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16 July 2009 : Column 181WH—continued
Then there are the problems of sheer economics, particularly during the credit crunch-the subject of the report. The difficulty of moving between social houses creates an inability to move around which affects the running and flexibility of the economy. That is a key issue. We have already heard how the HOMES-Housing Mobility and Exchange Services-move programme collapsed post-1997 when the Labour Government privatised it and it went wrong, but there is now an
online home-swapper programme, which moves more people around the country faster than any of the previous programmes. Will the Minister take a close look at how a proper national mobility programme and a set of measures that we have called the "right to move" could be put in place so that people who live in affordable, rented social housing can have the same mobility and flexibility to move as others?
On the Homes and Communities Agency, it is a huge quango, but we have not said that we are going to have a bonfire of all quangos. I suppose that we have said that we are going to have a barbecue of quangos and that we will check carefully what each of them does and whether it is performing to task. I have to say to the right hon. Member for Greenwich and Woolwich that I am not impressed when I see an agency that has 20 offices and spends £4.5 million a month on salaries alone, but as I have said to its chief executive Sir Bob Kerslake on several occasions, we want to see how the agency performs and what its outputs, rather than inputs, are-or what its outputs are in return for the inputs. The agency has time between now and the election to prove that it can get the stalled housing and the stalled town centres, as in my constituency, and other projects that it has an interest in, working. If it can, and if it proves to be an effective delivery model, then it or something similar would, presumably, have a role. To expect the Opposition to give a blank cheque to an agency that has been in place for only a few months-it got started on 1 December-without having seen how it really performs is unrealistic.
The same is the case for the Tenant Services Authority, which was set up by the same Act as the HCA. Indeed, the right hon. Gentleman and I both sat on the Committee that considered that Bill. I am not terribly impressed that the authority has so far spent its time surveying 27,000 tenants to get responses and then writing a draft report about what it might do. I want to see action from those organisations; they are spending a lot of public money and we need to make sure that we get proper protection to protect our tenants in the most efficient way. That is a quick round-robin of where we stand.
Mr. Betts: Does the hon. Gentleman accept that many tenants are rather pleased that the new authority is taking the time and trouble to listen to what they think? When it puts its monitoring arrangements in place to monitor what standards have been achieved by housing associations, arm's length management organisations and others, it will surely want to ensure that those monitoring arrangements are worked out so that the tenants' view of the standard of service that they are getting is reflected. That is its core mission, and I think that it is going about things from the start in a very admirable way.
Grant Shapps: That point gives me the opportunity to put on record that I want the absolute best, A-class service as far as representation for tenants is concerned. However, the TSA is not even doing the 1 million council houses yet, nor the ALMOs; it has focused only on registered social landlords. That will not come until 2010, so the picture is incomplete. I am concerned that it is taking so long to get things going.
Emily Thornberry:
I have done an in-depth study of the views of my constituents who have housing association landlords. Interestingly, what came out of that was that
one housing association might be at the top of the league in one place, but at the bottom of the league elsewhere, depending on the estate. The people who have the least power are the tenants, but they are also the people who know the most about the estates-and vice versa for housing associations. There is a big leap between national representation of housing association tenants and local representation, which is very important. The new body addresses that, and that is why I am a great supporter of it.
Grant Shapps: I am grateful for that intervention. I want to finish by the top of the hour, so I shall press on except to say that I am the Conservative who represents the most council tenants in the country, and that I want my 9,500 council houses-and the greater number of council tenants in them-to have the protection of a proper regulatory structure. The fact that the TSA does not yet cover them, coupled with my concern about the speed at which things are moving, makes me wonder whether it is going about things in the best way, or whether there are other ways of helping to provide those services to my constituent tenants and the hon. Lady's.
