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The Government also need to accept that the old cross-subsidy model of house building is not going to build any new homes in the short term. They need to scrap Treasury targets on the number of units per unit of subsidy so that housing associations have the confidence to know that they can use the money available to build without facing penalties later.
It is ridiculous that at the very time in a recession that we need house building to increase, building has been grinding to a halt. So much for the fiscal stimulus. By the time we get out of the recession, housing need will be greater, house prices will again spiral out of control, and we will not be able to do anything about it because the builders will all have retrained or gone back to Poland. We will have nothing with which to tackle the problem.
The Government have a real opportunity to improve housing now. Major investment now could absolve them of the sins of the past 10 years. I hope they will realise that they have an opportunity now and a clear way to make amends. I was pleased to hear the new Minister say how important he thinks it is that councils should be able to build homes. Councils are desperate to be able to build new homes for families in their area. They have to pick up the pieces when homeless families land on their doorstep, but they have only limited powers to fix the problem.
The Prime Minister made warm noises about that several months ago, but the proposals that were put forward were thin on the ground. The Minister was not sure how to answer the question from my hon. Friend the Member for Colchester (Bob Russell) on how many new homes would be built with the new money available. We calculated that it would be about 900 homes. That is two or three for every local authority area, which will make only a tiny dent in the number of 1.8 million people on housing waiting lists.
If councils are to be able to borrow to build, they need to know what their asset base and their rental income will be. Taking new homes alone out of the housing revenue account is not enough. We must have fundamental reform of the housing revenue account system now. I am pleased to hear from the Minister that it will conclude soon, but we have heard that for a very long time. Every time there is a change of Housing Minister, it gets further delayed.
I was pleased to hear the Conservative spokesperson join our campaign to end the tenant tax, but I was left a little unclear about what the Conservatives’ proposals would be. The hon. Member for Regent's Park and Kensington, North (Ms Buck) stated the position well for me. In my constituency, Brent, we receive a subsidy from poor tenants in Cambridge. It is invidious for poor tenants in Cambridge to be subsidising poor tenants’ repairs in Brent, and a solution is needed. Our solution is that that should be topped up out of general taxation. People like me, who can afford to pay out of their taxes, should pay for that, but the Conservatives have no proposal at all, which means that there will be no money for repairs in places like my constituency.
Mr. Syms:
The hon. Lady makes a good point. For all political parties, need has always been the basis of housing. If there is a debate about whether some areas should have resources and some should not, there has to be some kind of compromise. General taxation is one
way of doing it, but at present the negative subsidy is rising so fast that in five years most councils will not have council housing stock, because of what is happening to the financial system.
Sarah Teather: I entirely agree that we must end the system of negative subsidy. It is ridiculous. Councils cannot plan because they do not know what money they will have from one year to the next. They need to know that their rental income is available to reinvest in their housing stock for repairs or for building, and so that they have something against which they can borrow, knowing what their future revenue stream will be. The Treasury currently keeps about £200 million of the money coming in from rental income, so it is not as though all of it is going to repair houses in other parts of the country. It is unacceptable for the Chancellor to keep a portion of that rent.
The second thing that the new Minister should do urgently is to give councils back their right-to-buy receipts. Only then can councils replace the homes lost through right to buy, to make sure that future generations have a chance of somewhere to live. Since 1980, 2.5 million council properties have been purchased under right to buy from a council stock that then stood at 5 million. It is no wonder that councils have nowhere for people to live.
Taken together, new money, investment of rental and right-to-buy income, and extension of powers to borrow would make a real difference to councils’ ability to build homes that people need. But in the Conservative motion and in their green paper, they have no plans to do that. They have plans to review the HRA system and to end the tenant tax, but no plans to top up finance that is lacking for repairs. They have no plans to invest more money in social homes and no plans to give councils back money from right to buy, so I cannot see how they can deliver on their promise to build more council homes.
Bob Russell: Does my hon. Friend recall that I could not get an answer from those on the Conservative Front Bench on whether a Conservative Government would bring back the building of council housing?
Sarah Teather: Yes. It was a depressing moment. The Conservative spokesman seemed to be unclear which direction he would go in, were he to become a Minister. We are calling for a general election and he hopes to become a Minister, but he does not seem quite sure of the direction in which he would take his party.
Mr. Love: I have been listening carefully to the hon. Lady’s incredibly disparaging remarks about the Conservative party’s policy in this area, yet the Conservatives do not seem to be prepared to answer on any of the issues. Does that not speak volumes about the vacuity of what the official Opposition are offering?
Sarah Teather:
Yes. My hon. Friend the Member for Falmouth and Camborne (Julia Goldsworthy) said to me from a sedentary position that she was not sure whether that was because the Conservatives did not understand or did not care. I shall not be as mean as that, but they seem to be unwilling to put their policies out there so that people can scrutinise them and argue
with them. I do not understand why they are elected if they are not prepared to debate ideas. It seems to me that that is why we are here.
