9.24 pm
Mr Tobias Ellwood (Bournemouth East) (Con): It is a pleasure to participate in this important debate. I hope that the usual channels will recognise the demand for and interest in it and perhaps provide more time in future.
I begin with a challenge to the Labour party about the observations made in the report by the Office for Budget Responsibility. I very much welcome the existence of that body and its report. If the Opposition accept the figures in the report, they must also pay heed to its analysis. I believe they have accepted the numbers, but not the reality behind them. The OBR does not predict a recession here in Britain, according to page 15 of the report, but there is a caveat that has been stressed by Members of all parties about what is going to happen in the eurozone. It is hoped that the right decisions will be made to bring confidence back to that area.
The report provides three reasons why the OBR has had to provide an updated position. The first is rising commodity and food prices, the second is that the scale of the boom and bust under the last Government had a greater impact on the economy than previously thought, and the third is that the euro crisis has increased instability and uncertainty, which has affected household and business spending.
There is also uncertainty about the liquidity of Europe’s banks, which a number of Members have mentioned. There is an irony there, because in 2008-09 it was Governments who were bailing out the banks, but today the banks are called upon to buy bonds and bail out Governments. However, many banks across Europe are unable to do that. They are desperately trying to repair their exposure to the debt, and bond issuance across Europe is actually dropping. In the past six months, just €17 billion was traded, compared with €120 billion in the same period in the previous year. Big decisions need to be taken about the role of the European Central Bank, eurobonds and so on if we are to create the stability that is required.
I am grateful that our Government are in a different position from others, because they acted to keep the deficit down, cut the size of the public sector and help the private sector to grow through active enterprise policies and a reduction in corporation tax. They also took difficult decisions about universities and tuition fees, to ensure that we remain competitive in the long term.
I turn briefly, in the very short time that I have, to the economic growth figures as measured by GDP. The shadow Chancellor is keen on suggesting that the economy is flatlining. He uses funny gestures to say so—I wish he would stop them, because he looks a little bit like a
6 Dec 2011 : Column 262
cross between a lazy cricket umpire and Mr Tickle. I do not believe he understands the difference between the economy flatlining and growth. It is like the difference between velocity and acceleration—if someone jumps out of a plane, they fall at 9.98 metres per second squared. That number does not change, but as anyone who has done it knows, they do accelerate. It is the same with economic growth. The economy is growing year on year, as long as the figure is above zero. Labour need to recognise that. If they accept the figures in the OBR report, they must also accept that the outlook is that we can expect to see growth of up to 3% by 2015. If the Opposition say the economy is flatlining, are they saying that China’s economy is flatlining with a growth level of 10%? Of course it is not; it is growing year on year.
My final point is about the national debt and the responsibility that the last Government ignored. That is the public sector net borrowing requirement—the difference between what we raise in tax receipts and what we spend on all the Government Departments. In Labour’s last year in office, the Government put £513 billion into the pot but took £670 billion out, leading to a deficit of £157 billion. That was just one year. In 2002, the books balanced and there was not a problem, but the year after they borrowed £19 billion, and then it went up to £30 billion. Year after year, they accumulated a massive debt, which led us to the position that we are in at the moment.
It was not until this Government came to power that we said, “Stop. We cannot keep adding to this debt crisis.” By the time the election took place, we were perilously close to losing our triple A rating, and we inherited the highest structural deficit of any major economy in the world. I am very pleased that we have got a grip on the economy now. Many quotations have been given in the debate, and I will give one final one, from Margaret Thatcher, who said that sooner or later, every Labour Government run out of UK taxpayers’ money to spend. That is clearly what happened under the last Government.
9.29 pm
Sheila Gilmore (Edinburgh East) (Lab): This debate is not about denying the deficit, and nor is it about never reducing public spending: it is about if and how we reduce the deficit and how we use public investment to grow the economy.
I intervened on the Chancellor earlier in this debate and asked the Chief Secretary to the Treasury a question at Question Time because they ignored an important part of the OBR report, which they have quoted extensively—indeed, the Chief Secretary is still ignoring this point. He argued that we do not have growth because the OBR discovered that the recession was deeper than previously thought. However, the OBR also said that the recovery had been quicker and stronger in 2009 than previously thought and that the decline in growth came in the latter part of 2010.
That is when the famous oil tanker that people have talked about threw out its anchors and started moving backwards. The 2009 recovery did not happen by accident or because the sun was shining; it happened because the previous Government took steps to stimulate the economy. Such steps can be taken. It is not true, as has been argued, that if we simply use Government money, we will never pay off the debt.
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The National Housing Federation, which represents housing associations, has made a small but helpful suggestion. It says that if the Government put £1 billion towards shared-ownership housing, the housing association sector could put £8 billion towards it. That would grow 400,000 jobs and build the 66,000 shared-ownership houses that are hugely needed by many low-income families, and at the same time reduce spending on jobseeker’s allowance and housing benefit. Many who would live in shared-ownership houses would previously have lived in high-rent private sector housing, which causes the housing benefit bill, which the Government say they are worried about, to escalate.
That is just one small example. When we create jobs in that way, we create not just that one job. It is not a question of saying, “We spent all that money creating those jobs. Okay, those people will pay more tax and will not be on benefit, but that is not growing the economy.” Those people exist within local communities. If people have jobs and incomes, they will buy goods from other businesses.
It is no accident that many of the businesses in difficulty during the recession and after are related to the housing world. I know of one firm in Edinburgh that not only sold furniture but built it. The furniture-building side of the business has closed because the market has declined. People are not buying houses and they are not moving into new ones or redecorating, and they are not buying furniture.
Mr Speaker: Order. It is the height of discourtesy for an hon. Gentleman, who has just made a speech in the debate and who is fortunate to have done so, then to sit there, wittering away at other Members, completely ignoring another hon. Member on her feet. That hon. Gentleman should be thoroughly ashamed of his behaviour.
Sheila Gilmore: The ongoing effect of creating construction jobs would ripple far beyond the jobs themselves. That is what we mean by investing to grow the economy. We will not always borrow money for such things, but if we borrow on a short-term basis, we would still be borrowing for a purpose. Borrowing is not always bad. Many Government Members and others bemoan the fact that small businesses cannot borrow to expand. The Government can quite legitimately borrow to grow the economy. That is what we should be doing, but we have not been doing it for the past 18 months.
