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25 Feb 2009 : Column 100WH—continued

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Council Housing

2.30 pm

Mr. Mike Hancock (Portsmouth, South) (LD): I am delighted to introduce this Adjournment debate on an issue of great importance to my city, the council tenants whom I represent and those around the country who, in my opinion, are being systematically mugged in one way or another by the Government as a result of how the housing subsidy works.

I pay tribute to those constituents of mine and council tenants who presented a petition signed by some 5,500 people to the Prime Minister this morning. Later this evening, I will present to the House a further petition on behalf of council tenants in Portsmouth. Both those petitions ask the Government to take action. The promised review is one thing, but the attitude of Ministers when the matter is debated or questions are asked in the House does not make it sufficiently obvious that there will be a change that will benefit my constituents, who see and will continue to see much of their rent go elsewhere and be retained by the Government.

Some 200 councils retain council housing. The housing revenue account subsidy system currently takes money from about 150 of those local authorities and gives money to 50 other councils. In this financial year, 2008-09, the amount paid by those 150 authorities exceeds the amount received by the other 50 by some £200 million. In 2009-10, the excess, estimated to be some £300 million, will be retained by the Treasury, often to meet other, non-council spending needs. It is effectively a tax on council tenants, some of the poorest and most vulnerable people in the country and in our individual constituencies.

In my case, the facts speak for themselves. In the current year, tenants in Portsmouth will lose some £4.6 million to the Treasury, and large increases are expected over the following years. Our council rents have risen. Realistically, our council rents would have increased this year by 7 per cent. We were able to hold them at 5 per cent. only by using balances that could otherwise been used to benefit housing in Portsmouth.

If that £4.6 million were available, it would have addressed a number of the issues and policies that the Government want local authorities to tackle. It would have been good for the local economy. The money could reasonably have been expended on local builders to refurbish and renew existing housing stock. It would also have provided the local authority with the ability to build much of the housing that we need. If things continued according to the present trend and if we were able to retain the money, by 2013 the local authority in my city would be able to provide more than 1,000 new homes, but we will not be able to do so, because we are continually robbed and penalised.

Portsmouth is by no means the worst example. For every pound spent in the Waverley council area, 49p goes back to the Government to be redistributed or held by the Treasury. The council itself is in an extremely precarious situation. It has a long housing waiting list, and it is bottom of the league for fit homes. Why is that? Because it cannot invest the money.

David Taylor (North-West Leicestershire) (Lab/Co-op): The hon. Gentleman will be aware that the all-party group on council housing, of which he and I are members,
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is taking evidence today in various rooms in the House which will shortly be submitted to the Minister for Housing. Does he agree that, on the scale of what he is describing, about £200,000 is being taken each hour from capital receipts or housing rent? That is about £300,000 during the period of this debate, £5 million a day and £1.8 billion a year. Those are extensive resources that are urgently needed by people hanging on by their fingernails as far as local authority-owned stock is concerned. It is all part of some subtle, or perhaps relatively unsubtle, coercion to get stock transfer under way. Does he agree?

Mr. Hancock: I agree entirely. I can quote once again from the experience of my local authority. In 10 years, we will not be able to afford to maintain our housing stock. We will not be able to continue being a housing authority, despite the fact that on two occasions council tenants in the city of Portsmouth and in the Havant district, where Portsmouth also has housing, have rejected a stock transfer. They do not want it. They trusted the local authority. I speak as a politician who has spent most of my political life in opposition, but I can say with all honesty that all three political parties that have run Portsmouth have always treated housing as a high priority. The Conservatives, Labour and the Liberal Democrats have always given it priority, shown faith in council tenants and tried to deliver a fair rent. They have always tried to play the game for their council tenants.

Mr. Jeremy Hunt (South-West Surrey) (Con): I congratulate the hon. Gentleman on securing this extremely important debate. He mentioned Waverley, a council that I share with my hon. Friend the Member for Guildford (Anne Milton), and which is playing a leading part in the campaign. Does he agree that poverty is poverty whether it is in an affluent area or in an otherwise deprived area, and that it needs to be treated as such? Does he also agree that the current system creates extraordinarily perverse incentives? A council that reduces its housing debt and crime and vandalism on its estates has its subsidy reduced, which means that it can spend less money on raising the standard of homes that desperately need repairs.

