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16 July 2009 : Column 169WH—continued
Dr. Starkey:
Perhaps I can help the hon. Lady on that last point. The Committee took evidence from the Minister for Housing this Monday on proposals for the HRA. Obviously, he was not totally explicit, as that
would have anticipated the statement, but if local authorities are agreeable to the proposals once the consultation is completed, they could go ahead without the need for primary legislation. I understood from the Minister that primary legislation would be required if not all local authorities agreed to the scheme.
I hope that Members of all political parties could put it strongly to council leaders that although the outcome may not be precisely what they would wish and may not be quite as advantageous to their councils as they might, in the best possible circumstances, have wished, there is an opportunity for compromise. If the Local Government Association were able to get all its members to agree, the changes could go ahead without the need for primary legislation, to the benefit of the generality of councils even if one or two had to bite a slightly bitter bullet and take slightly less than they hoped for.
Sarah Teather: Unfortunately, the Minister left part way through the suggestion made by the Chair of the Select Committee, so we will not know-
Joan Walley (in the Chair): Order. The Minister left with my approval.
Sarah Teather: The hon. Lady's intervention was helpful. I hope that the Government will bring forward proposals that are agreeable to all councils. The devil will be in the detail. My council, like many London councils, is in receipt of subsidy; the question is what will happen to it. We have argued that that subsidy should be paid out of general taxation. It is untenable for poor council tenants in areas such as Cambridge or Kingston, who pay a lot into the system, to have to subsidise repairs for tenants in my area. It should be paid out of general taxation-by those who can afford to do so.
I do not know what model the Government will use. Authorities such as mine will be in a difficult position if they lose money and later find themselves unable to borrow in order to build. The Government's approach matters. We have been arguing the point for 10 or 15 years, but if they require local authorities to buy themselves out of negative subsidy, something that they have considered previously, it will be a disaster for authorities such as Cambridge. If they do not top up subsidy for authorities such as Brent, that, too, will be a disaster. We shall have to wait to discover what model they propose, but I would not want to push all authorities to agree to something that might be highly detrimental to their tenants. I hope that the Government bring forward something that is useful.
I feel a little frustrated that the Government are publishing the consultation document on 23 July, as the House rises the day before. I presume that the consultation will run throughout the recess, so there will be no opportunity to debate it in Parliament. If the consultation proposes something that is not helpful to local authority local residents, we will not be able to raise the matter with the Minister in Parliament until October. By then, I dare say that the Department for Communities and Local Government will have closed the consultation. That would be deeply regrettable.
Had the Government dealt with the issue 10 years ago-or even three or four years ago-or brought forward the consultation, local authorities may have been in a
position to push forward with building and to be at the forefront of the fiscal stimulus that the Government were hoping to introduce. Although I said that the Government have brought forward money, there are other things that they should have done. Instead of making a VAT cut, they should have invested the money in building housing. However, not all the money that has been allocated for the VAT cut has been spent, so the Government could still reverse the decision and build 10,000 to 20,000 more homes, which would make a considerable difference, and help to keep the building industry alive.
If the Government are going to cut VAT, they should cut VAT on renovation and rebuild. That would significantly help to keep skills in the construction industry and ensure that building work continues. Moreover, it would help us to deal with the issue of empty properties, which was touched on in the report when it dealt with areas of unsold properties. That problem is one of the consequences of the recession. We will see a heavy rise in the number of empty properties. Dealing with such properties will be made much easier if we were to reduce the VAT level on renovation and rebuild.
I hope that the Minister will focus on the issue of empty properties when he makes his reply. I am hoping that his civil servants are taking note of some of the things that I am saying, or that someone will read my comments in Hansard. Half of the hon. Members who have contributed to the debate seem to have left the Chamber during my speech. That is the normal situation that Liberal Democrats face when they speak in debates. None the less, it is not particularly courteous.
As I said, I think that we will see a considerable rise in the number of empty properties. I should like to hear what the Government will do with major regeneration projects, which was an issue touched on in the report. We have a major new deal project in my own constituency. I met teams from pathfinders projects this week. If there are problems with private finance and cross-subsidy, such projects tend to stall for a period of time. That will cause difficulties, especially if there has been stock transfer or people moving out of an area. We will see whole streets or estates being emptied for an extensive period of time-much longer than was anticipated during the regeneration project.
I should like the Government to encourage local authorities, pathfinders and new deal projects to make better use of short-life housing. Perhaps they need to provide incentives in the form of grants and loans. They could work with local co-operative organisations and even private companies. Whatever they do, they must ensure that housing is not lying empty because that will reduce confidence in an area. We must boost the sense that something is happening in such areas. The psychological impact of regeneration is often as important as the building projects. Moreover, such properties will provide short-term housing for many people who are in dire need. I am glad to see that the Minister has reappeared. I am sure that he is now listening attentively to my contribution.
