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14 Jan 2009 : Column 90WH—continued

10.40 am

Grant Shapps (Welwyn Hatfield) (Con): I congratulate my hon. Friend the Member for Cities of London and Westminster (Mr. Field) on securing the debate—it is a pleasure to have a debate secured by a Conservative colleague. In relation to affordable housing, he has demonstrated that even Conservatives who represent London boroughs that might to the casual observer seem to be well off share exactly the same problems as hon. Members who represent other parts of London and, indeed, areas just outside London—as is my constituency.

The areas of deprivation that my hon. Friend highlighted are of considerable concern and historical in his part of London. Things are moving in the wrong direction, rather than the right, and I have been struck by the degree of consensus across the Chamber this morning. I think that everybody agrees that the fundamental problems derive from not having built enough housing of all types in recent times, notably social housing. That has led to a crisis—the shortage of available homes—that is perhaps unparalleled since the war. Again, that applies to all categories of housing, but notably social and rented housing.

Time is short, so straight away I will talk about what should be done about the problem and ask the Minister for his thoughts. First, there are too many small, minutiae-type projects going on to try to tackle the problem. What is required is big thinking, not a lot of press release-type thinking. Too many small, sometimes complex and contradictory programmes are out there. We know that Social HomeBuy has been a spectacular failure. It was designed to help 10,000 people over two years, but is has helped 235 people over that period. What is the Minister going to do about that? Just the other month, a new scheme called HomeBuy Direct was announced to help people to obtain shared equity and get a foot on the housing ladder. Having spoken to social providers, affordable housing providers and developers, it seems that HomeBuy Direct and New HomeBuy can end up in direct conflict with each other in some developments.

We hear that a new announcement will be made by the Minister for Housing this Friday, which will involve £200 million and is designed to help people to get on to the housing ladder. Again, I fear that that will involve
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small, meddling schemes that no doubt have good intentions, but which will not solve a crisis of the kind that we have got ourselves into.

Ms Buck: On supporting people into home ownership, does the hon. Gentleman believe that priority should be given to households that earn more than a Member of Parliament earns?

Grant Shapps: We could get into a debate about exactly where the threshold should be, but as my hon. Friend the Member for Cities of London and Westminster pointed out, the average salary in one part of the country—and therefore the average availability of housing, as we know through the local housing allowance—can be very different from that in other parts of the country.

Levels of affordability mean that people can be in deprivation when they have relatively high earnings. It is nonsense to suggest that the situation is the same across the country. For example, this week, I visited social housing in the west midlands, where housing is significantly cheaper than in Cities of London and Westminster. We must have some flexibility, and therefore the numbers will be different.

Let us get back to the big picture. As I have said, we are suffering the consequences of nearly 12 years of less housing being built. On average, some 30,000 fewer units are completed each year under this Government. Things such as the density targets, which have been referred to this morning, have had a significantly damaging effect on the range of property available and, in many cases, have meant that the wrong types of property are available and are in surplus. Families in many hon. Members’ constituencies will therefore struggle to get into decent housing. Does the Minister think that it is time to end density targets, which have done so much damage?

Surely, a proper scheme to kick-start the housing market is required. Back in the early 1990s during the last recession, 60,000 affordable homes were built in 1992. Why is it that next year we will be lucky to scrape 10,000 or 15,000 affordable homes? That is a great shame and does not reflect well on current housing policy. I will end my contribution there to allow the Minister to answer some of those points.

10.46 am

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): I join other hon. Members in congratulating the hon. Member for Cities of London and Westminster (Mr. Field) on securing the debate. I have said before in this Chamber that for an hon. Member who represents what is seen as an affluent area—arguably the most affluent in the country—the manner in which he represents all his constituents in this place is testimony to his character. That has been shown today.

