Housing Association Grants

Clause 45 – in the House of Commons at 6:28 pm on 14th June 1988.

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Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health) 6:28 pm, 14th June 1988

I beg to move amendment No. 377, in page 34, line 6, at end insert 'except that in respect of grants made to charitable housing associations and fully mutual housing co-operatives for the provision of residential accommodation as sole or main residence, the Corporation shall calculate and pay the grant so that it is sufficient to enable and to ensure that the costs that are to be financed by rent shall not exceed 20 per cent. of the average weekly net income as determined by the index established under subsection (6) below.'.

Photo of Mr Paul Dean Mr Paul Dean , Woodspring

With this it will be convenient to discuss the following: Amendment No. 378, in page 34, line 24, at end insert— '(6) Within six months of the commencement of this section, the Housing Corporation shall establish, and thereafter annually update, a regional index (Essential Services Employees Earnings Index) of the average net weekly earnings of employees working in essential services and industries.'.

New clause 38—Rent Recoverable by Social Landlords'(1) Where a tenancy is granted for a dwelling-house by a landlord who is—

  1. (a) a registered housing association, within the meaning of Part I of the Housing Associations Act 1985;
  2. (b) a person who has acquired property under Part IV of this Act; or
  3. (c) a public sector landlord, within the meaning of section 86 of this Act.,
the rent recoverable by the landlord shall be not higher than a maximum rent for the region in which the dwelling-house is located to be determined by the Secretary of State in accordance with this section.(2) For the purposes of this section, the maximum weekly rent recoverable in a region shall be a sum not greater than 20 per cent. of the average net earnings of manual employees in the region.(3) For the purposes of paragraph (2), average net earnings of manual employees shall be calculated by taking into account average gross earnings of full-time employees in manual occupations whose pay is not affected by absence, less—
  1. (a) an amount in respect of income tax equivalent to an amount calculated by applying to those earnings the basic rate of tax after allowing for a deduction for personal relief of the amount specified in section 257(1)(b) of the Income and Corporation Taxes Act 1988; and
  2. (b) an amount in respect of primary Class 1 contributions payable under the Social Security Act 1975 in respect of those earnings.
(4) A maximum recoverable rent determined under this section shall be known as an "affordable rent".'

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

The subject of this important debate is affordable rents. Perhaps it would not be inappropriate to make a preliminary comment about the way in which we have come to it. This is the third day on which the Housing Bill has come back to the House for debate on Report. It is exactly three hours after the normally planned time that these debates should start. I wonder whether there was not some complicity between those who arrange the Commons business to put in two statements that certainly did not appear as if they inevitably had to be made today. I wonder whether it has been done in the hope that, yet again, housing is, hopefully, pushed away from the headlines in tomorrow's newspapers, because the Government would be embarrassed at what the headlines might otherwise be.

This Bill will bring substantial changes to the lives of many people. Not only does it not have enough time in general, but, on the day that it has time, we start the debate in what anyone would define as evening as opposed to afternoon.

It has also astonished those who have followed the progress of the Housing Bill—on both sides of the House and outside—how little attention the press has given to this major and important measure. Perhaps it is because the new language of housing—assured tenancies, assured shorthold tenancies, social landlords and mixed finance —is unfamiliar and sounds technical. However, perhaps there is a more important reason—that in Thatcher's Britain the press, which has to sell its wares, considers that the two thirds of people who own their own homes are perfectly comfortable anyway. It is not so bothered about the one third of the population who rent or the increasing number who have no homes at all.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

The hon. Gentleman has touched on an important point, because a number of us, himself included, have been trying to emphasise housing in the political debate. This morning I was listening, perhaps unusually, to the "Today in Westminister" programme, and I was worried when it was said that the most important business before the House was the two Bills dealing with mining subsidence. The programme then continued to give an extract of a point of order about the Norman Shaw doors being closed, and ignored the rest of the Housing Bill.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

Unusually, I agree with the hon. Gentleman, because I was driving home at the time of "Today in Parliament" and driving in at the time of "Yesterday in Parliament" and I heard both reports. Last night I think the Housing Bill was reported at about six minutes to midnight—the last six minutes of the half-hourly report. As a result of this morning's programme, one almost would not have known that we had debated housing at all yesterday. I find that sad, and an unusually poor reflection on those who edit and report those two programmes, which are normally fair in giving priority to the appropriate matters before the House.

Photo of Mr John Heddle Mr John Heddle , Staffordshire Mid

A moment or two ago the hon. Gentleman suggested that the press had not given due consideration to the Bill in Standing Committee. I remind him that it has been covered comprehensively by The Independent and The Times. The new clauses and amendments that he tabled in Standing Committee were scrutinised carefully by the Municipal Journal. I invite the hon. Gentleman to join me in paying tribute to Mr. Andy Marr of The Independent for his article of about 10 days ago tracing the history right back to speeches prepared by my right hon. and learned Friend, now the Foreign Secretary, in the early 1950s, pleading for decontrol of rents to increase the supply of rented accommodation for those who deservedly demand the right to rent.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

The article by Andrew Marr was an excellent article, tracing the history of a subject which it is easy to see in the short term. Many of the newspapers have written feature articles and specialist articles that have been good. I was not pretending that there had not been that sort of reporting. My anxiety was that the substantive debates had not been reported. For example, today the parliamentary page of The Independent had no report, and The Guardian had two columns, each of one inch and a half, partly because of the time of day that it was printed.

I do not disagree with the hon. Gentleman, and I hope not to offend him, because later I shall refer to him. We had a debate on the subject in Committee, and the hon. Gentleman made a valuable contribution. I should like to suggest a way now to proceed with which he will agree.

The crucial sector of the Bill that we are now debating includes clauses that completely rewrite the rules about rented housing. As that is still the way in which a third of the population occupy their homes, I believe that the entire country would be interested. It is not even certain that those who buy their own houses will always remain in owner-occupied housing.

This debate is about the most important element in that sector. It is about rents and whether they will be affordable for people who must pay them. The rents that people have to pay are neither a new nor a technical concept. I hope that the debate will mean that the threats that the Government's plans pose for many people who rent, and many people who would not be able to afford market rents or anything like them, will be reported well in the press in all parts of England and Wales. They need to be reported, because I believe that pressure will be put on the Government to amend their legislation to guarantee that affordable rented housing continues to be available and that its supply increases rather than decreases.

Last night I went to the celebration of the opening of a second hostel by an organisation called Thames Reach in the London borough of Westminister. That hostel takes from the streets people who would otherwise be homeless. We are talking about two categories of people today. The first category are those who at the moment have no homes at all, but who are certainly not in the category of people who wish to be members of what the Government Front Bench often call "the dependency culture".

I met a Scotsman, aged 62, who had been sleeping rough in London for nine years. Until some years ago he slept in a tent, but somebody burned his tent down. During that time he never claimed benefit. He went to the wholesale markets to get fruit and vegetables. He went to the warehouses to pick up damaged packets of sugar, tea and butter. He wanted to be independent, but he just did not have a home. That man has been in the hostel in north London now for a couple of weeks. He does not sleep on the floor: he sleeps in a bed. He enjoys that. He is beginning to realise the sort of opportunity that he could still have, even though he is 62. That then is the sort of person we are talking about in connection with housing associations, social housing and affordable rents.

We are talking also about many people who do a full day's or week's work—people who earn, but do not earn enough to escape the need for rented housing. They might be employed in the catering industry or the teaching profession; they might be nurses, bus drivers or people who have office jobs. The hon. Member for Hammersmith (Mr. Soley), the hon. Member for Hornchurch (Mr. Squire) and I have met and talked to such people in the context of a report produced about London, but other such people who are also well clear of the dependency culture are to be found in other cities and towns. They, too, need affordable rents, because to contemplate a society in which rent takes 30, 40, 50, 60, 70 or 80 per cent. of their income is unconscionable.

We debated this issue in Committee on 9 February, and some hon. Members who were there then are here today. I do not intend to go over old ground. I argued that there were two principal reasons why affordable rents were needed: first, the security of all the parties involved and, secondly, the respectability of all the parties involved—tenants, housing associations, investors and the Government. The Bill should provide for rents to remain genuinely affordable by housing association and other social housing tenants.

I give credit to the Minister for being sympathetic, but he said that a regime with rent regulations would be more politicised than a regime where public housing association grant levels would be the factor in determining rents. I quibbled with that then, and I quibble with it now. The amount of housing association grant—the contribution by the taxpayer—is as much a political matter decided by a Government as the amount fixed as an affordable rent by Government or local authority. The Minister's argument was profoundly flawed on that and on other issues.

Although the arguments still stand strongly for security and respectability of affordable rents, we must also ask questions about who should bear the risk of providing housing. The danger of the Government's plans is that individual tenants will have to bear the consequences of the financial risks taken by large institutions. We must ask why the wider public, through the relevant Government agency—the Housing Corporation in England and Tai Cymru in Wales—should not bear the risk. Although there is now a fair rent regime and some private finance in the housing association movement, which the Minister so much admires—such as Sutton Hastoe, which has brought in private finance over many years and not just in the last couple of years through the Challenge initiative—and although private finance has responded in the context of a rent restriction, the Government still argue that there should be no limitation on rents other than market levels if investors are to be attracted.

The basic case of principle is that the risks of housing association and all social housing projects should not and must not fall on the tenants, who are the most vulnerable in our society. Instead, they must be carried by housing associations and other social landlords. When their reserves are inadequate because they are only medium or small associations, the Housing Corporation, making use of public reserves, must make additional payments as necessary.

The extent to which housing associations should be expected to bear risk of losses is limited. All housing associations are non-profit-making bodies and, as such, do not have the benefit of making profits in the market place to compensate for bearing the risk of losses. As I made clear in Committee, I accept that it is reasonable of the Government to argue that, as housing associations develop and grow, they can and should work to build up reserves sufficient to enable them to carry some, and in the long run most, of the risks associated with their projects. Therefore, it is common ground that a handful of large housing associations can hear the risk for many projects. For medium-sized associations, risks can often be shared on a percentage basis—as, I understand, the Government envisage.

However, it is crucial that the Government accept that the shared risk system is not appropriate for small or developing housing associations—especially, for example, the ethnic minority associations, whose risk must be 100 per cent. borne by the Housing Corporation as the agency of central Government. In the interests of housing association tenants, most of whom are on low incomes, housing associations must be sufficiently large and well established before dependence on reserves is reasonable.

6.45 pm

I wish now to deal with what is, in some senses, a technical point, but which for the Government is a fundamental point. The minister argued in Committee—as he did in a letter to Richard Best, the director of the National Federation of Housing Associations—that public expenditure consideration controls the way in which financing is organised. It is because of a public sector accounting convention that private loan finance is counted as public expenditure if the Government guarantee to cover loss, the logic being that, if the project went wrong, the public sector would have to bear the whole cost. However, there is no overwhelming case why that convention—and it is only a convention—should always apply when a state agency provides some additional subsidy to cover a cost overrun on a project that makes substantial use of private finance.

If the Government were so minded, the convention could be changed—and it should be changed. Even if the Treasury insisted that it should not be changed, there are other possibilities. For example, the Government, without contributing funds directly, could establish a mutual insurance fund for housing associations and other social landlords, whereby premiums were paid to a private fund that would bear the risks. The whole cost of projects would not then have to count as public expenditure. Housing associations could be required by law to pay premiums to such a fund and the Housing Corporation could take those premiums into account when allocating grant.

There is no fundamental reason of public sector accountancy or expenditure why the Government should not share the risk by, for example, limiting the rents. A maximum limit on rents that ensured that social housing homes continued to be affordable for those for whom they were traditionally provided is essential if tenants are not to hear undue risks and become liable to be priced out of the market.

When the Minister last week made what may become known as the famous Warrington speech, he said: On the principles of rent setting, rents must remain within the reach of those in lower paid employment. Such people are not covered by housing benefit. Their rents will not be paid by the increases in housing benefit, if we really believe that there will be increases—and some of us are sceptical about that. Those people are working, and for many of them the reality will be that, unless there are affordable rents, rents will rise and they will be priced out of the market.

We began a debate in Committee on how affordable rents should be calculated. I want to deal with one of the objections raised by the hon. Member for Mid-Staffordshire (Mr. Heddle) to my arguments. I accept that the present system of fair rents is increasingly widely discredited. It is widely agreed that the way in which rents are set under the fair rent system is shrouded in mystery. The only major study on that is a book, part of which I have read, entitled "Public Control of Privately Rented Housing" by Doling and Davies, which found the system flawed in many ways and inconsistent over time and between different parts of the country. I do not argue that we should retain that system. There should be a more rational system of rent regulation for all lettings in the social rented sector. I advocate that maximum rent levels should be based principally on a measure of average income. Income would be the principal variable, although one could accept other variables, including capital values and maintenance costs.

There is one crucial reason for using a measure of income as the main basis for affordable rents. Under such a system, one would have a guarantee that, where housing costs in a market were very high—for example, in central London, but also in towns and cities elsewhere in the country and, most importantly, in the south—there would still be housing provision for the low-paid service workers who every city and rural area needs. Needless to say, a capital city suffers most severely from this problem. I represent a London constituency and therefore know that area best, but the problem applies equally to the Minister's city, Bristol, and to other towns and cities in England and Wales.

The danger is that market rents would mean that whole areas of a town or city would become no-go areas in housing terms for workers in many occupations. Shortages will become worse, particularly in respect of primary school teachers, transport workers, nurses and other health workers, caterers, local government workers and social workers. In some places, some of those services are already close to breakdown. The effect of the shortage of nurses, which is acute in London, but apparent elsewhere in the country, has been widely publicised.

The Minister and his colleagues will have seen an academic study prepared by University college London and supported by the Confederation of British Industry, which made it clear that the problem of access to rented housing in London is now increasingly severe for both employers and employees. The Campaign for Homes in Central London, which sponsored that study, supported by hon. Members of all parties, made it clear that the nation cannot afford to fail to address that problem.

A regime of maximum rents based on incomes—not all incomes, but incomes in a group of occupations—would have the fundamentally important advantage that, even where house price inflation was rampant, as it is widely now, homes could still be provided for people who need them at rents that they could afford. That is the basic argument behind the amendments and the new clause. We do not make a special case for London, but we are most acutely aware in London of the need for such a regime.

The amendments on the one hand, and the new clause on the other, set out alternative approaches, although the same principle lies behind them. I prefer new clause 38 which, by taking a measure of average net earnings already available in official statistics as its basis, is perhaps simpler and less susceptible to charges of favouring some groups and not others than the approach contained in amendments Nos. 377 and 378 which refer to a number of selected occupations.

I wish to allude here specifically to the points raised in Committee by the hon. Member for Mid-Staffordshire. He quite rightly expressed concern for people on fixed incomes, particularly pensioners. There was a flaw in the argument in favour of average income, as people on fixed incomes are not affected by that. The proposal in new clause 38, based on statistics commonly available region by region and on the average earnings of a group of low-paid workers, meets the fears expressed by the hon. Gentleman. I ask him to consider the proposal sympathetically and acknowledge that, after testing, it is a more credible way of meeting those concerns.

I wish to make a number of points in respect of new clause 38. First, it covers housing associations and housing acquired, under part IV of the Bill, by new landlords from local councils, along with those people who are at present council tenants. It is also deliberately designed to include local authority housing. There is no argument of principle why local authority housing, which is definitely social housing, should be exempt from provisions governing rents.

Secondly, overall average imcomes should not be taken as a basis for affordable rents. In areas such as central London, the average income may be very high, but the people at the bottom of the income scale would be unable to afford such prices. I have taken the wage levels of manual workers as a useful way forward, as the figures are easily available from the new earnings survey.

Thirdly, the precedent for subsection (3) of the new clause is regulation 29 under the Social Security Act 1986, which relates to the new housing benefit regime. It takes net income rather than gross income as the basis for housing benefit calculations, and the wording is taken as closely as possible from the regulation. That wording was passed by a Conservative Government and therefore should be acceptable to them.

Fourthly, the percentage of average manual earnings, region by region, that we have selected, is generally agreed by those people in the housing association movement who have considered the subject in detail as a suitable figure for a maximum rent. In Committee, I mentioned 18 to 20 per cent., but, having considered more closely the rent levels that arise from using variable groups of occupations and measures of income, I agree that 20 per cent, is acceptable. The regime established by the new clause would give an average national maximum rent of about £25 to start with. It provides for regional variations that would take account of regional wage variations. That may not be exactly the right figure, and I accept that there might be slight variations, but there must be a guarantee that rents are affordable; and the new clause shows that it is possible to legislate for such a guarantee for all social housing tenants.

Amendments Nos. 377 and 378 have been proposed by the Campaign for Homes in Central London. That organisation, which suggests an index of selected low-wage occupations as the basis for maximum rent levels, has existed for several years. It is a federation of groups representing communities in Battersea, Covent Garden, Fitzrovia, Hammersmith, Paddington, Pimlico, north Southwark, Somers Town, Spitalfields, Thornhill, Waterloo and the Docklands. Communities have survived in those areas while the land around them has been developed and made them increasingly expensive places in which to live. There are two interesting examples that might make the Government think more clearly about this matter. I ask the Minister to pay particular attention to this point because a great deal more than this debate may turn on it.

In Southwark, as elsewhere, housing association rents already appear to be in line with Government guidelines on affordability. The average Southwark unfurnished rent registered by the rent officer in the first half of last year was £19·83 and, for furnished property, £32·44. The Minister will know that the Southwark housing association group has written to him in strong terms making it clear that the proposed legislation will not address the pressing needs of the people of Southwark for an increase in the supply of affordable rented housing, let alone the essential repair of the public housing stock.

A borough that the Government might look at even more urgently is perhaps the royal borough of Kensington and Chelsea where there is a high proportion of rented accommodation. Owner-occupation is only 28·8 per cent. in the Kensington constituency. Local authority property accounts for only 34·3 per cent. About 37 per cent. of people in Kensington live in other rented accommodation; 11·5 per cent. have no bath; 8·5 per cent. are overcrowded; 13·5 per cent. of the population are unemployed and over 15 per cent. are pensioners. The Minister will have seen letters from the Kensington and Chelsea Housing Association Group, which has written to him, to the hon. Member for Hammersmith and to me, which make clear its concern that in just such a constituency and borough the Government's proposals will mean substantially higher rents, which many in the community will not be able to afford.

7 pm

I could, but I will not, read out representations from the Church housing association, a perfectly reasonable and respectable body; from the Family housing association; and, much more tellingly, recent evidence, about which the Minister will have read, from the Community housing association of NW1. Before I come to that evidence, which shows a major flaw in the Bill, I should like to ask the Minister of State a question raised by one of my constituents who chairs the Tower Hamlets housing associations group and who works for the Victoria Park housing association.

The questions asked by that constituent are questions that all such groups want to ask. What is an affordable rent in inner London? How is it calculated? How does it relate to ability to pay, and to the type and size of accommodation? What evidence does the Minister have that mixed funding schemes for 75 per cent. housing association grant will produce affordable rented housing in inner London? Will the Minister, as a matter of the utmost urgency, instruct his civil servants to allow special and general consents, because the only way in which housing associations can acquire the properties they need is if they can buy them at less than market value?

I am just about to table some questions on how long it takes to get answers to requests for specific and general consents, which will now have to go through the Department of the Environment where they appear either to get lost or to be delayed, in many ways, unconscionably.

The Family Housing Association and the south east area tenants panel makes the point that it is no good thinking that housing benefit will come to the rescue because not only are further cuts planned, but many tenants on housing benefit now have to pay 20 per cent. of their rates and will have to pay 20 per cent. of their poll tax.

Perhaps the most interesting example is that given by the Community housing association of NW1, relating to a fair rent set by the rent officer in Camden of £105 per week for a housing association property in Bloomsbury—[HON. MEMBERS: "Ridiculous".] Yes, as hon. Members say, that is ridiculous. However, it gets more ridiculous, because the top level that the Government permit for housing benefit in Camden is £88 per week; so already the registered fair rents, which will be lower than any rents that will come out of these proposals, are nearly £20 per week more than the maximum that tenants can get back through housing benefit.

