I beg to move,
That this House condemns the housing policies of Her Majesty's Government which have created record levels of homelessness, a dramatic decline in the supply of low cost rented housing, house price inflation and increasing urbanisation of the South East; and therefore calls upon the Government to introduce policies which will end dependence on bed and breakfast accommodation at the earliest possible time and restore a planned programme of house building, repair and renovation, and to introduce a reformed system of housing finance designed to create a genuine and fair choice between renting and buying for people at all levels of income, and an effective system of regulation of development to enhance the rural and urban environment of this country.
One of the hallmarks of a civilised and affluent society is that it finds it possible to provide good, high-standard housing for a large majority of its citizens, if not for all. There is no reason why we in the United Kingdom should not achieve that aim. Housing is vital to the welfare of the nation, for we know that people in poor housing suffer poor health and that some people in inadequate housing achieve less than others in education. We know that families are more likely to disintegrate if housing is inadequate or inappropriate. We know also that the supply of good housing affects the general level of community welfare.
I have pointed out to the Government many times that they will not be able to deal wholly and properly with crime prevention until they deal with homeless young people. Home Office research demonstrates a close and strong link between young people being homeless, drug abuse, alcohol abuse and crime generally. I see the previous Minister with responsibilities for housing wearing his new hat as a Government spokesman on crime prevention. I know that he is out of touch with the problem and he does not understand the nature and extent of crime, especially casual street violence and the rise in alcohol abuse among young people, and crime generally.
The Government have had the blessing of North sea oil to prime the pump of the economy. They have not used it in the way in which we, the Opposition, or many others would have recommended. Instead they have used North sea oil revenues to finance mass unemployment. We have seen the housing crisis growing at an alarming pace.
House price inflation is running at 20 per cent. this year. The Halifax building society states that in the first few months of 1988 the house price inflation rate has been at that level. In real terms, that is greater than the rate which prevailed in the 1970s. The rate in East Anglia is 40 per cent., which is the highest in the country. East Anglia has overtaken both London and the south-east.
The Government would like to raise interest rates to dampen the house boom, but they cannot do so. We saw the trap in which the Chancellor of the Exchequer and the Prime Minister placed themselves, and we are aware also that there is a danger that borrowers will overstretch themselves and that the various financial institutions that are lending them money—many others apart from the building societies and banks—will demand that borrowers repay their debts. If they do not, they will become homeless or get into arrears.
The evidence is clear. In 1985, mortgage defaults were 16,490 for building societies and 570 for local authorities. By 1987, local authorities had been able to reduce the number of defaulters to 490 as a result of good management. In the private sector, the number of mortgage defaults had increased from 16,490 to 22,630. There are now 10,080 families who are homeless because they have defaulted on their mortgages. Many of the people in accommodation for the homeless in places such as the new town of Telford are there because they have not been able to pay their mortgages. The Government blame local authorities for using emergency accommodation. It is significant that the Government are happy to use taxpayers' money to subsidise mortgages, yet somehow when mortgage companies cannot come to an arrangement with those who fall into difficulty—perhaps because of unemployment or ill-health—the ratepayer is expected to provide. There are 64,000 people who are more than six months in arrears on their mortgages, and the numbers are increasing.
This is not the end of the crisis. The repairs bill is frightening. In the public sector, it is estimated to be £19 billion. In the private sector, the repairs bill to maintain housing standards—let alone improve them—is £27·5 billion.
The Government tell us that, although they are willing to subsidise purchase, they must not, in their terms, "over-subsidise" rents. They talk of fair rents and market rents. Between 1979 and 1982, fair rents on unfurnished accommodation increased by 47 per cent. Between 1982 and 1984, they increased by another 18 per cent. and between 1984 and 1986 by another 17 per cent. As everyone recognises, people cannot sensibly afford to choose renting over buying. They are forced into buying, even if they want to rent. A person who cannot afford to get a mortgage has no option but to pay rent, which is often equivalent to mortgage repayments.
Housing benefit has been cut eight times. Despite the £100 million concessions wrung out of the Government, there is still the £500 million cut which was made last April. It is time that we put the meat on the bones of that argument. A 64-year-old pensioner lady suffering from diabetes came to my advice surgery to tell me that she had lost £10·81 per week in housing benefit. Because of the concessions that we wrung out of the Government, that will be reduced—temporarily—to £2·50, unless rates and rents increase, when it will probably be more. The most for which she can hope is that that £2·50 will be held for about a year. After that, she still stands to lose the rest of that money. A 75-year-old couple—the man was disabled in the war—who will lose £7·40 a week heat their home with paraffin. What are we supposed to be doing to such people? How can the Government possibly justify that?
Housing subsidies tell us a lot. Last Thursday, during Environment questions, the Secretary of State made a desperate attempt to evade answering a question about the different forms of subsidy for different tenures. In 1987–88, a local authority tenure attracted a subsidy of £271, compared with £265 in 1981–82. As I pointed out, those figures were misleading. Even on the right hon. Gentleman's figures, that was an increase in subsidy of £6. For the owner-occupier, the increase was £62. The subsidy increased from £514 in 1981–82 to £576 in 1987–88.