My final point is about the announcement, in the week before last, on "Moving Britain Forward" or whatever the latest catchphrase for a relaunch is, in which £1.5 billion was again promised to affordable housing. That is on top of the very admirable £8.4 billion from 2008-11. It is not for lack of promises that we have failed to build enough homes in the past few years. The confusion started almost from the moment that the £1.5 billion was mentioned, not least because the Government have yet to explain, even today, a fortnight later, where the cash is coming from. We understand that half has to be found from the communities and local government budget and that that money still has not been found. In the No. 10 briefings, morning after morning, we have been promised that this information will be released. Will the Minister explain where that half of the £1.5 billion is coming from? Is it the case, as many of us fear, that the only popular HomeBuy programme, Open Market HomeBuy-it gets confusing, so, for the Minister's reference that programme takes in the My Choice HomeBuy and the Own Home programme-has been cut, at a saving of about £210 million, to contribute towards the communities and local government half of that £1.5 billion programme? If that is the case, will the Minister accept that the Government are robbing Peter to pay Paul? Given their appalling record on housing, particularly on social and affordable housing, will he admit that the game is finally up?
4.58 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Ian Austin):
It is a great pleasure to take part in this debate under your chairmanship, Ms Walley. I know what a great interest you take in housing issues and that you have great knowledge and expertise on and commitment to those issues. Excellent though the debate has been, I am sure that it would have been enhanced had you been able to take part. I wanted to pay tribute to all the work that you do in Stoke to fight for better housing for your
constituents and to improve housing in the city as a whole, because you have not been able to speak in the debate about your role in your constituency.
Joan Walley (in the Chair): That is much appreciated.
Mr. Austin: Nevertheless, it has been a fascinating debate, in which a number of Members who are acknowledged experts on these issues have taken part. I congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey), the Chair of the Select Committee, on producing the reports and securing the debate. I apologise to the hon. Member for Brent, East (Sarah Teather) for having popped out of the room-I am very sorry for having done so.
I welcome the opportunity to have this debate. In June, my predecessor gave evidence to the Committee on the issue, but a lot has happened since then and I am grateful for the opportunity to report on the progress that has been made. As a number of Labour Members have made clear, housing has always been one of the Government's top domestic priorities and, whatever the Opposition spokesman wants to claim, I think it is fair to say that we have made significant progress over the past decade. A million more households now own their homes, and there are more than 400,000 new affordable homes and 1 million more decent homes. All of that has made a real difference to people's lives up and down the country.
Following that period of real success, as the Committee's report shows, housing, along with many other sectors of the economy, is undoubtedly now facing difficult times. The global economic turmoil has made conditions much tougher for developers, home owners and prospective buyers alike. The Government have had four key priorities in responding to these challenges: first, to help home owners concerned about repossession; secondly, to support first time buyers; thirdly, to restart the flow of lending; and fourthly, to increase the number of homes being built and boost skills in the construction industry. I shall set out the progress that we have made on each of those.
Supporting home owners who are threatened with repossession, so that we can make sure no household needlessly loses its home, is one of our top housing priorities. That is why we have put in a place a framework of support through the whole arrears cycle-from debt advice to court desks-which has helped hundreds of thousands of families already. As part of that programme, we have boosted the support offered by the benefit system and have implemented new schemes offering targeted financial assistance to those in the greatest need: the homeowner mortgage support scheme and the mortgage rescue scheme.
Every repossession is a tragedy for the family affected and all the figures and statistics will be of no consolation to people who have lost their home, but the measures we have introduced will help thousands of households avoid repossession. As my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) said, it is worth pointing out that the figures provided by the Council of Mortgage Lenders show that the number of repossessions in 2008 represent about 0.34 per cent. of all loans, which means that despite the fact that more than a million more households now own their home, the numbers affected are proportionately smaller than in the 1990s.
Again, as my right hon. Friend pointed out, the Council of Mortgage Lenders has already said that its forecast of 75,000 repossessions this year was looking pessimistic in light of the Government's intervention. The Council of Mortgage Lenders has now reduced that figure and that revision is a direct result of the action that we have taken, in combination with lower interest rates and other actions to support the economy. I am glad that the hon. Member for Welwyn Hatfield (Grant Shapps) raised that point and went into it in some detail. I want to deal with the matter with the same amount of detail. To be honest, it is a bit ridiculous to judge the success of a scheme or the impact of the Government's measures by the number of people whose homes have been sold to housing associations at the very final stage of one particular scheme and ignore the hundreds of thousands of people who have been helped much earlier in the process.
