Housing (Newham)

Part of Petitions – in the House of Commons at 1:30 pm on 23rd March 1989.

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Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East 1:30 pm, 23rd March 1989

No Member of Parliament could represent a constituency in the London borough of Newham without living every day in the knowledge of the appalling housing of so many of its people, the gross overcrowding of 6,750 households, the chronic shortage of affordable rented accommodation, the thousands of desperate people on the council's waiting list —currently 9,511—the 4,541 people on the transfer list and the 600 homeless families living in squalid bed-and-breakfast accommodation.

The crisis hangs like a pall of misery over the borough. It is with us constantly, with every telephone call, every postbag and every weekend surgery. Sometimes I think that hon. Members should swap surgeries and, on occasion, I should take the surgery of a Conservative Member, perhaps in a leafy suburb, while he or she takes one of mine in the inner city. In that way, they would meet the frustrated people who come to see me. They would meet the families sleeping in one room, people with fungus growing on their walls, people with leaking roofs and without adequate heating, bathrooms or inside lavatories. They would meet people without hot water and with dangerous wiring and people who cannot find anywhere to live and whose lives are being destroyed, and families who are breaking up under the strain. They would meet the genuine people who have been on the waiting list for years and are losing hope of ever being rehoused.

I would like Conservative Members to meet those people because that is Britain in 1989 after 10 years of their Government. They are our fellow citizens. Conservative Members would come out of those surgeries, as I do, emotionally drained and, I hope, shocked, bewildered and ashamed that we permit such things in our country today.

The housing crisis is a scandal and disgrace. It has been intensified every year the Government have been in office. We sometimes talk of the freedoms our citizens should enjoy in our society such as the right to free speech, and the right to vote. I would add to that list the right to a job and, after GCHQ, the right to join a trade union. But perhaps the most basic right of all is the right to a home and a roof over one's head. That is recognised even in primitive societies where, when a couple marry, the tribe rallies round to build them a hut. However, in modern Thatcherite Britain that is thought to be beyond us.

The Government's policy has been to encourage home ownership. There is nothing wrong with home ownership. Aneurin Bevan said that there is nothing in Socialism against owning one's own home, but that what we were against was someone owning several thousand other people's houses and exploiting them à la Rachman. Perversely, the effect of the Government's policy has been to push up house prices to unprecedented levels, thereby preventing access to home ownership. Some people talk of a rising market or a boom in house prices as if it were a good thing. However, when the price of anything else rises, it is known as inflation. The Government are supposed to be against inflation but they have engineered the biggest house price inflation in history, making it impossible for first-time buyers to buy. Is it any wonder that we cannot find train crews for the Northern line or bus drivers, nurses and teachers? They cannot find anywhere affordable to live.

On top of that, those who mortgage themselves to the hilt to obtain somewhere to live, find themselves clobbered by the Chancellor's interest rate rises. The increases in August and October mean that the average home loan rate of 9·5 per cent. has rocketed to 13 per cent. That means that on a £30,000 mortgage over 25 years borrowers have to pay an extra £52·80 a month. On an endowment mortgage, they have to pay an additional £65·62 a month and it will be double that for a £60,000 mortgage. Is it any wonder that people are putting "For Sale" signs on their dream homes and many are becoming homeless as building societies foreclose? All that is under a Government who pretend to support home ownership.

We need affordable houses to rent. We have 1 million fewer homes for rent in the private sector now than in 1979. The Government's efforts to reverse that will fail because it is more profitable to sell with vacant possession than to rent. The people who come to see me want local authority housing. That is the popular demand. That is precisely what the Government are destroying as a deliberate policy. They want to get the councils out of housing, and have said so.

In 1977–78, the last full year of the Labour Government, 78,606 homes were started by local authorities in England and Wales, but by last year that figure had been cut by 79 per cent. to 16,193. There has been a relentless decline. New building is grinding to a halt. In Newham there were 1,079 new build starts in 1978–79, but in 1986–87, only 83, in 1987–88 only 31 and in 1988–89 only 66. At the same time, up until September 1988, 4,120 homes were sold under the right to buy. A further 3,287 applications to buy are outstanding. This represents a quarter of the total council stock, and the best three-bedroom houses at that.

The receipts from those sales cannot be used for new building because much of it goes to the Treasury If the stock is sold, building is stopped, private renting diminishes and people are priced out of access to owner-occupation, what happens? There is an epidemic of homelessness. Newham has had a 12·5 per cent. increase in applications from homeless people each year since 1981. The cost of temporary accommodation to the council has increased from £52,000 in 1983–84 to £5·5 million in 1987–88. In the 1960s only 3 per cent. of lettings were to homeless people. In each of the past five years the majority of lettings has been to the homeless.

The council's 1989–90 housing investment programme bid—this is my main purpose in having the debate—was £100·65 million but the Government's allocation was only £14·432 million. That allocation was a cut in real terms of 24·5 per cent. over the previous year's provision and a cut of 69 per cent. over 1978–79. In other words, this year we shall get only 31 per cent. of what the borough got in the last year of the Labour Government. Housing has borne the largest cuts of all under the Government and it is destined to get even worse. Public expenditure plans show at national level a further reduction of local authority capital spending from £3·153 billion to £2·8 billion in 1990–91, an 11 per cent. cut and £2·65 billion in 1991–92, a further 5 per cent. cut.

It should be emphasised that the HIP allocation is not a Government grant but permission to spend and borrow. Virtually all housing, private and public, is financed by borrowing. Most of that expenditure is planned to be funded by capital receipts, much of it from the sale of council houses. Perversely, the new Housing Act 1988 will restrict Newham, along with other authorities, to only 25 per cent. of its capital receipts. That is astonishing. The council is prohibited from spending its own money. It cannot spend receipts from selling council houses or new buildings.

