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“The Government is keen to encourage greater renewal in the property sector, and the development of new...residential buildings”.
In 2006, the then Chancellor said in his Budget speech:
“To attract more capital into house building, we are now legislating to introduce for Britain the real estate investment trusts that are so successful in the USA.”—[ Official Report, 22 March 2006; Vol. 444, c. 293.]
However, nothing has happened since. The only investment trusts have been in commercial property and pubs.
At a meeting with Bob Kerslake a few days ago, I was interested to hear that that dialogue is being revived, at long last. With public expenditure now stretched to its limit, we need a fresh look at how institutional funds can be harnessed to tackle the needs that my hon. Friend the Member for Welwyn Hatfield (Grant Shapps) mentioned so eloquently in his opening speech. It is going to need some flexibility and lateral thinking, but the time is right for a fresh initiative. I hope that the Minister, when he winds up, will tell us that that option is being actively explored, as I believe that it would offer very real benefit to those in housing need.
3 pm
Mr. Nick Raynsford (Greenwich and Woolwich) (Lab):
First, may I draw attention to the interests declared in my entry in the Register Of Members’ Interests? Secondly, may I say what a pleasure it is to follow the right hon. Member for North-West Hampshire (Sir George Young)? I followed him, although not quite so immediately as this afternoon, in the role of Housing Minister. Both of
us know, as do almost all hon. Members, just how important housing is to the lives of our constituents and how crucial an effective and good housing policy is to ensuring social well-being and economic prosperity for the country.
Housing is an issue that has commanded considerable political salience throughout much of the past century, but the policies adopted at various points during that time have not always been as intelligent and far-sighted as they might have been. In the period immediately after the second world war, and for much of the following three decades, the focus was remorselessly on numbers. It was understandable why numbers were seen as important, as we were dealing with the backlog of wartime damage, dereliction and the fact that no homes at all had been built for some years.
However, the danger with the remorseless focus on numbers that was very much the driver of housing policy at that time was that other issues tended to be given a lower priority. The remorseless focus on numbers displayed today by the hon. Member for Welwyn Hatfield (Grant Shapps) will not do a service to the country if his remarks serve to draw attention away from the equally important issues of quality, sustainability and the need for appropriate mixed-tenure developments that provide a decent environment for people to live in.
Sir George Young: Will the right hon. Gentleman apply his criticism to the Government’s target of building 3 million homes by 2020?
Mr. Raynsford: I was going to say that all Governments have tended to adopt that approach. It is very easy and simplistic. A politician under pressure is likely to say that he will deliver numbers. Nye Bevan did it immediately after the war when he increased the housing output dramatically. Harold Macmillan did it in the 1950s: he promised 300,000 homes a year and delivered them. Harold Wilson said, “I’ll go one better, I’ll do 400,000 homes a year,” and he did it.
In their own terms, those politicians were successful, but the legacy was not so successful. When the right hon. Gentleman was Housing Minister—and this was still the case when I was in the post—he had to deal with the problems associated with an excessive focus on quantity not quality. Those problems were partly seen in the very unsatisfactory council estates that were often badly designed and shoddily built, and which above all were inadequately maintained. Many of them had to be either demolished or substantially remodelled at enormous cost.
However, an equal problem involved the many very unsustainable private housing developments that were often built on greenfield sites to unsustainably low densities. Their very poor energy efficiency has left us with a huge legacy of homes that are very difficult to keep warm economically and which contribute massively to global warming through carbon emissions. So let us not go down the route of focusing uniquely on numbers and forgetting the wider issues that are vital to a good and sensible housing policy.
Bob Russell: Is the right hon. Gentleman saying that people must be sacrificed? He must accept that people need to be housed, yet people are numbers so housing them must be a question of numbers. If we go for quality rather than quantity, what happens to the surplus that does not meet the quality criteria?
Mr. Raynsford: Of course we have to be responsible about meeting demand, but focusing remorselessly on numbers was a problem in the past—and I am afraid that it was the problem with the speech from the hon. Member for Welwyn Hatfield—as it meant that quality and other issues tended to be forgotten.