The article from Housing Associations Weekly of 10 June is short but telling. It states: Community HA, which owns the 3-bedroom maisonette in Bloomsbury Street, WC1"— I think that is in the constituency of the hon. Member for Holborn and St. Pancras (Mr. Dobson), and I apologise for not alerting him that I would make this point, but I think that he would agree with it without any problem——

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

Yes, his Front-Bench colleague says that he would agree.

The article continues: is making representations to the Department of the Environment about the high levels for fair rent being set in Camden. Chief executive Mike Sweeney said: 'We've had people turning down new flats on the grounds of affordability.' The association works almost exclusively in Camden and Westminster.Housing association tenants, to whom the housing benefit stop levels do not apply, can afford to live in properties such as these if they are unemployed. But there is a major disincentive…to return to work when the rent is so high. Using the Federation's benchmark—that a tenant should not have to pay more than 20 per cent. of his or her disposable income in rent—any tenant moving into the Bloomsbury maisonette would have to return to work on a salary of £24,000 to not lose out. The situation faced by community housing associations in central London, as house prices rise to unprecedented levels, is becoming more common.

Many more examples could be given. The rent officer service has been quoted as saying that in future affordable rents for assured tenancies will be used as comparators to fix fair rents for housing association secured tenants. The Community Housing Association states: Within two years of deregulation of rents it is not mere speculation to predict a massive increase in rent levels which will cause inflation to soar. That is happening against a background of regular cuts in housing benefit, the latest of which was effective from April. A pensioner couple came to see me because their rent doubled last week from £16 to £32 as a result of housing benefit changes and rent increases. Research by New Islington and Hackney Housing Association demonstrates that housing association rent levels are already at the limit of affordability and that single people will be paying a significantly higher proportion of their income in rent, after allowing for housing benefit.

On the same day that we are having this debate, it is galling to read an article in one of our national daily newspapers that in the new parliamentary year there may be substantial changes to take away from local authorities their duty to house the homeless, who will be increasing in number as a result of a combination of these provisions. The single homeless were the subject of a report produced last week which showed that they, too, would like to work but that they could not find any accommodation. They come to London from the north, Scotland, Ireland, the midlands and, increasingly, from the home counties because they believe that there are jobs here, but they end up on the streets, subject to gambling, alcohol or abuse of one kind or another. They want to work. They do not want to be part of the dependency culture. Hon. Members of all parties expressed their concern about that, as I did, in the Centrepoint report which was produced only last week.

I hope that the Minister will consider the serious proposals contained in the amendments and the new clause, because I do not believe that there is a responsible alternative way forward that does not accept that rents have to be held down.

I should like to make two substantive points before I conclude. First, I suppose it would be fair to concede that there could be a third way in which one could achieve affordable rents. The Government might find it more appealing, so I do not want to rule it out and I am being generous in suggesting it. I hope that we can come out of the debate with an agreement that the Government will change their mind, although, as yet, there has been nothing to give ground for great hope.

Maximum rents could be set deliberately somewhat higher than the rent levels that the Government think should operate and on the basis of which the Housing Corporation calculates the level of housing association grant. That would permit social landlords to raise rents in the event of shortfalls, but not beyond an explicitly laid down maximum. There could also be a requirement to reduce rents to the original levels within a period judged adequate to enable the housing association to balance its books after receipt of additional housing association grant where that was a legitimate way forward.

Secondly, in Committee the Minister deployed the following argument against affordable rents: I do not want to import a rent control mechanism because the private sector will then ask what kind of market it is, and if costs rise more than was predicted when the original package was agreed, what freedom does the housing association to which it is lending have if it is forced to raise rents to pay the higher costs? If it has no such freedom, the market will then ask if the Government are to guarantee any deficit. If they were to do so, we would be back to a full public sector system with Treasury control over provision and the rest, and we would still have not performed the trick. Under neither a Conservative nor a Labour Government would such a guaranteed deficit system be other than at the heart of the public sector, so we should not have gained the freedom which we need.If, on the other hand, the Government were not able to pay the deficit, the market would say that it was a horrible, politicised market in which rents were controlled and that if they got the sums wrong the Government would not pay the deficit. The market would not invest in that any more than it would in the fair rent system now, and for the same reasons. … much the best way for those rents to be negotiated is project by project, depending on who the client group is, on the area and on the costs. If we try to set an overall rent figure we shall make it either too lax or too tight. These are the questions, having got to the Minister on his defensive argument.

First, given that private money is already coming into social housing, why does he set so much store by the advice that he has received that the private sector will not be interested if, as now, there is any continuing form of rent limitation? In Committee, he said: the importation of a statutory rent control will scare people off and make them say that there is a wholly politicised market again."—[Official Report, Standing CommitteeG, 9 February 1988; c. 745–46.] He also said that if the hon. Member for Bootle (Mr. Roberts) were the Minister, he, like any Minister, could increase grants to housing associations to keep rents down. As I said before, that would be equally politicised; it would be Government intervention to help provide the housing that is needed in the market.

Publicly subsidised social housing will always be politicised, as it should be, because that is how Governments, by definition political, seek to assist with solutions to a political problem—how to house people given the money that they have got to pay. There is nothing more or less politicised about ensuring that rents are affordable by limiting them than by controlling them out of a grant that the owners of the property get. That is not the issue. The issue, if rents have to go up, is: who should bear the risk? It is clear that it should not be the most vulnerable prospective and actual tenants. If the Government are saying that they are going to opt out of politicising this issue, presumably they are saying that they are going to walk away from the responsibility to provide housing at affordable rents. Our case, and what the amendments and the new clause make abundantly clear, is that it would be perfectly possible for the Government to legislate for affordable rents if they believed that rents should continue to be affordable by tenants of the kind that housing associations and the like have traditionally housed.

The Government say that that is their objective. In Housing Associations Weekly for March we see the headline "Rent objectives the same, says Waldegrave."

In last week's press release that accompanied—I cite it, again—the famous Warrington speech, the Minister referred to the need to provide rents at an affordable level for those who need them, and the Government have tabled their own new clause, new clause 30, which refers to this issue.

The reason for the great concern outside the House —whether in the national or the specialist press, and specifically among increasing numbers of our constituents in England and Wales—is that there is nothing to back up the Minister's words and to prove that he will do what he says. In the consultation paper "Finance for Housing Associations", published last September, the Government said that the aim would be to ensure that housing associations can let at sensible rents that are attuned to the means of their prospective tenants. It sounds good, but from that day to this we have had no definition of the interchangeable words—the Minister admitted that they were interchangeable—"sensible rents" and "affordable rents." We have had no substance at all to back up the words. The amendments seek to write in that there will be rents at affordable levels. For the sake of the one third of our population who are tenants, or likely to be tenants, the Government must move towards a

7.15 pm

Is it not right that at the end of the day it should not be the tenant, particularly the vulnerable tenant, who should have to bear the financial risks of the agency providing the housing? Is it not right that the housing association movement, which the Minister praises and wants to see expand, should continue to be able to provide housing at rents that tenants of the kind that it has traditionally housed can continue to afford? They have been proved to be people on lower average incomes than either private rented sector or council housing sector tenants.

If the answer to those questions is, "Yes, that is right," the Government should be prepared to tell the House tonight that they will legislate for a system of regulation for genuinely affordable rents. Our fear is that they do not agree with these propositions, but agree that, as rents go up, tenants will have to bear the cost. The consequence of the legislation is obviously, as the Government have said, that rents will go up. They will mean that housing associations, social housing and the poorer people in Britain will yet again suffer from the Government's bringing the market place into the home.

The Government have a bad enough record in creating two nations, in putting people on the streets instead of in homes and in meeting the needs of the most needy. The rich get richer and the poor get poorer. This is an opportunity for Ministers to show that they understand that they cannot go on like this is our society and that all people need housing at costs that they can afford.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

The House is greatly obliged to those groups that have advised the hon. Member for Southwark and Bermondsey (Mr. Hughes). He has presented their and his view, which will be widely shared in the House; a view that is not merely based on the commitment to justice, which needs to be restated in the housing field, but also reflects anxiety about the future.

A few months ago I was driven around New York to look at the housing conditions in that city. They are worse than anything that we have, but if the Government do not begin to understand that the needs of the most vulnerable section of the community, to which the hon. Member for Southwark and Bermondsey referred, have to be met and cannot be met by the individuals and groups themselves or on the basis of existing central priorities, the condition of our people, of the national housing stock, of our inner cities and perhaps of towns outside the traditional inner-city areas will be increasingly serious.

The hon. Member for Southwark and Bermondsey referred to cases within London. Some of my hon. Friends and I have grave and growing anxieties about these matters because in recent years the Government have required British Coal to sell off housing estates, which have often been bought by London property companies, speculators who will be seeking a level of return from their housing operations in the provinces of the kind that, as the hon. Gentleman is well aware, they can obtain in parts of central London.

For that reason and a number of others that I shall refer to later, I am very sympathetic to amendments Nos. 377 and 378. I can think of a number of reasons in addition to those directly concerned with housing to justify the House in approving amendment No. 378. I should dearly like to see a regional index of workers engaged in essential industries. I would love to be able to compare the wages of workers engaged in essential industries and services in my own constituency with those of persons engaged in exactly the same industries and services in, say, south-east England. I think that we would find a difference of £80 or £90 a week, and things are, of course, getting worse as the gaps between the richer and the poorer areas widen.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

My hon. Friend makes an important point. In the north, housing was kept reasonably cheap specifically to retain workers in slum housing conditions. Down south, the city slickers who seemed to make a bomb out of the bang that occurred recently have perks that enable them to afford enormous houses. We must not forget that there are still many poor people in the south. Does my hon. Friend agree that the Minister should consider the needs of the poor rather than the greedy people?

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

I have not burdened the House with frequent involvement in debates on housing for quite a few years, although in the first part of my parliamentary career often spoke in housing debates, largely because I had relevant experience in a local authority in south Yorkshire, although not at the level of leadership and seniority which my hon. Friend the Member for Don Valley (Mr. Redmond) has attained. I believed that local authority housing, and housing in the rented sector, was being dealt with properly in areas like mine. In my former urban district, obliterated by a previous Conservative Government's obsessive desire to interfere with local authorities, we had established sound and sensible housing policies which did not require massive subsidies. When I entered the House in 1970, my local authority was building three-bedroom, Parker Morris standard housing, without any subsidy from the rates, which were rented at £4.7s.6d.

In the area that I represent, sensible and experienced local authorities have a much better grasp and a sounder approach to the problem than the Government. They could provide a more effective solution than anything which has emanated from the Government since 1979, when we were in sight of resolving a housing problem which has since become much worse.

I remember saying in a housing debate in the House in 1978 that, if my local authority was allowed to maintain its housing policy for not more than one and a half years, the housing problem in my constituency would be completely resolved. It was diminishing rapidly. Since the Conservative Government started to apply their policies and to operate their dogma, in my area, as in every other part of the country, the position has become much worse.

I want to warn the hon. Member for Southwark and Bermondsey about new clause 38, which is being considered with the two amendments to which he has referred. The hon. Gentlemen seemed to be taking a more kindly and optimistic view of the Government's attitude to the amendments than some of my hon. Friends might take. In new clause 38, the hon. Gentleman may be giving the Government a new instrument of dogmatic oppression. I can see a real temptation for some of the market-oriented Conservative Members to decide that the first nine lines of the new clause are attractive but that the rest should be removed.

If the Government accept the new clause, the sort of people who now attend in the other place may turn up and take out everything after the ninth line. Then the word "affordable" would no longer be relevant. It is a pity that the hon. Gentleman, who is as deeply committed as we are to establishing the principle of an affordable rent, has put the phrase "affordable rent" at the end of the new clause, where it may be more easily butchered by the people who are less concerned about the vulnerable sections of the community.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

I do not pretend that the drafting is perfect. It was chosen for two reasons. The first is that it follows Government precedent, which may make it more appealing. The second reason is that I am advised—and I think it is right—that there should be a definition, which is provided in subsection (2) where there is a reference to 20 per cent. of the average net earnings of manual employees". The case which is made strongly is that, if the Government do not take heed now of that fundamental point, they may have difficulty in resisting in the other place. I understand that there is considerable sympathy in the other place for housing associations and the social housing movement and for the concept that rents must be limited.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

The hon. Gentleman may be being excessively charitable. He mentions that in the other place there may be sympathy with the housing associations, but that, of course, is among those noble Lords who attend regularly. I am not worried about the noble Lords who attend regularly but about the ones who come down only rarely. They are likely to vote for different things than the housing associations to which the hon. Gentleman is attached. If the ruthlessness that I fear is displayed in the other place, the maximum rent for the region in which the dwelling house is located, to be determined by the Secretary of State may lead to an extension and a compounding of the weaknesses of the fair rent system to which the hon. Gentleman referred.

I recall that, about five years ago, I decided to advise a constituent under no circumstances to appeal to the rent tribunal. I have given that advice consistently, because I found that, when constituents appealed against a fair rent registered by the rent officer, in all probability the tribunal fixed a higher rent. So that recourse to what was supposed to be an instrument of justice was not of benefit or value. It merely created a great deal of stress among people who were subject to a vicious and distressing increase in rent.

At the time I made the decision to give such advice to my constituents, I thought it would also be fair to suggest to the Minister that a new approach be adopted to the manning of tribunals. When one examined the composition of rent tribunals, one found that there was excessive influence from those who had a professional and commercial interest in securing higher rents and higher property prices. It seemed absurd, for example, that an estate agent's wife should be on a rent tribunal when her family's income was always improved if rents or property prices increased, because that income depended on the value of the property or the rent with which the tribunal was dealing. In Yorkshire, we found that solicitors engaged in conveyancing and such activities, estate agents or close relatives of those people had more influence on rent tribunals than ordinary people who should have been better represented.

I can see a real risk of the Government accepting new clause 38, knowing that their keenest and cruellest supporters in the other place will be eager to remove everything after the ninth line, so taking out the commitment to the affordable rent which has inspired the comments of the hon. Member for Southwark and Bermondsey. The Government could take a more generous view. They could accept new clause 38 and offer an absolute commitment that they will do their utmost to ensure that those who generally support them will not be encouraged to change the new clause or remove from it anything of value.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

Call in the backwoodsmen.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

Loyalty in the Conservative party is such that if the backwoodsmen came down and were properly guided by those who influence the other place, they might be persuaded not to do so. But for the new clause, we would need a very firm commitment that the guidance would be clear and positive, so that there is no confusion.

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The Government could afford to take that view. After all, as recent statistical analysis has shown, in the last Budget the Government could afford to give £1·9 billion to the richest 1 per cent. of the country, which is twice as much as they gave the poorest half of the population. It is among the poorest half of the population—and it may be as high as one half—that the vulnerability exists to which the hon. Member for Southwark and Bermondsey referred.

The Government may imagine that only 1 or 2 per cent. of the population are vulnerable, but not any more—certainly not in areas such as that which I represent, where the real rate of unemployment may be 40 per cent. Nor is it true in areas such as the Dearne valley in south Yorkshire, whose economy has been devastated and where a huge proportion of the population is dependent on the state.

When I recently asked the Prime Minister about unemployment in that area, I was told that it was falling —but that is not the case. When I wrote to her the other day asking her to ensure that certain steps are taken to give my area some capacity and cause for pride, she replied —my hon. Friends the Members for Barnsley, East (Mr. Patchett) and for Don Valley have seen the letter—that the Government's commitment to my area is so great that they are keeping 17,500 of our young people on training schemes; that was a measure of the sustenance and support that the Government are engendering. How many of those 17,500 young people, who will probably never be able to buy a house, will be placed in future at the mercy of the Rachmans that we have seen creeping into south Yorkshire?

If the Government have any sense of obligation to the nation as a whole, they will ensure that the new clause and the two amendments, together with the principle of affordability, are enshrined in the Bill. It may be even more appropriate for the Government just to return to the situation of a few years ago and consider those local authorities which were able to provide decent housing efficiently, effectively and fairly, and who were in sight of a resolution to their housing problems—until the Government changed the whole emphasis and basis of their approach. The situation has now been reached in which business enterprise tax fiddling is given a higher priority than decent financial management of local authority housing.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

I accept entirely the hon. Gentleman's comments about south Yorkshire. It is also somewhat galling for my constituents, 95 per cent. of whom rent social housing and 25 per cent. of whom are unemployed, to look across the river—and sometimes not even that far—to see properties changing hands at £2·5 million. They know too that the bulk of property built since 1979 has been not homes for rent but second homes for those who are already adequately housed, in this country or abroad. That is the situation in our capital city, and not only in the deprived and neglected regions in the north of Britain and elsewhere. That is the situation within a mile or two of the heart of our nation.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

The hon. Gentleman emphasises a point that I made earlier, when I referred to my visit to New York to see conditions there. The gap between the rich and the poor in New York may be wider than it is here, but that may change as the months go by, as the sort of arrangements introduced in the Budget are continued. That gap is one cause of the unease, disorder and social problems which are increasingly assailing our urban areas. Housing conditions and rent levels lie close to the heart of those problems. The House is right to devote substantial time to the subject this evening and must continue to do so until the Government adopt a more sensible approach.

I referred also to the recent sale of Coal Board houses to companies outside the mining communities. I am extremely fearful of the Bill's effects, and the amendments are relevant to the circumstances I have described. We must ensure that the people living in those houses do not face escalating rent levels, especially at the same time as they are affected by reductions in housing benefit and social services. As the Government have compelled those houses to be sold and must take every ounce of responsibility in that matter, they should accept that the burdens faced by areas such as mine are now acute enough to lead them to view the amendments with greater sympathy.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

My hon. Friend referred to the sale of British Coal houses to financial companies and speculators in London. Perhaps he will remind the House what measures the Government took to stop the exploitation of British Coal tenants and to protect them and to protect the future housing stock for their children.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I advise the hon. Gentleman not to go down that road of questioning.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

I would not dream of doing so. My hon. Friend's concern is very genuine, but it would not be entirely appropriate for me to go down that road except to say that, as the Government created the problem and have increased anxieties to the present level, amendment No. 377 should certainly apply in areas such as ours. The only difficulty is that amendment No. 387 gives rise to some conjecture, anxiety and even astonishment.

In parts of the Yorkshire coalfield, the average net weekly earnings may not be easily obtained, as the majority there may not be employed full time. Some people are working only one and a half days a week, so that their employers may avoid the costs which they would otherwise incur in respect of full-time or substantially part-time employees. I called into a job centre in Rotherham recently and saw that the situation has not changed. One job was advertised at the rate of £1·50 per hour, but for only a very small number of hours. That was done so that the employer would not have to pay a national insurance contribution and could treat that employee as a casual worker. That situation is growing as each month passes.

How can we establish a proper register? I accept that from a statistical and sociological point of view a proper register should be established. However, I wonder whether that can be done reliably in areas of high unemployment. We all know that the Government's assessments and analyses are often grossly inaccurate, and such inaccuracies might disadvantage the areas of highest unemployment. Although I recognise that such a disadvantage exists, there is sufficient merit in amendment No. 378 to provide grounds for our approval. It refers to a guide, although I hope that no Minister, understanding —if they do—what they have done, would claim that the guide was accurate.

A few moments ago I mentioned the Budget and the changes in the use of business enterprise schemes to extend private sector housing entirely as a cost to the taxpayer. I suppose that some schemes have got off the ground already, probably in areas close to that represented by the hon. Member for Southwark and Bermondsey, who may be able to refer to some of them before the debate is over. If the Government can give such a priority and allow an enormous part of the investment in private sector housing to be set against tax, they cannot say that the nation does not have the resources to provide the material support that would be required by amendments Nos. 377 and 378 and new clause 38.