This has been an excellent debate and the hon. Gentleman set the scene extraordinarily well. His analysis was extremely strong, particularly when he pointed out that we have had many housing debates in the House, but the manner in which the current economic crisis is having an impact on housing markets makes such debates particularly important. The recent economic crisis is bringing such problems into even sharper relief, with
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consequences for home owners, house builders and prospective buyers. The full effects of the crisis are yet to unfold, but it is clear that the social housing sector and affordable housing in general are being affected.

There is more pressure on the stock of such housing because of increasing unemployment and the possibility of rising repossessions. There have also been strains on the business model, which was another strong element of the hon. Gentleman’s contribution. Other hon. Members also mentioned the business model and I would like to talk about it at length if I have time.

The Government want to address two challenges. First, we wish to ensure that much-needed social housing gets built. Increasing the supply of housing is vital, and despite the current pressures and the financial difficulties that the world is experiencing, we need to build more homes. Secondly, as has been mentioned in this excellent debate, we need not only to build homes and concentrate on numbers, but to drive up quality throughout the sector, offering a better quality of life and a fairer deal for tenants.

I do not have much time in which to speak, but I would like to paint a picture and set out some important scenarios regarding central London boroughs and the need for housing that illustrate the scale of the problem we have been talking about. More than 2,700 households are in temporary accommodation in Westminster, and in 2007, 1,344 households were on the waiting list for social housing in the City of London. That shocked me, because I was probably guilty of believing the perception and myth that there was no need for social housing in that part of the world. More than 8,000 people are on the waiting list for social housing in Westminster. As in all other regions of the country, waiting lists throughout London—particularly central London—have gone up.

There is also concern in some areas about the options on offer once people are in social housing and need to move home—for example, because their family has grown. My hon. Friend the Member for Regent’s Park and Kensington, North (Ms Buck) gave me the courtesy of allowing me to go to her constituency in the summer, when I visited five families in Westminster who were living in cramped and overcrowded conditions. The purpose of my visit was to see at first hand the impact of that on their quality of life and their life chances. What I saw shocked me and I want to do something about those problems.

It is clear that we still have some way to go in tackling overcrowding, and in reducing the use of temporary accommodation and—this particularly concerns me, and my hon. Friend mentioned it—out-of-borough placements, so that children do not have to travel a long way to school and the family unit can stay together and remain concentrated as much as possible in one place.

A theme of today’s debate has been the cross-party consensus on the analysis of the problems and the willingness and ambition to do something about them. I hope that all hon. Members will work with the Government and local authorities, as well as with the Mayor of London, to try to deal with those problems. Just before Christmas, I had a meeting with Westminster city council’s director of housing at which we discussed the related problems of overcrowding, temporary accommodation and out-of-borough placements, and I am keen to impress on the director and the local authority the need to do much more.

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There have been serious problems with affordability, and, despite recent house price falls, that remains the case. The ratio of house prices to average earnings throughout the country is high, which is one reason why we need to build more homes. In central London, as hon. Members would expect, the problem is particularly acute. In the City of London, lower quartile house prices are more than 12 times lower quartile earnings; in Westminster, they are more than 13 times. That really is an astonishing statistic. By comparison, the average ratio throughout England is less than seven times. We are painting a picture of real need for more homes and, in particular, more affordable and social homes in the City of London. The National Housing and Planning Advisory Unit states that somewhere between 33,800 and 42,600 homes are needed each year in London to tackle the supply and affordability problem.

Ms Buck: If I read correctly the body language of the hon. Member for Welwyn Hatfield (Grant Shapps), who spoke for the Opposition, he implied that the statistics that the Minister has just cited rather undermine my argument about the Mayor of London choosing to raise the threshold for assistance to significantly more than a Member of Parliament’s salary. I would argue that the Minister’s figures confirm my case, because the sheer scale of demand that he outlined for intermediate and sub-market housing and housing for rent confirms that we must prioritise. Does the Minister agree that people earning more than a Member of Parliament are unlikely to be our top priority for affordable housing assistance?

Mr. Wright: I agree with the sentiments that my hon. Friend expresses. The Mayor’s priorities are somewhat odd and confusing, as is his housing policy. I am keen to work with him, however, and if I have time, I shall articulate the current architecture of London and its housing policy, and how we can do more to work together.