The result of such thinking is that dwellings have to be demolished—and this Government had to demolish hundreds of thousands of them—because they are unsatisfactory. That is a vast waste of resources that could be better spent, and I put it to the hon. Member for Colchester (Bob Russell) that the problem cannot be resolved by increasing numbers in a simplistic way. Instead, we need a housing policy that addresses a range of issues, only one of which is quantity.
When we came into government in 1997 there was a huge backlog of substandard housing, as has already been noted. The bill to put right all the disrepair in the social housing sector alone came to £19 billion. There was also a problem with unsustainable patterns of development, and the disproportionate building at low density on greenfield sites quite rightly provoked public anger and led to charges that the countryside was being concreted over. In fact, the legacy belonged to the previous Conservative Government, but the new Opposition were quite clever about shifting the political responsibility and blame on to the present Government. However, the legacy that I have described was the product of unsustainable patterns of development, and that policy had to be changed.
There was also a problem of social division that resulted from a curious aberration of housing policy in the 20th century. For the first time in human history, to my knowledge, a policy of social apartheid was deliberately adopted. Estates were created with uniquely owner-occupied housing in some areas and uniquely social housing in others. The two never met.
I am open to correction, but it seems to me that one can look back to the 18th or 19th centuries, or back to mediaeval times or even before that, and see that although richer people obviously enjoyed better housing, communities did not suffer from rigid social stratification with areas treated exclusively as the preserve of only one social class. That was a pernicious influence, and it needed to change.
That is why I say that a good housing policy has to be about more than just numbers: it has to be about the quality, style, location and mix of a development too. The incoming Labour Government put in place measures to tackle precisely those problems. The decent homes programme has been a very significant success, as I think hon. Members of all parties must accept, and it has helped to turn around the huge inherited problem of the backlog of disrepair in the social sector. Moreover, the change in emphasis away from greenfield development and the greater focus on brownfield development have undoubtedly helped to reduce pressure in the countryside, while the work to try and get acceptance for mixed-tenure developments has been very important, especially in the long term.
That was not an easy task, as the house building industry was strongly resistant. Its members wanted to go on building in the patterns that they had traditionally used throughout most of the post-war era and with which they felt comfortable. Getting them to accept that it was desirable and appropriate to build mixed-tenure
developments with some social housing, some intermediate housing and some housing that was for sale outright took time, but we got there and the industry accepts that mixed-tenure development is appropriate.
The house building industry also accepts the need to improve hugely the energy performance of housing. I was Minister for construction in the very early days of the present Government, and I remember the resistance among housebuilders to the change in part L of the building regulations that was designed to improve energy efficiency in housing but which they saw as a burden and an undesirable imposition. Fortunately, the industry is now engaged in a constructive dialogue with Government about how to achieve the hugely ambitious target of zero carbon emissions by 2016. That will not be at all easy to achieve, but the fact that housebuilders are engaged in the dialogue represents a sea change in the industry’s attitude.
I am aware of some of the developments that have been achieved, and one of them is the Greenwich millennium village in my constituency. I live there, and it is frequently talked about: a mixed-tenure development of very high-quality housing, with a lovely environment, it has excellent transport linkages, a school and a health centre. It was built on sustainability principles, and it works. Such exemplars exist and we should be proud of them. We should talk about them more and promote them, but unfortunately all the processes of change take time.
My local authority is Greenwich council, and it was awarded the beacon council award for new housing development precisely because of its support for developments such as the millennium village. Part of the beacon council arrangement is that people from other authorities are invited to come and learn from the ones that win the award, but many of the people who came to Greenwich did not believe that it was possible to use section 106 and other such mechanisms to achieve that sort of development. That is a politics and social policy issue; it is a question of effecting change, and getting people to see what can be done.