Sammy Wilson: There is an additional ingredient that is needed in the hon. Lady’s proposal. Not only do the Government need to borrow, but banks need to be willing to lend to people the mortgage side of the purchase of the house so that the shared ownership can be effective.
Sheila Gilmore:
Indeed. Despite the fact that the Chancellor has assured us that he has entered into arrangements with the banks so that they would provide loans, we still have this mystery of why that has not been happening. If we do not do these things, we will see ourselves going further and further into decline. What the previous Government did to help us climb out of recession is worth repeating. That is why we are
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urging this Government to invest, to grow and to spend the money that is needed to get people back to work. We are talking about real people and real jobs that can be created. We should not be placing families in such hardship. Those who think that because we have high-end restaurants expanding in central London the economy is doing okay should move themselves out of central London and see the real world.
9.36 pm
Nic Dakin (Scunthorpe) (Lab): I thank you, Mr Speaker, for calling me to contribute towards the end of this debate. I have had the privilege of hearing much of the debate. What has struck me is the unanimity on all sides of this Chamber that the Government’s policies are hurting people in the world outside. The question is whether the policies are working. My constituents and constituents across the country want to know whether the policies are right and whether they are working. At the moment, the early indications are that they are certainly not working according to the plans that were set out by the Government 18 months ago. We have youth unemployment above 1 million and women’s unemployment at the highest ever level. The borrowing figures are £158 billion higher than expected to pay for unemployment and benefits, and not to pay for investment or jobs. At this mid-term point of the Government, that does not appear to be a positive step forward.
Businesses across the country are struggling. In my own constituency of Scunthorpe, an agreement was reached between the trade unions and the management at Caparo Merchant Bar to close early for the Christmas period so that the company can better reshape itself for the challenges of 2012. The demand for global steel is very low, which is causing a great challenge for steel companies in my constituency.
One of the arguments that concerns me is that the public and private sectors are somehow different. The public sector carries an element of risk while the private sector provides innovation and drive and those two sectors need each other. A local businessman said to me, “What we need, Nic, is demand in the economy. We need things done that drive demand.” I welcome the infrastructure projects that were outlined in the Chancellor’s autumn statement. Frankly, those projects should have been in place 18 months ago. It is not a matter of too little, too late but that there should be more. Consumer confidence is at an all-time low and dropping, and that is of great concern.
I want to focus on individuals because they are at the heart of this. A police officer in my constituency wrote to me, drawing my attention to the threats to his pay, his conditions of service and his pension. In a heartfelt way, he asked, “How much more pain do we have to suffer and how much more money does my family have to lose before enough is enough?” We should be listening to the words of the people out there. We owe them a stimulus and a direction forward and we should deliver them today.
9.39 pm
Chi Onwurah (Newcastle upon Tyne Central) (Lab):
Last year the Chancellor boasted, with barely contained glee, that it would be necessary to make cuts deeper and faster than any Chancellor in history in order to clear
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the deficit in four years. In the process, we were told that the private sector would be freed, that the economy would soar forth just in time for general election tax cuts and that we would all be in it together.
One week ago, the Chancellor came to this place to admit that growth had flatlined, that he would be borrowing £158 billion more than forecast, that further cuts had to be made and that the deficit would still be there at the next election. And it certainly does not feel like we are all in this together, as many of my right hon. and hon. Friends have said this evening—not when there are 1 million unemployed young people, not when two thirds of the cuts are being borne by women and not when manufacturing, the regions, education and innovation are all suffering.
This has been a lively and, at times, passionate debate, and there have been many excellent contributions. I am only sorry that I do not have the time to mention all my hon. Friends who have spoken so eloquently. I shall only mention my hon. Friends the Members for Blaydon (Mr Anderson), for Bishop Auckland (Helen Goodman), for Birmingham, Hall Green (Mr Godsiff), for Middlesbrough South and East Cleveland (Tom Blenkinsop), my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), my hon. Friends the Members for Islwyn (Chris Evans) and for Glasgow North East (Mr Bain) and my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke), who explained with passion and determination how the pain being experienced in their constituencies was but inadequately matched by the dry, outdated ideological dogma of too many on the Government Benches. [ Interruption. ] Yes, and we see it again this evening.
One week ago, the Chancellor came among us neither cowed nor humbled, and although his policies were discredited, he delivered a lecture and a series of ad hoc announcements but no proper plan for growth. Rather, he seems to think that if he talks about it, it will happen. But what we needed from him last week was a proper plan B. We need a short-term plan to kick-start the economy and create jobs such as—now let me think—Labour’s five-point plan for jobs and growth: a tax on bank bonuses to fund up to 100,000 jobs for young people; genuine long-term investment in infrastructure such as roads and schools; a temporary VAT cut giving families with children a boost of about £450 a year—[Interruption.] Government Members may laugh but that is a lot of money in my constituency. The plan also includes a year-long cut in VAT to 5% on home improvements and repairs to help small business; and tax breaks for small businesses to take on extra workers. It is a very good plan.
As well as a short-term kick-start, however, we need a long-term strategy, a vision for the future of the economy. On “Newsnight” on the evening of the autumn statement, Lord Heseltine claimed that it was the beginning of an industrial policy. I fear that he might have to explain to the Chancellor what an industrial policy is. Indeed, he should probably explain what an industry is—and, while he is at it, perhaps he should explain that to the Business Secretary too. Both are ideologically opposed to using active government to ensure that industry has the environment it needs to flourish. Both fail to recognise that we need a long-term vision for an economy that is competitive, resilient and fair, and that we need strategies
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to promote those sectors in which we have a competitive advantage and where businesses pursue long-term, inclusive and socially responsive strategies for the good of themselves and the rest of us.
Let us look at how the key drivers of our economy are doing under this Government. Lee Hopley, the chief executive of a manufacturing employers group, says that
“short-term confidence has all but fallen away”.
That is why this week the manufacturing sector cut its growth forecast to 0.9%, down from 2.2% just three months ago. And still the Government talk about a manufacturing-led export-driven recovery! Today the Deputy Prime Minister was busy announcing an extra round of the regional growth fund. We support its aims; in fact, they are similar to those of the regional development agencies, except that its fund is only half what theirs was, and it is controlled from Whitehall, not the regions, where it belongs. As of today, just a quarter of the successful bidders in round one have received their money. There can be no better example of the Government’s inept and out-of-touch approach to regional growth.
