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Some groups of such leaseholders enjoy various concessions when it comes to that repayment. In particular, those who are retired are able to put a charge on their property for sale. However, many younger, working households have not so far been able to avail themselves of a scheme that gives them any realistic opportunity of
being able to repay without losing their home. I am seriously worried about that group of people, and I urge the Government to swallow the resistance—a resistance that is also rooted in my local authority, Westminster, so it is cross-party—to providing practical support for those households. Some of them will lose their homes when those bills fall due, and they do not have the money to pay them.
Kelvin Hopkins (Luton, North) (Lab): Is that not a factor resulting from encouraging people at the margins to try to get into owner-occupation? That, in the long term, is unwise because of the costs and risks of owner-occupation, which some people can bear and others cannot.
Ms Buck: There is an important point in my hon. Friend’s comment. Generally speaking, what he has mentioned was not a problem among local authority leaseholders, although it depended a little on where they were. The leaseholders causing me the greatest concern were those who held leases in high rises; it is extremely expensive to carry out decent homes initiative work on high rises. Many other leaseholders, however, were perfectly able to sustain a mortgage on ex-local authority stock in normal times.
However, there is a genuine issue. Last week in my advice surgery, I met yet again a woman on housing benefit, who—extraordinarily—was allowed to buy her local authority property from Westminster council. I do not understand how anybody could have been complicit in allowing and encouraging people on very low incomes—sometimes benefit-level incomes—to buy their own homes.
It is also fair to say that the roots of much of the global economic catastrophe with which we are now dealing lie in the American sub-prime mortgage market, in which people who simply had no realistic means of repaying home loans were encouraged to buy. We all have to be careful, however; the issue is not confined to America and it is not just a party political point. We have an understandable desire to support and encourage people into home ownership, but there are people on the margins who should not have been so encouraged.
That brings me to my core point, which has been mentioned in this debate. I am thinking of the 4 million social tenants and the 4 million or so people—who overlap with the former to some extent—who are in a queue for social housing. Fundamentally, the big dividing line in housing policy is now between those of us who believe that social housing is part of the solution and those who believe that it is part of the problem. I say in all fairness that the Government have not built enough social homes; I have never believed that they have, and I am on record as having said that. I am concerned about meeting housing need, and I cannot deny that that is true.
However, it is also true, although ignored on the Opposition Benches, that the money that we have invested in social housing has been much needed investment in the decent homes initiative. We have rehabilitated and refurbished tens of thousands of homes in my constituency that were long overdue. The investment was made, although I would have preferred it to have been slightly more balanced towards new homes.
Mr. Slaughter: I do not want to correct my hon. Friend, but the situation is worse than that. The Tory council in my constituency tried to give back the decent homes initiative money; it said that it did not want it. Now the councillors involved describe it as an exercise in upgrading the deckchairs on the Titanic. They really do not believe that there is a future for social housing. They think that the £13 billion of decent homes initiative money was wasted.
Ms Buck: My hon. Friend always manages to trump me when it comes to Hammersmith Conservatives; what is going on in that borough is jaw-dropping. He is absolutely right. Sometimes it seems to me that Hammersmith Conservatives make Dame Shirley Porter look like Octavia Hill. My hon. Friend will, no doubt, continue to fight that battle.
I return to the issue of the dividing line on social housing. The message coming through extremely strongly from the practice in Hammersmith, from the statements made by Westminster council’s deputy cabinet member for housing and from many Conservative think-tanks and supporting politicians is that social housing is the fundamental problem. Even the Leader of the Opposition’s introduction to Conservative housing policy talks about families being trapped in social housing. The language repeated again and again in such texts implies that tenants are second-class citizens. It equates social housing with deprivation and loss of status. The implication is that tenants should be ashamed. I deplore that, because social housing should be a choice and tenure is not a matter of morality. People in social housing may not be there for life. Obviously, with home ownership being so desirable because of the equity return over the years, many people want to leave their social housing at some point, when they can do so, and enjoy the benefits of home ownership. However, when and while they are tenants, they are not in some way morally inferior because of the exercise of that choice.
