Sustainable Communities

– in the House of Commons at 11:30 am on 5th February 2003.

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Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission 11:30 am, 5th February 2003

We now come to the statement from the Deputy Prime Minister. [Interruption.] Order. Will those hon. Members leaving the Chamber please do so quietly; there is a statement to be delivered.

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee 12:31 pm, 5th February 2003

Last July, I made a statement to the House about the Government's plans for a step change in our policies for building sustainable communities. Today, I am publishing "Sustainable Communities: Building for the Future"—a comprehensive programme of action to take these policies forward. Copies are in the Library.

The future of our communities matters to all of us in the House, and I would like to record my appreciation to the Select Committee for the work that it has undertaken on those issues, including its recent report on affordable housing. Much of the communities plan is properly about housing, but sustainable communities need more than just housing. They need a strong economy, jobs, good schools and hospitals, good public transport, a safe and healthy local environment, better design, more sustainable construction and better use of land, and much more. The plan is part of the Government's programme to deliver better public services, strengthen economic performance and improve our quality of life.

The history of housing over the past 30 years shows that all Governments have failed to meet housing need. All Governments have failed to provide sufficient long-term investment. All Governments have failed to deliver enough affordable housing, and all Governments have ignored the mistakes of the past, when we built housing estates, not communities. Not only did we underinvest in our housing; we used land wastefully, and too much of what was built was poor quality and poorly designed. In 1970, we were building nearly 300,000 homes a year. Today, it is half that, but the demand has increased. The result is a legacy of spiralling house prices, rising land values and a shortage of affordable homes.

In London and the south-east, more and more young people and key workers cannot afford to live where they want. They are being priced out of their communities. In other parts of the country—in the north and the midlands—the housing market has collapsed and thousands of homes face demolition. While private house building has declined over the past 30 years, so has the condition of local authority housing.

By 1997, the repairs backlog on local authority housing was a record £19 billion. Throughout the 1980s and into the 1990s not enough was done. The problem just got worse. As more people moved into home ownership—many of them through the right to buy—local authority housing continued to decline. The 1.5 million right-to-buy sales since 1980 cost the public purse a massive £40 billion at today's prices in discounts. Despite the £29 billion in actual receipts, not nearly enough was invested in improving the housing stock.

Local authorities were denied the money that they needed to repair the homes of their own tenants. Instead, capital receipts from right to buy were used to pay off the national debt. That is the legacy that we inherited—fewer homes being built and the condition of the stock getting worse by the year. We decided that the overriding priority was to halt the decline. That is why we released the £5 billion of capital receipts, which the previous Administration kept in the local authority banks, for housing refurbishment and why we established the major repairs allowance, which released another £1.5 billion a year—and this to apply nationally as the problem applies nationally. That is also why we committed ourselves to making all social housing decent by 2010, and we are on track to do that with 500,000 homes already improved.

Our first priority was to deal with the £19 billion backlog across the country. The decent homes programme will achieve the replacement of the £19 billion disinvestment by 2010. Now we must tackle the fundamental problems of high demand in the south and a collapse of housing demand in some of our most deprived communities.

May I deal first with the action that we propose to tackle housing market collapse? I am talking about communities where the properties have become almost worthless and where people on low incomes have become trapped in negative equity. In the worst cases, whole streets have been abandoned. In those places, there is no shortage of housing, but there is no sustainable community either. However, low demand requires a new approach—to re-create places where people want to live, not leave. That means not just tackling housing but, where we can, rebuilding sustainable communities.

We have already invested £5 billion over the next three years to help regenerate those areas, and we have set up partnerships in nine of the worst low-demand areas. Today, I am announcing a new fund of £500 million to help those partnerships over the next three years. In some areas, the only option will be to demolish houses that are obsolete, and we will make that easier for the residents. Home owners already get back the value of their home and the cost of moving. We propose to increase the compensation for the disturbance of moving home by more than £1,000—the first increase since 1991. We also propose to prevent the automatic renewal of planning consents, which will reduce the development of greenfield sites in low-demand areas.

The issues in high-demand areas are different. Rising house prices and shortages of affordable homes, especially in London and the south-east, are having a damaging impact on public services and the country's economic performance. We need a step change in housing supply, reversing the trend of the past 30 years. Two years ago, after extensive consultation, we said in RPG9—the regional planning guidance—that local authorities could provide new homes at the rate of 62,000 each year in London and the wider south-east. We put in place a "plan, monitor and manage approach" to planning, moving away from the failed "predict and provide" approach of the past, as I announced to the House.

We have said that if we used more brownfield land at a higher density, we could build more homes on the same amount of land. We are meeting our 60 per cent. brownfield target—seven years ahead of time—and will continue to do so. We are also taking steps to push up the density of build in the south-east.

Those changes, together with the £350 million extra resources that we are putting into improving planning and design, will increase the supply of new housing on brownfield land and the quality of what we build and where we build. Good planning means the right communities with the right homes and the jobs in the right place. I emphasise "right place", as I want to make it absolutely clear that we are not talking about homes anywhere and everywhere. We are talking about homes in sustainable communities to meet the shortfall in supply—not suburban sprawl, not soulless estates and not dormitory towns.

I recognise and share the genuine concern about our countryside. May I remind the House that a Labour Government introduced the green belt formulas over 50 years ago? [Interruption.] How true. Mr. Speaker, may I remind the House that a Labour Government introduced the green belt planning system over 50 years ago? I am glad that hon. Members appreciate and support that. They did not at the time, as I remember, but I leave that aside.

It was this Labour Government who provided access to the countryside and proposed the first national park in the south downs, and this Government who added an extra 30,000 hectares of greenbelt land, which is an area the size of the Norfolk broads national park. That is what happened in the first four or five years of a Labour Government.

We are now taking that further. Today, I give the House a guarantee to maintain or increase green-belt land in every region in England. We are creating a new body, the land restoration trust, to turn 1,500 hectares of derelict land in our towns and cities into new urban green spaces. We are providing resources for English Partnerships and the regional development agencies to reclaim more than 1,400 hectares of brownfield land each year—an area the size of a typical town. Now that is what I call a step change.

The House will be aware that in July last year I announced four priority growth areas to help to meet the shortfall in housing supply in the south-east. Each area offers an exciting opportunity for new design-led sustainable communities, such as the successful Greenwich millennium village, which is now being built. Each will maximise the use of brownfield land and accommodate growth in a sustainable way, with jobs, housing and regeneration going together.

