I hope to show that, in practice, if the Government spend more on housing it is likely to pay for itself and that, therefore, whatever the Government are now spending, it would be beneficial to put more money in.
The housing manager to whom I spoke said that it was wrong for the Government to place more emphasis on shared ownership, for which there is limited demand: only a certain number of people can benefit from that form of tenure.
I recently visited a new housing association being built in Basingstoke by Wimpey, whose people kindly took me round the estate and showed me the different forms and sizes of housing and different forms of tenure. They told me which of the forms of tenure had been the easiest to fill. Interestingly, they said that the hardest to fill was shared ownership accommodation. When I asked why, they said that the answer was obvious: much of shared ownership costs more than outright purchase or renting, which is why people are unwilling to take it. A move towards more shared ownership, therefore, will have only limited applicability in trying to solve our housing crisis.
To a large extent, I welcome the emphasis on rehabilitation in the report of the Select Committee on the Environment. We should all like the standard of housing in this country to be raised. Much housing is in far too poor a condition nowadays and there are many advantages to be gained from rehabilitating older housing stock wherever we can. But a balance should be struck.
There is no point in putting all available resources into rehab or new housing. We must get the balance right. As long as the Government do not go overboard on rehab, I would welcome any moves to put money into that part of the housing movement.
The Government claim that they wish to spread their resources more widely by reducing the amount of housing association grant to each housing association property. One can understand their reasons for wanting to do that, but here again there is a danger in going too far. If Government resources are to be spread more widely, more money will be needed from the private sector and, as has already been said, there is a limit to which the private sector will be prepared to meet its share of housing costs.
Obviously, the more housing sector finance is demanded, the more rents of such housing will rise because interest on that finance will have to be paid. In addition, the larger the proportion of the money from the private sector, the higher the interest rate is likely to be, because the private sector will wish to have a higher interest rate if the risk is large. Clearly, there is a point at which it becomes counterproductive to continue to lower the percentage of housing association grant into each housing association property. The Government's new proposals go beyond that point.
What will happen? Rents will inevitably rise and much housing will no longer be affordable. At the same time, the Government's proposals on homelessness will push more homeless people into the private sector, where rents will also increase, leading to more dependence on housing benefit.
Housing benefit is due to be capped. Somewhere, we shall come to a crunch point. Sadly, for various reasons, many people are losing homes that they have owned for a long time. For instance, people lose their jobs or face difficulties with the Child Support Agency. If they are vulnerable—for example, they may have young families—they will be housed by the local council and the costs of that housing will be met by housing benefit.
When such people find another job, they may be worse off. Even in the present situation, with people being housed in comparatively cheap rented accommodation by local councils, they may face difficulties in paying the rent. For the many who are housed in private rented accommodation at higher rents, the problem will be exacerbated. I foresee a difficulty because if someone loses their job and then their house, they will be rehoused, but if they find another job, they may lose their house again. The Government are leading us into the position whereby people can either have a job or a house, but not both. I am sure that that is not a position which the Government will wish to endure.