Let us look at higher education. Universities—the centres of knowledge and ideas—should be the drivers of both growth and social mobility. In 2009, the sector contributed £7.9 billion to the economy. In 2008, the higher education sector created almost 700,000 jobs. It is our seventh largest export industry, but almost exactly a year ago this Government pushed through the most damaging and disruptive changes to the higher education system, tripling tuition fees and then changing the rules after universities had set their fees. At the same time, the Government introduced changes to student visas that, in effect, tell the world: “Britain is closed”. All this is hugely damaging to universities and students.
So what about innovation, the “engine of growth”, as the Business Secretary likes to call it? The Chancellor likes to say that he is protecting science, but research from the Library shows that the science budget is being cut by 15%. If this Government truly believed in putting science at the heart of the innovation economy, they would protect our position as one of the world’s leading science nations. Indeed, a recent report from the Department for Business, Innovation and Skills says that our position is at risk because of this Government’s lack of investment. It is true that yesterday the Government produced a life sciences strategy, but why has it taken them 18 months to produce a plan for one sector? Eighteen months and we still do not have a plan for innovation. That is because this is a “stand on the sidelines” Government, letting companies, industries and whole sectors fail in the absence of action.
Today the shadow Chancellor of the Exchequer said:
“The argument is whether it is better to be borrowing billions more to keep people out of work on benefits or whether action now to get our economy moving will get more people into work paying tax and help to get the deficit down in a fairer way.”
In March, the Chancellor ended his Budget statement —he may remember this—by saying:
“We want the words: ‘Made in Britain’, ‘Created in Britain’, ‘Designed in Britain’ and ‘Invented in Britain’ to drive our nation forward”.—[Official Report, 23 March 2011; Vol. 525, c. 966.]
Wanting is not enough, however. The Government need to act. There are millions up and down the country who want to drive our nation forwards by making and
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building things. Instead, they find themselves chasing far too few jobs with far too many others. There are hundreds and thousands of young people—young men and women—who want to learn the skills to make and build things, but instead are consigned to a life without education or employment. For how long will this Government continue to pursue a bankrupt ideological vision in the face of every economic indicator and so many broken lives? The Chancellor of the Exchequer is capable only of driving our nation forward into year after year of rising unemployment, flat growth and higher borrowing. We ask—we demand—that he change course.
9.50 pm
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey): I do not think anyone doubts the serious economic challenges facing the UK, Europe and the wider world. The serious tone of today’s debate reflects that. So it is important in such a crucial debate that we can agree on the economic and financial figures and forecasts, not least because in the past, Parliament, commentators and the markets have questioned Governments’ forecasts. In the past, Governments jealously guarded control of the forecasts and used that control to tweak, fiddle and fix the figures. As we can read in the previous Chancellor’s memoirs, the pressure to fiddle the figures is never greater than in the tough times. By giving responsibility for forecasts to the Office for Budget Responsibility, this Government have changed all that. The OBR figures are independent; the OBR figures tell it straight; so these figures command respect. I challenge Labour Members to say so now if they do not accept the OBR’s figures.
Mr Geoffrey Robinson (Coventry North West) (Lab): It is not a question of not accepting the integrity of the Office for Budget Responsibility. The question is the reliability of the figures stemming from the credibility of the organisation. Why does it get everything so wrong all the time? Is it not up to the job? Does it have a lack of expertise, or is it just that it is being asked to fix figures that have no meaning in the real world?
Mr Davey: Given that that comes from a former Treasury Minister in a Government who often got their figures wrong, I do not think that the OBR needs to listen to that. It is absolutely clear that the Labour party is taking the OBR’s figures seriously. It is significant that we can at last have a debate without the numbers being the issue—without the spin and the game playing that so debased the House’s deliberations in the past. The Labour party’s acceptance—grudging or otherwise—of our or the OBR’s forecasts presents Labour Members with a problem. Why do they not accept the underlying explanation of the OBR’s forecasts?
This House has heard that the OBR’s forecasts changed not because the Government’s policy has gone wrong, but because of three reasons outside this Government’s control: imported inflation, with higher oil and commodity prices; the huge uncertainty caused by problems in the eurozone; and, finally, the boom and bust that Labour once arrogantly told us they had abolished, which was worse under Labour than anyone had previously thought.
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The Labour party has to face up to this reality, yet the shadow Chancellor did not. This Government have, and have made the difficult choices in doing so.
Our strategy of loose monetary policy and fiscal consolidation, backed with some of the most ambitious supply-side reforms in generations, was not just right when we first announced it after the election; it is right now. Indeed, recent events have given even stronger confirmation that it is right. That is why, despite the changed forecast, our interest rates remain so low while countries all around us have seen their credit rating slashed, downgraded or put on negative watch. The markets have shown their confidence in the UK with the interest on our debt falling to historic lows.
In what was probably the most remarkable part of today’s debate, the shadow Chancellor was astonishingly dismissive of the low interest rates and our achievements. Never mind that Italy and Spain have seen their rates shoot above 6% while ours have fallen towards 2%; never mind the benefit to mortgage holders, businesses and taxpayers of that achievement. The shadow Chancellor seems to believe that the UK is in a liquidity trap—despite the fact that we have a credible central bank, despite the fact that quantitative easing has been judged effective and despite the major credit easing announced in the autumn statement. In the early 1930s, ahead of Keynesian rearmament, a monetary expansion with low rates combined with fiscal consolidation produced a significant recovery. Is that not the lesson from history that the shadow Chancellor simply has not learned?
Of course, we could have opted for another growth policy—some call it plan B—involving unfunded tax cuts, more borrowing and more spending. The details of that are never clear, but the consequences are higher interest rates. [Interruption.] Labour positions itself as the party of high interest rates, although a 1% rise in market interest rates adds £10 billion to mortgage bills—meaning that the average family with a mortgage will pay £1,000 more—and increases business rates by £7 billion and taxpayers’ costs by £21 billion. That would be the price of Labour government. [Interruption.]