The Thames gateway is the largest brownfield site in Europe. Plans for its development have been on the table for years, and we must now turn these plans into action, so today I am announcing new seedcorn investment of £446 million, which will help to attract extra private investment. With our partners, we will set up new local development agencies in east London and Thurrock to increase the pace of development. We will also invest £164 million over the next three years in the other three growth areas: Milton Keynes and the south midlands, London-Stansted-Cambridge, and Ashford. The four growth areas, including London, have the potential to deliver 300,000 more jobs and an extra 200,000 homes in the next 15 to 20 years. We must take that opportunity.

Every part of the country needs affordable housing, both for rent and for purchase. We are making £5 billion of our housing investment money available for more affordable housing over the next three years, including at least £1 billion more for key worker housing—trebling the current rate of investment—and extra resources for affordable homes built using fast-track, modern methods of building and design.

We will also tackle the problem of empty homes. In London and the south-east 70,000 privately owned homes have been empty for more than six months. That is not acceptable. The House will be aware that local authorities can lease empty properties on a voluntary basis. It is our intention that councils should be able to bring empty properties back into use through compulsory leasing, as recommended by the Select Committee. I also intend to allow local authorities to end their council tax discounts on empty homes.

Many rural areas, too, suffer from acute shortages of affordable housing. We are therefore increasing the number of affordable homes built in small rural communities, and we have changed the regulations to make it easier to keep homes bought under the right to buy for local people.

The Government are committed to home ownership, which has increased by 1 million since 1997, but we also want to protect the social housing stock. Right to buy is one way to help people into home ownership, but there are other ways that do not involve the loss of a social home to the community, and I believe that we could make better use of those schemes. That is why today I am asking the Housing Corporation to lead a new home ownership taskforce to advise on ways of helping more tenants into home ownership, using the whole range of existing ownership schemes, but without reducing the amount of social housing. [Interruption.] I remind the House that such schemes give social housing back to the community—they do not simply sell it off to the private sector and thereby reduce the number of houses available. That is the sort of social ownership that we have to take into account. The Conservatives spent £36 billion on giving right-to-buy discounts, but there are better ways of using public subsidies to assist home ownership and the provision of public housing. No doubt, we will debate the matter in future.

Sustainable communities need a safe and attractive local environment. We have already given local authorities an extra £1 billion in the local government funding settlement to improve the local environment and cultural services. I am now backing that up with more funding. Over the next three years we will give £50 million for neighbourhood wardens to help people to feel safer; £41 million to drive up the quality of skills in urban design; £70 million for community-led programmes to improve neighbourhoods; and £89 million to help local authorities to transform the quality of their parks and public spaces. All that will be supported by the proposals that we will make in our forthcoming antisocial behaviour White Paper and Bill, which will tackle issues that undermine our communities.

The most basic requirement of a sustainable community is a decent home. That is why we are making sure that tenants will be involved right from the start in decisions about how their homes are improved. It is why we are investing £2.8 billion over the next three years to improve council housing, making the private finance initiative easier to use, and providing £685 million of PFI credits to refurbish local authority homes. It is why we are providing an extra £60 million to improve conditions in private housing and £260 million to tackle the problem of temporary bed-and-breakfast accommodation. We also want to improve conditions for people in privately owned homes, especially older people and those on low incomes.

As the House has often said, there are inadequate powers to tackle bad private landlords who make life a misery for too many of our people, often supported by public subsidy through housing finance. I will publish draft legislation to licence all houses in multiple occupation and introduce a selective licensing scheme to tackle bad landlords in low-demand areas. In advance of the legislation, we are already funding new pilot schemes to target bad landlords.

The step change that I have described requires a different approach, which links housing with regeneration, growth, transport, public services and good design. It also requires major reforms of our system of housing finance. We must move away from the top-down approach of the past and decentralise our policies and programmes so that we can deliver regional solutions to regional problems.

I am pleased to tell the House that for the first time we are publishing nine regional daughter documents with the report, which set out what the action plan means for all our regions. As I said in July, we will move towards pooling housing spending in regional pots. Housing strategies will now be drawn up at regional level by new regional housing boards involving the key partners. English Partnerships and the Housing Corporation will also work together at the regional and national levels so that finding the land is directly linked with providing the housing.

This is a comprehensive programme of action for sustainable communities that I hope will command support across the House. Perhaps I am hoping for too much. [Interruption.] In view of the Opposition's proposed 20 per cent. cut in public expenditure, perhaps they could support these proposals. The programme is backed with substantial resources of £22 billion, a 40 per cent. increase over three years and more than double the cost of the plans that we inherited when we took office. That is a step change in resources by anyone's standards.

But that is just a start. This is an enormous challenge for all of us. The proposals are about people and the places where they live. They are about raising the quality of life and working in partnership. They are about taking a different approach and creating sustainable communities. I commend them to the House.

Photo of David Davis David Davis Shadow Lord Chancellor and Shadow Secretary of State for Justice

I usually begin by thanking the Deputy Prime Minister for making a statement and for advance sight of it. But today's statement is characterised by the amount of it that had already been briefed, leaked and spun to the press before the House saw it. That that strategy is deliberate is clear from the leaked letter from the Deputy Prime Minister to the Prime Minister about the communities plan and his right-to-buy proposals. [Interruption.] The Deputy Prime Minister asks for examples. He said in his letter:

"I do not want the media coverage of the Communities Plan to be swamped by headlines on the Right-To-Buy".

So what did the Government do? They smuggled out the vindictive, punish-the-poor policy cutting right-to-buy discounts in a written statement so that they could not be challenged in the Chamber, then spent the intervening time briefing favoured journalists on a selective view of the communities plan policy.

The Deputy Prime Minister's biased view of the right to buy was even demonstrated today when he misread his speech, the printed version of which said that right-to-buy raised £44 billion, not, as he said, cost £44 billion.

The communities plan has enormous implications for our constituents throughout England, and the House therefore has the right to hear about the policy first in the Chamber, and nowhere else.

We have already had the headlines, but good headlines are not the same as good policy, and there are some serious questions to be answered today. The Government's record in this area is five years of failure. In that time, we have had the new deal for communities, the urban taskforce, the urban White Paper, the rural White Paper and the active communities unit, to name a few. Yet if anything we are worse off than when we started.

