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Lord Rooker: My Lords, the noble Lord is brilliantly qualified to speak on behalf of Essex. I was simply making the observation that, on the Front Bench, one tries to take a national view of matters. It seems a little narrow for Members of both Houses to stick to only two counties out of the whole country when the Statement covered the North and the South.

I shall be brief in responding to the points raised by the noble Lord. The plans, projects and vision that exist in relation to the Thames Gateway, for example, will not work if only housing is to be considered. They will not work without new Thames crossings, and they will not work without infrastructure being put in place before work begins on the housing. I absolutely accept what the noble Lord said, and that is axiomatic throughout the rest of the Statement. On two occasions I referred to jobs and economic progress rather than simply housing.

I was not having a go at Essex; I was simply making an observation. Essex and Kent make valuable contributions to growth in this country, particularly through the Thames Gateway and the vision throughout the linear city. People will not have to travel tens of miles from their homes to work. We need jobs and sustainable communities, not only amorphous housing estates; otherwise, we shall make the mistakes of the past.

The Earl of Erroll: My Lords, taking a national view, it seems to me that this is a recipe for more regulators, more regulations and more inspectors. Will anyone be left to create wealth for the Government to tax in order to pay this new army of busybodies?

Lord Rooker: My Lords, absolutely. Regulators can save a great deal of money. The point raised by the

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noble Earl gives me an opportunity to answer a question put by the noble Baroness, Lady Scott, that I neglected to answer earlier. At present, the inspection of housing operates from two arms: the Audit Commission carries out one aspect and the Housing Corporation another. On inspection, we want a single body not three bodies. With the stakeholders concerned we are discussing the best way forward to create a single housing inspection. We do not want more busybodies or quangos. We want a single body where two exist at present.

Baroness Maddock: My Lords, it is a refreshingly frank Statement from the Government about the state of housing in this country. First, why has it taken so long to reach this decision? For two decades on average the household formation has gone ahead of the number of homes built by 31,000. Secondly, can the Minister be more definite about when the Government intend to regulate the private rented sector? They have been promising this for five years. Can we please have a guarantee that we shall not be told in another five years that we shall deal with the issue when we have parliamentary time. Thirdly, will the Government consider selectively suspending the right to buy in some areas? The Government are putting a lot of money into building new social housing. Yet last year 53,000 local authority homes were sold and only 18,000 were built to replace them.

Lord Rooker: My Lords, on the latter point I say to the noble Baroness what the Deputy Prime Minister said in another place. The issue is not just new homes. Sometimes in order to rebuild and reinvigorate communities, particularly in the north where we have the problem of market collapse, the right-to-buy issue pops up just as we are about to demolish, costing the country millions of pounds. In some areas there has been flagrant abuse. These issues are under consideration at present. I can say no more than that.

I regret to say that I have to hide behind the old caveat about the private rented sector and selective licensing. We have a proposal for that. We have a manifesto commitment. The issue is being worked on. I cannot say when it will come before Parliament. I do not know what will be in the Queen's Speech later in the year. We are working on the plans. We are making statements. We are pursuing matters within the department with our advisers so that we are ready and available when the opportunity arises. We are getting on with the preparatory work. As regards waiting for 20 years—you wait a long time and then along comes a Labour government.

Lord Swinfen: My Lords, in the Statement the Minister mentioned affordable housing. What will the Government do about the inflationary practices of mortgage lenders? In the 1960s and early 1970s they would lend a maximum of one and a half times an individual's annual income and twice the combined annual income of a husband and wife. They would lend only a percentage of the value of the property. I understand that today they will lend

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up to four times the annual income; and that they will lend up to 115 per cent, if not more, of the value of the property, which must force up prices. What are the Government doing to curb this inflationary practice?

Lord Rooker: My Lords, we do not control the market in that sense. It is a matter for individual companies. On the other hand, shortages create price increases. We seek to tackle that issue by increasing supply in the right place and, where we have market collapse, reversing the process by putting value back into properties which have negative equity because of wholesale abandonment of hundreds of thousands of dwellings. In some ways, we have the wrong houses in the wrong place and the wrong people in the wrong place. We have jobs in the wrong place. To that extent, we have a mis-matched economy. We seek to tackle that issue.

There is no doubt that mortgage lenders have considered the low interest rates—they are the lowest we have ever had—with low inflation in the long term. Under the pressures of the market and of customers, they are bound to seek to lend for longer periods. I cannot say that that is the key to the inflationary aspect. It may not be so at the affordable end but it is the effect on the market. Underlying the issue is an acute shortage of supply. The probable root cause of the problem is that there are fewer houses than the number of household formations, as the noble Baroness mentioned.

Baroness Billingham: My Lords, I thank the Minister for the Statement. I listened to it with the ears of one who chairs an urban regeneration company in the Midlands. The whole idea of an urban regeneration company is to roll up a series of partnerships—those are the ethics of the board—with communities, county councils, borough councils and partnerships with RDAs.

Twelve new urban regeneration companies have been announced in the past 18 months, Corby being one. One of our aspirations is to build 22,000 new homes. Most of those will be on brownfield sites, a relic of the old steelworks. I am listening carefully. I wonder how the Government will target assistance to urban regeneration companies which clearly have a reverse role when most people talk about housing. We say, "Bring us your people". We want to expand. We want to have a much larger critical mass within the Midlands.

What help will be available for urban regeneration companies such as Corby Urban Regeneration Company? Will the future bring more help in planning and housing? Our responsibilities are not only new build but also to improve the existing housing stock.

Lord Rooker: My Lords, I cannot go into figures today although the noble Baroness has not been slow in lobbying me along with the elected Members for the area in putting the case for Corby. I accept that there is substantial case for new housing and better

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infrastructure and transport arrangements. One of the growth areas is Milton Keynes and the south Midlands which includes the area to which the noble Baroness refers. We shall come forward with firmer proposals once we have talked to all the stakeholders in that area.

Lord Greaves: My Lords, the Minister said that in declining areas in the north of England there is a market collapse: with the wrong houses, the wrong jobs and the wrong people in the wrong places. Those of us who live in such areas do not think that we are the wrong people. I live in a valley where the towns are slowly dying. The population is and has been declining for some time. I refer to towns such as Nelson, Burnley and Accrington.

Part of the purpose of planning is not simply to accept that economic activity and growth exist but to influence them. Have the Government abandoned the old ideas of regional development—that in areas of declining regional activity one of the purposes of government is to resuscitate and encourage economic activity?

In the Statement it is proposed that housing expenditure in future should be in one regional pot. Can the Minister tell us whether the new Pathfinder projects—one is in our valley in north-east Lancashire—will be part of that regional pot or will they be kept separate?

Lord Rooker: My Lords, the Pathfinder projects have been especially delineated. The money has been specially organised for them. We shall get on with it. We need an urban renaissance in the northern towns as the noble Lord said; otherwise they will die. The issue is not just housing. We have to regenerate the whole economy, infrastructure and community. If we do not have sustainable communities, we end up with nothing.

The noble Lord is right. We have to look at the vehicles we use to create this change. The Pathfinder projects are one such vehicle. The money and resources will be put in the Pathfinder projects and we shall get on with it.

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