Mr. Hancock: I agree entirely. I had the pleasure yesterday of meeting the chief executive of Waverley council, who put a persuasive case on behalf of her local authority. What happens in that local authority and others makes double jeopardy look like a fairly even-handed approach. They are punished time and time again, not just once or twice but on three or four different levels.

Anne Milton (Guildford) (Con): I congratulate the hon. Gentleman on securing this debate. Does he agree that a number of councils—I cite Guildford, in my constituency, as one of them—do not yet recognise the problem? The matter has come to the fore because of the decent homes standard. In Waverley, on whose housing stock considerable sums need to be spent, they are acutely aware of it. However, for many other councils paying a similar subsidy, it is not quite up there in their heads yet, because they have not yet had to spend as much money on repairs as they will in time.

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Mr. Hancock: The hon. Lady makes an excellent point. Sadly, it is not unique. I think that all 150 councils currently being punished in that way could echo her sentiments.

I remember that when I was first elected to the city council in Portsmouth, it had 30,000 council houses. We now have about 13,000. The majority of the houses sold were the easy-to-maintain three and four-bedroom homes. We are left with the blocks built between the wars and in the late ’50s and early ’60s, which are the most difficult in which to secure and maintain a decent living environment. At a time when we need to be spending money on that sort of thing, our residents and tenants are denied the opportunity for their homes to be put in good order.

Bob Spink (Castle Point) (Ind): The hon. Gentleman is being most generous in giving way. Castle Point council tenants are effectively being hit by a double whammy. First, they are paying higher rents than they should; secondly, they are being denied reinvestment in their local area and in repairs and maintenance to their housing stock. Does he agree that in the current economic crisis it would be wise for the Treasury to reverse its policy and leave the money locally? Locally, it would be spent more effectively to help us to help people in poverty and build our way out of the recession.

Mr. Hancock: The hon. Gentleman always makes useful interventions in debates in this Chamber. His point, once again, is made on a solid foundation. It makes sense to keep the money locally, give a boost to the local economy and deal with the issues that the Government want us to deal with. The Government seem blind to the link between higher rents and increases in the amount of housing benefit paid. Generally, across the country, at least 60p in every £1 of rent paid is effectively paid by housing benefit. Forcing up rents may generate income to the Department for Communities and Local Government, but 60 per cent. of that money will be lost through the increased amount of housing benefit that will be payable by the Department for Work and Pensions. Furthermore, some tenants will be forced to claim housing benefit, with all the extra stress and complex disincentives to working that result from that.

The Government take 75 per cent. of the receipts from every right-to-buy sale of a council home through the rent rebate subsidy limitation, and they do not meet the full cost of housing benefit for council tenants. Taking that money together with the housing revenue account subsidy, in the four financial years from 2005-06 to 2008-09, the Government have taken more than £30 million out of the council housing stock in Portsmouth, which is a staggering amount of money. I am grateful to the treasury and the housing departments in Portsmouth for supplying those figures. Again, that is not an exaggeration; it is fact. Sadly, that situation is not unique to Portsmouth—it is a nationwide problem, and many other local authorities are similarly affected.

I was interested to read the brief that the Local Government Association supplied for this debate. It is not often that members of the LGA galvanise themselves into taking a common approach, but on this issue the LGA has a purposeful campaign and a solid position, which I, for one, welcome. I hope that the Government are listening to those at the sharp end of delivering decent homes for people to live in. There is a need to
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satisfy the increasing demand for housing and to rekindle enthusiasm for council housing. I am proud to say that I was brought up in a council house in Portsmouth. It did not do me any harm—at least, I hope it did not, but others might have a different opinion. I had a rather large extended family, so I expect that many of my neighbours felt that we would have been better off living elsewhere. Antisocial behaviour orders were not in force then; I am not sure that we would have qualified for one of those, but there might have been a suggestion that we would.

I believe that council houses and the Parker Morris standards changed the way in which members of my generation grew up, as we were able to do so in decent homes. It was to the great credit of the Labour and Conservative Governments of those days that they saw in the Parker Morris standards. That was something to be proud of. I remember joining a local authority nearly 40 years ago and thinking how important it was to give people the same opportunities that I had. Many houses in Portsmouth were way below what was a reasonably acceptable standard for people to live in, and it was only through the determination of my predecessor councillors and my peers in the ’70s that the programme continued and people were given that opportunity. I regret that so few houses like that are now built to satisfy the demands of families in cities such as mine.

