I am extremely grateful for the opportunity to address the House on the subject of affordable housing in Cumbria. My constituents in Westmorland and Lonsdale have average incomes of around £16,000 per annum, with average house prices at about £200,000. According to the Government's assessment of an affordable home—a home valued at three and a half times one's income—my constituents would need to earn more than three times the local average in order to own a home in their area.
For most local people in south Cumbria, buying a home is simply out of the question, but now a decent rented home is getting beyond the reach of most people. Last year, the local authority sold over 250 council properties, and at the same time roughly 130 new social houses for rent were made available by local housing associations. That is a net loss of 120 social houses during the last 12 months, and that is the lowest net loss for many years, partly because the council is simply running out of council houses to sell.
People who, had they been first-time buyers a decade ago, would have been able to afford a mortgage for a starter home, have absolutely no chance of doing so now. Those people do one of two things: they either leave the area or they enter the rented market, both of which have seriously damaging effects on our local communities. South lakeland currently loses 27 per cent. of its young people, never to return. Not only is that heart-breaking for local families, it is also disastrous for the economy and for society, stripping our towns and villages of talent and energy, reducing the skills base, reducing the birth rate, leading to falling school rolls and leaching the lifeblood from our communities.
Those who stay and decide to rent find themselves joining a pressurised market. As the pressure on the market and the private rented sector grows, rents go up, pushing many more families into the social rented sector. But the amount of social housing is shrinking each year and the consequences of that are appalling. Families who, a decade ago, would have qualified comfortably for a council or housing association property are now dumped in substandard or inappropriate accommodation, waiting on a housing list for an eternity. In Kendal, the council is forced to offer young families hostel accommodation for months on end because there are simply no homes available.
The human misery caused by this situation is immense. The impact on the physical and mental health of people caught in the trap is vast, and the effect on the children involved is unacceptable in any civilised society, and yet, of the 42,000 properties in my constituency, roughly 7,000 are not lived in. Some of those are holiday lets, which provide a valuable tourist income to our area, but most are second homes and are left vacant for much of the year.
Excessive second home ownership pushes house prices even further beyond the means of local people and removes homes that would otherwise be, and indeed once were, in the hands of local families. The impact on our community of excessive second home ownership is crippling, because the loss of properties to the second home sector threatens the survival of local businesses, schools and public transport, as well as other services. Villages such as Satterthwaite and Lowick in my constituency have lost, or are soon to lose, their local schools because the houses that used to send children to those schools now stand empty for much of the year. Villages such as Bouth have lost their post office and others, such as Crosthwaite, face the same fate because the houses no longer contain local consumers.
I do not want to focus any blame on people who have second homes, and I would not want to upset Labour Members, many of whom no doubt have second homes. I merely make observations about my constituency, where I have my home and where my constituents struggle in the face of a lopsided and increasingly inaccessible housing market. Local people do not resent second home owners; indeed, many who are classified as such are people who have purchased a home in my constituency with the intention of moving to it full-time once they retire. Those people will become fully fledged and wholehearted members of the community in time. I encourage them to hurry up and join us as quickly as possible, because their local post office, church and bus service need them.
My constituency is among the most picturesque in England, and one might say, "If you can afford to have a home there, why shouldn't you?" The answer is simple. We welcome people to Cumbria, including those who have second homes. I have no desire to demonise those people at all, but I am not a supporter of the unfettered free market; neither, I suspect, is the Minister.
Is my hon. Friend aware that my local authority area, Ceredigion, is the least affordable in Wales in which to buy a home, and that comparisons between Cumbria and Ceredigion are marked, with the lowest average wages in Wales coupled with the highest prices?
My hon. Friend is right to draw attention to the fact that affordable housing is a problem throughout the country, particularly in rural areas. We fear that some of the concerns in rural areas across the United Kingdom, especially in Cumbria, are being overlooked by the Government in their attempt to tackle the issue of affordable housing.
Adam Smith may have been a Liberal, but he was nevertheless wrong in this respect: no invisible hand is in evidence to correct the faults in this market—it is up to society to employ its visible hand to correct imbalances, to protect true freedom, and to ensure fairness.
The Minister may be interested to hear that in the past six months I have had two letters from second home owners ticking me off for my stance on this issue—I do not think that either was from the Minister's neighbour, Mr. Meacher. I said to them, and would say to any second home owner, that I fully recognise the liberty to purchase a second home, but respectfully point out that the right to have a decent first home is a much more important liberty.
Does my hon. Friend share my concern that the proposed Government regulations on self-invested personal pensions, which are due to come into force on
I am grateful to my hon. Friend for raising that important point, to which I shall turn in a moment.
It is important to recognise that there are competing liberties here—the right to have a first home and the right to have a second home. When it comes to a competition between those liberties, and at times it does, I am certain about which side of the fence I am on. It is important that the primary right is to a decent and affordable first home for people and their families. Second home ownership can bring some benefits to an area but a balance needs to be struck.
How do we achieve that? The Government could put a cap on the second-home market in those parts of Cumbria where it is agreed that the proportion of second home ownership is excessive. They could do that by introducing a new planning law that would place turning a first home into a second home in a formal category of change of use. In parishes where second-home ownership exceeded an agreed limit, the planning authority's default position would be to refuse any application for a change of use.
I welcome my hon. Friend's comments on planning. Does he agree that there is also an opportunity for dwellings that are currently second homes, when resold, to be brought back into use as first homes through that planning mechanism?
