After 12 years of office, the Government have little to be proud of when it comes to housing. They have presided over record levels of homelessness, record rent levels and record levels of house repossessions. The hallmark of any civilised society is its ability to house its citizens properly. People have a fundamental right to decent affordable housing, a right that the Government attempted to capitalise on with their ideology of a property-owning democracy. The right-tobuy policy was the Government's flagship in 1980, but because it was implemented as part and parcel of Conservative mania to reduce public spending and to restrict the powers of local government, it has contributed to the present scandalous homeless and housing crisis which is growing all the time.
Shelter's most recent report put the number of homeless people at 350,000. Some estimates are set even higher, at 500,000. As many as 8,000 people sleep rough every night. Age Concern believes that 30 per cent. of those people are over 50 years of age, many of them with disabilities. But the number of disabled persons who are homeless arid on our streets are not just among the elderly. The November issue of Disability Now quotes a new survey in Nottingham carried out among 50 homeless people between the ages of 16 and 25, which found that the majority had disabilities.
How the Government can come to the House today and call that a success is beyond belief. It is a disgrace. We are a supposedly civilised society approaching the 21st century, we have wonderful technology and great expertise, we play our part on the world stage—yet we fail miserably when it comes to housing our people.
The previous Prime Minister held up a dream of home ownership. The Government raised expectations but failed to deliver to thousands of people. Not only that, they also took away the choice of how people housed themselves. The right to choose figured prominently in all the Government's rhetoric, but when policies were implemented, choice was eliminated for most people.
The Government's housing policy was aimed at home ownership, to the detriment of the provision of affordable housing to rent. Many people looking for somewhere to live had little choice but to buy, often with 100 per cent. mortgages. For others, the opportunity was a dream come true. They believed the rhetoric and entered the property market. I accept that many of those people have never looked back, but thousands of others have.
Mortgage repossessions have reached record proportions throughout the country. As many as 100,000 to 120,000 houses will have been repossessed by the end of the year. With the current level of people in arrears running at 750,000, of which 162,000 are more than six months in arrears, that figure is set to go even higher next year.
The situation could be made worse if and when the housing market picks up because at the moment some building societies are holding back from repossessing because of falling house values. As soon as they see a turn in the market, they will begin the repossession process, and many more families will be evicted.
The Government are in for a nasty shock. Come the general election, they may find themselves evicted from the House, but that eviction will be the result of their own actions, unlike the fate of many of the homeless and those who have had their homes repossessed.
The Government have mismanaged the economy, introduced high interest rates, implemented housing policies but neglected the need for social housing and presided over the boom and bust cycle which has contributed to the depressed housing market. In recent weeks, the Government have tried to talk up the economy, but they have failed to convince anybody that recovery is around the corner.
It is not difficult to see why the Government have failed when industries such as the construction industry are on their knees. As Sir Clifford Chetwood, chairman of Wimpey, was reported as saying in The Guardian on 26 November, the construction industry is in "shocking crisis", with no prospect of a return to growth until 1993. He has forecast 250,000 job losses by next summer, with as many as 5,000 firms going to the wall before the end of this year. He says that the country is on the brink of a housing crisis with a shortfall of 1 million homes.
Some of us have been only too aware for a long time that housing in Britain was in crisis. Most of us have only to look around to see the homeless on our streets or to visit some of the homeless organisations such as the Simon community, which I have visited twice. There are many in that community who are sleeping rough. I expected there to be 40 in Lincoln's Inn Fields, but when I went, there were 260 people. Most of them have jobs; none of them have homes because they cannot afford the three months' rent.
With the construction industry depressed, with some building societies and mortgage lenders in trouble and with unemployment continuing to rise, the housing market is set to continue to fall, and Britain's economic recovery will be further delayed. The Government must take the initiative and look to ways to reduce repossessions and the number of homeless and to provide more homes for rent.
In the short term, much can be done which will have some immediate effect. The recently announced scheme to allow housing associations to take over repossessed homes to house homeless families for a year is a beginning, but if that is to be the only scheme, it is somewhat misguided. There is not much sense in turfing one family out into the cold in order to house another which, on present trends, will be homeless again within a year unless there is some guarantee of permanent housing.
The Government must use their initiative and power to prevent repossessions in the first place. They must introduce sensible mortgage rescue schemes. The transfer of mortgages to shared ownership schemes with local authorities and housing associations is one such scheme which will work. Local authorities already have the power to set up mortgage rescue schemes with housing associations, but the Government should find ways to encourage the extension of such schemes.
Mortgage lenders must take some of the blame for the current repossession crisis. I was pleased that the Minister mentioned that. Far too often in the past, lenders have been, if not irresponsible, over-enthusiastic. I do not want a return to the days when it was virtually impossible to obtain a mortgage, but I feel that lenders should be more responsible. Perhaps they will be: there is nothing like a nasty case of burnt fingers to restrict lending.
Mortgage-to-rent schemes should also be encouraged, since they would benefit lenders as well as families in arrears. Rather than selling at auction, possibly at a loss, lenders could hold on to properties that might appreciate in value, while continuing to receive a regular income from those properties. Tenancies could be short or long term, and, if necessary, housing benefit could be provided to make the rent affordable. If such schemes are to appeal to building societies, they may have to be administered by local authorities or other housing agencies. A shared-ownership scheme would also benefit both lenders and families in arrears.
Another possibility is a mortgage-to-rent scheme with the option to buy back. Regardless of which scheme is introduced, however, Liberal Democrats recognise that the lenders would need some assistance. We suggest that the portion of income support that is allocated for mortgage repayments be paid to them directly.
Other problems also need attention urgently. The Government must tackle homelessness in general. To help young single people, we advocate reform of the social security system, enabling income support to be paid in advance and restoring the full rate of income support to the under-25s. Family credit entitlement should be adjusted to reflect liability for mortgage interest payments.
The Government should also investigate the possibility of a housing benefit allocation that takes into account mortgage interest payments. I understand that reducing mortgage tax relief from 25 per cent. to 23·5 per cent. would release £400 million—the estimated cost of paying housing benefit for mortgage interest payments. That information is contained in a report by the Council of Mortgage Lenders entitled "Time for Mortgage Benefits", which is due to be published later this week. Perhaps the Minister will look at it.
The lifting of the restrictions on capital receipts from the sale of council houses would provide an immediate injection of cash for the housing market. It would provide more homes, and it would also create jobs. Our party's programme would increase the percentage of council house and land sale receipts that can be spent by local authorities from 25 per cent. to 75 per cent. when the money is to be spent on repairs and renovation.
The Government's housing policy has led to many untenable situations. Let me give an example of the ridiculous state of housing finance and the false economies that have been made. Because of the lack of affordable housing to rent, and the lack of funds to bring poor housing up to standard, many local authorities have to resort to providing bed-and-breakfast accommodation. According to the Audit Commission figures for 1990, the cost in the first year of such accommodation in London is £15,540; the cost in the first year of building a home to rent is £8,200. Outside the metropolitan districts, the figures are £5,475 and £5,000 respectively. Those figures speak volumes about the absurd way in which the Government run their housing policy.
So far, the Government's response to the housing crisis has been dismal. Palliatives are not enough; we need fundamental change. Unless the Government take action now, the nation's housing needs will continue to increase and the current state of affairs will continue to go downhill.