A number of hon. Members focused on the issue of repossessions. Earlier, I said that it was frustrating that so many straw men had been built and knocked down during the debate. When I challenged the right hon.
Member for Greenwich and Woolwich on the issue of long-term projections for repossessions, he responded by saying that there was an issue around mortgages and mortgage finance. However, I did not criticise that particular building society for offering more than 100 per cent. mortgages to people in specific circumstances who want to move.
My hon. Friend the Member for Twickenham (Dr. Cable) raised the issue in a debate here at the end of June. We often focus on the short term, with the consequent danger that we forestall repossessions. At some point, interest rates will almost certainly rise. People in negative equity have found themselves unable to move their mortgage. It is not necessarily about moving house; they may be unable to get another fixed deal. Lots of people who are over-mortgaged have been accustomed to moving their mortgage every three or four years to another fixed deal. That may not be a healthy situation, but it is how an awful lot of young people on a mid-range salary cope with buying a property. They will find that they are unable to move. When interest rates rise, some of them will inevitably fall into arrears.
There may be a time lag with unemployment, which is what we almost always see in recessions. Unemployment figures tend to lag behind what is happening with the economy, so even when the economy starts to pick up, redundancies will continue for six, nine or even 12 months down the line. Many of those people will fall into arrears and some will lose their homes. I do not mention the figure of 100,000 to try to create scare stories. I just want the Government to think in the long term about how we are going to plan for the future of those people. Not all of the mechanisms that have been introduced will help them in the long term.
Mr. Raynsford: Does the hon. Lady accept that had the Government not intervened in the way in which they have done to try to reduce the incidence of repossessions and to restore some confidence to the mortgage market, it might well be that the kind of figures that she is talking about will already have happened, and we would be talking not about scare stories but about human casualties? If that is the case, will she give some credit to the Government for acting in a way that has helped to limit the extent of the problem?
Sarah Teather: The right hon. Gentleman has not been in quite as many housing debates in this place as I have in the past three or four months.
Mr. Raynsford: That is not true.
Sarah Teather:
The right hon. Gentleman has in the past 10 or 15 years, but not in the past three months. If he had been in any of the debates in which I have spoken, he would have heard me give credit to the Government for making significant advances, particularly on income support for mortgage interest, which I have welcomed regularly and which have helped many people. My point is not to say that the Government have done nothing. My point is that they must think long term. I have not criticised them for everything that they have done, and I am trying to make a constructive contribution to the debate, which, so far, has involved an enormous number of straw men being knocked down. The right hon. Gentleman need not knock down another straw
man now. I have welcomed the contributions to ISMI. What I have also said is that some of the Government's policies have been very tightly drawn, which has meant that a lot of people have fallen through the net. That is why I have consistently argued for mortgage law reform.
The report picked up a point about the pre-action protocol and said that the Select Committee was concerned that it lacked teeth. I have consistently pushed the Government on the issue of mortgage law reform, and I hope that the Minister will consider the issue favourably.
The hon. Member for Sheffield, Attercliffe spoke about the difficulties that tenants find themselves in. The Committee Chair, the hon. Member for Milton Keynes, South-West (Dr. Starkey), also spoke about the issue. I know that the Ministry of Justice is considering the matter at the moment. I argued in the previous debate that we had in Westminster Hall with this Minister that I hoped that mortgage law reform could be used to give courts the power to intervene. Guidance could then be issued. We would not necessarily need primary legislation to enforce a longer notice period for tenants who find themselves in difficulty because their landlord has got into arrears on their mortgage.
I hope that the Government will look on that favourably and take action soon, because we are about to go into recess. Although the Ministry of Justice is looking at the matter, we do not have any time scale on when such a measure will be brought in. Which law are the Government hoping to amend? Will it happen through secondary or primary legislation? Will that be in the next Queen's Speech? How long will it take, because enormous numbers of people will find themselves in difficulty and may fall through the net?
Finally, I want to pick up on a matter that was in the report and that I asked the Minister about in our previous debate. He said then that he did not know the answer, so I hope that his civil servants have briefed him ahead of this debate. I am talking about sale and rent back. The Government have consistently said that they want the OFT to regulate that area. However, I am still seeing notices on lamp posts across London saying, "We can buy your house and you can rent it back. We can get you out of difficulty if you are in debt." Given that the mortgage rescue scheme is predicted to rescue only 6,000 people, there will be many who get themselves into arrears, take part in those schemes and lose their homes some 12 months later. When will the Government regulate that kind of sale-and-rentback scheme? The Committee said that the matter was urgent in February when the report was published and the Government have been promising such regulation for several years, so I hope that the Minister answers that question.