The Deputy Prime Minister has told the House that he wants to build more homes, and to make communities grow and become sustainable. If that is the case, why has the number of newly built social houses fallen by a third since Labour came to power? That is some 35,000 extra homes that could have been available now—enough to house the families currently living in bed and breakfast three times over. Why, during the right hon. Gentleman's time in power, have the fewest houses been built since 1926, despite his claims about so-called legacy? Today's announcement of a dramatic increase in house building, particularly social housing, must be seen in that context. A cruel but accurate description of the right hon. Gentleman's plans seems to be that he intends to bulldoze the north and concrete the south. What he proposes amounts to concreting an area the size of Hull every year.

Will the Deputy Prime Minister now answer some questions? The Council for the Protection of Rural England claims that the Government's grand plan means that a total of 500,000 new homes will be built on green fields. Will the right hon. Gentleman confirm whether that figure is correct, and will he say how much of that greenfield land will be green belt? Will he set out the full extent of greenbelt and greenfield development under this Government to date and say how much he expects to take place in future years, including under the plans that he has outlined today? His guarantee of greenbelt land is meaningless if all that he is doing is removing the green belt designed to protect our cities and declaring as green belt a field somewhere else.

It seems, although the Deputy Prime Minister did not say so, that his plans rely heavily on urban development corporations—a Conservative idea that has proved successful, not least in the London docklands where Michael Heseltine oversaw the development of 25,000 new homes and 100 miles of new road links. I am very happy to see newspaper headlines saying, "Prezza copies Hezza", but I will withhold any further compliments until we have seen the plans in detail. We will want to look very carefully at the operation of such corporations, and I warn the Deputy Prime Minister that Ashford and Milton Keynes are not the London docklands. Will he guarantee to the House that he will use such corporations properly, as an instrument to release brownfield land, and not as an instrument for compulsory purchase of greenfield land?

What effect does the Deputy Prime Minister envisage that the expansion to the Thames gateway will have on the growing problem of flooding? I thought that I heard a Labour Member call out "floodplains". Just a few weeks ago we saw the problems caused by that issue for people who are trying to get insurance for their houses. What discussions have Ministers had with the insurance industry about those problems, particularly in light of the increase risk as a result of today's announcement?

The Deputy Prime Minister says that he wants to improve transport infrastructure, but the truth is that he himself cut the roads budget, cutting more than 70 important road projects from Government plans. He cut spending by more than £2 billion in the first five years of this Government. Last year, not one extra mile of major road was built. What is more, the financial pressure that he is putting on southern local authorities today will force them to protect vital services such as education by cutting back on transport services, compounding the problem that the right hon. Gentleman has created. The Government are five years behind the game, and if the Deputy Prime Minister's five and 10-year plans do not work, how are we meant to trust his 20 and 30-year plans? With that in mind, he will forgive the House for judging him by his actions, not his words.

Overall, employment growth east of London and in Kent is only 1 per cent. a year, compared with 5 per cent. in the west of London. The Deputy Prime Minister claims that he will not create dormitory towns. How will he ensure that? Will not people in the east of London and in Kent have to travel to get to their jobs?

I have asked specific questions of the Deputy Prime Minister, and I shall be interested to see whether he answers any of them. Hon. Members on both sides of the House will be able to unite in the desire behind his plan, which is to improve the quality of life in Britain for this generation and the next, but there are inevitable differences in approach.

We cannot overlook the failures of this Government which have brought us to this point. It is all very well the Deputy Prime Minister talking about housing shortages, but has not his direct failure contributed to them? It all very well for him to talk about transport infrastructure, but has not his direct failure led to a standstill on road-building and a standstill on our roads? I could not believe it, but in his statement today he yet again boasted that Labour created the green belt. This is the man who famously said,"The greenbelt is a Labour achievement and we mean to build on it." We have teased him about that before. Some thought that he had made a mistake; some thought it a joke; some thought it yet another "Prescottism". Sadly, however, today's announcement proves that that is one of the few promises that the Government have set in concrete.

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

That was another pitiful contribution from the right hon. Gentleman in his attempt to become the leader of his party. He does not have much to beat, I agree, but I do not think that he will do it with contributions like that.

First, I shall deal with the right hon. Gentleman's complaint, because I take these matters very seriously. I did not leak any of these proposals to the press. I have said that to the House time and time again. I make great efforts to come to the House to make announcements. No evidence was given to back up the right hon. Gentleman's claim. He quoted a Cabinet letter, which was leaked—a problem that plagues all Governments from time to time.

I heard that the right hon. Gentleman had made a complaint about information being given to the press, so I looked into the matter. I found that the only paper with any information about today's statement was The Daily Telegraph, where it appeared in an article by Charles Clover. I went through that article, and I have to tell the right hon. Gentleman that every fact was wrong, except those concerning housing numbers, which I announced last year. Hon. Members may think that I have briefed on the wrong facts, but I like to think that as I know what is in the statement, they would have been the right facts. The right hon. Gentleman's allegation is untrue, and I hope that he will withdraw it or provide evidence of anything in the press today which shows that I leaked anything in this report. I give him the chance to intervene—does he want to withdraw or to provide evidence?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I get used to allegations without substance, and I hope that people will note what I have said. I have the relevant quotes, and the answers to them, but I will not go into that.

The right hon. Gentleman made great play of my being vindictive about the right-to-buy policy. My point about that policy, which has continued under this Government, is that the £36 billion of subsidies, which is the cost of the discounts to promote home ownership, is an awful lot of money. If one wanted to extend the right to buy, there are other schemes that are less expensive and, much more importantly, they reserve the public housing for people who cannot afford to buy. Perhaps Conservative Members are not familiar with those schemes. A number of them give people money to subsidise a house purchase but they also return their previous property to the local authority, so they do not reduce public housing. Hon. Members may disagree with that, but it happens to be a fact. That is a difference of choice in our housing policy.

The right hon. Gentleman complained about other such differences. It is true that the provision of social housing has gone down 1 per cent. every year since 1980; that happened under our Government as it did under other Administrations. [Interruption.] Hon. Members can go and look at the figures. I admit that social housing has declined during my time in office, but in defence I would say, first, that we have spent a lot of time dealing with economic problems to bring about stability.