The council is asking not for Government money, but for freedom to spend its own, but that permission is refused because of crazy ideological dogma, because the Government want to push councils out of housing provision. The Government have said that they do not want councils to build any more houses and they want their existing estates sold off. In fact, at the launching of the Housing Bill, the Secretary of State for the Environment the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) said: We'd like to see council house building at a low level with local authorities composed of providing housing in certain categories such as hostels or sheltered housing. If the councils cannot help the desperate people who come to my surgeries, who will? This basic need cannot be left soley to market forces. Millions of people cannot afford to buy or rent on the open market. What will happen to them? If the Government are not interested or do not care about them, why should they deliberately obstruct local councils in spending their own money to help people in acute need? That policy is not only evil, but economically illiterate, because councils are giving priority to void reinstatement, rehabilitating empty homes and new build. It costs twice as much to keep families in bed-and-breakfast accommodation as to build new homes.

The reduced housing investment programme allocation means that Newham cannot give much help to housing associations, although the original bid included £18·4 million for such projects, nor can it give discretionary grants to occupants of private housing. The reduction significantly restricts the programme of improving existing council stock. There is a huge backlog of repairs. The total expenditure necessary to improve existing stock is an enormous £120 million. The 1989–90 HIP bid asked for £6·5 million for security work, lift renewals and refurbishment for 20 tower blocks. The cut in allocation means that that has had to be reduced to £2·5 million. That means that work can only proceed on eight blocks. One of the results of that is that the residents of 12 blocks will continue to live in abysmal conditions. Only this week, an environmental inspector said that in his opinion, one block was unfit for human habitation. Pointing to the dangers, he said that the balconies were a "stepladder to oblivion". Six months ago, a 20-month-old toddler fell to his death from the balcony of his home in that block.

The borough is having to restrict the number of repairs it is able to carry out on council properties, laying up bigger and more expensive problems for the future. The inevitable and only conclusion is that the Government's decision will mean that the condition of housing in both the public and private sectors in Newham will continue to decline and homelessness will become worse. It is an appalling and evil policy. I meet the human consequences at every surgery I hold. Homeless applications are currently running at about 200 per month. The Audit Commission's recent report said that homelessness has been increasing" over a long period of time, across all types of authority, in different regions, under all types of political control and widely varying housing policies. Newham has more than 500 families in often squalid bed-and-breakfast accommodation. They sometimes live in overcrowded rooms without tables or chairs for meals, with no privacy for parents or children, with no place for the children to play or do their homework and no readily available doctor, social worker or health visitor. Newham has another 500 families in other forms of temporary accommodation. The lunacy is that it costs more to keep families in such accommodation than to build new homes, but the Government will not allow the council to do that.

The Minister may mention Estate Action. Let me tell him that the council has had 11 Estate Action bids rejected. Furthermore, now that the Government are insisting that 50 per cent. of the capital cost of Estate Action programmes count against existing HIP allocation, the council is wondering whether the scheme is worth the paperwork. The £200,000 received under the area renewal initiative is too little to be significant.

The council has no ideological hang-ups about working with the private sector and housing associations. It has concluded a partnership agreement with Laing to demolish the eight remaining TWA tower blocks of the Ronan Point type and to develop the site. It has already sold, or is completing the sale of, a number of sites in its ownership to housing associations. All the council's sites are being reviewed with the option of disposal being considered. The problem is that the level of housing association grant for housing association schemes, coupled with the high price of land and construction costs, will put the level of rents of many of those schemes beyond the reach of most of the people in the most acute housing need in Newham. The truth is that, even with the fullest possible co-operation with the council, those high costs, the recent decontrol of rent, the limitation of security and the inadequate level of subsidy mean that housing association and private sector housing cannot be an adequate substitute for local authority housing in Newham.

The Government's policy of stopping council house building and pushing councils out of housing has caused and is exacerbating the housing crisis in the borough and even more human misery and family breakdown. The council's housing investment programme for 1989–90 was a carefully worked out, realistic and necessary programme, decided upon by those on the spot. By rejecting it, the Government have sacrificed the interests of the local community to ideological dogma and condemned thousands to more heartache.

I shall allow the Minister as much time as I have given myself. I hope that he will respond seriously and not take refuge in knockabout attacks on local government as he has on previous occasions—by pretending, for example, that the borough has a large number of voids. That is certainly not true of Newham, where only 1·5 per cent. of council stock is empty; indeed, a previous Parliamentary Under-Secretary of State congratulated the borough on its policy on voids.

Nor does Newham have large rent arrears compared with those in other boroughs. Rent arrears are being reduced in Newham. The figures tend to be misleading because Newham does not write off bad debt, as some boroughs do. It has a twin track policy on rent arrears: it actively counsels tenants whose rent is in arrears and it operates an active collection policy, including recovery through the courts. Its decentralised housing offices all have targets for the recovery of rent arrears. I hope that the Minister will not try to shelter behind that argument. He will know that the Government's housing benefit changes have caused problems in this regard. In my constituency some people are now spending 40 per cent. of their income on rent.

I hope that the Minister will address the housing crisis in Newham seriously. The Government now have a £14·5 billion budget surplus—a great opportunity to tackle the infrastructure and the housing backlog. I shall continue to raise this matter in the House and to keep it to the fore, and if I can get the Government to take it seriously, I shall have worked in the interests of my constituents.