs. I promised to raise a case about which I have written to him concerning a Bangladeshi family with 27 years of local connection to the Church Street ward. They were born and bred there, they work locally and their children are in Gateway school in that ward, but they have been sent to Barking and Dagenham where there is a problem with community cohesion. As my hon. Friend the Member for Ealing, Acton and Shepherd's Bush has said, we look only to the Government to enforce the rules and to help us to deal with this crisis, which has been so well described this morning.

10.34 am

Sarah Teather (Brent, East) (LD): Let me begin by congratulating the hon. Member for Cities of London and Westminster (Mr. Field) on securing the debate, which has been useful. It has covered much ground that
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has been covered in previous housing debates, usually with the same speakers. The focus on the economic crisis is useful to the overall debate on housing need.

Like most hon. Members who have spoken today, I have acute problems with housing in my constituency, in which about 20,000 families are on the housing waiting list. One in 10 children in Brent live in temporary accommodation. Nationally, 1.7 million are on council waiting lists. As the hon. Member for Islington, North (Jeremy Corbyn) has said, the issue is fundamentally one of supply, which is why it is important to tackle the problems that prevent housing associations and councils from meeting targets on affordable housing for rent.

The issue is partly about lending, as the hon. Member for Cities of London and Westminster said. Many of the housing associations that managed to secure private finance before the credit crunch hit have found that banks are trying to renegotiate the terms of their loans. They say that will happen at the end of this financial year, when land that they purchased previously will be downgraded in value, appearing as a large loss in accounts and audits. The banks will use that as an excuse to renegotiate loans. That is affecting the larger housing associations; it is not just about smaller housing associations having difficulties with liquidity. As it is predominantly the larger housing associations that are building and developing properties, they are having the greatest difficulties.

There is also a problem with cross-subsidy, as many hon. Members have said. It is essential that the Government consider creating more flexibility in the subsidy per unit. This is not necessarily a long-term issue—it is a short-tem one—and it is crucial that the Treasury relax the rules. We have to accept that, for the moment, it is going to cost more to build affordable housing for rent. If we do not relax the subsidy, no housing will be built.

Jeremy Corbyn: Does the hon. Lady agree that it is important to have more fairness for housing co-operatives? By their nature, they cannot, and do not, become involved in the sale of property, as that is against their ethos, so they need more support with new building.

Sarah Teather: The hon. Gentleman makes a valid point.

Another relevant issue is flexibility for councils, which would probably find it easier to borrow on the financial markets at the moment as public sector bodies, but the Treasury rules on council borrowing make that difficult. In addition, they cannot keep the capital receipts for properties that have been sold under the right to buy. As my hon. Friend the Member for Carshalton and Wallington (Tom Brake) said, there is uncertainty about the amount of housing rent money they can keep. They are not in a position to borrow, but they could make a greater contribution to meeting the need for affordable housing to rent if they had that flexibility.

Many hon. Members have mentioned the social housing model. The whole point of having cross-subsidy and a mixed economic model is to ensure that we do not have ghettoised communities, but there is another option. We could have affordable housing for rent, intermediate rent and private rent in the same developments. What consideration are the Government giving to intermediate
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rents? Such rents would make a substantial difference to the ability of housing associations to meet the sustainable communities requirements that the Government place on them and on councils when they are able to build developments. They would also ensure that those involved were not stuck with a model where they could finance the development only through private sale, which is, of course, what is causing difficulty. Is it really a sensible policy priority for the Government to push people into home ownership at the moment? As property prices are still going down, is it not more sensible to use the subsidy to try to make sure that we build more affordable housing for rent? There is no reason why those properties cannot be sold later, either through shared ownership or on the open market, if that is appropriate and if lending comes back on stream. However, banks are not offering mortgages for shared ownership properties anyway, so it does not seem to be a particularly sensible priority for the Government to continue to put money into that when so many families are absolutely desperate for affordable housing to rent.

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