Secondly, we decided to put money that was lying idle in the banks into refurbishing houses that had been allowed to decline. All the time the Conservatives were promoting right to buy, they were forcing down standards in our public housing. I chose to make a difference. I chose to use that money to ensure decent housing for people who were living in deplorable conditions. Those conditions had declined not because the money was not available but because it was being used to reduce the debts caused by the failure of central Government at the time. That, I readily agree, is a difference of choice in our housing policy.

The right hon. Gentleman said that no improvements had taken place. He should visit the new deal areas and the coalfield communities. We gave them the money after the previous Administration implemented a vicious policy to destroy the coalfield communities. We invested nearly £400 million in developing them. [Interruption.] The right hon. Gentleman might live near them but he obviously has not got his eyes open. If he visits the new deal communities, he will see the improvements.

It is important to take refurbishment and changes in finances into account. The right hon. Gentleman accused us of being five years behind the previous Administration. Yet we are spending £22 billion, which is double the amount that was invested in housing when we came to power. If the right hon. Gentleman believes that that constitutes being five years behind, he takes a "Back to the Future" approach to analysing figures.

We could argue money for transport, but we have invested £180 billion in it—far more than at any other time. As for transport failure, I inherited the failure of the financing of the channel tunnel link. We had to refinance it, and many of the areas that are affected by the announcement depend on the new transport link. I am therefore happy to compare our record with that of the previous Administration.

Let us consider the record on brownfield sites. Under the Tories, there were fewer such sites. We increased them because that was our policy. Hon. Members may well move their hands. Raising them means "up" and lowering them means "down". Brownfield sites decreased under the previous Administration and increased under Labour. Again, our record stands against the rhetoric of the previous Administration. I am proud of what we are doing.

As I said earlier, the right hon. Gentleman's speech will not help him in his leadership bid. He should ensure that his statements match the facts. Today, it did not.

Photo of Edward Davey Edward Davey Shadow Spokesperson (Office of the Deputy Prime Minister), Shadow Minister (Olympics and London), Liberal Democrat Spokesperson (Olympics and London), Liberal Democrat Spokesperson (Office of the Deputy Prime Minister)

Unlike David Davis, who speaks for part of the Conservative party, I thank the Deputy Prime Minister for his important statement. I welcome the fact that housing, especially affordable housing, is at last getting the attention that it deserves. The proposed new build on brownfield sites in the Thames gateway is long overdue.

In proposing measures that go beyond tackling the problem of affordable housing in the south-east, is not there a danger of going too far and fuelling the flames of economic overheating in the south-east that caused the difficulties? Does the Deputy Prime Minister realise that many other parts of the country, including rural England, have similar affordable housing crises? Is he convinced that he has got the regional balance right, with the south set to receive more than four times the housing cash of England's five northern regions? Where is the strong regional policy that is rightly beloved by the Deputy Prime Minister? Why is he taking the slow train to regional devolution when that could help rebalance growth? Does not the statement show that the Government have given in to the north-south divide?

Although some development will be on brownfield land, much of the proposed new housing is on greenfield land. Why have the Government maintained the Conservative Administration's perverse VAT system, which penalises the repair and renovation of old housing stock and encourages greenfield development? How many more acres of countryside must be concreted over before the incentive for environmental vandalism is removed? Why does not the Deputy Prime Minister increase the target of 60 per cent. new build on brownfield land?

We agree with the Deputy Prime Minister that any new house-building programme must take account of the mistakes of the past. We must build communities and involve all Departments. Why is there so little evidence of joined-up government in the statement? Where is the related transport infrastructure around London and for the regions to support our communities? Why has the decision on Crossrail been shelved when it is central to the viability of development in the Thames gateway? Will the new Cabinet Committee, which the Prime Minister chairs and reports by May, specifically consider funding Crossrail and the Olympic bid?

Will the Deputy Prime Minister guarantee that the social infrastructure, for example, schools and hospitals, for proposed developments in other places such as Milton Keynes will be there in time to serve the new communities? Will he enter into a contract with the people of Milton Keynes, Ashford and south Essex so that they will not have to accept the homes unless the Government provide the cash for schools, hospitals and public transport?

The Deputy Prime Minister called his proposals "the communities plan". Will he assure us that it will be community led, not quango driven? Why are the Government so focused on the undemocratic Conservative model of urban development corporations, which the right hon. Gentleman rejected when in opposition?

The Deputy Prime Minister mentioned empty homes. Surely far more urgent action is needed. There are empty homes and homeless people in every region of the country. Why did not he announce the largest campaign ever to end the scandal of empty homes? Would not we make an impact more quickly on the affordable housing crisis, with much smaller environmental costs, by using the homes that already exist? Why does not the Local Government Bill allow local councils to keep the cash from ending council tax discounts on empty homes? [Interruption.]

Photo of Edward Davey Edward Davey Shadow Spokesperson (Office of the Deputy Prime Minister), Shadow Minister (Olympics and London), Liberal Democrat Spokesperson (Olympics and London), Liberal Democrat Spokesperson (Office of the Deputy Prime Minister)

Although the statement was ambitious, it was also a holding statement. The Government clearly have much more work to do. The jury is therefore still out. The affordable housing crisis continues almost six years into a new Labour Government. It is time for a timetable to end it.

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I gave up after two pages of notes but I shall try to answer some of the hon. Gentleman's questions.

First, I welcome his comments that the statement is ambitious. That is true. He is also right that the plan is not completed. As David Davis also pointed out, sustainable communities include many elements, such as transport, education and health. They must be brought together. We achieved that in the millennium village at Greenwich by working across government.

Other Departments are responsible for most of the expenditure on, for example, education and transport. I have to argue my case for any extra money. The Prime Minister is taking charge of the Cabinet Committee because we have to work across the Government to ensure that we have the infrastructure for community investment and thereby sustainable communities. It is therefore true that other documents and statements will follow.

However, I remind Mr. Davey that when I spoke in the House about the review of the Budget statement for the next three years, I emphasised that I would tell hon. Members how the money would be spent. That is why I have made a statement today. The amount was announced at the time, and I now have to apportion it.

The hon. Gentleman asked whether money would go into a balance of affordable houses and key homes. I have allowed the regions to determine the balance. When I receive their views, we can ascertain the total effect, which the 2004 expenditure plans will set out. I shall therefore have to come back to the House to report on those matters. The hon. Gentleman is right to point out that much work remains to be done, but I have been trying to plan where the money should go.