It is no good the Government saying that there would be cost burdens. There may be, but if the Government can allow taxes to be reduced in order to sustain the astonishingly generous schemes available under the business enterprise scheme for rented sector housing, they cannot say that they lack the resources to assist here. If they are to rely increasingly on private sector housing, they will have to make the rewards generous, because the entrepreneurs to whom the Government are committed are so trained and accustomed to go for an early yield, a quick killing and a high profit, rather than for long-term investment, that unless they get the quick killing, high return and substantial growth in capital, they will not play. The Government should understand that they will not play unless their greed is fed. Why on earth should the vulnerable half—perhaps more than half—of Britain's population be plunged into difficulty, enormous anxiety and great financial stress to assist a small proportion of landlords? I doubt whether, in a democracy, anyone would see such a situation again.

The hon. Member for Southwark and Bermondsey touched upon the problem, but I do not think that he perceived the scale of the problem that will now unfold. A few moments ago, he referred to the enormous increase in housing costs. He referred to relatively small houses across the river being sold for millions of pounds. What the hon. Gentleman and some of the people engaged in the worthy groups to which he referred may not have perceived is that the effect of that massive explosion in house prices has not yet been reflected in the rents that apply in parts of London. Houses have been going up in price, sometimes by thousands of pounds as each week passes, and one shudders to think what the rent levels will be in a little while.

Earlier today—it is a pure coincidence that I had this experience—I travelled on the train from Brighton, where I had been addressing the local government conference on the privatisation of the electricity industry—another example of commitment to greed. I could not help overhearing the conversation of a young couple on the train. One said, "My father has been very good to us. He bought my husband and me a house last year and he has let us have it at the price that he paid for it." The lady to whom that person was talking gasped with astonishment and said, "You are very lucky. Your father is a very generous man." She was astounded that the girl's father had let his daughter have the house for the price that he had paid for it the year before. He is obviously a supporter of the Labour movement, or at least espouses the values to which we are attached. He certainly is not a Conservative, or he would not have dreamed of acting in that way. That shows how enormously generous someone can be considered simply because he is prepared to sell a house this year for the price he paid for it last year.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith 7:45 pm, 14th June 1988

One of the quickest ways of becoming rich in the Prime Minister's enterprise Britain is to have bought a house about five or six years ago and a barrel of beer or a crate of wine, and to have drunk oneself to perdition, making about £70 a day in doing so.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

Yes, that is an entirely appropriate example. Conservatives would probably regard such a person as patriotic because they believe in indirect taxation. They would probably suggest that he went out and bought two barrels.

The scale of capital appreciation is vast. I was seeking to make the point that the capital appreciation of recent months has not yet fed through into the rented sector and will exacerbate the problem dramatically.

I had not planned to make a long speech, because my main anxiety was keenly to warn the hon. Member for Southwark and Bermondsey that the Government might take new clause 38 on board. We need to extract from the Minister a promise that, if the Government do that, they will retain it in its entirety rather than chopping it off at the ninth line, bringing the Liberal party into even more disrepute than it is in already. I do not want to be unkind to the hon. Gentleman. We are still a long way from a general election and, if he serves a decent cause, we are entitled to support him. On the other hand, he should understand what he is doing. Unless he insists on proper safeguards from the Minister, he may well have put a tool of oppression, cruelty and unfairness into the Minister's hands.

The Minister enjoys a reasonable reputation on conservation matters. He and I share a profound interest in that. The hon. Gentleman made appropriate noises and went a good way along the conservation road in a direction of which the House should approve. But the fact remains that he will not be doing his reputation any good if he shows himself more sympathetic to Britain's flora and fauna, to which he was, and I believe still is, greatly attached—a sympathy that I endorse enthusiastically—than to half Britain's human race. He will not be assisting his career as much as some of us would like, especially as he is not regarded as one of the more unpleasant Rachmans on the Conservative Benches, and there are plenty of them. If there were not, we would not have the Bill.

Just as I suggested that the hon. Member for Southwark and Bermondsey might be the Government's tool, so the Minister might be the instrument for further unwisdom. To create the sort of society that Conservative Members seem set on creating inevitably means the creation of enormous social problems. It means that young people will leave my constituency and those of my hon. Friends to find employment because they want to work and they cannot find any economic opportunity close to their homes.

Earlier this year, in an Adjournment debate, I spoke about the abuse of young ladies from my constituency and similar areas, who come to London to take up domestic service because there are no employment opportunities for them at home. Such young people may sooner or later wish to live here. They cannot bring with them the capital resources to obtain a decent home, so they will be at the mercy of the BES Rachmans, or the housing associations will be placed under enormous pressure to increase the yield from their rent income—market rents fixed by people who have every possible incentive to see that those rents are as high as possible.

We are already in a jungle. I suggest that the Minister takes careful note of the amendments. If he has any capacity or freedom to do so, he should accept them, and, in doing so, make sure that the Government understand that they are committed to maintaining the principle of affordability, that they are committed to assisting the vulnerable and that they perceive that vulnerability in our society now embraces a majority of the population.

Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Energy and Climate Change)

First, let me deal with one or two comments made by the previous two speakers. The hon. Member for Southwark and Bermondsey (Mr. Hughes) and my hon. Friend the Member for Wentworth (Mr. Hardy) both decried the present system of fair rents. While tribunals may be more likely to put rents up than to lower them when they have been set by the rent assessment officer, at least that system provides something that another part of the Bill will evidently remove—the right of appeal by either the tenant or the owner of a property. The decision of the appeal tribunal is of course binding on both parties. I do not believe that the changed situation will be very healthy for many of my constituents who have been driven by their circumstances to live in privately rented homes rather than owning their own property.

My hon. Friend the Member for Wentworth mentioned house price inflation. It seems strange to me—and to many other hon. Members—that although the Government are always talking about the absence of inflation, house price inflation is considerable. In my constituency the average annual rate of house inflation is well over 15 per cent. I recently had the good fortune to visit East Anglia to speak about the poll tax. Figures announced about six weeks ago showed that the figures over the past quarter reflected an annual increase of some 40 per cent. in the area.

There is no doubt in most people's minds that there will be a dramatic effect on those in the private sector if they are deprived of the rent protection afforded by the current legislation. We can only speculate on the effect on the generations of young people now either at school or just beginning their working career—if, indeed, they are lucky enough to be working—who may not be able to buy a home and settle down. If the Rent Acts are repealed or amended, they may be forced to rent in the private sector.

The hon. Member for Southwark and Bermondsey said that if the Minister could not accept amendments Nos. 377 or 378—I accept what my hon. Friend the Member for Wentworth said: the compiling of a register will involve problems in certain areas, and we are discussing an area problem—he should consider accepting new clause 38. The new clause would help to achieve an affordable rent specific to a region rather than to individual households. It would be much fairer if decisions about the approximate level were made in consultation with another Government Department.

The hon. Member for Southwark and Bermondsey should not despair. The National Federation of Housing Associations suggests that when the Bill has gone through all its stages—and stages seem to have been added each day over the past two or three months——

Photo of Mr Rhodri Morgan Mr Rhodri Morgan , Cardiff West

The Government do not know what they are doing.

Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Energy and Climate Change)

I must say that, judging by the number of informed decisions so far, that seems to be true. If we could listen again to what was being said six months ago about what the Government envisaged, we would certainly say that they did not know what they were doing, because so much has been added on Report. The part that we are debating now, however, has been in the Bill for some time.

The evidence of the National Federation of Housing Associations has plainly fallen on deaf ears. I should like to go into some detail about what the federation has said about affordable rents, because it makes sensible reading. Given its arguments, I should have thought that the Government would want to introduce the concept. The federation says: The concept of an affordable rent applicable to housing association tenants would not necessarily involve an individual assessment. While we have said that we must look at incomes, certainly on a regional level, and perhaps more locally than that, the procedure of individual assessment would be a long-drawn-out one. We must also bear in mind, however, that many people living with "social landlords", whether they are housing association or local authority tenants, are assessed on their ability to pay rent through the housing benefit mechanism—although the Government have changed it considerably over the past two months. There is no doubt that individual assessments must be made in that context.

An affordable rent need not be a rigid ceiling. Obviously it would have to change from region to region if the decision was made on the basis of income. It would mean that the Secretary of State would have to place limits on rents for different projects in different areas, which in some instances would be below the open-market rent level. Some rents would be higher than fair rents, but the limits would ensure that the housing associations could continue to meet the needs that they currently serve.

We should take on board what the federation has said, and also what seems to make good common sense. I take the point made by the hon. Member for Southwark and Bermondsey about the inner cities. It is true that a far higher percentage of homes are rented, in either the public or the private sector, in his constituency than in mine, but my constituency is not without such problems in parts, normally affecting old people living in accommodation provided through housing associations with the support of the local authority. The hon. Gentleman gave a vivid description of a 62-year-old person who, after nine years of living rough in London, was provided with a home over his head that was not made of cardboard or, presumably, canvas. In such circumstances it would obviously be wrong to base an assessment on anything near the average income.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

May I give the hon. Gentleman a figure that I did not put in my speech? It is interesting to note that, among the poorest groups of tenants, of all those in housing association property, 75 per cent. need housing benefit, compared with 60 per cent. of council tenants and 50 per cent. of private tenants. We are talking about the most vulnerable among those who are housed at all, the great majority of whom need additional help to meet their present rent levels, let alone those that will be imposed in future.

Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Energy and Climate Change)

The hon. Gentlaman has made a very good point. I hope that before we conclude this debate the Government will ensure that people in the housing associations concerned with that level of take-up of housing benefit are satisfied that the Bill will not make matters worse. We hope that some words of comfort will be provided by the Minister when he replies to the debate.

The National Federation of Housing Associations believes that there are many advantages in limiting rents to meet the specific market needs of different types of people living in different types of accommodation. Tenants would have greater security knowing that the next rent increase would not raise rents far beyond the level that they could afford. That is very important for many people who are at the lower end of our society who have not made it in the City or elsewhere in the so-called enterprise culture which the Government claim to have created over the past eight years.

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The victims of the enterprise culture are now living in poverty in greater numbers than was the case eight or nine years ago. It is important that we protect those people and tell them with some confidence that it is highly unlikely that in years to come, given that their incomes are likely to be close to or remain at the present level, they will be priced out of the homes that they are renting at the moment. Those people feel very vulnerable because of their level of income. Many families also feel vulnerable, and it would be nothing short of callous to move to a different level of rent which did not provide the protection that they require to provide them with as stable a life as possible in those circumstances.

Another advantage of limiting rents would apply to local authorities. At the moment local authorities are responsible for homeless people in their areas even if those people are moving overnight or in a short period. I do not disagree with the present legislation which makes local authorities responsible for housing people in their boroughs. In accepting that responsibility, local authorities know with some confidence, when nominating homeless families and others in similar circumstances, that housing associations will not turn people away because they cannot afford the rents.

I am sure we are all aware that there has been some conflict in the capital over the treatment of homeless families in different boroughs. I must tell the hon. Member for Southwark and Bermondsey that a council not too far from here which flies the hon. Gentleman's political flag does not have a good record in its treatment of homeless people and its interpretation of current legislation. However, the vast majority of local authorities recognise the problem, especially because of the cut in Government funding, which has affected the building of local authority homes for homeless people throughout Britain.

Given the current legislation and the way in which housing associations are run, the authorities know with some certainty that if they direct a homeless family to a particular housing association it is likely that the family will be able to afford the rent. If that is the case, the local authority will know that that family has been dealt with satisfactorily and that it can move on to the next family requiring accommodation.

I am sure that all right hon. and hon. Members are aware that there has been a phenomenal rise in homelessness recently, not just in London and the major cities, but in rural and suburban areas and in the type of area that I represent. It is important that local authorities are able to direct people to some security.

Another advantage in limiting rents to meet specific market needs is that the Department of the Environment would know that, in return for its payment of grant, an association would always be able to target the subsidy to supply accommodation on the basis of housing need, not on the ability to pay. I am sure the Minister will agree that, no matter how the Government fund housing associations, they will not be able to ignore the plight of the housing associations, through the Housing Corporation, even if they can ignore the plight of the homeless or those who are worried about proposed increases in rents. The Government cannot ignore the fact that the funds must be found from somewhere.

As the hon. Member for Southwark and Bermondsey explained, many people will still need state funding from one source or another—whether that is provided in their basic income or through the Housing Corporation and a housing association—to keep a particular dwelling. The housing associations will need funding to carry out their job to house homeless people.

Another advantage of limiting rents would be that the Department of Health and Social Security would be protected with regard to housing associations. That is relevant because, according to the Bill, housing associations will come under more financial pressure. They are certainly under financial pressure at the moment. I am sure the Minister is aware of the problems in constituencies such as mine, where we have tried to attract housing associations, as they are responsible landlords, to buy houses that have been sold by public bodies such as British Coal.

The DHSS must be protected because housing associations will be under presssure to push up rents to the maximum, which the DHSS will cover through housing benefit payments. That will increase public expenditure. The Goverment may think that they are saving money in one form, but that might not be the case.

The hon. Member for Southwark and Bermondsey referred to a rent that had risen to £110 a week, far in excess of the current level of benefit payment. The private sector does not address itself to such problems. That is a classic example of the difficulty that we face, and the Government must do something now.

There may be no reason why housing association rents in some areas, perhaps in an area such as mine, should be forced up to 50 per cent. of the maximum level of benefit payable, unless the associations were trying to get the maximum amount from the state—because they are under pressure to raise funds—under the housing benefit system. In those circumstances it would be sensible to impose a limit of an affordable rent which recognises incomes on a regional, if not local basis. Such a limit would protect the DHSS. I believe that it is sensible to include an affordable rent clause in the Bill, if not in new clause 38 as envisaged by the hon. Member for Southwark and Bermondsey. That would provide some protection for the public sector.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

My point links directly to what the hon. Gentleman has just said. The Government have argued that there might be protection under housing benefit and, as the hon. Gentleman said, that comes from the public purse—either from DHSS or Department of the Environment moneys. The trouble is that the DHSS and the Chancellor of the Exchequer will never guarantee to continue paying housing benefit to an ever-increasing level. The best argument for affordable rents is that the system may not cost the public sector any more, and it will guarantee that people will be helped by knowing that only a certain proportion of their income would have to go on housing. That would be a much firmer guarantee than the other ways proposed, whereby the public sector would have to pick up the tab at the end of the day.

Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Energy and Climate Change)

I entirely agree with the hon. Gentleman. Only a week ago there were strong rumours that housing benefit might be a thing of the past in years to come. In those circumstances, we definitely need some limit on affordable rents in this legislation.

To limit rents to meet specific market needs would also give some advantage to private investors. They would be less fearful of future Governments imposing rent controls that would jeopardise their investment. Affordable rents could be the sensible price of political consensus, which may turn out to be the essential prerequisite for long-term private investment, and it is important that such investment is long-term.

My hon. Friend the Member for Wentworth rightly highlighted the short-term gain. There has been a lot of speculation recently, particularly in housing, but also in other sectors. That is not necessarily good for private investment in housing in the long term. It may be all right for city speculators who will buy a block of flats, a house or two homes and sell them. They are not too worried about the housing market after they have offloaded their short-term property investment, but long-term private investors are worried about the cost of housing and affordable rents would provide protection for them. Such rents would ensure that the market was more stable than would otherwise be the case, so that they could plan better in the medium and long term for what they believe to be right.

Affordable rents would benefit existing tenants who need to transfer to another of the housing association's properties. That is important for families who leave their homes, perhaps to look for work and for the elderly whose families have got married, and who can therefore think of moving within the same area or community into a small purpose-built flat or bungalow owned by the same housing association. Affordable rents would give them protection if they moved, so they would not be deterred from undertaking what would be a sensible move on their part, and an economic move for the housing association, because by moving into a one-bedroomed flat and releasing a three-bedroomed family home, a local homeless family, or a homeless family who wanted to move into the locality, could move in.

It would be easy to transfer between housing association property because of the protection afforded by affordable rents. This is an eminently sensible proposal and I can see no reason why hon. Members should not want to write it into the legislation to ensure that housing associations could use their property to its full potential to help homeless families, which is what housing associations are about.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

Housing associations can help those in need. I am not sure what this proposal does or how it affects the schemes that are implemented by local authorities which take part in the mobility scheme. In the search for jobs it is important that people can move from the north to the south, and from the south to the north. It is important that associations operate the mobility scheme to ensure that couples or people searching for jobs can find accommodation in those areas. Does my hon. Friend agree that that is vital if associations are to provide a service and fulfil a function?

Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Energy and Climate Change) 8:15 pm, 14th June 1988

My hon. Friend raises a good point. The National Federation of Housing Associations has not spent much time on that, but obviously it will have looked into the matter. I do not have any figures on mobility between the homes of housing associations.

A person of working age, with an income, who wants to move from one region to another would find himself or herself under some pressure if there were major discrepancies in rents because of the limits set by different markets. During this short debate we have had many examples of the effect on rents of the private sector in London. We all know people who, like me, live in a region and have to live in London, if not all the time, at least for part of the week. There is a tremendous difference in the rented sectors of areas, such as south Yorkshire and London.

The idea that without some form of protection people could transfer and that markets would set rents for housing associations scares me. In effect, there would be no mobility. An aged parent could not move nearer children or grandchildren. If a husband or wife died and the only offspring of the surviving spouse was 200 or 300 miles away, he or she would not he able to move nearer to that member of the family. Unless protection is written into the legislation, families will be kept apart, and by families I do not mean man and wife, but, for example, mother and son. They would be kept apart because of the economic disparity across Britain. That has not been assessed properly in the context of this problem.

The most vital reason why affordable rents—or some form of limit—seem eminently sensible relates to the increasing problem of rent arrears and the inevitability of homelessness if tenants are evicted. Affordable rents would be a way of avoiding rent arrears and any subsequent court action that would remove a tenant from his home. Some people may get 20 per cent. more than, or even double, the average earnings of an area. There is little that we could do to protect people who have been silly and have spent the family income and neglected the essential family responsibility of keeping a roof over the family, but where that is not the case it would be negligent of us, as a legislative body, to ignore the possibility of evictions where there is no rent limit. An affordable rents provision in the legislation seems obvious and sensible, and we should consider that in greater detail.

The federation says in its facts sheet: In so far as affordable rents are lower than the market rents which associations might have obtained by letting to those on higher incomes, housing association projects will require more grant-aid. We accept that that is inevitable, especially when 75 per cent. of people living in housing association homes receive some form of state benefit, be that housing benefit or anything else. We must accept that, one way or another, state money will have to be used to keep families in their housing association homes. Such funding is no different from what we now provide for housing or other areas of the economy.

I do not wish to go into the question of regional aid and what is given to the different regional groups that assist in trying to develop regions. I have no doubt that a substantial amount is being spent in the regions. It is not enough, but that money is given to those regions because, on occasions, the Government seem to recognise that there are regional imbalances. I should know about this, because I come from one of the poorer regions. Some regions are a lot poorer than others, and in reality the Bill will change nothing. The Government will have to carry on providing such funds until such time as we can get rid of regional discrepancies. I am sure that many of my hon. Friends and a number of Conservative Members, although they do not often talk about regional imbalances, believe that it is something that we should get behind us, so that people do not have to live in different forms of poverty or wealth.

The federation also states: The global amount of government subsidy to associations is obviously limited, so if rather more is needed for each home, the total programme has to expand more slowly. But housing associations would rather grow at a modest level and continue to house those with the most severe housing needs, than expand more rapidly but fail to help the very people for whom they were founded. That is an important factor. Earlier we discussed poverty in inner-city areas. On occasions such poverty can he found in rural areas, and pockets of need in urban areas also need attention. If we go for a quick return basis and introduce some form of market rent without protection, housing associations will be forced to charge such rents.