Using new mechanisms better takes time. All the changes have taken time, and I accept openly that there has been a problem of an inadequate supply of new housing. The irony is that just before the impact of the credit crunch was felt, there was a rising trend in new building, both in social housing and market housing, as a result of the Government’s increased emphasis on output. We were approaching a figure of 200,000 homes a year, and the objective of 240,000 homes a year by 2016 was not unreasonable. Things have totally changed. We are living in a completely different world. The impact of the credit crunch, the withdrawal of mortgage facilities from large numbers of people, and the inability to maintain the traditional development model of cross-subsidy from market housing to social housing have all created huge problems in delivering a homes programme on a decent scale.
Fortunately, there is one bright spark in the otherwise grim situation, and that is the creation of the Homes and Communities Agency. For that, I give great credit to the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hartlepool (Mr. Wright), who will respond to the debate,
and who took the Bill that created the agency through Parliament. The creation of the agency was a really positive move. I am sorry that the Opposition were opposed to it at the time, and cast all sorts of doubts on the agency; they must now recognise that in this extremely difficult period, the agency is the one body that gives us a chance to achieve a sustained housing programme of some capacity to meet needs.
The agency has some very difficult tasks. It has to help to prevent the current level of repossessions from undermining confidence even further. It has to ensure that developments that would otherwise have stalled are helped to proceed through the judicious use of investment. It has to try to maintain capacity in the construction and house building sectors. It has to ensure that the housing association movement can continue to develop when its traditional model, based on cross-subsidy from sales to rented housing, is no longer effectively workable. It has to ensure that a range of standards that make housing desirable continue to be met, even though the industry is increasingly resistant to meeting the high standards expected of it because of financial pressures.
The agency has a hugely difficult task, but we are lucky that it is there, and very lucky that it is led by an absolutely first-class team, headed by Sir Bob Kerslake. His colleagues on the agency’s senior management team are a very experienced and high-calibre group of people. I am delighted that we have their expertise to help us through extremely difficult times.
What is required is not sloganising or simplistic political debates, but a serious analysis of how we guide ourselves through difficult times, how we build as many homes as possible in these difficult circumstances, and above all, how we ensure that they meet the quality and sustainability objectives that we now understand are fundamental to good housing policy. For that reason, I do not believe that the Opposition’s motion merits support. I hope that it will be decisively rejected.
3.13 pm
Mr. Robert Syms (Poole) (Con): I declare my interest, as set out in the Register of Members’ Interests; I am the director of a building company and a property company, and have one or two other entries.
This is an interesting and important debate. Unemployment did not quite break the 2-million mark today, but many Members see people with housing problems in their surgeries. It is fairly clear that many of the people who come to see me time and again with great, long-term problems have difficulties that date from their being caught with negative equity in the early 1990s, when my party was in government. They have never quite recovered from the housing difficulties that they faced then.
The difficulty today, as opposed to 10 or 15 years ago, is the level of personal debt; mortgage debt is far higher. I fear that as unemployment rises, the consequences for individuals will be pretty severe. One welcomes any kind of assistance with mortgages, but the reality is that if somebody is out of work for any time, they will get into financial difficulty. If there are two people in a household who work, and one loses their job, the household does not necessarily qualify for mortgage help. The rules mean that those who are highly geared up, in particular, will face problems. As we heard from my
hon. Friend the Member for Welwyn Hatfield (Grant Shapps), our Front-Bench spokesman, the figures show an increase in the number of people on the waiting list for social housing. I think that in the next two or three years, there will be a large growth in those figures.
There was not much that I could disagree with in the speech of the right hon. Member for Greenwich and Woolwich (Mr. Raynsford); it was a well-turned speech on housing policy. Numbers are not the only issue, although they are important. The difference between this country and the United States of America, which has surplus housing, is that longevity and divorce mean that there will be continued housing demand here in the long term. However, we must ensure quality housing, and we must manage our housing stock better. Financial or tax incentives to manage our housing stock better are necessarily far more productive than sallying forth with targets for 3 million homes.