The hon. Gentleman referred to brownfield sites. Many are in the Thames gateway, which is an important area that we can use. When we consider sustainable development, we are talking about people and families. Sons and daughters are being told that they cannot live near their mothers and fathers and that they must move elsewhere. I note that those who are firmly ensconced in their areas demand that the others should move.

We have a responsibility in sustainable communities to try to keep people together where they want to be. That is important. It has been suggested that keeping people together can lead to more land being taken. However, greater density can lead to more houses with the same land take. That is a fair point that I have made previously.

The hon. Gentleman asked whether we would take more greenfield space for housing. The Council for the Protection of Rural England has been critical and almost suggested that all building could be done on brownfield sites. A representative said on the "Today" programme that 75 per cent. should be built on brownfield sites. I do not know whether the hon. Gentleman supports that figure. He should consider the difficulties of achieving of that. Some areas of the United Kingdom do not have brownfield sites and I therefore have to strike a balance.

Nick Scone of the CPRE said on the "Today" programme:

"We accept that there's a need for more housing and we accept that some it will have to be in the south-east and we accept that some of it will have to be on green fields."

[Interruption.] That was on the "Today" programme. I have the exact quote. I know that the CPRE also seems to be sending other messages. It is headed by the former editor of the Standard, whose name I cannot recall. I agree with the statement that I quoted.

Building on greenfield sites happened even under the Tory Administration. They gave us no extra green-belt land. Conservative Members' rhetoric is not consistent with the facts. However, those who are critical must realise that although many hon. Members said that a target of 60 per cent. was impossible, we achieved it seven years ahead of time. Even if the target was 75 per cent., 25 per cent. would have to be built on greenfield sites. Let us show a bit of intelligence, and recognise reality.

As for joined-up government and transport policy, let me point out that the Thames gateway depends greatly on the channel tunnel rail link. We renegotiated the arrangements because we were spending so much. A modern transport system is crucial—and we rescued the system imposed by the last Administration from bankruptcy. We think that our approach is fair. As for the need for a proper balance, I agree that it is a matter of judgment, and I am here to answer for mine.

Several hon. Members:

rose—

Photo of Mr Tony Clarke Mr Tony Clarke Labour, Northampton South

I warmly congratulate the Deputy Prime Minister on his statement, while acknowledging the challenges that it issues to communities such as mine, just north of Milton Keynes. Does he accept that such challenges are best met through innovative projects such as Lifespace in my constituency, which I know he has seen? The aim is to develop eco-friendly "green" housing on brownfield sites, while providing funds for the release of green space for local communities.

Can the Deputy Prime Minister assure those who say that we are destroying our green belt that English Partnerships will do all it can to support projects such as Lifespace, which are trying to set the Government's agenda and to make it work?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I agree with what my hon. Friend says, and I am grateful for his welcome. As he says, the issues can be different in different areas. We want to see eco-friendly greenfield development, as we say in our report: my hon. Friend should read it. As the Select Committee has also said, energy efficiency and water resource efficiency are also crucial. That has already been achieved with the millennium village. I am not merely advocating a development; the development has already taken place. I initiated it back in 1997. I wanted to build something that we could remember—a village rather than a dome, perhaps. The village remains, representing an important step towards achieving the desired standards.

As for the green space argument, as I have said, more green-belt areas are available. We are ensuring that we can do more and more building on brownfield sites. Increasing the density of housing on such sites will take the pressure off demand for greenfield areas. Meanwhile, we shall see an increasing number of green spaces in our urban areas. Empty spaces will be turned into places that we can enjoy.

Photo of Damian Green Damian Green Shadow Secretary of State for Education

My constituents will find the phrase "sustainable communities" a little ironic coming from the Deputy Prime Minister's lips. Already, with current growth levels, Ashford is short of GPs and school places. Its road network cannot cope, and it is building more houses than jobs are being created. Will the Deputy Prime Minister acknowledge that, in the real world, his statement means creating dormitory towns and condemning tens of thousands of people to a lower quality of life than they deserve because of an apparent bizarre obsession with crude house-building numbers?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

The hon. Gentleman makes a fair point about his constituency—although I think he advocated the building of the channel tunnel rail link, which has brought more and more housing to his area. In such cases, infrastructure is often slow to follow the development of sustainable communities: if we want sustainable communities, we have to invest. We are talking to Kent county council, and also working through the bodies that we have set up, to see how we can achieve what we want.

I was pleased that Kent county council endorsed our approach in growth areas, including Ashford. It is important to secure the co-operation of local people. Those in areas such as Ashford, however, must recognise that others also want to live in nice communities. We must create the necessary infrastructure and bring in more people in a sensitive way. We think Ashford is an excellent place—it is connected to the channel tunnel rail link—and we will do our best to allay the fears of people there.

Photo of Mr Brian White Mr Brian White Labour, North East Milton Keynes

I welcome my right hon. Friend's statement. He obviously listened to our representations, and learnt the lesson that infrastructure needs to be built alongside housing. He said that housing would be provided on a regional basis. The south midlands and Milton Keynes cover three regions. Can he assure us that cross-regional issues will also be dealt with?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I thank my hon. Friend for his support. As he knows, I visited Milton Keynes quite recently. It had become a dormitory town for the London area because we had been taking people out of the slums and into greenfield areas, which was right at the time. There were about 12 houses per hectare. If we want to develop we will have to change the density levels, which will pose a challenge. As my hon. Friend knows from our dinner with local authority and regional development agency representatives, that involves two or three regional bodies. The same applies to the Thames gateway, which also covers two or three regions. We need all the co-operation of those bodies, so that they can help in the making of strategic decisions that affect them in the development of new growth areas and sustainable communities.

Photo of Mark Prisk Mark Prisk Shadow Financial Secretary

Many of my constituents in Bishops Stortford and east Hertfordshire will regard this plan, if it is imposed, as highly destructive. At the beginning of his statement the Deputy Prime Minister made a promise about the green belt. Can he confirm that no new houses will be built on the green belt in Hertfordshire—yes or no?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I think that if the hon. Gentleman had asked the same question of his party's Administration he would have received a very dusty answer. The guarantee referred to the regions, and I think that it is necessary. It is like the commitment involving brownfield and greenfield sites. In some areas there is no brownfield, so there can be no 60:40 ratio. The calculation must therefore be made on a national or regional basis, and the guarantee about green belt was regionally based. There was no such guarantee under the last Administration. I know that the hon. Gentleman is fixated on a county issue, but we must take regional issues into account as well.