I am sure that even the Minister will accept that there is already great pressure on housing associations to try to self-finance by buying out or building in certain areas to help homelessness. In those circumstances, we should not divert housing associations from that work. If housing associations are obliged to follow certain projects as a means of getting more money to enable them to manage their schemes and to deal with problems elsewhere, it will mean that they will be unable to look after an entire area or undertake other necessary projects. It may be that housing associations have projects that offer a low return of income because of the nature of the income received by the people housed by that project. It would be doing a great disservice to housing associations if they were forced to make a choice between projects on the basis of received income.

I have great faith in local authority housing, and I do not like the discrimination that is shown against it, but I should not like to talk down the help that has been provided by the many good projects that have been developed by housing associations in my constituency. I am sure that there are many other right hon. and hon. Members who could say the same of their constituencies.

The federation also points out: In the absence of the Secretary of State setting rent limits for housing association tenancies, financial pressures may compel associations into a higher rent regime. This will move some associations up-market to helping the middle income groups for whom such rents do not present a problem. And paradoxically it will drive other associations down-market, concentrating exclusively on those whose rents are paid in full by the state. But for many people in between—for example, pensioners with occupational pensions or modest capital resources, families in low-paid occupations"— there are at present many such families— this would create immense problems. The people in the middle would suffer immense problems, but they would have no protection. The federation states: Housing associations wish to concentrate on helping those people for whom market forces are not producing the answer. They want to help a mix of households; they do not see their role either as providing welfare housing entirely for the destitute, or becoming like commercial landlords charging market rents. The federation starkly concludes: The Bill enables Parliament to spell out the true position of housing associations as social landlords, not open-market, profit-making bodies. The twin concepts of tenants' rights enshrined in a housing association tenancy, and a ceiling on rent levels for this sector, would achieve the objectives shared by all concerned. When the Minister replies to the debate I hope that he will have some words of encouragement for housing associations, which have worked alongside the homeless for many years. They do good work, not only in inner-city areas, but in rural areas. I hope the Minister will say that housing associations will not be forced into the position of having to leave some sections of the community behind because they are too poor. Presumably the Government would say that care for that sector falls upon the shoulders of local authorities and that they, not housing associations, are responsible for the homeless.

I hope that housing associations will not be forced to go after people with higher incomes on the basis that they represent a reasonable investment because the income received will enable then to carry on and manage particular projects. In those circumstances, it is important that some words of reassurance are given. The Minister has managed to convince his right hon. Friend about many issues relating to tenants but when we discuss later clauses we shall see how far the right hon. Gentleman has been convinced.

I hope the Minister will say that housing associations will be given some protection over affordable rents for different projects in different parts of the country. I hope he will say that housing associations will be protected, just as they protect those who are in need. The Government boast about a tenants' charter, and I hope that the Minister and his right hon. Friend will make it clear that housing association tenants will be afforded the protection that the Government say will be given to others elsewhere.

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

In common with my hon. Friend the Member for Wentworth (Mr. Hardy), I have great sympathy for amendments Nos. 377 and 378. I also share my hon. Friend's reservations about new clause 38 but it has my support. I hope that the hon. Member for Southwark and Bermondsey (Mr. Hughes) and the Minister take note of that.

It is useful to quote the view of the National Federation of Housing Associations on the Bill and what it believes to be the role of housing associations: The Housing Bill will determine the future direction of housing associations. The Bill abolishes for future tenants the current rent controls currently imposed through the rent officer service. And it removes the charter of tenants' rights currently enjoyed by housing association tenants. If the Bill is enacted without amendment, housing associations will become indistinguishable in law from profit-making private landlords. My concern here is new clause 38(1)(b): a person who has acquired property under Part IV of this Act". I am concerned that much of the present local government housing stock, which is confined now to housing associations and other socially acceptable bodies, will find its way to private landlords. The area that I represent has, unfortunately, suffered severely from that in recent times.

8.30 pm

I was privileged to be chairman of the Wakefield metropolitan district council housing committee until 1978. At that time it enjoyed a waiting list time of only a fortnight; rents, including rates, were running at about £16; the council was doing an excellent job. Entirely as a result of Government housing policy since then, many areas in my constituency have been experiencing great difficulty—although it is probably not as bad as in some other places—in housing people. People are having trouble finding the present rents, even though many of them receive rent support.

If many of these local authority tenancies find their way into the private sector, we in my area fear that something similar to the free-for-all that took place with the sale of Coal Board tenancies will occur. I do not want to discuss that experience now, but it is a fact that, if council tenancies find their way into the private sector, private landlords will let out tenancies on short-term contracts at high rents, rates and key money. Such contracts will last for 12 months and landlords will reserve the right to throw the tenants out at the end of 12 months or to increase their rent substantially.

Unfortunately, many people purchased their properties in accordance with Government policy but, during the miners' strike, were unable to maintain their mortgages, were forced to give up their homes and were thrown on the market at the mercy of private landlords. That is the great danger of council properties finding their way into the private sector.

Why do the Government believe it is necessary? If they had continued to give the same support that has always been given to local authorities to maintain their housing stock, there would have been no need for this. Only political dogma can explain it.

I fully accept that many people would like to own their own homes and that many took the chance under this Government's policy, but they have now lost because they cannot maintain their mortgages——

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

It is true that many people have had their homes repossessed and many families have been kicked out on the street. To whom did those people turn for accommodation? Did they turn to the local authorities who are getting hammered, or to the housing associations?

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

They turned to local authorities, but because local authorities such as that in my area could not maintain their building programme and have built few homes for letting since 1979, they could not fill them up with tenants. They have no houses to offer, but are required by law to house the homeless. They then attempt to send the homeless to housing associations and do the best they possibly can for such people. That is ludicrous. If the Bill is enacted and there is a free-for-all, desperate people will be forced to accept short-term contracts of the type I have described. Young married couples with children who have nowhere to lay their heads will put their signatures to documents to obtain somewhere to live, knowing full well that the high rents—the key money and all that goes with it—are beyond their means.

What does this mean in the end? The Rachmans of this world will charge higher rents; their tenants will qualify for added rebate; that is an added charge on Government funds. Short-term contracts would involve higher rents, and because these people's incomes are insufficient to pay those rents, they will qualify for rebates for which the Government will have to foot the bill. That is crazy.

What are affordable rents?

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee, Vice-Chair, Labour Party

May I give my hon. Friend an example of an affordable rent? I have in mind a Minister's residence—a Prime Minister's residence. Apparently, the Prime Minister has an affordable rent. She pays nothing for 10 Downing street or for Chequers. I should like to know why that is not allowed for the millions of people who will be affected by the Bill. Why cannot they be allowed not to pay rent and rates? It seems that the fact that the Prime Minister does not pay has something to do with her taking a cut in her salary—yet other Ministers do pay. It sounds a bit of a twist. So if we are talking about affordable rents, let us think of those, such as the Prime Minister, who get their residences for nothing —

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. This is an intervention. The hon. Gentleman, who is very experienced in these matters, knows that interventions must be short and to the point. The hon. Member for Pontefract and Castleford (Mr. Lofthouse) has the point.

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

I have the point, and I have a great deal of sympathy with it——

Photo of Mr Timothy Devlin Mr Timothy Devlin , Stockton South

May I follow that intervention by pointing out that the hon. Member for Bolsover (Mr. Skinner) has a subsidised flat, which he gets from the National Union of ——

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. That is not relevant to the clause that we are discussing.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee, Vice-Chair, Labour Party

On a point of order, Madam Deputy Speaker. As was explained by Mr. Speaker in a debate a few weeks ago when this matter was raised, I do not live and have never lived in a subsidised flat in London. That was made abundantly clear when Mr. Speaker referred to the fact that I had informed him of the position. I challenge the hon. Member for Stockton, South (Mr. Devlin) or anyone else: say that outside, and I shall ensure that the National Union of Seamen or some other union will get some money out of people who are prepared to make these statements——

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. The hon. Gentleman made his position clear many weeks ago. I should have thought that all hon. Members were perfectly aware of it.

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

I shall treat the remark from the hon. Member for Stockton, South (Mr. Devlin) with the scorn that it deserves.

As I said, if new clause 38(1)(b) is passed, many council tenants may find themselves at the mercy of private landlords.

We cannot overlook the type of private landlord that may be attracted to these properties. It is the type of landlord who used to send letters to Coal Board tenants with a £ l coin in the envelope. Landlords of that type asked if they could inspect the interior of a property. They then made a bid for the property and sold it the next day, making a profit of £3,000 within 24 hours. People like that could be interested in purchasing local authorities properties. The Bill gives no protection against that sort of thing. I hope that the Minister will seriously consider the amendments and new clause 38 and will bear in mind the dangers to council tenants that can arise.

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

This is a useful debate, covering some of the basic issues of this part of the Bill. The hon. Member for Southwark and Bermondsey (Mr. Hughes) may have been a little surprised to find himself leading such a formidable group of Yorkshire Members. That was perhaps not a normal position for the hon. Gentleman. We covered many aspects of the problem, including Coal Board houses, and discussed some other problems that are present in the north as well as in the south. Nobody denies that.

New clause 38, which is at the heart of this group, is wide-ranging. It would apply to every type of landlord who provides or is likely to provide what we have come to call social rented housing. The amendments supplement the clause by requiring the Housing Corporation to pay grant to housing associations at particular levels in order to make the specified rent level effective.

The debate is wide-ranging, and I should like to say something about our future intentions towards housing associations. Many hon. Members have paid tribute to them and I know that that will be welcomed by the housing association movement. There has been rather more unanimity in the debate about the role of housing associations than there sometimes was in Committee. In Committee, one of the Opposition spokesmen did not share the views that have been expressed in this debate.

I am perfectly willing to join in tributes to the housing associations. The whole purpose of this part of the Bill is to try to enable housing associations to meet the needs of their traditional client groups, while being freed to some extent from the inevitable Government constraints of being fully within the public sector when it comes to the national accounts. Its purpose is to get more housing association property that meets the needs of the people. It is to ensure that those involved in the housing association movement from its very beginning—before the time that the House started to take an interest in cheap housing—can continue to meet those needs. Such housing is a major objective and was a major objective of one of my predecessors, the hon. Member for Ealing, Acton (Sir G. Young). That objective was to free housing associations and allow them more flexibility in this area. I am glad that that has now become a Government objective.

The hon. Member for Southwark and Bermondsey spoke about one of the grounds on which we argued against the new clause in Committee. That is the danger —a real danger, although I shall not put too much weight on it—that if we go back to a system of centralised rent control, the market will be bound to look at the area as being firmly back in the public sector.

We would then have a market in which there were considerable Government grants amounting to hundreds of millions a year. Government would fix the rents by some formula such as that in the amendments. I shall not say that we would have lost the chance, because there might still be some schemes that would be financed on that basis, but we would have diminished the chance of attracting the major flows of capital for the provision of social rented housing. That is because the feeling of the markets would be that this had not moved far enough from being the regulated market of the kind that they dislike.

8.45 pm

There is at least one other powerful reason for the change, and to it we attach at least as much, and perhaps more, importance. It is the very necessary changes introduced in, I think, 1974 by the bipartisan Act that established the modern housing association movement. One of the necessary parts of that Act was introduced because abuses had arisen in the old housing association movement. All parties and leading members of the housing association movement realised that the time had come to regulate the whole thing properly and to put it on a modern footing. The noble Lord Goodman and others played an important part in that. That was obviously right and we now have a proper regulatory framework.

The Housing Corporation's powers are widely accepted, and it has very able people. Perhaps inadvertently, we introduced in the process one fundamental change that has not been wholly to the benefit of the housing association movement. It was that we effectively made the housing association movement more or less completely part of the public provision. Virtually all the movement's money, except for the funds of housing associations that had some charitable funds, such as Guinness or Peabody, came from the state.

Although the strength of their different traditions has continued to provide to some extent a pluralistic supply in the social rented sector, they have steadily become, like any organisation that is wholly dependent on state funding, more and more like state bureaucracies. There is nothing wrong with state bureaucracies and they are perfectly necessary. However, the whole purpose of the movement to establish and expand the housing association sector has always been to try to provide an alternative sector for social provision with a variety of different styles and traditions.

Part of the purpose of the Bill is quite explicitly to try to push the housing associations a little further from Government. The key to that must be to say to them that when it comes to setting rents, to balancing the costs and to seeking the necessary efficiency, Government are asking them to take more responsibility and to stand further from Government.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

I am puzzled as to whether the Minister is trying to push the housing associations further away or trying to drown them. Many of them are managing perfectly well on their own funds. Those funds have existed for a long time, and the associations can borrow on the capital. Is the Minister saying that they are not capable of continuing as they are? Why does he not help them to continue as they are, rather than putting added financial burdens on them, which is what he is doing?

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

The hon. Gentleman should not be puzzled. One of the most welcome developments in recent times is that some of the associations with major reserves —I have mentioned two of them—have started to use the basis of those reserves to go out into the market. I welcome that. We say that we should be seeking to help and encourage other associations to behave in exactly the way that the hon. Gentleman applauds. I applaud that too.

The key to this is that the associations will continue to benefit from a high level of public subsidy. We are in the second year of the experimental mixed-funding scheme, which is 75 per cent. in London, 50 per cent. elsewhere and averages about 60 per cent. nationally. We are watching this very closely to see how rent levels turn out. It is better for associations to look to the needs that they know best and for their people with all their skills to find out how they can best meet those needs.

Of course, there is still 100 per cent. funding for the major part of the programme, and there is no need to fear that we shall not watch very closely what happens as the funding arrangements develop. The earnest of that is not to be found in anything that I have said, but in what we have done in moving from 30 per cent. to above 60 per cent. nationally.

The Government remain firmly committed to helping the housing associations to meet their objective. That is why we are providing the Housing Corporation with increased funds for them—to enable them to become more flexible and to restore to them a little of the independence that they have inevitably lost since Government agencies have been setting their rents. I assure hon. Members who made powerful speeches about the need in their areas—some of which I know because I have had the privilege of visiting them—that housing associations can still play, and increasingly play, an important part.

We are resisting the amendments on that basis, and not on the basis of wishing to drown or hinder the housing associations. I know that many people in the housing association movement—many I have met—are nervous about it, but there are also those who regard it as a challenge which they can meet and which will provide greater opportunities if we get the correct proportion of spending. The hon. Member for Southwark and Bermondsey fairly implied that that is so.

The best earnest of that is the figure that I quoted in a debate yesterday of the relatively small part of the approved development programme of the Housing Corporation that has entered into the Challenge funding scheme, which is about £58 million this year. Seven hundred million pounds-worth of applications have been received for that, which is encouraging. I do not believe that the housing associations, which are responsible for those applications, have deserted their roots. They believe that they can do what needs to be done for various schemes on the basis that we propose should be used more widely.

It is on that basis that we oppose the amendments and the new clause. It is not on the basis, as some hon. Members have alleged, that we doubt the purposes or wish to undermine the projects of the housing association movement.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

The Minister gave the game away in his closing remarks, because he acknowledged that some of the housing associations are unhappy about what is happening. What the Government have done uniquely—what the Minister has done uniquely—is to divide the housing association movement. They have also burst wide open any consensus on housing associations that used to exist in the House.

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

The hon. Gentleman used that argument the other day. I can understand that, at a time of fairly radical change, there must be anxieties. However, he will remember that before the Act which we now all support—the measure that we drafted in 1973 and the Labour Government passed in 1974—many doubts and anxieties were expressed. It came later to be generally supported.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

The radical difference is that the Minister knows—he has been told over and over again by people from the housing association movement—that he is pushing the housing associations up market. That invariably will be the result of this action. If he does that, all the words that I used in the House the other day when we were debating the Housing Bill apply. I must say that those housing associations that stay true to their original principles and continue to service the groups that they were set up to serve will receive our support. However, those who move up market and bring in outside private investment to the extent that they are providing an up market service will risk burning the fingers of their investors. That is the essential difference, because that did not have to be said before. Now that message has to go out loud and clear to housing associations and to investors.

Similarly, it has to be said, as I said the other day, that a Labour Government will reintroduce rents set independently of the landlord. I reiterate that it is not just the Labour Government who will do that. I predict with confidence that Conservative Governments will have to do the same, because the entire basis of the philosophy is economic nonsense. There is not and cannot be a free market in housing. At the least, it is a grossly inelastic supply system.

If the Government make a two thirds cut in housing completions in the public sector, cut the number of housing association completions and have only a minor improvement in the private sector rebuild for rent, scarcity must become worse. That must mean inevitably—even to someone who is on chapter 1 of a basic economics book —that rents will go up, that house price inflation and homelessness will continue to rise and, as all those things take place, that political pressure will grow to persuade the Government to do something about it.

If we cannot increase the supply of housing rapidly, Governments will have to step in sooner or later and say, "We will have to control rents." That is the central part of the argument. That is why the Conservative Government's attempt in 1957 to take off the Rent Act failed. They decreased the amount of private rented property available, just as the cut in the Rent Acts in 1980 decreased it. However, now, unlike then, we had housing associations to help us out. The Government have restricted the amount of building, and perhaps, above all, the amount of economic planning ahead that housing associations have been able to do. The constant twists and turns of Government housing finance policy have resulted in local authorities and housing associations not being able to plan ahead. If one cannot plan ahead on one's housing renovation, repair and rebuild programme, one must expect to create the managerial problems that this Government have created for local authorities and housing associations alike.

The amendments tabled by the hon. Member for Southwark and Bermondsey (Mr. Hughes) are on the same lines as amendments originally tabled by us but not selected. However, they are important amendments and we have no hesitation in supporting them. There is no longer a consensus on housing association rents. That is what the Government have destroyed. Rents will not be limited to an affordable level for existing client groups, and that is the problem. The Minister constantly uses the word "affordable", but he never says what it means. We do not know what an affordable rent is supposed to be for anyone. All we know is that the Government talk at one level of affordable rents and at another level of market rents. We have some idea of what market rents will be, and I will return to that in a moment.

In Committee, the Minister said that he could agree wholeheartedly with me that no one wants the housing association movement to move away from doing the job for which it has been funded under both Labour and Conservative Governments. In the same speech in Committee, the Minister went on to say that the House would want to know whether subsidies would produce housing at low market rents. In other words, the Minister recognises that there is a need for housing associations to provide for the lower end of the market, but he cannot say how he will control the rent levels. At the same time he is describing and, indeed, by his actions, making housing associations go up market. They will increasingly be pushed into that corner by the Government's actions. The Minister says that he does not want to do that, so will he explain what he means by "affordable"?

9 pm

Let us pick on what I accept to be one of the most difficult areas in the country—London and the south-east. I looked at some of the newspapers and magazines in west London advertising property in the private market. I could find but one property, a bed-sitting room, available for £38 a week; the average rent was more than £200 a week. If we tried really hard, we might find the odd advertisement with rents in the upper £30, £40 or £50, but the majority would be £70 or £80 for those advertised in the local newspapers and more than £200 for those in estate agents' magazines. With rents for a one or two-bedroomed flat in west London of more than £200 a week, one does not need to be an intellectual Tarzan at economics to work out that if the Government continue to push housing associations into the private sector, their rents will begin to approach those prevailing in that sector. The more that that happens, the greater will become the problem of homelessness because people on low incomes simply cannot pay those rents.

Indeed, the Government's problems in the south-east will grow generally because, once again, people will have to move at least 100 miles out of London to find a housing belt that they can afford. However, at the same time high-cost housing is being built in that belt, which is why the right hon. Member for Henley (Mr. Heseltine) and others complain about development in the south-east. With the average price of a house in the south-east at about £150,000, it means rents of about £300 to £400 a week. Where will the second generation find properties to rent, or are they expected to buy as soon as they leave home? Where will essential workers live? I am referring to teachers, nurses and the people who clean our streets and drive our trains and buses. The more that housing associations are pushed up market, the greater will be the problems for those people.