If the existing arrangements remain in place, collective payments to Government from the paying authorities will exceed £1.2 billion over the next 30 years. That is a phenomenal sum, so we have to be cautious about allowing those arrangements to remain. People will not sit back and allow the current situation to go on. Why should the council tenants of Britain be punished unfairly in that way, and be condemned to live, or to continue living, in properties that the Government know should be subject to improvement under the decent homes criteria? If we do not have the money to do that, we condemn people to go on living in that sort of environment.

What are MPs and local authorities doing collectively? I am delighted to say that my colleague, the hon. Member for Havant (Mr. Willetts), is an enthusiastic supporter of this issue, and I am sure that he would have joined us today if he could have done so. He has a huge number of Portsmouth residents in his constituency, living in what was once the largest council estate in Europe, so he knows, from first-hand contact with his constituents, of the pressures that result from their having to pay council tax to one authority and council rents to another, both of which have great problems delivering the services that ought to be expected in local authority areas.

The good news is that there has been a campaign across the country to show the Government the strength of feeling on this issue, and we have presented 5,500 signatures to Downing street today. Some of the people responsible for gathering that petition are listening to the debate—eagerly, I expect—hoping that the Minister will indicate that some good news is coming. They did not simply take pieces of paper on to the street for people to sign. They sent cards to people, which they filled in and sent back, so this has not been a hit-and-miss, Mickey Mouse petition that anyone could sign whether they were a council tenant or not. All 5,500 signatories are genuine council tenants from the city of Portsmouth, and that gives strength to the campaign. In some local
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authority areas—other Members are submitting similar petitions to Downing street today—more than 50 per cent. of tenants have signed up to the campaign. That is not easy to achieve, and I am proud that tenants in Portsmouth have led the campaign both locally and, to a great extent, nationally, and have tried to get it recognised.

Mr. John Leech (Manchester, Withington) (LD): I am grateful to my hon. Friend for giving way. It is good to see him on the Floor of the Chamber, for a change, instead of in the Chair. Does he agree that while all local authorities, whether they are run by Liberal Democrats, by Conservatives or by Labour, see housing as a priority, the Government unfortunately do not do so?

Mr. Hancock: It is sad to hear any Member say that, but I agree with my hon. Friend to a certain extent, because a real passionate desire is needed. The hon. Member for Great Grimsby (Mr. Mitchell) has made it his life’s work to try to rekindle enthusiasm for housing and to get the message across, but I sometimes wonder whether he is banging his head against a brick wall.

Ms Karen Buck (Regent's Park and Kensington, North) (Lab): On that point, and in picking up the point made by the hon. Member for Manchester, Withington (Mr. Leech), while I have certainly made representations to Ministers on many occasions about housing supply, it is absolutely ludicrous to conduct a debate on this issue that simply fails to recognise the investment that has come with the decent homes initiative in the past decade and the total transformation of the quality of housing stock. If we are going to be honest about housing in the round, we at least have to recognise those points, do we not?

Mr. Hancock: I do not have a problem with that. However, the situation that we face today in my city is as bad as the one that we faced at the end of the second world war, when a third of the properties were either demolished or totally uninhabitable. The housing waiting list is as long today as it was then, although we have built 30,000-odd council properties. We have begged successive Tory and Labour Governments to do something about this, but they have flatly refused to listen to our pleas that they should provide decent homes for people. I do not decry the fact that lots of money has been put into housing, but this is about council tenants’ rents being misappropriated, and taken from them and given to others in cities that have not been as prudent in caring for their housing estates as Portsmouth has tried to be. That is unfair. Why should those who have tried to do their best for tenants have to pay a penalty now, because others chose not to, or because they did not put their rents up when the thing to do was to keep rents low and choose not to service needs? [Interruption.] The hon. Member for Regent's Park and Kensington, North (Ms Buck) shakes her head, but if she looked at the facts, she would see clearly that some local authorities have refused to deal with many of the problems on their estates and with ageing properties.

Ms Buck: I am slightly confused. Is the hon. Gentleman arguing for higher or lower council rents, because he appears to be arguing for both at the same time?