Photo of Mr Andrew Bennett Mr Andrew Bennett Labour, Denton and Reddish

I congratulate my right hon. Friend both on his statement and on listening so carefully to the Select Committee. Notwithstanding all the whinges from Opposition Members and the "nimby", or rather "not in my constituency" attitudes, can he give us a time scale for the conversion of all these fine words into bricks and mortar? Could he also have another go at the Chancellor, and try to persuade him to come up with fiscal incentives to encourage people to move from the south-east and occupy many of the good empty homes that exist in the north?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I am grateful not only for my hon. Friend's support, but for the Select Committee's constructive and informed comments. I had a happier experience with that Committee than I had with the Transport Committee, and I look forward to a happy relationship with my colleague in the future.

We have committed ourselves to a three-year programme of expenditure. As my hon. Friend will see if he looks at regional planning guidance note 9, he will see some longer time scales for some housing projects—20 or 30 years on some growth areas. Once we have discussed the details with the stakeholders I will make another statement, but I expect to address the Select Committee before then, and I shall be open to examination then.

Photo of Hugh Robertson Hugh Robertson Opposition Whip (Commons)

My constituency, next door to that of my hon. Friend Mr. Green, contains 12 local pressure groups which are campaigning and complaining about the amount of traffic already on Kent's roads. Will the Deputy Prime Minister give the people of Kent an undertaking that the infrastructure improvements will be made before any new homes are built; otherwise a bad situation will be made immeasurably worse?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

The commitments in regard to that area are already covered by transport expenditure, and Ashford's connection to the motorway is included in the plan. There are also other infrastructure investments for the area, which are quite considerable. We are discussing the plan with Kent county council, for whose support I am grateful. The council makes the point that I have been making: an increase in the number of schools and hospitals, more transport and indeed more river crossings are critical to the population increase that is being envisaged. That is why we have had discussions with the Prime Minister to ensure that resources follow our commitments to housing and growth.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

In Burnley empty homes are no longer a problem; they are a living nightmare. Many people will feel that the £500 million announced by my right hon. Friend, although welcome, may well not prove sufficient for the nine pathfinder projects. Will more money be made available, and does my right hon. Friend recognise that all the problems in those nine areas cannot possibly be solved in three years?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I agree with my hon. Friend. Having visited his constituency, I was left with a powerful impression of the way in which such problem areas scar the whole community and give rise to economic and political problems. That is why we designed the pathfinder programmes. As he knows, we have already advanced £10 million in order to begin the preparations. We want to give comfort to those communities, but these things take time. He is right—we cannot solve all the problems in three years. We are making a start with £500 million for the three-year programme, which will concentrate attention. The problems in the areas in the north that he mentions are entirely different from those in the south-east, which is why we have had to design a separate programme. We hope to learn a great deal from it and to expand it, but it certainly will not be limited to three years.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

What would the Deputy Prime Minister say to the hundreds of my constituents who packed into Willingdon school hall last night, and who are concerned at the fact that their local council is being forced by him to find space for 950 new houses in that area—an area in which schools, the health service and roads are already under enormous pressure?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I assume that those people have children who, quite properly, want to live in that area. Before we arrived at those figures, considerable discussion revealed the level of housing demand. I told the House some years ago that we would not simply order people to predict and provide—there was some controversy about the figures—but that we would plan, monitor and manage, and see how things were going and whether demand was increasing. A number of local authorities decided not to accept the figure that they were given, and said that they could meet the demand. It became clear that they could not, and we are now telling them that they are behind with those targets, and that they must act to meet them. Of course, what they can do is to use the density figures that I require of them, and which I referred to. That way, they can meet demand—provided that they do not build four-bedroom executive houses, and instead make better designed, higher density accommodation available to people.

Photo of Gordon Prentice Gordon Prentice Labour, Pendle

There are thousands of rotten, empty, decaying, blighted properties in my constituency, and next door in Burnley. The Deputy Prime Minister has just told us that the £500 million over three years will be a first tranche. Can he give us some estimate of how much it would cost to bring properties in east Lancashire that are the worst in the entire United Kingdom up to a decent standard?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I believe that approximately 1 million homes in those areas are in various states of disrepair. Assessments are being made as to the exact cost of such repairs, but I do not want to have to wait for the consultant's report. If possible, I want to find some money now and start the programme, but I must establish the money with the Chancellor. He has given me £500 million, and I am very grateful. My hon. Friend's description of those areas is exactly right—the situation is desperate and something needs to be done. That is precisely why £10 million has been advanced: to begin the proposals and the planning, and to hold meetings with people to whom promises have been made. One factor characterises most of these homes. They have undergone various refurbishment schemes over the years, and people have become completely disheartened with those schemes. Many of those schemes were good at the time, but they did not last long, and something much more fundamental needs to be done. We are making a start with the £500 million. I know that this is a difficult problem, but if I can find more resources and the project proves successful, our efforts will have been worth while.

Photo of Eleanor Laing Eleanor Laing Shadow Spokesperson (Education)

People who live in the Epping Forest area will be very alarmed at what the Deputy Prime Minister has said today about green belt. In my constituency, it is simply is not possible to increase, or even to maintain, the existing green belt while also undertaking the amount of building that he said is likely to go ahead. Will he give an undertaking now to my constituents that he will not allow plans to build on the ancient forest of Epping forest to go ahead?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

There in no plan to build on Epping forest. The hon. Lady must know that it is because of the very difficulty in finding housing land that she mentions that we have moved to a regional requirement, so that those at a regional level can decide that their housing demand be met on a regional basis. If we simply leave the decision to local authorities, every one of them will give a reason why building cannot take place in their area. I hear such reasons from Members all the time, and no doubt I will hear more. They want houses for their constituents, but not built near them. It is a common problem, and it is called nimbyism.

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

Yes, I know it is a forest. The regions themselves will advise on these matters, but we should be clear: the demand from existing residents to live in the south-east needs to be met, and it can be met in an intelligent way without closing down all building in that region. I have given some indication of the Government's priorities, and they will guide our policies.