I have looked around Europe for Governments or mainstream political parties that have opted for a policy such as plan B, but they are in short supply. Other Governments are now having to address their budget deficits—[Interruption.]
Mr Speaker: Order. Far too many private conversations are taking place in the Chamber. Let us hear the Minister.
Mr Davey: Other Governments, faced with rising interest rates on their debts, are now having to address their budget deficits. Often they are having to cut deeper than us. It is true that our deficit reduction, at 3.7% of GDP over the next four years, is the third highest in the G7. After all, in 2007 our structural deficit was the highest in the G7. Yet Italy is now making much deeper cuts, and France too is planning deeper cuts. Our deficit reduction is of course significantly less than that of Greece, Ireland, Portugal or Spain, so we will not be opting for plan B as suggested by the Labour party.
We heard many excellent speeches from Members in all parts of the House. I particularly commend those of my hon. Friend the Member for Chichester (Mr Tyrie) and of the hon. the Members for Skipton and Ripon (Julian Smith) and for Newton Abbot (Anne Marie
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Morris), all of whom referred to the importance of the supply-side reforms. The hon. Member for Skipton and Ripon mentioned the important employment law reforms which, I believe, will make a big difference to our efforts to return people to work, and the hon. Member for Newton Abbot spoke of the importance of ensuring that regulation was cut for micro-businesses. I can tell the hon. Lady that we are achieving that now, even at European level.
We also heard good speeches on the importance of infrastructure investment from the hon. Members for Folkestone and Hythe (Damian Collins), for Ochil and South Perthshire (Gordon Banks) and for Scunthorpe (Nic Dakin), and from the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling). The significance of the infrastructure plans that we announced in the autumn statement is that they are well advanced, and some are even shovel-ready, so the problems that the shadow Chancellor worried about do not pertain.
This was an important debate. For once, it was not about the figures in the economic forecasts and the Budget questions. Thanks to the innovation of the Office for Budget Responsibility, it focused largely on analysis—although at times the analysis presented by the shadow Chancellor was more theoretical than academic—and it sharpened the differences between the coalition and the Opposition. While the Government are focused on keeping interest rates low, Labour’s priority is to spend and borrow more. While this Government—
Mr Alan Campbell (Tynemouth) (Lab) claimed to move the Closure (Standing Order No. 36).
Mr Speaker: The Question is, That the Question be now put. [Interruption.] I think the Ayes have it. [Interruption.] Order. Hon. Members must calm themselves; it will be injurious to their health otherwise. The Question is, That the Question be now put. [Interruption.] It is simply a case of putting the Question. I will try once more. The Question is, That the Question be now put. I think the Ayes have it.
Question accordingly put, That this House has considered the matter of the economy.
The House divided:
Ayes 79, Noes 213.
[9.59 pm
AYES
Adams, Nigel
Afriyie, Adam
Aldous, Peter
Alexander, rh Danny
Baker, Steve
Baldry, Tony
Baldwin, Harriett
Beith, rh Sir Alan
Blackman, Bob
Bradley, Karen
Bruce, Fiona
Burley, Mr Aidan
Carmichael, rh Mr Alistair
Cash, Mr William
Clark, rh Greg
Coffey, Dr Thérèse
Collins, Damian
Crockart, Mike
Davey, Mr Edward
Davies, David T. C.
(Monmouth)
Davies, Glyn
Davies, Philip
Dorrell, rh Mr Stephen
Dunne, Mr Philip
Ellison, Jane
Ellwood, Mr Tobias
Elphicke, Charlie
Evans, Graham
Farron, Tim
Francois, rh Mr Mark
Fuller, Richard
Gauke, Mr David
George, Andrew
Gilbert, Stephen
Hancock, Matthew
Hands, Greg
Harris, Rebecca
Harvey, Nick
Haselhurst, rh Sir Alan
Heaton-Harris, Chris
Hinds, Damian
Hollingbery, George
Hollobone, Mr Philip
Jackson, Mr Stewart
Javid, Sajid
Jenkin, Mr Bernard
Johnson, Gareth
Jones, Andrew
Knight, rh Mr Greg
Lamb, Norman
Leigh, Mr Edward
Mills, Nigel
Moore, rh Michael
Morris, David
Mosley, Stephen
Mulholland, Greg
Munt, Tessa
Murrison, Dr Andrew
Ollerenshaw, Eric
Osborne, rh Mr George
Percy, Andrew
Perry, Claire
Prisk, Mr Mark
Redwood, rh Mr John
Reid, Mr Alan
Rogerson, Dan
Ruffley, Mr David
Russell, Bob
Rutley, David
Selous, Andrew
Skidmore, Chris
Smith, Miss Chloe
Stanley, rh Sir John
Stevenson, John
Stunell, Andrew
Tyrie, Mr Andrew
Vickers, Martin
Watkinson, Angela
Williams, Stephen
Wright, Simon
Tellers for the Ayes:
James Duddridge and
Mr Shailesh Vara
NOES
Abbott, Ms Diane
Abrahams, Debbie
Ainsworth, rh Mr Bob
Alexander, Heidi
Ali, Rushanara
Allen, Mr Graham
Anderson, Mr David
Austin, Ian
Bailey, Mr Adrian
Bain, Mr William
Balls, rh Ed
Banks, Gordon
Barron, rh Mr Kevin
Beckett, rh Margaret
Begg, Dame Anne
Benn, rh Hilary
Benton, Mr Joe
Berger, Luciana
Betts, Mr Clive
Blackman-Woods, Roberta
Blears, rh Hazel
Blenkinsop, Tom
Blomfield, Paul
Blunkett, rh Mr David
Bradshaw, rh Mr Ben
Brennan, Kevin
Brown, Lyn
Brown, rh Mr Nicholas
Brown, Mr Russell
Buck, Ms Karen
Burnham, rh Andy
Byrne, rh Mr Liam
Campbell, Mr Alan
Campbell, Mr Ronnie
Caton, Martin
Chapman, Mrs Jenny
Clark, Katy
Clarke, rh Mr Tom
Clwyd, rh Ann
Coaker, Vernon
Coffey, Ann
Cooper, Rosie
Cooper, rh Yvette
Corbyn, Jeremy
Crausby, Mr David
Creagh, Mary
Creasy, Stella
Cruddas, Jon
Cryer, John
Cunningham, Alex
Cunningham, Mr Jim
Cunningham, Tony
Curran, Margaret
Dakin, Nic
Danczuk, Simon
Darling, rh Mr Alistair
David, Mr Wayne
De Piero, Gloria
Denham, rh Mr John
Dobbin, Jim
Dobson, rh Frank
Docherty, Thomas
Dodds, rh Mr Nigel
Donohoe, Mr Brian H.