The macro-economic framework we have put in place means that millions of home owners have benefited from record low interest rates, which is in stark contrast to what has happened in previous recessions when interest rates soared to 10 per cent. for four years and 15 per cent. for a year. That caused even bigger problems for millions of families. Ensuring that lenders are offering their own forms of support to borrowers and that they are providing extra advice and protections through the courts has helped hundreds of thousands more people.
Grant Shapps: I am intervening because the Minister seems to be trying to paint a picture that suggests that, for all sorts of reasons, it does not matter that just six families are being helped through, for example, the mortgage rescue scheme. Is he aware that the real reason for that is it is almost impossible to jump through the required hoops to qualify for the scheme? I invite him to comment on that?
Mr. Austin: I will deal with that and answer the important point that the hon. Gentleman has made, but I want to take him through the whole process. To support households in financial difficulty, we have provided extra funding for debt advice, including £6 million for the National Debtline and £10 million for the citizens advice bureau. CAB figures show that 95,000 households received advice on a mortgage or secured loan last year. When a possession case has reached court, repossession is not inevitable and the right advice and support can help households remain in their home even at that stage. That is why we have put in place universal access to advice desks in courts, and have doubled DCLG funding for that vital scheme to £1.5 million for the current year. The scheme provides free legal advice and representation to people facing repossession or eviction hearings.
Legal protection for home owners in difficulty has also been strengthened. In 2004, the Government introduced statutory regulation of mortgages and the Financial Services Authority's regime affords consumers important protections and requires lenders only to repossess as a last resort. More recently, we introduced the mortgage pre-action protocol, which sets out clear guidance to the judiciary on what steps the courts expect lenders to take before bringing a claim to court. That helps ensure that lenders can only repossess as a last resort-and the measure has paid off. More lenders are working with their customers to help them stay in their homes and
although, as I said earlier, every repossession is a tragedy, Ministry of Justice figures show a 42 per cent. drop in mortgage possession claims issued in quarter one of 2009 compared with quarter one of 2008. That is important as it is crucial for effective forbearance that lenders treat borrowers fairly and that borrowers talk to their lender if they enter financial difficulty.
On other measures, we are helping 200,000 through the support for mortgage interest scheme, which helps with payments towards the interest component of a mortgage. We have also introduced the homeowners mortgage support scheme, which helps people on reduced incomes to reduce their mortgage payments, and we estimate that that could help tens of thousands more households. In addition, the mortgage rescue scheme helps people stay in their homes-some by selling a stake to the housing association-and has helped up to 6,000 families, 200 of which have had repossession action in the first five months of the scheme. I want that scheme to help people as quickly as possible, but there are practical problems because households are selling their home when they enter the scheme. It is not an overnight process. We need to ensure that checks on the property are carried out and that the home owner gets proper advice before making the decision to go ahead.
However, we want to speed up the process where possible, which is why, on 30 June, the Minister for Housing, my right hon. Friend the Member for Wentworth (John Healey), announced our plans for the new mortgage rescue fast-track team, which will be up and running by the end of this month. The team will be based in Birmingham and will help manage MRS applications. Its work will include handling negotiations with lenders and registered social landlords, which should really speed up the process for some households.
The truth about the package as a whole is that millions have benefited from low interest rates-that did not happen in previous recessions-and hundreds of thousands have been able to stay in their homes because of direct help from the Government. As I said, every repossession is a tragedy and none of the statistics will be of any consolation. However, as a result of these measures, even though a million more households own their home, the numbers being repossessed are proportionately smaller than in the 1990s.
I understand the Opposition's position on this and why they want to claim that such schemes-the home ownership and the shared ownership schemes and so on, to which the hon. Member for Welwyn Hatfield referred earlier-are not having an impact. To be fair to the hon. Gentleman, I do not think he is making such claims to score political points-[Interruption.] Although, perhaps I am being too generous. I think there is a fundamental difference in our values and the Opposition's view of how things should be organised.
The Opposition want to say that the extra investment and the real help that we have provided is not working because they are ideologically opposed to Government intervention. When they talk about wanting a smaller state and rolling back the frontiers of the state, what they actually mean is that the Government should do less, and spend less. The Opposition would like to introduce spending cuts, so that they can do whatever they want to do on inheritance tax regarding some of the richest estates in the country. They were opposed to the action that we took to save the banks. They think
our approach should have been to do much less or nothing during the recession and that we should cut public spending. We think that we should increase investment to keep people in their homes, save jobs and get the economy moving. Those are two very different sets of beliefs, are they not?