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

My right hon. Friend will be aware that the shortage of affordable housing in London is holding back its economy, undermining our capacity to recruit to the public services, and blighting the lives of the soaring number of my constituents who are trapped in overcrowded housing. Unlike apparently every member of the Conservative party, I would very much welcome my right hon. Friend's building some more housing in my constituency. Can he assure me that, in addition to prioritising the key areas set out in his statement, he will ensure that resources are available to build and to maintain sustainable communities right across London, including in areas such as mine?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I think that everyone wants to deal with the problems in the inner-city areas that she talks about, and it is clear that housing is needed in both the private and public sectors. My statement referred to the renovation of houses and to new forms of purchase, and more resources have been made available for that. I have reduced the discount on the right to buy in order to deal with precisely the problems that my hon. Friend mentions. All too often, the right to buy leads to the purchasing of more public housing than can actually be replaced. The question is one of balance: the problems in her constituency differ considerably from those in areas outside London. On identifying those areas with very high prices and levels of homelessness, it was noticeable that most are in London, and we intend to deal with that problem.

Photo of Bob Russell Bob Russell Liberal Democrat, Colchester

Will the Deputy Prime Minister give an assurance that he will persuade his Government colleagues to offload surplus land and properties as part of the release of land? At the same time, can he assure us that the definition of brownfield development does not include landscaped grounds and sports fields such as those in a former psychiatric hospital?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I am not sure about the last point—I do not think that they are included, but I shall write to the hon. Gentleman on this issue, as there are some peculiar definitions. His first point is a serious one that has concerned me for some time. Many Government Departments have a considerable amount of land available, and to be absolutely truthful, the Treasury always require that such land be sold at the highest market price.

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

Don't get too excited. The market price is calculated in the Chancellor's settlements. I have argued that we are being rather silly, in that we are putting up house prices and giving bigger discounts so that people can buy. Surely it would be better to establish a priority policy for available Government land, so that it can be used as one element in contributing to a reduction in the cost of housing, including even the purchasing of housing. We could use land more intelligently than we currently do. I am having some success with certain Departments and less with others, but we are getting on with it.

Photo of Mr Kevin Hughes Mr Kevin Hughes Labour, Doncaster North

The Deputy Prime Minister announced a portion of funding to be spent in the north. The former mining communities in my constituency have old and poor housing stock, and the people there have difficulty finding jobs. Will those communities benefit from today's announcement?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

Yes, in the sense that the area will get a share of the funds to meet its priority housing needs. My hon. Friend has pressed me before on what we can do for the coalfield communities that were greatly affected by the collapse of the coal industry. Some £350 million is working its way through, but I think that they will still get their share of the normal national programmes. Such funding is distributed north and south, and none of the housing programmes in the northern areas are cut to pay for any sale: they still get that money, and more. However, as I explained in my statement, I have directed some resources towards the greater priorities.

Photo of Gregory Barker Gregory Barker Conservative, Bexhill and Battle

If the sustainable communities strategy represents a genuine step change in the amount of building on brownfield sites, will the Deputy Prime Minister take this opportunity to revise downwards the wholly unsustainable, massive house-building targets forced on East Sussex, which has neither the transport infrastructure nor the environmentally suitable sites to meet those targets?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I suspect that, if the infrastructure were provided, the hon. Gentleman would still complain about extra houses in his area. If his point were simply about infrastructure expenditure, I could accept it. However, his comments and many others that are made outside this House are more along the lines of, "We do not want any building in this area." I cannot make the promise that asks for, because I have a greater commitment to the homeless, and to the sons and daughters of families who already live in such areas.

Photo of Andrew MacKinlay Andrew MacKinlay Labour, Thurrock

First, we in Thurrock welcome every unit of affordable housing that might come from this announcement. Thurrock has the most river frontage, the most brownfield sites and the most green belt of all the gateway riparian authorities, and we would welcome our own urban development corporation. Will those bodies address the fact that much of the railway network is to the east of the channel tunnel link and requires substantial upgrading owing to low capacity?

Secondly, our green belt has been taking in London's household waste. That is unacceptable and we do not want any more.

Finally, we need a massive boost to our health and hospital provision, which is wholly inadequate.

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

As on so many occasions, my hon. Friend points out the weaknesses and difficulties that are involved in the transfer that has been taking place in terms of the economic and industrial development of the Thurrock area. Traditionally, transport links have not necessarily developed in that direction or have suffered from underinvestment. We are discussing that with the Secretary of State for Transport, and some relevant proposals are already in his plan. Some areas of London will not be opened up to housing development unless there are connections to rail links. As usual, we have to set priorities, because demands are far greater than resources. As my hon. Friend knows, we have established an urban development corporation that will work in those areas with the authorities to achieve the measures that I have announced. As he says, there are a great many brownfield sites in his area. [Interruption.] My right hon. Friend the Minister for Local Government and the Regions says that there are more in Greenwich. I will not dispute that both areas have many brownfield sites, and I very much welcome that because it will help us to keep on building.

Photo of Crispin Blunt Crispin Blunt Shadow Minister (Business, Innovation and Skills), Shadow Minister (Trade and Industry)

In Reigate and Banstead a regional daughter plan that contains the Deputy Prime Minister's house-building targets still looks like a top-down approach. Why does he know so much better than local politicians?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

The hon. Gentleman's own Government were dictated to by their policy of predict and build. There is a long history of the previous Tory Administration imposing targets on local authorities, which did not like them. I said that that was unfair because central Government might be wrong. Central Government and local authorities must combine to agree on housing supply, and from time to time there is a great deal of disagreement. Our proposal to plan, monitor and manage was a way in which to decide who was right when demands for housing were made and how many houses were to be built. The areas that do not want any kind of housing will not be able to achieve what we believe to be the reasonable target set for the whole south-east region, which, with the change in density planning, can be met without new land take. That might mean that there will be fewer four-bedroom houses, but many more affordable homes for ordinary people to live in.

Photo of Ms Oona King Ms Oona King Labour, Bethnal Green and Bow

Following your strictures, Mr. Speaker, I have no time to say how excellent any of these proposals are, so I shall forget about that.