The thrust of the argument emerging from the Conservatives is focused on security of tenure. Tenants everywhere should be very worried about that emerging thinking because, as is well researched and documented, the loss of security of tenure has a devastating effect on communities and on the lives of the people it affects. There is a litany of policy in Conservative thinking that would do untold damage to neighbourhoods and families. It would also lead to additional expenditure being incurred by the public purse, particularly through housing benefit when tenants, whether in social housing or forced into the private sector, have to pay higher rents that must be picked up elsewhere by the public purse.
Jeremy Corbyn: My hon. Friend must be aware from her constituency that the transient nature of communities where the majority of people are in private rented accommodation leads to fractured communities, a diminution of community life, and a less satisfactory form of existence than for those who have security of tenure in council and housing association properties.
Ms Buck: My hon. Friend is absolutely right. That is exactly why housing associations grew up in the first place—to meet the needs of vulnerable people who were forced into the private rented sector and whose lives were damaged as a result.
The emerging thinking in the Conservative party is extraordinarily damaging. It threatens market rents for tenants and the loss of security of tenure for tenants. The abandonment of targets and the lack of acknowledgement of the need for social housing, as reflected in the motion, would mean that those people continued to be treated and regarded as second-class citizens, and that their housing needs would not be met. This Government, with their investment programme in the decent homes initiative and an expanded building programme within a continued commitment to affordable accommodation with reasonable rents, have the only solution to the housing pressures that we face.
Madam Deputy Speaker (Sylvia Heal): Order. I advise hon. Members that the winding-up speeches will commence at 9.40 pm. Several Members are hoping to catch my eye; if they do the arithmetic and exercise self-discipline, all may be successful.
8.47 pm
Mr. Andrew Lansley (South Cambridgeshire) (Con): I am grateful for the opportunity to contribute briefly to this important debate. I particularly enjoyed hearing the opening speech by my hon. Friend the Member for Welwyn Hatfield (Grant Shapps). There is nothing that I wish to add to or detract from his critique of Government policy and his exposition of our policies.
My purpose is simply to add some remarks relating specifically to South Cambridgeshire and the application of Government housing policy even in the months still available to them. Much needs to be done by the Government to offset the difficulties that we face in meeting our future housing need. The Minister will be aware that South Cambridgeshire is one of those places where housing need is the most acute, as are the problems of affordability and the house price to earnings ratio. In Cambridgeshire we have never taken the view that we wish to constrain the availability of additional housing supply; we have always actively sought opportunities to match new housing supply to the evident requirement for employment and new housing in our area.
That is why, five or six years ago, we identified additional housing requirements through the county structure plan. In my constituency, we have given up a great deal of green belt. New developments are happening in Cambourne and in Trumpington Meadows. Through the structure plan, we are committed to the development of Northstowe as a new town of more than 9,500 homes. We have always advocated that. We recognised, after an exhaustive process through the structure plan, that that location was the right place for us to take the next step towards supplying a substantial number of new houses as part of a large increase overall. In my constituency, even on our existing plans, we intended to double the rate of new housing in the next few years.
It will be no surprise to hon. Members that, in the fourth quarter of last year, much of the impetus simply stopped. It is vital to regain some of that initiative. The Government can do several things to help increase housing supply and provide more affordable and social housing in South Cambridgeshire. Like others, I have witnessed the number of people seeking social housing more than double during my time as a Member of Parliament.
Some of my hon. Friends have already made the point, so I will not go on about it, that in South Cambridgeshire and Cambridge city, more than £11 million disappears in negative subsidy on the housing revenue account—something approaching 40 per cent. of the rental income in South Cambridgeshire. By the measure of housing need, which is the starting point for negative subsidy, we clearly have dramatically rising needs. We also need social housing and I therefore urge Ministers to act quickly to enable us in South Cambridgeshire and in Cambridge city to respond to the dramatic housing need by retaining more resources to improve our existing housing stock and add to it.