4.20 pm
Grant Shapps (Welwyn Hatfield) (Con): I congratulate the hon. Member for Milton Keynes, South-West (Dr. Starkey), the Chairman of the Committee, on two excellent reports, particularly the first report. The second report is a very good update-it is bang up to date-on the situation and includes information about the Government's most recent "Building Britain's Future" announcements. They provide a good basis for the debate.
I welcome the new junior Housing Minister to his place. This is the first full debate that we have had as opposing Front-Benchers. Previous Housing Ministers have not had the longest tenure. I have worked out that the four Housing Ministers whom I have faced across the Dispatch Box were in place for an average of 211 days. It is slightly better news for the Minister: he is only the second junior Housing Minister whom I have faced. Junior Housing Ministers usually last slightly longer than Housing Ministers on average, but with an impending general election, time will tell.
Given the Minister's short period in office, he will still be struggling-excellent though he will turn out to be-to get his head around some of the key housing figures, and of course it can take a long time to comprehend the housing lexicon, so I thought of a few basic facts to lay out some of the background to these excellent reports. Not all those facts are referred to in the reports, so perhaps there have been one or two omissions.
The first key figure for the Minister is that far too few homes have been built in the past 12 years-that is the underlying cause of everything that is written about in the reports. How many too few? The answer is about 24,000 a year-missing homes that were never built under this Government, by contrast to the trend of the previous couple of decades. That has left a huge hole in housing in this country. Simple maths tells us that that is one reason why we are in the current mess. However, that is not the only problem.
Most of the debate has focused on affordable housing for rent, purchase or part-purchase. The bad news of the overall house-building statistics gets even worse when it comes to affordable housing numbers. Less affordable housing has been built in every single year of this Government than in any of the years under the Governments of Margaret Thatcher and John Major. That is a rather damning indictment of a Government who I am sure would like to be thought of as being on people's sides and assisting with things such as housing for those most in need.
This year, it is likely that 70,000 to 90,000 houses will be built in total, which is fewer than half the Government target of 200,000, which is supposed to increase rapidly to 240,000. We are in a mess. The single greatest lesson that the new junior Housing Minister could learn from the two reports and the current housing situation is that those top-down targets simply do not work. In fact, not only do they not work; they probably make the situation slightly worse. Regrettably, he will not find that conclusion in the reports.
I am afraid that the Committee has in many ways fallen for the Government's warm words on housing, which they deliver all the time. The Government have always been very polite about housing. They never told anybody that they were going to get fewer homes of all types built in this country, including affordable housing-it has just happened over a number of years. It is almost as though, as long as the Government come out with new and supposedly ambitious or challenging targets-as they are variously described-everyone, including, I am afraid, members of the Committee, will buy the argument and congratulate them on having so much aspiration.
The truth is that aspirations, targets and challenges do not build homes, and nor do headlines. All too often, the problem with the Government's housing policy has been that they chase headlines. There were supposed to
be 10 eco-towns-five by 2016 and the other five by 2020-yet today, it was announced that there will be only four and they will probably take till 2020. By the way, the houses will not be as environmentally friendly as the zero-carbon homes that we will be building by 2016. The houses in the eco-towns, which is a sham name, will only be at sustainability level 4-I am sure the Minister has already discovered that level 6 is the zero-carbon level. We have an incredible situation in which the rhetoric is so far distant from the reality that even Labour Back Benchers and those who are most experienced in housing dare not challenge the raw facts of a failed, top-down housing policy.
I do not believe that the Government want this situation or that they lack the compassion to change things, and it is not for the lack of warm words about new headline-grabbing schemes and initiatives that we are in this situation. It is worth reflecting on some of the schemes mentioned in the reports, even if there is not the forensic detail that one would like. To be fair to the Committee, such detail would be impossible to provide, simply because the numbers change daily, although not by much.
Mr. Betts: In the hon. Gentleman's comments so far, we have been given a very general picture. He has said that the Opposition are in favour of more social housing and that we cannot have a top-down approach, but I have not heard him say how, if there are going to be spending cuts under a future Conservative Government and if health and education spending will be completely protected, funds will be available to build the social rented housing for which he is arguing.
Grant Shapps: If the hon. Gentleman would be so gracious, I shall come to that. I am on only the first page of my four pages of notes, and the last page describes precisely what we will do to get more from less, as he describes it.
Emily Thornberry: Is not one of the problems of building new housing that people do not seem to want new housing schemes near them? An awful lot of that involves Conservative councils that do not give planning permission for housing schemes. If, for example, 250 Islington families wanted to move into the hon. Gentleman's constituency, would planning permission for social rented housing be given?
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