But those were not the real figures. These are the real figures. in 1980–81, local authority tenants received subsidy worth £1·393 billion. By 1987–88, that had been cut to its present level of £500 million. That is a cut of nearly two thirds in the subsidy available to public sector tenants—while mortgage income tax relief for owner-occupiers for the same two years started at £2,190 million—about £700 million more in the first instance—and has now rocketed to a massive £5,000 million per annum compared with the £500 million available to local authorities.
It might be instructive now to look at the Government's White Paper issued towards the end of last year. Paragraph 1.10 states:
These problems have often been compounded by indiscriminate subsidies from the rates to hold down rents.
At the moment, many Conservative-controlled local authorities are increasing rents in the public sector to keep the rates down. It is almost as if they were using an owner-occupier's income to keep taxes down. That would be the alternative if the practice was operated in the owner-occupied sector. The White Paper went on to state that that created dependency among those people. If it creates dependency, the Government had better tell us why dependency is not also created when subsidy is given to owner-occupiers. That is why the Government's housing policy is so fundamentally flawed.
A cut in the subsidy to rent and an increase in the subsidy to buy means that the rented sector will dry up. I have explained that to Conservative Members time and again, and to be fair to some of them, including the hon. Member for Eastbourne (Mr. Gow), they acknowledged that I was correct about the figures. In Dorset, the price of the average family house is about £90,000 and a manual labourer will receive £80 to £90 a week. If that house becomes vacant, the owner can sell it and put the money in a building society and he will receive nearly £200 a week in interest. Therefore, it is obvious that the market rent will be close to £200 at the very least. How can we expect that manual worker in Dorset to pay £200 a week rent out of his wages of £80 to £90 a week or to buy that house if it costs £90,000? He cannot do that. That is why the Government's housing policy is fundamentally wrong.
In England in 1975, 55 per cent. of people were owner-occupiers, 29 per cent. were local authority tenants and 16 per cent. were in the private rented sector. The Government have long boasted of their intention since they were elected in 1979—and before that—to increase the supply of private rented accommodation. In 1984—these figures have decreased more since then—63 per cent. were owner-occupiers, and that is an increase of 8 per cent. over the 1975 figure; 26 per cent. were local authority tenants, representing a drop of 3 per cent., and 11 per cent. were in the private rented sector, a drop of 5 per cent
We have told the Government time and time again that the private rented sector will continue to decline unless they do something about housing finance. The Rent Acts are only marginal in that respect. When the Rent Acts were abolished by an equally foolish Conservative Government in 1957, we saw the advent of Rachmanism and a dramatic collapse of the private rented sector. More houses were removed from the private rented sector then at any other time. In 1980, the Government tried to get rid of most of the Rent Acts then in force. As the figures that I have referred to show, there was another decline in the private rented sector.
I predict without any hesitation that unless the Government do something about housing finance, they can remove all the Rent Acts, but they will only increase harassment and the activities of some of the worst aspects of landlordism—although that does not involve all the private landlord sector by any means—and a significant minority of private landlords will behave extremely badly. As there will be no adequate supply, there will be no real choice for people who want to go to the public or private sector. They will not have any choice, because people will be keeping their houses empty for sale.
A survey undertaken by the Department of the Environment showed that only about 2·5 per cent. of properties were kept empty because of the Rent Acts. The vast majority of them were kept empty either for repairs or for sale.
I can pray in aid one newspaper that is becoming increasingly supportive to me. I quote none other than The Daily Telegraph, which on 17 May commented:
A prudential restraint on the ratio of home loans to property values is called for: and notice should be served on mortgage interest tax relief before the credit boom turns, as these things do if unattended, into bust. This way too, the need for higher interest rates would be diminished, and the present tensions between Prime Minister and Chancellor resolved.
I am grateful to The Daily Telegraph for that supportive evidence.
I make again the offer we have made to the Government several times. We are willing to talk about housing finance reform, but any such reform must be fairer both within and between the rented and purchase sectors. It must also be capable of being introduced in a way that does not cause either mortgage or rent payers economic distress. The last mentioned is particularly important, bearing in mind the increasing number of people being put into accommodation for the homeless because they cannot cope with their mortgages due to unemployment or rising interest rates, or because of the dramatic increase in rents in both local authority and private sector housing brought about by the present Government.
The most shameful and telling figure of all relates to homelessness. In 1978, 53,000 people were registered as homeless in Britain. Despite all the assets of North sea oil and the Government's boasts about an improving economy—although if one examines manufacturing industry, one sees no evidence of that; we must take the Government's word for it—the homeless figure has doubled to 100,000. That is the tip of the iceberg, because many homeless do not register. The youngsters sleeping under bridges in cardboard boxes do not register.
No one has made an accurate assessment of the number of homeless. We only know that the figure has dramatically increased. I emphasise again the enormous consequences of that trend for future generations and for safety on our streets. Young homeless on the streets at night will be exploited, and they will drift into drink, drugs and crime. Although some of them may survive that experience, it is inevitable that a larger number of youngsters are falling into such difficulties than need be the case.