Secondly, let me consider Northstowe. The new Minister for Housing told us nothing about the Government’s plans for eco-towns in South Cambridgeshire. Despite all our efforts to offer additional sites for major new developments, the Government wanted to wish an eco-town upon us. We said that it was in the wrong place, there was no infrastructure to support it and that it was environmentally unsustainable. The Government wanted to go ahead, we fought and, in the space of several months last year, we defeated the proposal. It went away and I hope that it does not come back. We in Cambridgeshire will decide where best to support new housing supply.
However, I stress to Ministers that, during the discussion last year with the Minister’s predecessor but one, we made it clear that we wanted Northstowe in my constituency to be the first eco-town. In July 2007, just after the Prime Minister took office, one of his first proposals, which he set out in The Sunday Times, was to build eco-towns. The example that he gave was described as “Oakington in Cambridgeshire.” Oakington, which is in my constituency, is the location of the planned new town of Northstowe. We want it to be an eco-town, an exemplar and the first new town of its kind in this country. We want it to go ahead, but that will not happen at the moment. Gallagher, the developer, has backed out and the proposal depends on the Homes and Communities Agency, with Government backing, being prepared to turn it into the first exemplary eco-town. I urge Ministers who are taking on their new responsibilities to consider positively how we can make Northstowe the first eco-town.
If we are to take a rational approach to providing additional housing, the Government must remove from the regional spatial strategy in the east of England the specification that the housing targets are “a minimum”. If we carry on as we are, with little new housing being built, opportunistic developers will try to claim that, because we are not on track to meet the housing target in the regional spatial strategy, they can make highly speculative proposals for new house building in highly unsuitable locations at some unspecified time in the future. We will end up with an enormous overhang of designations for new housing in the wrong places, whereas local authorities should decide, with local people’s support, where that new housing should be built, with the necessary infrastructure support. I urge Ministers to reject that misuse of language in the regional spatial strategy, which drives that bad effect.
8.54 pm
Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab):
It is a pleasure to follow the hon. Member for South Cambridgeshire (Mr. Lansley), who made a thoughtful
contribution and some points that deserve consideration. It was very different from the contribution from the Conservative Front Bench. I agree with the hon. Member for Brent, East (Sarah Teather), who has now left, that that was vacuous. Indeed, in my view parts of it were positively dangerous.
I want to focus on a couple of the points in the Conservative motion, because it is important that we rebut them. First, the hon. Member for Welwyn Hatfield (Grant Shapps) spoke from the Front Bench about the take-up of the mortgage support scheme and the mortgage rescue scheme, as well as the homebuy schemes. His comments were essentially debating points and party political point scoring, and did not give a realistic assessment of the reality of the situation.
I would point the hon. Gentleman to the interesting evidence that the Select Committee on Communities and Local Government heard from the Council of Mortgage Lenders and the Intermediary Mortgage Lenders Association. They said that it was far too soon to judge the success or otherwise of the two schemes to support people facing repossession, because of the time that it takes for people to get through to the end point. The famous two households at the end of the MRS involved individuals whose houses have been bought by a council or a housing association.
The CML and the IMLA both made the point that those schemes are actually about preventing repossession. Much of the benefit achieved by both schemes, including the one that was introduced as recently as April, has been in encouraging those who are experiencing difficulties to approach their lenders straight away. Regrettably, in the past, people having difficulty with their mortgages tended to put their heads in the sand and hope that the problem would go away. They would build up huge arrears and at that point there would be repossessions. The evidence from both of the current schemes is that many people are going to their lenders first and that lenders are exercising forbearance—although partly out of self-interest.
Lenders have realised that it costs a lot for a mortgage company to repossess a property—about £35,000 to £37,000—and there is not a lot of point in doing that in the current circumstances, because they would not be able to sell the property and recoup any losses. Lenders have been persuaded, partly in their own self-interest and partly because of the pressures put on them by central Government, that they should exercise forbearance, come to an agreement with their borrowers and use all possible measures to maintain people in their homes, thereby avoiding reaching the end of the process and having to get the council or a housing association to buy a property.