Doran, Mr Frank
Dowd, Jim
Doyle, Gemma
Dromey, Jack
Dugher, Michael
Durkan, Mark
Eagle, Ms Angela
Eagle, Maria
Efford, Clive
Elliott, Julie
Ellman, Mrs Louise
Engel, Natascha
Esterson, Bill
Evans, Chris
Flello, Robert
Flint, rh Caroline
Flynn, Paul
Fovargue, Yvonne
Francis, Dr Hywel
Gapes, Mike
Gilmore, Sheila
Glass, Pat
Glindon, Mrs Mary
Godsiff, Mr Roger
Goggins, rh Paul
Goodman, Helen
Greatrex, Tom
Green, Kate
Greenwood, Lilian
Griffith, Nia
Hamilton, Mr David
Hanson, rh Mr David
Harman, rh Ms Harriet
Havard, Mr Dai
Healey, rh John
Hendrick, Mark
Hermon, Lady
Heyes, David
Hillier, Meg
Hilling, Julie
Hodge, rh Margaret
Hodgson, Mrs Sharon
Hoey, Kate
Hopkins, Kelvin
Hosie, Stewart
Howarth, rh Mr George
Hunt, Tristram
Irranca-Davies, Huw
Jamieson, Cathy
Jarvis, Dan
Johnson, rh Alan
Johnson, Diana
Jones, Graham
Jones, Helen
Jones, Susan Elan
Jowell, rh Tessa
Keeley, Barbara
Kendall, Liz
Khan, rh Sadiq
Lammy, rh Mr David
Lavery, Ian
Lazarowicz, Mark
Leslie, Chris
Lewis, Mr Ivan
Long, Naomi
Love, Mr Andrew
MacNeil, Mr Angus Brendan
Mactaggart, Fiona
Mahmood, Shabana
Marsden, Mr Gordon
McClymont, Gregg
McDonagh, Siobhain
McDonnell, John
McFadden, rh Mr Pat
McGovern, Jim
McGuire, rh Mrs Anne
McKechin, Ann
McKenzie, Mr Iain
McKinnell, Catherine
Meacher, rh Mr Michael
Mearns, Ian
Michael, rh Alun
Miliband, rh David
Miliband, rh Edward
Miller, Andrew
Mitchell, Austin
Moon, Mrs Madeleine
Morden, Jessica
Morrice, Graeme
(Livingston)
Morris, Grahame M.
(Easington)
Mudie, Mr George
Munn, Meg
Murphy, rh Mr Jim
Murphy, rh Paul
Murray, Ian
Nandy, Lisa
Nash, Pamela
O'Donnell, Fiona
Onwurah, Chi
Osborne, Sandra
Owen, Albert
Pearce, Teresa
Perkins, Toby
Pound, Stephen
Raynsford, rh Mr Nick
Reed, Mr Jamie
Reeves, Rachel
Reynolds, Emma
Reynolds, Jonathan
Riordan, Mrs Linda
Ritchie, Ms Margaret
Robertson, John
Robinson, Mr Geoffrey
Rotheram, Steve
Roy, Lindsay
Ruane, Chris
Ruddock, rh Joan
Seabeck, Alison
Shannon, Jim
Sheerman, Mr Barry
Sheridan, Jim
Shuker, Gavin
Skinner, Mr Dennis
Slaughter, Mr Andy
Smith, rh Mr Andrew
Smith, Angela
Smith, Nick
Smith, Owen
Spellar, rh Mr John
Straw, rh Mr Jack
Stuart, Ms Gisela
Tami, Mark
Thomas, Mr Gareth
Timms, rh Stephen
Trickett, Jon
Turner, Karl
Twigg, Stephen
Umunna, Mr Chuka
Vaz, rh Keith
Vaz, Valerie
Whiteford, Dr Eilidh
Whitehead, Dr Alan
Williamson, Chris
Wilson, Sammy
Winnick, Mr David
Winterton, rh Ms Rosie
Wishart, Pete
Wood, Mike
Wright, David
Wright, Mr Iain
Tellers for the Noes:
Phil Wilson and
Jonathan Ashworth
Question accordingly negatived.
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The Comptroller of Her Majesty's Household (Mr Alistair Carmichael): On a point of order, Mr Speaker. I seek your guidance. Is there any means by which tomorrow’s record can record that the sort of meaningless gesture that we have just seen is as good as it gets?
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Mr Speaker: That, I think, was a case of either a point of frustration or, as the right hon. Gentleman has a smiling countenance, him getting his point on the record.
Ed Balls (Morley and Outwood) (Lab/Co-op): On a point of order, Mr Speaker. Given that the motion before the House today was on whether there has been a sufficient debate on the economy, given the failure of plan A, given the £158 billion of extra borrowing, given rising unemployment, and given the view of the House that more time is needed for this debate, could you advise on whether the will of the House could be expressed and there could be more time to debate the very important issues facing this House and the country?
Mr Speaker: I am grateful to the right hon. Gentleman. The allocation of time for parliamentary debates is not a matter for the Chair, but the right hon. Gentleman has recorded his view, as has the Deputy Chief Whip.
Dr Thérèse Coffey (Suffolk Coastal) (Con): Further to that point of order, Mr Speaker. I seek your advice. Is it fair to say that anyone who has spoken in the debate and then voted against the motion is actually misleading the House by saying that it has not considered the motion?
Mr Speaker: The very simple answer to the hon. Lady is that the House has not been misled in any way. Nothing disorderly—[ Interruption. ] Order. I have just made the point, which brooks no contradiction, that the House has not been misled in any way. Nothing disorderly has taken place. The vote is what the vote is; it is not for me to interpret. Other hon. and right hon. Members and people outside the House are free to do so as they wish.
Andrew Miller (Ellesmere Port and Neston) (Lab): On a point of order, Mr Speaker.