There is an issue about scrapping the 50 per cent. affordable housing target, and about the idea that we can help people who are on more than £70,000 when there are real priorities. My hon. Friend the Member for Ealing, Acton and Shepherd’s Bush (Mr. Slaughter) said that there are people on £20,000 a year who are really struggling, distorting the economy and reducing the chances of the London economy achieving its potential. We really need to concentrate on that element. That is an important point.

Mr. Mark Field: I do not want to bandy around the remarks involved in the little battle that is taking place between my hon. Friend the Member for Welwyn Hatfield (Grant Shapps) and the hon. Member for Regent’s Park and Kensington, North (Ms Buck), but surely the Minister acknowledges that one of the biggest concerns in London involves people who are on £72,000.

I would not have set the target quite so high, but, equally, we are talking about not only people who are on £20,000 a year, but about people on £50,000 and £60,000 who desperately want to stay and live in central London. They simply cannot get on to the housing ladder, but there is that sense of needing to try to
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achieve a mix, because it is in all our interests to have mixed communities. The case is slightly easier to make for someone on £20,000 a year, and I know that it is more difficult to make when one is looking at a multiple of the average national wage, but that is the depth of the problem here in central London.

Mr. Wright: I fully understand what the hon. Gentleman says, and I know that in the economy of central London the wages of a certain element of its population are proportionately much higher than those of people in the rest of London and the rest of the country. He made the point, however, that had he been Mayor he would not have set the level at £72,000, which seems to indicate to me, and probably to my hon. Friends, that the level is wrong and that the measure should have been concentrated on people on lower wages. We could have helped an awful lot more.

I want to mention several points, particularly about how we can help to increase supply. Hon. Members will know about the £8 billion investment programme that the Homes and Communities Agency has planned over the next three years. It has been mentioned this morning, and we anticipate that it will provide 70,000 affordable homes, including 45,000 homes for social rent each year from 2010-11.

London is the biggest recipient from that £8 billion pot, receiving about £4 billion over the next three years, £3.2 billion of which will be London’s element of the national affordable housing programme. A further £440 million will be allocated for local authorities’ decent homes programmes.

Hon. Members will know that the HCA is up and running—it has been since 1 December 2008—and is responsible for housing and regeneration funding. We have talked today about partnership, and the HCA, with Bob Kerslake as its chief executive, wants to bring people together to have with local area representatives a single conversation about their regeneration and housing needs to deliver better focused and more effective outcomes for places and communities. Given the particular challenges in London, a sub-committee chaired by the Mayor has been set up to oversee delivery.

A key theme of this morning’s debate has been the fact that pressure will increase on social housing in central London as a result of the economic downturn, and I agree with the analyses that hon. Members from all parts of the Chamber have provided. The strains on the business model in housing association sectors have been acute, and there has been an assumption that housing associations will have to rely on cross-subsidisation to build social housing. One thing that concerns me, however, having spoken with chairs of housing associations, is the fact that, because of the difficulty and the financial concerns, they are more risk averse—in a similar way to the banks. There is no willingness to increase their stock, and they want to manage their existing stock, but that does not help anybody.

The hon. Member for Cities of London and Westminster mentioned lending. He talked about trying to renegotiate the banks’ lending covenants and how the banks have introduced difficulties and obstacles—an issue that has been raised with me previously. Before Christmas, I met housing association chief executives and the National Housing Federation, and precisely that point was made about attempts to renegotiate a group structure and the
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bank involved wanting to renegotiate its entire lending policy. That is not good; it is short-termist and does not help anybody, and this debate has put a rocket up me, frankly. It has ensured that I can go the lending panel, which my right hon. Friend the Chancellor chairs, and say that we need to do something about the issue. It is not in the interests of increased housing supply if banks are not willing to take a sensible approach to lending.