Simply to cite the figures for how many people reach the end of the process, as the hon. Gentleman did, is to make a debating point. It shows that he does not give two hoots about the individuals involved and does not want to have a constructive debate—and the same goes for his comments about the other mortgage scheme. [ Interruption. ] I notice that the hon. Gentleman is closing his ears, obviously because this is uncomfortable to hear, which will be interesting for everybody out there—not those in the Public Gallery, because there are not many there now, but for everybody who reads
Hansard tomorrow. They will realise that the Opposition spokesperson is now chatting to the person next to him, because he does not want to hear the debate—which, if I may say so, also demonstrates his contempt for Parliament, as there is little point in having a debate if people do not listen to the contributions of others.
The second point in the Conservatives’ motion, which nobody has even alluded to, is the ridiculous suggestion, which the Opposition constantly make, that it is the Government’s planning guidance on housing that has led to a glut of flats. There are two reasons why there are so many flats in city centres. The first reason is that local councils have not used their planning powers properly and have allowed planning applications to go through. The second reason is that developers make more money if they pack lots of tiny flats on to a small site.
Opposition spokespeople frequently suggest that the reason why there are so many flats is the Government’s rules on increasing the density of housing. Actually, the density of flats in city centres is many times higher than that set out in the guidance on density provided by the Government. The reason why flats are being built is that developers want to make the maximum profit, and that is what flats give them. Previously, they were able to sell the flats and get their money back. Supine councils do not make proper use of the planning powers that they already have to draw up proper local development frameworks that would allow them to refuse planning applications in the first place. It is ridiculous for the Opposition constantly to blame the Government’s density requirements and to pretend that local councils have no responsibility in the matter.
That brings me to the points that an Opposition worth their salt should have been making today, because there are some things that the Government need to do more of in order to address the problems before us. The right hon. Member for Wokingham (Mr. Redwood), who is obsessed with regulation, made the astonishing point that he could not understand why house prices were falling even though housing need still exceeded housing supply. That is happening because there is no mortgage money. House prices, regrettably, do not respond to people’s need; they respond to people’s ability to compete for a scarce resource, which bears almost no relation to people’s need for housing. Regrettably, many people who need housing do not have the financial resources to express that need economically.
In order to enable more people to gain access to the housing market, we need to free up mortgage finance. That is not within the gift of the Department for Communities and Local Government; it is within the gift of the Treasury. Some very reasonable complaints were raised in the Select Committee about the asset-backed securities guarantee scheme. I cannot go into the technicalities now, but I refer the Minister to the transcript of the evidence. Clearly, certain things need to be done to tinker with that scheme in order to get mortgage finance flowing more freely. That would help shared ownership and shared equity schemes, in particular, and enable people to express their housing need economically.
The Government are taking certain steps to try to get the housing market moving again. Evidence was given to the Select Committee by the two lenders as well as by the National Housing Federation and the Home Builders Federation, representing the housing associations and the builders. All those groupings said that the Government
were doing the right thing, but not enough of it, and that more money should be made available for the schemes. In relation to the asset-backed securities guarantee scheme in particular, they said that it was not just a question of more money, but that the Treasury should be prepared to take greater financial risks. I urge the Government to consider that idea.
The major criticism that the Opposition have made of the Government’s steps to cushion businesses and home owners from the effects of this recession is that we are spending too much money, that we have borrowed too much, and that we should be borrowing and spending less. That is at complete variance with what was said by all those who gave evidence to the Select Committee. They said that, if anything, the Government should be borrowing and spending more now in order to try to restart house building, to keep the construction industry going and to ensure that the people whom we represent, and care deeply about, can gain access to the housing that they need at a price that they can afford, either to buy or to rent.
I therefore urge the Government to consider increasing their spending even more, because if we do not spend that money now, the cost that society will subsequently have to bear of the lost opportunity to keep the house building industry going will be immense, as will the cost to the people whom we represent, because more families will have to live for longer in unsatisfactory and overcrowded accommodation. Those costs will be borne by future generations.
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