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Lord Whitty: My Lords, I can certainly assure my noble friend that all forms of potential recipients of stock transfer--registered social landlords who operate on a co-operative basis--could play an important role in many parts of the country. I would hope therefore that we would look favourably on any proposals from co-operative housing groups to take advantage of these powers.

Lord Jenkin of Roding: My Lords, is the noble Lord aware that one becomes conscious during Statements of this kind that they have been drafted to be read in another place? Does he accept that there is some sense of regret that the noble Lord from the Front Bench in this place has to repeat, to his, I think, embarrassment, some of the egregious statements about the previous government's policy on housing that were included in the Statement? Is it not a fact that between 1979 and 1997 the quality of housing throughout this country rose dramatically? While there were many things still to be done, it is really a travesty to describe the policy of the previous government in the way that his right honourable friend the Deputy Prime Minister described it.

One of the points I welcome in the Statement is that the Government have now gone the whole way to acknowledge the value of the right to buy. One can give that a total welcome. Is that not a very long way away from the experience one had as Secretary of State of dealing with Labour authorities where the councillors had exercised the right to buy and then did their best to prevent any of their tenants getting it and where one had to suspend a council for failing to obey the law about the right to buy? The conversion, although belated, is welcome.

Finally, as I do not think the noble Lord replied to the questions put from the two Front Benches, why was there such a flurry of rumour before the Budget that there would be a shift in VAT as between new building and refurbishment--so much so that most

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people expected a statement in the Budget? The Minister will be aware that it contained no such statement and that there is nothing in the Green Paper to suggest any change of heart. One is looking for the refurbishment of inner cities and for the use and conversion of old buildings as against building new property on greenfield sites. Is it not, therefore, absurd to preserve the distinction of full VAT on refurbishments and no VAT on new buildings, even though that approach may have been right many years ago?

Lord Whitty: My Lords, in his opening remarks the noble Lord overestimated my sensitivity. I have no embarrassment in repeating the words of my right honourable friend in another place. Indeed, I heartily endorse them. The noble Lord is seeing the past through slightly rose-coloured spectacles. I am not sure that we should re-open old battles. There were certainly some improvements in the quality of housing for a large number of people, particularly in the owner-occupied sector, including some benefits from right-to-buy. The Labour Party accepted right-to-buy many years ago when in Opposition, so it is no sudden Pauline conversion for me or for the party, or indeed for my right honourable friend.

In parallel to improvements for many people, there was substantial neglect of housing for the poorest in our community. That included a substantial and clear neglect of social housing over the period referred to. The figures indicate a backlog of £10 billion for repairs and £9 billion for modernisation. As a result, the conditions of many people in social housing have worsened over the past decade or so. That is true also for people in some of the private rented sectors and for some poorer people in older owner-occupied housing. Among my departmental responsibilities, for example, are warm homes and energy efficiency. Some of the most vulnerable people live in private sector housing as well as in significant parts of the social housing sector. So I do not accept the noble Lord's point that the years 1979-97 were a time of unmitigated improvement in the standard of housing in this country. Indeed, the stock probably deteriorated more significantly than it had in previous decades.

As to the noble Lord's point about VAT, there are judgments that the Chancellor has to make. He gave priority to reducing VAT on materials to improve the energy efficiency of homes rather than on any general repairs or refurbishment. That is the judgment he made and it seems to be the right priority in this area. The noble Lord may be more ambitious, but this was never done under the previous regime.

Earl Russell: My Lords, the Minister was perhaps a little more surprised than he need be to find no deep-seated opposition to his proposals from my noble friend Lady Miller. It is hard to find deep-rooted proposals, and very hard to oppose them until you can find them.

Does the Minister agree that in Chapter 11 of the Green Paper, dealing with housing benefit, we hear a debate between different schools within the

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Government--incompatible propositions and aspirations which are no more resolved today than they were at the beginning of this Parliament?

I congratulate the Government on what they have done as regards extended payments for housing benefit. Perhaps I may extend those congratulations to Janet Albeson, of the National Association of Citizens Advice Bureaux, whose research she has put into effect; and I suspect also to the Minister's noble friend Lady Hollis of Heigham. On the other hand, will he Minister note our deep disappointment on these Benches at the weakness of paragraph 11.47 on the single room rent, which says absolutely nothing? Will the Minister pay attention to the findings of the department's own research, with which we on these Benches have no argument? Further, I ask him to note that he will find on these Benches an adamant opposition to moves towards a flat rate of housing benefit, for reasons many of which are well set out in paragraphs 11.68 and 11.69 of the Green Paper. Will the Minister follow his noble friend Lady Hollis of Heigham, who in 1997 committed herself to continuing the principle of the 1986 Act that income support is not intended to meet rent?

All these measures--42 action plans to improve administration, a somewhat paradoxical proposal--look increasingly like the Chinese building up sandbags to stop the flood of the Yangtze. Are the Government looking at the problem of housing benefit the wrong way round? Instead of trying to curb demand for rented property, should they be looking at improving the supply and changing the terms of finance for landlords so that they can provide affordable housing at a rather lower cost? The Minister may say that that is very difficult. I am well aware that no government since the First World War have arrested the decline of the private rented market. But if this Government cannot, there will not be very much left, and we shall be in considerable trouble.

Lord Whitty: My Lords, I accept that a number of the aspects of housing benefit mentioned in the document will require considerable further analysis and discussion and, it is to be hoped, the creation of some consensus on the long-term future of housing benefit. I do not, however, accept that the proposals in the document will make no difference. The noble Earl refers to "42 action plans", but there is a great deal of administrative improvement that can be made in regard to the delivery of housing benefit, the identification of recipients, the matching of those recipients to appropriate properties, the avoidance of fraud and mistakes within the system. All those matters need to be addressed in relation to the present broad basis of housing benefit.

My right honourable friend the Deputy Prime Minister gave an assurance that, whatever we do in relation to housing benefit, pensioners will not be any worse off as a result of any proposals made. That will also, so far as possible, apply to people in other low-income groups who are particularly vulnerable. The noble Earl is nevertheless right that some overall

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assessment of housing benefit, its distortion of the housing market and rent levels and the way in which we effectively subsidise housing by identifying people by income need to be addressed. Before that fundamental approach can be pursued fully, we need some reform of rents, which the Green Paper proposes; we need some reform of housing management, which it includes; and we need reforms in the housing benefit system, proposals for which are also included.

I accept the noble Earl's thanks for the changes that we are making in terms of rolling over benefit in to work. In that context it is appropriate to refer to the activities of my noble friend Lady Hollis in that regard and to the work done by the CAB.

I note the noble Earl's concern about the single room rent. We state in the Green Paper that we are looking at extending the definition of premises to which that approach applies, therefore giving greater freedom of choice to young people. The matter will be addressed through the consultation and beyond.

I also note the noble Earl's view that we could not introduce a flat rate element in to housing benefit over the medium term, and his request for housing benefit to cover effectively the full rent and for there to be no reliance on income support. However, all those issues have to be addressed in the longer-term review of how housing benefit works, whether the money is going to the households which need it and whether we can get over the distorting effect it has on rents and the housing market more generally. I cannot provide answers today. We shall probably not have answers by July. But we are starting the process of that fundamental analysis.

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