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Mr. Hancock: I am saying that we are forced to put rents up in cities such as mine, while not providing our tenants with the service that we ought to provide, because other local authorities and councillors have taken soft options in the past by not putting rents up to the same level as we did and not looking after their properties. Why do those 50 councils have to be subsidised by my council tenants? Will the hon. Lady explain why the repair lists in some of those cities are so dramatically high that the Government will not bail them out, although they are forcing council tenants elsewhere to do so?

Sarah Teather (Brent, East) (LD): Part of the problem is that the housing revenue account and the formula for working out what subsidy should go where is very complex, and it is partly based on historic debt. My council is one of those in receipt of subsidy but, nevertheless, I believe that such a subsidy should come from general taxation and those who can afford to pay, not from poor people living in Portsmouth, Cambridge, Waverley or anywhere else.

Mr. Hancock: I agree entirely, and I am happy to know that a representative of one of the receiving authorities is keen enough on this matter to say just that. We need change, which leads me to the issue of what we want. Our key aims are to achieve a fair and locally controlled system of housing finance, and doing so would require the following action: the abolition of the housing revenue account subsidy system; the abolition of the rent rebate subsidy limitation arrangements; all receipts from right-to-buy sales retained by the local authority; rents controlled locally; and all rents retained by, in our case, Portsmouth city council and the housing revenue account. If those changes were to happen with effect from April 2010, it would be of dramatic benefit to those on the waiting list and to existing council tenants. If we do not make those changes, the situation will simply get worse.

How would those changes help the Government meet their aims? They would lead to the poor and vulnerable in our society being treated fairer and better, which I think everyone would agree is important. There would also be savings for the Department for Work and Pensions and better employment prospects for tenants, because they would not be forced into the benefits system by higher rents. The city council itself could finance the building of 1,700 to 1,900 homes over the next five years, which would help meet the desperate need for social housing at affordable rents and help to offset the effects of the recession by maintaining local jobs in building and related industries. Local decision making would empower councils to tailor solutions to local problems and enable them to work with tenants to plan long-term investment in council homes. In addition, devolving power to local councils would stimulate and strengthen local democracy.

Is that too much to ask? Is it really too much to ask from a Government who claim that they care about people on council waiting lists? Is it too much to expect a Government to respond to the known needs of a huge number of people in this country? Is it too much to want to have better and newer homes for people to live in and for children not to be condemned to live on the 20th floor of a high-rise building with nowhere to play and no safe spot, except the corridor in the hall where
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their flat is? Is it not right to want older people who under-occupy properties to be given a viable alternative so that they can move out of a three-bedroomed home into a decent property? We would love to be able do that in Portsmouth. We have a large number of under-occupied properties, but we face a problem if we expect someone to move out of a three-bedroomed house when we offer them a tenement that does not even have a lift.

If we want people to cease to under-occupy properties, we must use our imagination and deliver for those people the sort of properties in which we would want to live if we had to give up a home with a garden to go elsewhere. These are challenges for all of us, and they are big challenges for local authorities. Local authorities—mine included—could do a lot more if we were able to use the money that we collect from our tenants in the local area. That would satisfy many of the Government’s ambitions.

I am disappointed and dispirited. As someone who is still a member of a local authority after 38 years, despite the worst of the Thatcher era when Mrs. Thatcher did her best to deliver the killer blow to local authorities, in my experience it has never been more difficult to try to bring council properties up to a higher standard. The opportunity to build council houses should be given to local authorities again, so that they can actually do it.

Mr. Stewart Jackson (Peterborough) (Con): The hon. Gentleman is making a characteristically passionate and persuasive argument. Should we not reach the conclusion that although the Government have had well over a year to enact and publish the housing revenue account subsidy review—we understand that that might be done by the end of spring—they are really using the HRA subsidy system as a weapon to force local tenants into using registered social landlords across the country? That might be appropriate in some cases but not in others, and such a policy has been driven by the Treasury.

Mr. Hancock: I am afraid that I came to that conclusion some time ago. As I said in relation to my own area, if this situation continues, in the next few years it will be impossible for our tenants to remain under the auspices of the housing department of Portsmouth city council. I am disappointed that that might be the case. It would be a tragedy in the short and long term if that were to happen and people lost the democratic option that the Government offered them. They would be forced into a solution that they have repeatedly refused to go along with because they chose and voted with their feet to stay with Portsmouth, rather than take the other options available. If they were forced into such a solution by the sheer economic mayhem that the Government have created in relation to housing finance, it would be unforgivable and completely unnecessary.

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