Mr Speaker: I hope it is a different and unrelated point of order.
Andrew Miller: Mr Speaker, by a majority of 134, the House has determined that this House has not considered the matter of the economy. Have you heard from the Government Front Bench whether the Government intend to allocate more time to ensure that the House does consider the economy properly?
Business without Debate
delegated legislation
Motion made, and Question put forthwith (Standing Order 118(6)).
That the draft Renewable Transport Fuel Obligations (Amendment) Order 2011, which was laid before this House on 14 November, be approved.—(Greg Hands.)
Mr Speaker: With the leave of the House, motions 4 and 5 will be taken together.
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business of the house
That at the sitting on Tuesday 13 December paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motion in the name of Mr Nigel Dodds as if the day were an Opposition Day; proceedings on the Motion may continue, though opposed, for three hours and shall then lapse if not previously disposed of; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Greg Hands.)
That at the sitting on Wednesday 14 December paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motion in the name of Edward Miliband as if the day were an Opposition Day; proceedings on the Motion may continue, though opposed, for three hours and shall then lapse if not previously disposed of; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Greg Hands.)
delegated legislation (committees)
That the draft Daventry (Electoral Changes) Order 2012, be referred to a Delegated Legislation Committee.—(Greg Hands.)
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Short-life Homes (Lambeth)
Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.
10.17 pm
Kate Hoey (Vauxhall) (Lab) rose— [ Interruption. ]
Mr Speaker: Order. I appeal to hon. and right hon. Members who, for whatever reason, quite unaccountably, are leaving the Chamber to do so quickly and quietly so that the hon. Member for Vauxhall is afforded the same courtesy for her Adjournment debate as they would want for theirs.
Kate Hoey: Thank you very much for those words, Mr Speaker, although I do not think the House will stay full for much longer.
It is with a great deal of sadness that I hold this Adjournment debate, but it is important that the House understands what is happening just over the river in Lambeth in terms of short-life housing disposals. If there were any kind of legislation on wording, using the description “short-life” would almost be in breach of it, because the homes are not short life in the sense that people have lived in them for only a few months. Many of the people I shall refer to will have been in their homes for 30 years or more—most of them for between 15 and 25 years.
There is a history in Lambeth. Short-life housing co-ops were formed in about 1980 to make use of Lambeth council properties that were in too bad a condition to let normally, but that Lambeth could not afford to repair to a lettable standard. Housing co-operatives were given licences to use those properties, usually by a secondary agency, typically a housing association. Initially, short-life meant short-life, six months being the normal period, but owing to Lambeth’s general mismanagement and policies that seemed to change every 10 years, many people have been in their homes for more than 30 years. One resident, Steve Drake, who lives in Nealden street in a co-op, has been there now for 31 years.
Through the mid and late 1980s and into the 1990s many housing co-ops became established as the properties that they managed became more long term. As I said, the phrase “short-life” became a misnomer. There were various schemes involving many properties attracting some limited funding via schemes such as Mini-HAG, which was mini housing association grants administered by the then Housing Corporation. That finished in about 2000. Housing co-ops needed an income to pay for the maintenance of the properties that they managed and the day-to-day running of the co-op, so co-op members paid rent, the amount agreed by members of each individual co-op.
Throughout that 30-year history of housing co-ops, Lambeth has changed its policy at various times, thought about recalling the short-life properties and threatened evictions at various times, but as recently as 1997, which does not seem such a long time ago, Mr Drake got a letter from the then chair of housing, Labour’s housing spokesperson in Lambeth, saying:
“I write to you further to your letter of 29 June 1997, to update you on the situation regarding shortlife housing.
I am pleased to say that at the last Housing Committee meeting at the beginning of September, we succeeded in persuading the other parties to back our proposals for proper negotiations
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with the shortlife housing co-ops. I am sure that … the Lambeth Federation of Housing Co-ops has been in touch with you … and I hope that as a result of this work, it will be possible to come to an agreement which allows the current residents to stay in their homes.”
That was from Tom Franklin, who was then the councillor in charge.
Shortly after that, the council seemed to change its policy. It did not seem to make much difference whether it was a Labour council, a coalition council or a hung council. The policy got into one of those files that seem to sit around local authorities, and for many years the residents had no idea what was happening, but they carried on with their co-ops, some of which were very successful. The Short Stock housing co-op—I have named the person who has been leading that, Steve Drake—has been going extremely well, and is part of the Lambeth Self Help scheme that involved buying Short Stock’s properties with tenants in situ. The plan was that the very large property would be worked on and could be sold, but that everybody would be allowed to stay in their houses and renovate them. The people in Nealden street and in Morat street have stayed on. During that time Lambeth had 100% nomination rights to any vacancies that came up.
Last year Lambeth Self Help was approached by Lambeth council. It submitted a plan, which the council wanted revised, given the change in central Government policy on social housing rents. The plan was resubmitted and rejected, then re-submitted and rejected again. Finally, Lambeth changed its policy in the summer and now wants to sell off all the remaining properties housing families of different sizes—there are roughly 150 of them—and the council wants to do a deal. It originally wanted to do a deal with Hyde Housing. Hyde Housing had come to an arrangement whereby some of those residents would be able to stay in their homes when they were bought.
That fell through because Lambeth did not think it was getting enough money. It has been in negotiation with Notting Hill Housing, which is making clear its opinion that it is doing Lambeth a favour. It will buy the properties and immediately put 80% of them on the open market, leaving 20% as affordable houses in Lambeth. I can understand that, as there is a shortage of capital, although Lambeth has not said that that money will go into housing. It has said that some of the money—we do not know how much—will go towards reducing the shortage of school places in the constituency of my hon. Friend the Member for Streatham (Mr Umunna). If there is money going out of housing to the council, it should come back into Lambeth to be used for housing, as there is a huge waiting list.
In the meantime, the council has said that it wants vacant possession, and every property must be empty by the time the deal goes through with Notting Hill Housing. Notting Hill Housing told me that it might have been prepared to consider taking on some of the residents who were adequately housed and in social need, but Lambeth council said that it wanted to give them with vacant possession, and Notting Hill Housing then said that it would take the properties only with vacant possession.