We want to know whether the rent officer will use clause 109 to rule that a rent is unreasonably expensive. In a speech in August 1987, reflecting on housing policy, the Minister said: For example, people assume that it is right to pay far more housing benefit, or to spend far more on building a council house or a housing association house in a high cost area than in a low cost area. That is, we are saying we will pay to keep poorer people in more expensive areas, even if it means that that recipient of help gets ten times more money or ten times more help in kind than someone in another part of the country. The Minister then basically said that that was wrong. The implication is that we must make someone decide whether a rent is a proper rent for someone to pay and to receive subsidy towards in certain areas.

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

The hon. Gentleman would bore the House if he read out my old speeches. However, if he had properly read that one he would know that I said that such matters should be explicit and costed because they were part of housing policy. To understand the differences in costs is an essential ingredient in understanding the policy.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

The Minister makes a fair point in saying that he is considering the wider issue. However, it would be hard to interpret, in any way other than I did, his comment: I note that we do not think like that in terms of other welfare payments. Presumably, he is saying that that is the wrong way to do it. Indeed, the whole speech implies that that is undesirable. If that is so, what is the purpose of clause 109?

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

We shall debate clause 109 later, but in case anyone reading the report of this debate misinterprets it, I ask that my speech be read in whole because it was not designed for selective quotations.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

I shall quote more of what the Minister said: Usually, 'fairness' means national equality, roughly; in housing it is automatically taken to mean the opposite either because we assume that people have something near a right to live where they want (but only if they are receiving state money), or, perhaps because we are thinking that it would be undesirable for only better off people to live in high cost areas —and we are willing to pay for a social mix. Would it not be interesting if, all of a sudden, the Minister said, "I am struck by the fairness principle; I had better apply it to mortgage income tax relief. We cannot have all those people buying expensive houses in expensive areas and expecting to be subsidised for it. That is unfair." If the Minister really believes that that is unfair, why do not he and the Government take me up on the offer that I have made several times? We are willing to work on a Bill that will reform housing finance in a way that makes it fairer, both between the rented sector and the purchase sector and within the two sectors.

At present, there is a gross distortion and massive unfairness against those people who rent. Increasingly in this country people do not have a right to rent. That is the problem. The Government talk constantly of a right to buy, but they will not talk of a right to rent and, as a consequence, homelessness has doubled. The only right of those homeless people is to a cardboard box under a bridge, yet we call ourselves a civilised society. If I were a Housing Minister in this Government, I would start asking myself what sort of a society we are creating in this country where it is apparently perfectly acceptable to give £5 billion in mortgage income tax relief subsidy and about £500 million to subsidise the public housing sector, while at the same time watching homelessness double. What sort of society does that? What sort of Government are prepared to live with the gross unfairness that they have imposed and are continuing to impose with this Bill?

The hon. Member for Southwark and Bermondsey mentioned Camden. I point out that in Camden a rent officer has set a fair rent of £105 per week in respect of a housing association flat, yet the housing benefit stop for Camden is £88 per week. When the Bill is enacted, the people concerned, because they are members of a housing association, will no longer be able to obtain full housing benefit. What will happen to them? Again, the hon. Member for Southwark and Bermondsey made an important point. A person may at present be in a flat in Camden and pay a rent which is met by housing benefit subsidy, but, when the Bill is enacted, he or she will not receive that same degree of subsidy. That person will suffer a dramatic cut in state subsidy. The Minister may say, "Well, that is all right; I am only making it fairer," but he is in fact imposing the burden on people who rent while turning a blind eye to the increase in subsidy that he is prepared to give to those people who buy.

That is what is so wrong. I have no objection to people being subsidised for buying, but I have every objection if people are not given a relatively equal and fair subsidy for renting. That is what is so fundamentally wrong with this country. We do not subsidise rents as other European and north American countries do and we do not subsidise purchase in the same way as they do. We subsidise purchase far more generously. That is why people move constantly from the rented sector to the purchase sector and that is why there is a continuing decline in the availability of low-cost rented housing in Britain. Everything that the Government are doing in the Bill and in resisting the amendments is designed to make that worse.

What is the Government's policy on high-cost areas? The Minister does not appear to like me quoting from his speech; he appears to think that it is unfair.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

The Minister now appears to like me quoting from his speech, but I presume that he is prepared to stand up and tell us what policy the Government have for high-cost rent areas. As is inevitably happening in Camden, will they remove benefits so that people have to give up their flats and move out? Will they insist that some people do not receive the benefit that they received before because they live in unreasonably expensive areas? What will they do?

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

I do not want to prolong a full debate, but the hon. Gentleman deserves an answer. As he knows, the Bill deals with that problem because the housing benefit stop is a temporary system which will be replaced by the commitment that we have made and by clause 106, now clause 109, which states that a market rent—not something that is a distortion of the market rent, but a market rent—will be paid by housing benefit.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

That is where we come to the "Catch 22" and that is why we distrust the Government so much. We keep hearing them say, "We are going to increase housing benefit," but they have cut it eight times since 1979 and the evidence in the leaked documents from Downing street is that they will cut it again. The problem for the Government is that sooner or later—to be fair to the Minister of State, I think that he understands this although I am not sure that the Secretary of State does—they will not only have to increase housing benefit, they will have to do something radical about the way in which it is structured because, even if one doubled, trebled or quadrupled housing benefit overnight, that would still not help many people because of the way in which the tapers work.

Unless the Government can come up with a more sensible form of housing finance reform, they will be trapped. They can say to the country, "Do not worry; we will increase housing benefit," and those people who are in the know will say, "Hang on a minute; they have cut it eight times already," and those who are not in the know will say, "They will have to do that by a large amount to make it manageable." In early April, many people, who suddenly had their benefits cut, realised that that was happening to the extent of £10 or £20 per week—not by small amounts. When the Government and the Minister for Social Security and the Disabled did an about-turn on that after pressure had been put on them, they realised that they had hurt far more people far more deeply than they had thought.

If the process goes through, we need to know whether people on low incomes will be able to stay in some areas. The Minister knows that the Campaign for Homes in Central London, supported by the hon. Member for Southwark and Bermondsey, myself and the Minister's hon. Friend the Member for Hornchurch (Mr. Squire), has put to him in letters and on a visit that I was unable to attend, that the problem in London is so acute that unless the Government do something dramatic to increase the supply of low-cost rented accommodation, that shortage will continue to have a dramatic effect on London's economy because it is no longer possible to find the low-cost accommodation that is necessary if one is in a low-income job. It is fine if one already has accommodation, but, if one is second generation and is about to leave home, one does not get anything. Similarly, if one is trying to move to London to find work, one does not get anything.

I visited Reading some months ago to look at some of the properties that were being offered to people who were coming from the north to work around that area. The accommodation offered was appalling, and at a high rent. If we ask where such people will live we discover more of the hidden nightmares of the Government's housing policy. Some large building companies, for example, are encouraging their employees to sleep on site because that provides the company with night watchmen as well as enabling those people who have travelled down for the working week to have somewhere warm and dry to sleep at night—usually in one of the portakabins. When we see that that is happening in one of the world's richest countries, we ask, "What on earth are we doing?", but the Government drive on with all the blind stupidity that they can muster to plough through a system that is almost consciously designed to make the situation worse.

We want to know how the Government are going to change housing benefit. If the Minister says, "We have given a pledge to increase housing benefit," as I said earlier, that begs the second part of the question: what are the Government going to do about the tapers? Will the tapers be reformed and revised so that they are made more effective and people do not get the sharp cut-off that they do at the moment? Is that what the Government are talking about? If so, when are we going to hear about it? Will it be in the form of yet more legislation on the hoof with provisions being presented to us suddenly as though they have just been dreamt up in one of the Minister's back rooms late at night with the thought, "We will shove this in the Housing Bill when it is going through Parliament so that we can dodge the Committee system. We do not need to bother with all that because we have a big enough majority to get it through."? Is that really what the Government will do?

I turn now to the effects of the provisions on some housing association tenants. I take as an example a family —a couple with two children under the age of 11, living in a newly built flat in Cambridgeshire, with a net household income, including child benefit, of £151·59p a week. If housing association grant is limited to 65 per cent. of scheme cost, the weekly rent required will be £46·61—about one third of that figure. Is that supposed to be an affordable rent? Is the Minister saying that what he means by an affordable rent is one third of a family's income? Or are we talking about 20 per cent. perhaps? Is that affordable?

9.15 pm

A single nurse aged 31 living in a one-bedroom modernised flat in Islington has a net income after tax of £117·31. If the housing association grant is limited to 75 per cent. of scheme cost, the weekly rent required will be £48·15—about 40 per cent. The Minister will probably remember—he was not present, needless to say, but he probably picked some of it up from the media—that I gave a press conference a month or so ago when the Government were giving their increase to the nurses. I demonstrated that with market rents a nurse in west London would be worse off financially by a significant sum —I cannot remember the exact figure now, but it was over £10 a week—simply on the basis of market rent, even taking into account the recent rise. So market rents, and presumably affordable rents, on the housing association basis, will leave nurses worse off in many cases than they were before. So much for that theory.

Pensioners are devastated by what has happened recently. The housing benefit cuts were cruel and vengeful. I remember at my advice night a 75-year-old couple—he was war-disabled—telling me that they had lost £7.51, I think it was. They were heating their house by paraffin. He was one of the people who talked to me about a land fit for heroes. When one hears things like that, one wonders what sort of a society the Government are creating.

A pensioner couple aged 68 and 66 living in a one-bedroom flat in a new sheltered housing scheme in Cardiff have a net household income, including the state pension, the husband's occupational pension and the wife's part-time earnings, of £130·48. If the housing association grant is limited to 40 per cent. of scheme cost, the weekly rent required will be £47·39.

We have three examples taken from the southern area of Britain—Wales, Cambridgeshire and London—that demonstrate that if the Government plough on in their mindless way it will mean that people will be expected to spend between one third and one half of their income on rent. That will be the normal pattern of affordability for many areas of Britain.

If we suddenly turned the situation round and treated those who were purchasing their homes in the same way —expecting them to bear that burden throughout the period during which they were paying the mortgage—there would be uproar in this country. Sadly, it is because people in rented accommodation, particularly private tenants, have a less effective voice in British politics than those who purchase that the Government have been able to get away with ignoring them.

This goes back to what the hon. Member for Southwark and Bermondsey said when he opened this debate, about the lack of interest in some areas. I would be the first to concede that, as the hon. Member for Mid-Staffordshire (Mr. Heddle) said, The Independent, The Guardian and one or two other newspapers have done good work on housing issues, but the vast majority of the British press have not shown any interest at all in the Housing Bill, and they are thus ignoring a very large section of the community who are being devastated by this Government.

One of the most important concepts that the Government have argued—the Minister put it first in his opening remarks—is that of attracting private money into housing associations. I have made it clear on a number of occasions that I am not fussed about housing associations taking private money. That is fine. However, if they are pushed so far up market that they are unable to provide for the groups which they were set up to provide for, the Minister, as I have said on a number of occasions, will have busted wide open any consensus on housing in this country, because he will have put in the front line some of the most vulnerable in society. He has ignored the fact that the desperate need at the moment is for good, low-cost, rented and purchased accommodation. It is not available for the vast majority.

The Government say that they will encourage private investment. If private investment results in housing associations going so far up market that they cease to provide for the low-income groups for which they were set up to provide, they cannot expect to be bailed out by a future Labour Government. They cannot expect to be bailed out when rents set independently of the landlord are reintroduced by a Conservative Government or by a Labour Government, as will inevitably happen, for the reasons which I have outlined. They will get their fingers burnt.

If genuine money is invested in low-cost, rented accommodation, that will be good and I will support it. If building societies are interested, that is fine, too. What gives the game away is the Government's move in the Budget to invent the business expansion scheme. What do we find? We find Rachmanism paid for by the taxpayer. Even Conservative Back Benchers are worried that that is wide open for abuse. I raise that point because it is relevant to the crisis that the Government have created by cutting back so dramatically on the provision of public housing, including housing provided by housing associations, and by failing to increase supply in the private rented sector. Indeed, they have actually cut back the private rented sector by 500,000 homes since 1980. By doing all this the Government have produced a crisis which they can only address by short-term crisis measures, of which the business expansion scheme is one.

I predict that we will have other measures. I fear that the Government are still trying to avoid their responsibility to face the fact that, as long as they subsidise the purchase sector and fail to subsidise the rented sector, they will continue to drive people into purchase, even when they want to rent, and they will continue to dry up the rented sector, public or private. As a result, the housing crisis will continue to get out of control. At first the position will only be noticeable when we walk along the streets at night and see the homeless begging or sleeping rough, or when we see people queueing up for council housing.

The Government try to kid everybody that council housing is unpopular, but people want to get out of the private sector into housing association and council accommodation. That is what is happening, despite the Government's constant attacks on local authorities and on housing associations which have made it continuously difficult for them to provide the quality of management which should be expected in any rented section, public or private.

The position will continue to get worse. People who were not previously affected are now suffering the long-term consequences of house price inflation. There is a link running through the housing problems. As I indicated earlier, as housing finance is more and more distorted, it is not just homelessness that goes up and the supply of low-cost rented accommodation that goes down, but house price inflation goes up, too. Several of my hon. Friends have raised that point. The three things are so interwoven that they demonstrate almost beyond any need for me to spell it out that the Government have no housing policy. Their policy is a shambles, a mess and a racket.

To his credit, in Committee, the Minister tried to pick up some of the bits for his right hon. Friend the Secretary of State for the Environment. Then he trotted out other bits and pieces which were an offensive act against the House. He did that in a way that showed the desperation which he feels about the needs of housing. Sadly, the problem will not go away. Whichever Government are in power in a couple of years' time, they will have to pick up the bits of this wretched mess, and, by God, it is a mess. We will support the amendment proposed by the hon. Member for Southwark and Bermondsey.

Photo of Mrs Alice Mahon Mrs Alice Mahon , Halifax

I make no apology for bombarding the Minister with arguments that he has already heard from hon. Members, including my hon. Friend the Member for Hammersmith (Mr. Soley). The Minister is part of a Government whose actions have led to one of the worst housing crises since the war, and he should be made to listen to the problems that his Government have created. I see the Secretary of State for the Environment hiding away in the corner of the Government Front Bench, but I am glad that he has come to listen.

The Minister has stated on many occasions that it is not his intention to force housing associations up market. He says that rents will be affordable, and many hon. Members have asked him what he considers to be "affordable", but we still do not know. I shall listen with interest for any indication of what "affordable" really means. The Minister has also said that housing associations will be able to accommodate the kind of people for whom they now provide accommodation, but there are already problems. I refer to a problem affecting the Anchor housing association in my own area. It is a well-known and well-respected housing association, with a good reputation. It has near my constituency office in Halifax a lovely sheltered development, which is a housing with care scheme.

Housing associations are very good at caring for special groups of people—not least the elderly. The development to which I have referred cares for the very frail elderly, for whom it provides an ideal way of living. Care is there, but the independence of the individual remains, which is something that we all want to see. It offers 48 units, but it is not an institutionalised development and is the very best example of housing association accommodation.

That development is in trouble. Some weeks ago its management invited me to look around and meet the tenants there. They are very comfortable, happy and well cared for. They have a community room and everything that we would wish for those who are in their twilight years and finding it difficult to sustain an independent life alone. The scheme is running at a deficit. Its total annual expenditure is £355,189, but its income from tenants totals £324,630, leaving an annual deficit of more than £30,000. The deficit is currently running at £150 per week. That is happening because housing benefit no longer covers its costs.

That is just one example of the problems facing us. What on earth will happen to similar schemes in the future? The Minister cannot just sit there with his eyes closed, and with the Secretary of State nodding off in the corner of the Front Bench.

Photo of Kevin Barron Kevin Barron Shadow Spokesperson (Energy and Climate Change)

It is difficult to tell whether he is awake, even when he is standing.

Photo of Mrs Alice Mahon Mrs Alice Mahon , Halifax

I agree with my hon. Friend.

I recognise that the problems in Halifax are probably nothing compared with those faced by my hon. Friends with constituencies in parts of London where there is a huge problem of homelessness, which destroys the assurances which have been given. We see the truth and the reality through the eyes of our hon. Friends representing constituencies there.

The Minister has given no assurances about the housing benefit stop. At present the housing benefit stop does not apply to housing association rent, so housing associations can let property to a tenant on full housing benefit, without which no one in low-paid work could afford it. What will happen to that property and others like it when the Bill is enacted? Will the rent officer, in his new role under clause 109, deem it acceptable for housing benefit or unreasonably expensive? Will the existing tenant be forced to move and the flat let to someone who can afford a rent of over £100 a week? What will happen to those who have formed themselves into a community? Will they be moved to places according to their different levels of income? They have no security, and great anxiety must be building up in those communities.

9.30 pm

Do the Government accept that people on low incomes have a right to live in certain areas? Will there be ghetto areas in which people with a certain level of income can live? Will people be moved out just to tidy a place up? The Government have not told us whether we shall have that kind of dehumanising policy.

I hope that the Minister and the Secretary of State, who is now sitting in an upright position, will think again. They are inflicting this terrible Bill on vulnerable groups of people. It is not too late. I am sure that the Minister has had many wrangles with the Secretary of State who, having led a sheltered and privileged life himself, is renowned for his stubbornness and inability to understand how ordinary people live. I hope that the Minister will think about what he is doing and what the Bill will inflict upon people. It is not too late to retract.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

I shall not be too long, but I have sat through all the debate and I want to comment on one or two aspects of amendments Nos. 377 and 378 and new clause 38. I support the amendments and the new clause but I have certain reservations, some of which have already been expressed. The amendments and the new clause are obviously far superior to what is already in the Bill.

The hon. Member for Southwark and Bermondsey (Mr. Hughes) referred to the famous Warrington speech. I have not read that, but if it is anything like the Bill, I do not wish to. The hon. Gentleman looked for a little compassion on the Conservative Benches, but I do not think that he found any. He referred to the Bill being gobbledegook, like most Government publications. When I was a member of the old Doncaster metropolitan council, we spent a considerable time devising a rent rebate form that would be easy for tenants to understand so as to ensure that they claimed the maximum rent rebate.

The Bill is designed to take away many rights that the private tenant and the council tenant have previously enjoyed. Since 1979, the Government's main thrust has been against the council tenant, and they are now coming the old soft shoe shuffle, trying to get the housing associations to take up the slack that they have created. However, the two cannot be divorced in the two amendments and the new clause and the Government attack on housing. Council rents have a direct link with housing association rents. One can give many examples of where housing associations have linked their rents to council rents. They have always been on the high side in councils, but that is to be expected.

What never ceases to amuse me is that Ministers, from the Prime Minister down, have launched a massive attack on private and council tenants. I do not think that one of them has ever been a tenant. They lack experience of what tenants are looking for. I wonder whether the Minister would be in a position to give funds to a housing association that wanted to build accommodation in a sweet village not too far away where the farmer is having some difficulty over a planning application for housing.

I believe that it was in the mid-1960s that the question of fair rents arose——

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee, Vice-Chair, Labour Party

The fair rent idea began in about the late 1960s. It became the germ of an idea under that Tory wet, the right hon. Member for Old Bexley and Sidcup (Mr. Heath)—who was very Right-wing at the time—accompanied by the present Prime Minister. They introduced the Housing Finance Act 1972 in a blaze of glory. Many authorities refused to implement it, including Clay Cross, right to the bitter end.

It is interesting to note that although 11 members of Clay Cross council were bankrupted and surcharged, the Housing Finance Act suffered a severe rebuff in the 1974 general election and the legislation was not reintroduced thereafter. The fair rent principle, however, was continued in the sense that assessment officers were included in legislation for both private and public rents.

If my hon. Friend is going back to the 1960s, he can talk only in terms of the private sector, which was dealt with by rent assessment committees. But we may discuss that later.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

I am grateful to my hon. Friend. But I would argue that it was in 1967 and 1968 that people such as Percy Riley—who is now dead—and Owen Briscoe led the tenants' associations' fight against the higher rents that the Coal Board was trying to impose. To some extent British Coal as landlord can be likened to housing associations. I am certainly not critical of the excellent standards that housing associations provide, but it would be possible to be very critical of British Coal—or the National Coal Board, as it then was—for the conditions that it provided for tenants.