The next election will be an opportunity for the country to choose which approach it wants. But let us not reduce this to some kind of point-scoring around this or that number. Let us have an honest debate about the competing values that our different parties hold.
In addition to supporting those at risk of repossession, we have also taken action to help make home ownership more affordable. To help first time buyers get on the property ladder, we will provide increased funding for our low-cost home ownership schemes. These include the Rent to HomeBuy scheme, which enables potential purchasers to rent a property at below market rent for up to five years, giving them an opportunity to save the deposit needed to buy a share in their home.
The HomeBuy Direct scheme enables purchasers to buy a newly built home with the assistance of an equity loan of up to 30 per cent. Households with incomes of up to £60,000 that could not afford to purchase a suitable property on the open market are eligible to buy through HomeBuy. Together with the recent housing pledge, we expect to help more than 46,000 people into home ownership this year and next.
The Committee and my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) discussed finance for mortgages. In January, the Government announced measures to reinforce stability of the financial system, increase confidence and capacity to lend, and support the recovery of the economy. Those measures build on the £500 billion package announced in October last year to help restore confidence and trust in the markets.
In addition, and as a condition of accessing the asset protection scheme, lending commitments on commercial terms have been agreed with the Royal Bank of Scotland and Lloyds for the 12 months from March 2009. Other banks have also signalled their intention to increase lending. That should help families looking to buy a property and households that want to remortgage.
As I said earlier, the Bank of England has taken decisive action to reduce interest rates. Mortgages are cheaper for some prospective buyers and many in home ownership as a result of the average mortgage interest rate having fallen from 5.8 per cent. in April 2008 to 3.59 per cent. in May 2009.
Let me turn now to housing supply, which was raised by my hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry). She spoke with great passion about the problems facing her constituents. I would be happy to go to her constituency and meet some of those people and see for myself the conditions that she described. In addition, I would be happy to speak to her in more detail about the problems that she referred to with the housing market in London more generally.
The Government's help, combined with the commitment of the registered social landlord sector, meant that more than 47,000 affordable homes were funded through the HCA in 2008-09. That is a real achievement, and we
have to do more. It is fair to say that, for decades, housing supply has failed to keep up with our growing and aspiring population, and that demand for housing, both affordable and in the private sector, will continue to increase. It will be crucial that our house building industry responds flexibly to meet that challenge.
That is why our recent pledge to invest £1.5 billion to build 20,000 new affordable homes for rent and low-cost sale is so important. The pledge builds on existing programmes: the national affordable housing programme, the local authority new build programme, the kickstart housing delivery programme and the surplus public sector land programme. The pledge will increase total investment in affordable housing over the next two years to £7.5 billion, and it will mean that more than 110,000 new affordable homes will be built during that period.
The Chairman of the Committee, my hon. Friend the Member for Milton Keynes, South-West, discussed the latest projections, which indicate that the number of households will grow at a faster rate, and that we might need to build even more homes. That underlines the urgent need to maintain our ambition to provide more homes, not just for now but for future generations as well.
Grant Shapps: The Minister is being generous in giving way. He rushed through the £1.5 billion pledge without mentioning where the money will come from. Could I push him on that point?
Mr. Austin: We have, actually. We said that the money will come from reprioritising in my Department and elsewhere in Government, and from underspends in other Departments. We will provide more detail in due course, but the challenge for him is to say whether he would match the pledge and what he would invest in providing new homes, and whether that would be subject to the cuts to which his party is committed. It is all very well for him to ask these questions-
Grant Shapps: You are the ones in government.
Mr. Austin: There will be a general election in less than a year, and the Opposition's proposals will come under just as much scrutiny as our record and our plans for the future. The country will face a big choice between our plans to invest in the economy, to save jobs in the construction sector and to provide the homes that people need, and the Opposition's plans to cut public spending. Frankly, I cannot wait for that debate, which will subject the Opposition's proposals to the scrutiny that they have so far escaped. I believe that the people of Britain will take a very different view of the Opposition's policies when we and the media are able to subject them to the scrutiny that they deserve.
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