Mr. Slaughter: It seems strange to be debating the matter when the Conservatives are here but silent. As they are silent, let us continue debating it. The hon. Lady heard the answer from my right hon. Friend the Minister. We know what the Conservatives’ policy is because their think tanks are telling us. It is no more social housing, no security of tenure, market rents, no responsibility for homelessness, and effectively the end of social housing in this country. They will not say that because they know that 8 million people out there will rumble them if they hear it.
Bob Russell: You can say that again.
Sarah Teather: I suspect that the hon. Gentleman could not do that and I should offer him some advice as someone who lost her voice after being ill. It is best to keep quiet. It will heal much more quickly if he says less, I promise, but I thank him for his intervention.
I shall continue to be a little bit rude to the Conservatives, and then I shall move on. On right to buy, not only have they no plans to give back right-to-buy receipts, but they want to extend right to buy to housing associations. That idea has been universally condemned. Housing associations already face great difficulty because of the current economic climate, and the Conservatives want to remove their rental income and dwindle their asset base. Who on earth do they think will lend money to them to build homes under those circumstances? Worse, a requirement to sell properties at below market values would be against the charter of most housing associations. It is not a feasible or a sensible policy to take forward.
Martin Horwood (Cheltenham) (LD): Does my hon. Friend agree that the right to buy council housing stock led to cherry-picking and the loss of some of the best council housing stock, and meant the ghettoisation of some council housing? Does she not fear that exactly the same thing would happen if Conservative policy for other social landlords were implemented?
Sarah Teather: My hon. Friend makes a good point. The right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) recently made a similar point about right to buy as part of the report for the Centre for Social Justice.
In addition to building new homes, it is important that we make a more concerted effort to bring empty properties back into use. The hon. Member for Westbury (Dr. Murrison) made a point about MOD housing—a point that my hon. Friend the Member for Colchester has made many times in the Chamber. It is an excellent point, but we need to be willing to think flexibly also about empty commercial space during a recession, and to be prepared to offer short-life housing to people who want it. The single most important thing that the Government could do to help to bring empty properties back into use is to make renovating them cheaper. They should cut VAT on renovation, rebuild and then make grant available to housing associations to repair the
empty properties that they buy, because at the moment they cannot use Homes and Communities Agency money to do so. The Government should also offer grants and loans to individuals to repair properties in return for lets to social housing tenants. All those things would make a difference.
The Conservatives’ key policy for tackling empty properties is to reduce the space and design standard for social homes, and I wonder whether they have any idea how long the average social tenant spends in temporary accommodation. If one puts a tenant into a draughty or cramped unsuitable home as a supposedly short-term measure, most will still be suffering in unsuitable housing a decade later.
Anne Main: I am following the hon. Lady’s argument on empty properties with great interest, because empty dwelling management orders, as she knows, are a totally under-utilised device. Indeed, they have been completely under-utilised by the Liberal Democrat-led council in St. Albans, so before she lectures all of us on bringing back empty homes, I should say that I have been pressing my council to get its empty homes back into use. However, it has not as yet chosen to use that device. We could all lecture each other on empty homes, so I hope that the hon. Lady will bear that in mind.
Sarah Teather: I am greatly relieved to hear the hon. Lady’s conversion to EDMOs, because her party opposed them when they were debated in this place.
Early in the debate, a lot of time was spent poking fun at the Government’s mortgage rescue scheme and its total inadequacy in the face of the 50,000 or 70,000 repossessions—depending on which estimate one takes—this year. However, I shall give some credit where credit is due, because the Government have done some welcome things, particularly on the changes to income support for mortgage interest. When we add up all the different schemes, however, we still have the problem whereby tens of thousands of people fall through the net and face having their home repossessed. Similarly, if the landlord of a bought or buy-to-let property gets into difficulty, the people renting such properties may find themselves on the street with no notice whatever.
Julia Goldsworthy (Falmouth and Camborne) (LD): My hon. Friend was just talking about how the mortgage rescue scheme has failed to help many people who face losing their homes. Last week, a very worrying case was raised with me of an individual who, at the beginning of December last year, thought that they would be one of the first beneficiaries of such a scheme, but, at the end of April, they were told that they no longer qualified. During that period, their mortgage payments were frozen, and they are now more likely to face repossession as a result of their being rejected for the scheme. Should not the Government be helping to prevent such problems rather than making matters worse?
Sarah Teather: I absolutely agree: it is a very worrying case. The difficulty is that many criteria have been drawn tightly, and it has been difficult for the people implementing the scheme to understand exactly what will happen as they go through the process. It takes a long time before someone is approved or found not to be eligible to claim help, and, in the meantime, they can get into great difficulty.