My hon. Friend the Member for Bolsover (Mr. Skinner) remembers Clay Cross. In my area in Doncaster there is a place called Conisbrough, which fought like hell.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

The housing chairman of the time ended up as chief whip on Doncaster council. The qualities that he showed on Conisbrough district council made him vice-chairman and then chairman of housing in Doncaster. Unfortunately, the old lad is dead now, but the Minister ought to go and meet him at the appropriate time. Of course, that would not be possible, because Alf went upstairs, and the Minister will obviously go downstairs!

I want to refer to Doncaster council because there is a direct link between the housing associations and public council tenants. One of the problems that housing associations have to face involves the greater demand placed on them as a direct result of Government policies to stop local authorities building houses. In 1974, Doncaster council decided to produce 1,500 new starts each year. My hon. Friend the Member for Doncaster, North (Mr. Welsh) is nodding and he was actively involved in that at the time. Those new starts were made to meet the needs of people in Doncaster.

Obviously the Government thought that such provision was off-putting when they came to power. They thought it was off-putting to meet the needs of young married couples and give them smart new houses with all the modern conveniences that money could buy. Therefore, the Government set about reducing housing grants. Systematically they robbed council tenants and, because of the link between them, they robbed the housing associations.

The tragedy is that, if the Government were really concerned about providing good housing stock for people to rent at a price that they could afford, they would be looking to local authorities to meet that need. In this thrust against council house tenants, I wonder whether the Government have considered some of the Conservative-controlled authorities which have taken some of the rents from council tenants to prop up the rates. That is diabolical.

Local authorities cannot use the money that has been accumulated in the kitty from the sale of council houses to make good repairs about which the Government do not care. I want to repeat a question which has been posed many times tonight: "What is a fair rent?" I do not know. Perhaps the Minister—or the Secretary of State when he wakes up—will give us the definition of a fair rent.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee, Vice-Chair, Labour Party

We asked ourselves that question on the Clay Cross urban district council in the 1950s, 1960s and early 70s. We decided that the rent should be 30 bob in the old money because we were never keen on decimalisation, the Common Market and all that. We kept the rents down. The rents only went up 2s. 6d. in 12 years and some Tories took us to the district auditor. I thought that was terribly unfair because we were answering the question, "What is a fair rent?" We said it was 30 bob. That was 30 bob more rent than Minister's houses cost. We believe that that is the level that we should be targeting. I hope that that level will be included in the Liberal party recommendation for an affordable rent. I wonder whether that is carried through in Tower Hamlets for the Bangladeshis. That is the key question. My hon. Friend has hit the nail on the head.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

I would obviously like to think that the level will relate to the affordable rent that has been mentioned. However, we do not see that compassion on the Conservative Benches.

Photo of Mr Peter Hardy Mr Peter Hardy , Wentworth

Following from the point made by my hon. Friend the Member for Bolsover (Mr. Skinner) to which my hon. Friend the Member for Don Valley (Mr. Redmond) referred a moment ago, will my hon. Friend the Member for Don Valley refer to a problem which may face his area and mine and which echoes the point made by my hon. Friend the Member for Hammersmith (Mr. Soley), who quoted cases in Cardiff. When, in the next few months, we see the massive expansion of commuter traffic between London and Doncaster, because people will be able to complete that journey in 50 minutes, will the rents in the Doncaster area be fair on the people who maintain their present level of income given the impetus to house price inflation which will follow electrification?

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

My hon. Friend makes a valid point. There are swings and roundabouts. One welcomes the electrification if the Channel tunnel has a terminal within Doncaster, as that will provide jobs. But obviously it brings the other evil—commuters from London who will gobble up the cheap houses in Doncaster which will raise prices. Then young married couples will not be able to afford houses.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee, Vice-Chair, Labour Party 9:45 pm, 14th June 1988

It is not as simple as that. My hon. Friend is right in one respect, but I must challenge him about commuters coming to Doncaster. It is true that they are coming to Grantham and further to Newark and Retford, but once they reach the coal mining areas where there is subsidence they have a problem. Yuppies will steer clear of subsidence now that the Government are helping the Coal Board not to pay out the moneys that it should pay for those houses. That is the speech that I should have made yesterday.

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

That is a fair point. One of the benefits will be the jobs that the Channel tunnel terminal will bring to Doncaster. The bad effect will be the escalation of house prices which will have a knock-on effect on houses beloging to housing associations in the Doncaster area. A further benefit of electrification is that it will bring yuppies and commuters from down south to Doncaster to meet real people who are the salt of the earth in south Yorkshire.

What is a fair rent? That is a valid question and I should like the Minister to answer it. I do not know what constitutes a fair rent. There is great talk about a body to which people can appeal, but it will not be like that. I do not know what teeth it will have.

Photo of Mrs Mildred Gordon Mrs Mildred Gordon , Bow and Poplar

Is my hon. Friend aware that John Scurr house in Tower Hamlets, a semi-derelict estate that was emptied some time ago and which, if one visited it, one would think was uninhabitable, is now being used for homeless families? That is an improvement on the vast sums spent on bed-and-breakfast accommodation, but some of these families, who are paying rent to a housing association which is letting the flats under licence, are being charged £100 a week. That is more than double the price charged for good council flats. Does my hon. Friend think that that will be the future pattern of housing associations?

Photo of Mr Martin Redmond Mr Martin Redmond , Don Valley

My hon. Friend certainly has a point. The housing policy in London is uneconomic and crazy. It seems stupid to spend millions of pounds providing overnight accommodation but not to make the repairs and to provide good quality houses that are so desperately needed. To think that that is in the capital and that Ministers pass it every day is absolutely appalling.

Will fair rents apply to pubs? If prices escalate—I have never known owt come down under this Conservative Government—that will affect the price of a pint of beer. Obviously that will affect many Conservative Members, and I would not want that to happen. If rents escalate, many students who live away from the university campus will seek to return to campus and that will cause excessive overcrowding.

The old Adwick urban district council decided to allocate some ground to a housing association. It built some nice flats, but unfortunately it had to charge an economic rent. Over a period, the tenants found that they were unable to meet their rents and they went to the local authority for help. Can the Minister assure us that that will not happen as a result of an escalation in rent charges? He has already said that market forces will prevail.

In Doncaster, bungalows for old-age pensioners were provided at a fair rent. The authority made those bungalows available to the public and the private sector. Those bungalows met a demand because, at that time, the private sector did not provide such bungalows. The local authority intended to have 1,500 new starts per year, but that went by the board when the Government started to chop the housing grant to local authorities.

The Minister has spoken about meeting the needs of the people. The Government are not meeting that need because they are not providing the finance to local authorities and to housing associations to provide the accommodation that is desperately needed.

It has been said that housing benefit will meet the rents charged by the housing associations and the private sector. The Minister said that housing benefit will give such tenants protection against any savage increases. Perhaps the Minister would care to come with me to one or two places in my constituency and talk to those people who have been affected by the latest cuts in housing benefit.

It is not good enough for the Government to produce a housing Bill that is totally devoid of the compassion and common sense that is needed to provide the necessary housing stock.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

We began this debate at about half past 6. It is a testimony to the state of this Bill that you, Mr. Speaker, selected 196 amendments or new clauses for debate today. Half those amendments or new clauses have been introduced by the Government, but we have been fortunate to have a debate on two amendments and one new clause that have been tabled by the Opposition on a matter that the Government have not included in the Bill. A provision to ensure in law that people will rent at prices that they can afford was, like homelessness, a noticeable omission from the Bill.

This has been an interesting debate in another respect, too. There have been eight substantive contributions, seven by hon. Members from Opposition parties and one by a Conservative Member—the Minister. He had no choice but to make a speech, but not one Conservative Back Bencher spoke, in nearly three and a half hours of debate, in support of affordable rents for tenants. Is it surprising that there appear to be two nations, politically as well as in other respects?

It is good that the debate has shown the breadth of shared opinion among hon. Members in opposition parties. I am grateful to the hon. Member for Halifax (Mrs. Mahon) and her hon., Friends for joining the hon. Member for Hammersmith (Mr. Soley) and me— representing London constituencies—and showing that the issue is of relevance and concern throughout the country.

The hon. Member for Wentworth (Mr. Hardy) was worried that the Government might carve up the new clause and take the bits that give the Secretary of State power, throwing away the bits that give protection to tenants and ensuring that the future is as bad as what is proposed now. That is possible, of course. It is possible that the Government will maul and carve up a proposal that would give tenants protection. But the message that has come through loud and clear from us is that the 6 million or 7 million people whom we are discussing—the 6 million council house tenants, the 600,000 housing association and housing co-operative tenants and all who, as the hon. Member for Pontefract and Castleford (Mr. Lofthouse) said, may join them if the council estates in which they live are taken over by housing associations or the private sector—should be protected from now on, and not left to be victims of the new Tory party market philosophy.

The hon. Member for Rother Valley (Mr. Barron) made it clear that consensus across the political divide is needed for good housing law. The housing association movement was born of consensus. A Bill that was drafted by one Government was implemented almost unchanged by another. The most important part of consensus is that tenants should have rights, the most important being the right to a rent that they can afford. With the growth of housing associations encouraged by the Government, it is important that housing association tenants, as well as local authority tenants, should have rents that they can afford.

This is not an insignificant group. There are 1,800 registered housing associations in England and Wales, some with housing stock as large as 21,000 properties. The hon. Member for Halifax said that some of the people that we are discussing are among the most vulnerable in society. The hon. Member for Don Valley (Mr. Redmond) made it clear that this is a linked sector of housing associations and local authorities working together. They have done good work and are now desperately trying to pick up responsibility for those with whom the private sector cannot possibly hope to cope.

Next we heard the Minister's response. As is often said, he is an intelligent man. He could have dealt with proper concerns and given convincing and persuasive answers but, sadly, in a short speech, he did not. He gave two reasons for rejecting these amendments. The first was that they might diminish the chance of obtaining capital investment from the private sector. I shall quote briefly from a letter that he wrote to Richard Best; its first sentence is ironic: As regards rents, there is nothing between us on objectives. It is, of course, an essential characteristic of the social housing sector that rents should be below market levels. But, as I have now explained in Committee, I still believe that a formal limit is not the right way to secure this; and indeed that it would undermine our policies for expansion of the movement to provide desperately-needed accommodation for those on lower incomes. The essential point is that rent control would be acceptable to the private investor only if the Government agreed to underwrite any resultant deficits. That is precisely the case. If the public sector and not tenants bore the risk where necessary, the private sector would still invest in the future in the way that it has invested hitherto. The housing association movement has argued a different case.

It being Ten o'clock, the debate stood adjourned.

Ordered,That, at this day's sitting, the Housing Bill may be proceeded with, though opposed, until any hour. —[Mr. Durant.]

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

As I was saying, the housing association movement has argued a different case. It has argued that a sensible price for political consensus, regarded as vital to secure private sector investment, is some limitation on rent levels. That is what the amendments and the new clause seek to achieve. They seek not the informal protection that the Minister pretends will come, but formal protection that will be written into the Bill.

The second argument adduced by the Minister was that it is important that the housing association sector should not be on all fours with the public sector. I do not dissent from his logic on that. He said it is important that it should be free-standing, able to take initiatives and able to draw in willing money from the private sector. Of course that is right, but the role of the housing association is also to come to the aid of those who most need to be housed. The money will come in and the independence from the public sector will be guaranteed even if the Government accept that there must be a limitation on rents.

It is interesting to note that the Government were anxious to ensure that too large a public sector commitment to housing associations did not imply that it would be counted as public spending. The Minister well knows that, when Ministers accepted that the average for public sector housing association grant would be 60 per cent. in England and 55 per cent. in Wales, the previous convention by the Treasury about that being public expenditure was changed. It was changed then, and it can be changed again. A more flexible system can and should incorporate rent control.

The hon. Member for Hammersmith (Mr. Soley) made three very important points, and I should like to repeat them. First, he made the case that the Opposition parties are arguing for subsidy for those who rent and that by resisting that the Government are massively subsidising those who buy. The divide continues. The Government say that they will help people who buy but will offer less help to those who rent.

Secondly, the hon. Member for Hammersmith said that our argument that consensus is the prerequisite for housing legislation appears to be falling on deaf ears. During the speech by the hon. Member for Hammersmith, my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) said he found it incredible that in England or Wales the Government are contemplating paying housing benefit on market rents.

Thirdly, the hon. Member for Hammersmith said that the cut in housing benefit is not fantasy. We have seen it happen and do not believe promises that housing benefit bills will continue to be met. Those promises have not been kept in the past. Rented accommodation houses one third of our fellow citizens. The system was born of consensus and has been developed, especially by housing associations, in consensus. The risk is that it will be destroyed in a conflict precipitated by the consumerist greed of the Government, who are motivated to legislate for those who have against the interests of those who have not.

We are not embarrassed or ashamed of that consensus. We are its guardians. We are the guardians of the interests and rights of the vulnerable, the low-paid, the unpaid, the pensioner, the widow, the widower, the carer, the disabled, the single, the homeless and the inadequately housed. The Government promised that they would pay with housing benefit; we do not believe them.

There are two alternatives on which we are about to vote. We either write in protection for those on lower incomes or state benefit or we knock it out. The Opposition parties—and, I hope, some Conservative Members—will display a commitment to the fundamental principle that we should provide rented housing throughout the country, from the north to the south, at rents that people can afford.

Question put, That the amendment be made:—

The House divided: Ayes 215, Noes 255.