Will the Deputy Prime Minister tell me when, in practice, people might be able to buy affordable houses that do not deplete our housing stock, but maintain it? On a small point, will he assure me that when the Tories start bleating on about "poor people", he will continue to have regard to families in my constituency, where, for example, five people share one bedroom but cannot move because social housing stock was sold off under right to buy?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

We conducted a survey on those matters to see whether any damage had been caused by right to buy, and we found that many abuses of the system had been taking place in my hon. Friend's constituency. For three years, it became profitable for tenants to exercise the right to buy and, following neighbourhood regeneration, to sell the house on for the full market price. That abuse of the system, where there is a desperate need for housing, means that those houses do not go to people who live in them as owners, but that they are rented out at a very high rent that people cannot afford. That has reduced the availability of housing stock. We are therefore taking a number of actions, one of which concerns right to buy and the reduction of discounts so that it is not so profitable for a tenant to do a deal with a buyer who persuades them to do so, then come back to ask for public housing having received the money. That is an abuse of the system that was never intended to take place, and I hope that the Opposition would agree that we cannot condone it.

As for the time scale to which affordable homes will be provided, the amount of money that is available is £5 billion, with £1 billion for key workers, and we are considering its regional distribution. The number of affordable homes will depend on how we calculate those figures. The cost of replacing a house in the north is very different from that of replacing a house in London, and we must take those factors into account.

Photo of Gary Streeter Gary Streeter Conservative, South West Devon

What specific policies does the Deputy Prime Minister intend to put in place to ensure that these new communities do not simply become four more dormitory towns for London, adding pressure to already congested roads? What ideas do he and his Department have as regards ensuring that the affordability element of any affordable homes to buy can be passed on to the second and subsequent purchasers?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

On right to buy, we have made our proposals, but that is not the end of the matter—we shall want to consider exactly what our surveys show. Many local authorities are telling me that they believe that the measure should apply to them instead of the 40-odd that I mentioned. I will have to assess that further, taking into account the hon. Gentleman's point.

On sustainable communities, the Office of the Deputy Prime Minister: Housing, Planning and Local Government Select Committee produced a report on new towns that showed that although they were excellent in their time, unfortunately they became dormitory towns as people moved from place to place. We have to ensure that jobs are provided, that the infrastructure is in place—whether for roads, hospitals or schools—and that houses are better designed than they have been in the past and meet the energy and water resource requirements. I have seen all those things embodied in the millennium village concept, which will provide quite a contrast with towns such as Milton Keynes that were built to the old standards of the new towns: here are new requirements for a new millennium. That is what we intend to do, and that is what sustainability is all about. I refer the hon. Gentleman to the report, which will give him more information.

Photo of Phyllis Starkey Phyllis Starkey Labour, Milton Keynes South West

I welcome the extra funding that is coming to the growth area around Milton Keynes, but I remind the Deputy Prime Minister that it is the strength of our local economy that is causing house prices to rise and requiring additional housing. We are not a dormitory town—anything but.

I draw my right hon. Friend's attention to the remarks made by my hon. Friend Brian White about the need to ensure that infrastructure is built at the same time as housing. My right hon. Friend proposes local development agencies in the Thames gateway to provide an overarching view on pushing developments forward. Will he consider such a mechanism in our area to ensure that development is delivered on time?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

As my hon. Friend knows, I recently visited Milton Keynes and we had a good discussion about those problems with representatives from the local regional development agencies.

It is important that people in the community have some say about the priorities that are adopted. When there are three development agencies, all the signs may be that they will work together, but it is desirable to bring them together in one body to reach common agreement and to administer developments. We are doing that in the Thames gateway. I take on board my hon. Friend's point, and we will have further discussions with her.

My hon. Friend talks about more jobs leading to greater demand for housing in Milton Keynes. That is always a problem, but, at the same time, pockets of great deprivation exist in areas that are not normally associated with new towns. Although the general situation may appear to be good in such areas, we have to address the problems of social exclusion. That is important in the context of sustainable communities.

I say to my hon. Friend that in many areas different priorities will arise at different times. Milton Keynes is already a built-in community, and it is important that investment in infrastructure is expanded, but the Thames gateway faces a different set of problems. Given that it is a three-year programme, I had to decide on the main priorities in terms of how much money has to be put in now to create infrastructure prior to house building. We should not underestimate the amount of money that is needed—I do not want to mislead the House about that. We are back to the language of priorities. Over the next year or so, we shall try to ensure that we get the balance right—that we create sustainable communities that have the back-up infrastructure, as well as the housing.

Photo of Mr John Burnett Mr John Burnett Liberal Democrat, Torridge and West Devon

There is a huge unmet demand for affordable housing in the south-west, especially in Devonshire. Will the measures that the Deputy Prime Minister has announced lead to a reduction in funding for affordable housing in the south-west?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

I have already said that the amounts of money to be made available will be determined once we have assessed the pot of money for each region—in this case, the south-west. Key workers are largely found in the south-east, but I am sure that Devonshire might say that it has them too. The decision on the number of affordable houses to be built in the region will be based on the proportion of key workers there. I doubt that there will be any reduction in the resources in the hon. Gentleman's area: quite a lot of money is being proposed, but we must wait and see what happens. However, I remember that a number of local authorities in the south-west refused to meet the requirements, under regional planning guidance note 9, to build sufficient houses. Meeting need in an area is the way to provide enough houses.

Photo of Peter Kilfoyle Peter Kilfoyle Labour, Liverpool, Walton

I welcome the £500 million being put into the housing market renewal fund. Does my right hon. Friend agree that that money has to be targeted and focused in the pathfinder areas if it is to be used effectively? What does he think of the Liberal Democrat-controlled Liverpool city council, which has spread the money over half the city, including areas that already receive funding under the new deal for communities? Most surprisingly, the city centre, a thriving housing market, is also included. Does my right hon. Friend consider that to be the best way forward for the pathfinder areas? Secondly, will my right hon. Friend say whether his Department has been party to the Treasury's discussions on housing tax credits?

Photo of John Prescott John Prescott Deputy Prime Minister, Office of the Deputy Prime Minister, Deputy Prime Minister and Secretary of State for Local Government and the Regions, Deputy Leader of the Labour Party, Member, Labour Party National Executive Committee

My experience with Liverpool over many years is that one should not put a foot in the water without knowing what one is talking about. I readily accept that my hon. Friend may be offering a fair interpretation of what the council is doing, but I do not know enough to say whether it is right or wrong. We must look at the whole question of finance and housing credits, to which my hon. Friend referred. We might be able to get more money for developments in areas such as his than we do at present. We are actively involved in discussing a number of such ideas with the Treasury.

Several hon. Members:

rose—