We should bear it in mind that there are some 2 million empty flats over shops, and local authorities and social landlords still have quite a lot of void properties. There are far too many empty properties in the private sector, and a lot more could be done to use existing housing stock to house people. We have to consider the issue as a whole if we are to provide housing, that most basic requirement. My right hon. Friend the Member for North-West Hampshire (Sir George Young) mentioned the difference between the car industry and the housing industry. He was right; it is important that we house people, because the consequences of poor housing for families and children are substantial. I am on the Health Committee, which is looking into health inequalities, and the issue of housing tends to come up fairly regularly in relation to health inequalities. The issues are intricately linked.
In the brief time available to me, I would like to raise an issue that I mentioned in an intervention. We are fortunate in my area to have Poole Housing Partnership, an arm’s length management organisation. It does a very good job in providing housing for people. It is still within the housing revenue account system. This year, it is paying £3.4 million of negative subsidy—in other words, it pays that amount into the pot. Next year, it is expected to pay £4.5 million into the pot, which is about 20 per cent. of council rents. Our area has high housing costs, and we have a waiting list as a result. Social housing has to take the strain. Local people find it difficult to understand why, when they pay rent to Poole Housing Partnership, that money is recycled elsewhere and goes towards national public policies. It was pointed out in an intervention that if it is right to subsidise council rents, the subsidy should come from general taxation; it should not be other tenants who subsidise council rents. That is a powerful point.
We are heading towards the decent homes standard, which is good; I think that we are all in favour of that. However, many authorities and arm’s length management organisations will find it difficult to continue to maintain their houses at a decent standard if the sums that I have mentioned are to come out of their budgets. Poole Housing Partnership is worried that the current system may not be sustainable in the long term because of the sums that are taken out of the rents. Those sums could be spent on maintaining properties, reducing the number of void properties, and providing a real service.
I make a plea to the Minister. I know that the issue is under review, and that there are no magic bullets. I know that things are difficult, because if we ended the system, there would be complications and difficulties elsewhere, but my constituents, particularly those in council housing, find it difficult to understand why they are subsidising other parts of the country. They have a good arm’s length management organisation in Poole Housing Partnership; they will not forgive it if, in the long term, it has to become part of a bigger organisation because of the method of financing.
As we all know, housing is a basic service. It is important to our constituents. The point that my right hon. Friend made about the VAT reduction was valid. Given the situation in the building industry, the number of surplus building workers, and the fact that there is potential housing land on the market, the money could have been much better spent on a long-term objective that would meet the demand that many of our constituents want met.
3.19 pm
Bill Wiggin (Leominster) (Con): I am pleased to follow my hon. Friend the Member for Poole (Mr. Syms), and I shall keep my comments short so that the hon. Member for Colchester (Bob Russell) can contribute.
I shall speak about rural housing. Over the past five years alone, the proportion of rural households that form part of the national homelessness figure has more than doubled from 16 per cent. to 37 per cent. of the total. There are more than 700,000 people joining rural housing waiting lists. The rural housing time bomb is not ticking; it has gone off.
In Herefordshire, numbers on housing waiting lists have risen from 3,218 in October 2002 to 5,507 today, including 164 homeless households. There are just 10 to 15 housing association properties available each week. Young families are not only priced out of buying houses, but see themselves as just a number on a list. Without a gold band from Home Point, they have no chance of getting a house in my constituency.
I have heard appalling stories, the worst of which concerned a child molester who had been released from prison on early release. He had come back to the property in which he had lived before, which happened to be on the other side of the garden fence from his victim. To get that family out of that house took a considerable effort. I have no criticism of excellent local housing associations such as Marches, but when we see what such people are going through, our heart goes out to them. They face a very tough situation.
The targets being set do not contribute to solving those problems; in fact, they distort the communities that they are meant to help. Targets overwhelmingly dominate local planning. The wonderful section 106 solutions that could have been used to provide local housing for local people are put to one side, and we see people coming from outside my constituency who, in some cases, are even more desperate for housing. They are parachuted in, so all those well thought out ideas do not deliver the housing that we need.
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