Division No. 350][10.05
AYES
Abbott, Ms DianeBermingham, Gerald
Adams, Ailen (Paisley N)Bidwell, Sydney
Allen, GrahamBlair, Tony
Alton, DavidBlunkett, David
Archer, Rt Hon PeterBoateng, Paul
Armstrong, HilaryBradley, Keith
Ashdown, PaddyBray, Dr Jeremy
Ashton, JoeBrown, Gordon (D'mline E)
Banks, Tony (Newham NW)Brown, Nicholas (Newcastle E)
Barnes, Harry (Derbyshire NE)Brown, Ron (Edinburgh Leith)
Barron, KevinBuchan, Norman
Battle, JohnBuckley, George J.
Beckett, MargaretCaborn, Richard
Beith, A. J.Callaghan, Jim
Bell, StuartCampbell, Menzies (Fife NE)
Benn, Rt Hon TonyCampbell, Ron (Blyth Valley)
Bennett, A. F. (D'nt'n & R'dish)Campbell-Savours, D. N.
Canavan, DennisLamond, James
Clark, Dr David (S Shields)Leadbitter, Ted
Clarke, Tom (Monklands W)Leighton, Ron
Clay, BobLestor, Joan (Eccles)
Clelland, DavidLewis, Terry
Cohen, HarryLitherland, Robert
Coleman, DonaldLloyd, Tony (Stretford)
Cook, Frank (Stockton N)Lofthouse, Geoffrey
Cook, Robin (Livingston)McAllion, John
Corbett, RobinMcAvoy, Thomas
Corbyn, JeremyMcCartney, Ian
Cousins, JimMacdonald, Calum A.
Crowther, StanMcFall, John
Cryer, BobMcKay, Allen (Barnsley West)
Cummings, JohnMcKelvey, William
Cunliffe, LawrenceMcLeish, Henry
Dalyell, TamMcNamara, Kevin
Darling, AlistairMcTaggart, Bob
Davies, Ron (Caerphilly)Madden, Max
Davis, Terry (B'ham Hodge H'l)Mahon, Mrs Alice
Dewar, DonaldMarek, Dr John
Dixon, DonMarshall, David (Shettleston)
Doran, FrankMartin, Michael J. (Springburn)
Douglas, DickMartlew, Eric
Duffy, A. E. P.Maxton, John
Dunnachie, JimmyMeacher, Michael
Dunwoody, Hon Mrs GwynethMeale, Alan
Eastham, KenMichael, Alun
Evans, John (St Helens N)Michie, Bill (Sheffield Heeley)
Ewing, Harry (Falkirk E)Michie, Mrs Ray (Arg'l & Bute)
Ewing, Mrs Margaret (Moray)Millan, Rt Hon Bruce
Faulds, AndrewMitchell, Austin (G't Grimsby)
Field, Frank (Birkenhead)Moonie, Dr Lewis
Fields, Terry (L'pool B G'n)Morgan, Rhodri
Fisher, MarkMorley, Elliott
Flynn, PaulMorris, Rt Hon A. (W'shawe)
Foot, Rt Hon MichaelMorris, Rt Hon J. (Aberavon)
Foster, DerekMullin, Chris
Foulkes, GeorgeOakes, Rt Hon Gordon
Fraser, JohnO'Brien, William
Fyte, MariaO'Neill, Martin
Galbraith, SamOrme, Rt Hon Stanley
Galloway, GeorgeOwen, Rt Hon Dr David
Garrett, John (Norwich South)Parry, Robert
Garrett, Ted (Wallsend)Patchett, Terry
George, BrucePendry, Tom
Gilbert, Rt Hon Dr JohnPike, Peter L.
Godman, Dr Norman A.Powell, Ray (Ogmore)
Golding, Mrs LlinPrescott, John
Gordon, MildredPrimarolo, Dawn
Gould, BryanRadice, Giles
Griffiths, Nigel (Edinburgh S)Randall, Stuart
Grocott, BruceRedmond, Martin
Hardy, PeterRees, Rt Hon Merlyn
Harman, Ms HarrietReid, Dr John
Haynes, FrankRichardson, Jo
Healey, Rt Hon DenisRoberts, Allan (Bootle)
Heffer, Eric S.Robertson, George
Henderson, DougRobinson, Geoffrey
Hinchliffe, DavidRogers, Allan
Holland, StuartRooker, Jeff
Home Robertson, JohnRoss, Ernie (Dundee W)
Hood, JimmyRowlands, Ted
Howarth, George (Knowsley N)Ruddock, Joan
Howell, Rt Hon D. (S'heath)Sedgemore, Brian
Howells, GeraintSheerman, Barry
Hughes, Robert (Aberdeen N)Sheldon, Rt Hon Robert
Hughes, Roy (Newport E)Shore, Rt Hon Peter
Hughes, Sean (Knowsley S)Short, Clare
Hughes, Simon (Southwark)Skinner, Dennis
Illsley, EricSmith, Andrew (Oxford E)
Ingram, AdamSmith, C. (Isl'ton & F'bury)
Janner, GrevilleSmith, Rt Hon J. (Monk'ds E)
John, BrynmorSnape, Peter
Johnston, Sir RussellSoley, Clive
Jones, Barry (Alyn & Deeside)Spearing, Nigel
Jones, Ieuan (Ynys Môn)Steel, Rt Hon David
Jones, Martyn (Clwyd S W)Stott, Roger
Kennedy, CharlesStrang, Gavin
Lambie, DavidStraw, Jack
Taylor, Mrs Ann (Dewsbury)Williams, Rt Hon Alan
Taylor, Matthew (Truro)Williams, Alan W. (Carm'then)
Thomas, Dr Dafydd ElisWilson, Brian
Thompson, Jack (Wansbeck)Winnick, David
Turner, DennisWise, Mrs Audrey
Vaz, KeithWorthington, Tony
Wall, PatWray, Jimmy
Wallace, JamesYoung, David (Bolton SE)
Walley, Joan
Wareing, Robert N.Tellers for the Ayes:
Welsh, Andrew (Angus E)Mr. Archy Kirkwood and Mr. Malcolm Bruce
Welsh, Michael (Doncaster N)
Wigley, Dafydd
NOES
Arbuthnot, JamesGoodson-Wickes, Dr Charles
Arnold, Jacques (Gravesham)Gow, Ian
Batiste, SpencerGrant, Sir Anthony (CambsSW)
Boscawen, Hon RobertGreenway, Harry (Ealing N)
Boswell, TimGreenway, John (Ryedale)
Bottomley, PeterGregory, Conal
Bottomley, Mrs VirginiaGriffiths, Sir Eldon (Bury St E')
Bowis, JohnGriffiths, Peter (Portsmouth N)
Bright, GrahamGrist, Ian
Brown, Michael (Brigg & Cl't's)Ground, Patrick
Bruce, Ian (Dorset South)Grylls, Michael
Buchanan-Smith, Rt Hon AlickHampson, Dr Keith
Budgen, NicholasHanley, Jeremy
Burns, SimonHannam, John
Butterfill, JohnHargreaves, A. (B'ham H'll Gr')
Carlisle, Kenneth (Lincoln)Hargreaves, Ken (Hyndburn)
Carrington, MatthewHarris, David
Carttiss, MichaelHaselhurst, Alan
Chope, ChristopherHawkins, Christopher
Churchill, MrHayes, Jerry
Clark, Dr Michael (Rochford)Hayhoe, Rt Hon Sir Barney
Clark, Sir W. (Croydon S)Hayward, Robert
Clarke, Rt Hon K. (Rushcliffe)Heathcoat-Amory, David
Colvin, MichaelHeddle, John
Conway, DerekHeseltine, Rt Hon Michael
Coombs, Anthony (Wyre F'rest)Hicks, Robert (Cornwall SE)
Coombs, Simon (Swindon)Higgins, Rt Hon Terence L.
Cope, Rt Hon JohnHind, Kenneth
Cormack, PatrickHolt, Richard
Couchman, JamesHordern, Sir Peter
Cran, JamesHoward, Michael
Critchley, JulianHowarth, Alan (Strat'd-on-A)
Currie, Mrs EdwinaHowarth, G. (Cannock & B'wd)
Davies, Q. (Stamf'd & Spald'g)Howell, Rt Hon David (G'dford)
Davis, David (Boothferry)Howell, Ralph (North Norfolk)
Day, StephenHughes, Robert G. (Harrow W)
Devlin, TimHunt, David (Wirral W)
Dickens, GeoffreyHunt, John (Ravensbourne)
Dicks, TerryHunter, Andrew
Douglas-Hamilton, Lord JamesIrvine, Michael
Dover, DenIrving, Charles
Durant, TonyJack, Michael
Dykes, HughJackson, Robert
Emery, Sir PeterJessel, Toby
Evans, David (Welwyn Hatf'd)Johnson Smith, Sir Geoffrey
Evennett, DavidJones, Robert B (Herts W)
Fallon, MichaelJopling, Rt Hon Michael
Favell, TonyKellett-Bowman, Dame Elaine
Fenner, Dame PeggyKey, Robert
Finsberg, Sir GeoffreyKing, Roger (B'ham N'thfield)
Fookes, Miss JanetKirkhope, Timothy
Forman, NigelKnapman, Roger
Forsyth, Michael (Stirling)Knight, Greg (Derby North)
Forth, EricKnight, Dame Jill (Edgbaston)
Fox, Sir MarcusKnowles, Michael
Franks, CecilLamont, Rt Hon Norman
Freeman, RogerLang, Ian
French, DouglasLatham, Michael
Fry, PeterLawrence, Ivan
Gale, RogerLee, John (Pendle)
Gardiner, GeorgeLennox-Boyd, Hon Mark
Garel-Jones, TristanLester, Jim (Broxtowe)
Gill, ChristopherLightbown, David
Goodhart, Sir PhilipLloyd, Sir Ian (Havant)
Goodlad, AlastairLloyd, Peter (Fareham)
Lord, MichaelRumbold, Mrs Angela
Luce, Rt Hon RichardSackville, Hon Tom
Lyell, Sir NicholasSayeed, Jonathan
MacKay, Andrew (E Berkshire)Scott, Nicholas
Maclean, DavidShaw, David (Dover)
McLoughlin, PatrickShaw, Sir Giles (Pudsey)
McNair-Wilson, Sir MichaelShaw, Sir Michael (Scarb')
McNair-Wilson, P. (New Forest)Shelton, William (Streatham)
Madel, DavidShephard, Mrs G. (Norfolk SW)
Major, Rt Hon JohnShepherd, Colin (Hereford)
Malins, HumfreyShepherd, Richard (Aldridge)
Mans, KeithShersby, Michael
Maples, JohnSims, Roger
Marland, PaulSmith, Tim (Beaconsfield)
Marshall, Michael (Arundel)Soames, Hon Nicholas
Martin, David (Portsmouth S)Spicer, Sir Jim (Dorset W)
Mates, MichaelSpicer, Michael (S Worcs)
Maude, Hon FrancisStanbrook, Ivor
Maxwell-Hyslop, RobinStanley, Rt Hon John
Mayhew, Rt Hon Sir PatrickSteen, Anthony
Meyer, Sir AnthonyStern, Michael
Miller, Sir HalStevens, Lewis
Mills, IainStewart, Allan (Eastwood)
Miscampbell, NormanStewart, Ian (Hertfordshire N
Mitchell, Andrew (Gedling)Stradling Thomas, Sir John
Mitchell, David (Hants NW)Sumberg, David
Moate, RogerSummerson, Hugo
Monro, Sir HectorTaylor, Ian (Esher)
Montgomery, Sir FergusTaylor, John M (Solihull)
Moore, Rt Hon JohnTaylor, Teddy (S'end E)
Morris, M (N'hampton S)Temple-Morris, Peter
Morrison, Sir CharlesThompson, D. (Calder Valley)
Morrison, Rt Hon P (Chester)Thompson, Patrick (Norwich)
Moss, MalcolmThorne, Neil
Moynihan, Hon ColinTownend, John (Bridlington)
Neale, GerrardTracey, Richard
Nelson, AnthonyTredinnick, David
Neubert, MichaelTrippier, David
Newton, Rt Hon TonyTrotter, Neville
Nicholls, PatrickTwinn, Dr Ian
Nicholson, David (Taunton)Vaughan, Sir Gerard
Nicholson, Emma (Devon West)Waddington, Rt Hon David
Onslow, Rt Hon CranleyWaldegrave, Hon William
Oppenheim, PhillipWalden, George
Page, RichardWalker, Bill (T'side North)
Paice, JamesWaller, Gary
Patnick, IrvineWard, John
Patten, John (Oxford W)Wardle, Charles (Bexhill)
Pawsey, JamesWarren, Kenneth
Peacock, Mrs ElizabethWatts, John
Porter, Barry (Wirral S)Wells, Bowen
Porter, David (Waveney)Whitney, Ray
Powell, William (Corby)Widdecombe, Ann
Rathbone, TimWiggin, Jerry
Redwood, JohnWilshire, David
Rhodes James, RobertWinterton, Mrs Ann
Riddick, GrahamWolfson, Mark
Ridley, Rt Hon NicholasWood, Timothy
Ridsdale, Sir JulianYeo, Tim
Roberts, Wyn (Conwy)Young, Sir George (Acton)
Roe, Mrs Marion
Ross, William (Londonderry E)Tellers for the Noes:
Rossi, Sir HughMr. Richard Ryder and Mr. Stephen Dorrell.
Rost, Peter
Rowe, Andrew

Question accordingly negatived.

Amendment made: No. 247, in page 34, line 24, at end insert— `( ) Where one of the associations mentioned in subsection (4) above is registered by the Housing Corporation and another is registered by Housing for Wales, the determination mentioned in subsection (5) above shall be such as shall be agreed between the two Corporations.'. —[Mr. Waldegrave.]

Photo of Mr Paul Boateng Mr Paul Boateng , Brent South

I beg to move amendment No. 86, in page 34, line 24, at end insert— `(6) For the purposes of this section, section 71 of the Race Relations Act 1976 shall apply to the Corporation and to registered housing associations as it applies to local authorities.'.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

With this it will be convenient to take the following: Government amendment No. 298.

Government new clause 29.

New clause 8—Extension of Section 71 powers—'For the purposes of this Act, section 71 of the Race Relations Act 1976 shall apply to the Housing Corporation, a housing association and housing co-operative, a Housing Action Trust and a person who is an approved landlord by the Housing Corporation pursuant to Part IV of this Act, as it applies to local authorities.'.

Photo of Mr Paul Boateng Mr Paul Boateng , Brent South

We are seeking to deal with some of the problems experienced by the most deprived section of our community in relation to housing—the black community. We would do well to reflect on the Minister's performance in Committee. The Minister was at his most effusive and emollient. He was all too happy to please, and all too willing to lend a sympathetic ear to our legitimate concerns. We were promised that we would be well pleased with the results of his deliberations in the Department of the Environment. However, when we come, at this late stage, to consider the Bill on Report—[Interruption.]

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I am anxious to listen to the hon. Gentleman. Will hon. Members who are not taking part in our proceedings please leave the Chamber quickly and quietly?

Photo of Mr Paul Boateng Mr Paul Boateng , Brent South

—we find that the Minister has been unable to deliver his promises. Somewhere between the Committee and Report, he was nobbled. Opposition Members know who nobbled him—it was his right hon. Friend the Secretary of State.

We were told that we would have a code to deal with the matters of concern that we raised in Committee about the needs and aspirations of the community in question in relation to housing. Where is the code? We have been waiting for it month after month, but there is still no sign of it. Instead, we have two Government proposals that recognise that it is important that section 71 of the Race Relations Act 1976 should apply to housing action trusts and to housing corporations, but that is as far as the Government are prepared to go.

Our amendment and new clause seek to recognise the deep-rooted disadvantage that exists in relation to the black community and housing. I give some examples of the form in which that disadvantage manifests itself in London. When one looks at the results of the surveys that have been carried out over the years by, for example, the Policy Studies Institute, the Commission for Racial Equality, the London boroughs, and the then Greater London council, one finds that a pattern of deprivation emerges in every sector of the housing market.

That pattern of deprivation is evident in the private rented sector, in local authority provision and in the provision offered by housing associations. The picture that emerges is that if black people are owner-occupiers they tend to live in the older, more overcrowded terraced houses in our communities. If they are council tenants, again, they tend to live in the older more overcrowded or high rise properties. If they are private tenants, they tend to pay higher rents for poorer quality accommodation outside the protection of the Rent Acts.

Private landlords refuse to let accommodation to black and ethnic minority people because of their race, estate agents refuse to give details of houses to black and ethnic minority applicants, and local authorities tend to allocate to black families some of the worst accommodation that exists within their stock of property. The activities of housing associations leave much to be desired. Both private and public developers are failing to provide the sort of accommodation that is needed to meet the needs and aspirations of the minority community.

What hope do the Government's amendment and their new clause hold out to that most deprived section of the community, to the 75 per cent. of all those homeless in Brent who find themselves in bed-and-breakfast accommodation, and who are black? I am afraid that the Minister has lost his opportunity to hold out the hope of any improvement for them. When we examine how he has lost that opportunity we are forced to the conclusion that, whatever his good intentions when the Bill was in Committee, he has not been able to deliver them in the face of opposition from within the Department of the Environment.

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

I do not want to spoil the hon. Gentleman's eloquent speech, but I shall be providing reasons why we are not able to bring forward the code in the House. But he will get his code.

Photo of Mr Paul Boateng Mr Paul Boateng , Brent South

We welcome the assurance that comes at this late stage, but our concern is not simply with the fact that a code might at some unspecified time in the future be produced. We are, with respect, concerned about the content of that code, and we have every right to be so concerned.

Considering how we treated the Minister in Committee, and how until now we have treated him on Report, he should realise that he has got off very lightly. We have treated him as a nice man delivering a nasty Bill. That may have been our mistake, because perhaps the Minister is not so nice after all. Perhaps we have mistaken the man because of the way in which he brings forward these provisions, and perhaps the time has come when we should see his true nature.

I must admit that there is one hon. Member who has seen through the Minister from the word go——

Photo of Mr Paul Boateng Mr Paul Boateng , Brent South

No. My hon. Friend will no doubt have his moment of glory, but it will not be now. That man is my hon. Friend the Minister for Makerfield (Mr. McCartney). He has always been quite clear. I see a smile beginning to play around the lips of the Minister and, indeed, those of his acolyte, who sits so resplendent beside him, recently returned, we understand, from studying opera in Finland. It is said that the opera is not over until the fat lady sings. I am bound to say that we have not heard a word from the hon. Lady in the course of this whole debate. We would like to hear more. We are very fond of her.

Photo of Mrs Marion Roe Mrs Marion Roe , Broxbourne

I spoke in the debate yesterday, but unfortunately the hon. Member was not in the Chamber at the time.

Photo of Mr Paul Boateng Mr Paul Boateng , Brent South

I am delighted that at last the hon. Lady has been ungagged, because our experience of the hon. Lady's performance in Committee was that she was very rarely let loose, and when she was she seldom departed from her brief. I do not want to be seen to be ungallant to the hon. Lady, because all hon. Members who were on the Committee, rather than joining in at this late stage and mocking from the middle Benches, will know the high regard in which we hold the hon. Lady. She was our greatest friend in Committee, and whenever she speaks, the clarity of our argument becomes even greater and the wisdom that we have over the months sought to share with Government Members becomes that much clearer. I am sorry to have missed the hon. Lady's speech, but it does not in any way detract from the point that I seek to make about the Minister.

My hon. Friend the Member for Makerfield has always maintained that the Minister would go down in the halls of infamy for his role in producing the Bill. I see a chorus of assent from my hon. Friends who were most closely associated with him in Committee. I beg to differ. Hon. Membes on both sides of the House and, I am sure, the Minister of State, will remember Caligula and his horse. Hon. Members should reflect on the fact that there was another person connected with Caligula and his horse whom we tend to forget. That person was the hapless senator whose job it was to introduce Caligula's horse into the chamber of the senate of Rome. We remember Caligula and we remember the horse, just as we will remember the Bill and the Secretary of State, but we do not remember the hapless soul who had to introduce the horse into the chamber of the senate.

10.30 pm

In tabling the Government amendments and, indeed, in introducing the Bill in its entirety, the Minister has all the moral authority and political credibility of the senator who introduced the horse into the senate of Rome, and his fate will be the fate of that senator—obscurity. He will not be remembered. If he sees another summer on the Front Bench as a Minister of State, I will eat the provisions of this amendment with a light cheese sauce.

The Minister has sealed his fate in bringing forward the amendments and the new clause. I want to give the Minister an opportunity to tell us what is in the long-awaited charter for which we have been holding our breath. Will it deal with harassment by the private landlord which is the common experience of all too many Asian and Afro-Caribbean people? Will it provide a means by which that harassment can be avoided? Will it answer the very clear picture presented by the Greater London housing condition survey, by the survey of private tenants in London conducted in 1983 and 1984 and by the London housing survey of 1986 and 1987? The picture which conies from all that work, which is not likely to be dismissed by the Minister, is that the impact of housing deprivation on our city is felt most directly by the Afro-Caribbean and Asian community.

On numerous occasions the Minister has gone out of his way to praise the response of that community to the housing crisis. In his response to this debate I want him to deal with a number of questions about the role of Afro-Caribbean and Asian housing associations if our amendment and new clause are not passed by the House. As the Minister well knows, the impact of the Bill on housing associations that cater for these special needs will be to render them less likely to be able to cater for those needs at acceptable levels of rent.

The Minister knows that, as a proportion of earned income used for rent, the black family is likely to spend about 42·5 per cent., while the white family will spend about 36·5 per cent. He knows also that in London, with 70 per cent. HAG, a couple with two children will pay £45·99 per week rent as a result of the Government's proposals.

The Minister must be able to tell the House that his new clause and amendment, which deal only with housing associations and housing action trusts, will deal with that issue. He must be able to assure the House that housing associations will, in view of their size, be able to raise sufficient private capital to meet the new conditions under which all new associations will be obliged to operate when the Bill is enacted. The Minister must also assure the House that there will not be the loss of revenue to those housing associations that we fear because fewer families will be able to maintain their rent payments at the new level.

We suggested ways in which it might be possible for the Government to acknowledge that it is important that the Housing Corporation and the Secretary of State should consult black housing associations before making financial determinations that affected the special needs that they were established to serve, but answer came there none.

We asked the Minister to consider, but he failed to do so, a means by which it would be possible to ensure that statutory revenue funding to black housing associations would be guaranteed during the first few years of their life, to provide the start that is necessary if they are not to fail. The Minister knows, because his Department has undertaken the research that shows this, that without that start-up support, the survival rate is likely to be unacceptable.

This is not a topic to which the Minister is oblivious or about which he does not care—he does, but he has been nobbled. He knows also that, because of the way in which housing associations conduct themselves, there is no room for complacency. The idea that by applying section 71 to the Housing Corporation one will necessarily enjoy a spin-off effect in terms of the way in which housing associations conduct themselves simply is not on.

I will give the Minister one example from the city of Leeds, showing the impact of the Government's proposals and the beneficial effect that our amendment and new clause would have. Leeds city council conducted a survey of the equal opportunities policy of 18 housing associations in its area, and all credit goes to it for doing so. That survey found that 66 per cent. of management committees gave cause for concern over their black membership. They simply did not have any, or sufficient, black members. Fifty per cent. of the associations needed to ensure that black people had access to their housing, because their existing patterns and systems of regulation worked in such a way as to ensure that that did not happen.

The survey showed also that 44 per cent. of the associations had not even established ethnic record keeping for housing allocations, so they would have no way of determining whether they were meeting any guidelines subsequently laid down by the Housing Corporation or by the Secretary of State. Fifty-five per cent. of them did not keep ethnic employment records, and 50 per cent. needed to monitor records in other areas of particular concern to them. Sixty-six per cent. of the associations did not even produce reports for their management committees, 44 per cent. had not adopted a policy of racial harassment, and 78 per cent. had not taken any action to deal with specific issues and causes of concern in the communities that they were seeking to serve.

Those are the facts, and they were produced with good will and good intentions. Can the Minister really come to the Dispatch Box and tell us in good faith that section 71 of the Race Relations Act 1976 should not apply to housing associations? I suspect that he cannot. I suspect that he will find great difficulty in doing so. He is an honest man, so I hope he will recognise that something has to be done. Something must be done about racial harassment, homelessness and the housing associations.

When the Minister looks at the likely impact on the black community of the change in landlord provisions in the Bill, can he say that it will not be necessary to introduce the amendment? He has an opportunity to redeem his reputation. He need not necessarily go down as the third party to that triangle between Caligula and his horse. This is his opportunity. We look forward to hearing what he says. We look forward to seeing his commitment in a practical sense to creating a successful multiracial society in terms of housing provision. We look forward to his demonstrating in a practical way his commitment to ensuring that the real patterns of deprivation and disadvantage in housing are not replicated in the experience of Britain's black community.

We wait for the Minister's answers, but we do not wait with bated breath, because our experience of his previous contributions in this respect is not a happy one. However, the communities that we represent are tired of waiting. They want justice and they sent us here to get it, and justice we shall ensure that they have.

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

Those who were not fortunate to be on the Committee that considered the Bill will have seen that one reason why it was so enjoyable was the speeches of the hon. Member for Brent, South (Mr. Boateng) which have a style and panache which always make them a pleasure to listen to, even though they sometimes depart from the direct line of the argument.

I am becoming a little confused by the hon. Gentleman's references to Suetonius. Yesterday I was likened to Caligula's horse. I have now gone up to the senator. That seems to be progress in the right direction, but as far as I know, remembering that book, there is nothing to say that either the horse or the senator did not live to a happy old age, so that analogy may be perfectly satisfactory.

I think that by the end of the hon. Gentleman's speech we were coming back on to the track, because he and I are not far apart on these issues. I recently spoke to the annual general meeting of the Ujima housing association, a huge meeting with a number of housing associations serving minority communities. I do not think that he was present on that occasion, but I think that he has been present on similar occasions in the past.