Lambeth’s legal firm, Devonshires, which must be making a fortune out of this, is now going to the courts in Lambeth or Wandsworth week after week to try to
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get the long-term residents evicted. On almost every occasion the courts have said, “Hang on, we haven’t got all the facts and we want to know more.” A number of cases have been postponed over and over again, costing Lambeth huge amounts of money each time. Many of the properties are in a really good state. There is absolutely no reason why they could not be kept by the council or, if they go to Notting Hill Housing, left with the current residents, who have maintained them to a high standard for over 20 years.
I simply do not understand how a housing association can get away with spending a lot of money buying up properties from a local authority that has tenants who need housing and then planning to sell off 80% of them. They are not trading organisations. I thought that the point of a housing association was to provide housing. I find Notting Hill Housing’s attitude very strange. If it is doing this as a favour to Lambeth, I do not think that it is much of a favour to the people living in the properties. The most recent communication I received from Notting Hill Housing on 30 November indicated that it was
“clear that the properties will be sold to us with vacant possession. That means that the Council will evict all the current residents. We will then refurbish 20 per cent, and will sell up to 80 per cent of them. This is the assumption so that we can give the Council the kind of receipt they require. I know this is distressing for many of the residents who have lived here for many years but I understand the council will rehouse everyone”.
Of course they will get an offer from the council.
I want to give some examples of the people who live in the properties and how they have been involved for many years in the local community, in campaigning organisations and in all the things that are so important to an inner-city area. The Cope family live at 26b Stockwell Park road. Indeed, some hon. Members live around that area, which is probably one of the most expensive in my constituency. Another long-term resident lives next to them, at 24b. The family have been in a short-life residence there since 1987, originally part of the Ekarro housing co-operative, which became a different housing co-op, and finally they ended up with South London Family Housing Association, which was later taken over by Amicus, which was when the licence was withdrawn from the housing association. The family have done all the repairs in the house and managed to prevent the ground-floor flat next door, which was owned by Lambeth council and had been empty for years, being squatted by what I call real squatters—I am not opposed to the squatting of long-term empty houses in some cases. The family have done all the work on that house but are now being told that they must move out, which will probably mean the loss of the last two or three remaining houses in affordable social housing in the middle of one of the most expensive areas.
The Cope family is very much part of the community, and all the residents of the Stockwell Park residents association have signed a letter stating that they want the family to remain. It just does not make common sense, because they will be moved into another Lambeth property that someone on a waiting list might have their eye on, and at the same time the family might be moved out of their community to somewhere many miles away from where their children go to school—and for what purpose? In the end the property will either go back to another tenant, if it happens to be in the 20% that Notting Hill keeps, or it will be sold on the open market.
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Just up the road, literally four houses up, 20 Stockwell Park road was one of those short-life properties. The resident was evicted—taken away, asked to get out—a few years ago; the property was squatted; Lambeth got rid of the squatters and re-did the place with new bathrooms and kitchens in two of the flats; three weeks later it was squatted again; and the squatters in one flat have not been removed. So, the council has spent a lot of money on its own property, allowed it to be squatted by people with no housing need and, at the same time, is trying to get rid of people who do have housing need.
The Clapham North Housing Co-operative is a very active co-op, with a substantial number of properties—19 homes—on which people still pay rent, and Lambeth could have negotiated with it. The negotiations started, stopped and then Lambeth changed its mind, so now, despite saying at the bottom of every letter that it is a co-op council, it is getting rid of co-ops. I speak as someone with many co-ops in the north of my borough and in Bishop’s ward, such as the Coin Street housing co-operatives, and I have seen the value of co-ops and how they link people with their community.
We have some terrible individual cases. Heidi Usher, of 12 Thorpe Park road, has been there for many years. She has been adequately housed, with four children in her home, which she has kept beautifully, having done all the work herself, but she is now being taken to court. Fortunately, yesterday when she went to court, the magistrate said, “This is ridiculous, this needs more than an hour. I need at least a day,” and has deferred the case until 28 February. So, every case is being put back, and that gives the Minister an opportunity to intervene and do something that would give those people hope, because it does not make common sense.
I want to ask the Minister some questions that he might or might not be able to answer. Many of these issues have occurred because of the local authority’s inadequacy and incompetence over many years, for which we can blame many people, but at the end of the day the people who are suffering are the residents, whose fault it is not. The cost of all those legal cases could have adequately brought some of the homes up to the decent homes standard.
On the decent homes standard, when I visit those residents I feel that they are living in a decent home, as they do. It may not tick the box, because the kitchen may not be exactly like the modern kitchen that represents supposedly the decent homes standard, but, if they are happy there and adequately housed, why is the decent homes standard used as a reason to move them out?
Does the Minister share my view on what his Department could do to ensure that families are able to stay in their homes of many years? Surely the Government must have some say in the matter, because Lambeth will get Government housing money, as will Notting Hill Housing association. I should like an assurance that he understands Notting Hill Housing to be conducting the process properly, because I have concerns. about how it is doing so.
Some time ago, Lambeth offered many residents the right to buy, albeit at absolutely open-market prices, but some struggled to do so because it was their home. Will they be considered under the Government’s new policies on the right to buy at less than market value? That could be a solution.
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If Notting Hill Housing buys that group of properties, can the Government do anything to stop it immediately selling off 80% of them? It seems absolutely scandalous that it can spend public money buying properties and immediately sell them.
Can the Government insist on Lambeth council and Notting Hill Housing allowing those sitting tenants and residents who are adequately housed and meet the criteria to remain tenants of the association, rather than being moved somewhere else to move in somebody who has lived in Lambeth for only a couple of years? That would at least be a fair way of looking at the issue.
Does the Minister understand the anger and misery that is being caused by a policy of moving people out of their homes of over 20 years just so that at some time in the future they will be let to new tenants? Given that there are already very well-established co-ops in other parts of the borough, will he encourage Lambeth to incorporate those that are working adequately into some kind of system that would allow those people to stay? Most of all, does the Minister think that a local authority such as Lambeth could show a little more imagination? Of course we know that there is a shortage of money everywhere, but money from the Government has been stopped and we need to get some of that investment back.