Having said all that, and given the strains on the business model, I must say that the hon. Gentleman and my hon. Friends will be aware that we have acted speedily to bring forward £550 million-worth of spending on social housing from the £8 billion pot. That will not only ensure that homes are built, but keep construction firms open and people in jobs, which is vital at this time.

Another theme of today’s debate has been the need to be more flexible about grant rates, and I absolutely agree.

Mr. Field: rose—

Mr. Wright: I shall just mention this point, because it is key. The key word at the moment is “flexibility”, whether in grant rates, models of home ownership, different tenures or different ways to bring forward development, which is what we are doing. The HCA is providing a great deal of flexibility in its grant regime to enable those schemes to go forward, so I hope that hon. Members are reassured by that.

Mr. Field: I thank the Minister for giving way. Will he briefly address the point that I and the hon. Member for Regent’s Park and Kensington, North made about the 50 per cent. target on temporary accommodation and its distorting effect? Will the Government look again at the issue, with some urgency, either to scrap the target in the short term or to place some downward movement on it?

Mr. Wright: My hon. Friend the Member for Regent’s Park and Kensington, North has brought the issue to my attention on previous occasions, and I am aware of her concerns, as well as those of the hon. Gentleman, about the relationship between temporary accommodation, overcrowding and—an important secondary issue, in my opinion—out-of-borough placements.

I shall look at the issue. The temporary accommodation target is important and has provided discipline to try to reduce the real moral outrage of people in inferior housing, but I know that there are genuine concerns—[Interruption.] And I know that my hon. Friend is shaking her head now. The target has stimulated work and improvements, but I know that there are concerns and I acknowledge them.

I pay tribute to the contributions made by all hon. Members. The debate has been of extremely high quality, and the analysis focused and well made. We can all work together to improve London’s housing stock.

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Chase Farm Hospital

11 am

Mr. David Burrowes (Enfield, Southgate) (Con): I am pleased to have secured this important debate on Chase Farm hospital. It is a matter of great concern to my constituency and neighbouring constituencies, and I welcome the hon. Member for Edmonton (Mr. Love) and my hon. Friend the Member for Broxbourne (Mr. Walker) to the Chamber. This issue is of concern to the community of Enfield, which is made up of 300,000 people, as well the surrounding area. Some 1 million people have been affected by recent decisions on Chase Farm hospital.

Issues affecting the hospital have been debated in the community for a number of years. We often say that a debate is timely, but this debate is particularly timely. Discussion has been going on since 1999, when the trusts were merged. We were given promises that a full range of front-line services would continue on both sites, followed by the “Healthy Hospitals” consultation in 2003, and recently, the “Your Health, Your Future: Safer, Closer, Better” consultation.

The primary concern is about the future of a fully functioning accident and emergency service and consultant-led maternity services. Those services have been in doubt, and over the years successive Ministers have come to Chase Farm hospital—particularly at election time—to provide assurances that the A and E service would not be downgraded. Come the next election, however, we will not have that privilege. The future of A and E and consultant-led maternity services is no longer in doubt, because on 4 September 2008, the Secretary of State confirmed the local primary care trust’s decision to cut those services.

Joan Ryan (Enfield, North) (Lab): I congratulate the hon. Gentleman on securing this debate, and I agree that it is timely. Before he moves on from the history of the situation at Chase Farm hospital, may I point out that it has been a subject for debate for the past 20 years? Does he agree that the consultation processes that we have experienced personally have been wholly unsatisfactory, and that efforts to engage the public in such consultations have not facilitated their access to the process nor their ability adequately to express their views?

Mr. Burrowes: The consultation was inadequate and flawed, which is why this debate is particularly timely. Enfield council challenged the decision through judicial review, and the flawed consultation is at the heart of that challenge. If the Minister has any concerns about commenting on the details of the challenge or the decision, he may be pleased to know that the rule of sub judice does not apply in this case, because when a ministerial decision has been challenged, full debate is allowed. No jury would be affected by our debate today, so we can have a full and frank discussion, and I look forward to the Minister’s response to concern about the wholly flawed and inadequate consultation process.

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