Housing

Part of the debate – in the House of Commons at 6:24 pm on 15th February 1993.

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Photo of John Battle John Battle , Leeds West 6:24 pm, 15th February 1993

Many outside the House will not know or understand the internal lottery system which enables Back-Bench Members to win space in the parliamentary timetable to debate a topic of their choice on the Floor of the House. I warmly congratulate my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) on choosing to debate the housing crisis. In so doing, he has ensured that housing and homelessness in his constituency and throughout the country are firmly on our agenda. In his thorough approach he underlined the need to consider need, health and disability under the heading of housing. He stressed that such issues should be taken seriously and echoed on the floor of the House more regularly. I am sure that he will continue ensuring that that happens on the basis of his contribution today. We are indebted to him for the debate.

My hon. Friend the Member for Lewisham, East (Mrs. Prentice) expressed passionate concern and a deep knowledge of housing in London. She spelled out the bleak prospects which face her constituents and many thousands of others in London unless the Government are jolted out of their rather complacent approach to the housing crisis.

It is almost a year since we were presented with the Tories' election promises. We heard tear-jerking threats as soundbites were issued. On 23 March, the right hon. Member for Henley (Mr. Heseltine)—he is now the President of the Board of Trade—said: House sales under the Conservatives are picking up. All this would change on 10th April if there were a Labour Government. The recovery in the housing market would be devastated just as it gets under way. Of course, that was not true. The market was not picking up, and the recovery is still not under way a year later. On 31 March, the Prime Minister echoed the right hon. Gentleman when he said: We're going to make life easier for people buying their home and our policies will mean a stronger housing market. We all know something of the Prime Minister's ability to turn language inside out and to turn meanings on their head. Government policies in the past 12 months have resulted in a weaker housing market.

It seems that the stark reality is obvious to everyone except Conservative Members. Only this month, the former head of Wimpeys commented: It is the worst recession I have experienced in my 42 years in the construction industry. There is a crisis in the housing market, and it has been manufactured by escalating unemployment. Last year, 68,000 families had their homes repossessed., According to the latest figures presented by the Council of Mortgage Lenders, 147,000 families are more than 12 months in mortgage arrears and are staring eviction in the face. We are already hearing of people losing their homes because of secondary mortgages. Double glazing companies are causing people to lose their homes by calling in debts of as little as £500.

Over 1 million people cannot afford to move because their homes are worth less than the prices that they paid for them. They are caught in the negative equity trap described by my hon. Friend the Member for Ellesmere Port and Neston. In response, the Prime Minister talks about cash incentives in the Budget for first-time buyers to revive the housing market. Even today, however, there are printed leaks from the Treasury informing us that there may be a 5 per cent. increase in VAT on new home sales in next month's Budget. It seems that everyone except the Government acknowledges that escalating unemployment is undermining the housing market. The fear of redundancy holds families back from extending mortgage commitments. Millions are terrified that they may be just one payslip from redundancy. Faced with that economic insecurity, they dare not risk extending their long-term financial commitments.

Escalating unemployment—the figures this week will show another rise—is the primary cause of the crisis in the housing market and the homelessness in our society. What do we need? Although the Government's position is not clear, it is evident to everyone that there is a desperate shortage of rented housing, so the response to the crisis must be the right to rent. However, under Conservative Governments the only policy offered by one Housing Minister after another—there have been many in the past 14 years — has been the discounted right to buy.

That single policy instrument has dismantled any post-war consensus on housing. That deep-seated Tory obsession with tenure has led to almost 2 million rented homes disappearing since 1987. Over the same period, there has been a fall in the number of houses built by local authorities and housing associations. The result is a massive imbalance in tenure. At 69 per cent. of the stock, home ownership is proving difficult to sustain. In other words, there is a desperate shortage of decent, affordable and secure housing to rent.

There are 1·5 million families stuck on local authority housing waiting lists. We must not forget the hidden homeless who share sofas and floors while they wait for their own space. The Institute of Housing, Shelter and the Audit Commission have spelt out the fact that each year there is a shortfall of 100,000 homes to rent. As my hon. Friend the Member for Greenwich (Mr. Raynsford) said, on the best estimates, the Government are providing only slightly more than half that number this year. Local councils have been sidelined, undermined and prevented from providing homes.

In the latest Department of the Environment annual report, published only last week, the projections for housing under the housing investment programme capital provisions show a decline of £325 million between 1992–93 and 1995–96. That is an actual cut in housing budgets, taken out of housing programmes, of £100 million a year.

Housing associations still have only 3 per cent. of Britain's housing stock, yet they have been given the task, practically on their own, of filling the enormous gap of need. Despite that, day by day they are being undermined by Government changes in the rate of grant. This year it is down from 73 per cent. to 67 per cent. and it appears that next year it will go down further to 60 per cent. and the year after to 55 per cent. What will be the result of that cut in grants? Housing associations will have to borrow more money from the private finance sector, so rents will have to rise beyond the incomes of those not receiving full housing benefit.

By those reductions in the rate of grant, the Government are ensuring that housing associations will be turned into providers of welfare housing with a vengeance. They will soon be putting signs in windows saying, "Rooms to let: DSS only—apply within." Some 70 per cent. of housing association tenants are on housing benefit, yet rents are still rising. It is tragic. The Government are also building in a work disincentive. They are saying to those on housing benefit, "You can afford to rent a housing association property, but don't get a job because that will take you out of full housing benefit, you will not be able to afford the rent and you will lose your flat."

The Government must deal with the problem of housing benefit. The latest Department of Social Security report, also published last week, shows that the amount spent on rent in the housing association and private rented sector has doubled. A real poverty trap is built into the system for those who are not on housing benefit. Their homes are at risk because they have to spend more than their incomes to meet the rent demanded. I hope that the Government will begin to deal with the problem of affordability. A report from the Housing Corporation was discreetly placed in the Library. I hope that the Government will provide a full debate on affordability because under their policies housing association houses are becoming beyond most people's means.

Homelessness has more than doubled since 1979. A record number of 65,000 families are now in temporary accommodation. They are wondering whether "temporary" actually means for the rest of their lives. I recently met a young woman called Michelle who had been moved across London, away from her family and friends, when she was taken out of bed and breakfast. She lost her daughter's creche place and she lost access to her training course. She said that she felt like an exile from her community. She wants to get out of temporary and into permanent accommodation among her family and friends so that she can rebuild her life and find a job.

The crisis in temporary accommodation is tragic. I accept that the number of people in bed and breakfast is falling, which is welcome, but the problem cannot be solved simply by putting people into temporary accommodation. They need permanent secure housing where they can build basic communities with their friends and their families.

I remind the Minister for Housing and Planning that at the launch of the rough sleepers initiative he said that people sleeping on the streets of London would disappear by February 1992. It is now February 1993. If, when we leave the House tonight, we walked the streets of London, we would still meet many homeless people. Just before Christmas, late one night, I left the House and I spoke to some homeless youngsters. I was shocked because when I asked them how old they were, those who were confident enough to answer did not say that they were in their 20s or 30s—certainly they were not, as in the past, older people broken by war or alcohol—they said that they were 16. That suggests that many of them were not 16, but younger. I was shocked that youngsters of 16 were on the streets of London.

Another factor was important. When I asked them where they last lived, most of them said that they had been in local authority care. That care runs out at 16 and those youngsters have to fend for themselves. The Government have a responsibility to deal with the problems of youngsters of 16 who come out of local authority care but are then left to fend for themselves and so end up on the streets. I shall return to that point later.