The Government introduced a pre-action protocol that I thought contained many useful things. I agreed with all the protocol’s sentiments, which we called for before the Government published it, but the problem is that it has no teeth, and I cannot understand why the Government are not prepared to reform mortgage law to give it teeth. If we were to reform mortgage law, we could give the courts the power to intervene to enforce some of the good things that are in the pre-action protocol. We would also be able to deal with the situation when a landlord’s home is repossessed and the people who rent it get no notice at all, except when they go home and find that the locks have been changed. We can deal with much of that simply by giving the courts the power to intervene and then to put the rest into guidance, as the Government have done. I pressed the Minister’s predecessor repeatedly on the issue, and I hope that the new Minister will consider it afresh.
I am pretty fed up to be debating another Conservative motion that has nothing in it.
Grant Shapps: Why don’t you call a housing debate?
Julia Goldsworthy: She’d have plenty to say.
Sarah Teather: I would have plenty to say, and there is lots more that I could say.
Grant Shapps: When are we going to have a Lib Dem housing debate?
Sarah Teather: We have fewer Opposition day debates, so the Conservatives might like to give us one of theirs. We would be quite delighted to lead on the issue.
What depresses me is that the Conservatives have nothing to say on the issue and the Government seem to be sticking their head in the sand. It depresses me because my constituents need this place to take positive action and to do something to make their lives better.
I shall end by telling the House a story that, I am afraid, is typical in Brent. Lucy has been living in temporary accommodation in my constituency for 14 years. She lives in a two-bedroom flat with her four children and bids regularly on the choice-based letting system. However, the highest that she has ever been ranked is 140th out of 300, and she has no hope whatever of moving. Her eldest child is now 16 and has lived in that unsuitable property for almost her whole life. She needs some room—a bit of quiet and privacy away from brothers and sisters—to study for her GCSEs, otherwise the misery of her housing situation, which has blighted her whole childhood, will ruin her future, too. We need the Government to act for people like that. We have a new Minister; I implore him to make a new start.
8.34 pm
Ms Karen Buck (Regent's Park and Kensington, North) (Lab):
I, too, should like to welcome the Minister for Housing to that most important post. About three quarters of householders in this country are home owners. For most of those people, most of the time, being a home owner has been a happy and successful experience. It has benefited them and their families enormously. Obviously, the majority of people still aspire to be home owners. However, people in many of
those families are experiencing real pain because of a combination of factors, including lack of affordability and changes in their circumstances; in some cases they will have lost their job. That leaves many families genuinely worried, and they are sometimes at risk of losing their homes. That rightly causes concern to all of us. My right hon. Friend has already recognised that in the early 1990s the level of repossessions, with all the pain that repossessions put families through, was at least as high as it is now; in some cases it was higher. However, that should not stop us focusing a great deal of attention and support on those families. It is absolutely critical that we do everything that we can to reduce repossessions and to help people through a difficult time.
On looking at mortgage law, I agree with the hon. Member for Brent, East (Sarah Teather) that we should in some cases do more to enforce controls against lenders who are excessively zealous in the action that they are taking. One particular group of people about whom we need to worry are tenants in buy-to-let properties. In some instances, we should also worry about unauthorised tenants in properties in cases in which the mortgage holder has defaulted. Such tenants have virtually no protection and are at risk of being thrown out, sometimes with no notice whatever. In many cases, they then become the responsibility of the local authority. I know that the Government are considering the issue; it is important that they look at it closely and act swiftly. For a host of reasons—for the sake of the people involved, and because of the pressures on local authorities—we need to do what we can to support those individuals.
Julia Goldsworthy: The hon. Lady makes an important point, and I agree it is important that the Government and the Minister should come forward with proposals as soon as possible. Does she agree that the Local Democracy, Economic Development and Construction Bill, which is currently being considered by the House, provides an opportunity to make such proposals, and does she agree that the Minister should make the most of that opportunity to bring forward proposals as soon as possible?
Ms Buck: I have not looked closely enough at the clauses of the Bill to know whether it would be an appropriate hook, but I see no reason at all why Ministers should not at least consider whether it provides an opportunity. There is no question but that there are large numbers of vulnerable households in such properties, whom we may need to act swiftly to assist.
Before I move on to the core of what I want to talk about, may I take the opportunity to raise with the Minister an issue that I have raised many times with his predecessors? It is the plight of local authority leaseholders—people who own ex-local authority stock, having bought it, sometimes through the right to buy, but more frequently through resale. In some cases—I am thinking of my constituents—as an unintended consequence of a desirable objective, namely the decent homes initiative, they face major works bills of £60,000.
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