There is no question but that the examples that the hon. Gentleman and others can give show that housing is one of the areas in which racial discrimination has been frequent and can be damaging. But during the course of that meeting, one remark by a delegate from the floor of the hall stuck in my memory, because sometimes the conclusions are not always what one expects. He was an immigrant from Jamaica, and he said that when he and his friends and relations first came to Britain they certainly faced discrimination—very largely, as he put it, from the public sector. He reminded the meeting that it had often been the private sector, with all its faults, that had provided any housing at all in those days. Faults are to be found not only in one sector.

That is why I want to say straight away that there has been no backing off from the commitment. As a matter of fact, I did not make a commitment in Committee to ask the Commission for Racial Equality to bring forward a code on housing practice. I said that we would look at that. We have decided that we should do that. We have decided to invite the CRE to bring forward a code covering all housing. I am no expert in these matters, but we wish this to cover all housing, not just rented housing.

The hon. Gentleman may have seen a recent controversial film made by the local television company in Bristol, which showed that discrimination could be found not only in rented housing but in other forms of accommodation. The rules of another place may allow us more easily than those of this House to introduce an amendment to which could be attached a code dealing with all housing. That is our intention, and that is why the amendment is not down at this stage. It is, of course, for the CRE to bring forward the code, which must be discussed before it is finally approved by the Secretary of State.

Photo of Mr Robert Hughes Mr Robert Hughes , Harrow West 10:45 pm, 14th June 1988

My hon. Friend will recall that race relations and racial harassment on estates were debated in a genuine spirit of bipartisanship. It is inherent in deciding whether the Government are following the right course for us to know at least some of what will be in my hon. Friend's mind when he brings forward the code. I accept that it is a matter for the CRE, but the task will be very difficult unless he is able at least to raise the curtain slightly and show us what he is looking for.

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

My hon. Friend—who, I know, has considerable interest in these matters—will know that it is for the CRE to bring forward the code, after which there will be widespread consultation on it. We have committed ourselves to giving the code a statutory basis and inviting the CRE to bring it forward—an invitation that that organisation has welcomed. I do not consider it right in this instance—as opposed to others that we shall discuss later tonight—to try to foreshadow completely what will be done. The CRE is the expert, and it must bring forward its proposals.

With one exception to which the hon. Member for Brent, South referred, we accepted the proposals put forward from both sides—my hon. Friend the Member for Harrow, West (Mr. Hughes) spoke on the matter in Committee—and agreed to make section 71 of the Race Relations Act 1976 bite on the Housing Corporation and on housing action trusts. We did not go the step further that the hon. Member for Brent, South wanted, which was to make it bite on housing associations individually as well.

We considered the proposal and listened to the arguments put in Committee, but we believe that section 71 is a duty specifically tailored for public authorities and those who hold wider responsibilities. It applies to local authorities; it should apply to the Housing Corporation, because the corporation, in the more pluralistic social housing sector, will have some of the wider responsibilities of local councils; and it should apply to HATs, because they will be standing in temporarily for local authorities in some of their funcions. However, while the housing associations will be relieved of none of their duties to behave properly about discrimination we do not believe that section 71, which is aimed at public authorities, can be suitably applied to the specialist providers of housing, with their narrower function.

That is not to say that it is not vital for social or any other landlords to conduct their affairs properly. They are already subject to the provisions in the 1976 Act which make it unlawful to discriminate in the provision of services and accommodation. I do not feel, however, that what might be called the "promotional" side of section 71 relates to their primary function.

I hope that, underneath the enjoyable rhetoric, the hon. Member for Brent, South, and my hon. Friend the Member for Harrow, West, will agree that we have moved rather further than we said we would in Committee in one important respect. We have invited the CRE to bring forward a code, and promised an amendment in another place to give it a statutory basis. That shows that we share the hon. Gentleman's view that the subject is important. I hope that he will agree, in a spirit of fairness, that we are moving a long way in the right direction.

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

The Opposition will not divide the House on this issue. We recognise that there was a measure of bipartisanship in Committee and that the Government have come forward with something of a concession. However, as my hon. Friend the Member for Brent, South (Mr. Boateng) said, we are not satisfied with the Government's concessions. We are not happy, because the code that we were promised is not before the House now for us to judge.

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

The Minister says from a sedentary position that it was not promised. We were told that we were going to get it. We are now told that we shall get it in another place.

The general problem with the way in which the Government have dealt with the Bill, not just on Report now but in Committee, is that everything has been up in the air. The Government have promised to do something and then said that they are not sure about the proper form for doing it. They said that we would know where the housing action trusts are by Second Reading, but we still do not know where they are and we still do not know what criteria will apply to them. There will be a code in relation to the social landlord, but that will not be included in the Bill now. We shall have that code after we have considered the Bill, and we shall not know whether it will be satisfactory. We are in the same position now, as the Government have said that there is a code in relation to racial discrimination, but they will not let the House see it before we pass the legislation in this place. They said that it will be introduced in another place. We shall not be able to judge whether the code is satisfactory while we deal with the amendments and Third Reading in this place.

We believe that the Government have treated the House with contempt. This Bill is completely different from the one that we debated in Committee. Even now, with the 180-odd amendments, new schedules and new clauses which amount to a total rewrite of the Bill since it came from Committee, we are told that other major amendments, including a whole code on the very important issue of racial discrimination, will be tabled in another place. That is what the Minister said.

The Minister said that there would be a major amendment on the issue in another place because the procedures in another place are a better way of dealing with the matter and getting it through. It is a strange admission for the Minister to make that it is easier to get amendments and legislation through, another place than the House of Commons. If that is the case, perhaps the House should scrutinise the matter and make it a little more difficult for the Government to push this through.

The Minister might be pleased to hear that we accept that there might be an amendment to deal with the issue in the spirit of the concession or commitment that the Minister gave. He seems to believe that no commitment was given, but we think that one was made and it seems to have been followed up by the Minister, at least to the extent that we have a commitment that we shall get the code. We have had a concession from the Government on that. Therefore, we shall not divide the House.

Photo of Mr Robert Hughes Mr Robert Hughes , Harrow West

I want to be brief——

Photo of Mr Robert Hughes Mr Robert Hughes , Harrow West

My hon. Friend says be brief, and I will be.

After the hon. Member for Brent, South (Mr. Boeteng) finished giving us his racing tips for Epsom when he talked about horses, he made a very serious contribution and I agreed with the points that he made.

I regard this as an extremely important issue. If we talk to anyone who has suffered racial harassment in housing or any other sphere of activity, we realise how serious this is and what a degradation it is to those people. It is an affront that this still happens.

It is important that the Department of the Environment drives towards a proper code of practice and that the matter is not simply left to the Commission for Racial Equality. I do not want to make disparaging comments about the commission's abilities, but it took many years to put together a proper code of practice for employment. I would not like us to have to wait two, three or four years for the code of practice that so many of us seek so urgently in this area.

I commend to my hon. Friend the Minister not only the work by Leeds city council, but previous important and serious work by the Greater London council and by some boroughs in the east end of London. They uncovered some problems which had not been brought to light previously. That is more apposite and useful than the draft code of conduct that I have seen from the Commission for Racial Equality to date.

By the time this Bill goes to the other place and subsequently returns, I hope that we shall see some significant progress in this area and that the Government have been able to satisfy the hon. Member for Brent, South and me. I hope that we shall have made progress in helping people who urgently need our help.

Photo of Mr Paul Boateng Mr Paul Boateng , Brent South

I wonder whether the Minister could clarify one or two points for us about this code of practice, aspects of which are only now coming to the fore. Has he any timetable for its presentation? Is it to see the light of day during the deliberations in the other place? Will the other place be treated to insights into its contents, to which we have not been treated, or will it simply be given the option to amend the Bill to enable it to exist at some later date within a statutory context?

The Minister talks about the breadth of consultation. Will it include the National Federation of Black Housing Associations and local authorities which have some experience of seeking to address these issues? How wide will consultations be? Will it draw on the fund of knowledge and experience to which the Minister referred in relation to the Ujima housing association and others in terms of making the provisions work in biting and impacting on the sort of problems that are faced within housing associations—the sons and daughters rule, for example? Can the Minister flesh out the proposals for the code of practice in that respect? If he cannot, we shall continue to have real doubts.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

I should like the Minister to enlarge on the code, because it forms a semi-area of delegated legislation. As Chairman of the Joint Committee on Statutory Instruments, I believe that it is important that the House should have some details.

The way that we deal with delegated legislation is inadequate, particularly with codes of practice, because they inhabit a sort of never-never land: they are not the rule of law, yet they are invoked in prosecution cases. Breaches of the code are primie facie regarded, if it is a statutory enforcement, as breaches of a statutory requirement. Can the Minister enlarge on this, particularly regarding consultation? The Government are moving increasingly to codes of guidance and practice, which is less than satisfactory. Statutory instruments at least have the merit of being clear, in that they are delegated legislation. They are not in the in-between position of simply being a guide so that a breach is not a breach of law. Therefore, consultation is important. We should know in detail which bodies will be consulted, and this House should be consulted.

We are all keen for outside bodies to be consulted, and we want to know that that is happening. It amazes me, however, that this House, which is the most important legislature in the country, is often presented with a fait accompli. No consultation documents are made available in the Vote Office. Hon. Members are unable to obtain such documents or to submit amendments.

11 pm

One of the problems with delegated legislation—for the purposes of discussion I shall include codes of practice—is that there is no opportunity to amend it. Primary legislation is amended as it makes its passage through the House. Committee members may amend a Bill in detail and every hon. Member may amend a Bill on Report.

I guess that the Minister will produce a code, describe it as a step forward and say, "Take it or leave it." He will not use such words, of course, but that is the effect produced by the Executive presenting such a document to the House. The Government will consult outside bodies and may consider amendments—frankly, I hope they will.

I hope that the Minister will assure us that he will present an outline code to the House and invite comment upon it; otherwise the code will be presented as decided by the Minister—that is the only process available for dealing with it. There are no Committees that can examine such codes and there are no other means by which they can be debated in the House. Statutory instruments are subject to the negative procedure and if a prayer is put down there is a chance for debate. An affirmative resolution must receive the resolution of the House and is at least dealt with by the merits Committee upstairs. There is no procedure to allow a code to be examined, challenged or amended.

The Minister may say that the code is only a guide, not legislation, and that it is simply something that the Government expect people to follow. If people breach that code they are in danger of having a case found against them. Codes of practice are being increasingly used by the Government. Absolute provisions relating to health and safety at work are being supplanted by codes of practice. I regard that as watering down standards.

I hope that the Minister will adopt a conciliatory attitude and will agree to produce an outline proposal so that hon. Members can make suggestions. Anyone who takes an interest in housing would want to make such a contribution. Such consultation should be additional to the consultations that the Minister has already mentioned.

Some of us have deep suspicions that Ministers are producing the code of practice to act as a sop to criticisms, and that they have no intention of utilising legislation through delegated powers because they want to deal with the matter in a way that satisfies all parties. It is difficult to do that in this circumstance because racial discrimination is not a subject on which we can be nice to all sides. We must tackle the matter firmly. In such circumstances, legislation is the best and only way in which to do it. The Minister may be aware that codes of practice do not have to be considered by the House of Commons Standing Committee on Statutory Instruments or by the Joint Committee on Statutory Instruments—there are no provisions for such consultation.

I hope that the Minister, who I know takes an interest in the detailed application of these things, will examine this matter and return with it to the House, so that we can see what sort of improvements he has in mind for our scrutiny of this area, which is of great importance.

Photo of Mr Pat Wall Mr Pat Wall , Bradford North

I support the demand for an effective code of conduct. The problem has been greatly oversimplified. Some of the nationally published reports show that, in Liverpool, for example, black people usually have to wait longer for Council housing and when rehoused tend to be given lower quality accommodation. In Hackney, black applicants seem either to have difficulty in obtaining access to Council housing, or consistently receive poorer-quality accommodation than white applicants. This problem also applies to Leeds and every other major urban centre with a high immigrant population.

This is not only a problem of the direct exclusion of black people, or of poorer provision and longer waiting periods for black applicants. There is no housing policy designed by most local authorities or housing associations to deal with the problems of the Asian population of Bradford and other parts of the country.

I refer to a report done for Bradford city council in the Manningham area of Bradford. Of the housing used by immigrants in that area, 92·2 per cent. was late Victorian, much of it back-to-back; 86·3 per cent. was owner-occupied; and only 13·7 per cent. was rented. The reason for that was that in the appalling economic conditions that prevail, more than 35 per cent. of the houses surveyed contained no one in full-time employment. More than two thirds contained only one person in full or part-time employment. Most of the families in the properties were grossly overcrowded and living in appalling conditions. It is not as if they wanted to purchase their properties. They would have much preferred to rent, but that sort of property is not available.

The vast majority of housing association accommodation is single or two-bedroomed—for one or two people, or for families with one or two children, or for elderly people on their own. Hence there is no provision for the extended families of Asian households and large houses in housing associations are generally not used as such but are converted into flats and bed-sits. It is impossible for Asian families to move in and use these facilities.

The Manningham survey frankly pointed to the surprising fact that Asian people prefer to live in the inner cities with their communities, because of racism, other pressures and problems of language. They want the protection that the community spirit affords. There are plenty of slum-clearance areas in the inner cities, but they are not being used for housing provision for ordinary families—particularly, not for immigrant families.

It is nice, of course to have a code and to say that a certain proportion——

Photo of George Howarth George Howarth , Knowsley North

The hon. Member for Harrow, West (Mr. Hughes) said earlier that he had seen the draft CRE code to which my hon. Friend referred earlier. Knowing my hon. Friend's interest in this matter, I wondered whether anyone had bothered to show him a copy?

Photo of Mr Pat Wall Mr Pat Wall , Bradford North

I have not seen a draft of the charter. No doubt I can trot over to the other place and see my old friend Bill Sefton, now Lord Sefton of Garston, in whose house I joined the Labour party. He will tell me what is going on in that place and we can discuss it and I can find out more about this problem.

I should like to quote from the Manningham association report in relation to the question of owner-occupation. It says: The existence of owner-occupation cannot be taken as an indication of high standards of housing or indeed wealth. Owner-occupation has become the only alternative to over-occupied scarce rented housing. In order to meet the economic burdens of mortgage repayments and housing maintenance the sharing arrangements of large Asian families alleviates to some degree the serious levels of poverty.High percentages of home ownership have therefore been achieved by economies of scale in the presence of relatively larger numbers of persons per house. The cost of home-ownership in social terms is revealed by cramped and severely overcrowded conditions within the Asian community. The largely held assumption of home ownership being linked to prosperity is therefore deceptive. Whilst there undoubtedly exists a greater inclination and desire for owner-occupied housing within the Asian community, the availability of large rented houses is non-existent. That clearly expresses the present difficulty.

The report goes on to deal with local housing associations. The Brunel and Family housing association and the North British housing association have made an attempt to provide some large accommodation for Asian families, but that has by no means met the need. The Manningham housing association was founded deliberately to tackle the problem. However, it is under-resourced and under-funded, and for those reasons it cannot make any inroads into the appalling overcrowding and social problems.

The report on Manningham says: The housing associations which operate in the Manningham area cater largely for single persons, lone parents and the elderly. Large families sized accommodation is broadly speaking not provided by these associations. The rehabilitation work undertaken by housing associations has undoubtedly removed the larger properties from the private market. The larger houses are invariably converted into bedsits and flats. The lack of provision of larger family units by housing associations is due mainly to demand pressures for single persons. The future possibilities of undertaking rehabilitaion projects for the purpose of family accommodation is increasingly diminishing. Clearly, as associations successfully convert this dilapidated housing into flats and flatlets, less become available for alternative uses.The ethnic minorities tend to be under-represented in housing association properties. Those who do keep ethnic records should be encouraged to publish their statistics and implement equal opportunity policies. The National Federation of Housing Associations has provided a comprehensive guide as to how this can be achieved. The creation of a specialist Section 11 post of Housing Association Development Worker could monitor and develop the equal opportuntites progress of Housing Associations. I press quite strongly for the needs of Asian communities to be taken into account. Bradford has the most abominable housing conditions in Britain. I must press especially for the Asian community to be represented on the governing bodies of housing associations. Only when such representation is reflected in the associations will Asian needs begin to be met. Only then will a code of conduct be of any use. If a code of conduct applies to housing associations with small units of accommodation, it will serve no purpose for the vast majority of Asian people in Bradford, Leicester, and other cities. I hope that when the Minister replies he will not only give us some assurance about an anti-racist and fair code of conduct, but deal with the problems of Asian and other people who prefer to live in large family units.

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

I shall speak briefly. I do not want to set myself up against the hon. Member for Bradford, South (Mr. Cryer), who is such an expert on the arguments about the control over delegated legislation, which go back many years.

As the hon. Gentleman rightly said, the code would be one of those codes which, with a statutory peg, could be taken into account in court proceedings brought under the 1976 Act. In that sense, we would be returning to the express provisions of a broadly bipartisan Act that was introduced by our predecessors to deal with racial equality.

The one matter that is, perhaps, different from the point made by the hon. Gentleman is that we would not be taking the initiative in drafting the code. The Commission for Racial Equality asked us to provide the power under which it could produce a code of practice. The hon. Gentleman has asked me to be conciliatory, and I shall try to be so. The best thing that I can do is direct his words to the attention of the CRE so that it might offer to consult interested Members of the House. The procedure for this code is equivalent to the employment code—and I believe that there will be one coming forward on education—which is that the Secretary of State approves it and it is then laid before the House. I do not want to commit myself to any new procedure that I cannot subsequently deliver, although I shall draw the CRE's attention to what the hon. Gentleman has said.

Photo of Mr Robert Hughes Mr Robert Hughes , Harrow West 11:15 pm, 14th June 1988

Has my hon. Friend seen the draft code of practice that has been drawn up by the CRE, which it gave me during the Committee stage of the Bill and on which I made some comments at that stage?

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

I shall not claim that I know it by heart, but I know that it exists. I have looked through it. I have confidence in asking the House to follow the usual procedure, because I know that the CRE is well forward with its work and that the procedure is in train. As my hon. Friend says, there is a first outline, rough draft in existence.

Photo of Mr Paul Boateng Mr Paul Boateng , Brent South

Why is it that some Conservative Members have had access to the draft code and Opposition Members have not? This is the first that the Opposition have heard of such a code. If it is circulating among Conservative Members, why has the National Federation of Housing Associations not been consulted about this code? Why is that the local authorities have not been consulted about this code? Why should it be only the hon. Member for Harrow, West (Mr. Hughes) who has been made privy to the thoughts of the Commission for Racial Equality?

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

I am answering outside my responsibility. I have no idea how my hon. Friend the

Member for Harrow, West (Mr. Hughes) gained access to the code. Perhaps the hon. Member should address his question to the CRE.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Does the hon. Member for Brent, South (Mr. Boateng) wish to withdraw his amendment?

Photo of Mr Paul Boateng Mr Paul Boateng , Brent South

May I make a few points in conclusion?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. The hon. Gentleman has addressed the House twice, so he cannot speak again.

Photo of Mr Paul Boateng Mr Paul Boateng , Brent South

On a point of order, Mr. Deputy Speaker. Is it right that there should be introduced into the House at this late stage a document that is clearly relevant to the procedures before the House, but about which we have been given no prior notice whatsoever——

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. That is not a matter for the Chair; it is a matter for debate. The hon. Gentleman has addressed the House twice.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

On a point of order, Mr. Deputy Speaker. The usual procedure is that when the Government introduce a document, they lay it on the Table of the House. The Minister referred to a CRE document, which, as you have heard has been distributed to some hon. Members. The Minister referred to the code which the CRE is developing, and which will apparently be the subject of approval by the Secretary of State ——

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I neither know, nor is it within my responsibility to know, to whom the authors of the document referred. That is not a matter for me. Does the hon. Member for Brent, South wish to withdraw his amendment?

Amendment negatived.