Lambeth has improved its housing management. My previous housing Adjournment debate was also about Lambeth, and I have to say that things have improved since then. Lib Peck, who is the cabinet member for housing, has done a sterling job and has bought into the whole idea of this being the only way to protect the investment. However, the council’s policy is misguided and has been built on many years of mismanagement and neglect. As I said, there are many people to blame for this, but they are not the residents.
This is a complicated situation that is somewhat historical and almost unique to Lambeth, but sometimes in such cases, where there is clear injustice, we must find a way to stop it happening. I hope that the Minister will, at the very least, offer to meet me and a group of co-op residents from across the borough so that we can explain how unjust this is, because in such a short time I have not been able to go into much depth. Not a single ordinary person would read through all the dossiers and meet these people and not say at the end of it, “This does not make common sense in 2011.”
10.37 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): I congratulate the hon. Member for Vauxhall (Kate Hoey) on securing this debate and on the diligent work that she has done in support of her constituents and residents. She spoke very eloquently.
This is the first time that the situation that the hon. Lady described has come to my attention. I understand that Lambeth has a proposal that is designed to dispose of properties to help to fund renovation, perhaps of those properties but certainly of other stock in the borough, some of which is being let for short-term tenancies. She described the confusing development of the phrase “short-term” to mean something quite different and gave illustrations of the very long length of tenancies
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that some people have had in these properties. I want to make it clear that I am working from the description that she has given. I do not have first-hand information, and the Department has not been formally notified by Lambeth, or anybody else, of any transactions taking place.
The House will know that the Government fully understand the need for a radical and comprehensive approach to housing. That is why we published our housing strategy for England last week. That strategy covers a broad range of housing topics, including social housing, the reuse of empty housing, and a number of other factors of which I am sure that the hon. Lady is well aware. I want to stress that it is for the London borough of Lambeth to decide its own strategic approach to its housing, and not for Government to comment on it. Speaking in this debate as a member of the Government, I have to stick strictly to that rule. In the privacy of the Members’ coffee room, I might say something else. The reality is that the Government’s job is to provide the strategic approach to housing policy and it is for the London borough of Lambeth to decide its approach to its housing. Of course, the Government want all local authorities to adopt the effective management of assets, including in their disposal of stock and reinvestment.
To go back, perhaps I should say that the basic assumption is that local authorities will plan for holding or redeveloping all their council stock. Clearly, the right to buy entitles tenants to purchase properties. The hon. Lady asked whether the right to buy would apply to these particular tenants. The nub of that issue is that it depends on the nature of their tenancy agreement. If they have a standard council tenancy, which it seems they may not have from her words, they would be entitled to exercise their right to buy. Otherwise, they would not have a statutory right to buy.
As well as tenants buying stock, councils can engage in partial or whole stock transfers, but those require the consent of the Government. There can be no question of wholesale disposals without the need for some consent or approval. Similarly, housing associations registered with the Tenant Services Authority need consent to dispose of their properties. I want to reassure the hon. Lady that in this system, there is a strong degree of control over what happens to social housing stock.
Kate Hoey: Does that mean that if this sale was going through, the Secretary of State would have to agree to it?
Andrew Stunell: I certainly want to cover that point. There is a regime known as general consents, which means that if certain preconditions are met, specific consent over a particular transaction is not required. The key point is that money arising from such disposals must be reinvested in affordable housing or regeneration. That would be within the general consent. Use of the money elsewhere would not be suitable. The meaning of investment in affordable housing is perhaps self-evident, but regeneration has a technical meaning. It means projects or activities on land where the land is
“vacant, unused, underused, ineffectively used, contaminated or derelict”
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“the works or activities are carried out in order to secure that the land or the building will be brought into effective use”.
The hon. Lady has mentioned the possibility—obviously I have only her words to go on—that it was proposed to provide more school places with some of this money. It would be a matter for examination whether that was a regeneration activity. If it was not, the expenditure of the money from this projected sale would require specific consent from the Secretary of State. If it was regeneration, it would come within the general consent. I am happy to write to her to spell that out, because it is a complex area to get across in this debate.
The treatment of properties that are occupied by secure tenants is tightly controlled and it always requires specific consent, unless the disposal is to the occupant. In other words, if it is not a right-to-buy sale, a secure tenant’s property cannot be transferred without specific consent. The nature of the tenancies that these constituents enjoy again depends on the intricacies of the story that the hon. Lady has presented to the House.
The Government do not have any intention of changing those arrangements. Of course we are keen to see run-down properties passed on to landlords who are able to invest in them while retaining them for social tenants. I have had the opportunity to announce to the House a £100 million fund for bringing such empty homes back into social and affordable use for social tenants. Those disposals can be to other bodies or individuals, and they could be covered by the general consents in the situation that I have previously outlined.
No application has been received in respect of the schemes that the hon. Lady has mentioned, and I cannot comment on what decision the Secretary of State might take unless one is submitted and there is a proper investigation into the circumstances by the Secretary of State.
The Government have put significant support into social housing in Lambeth. We have committed £18 million this year and next to bring homes up to a decent standard there, with a further £82 million provisionally allocated for the next two years, making a total of £100 million to be invested in Lambeth to bring its backlog of non-decent homes up to a decent standard. A significant amount of money is available to Lambeth from the Government to improve its homes, and she may want to consider encouraging the council to direct some of those resources to the homes that she has mentioned today.
London has been allocated 27% of the new affordable homes to be provided through the affordable homes programme. Combined with the existing commitments, that means that the target of 50,000 new affordable homes by 2012 set by the Mayor is very likely to be reached. I am not in a position today to say how many of those homes will be built in Lambeth, because that is subject to contracts, not all of which have been sold.
Lambeth currently has 25,000 council homes, and according to the housing strategy statistical appendix it has a waiting list of 23,000. In other words, there is an acute demand for social housing there. It is also true that Lambeth has an above-average number of empty social homes, or voids. In April, 4.1% of its stock was vacant compared with a national average
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of 1.5%. According to the council tax database, Lambeth has 1,676 long-term empty homes, which are those empty for longer than six months.
The hon. Lady might like to consider the fact that given the £100 million that is being provided to Lambeth over the next four years for decent homes, given the
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investment that we are making in new and affordable homes and given Lambeth’s higher than average number of empty homes and long-term empty homes—
10.48 pm
House adjourned without Question put (Standing Order No. 9(7)).