Yes. I am grateful to my hon. Friend for making that point. Clearly, the Government could build such a provision into the mechanism. That would be helpful. It is important to examine the possibilities and be pragmatic. It is not beyond the Government's wit to draft enforceable legislation and guidance on the matter.
Another way in which to affect the housing market positively would be to build on the Government's encouraging recent work of granting local authorities permission to charge second home owners up to 90 per cent. of the full amount of council tax. The position is much improved. The previous Conservative Administration—representatives of which are scarce—deliberately granted a 50 per cent. council tax subsidy for second-home owners when they introduced the council tax in 1991. It is a great shame that no Conservative Members are here to intervene and put me right should I be wrong. It was a reprehensible act, which redistributed wealth from the hard-working many to the privileged few.
I urge the Government to abolish the remaining 10 per cent. relief to second home owners and to examine the possibility of introducing permission further to increase council tax for second home owners in areas where there is deemed to be an excess of second-home ownership. Such a measure would reduce demand for second homes, although, realistically, it may not make a vast difference. More important, it would provide local authorities with the wherewithal to fund new affordable housing schemes.
The communities of south lakeland are well aware of the Government's plan, which has already been mentioned, to introduce new pension rules from April 2006, to give tax relief of up to £215,000 to individuals who invest in a second or third property and place it in their personal pension. They also know that the change will have disastrous consequences for our area, providing another incentive for purchasing second homes and further heating an already overheated market, thus leaving local families who are searching for a home in an even more desperate position.
With one in six homes already beyond the reach of local families, how much worse will the position be for Cumbria's towns and villages when the new pension rules are introduced? How many more local young people and families will be forced to move away from the area that they call their home as a result of the proposal? How many beautiful lakeland villages, which so many hon. Members have visited on their holidays, will become moribund ghost towns, bereft of a living, working community?
The Lake District and the Yorkshire Dales national parks are in my constituency. For those national parks to remain valuable centres of peace and recreation for the nation, the communities in them must not be allowed to die, replaced by weekend havens for the well-to-do. The national parks were set up as accessible assets for the nation—for the people of this country. To contribute towards the parks' becoming available only to a minority flies in the face of the national park ideal, with which the Labour party has often closely aligned itself.
I am sure that the Government did not intend to damage rural communities through their pension plans. However, the proposal's unforeseen consequences will be appalling. I ask the Minister to confirm in his response that the Government will abandon the proposed change in the pension rules.
Does my hon. Friend accept that the consequences are not totally unforeseen because Liberal Democrat Members have raised them not only in the past few months but in the past couple of years? Despite the assurances from the Treasury that such consequences will not ensue, the aggressive marketing campaigns of many companies to promote those products suggest that they could ultimately be worth several billion pounds.
My hon. Friend makes an excellent point. Perhaps I was being a little too generous, and gentle, to the Government in the hope of coaxing something out of them.
I suggest that, if the Government are seeking to stimulate saving and investment, they might instead offer tax credits for investment in affordable housing developments. The benefits of such a move would be many and, importantly, they would be shared. Such a scheme would provide a return for investors, a boost to the supply of affordable homes, and a contribution to the achievement of Government policy—which would be no bad thing, I am sure.
While I am in the mood for making suggestions, may I say that I would be grateful if the Government actively encouraged the sustainable development of affordable homes for local people within the national parks? The Yorkshire Dales national park, for example, has won plaudits for its work in ensuring the development of affordable homes for local people and in flexibly interpreting its planning and conservation roles, employing much-needed common sense in response to local needs. Such good practice should be spread to other national parks, with the Government's proactive support.
My neighbours and fellow residents in Westmorland and Lonsdale face average house prices that are 13 times higher than the average annual wage. This is not untypical for rural areas such as ours, as my hon. Friends have pointed out. The Government's support for the development of new affordable housing, for purchase as well as for rent, is welcome, as is their support for shared ownership schemes and for the provision of local occupancy clauses in affordable housing developments.
However, I have two concerns in that respect. The first is that the term "affordable" seems to have been stretched beyond all credibility. New properties on sale for upwards of £120,000 are being presented as affordable housing, but I can assure the House that, for most of my constituents, that amount is definitely not affordable. Secondly, local occupancy clauses are far too easily abused and thwarted. I have come across many examples in Grasmere, Windermere, Coniston and Ambleside of buyers who, technically, meet the criteria for local occupancy, but who have purchased property and let it for commercial purposes, rather than for the provision of affordable housing to local families. I hope that the Minister will take notice of my early-day motion calling for more effective enforcement of local occupancy clauses.
In closing, I observe that the term "affordable housing" has now fully entered the Government's lexicon, and I am grateful for that. However, the problem is that too much housing in Cumbria is unaffordable, and too much of it is unoccupied. That situation is not inevitable, however, and it is certainly not irretrievable. It is within the grasp of society to affect this situation, and to remove the appalling pressure on local families. The Lake district and the Yorkshire dales, which I represent, are often described as the lungs of England. I call on the Government to take action that will benefit the communities that populate those lungs, to allow them to breathe more easily.
I should like to start not only with the traditional congratulations to Tim Farron on securing this debate, but with very genuine congratulations. He has raised this issue in his maiden speech, in two letters to the Office of the Deputy Prime Minister, in his early-day motion, in a press release this afternoon and in this Adjournment debate, and I congratulate him on his campaign. I agree with much of what he has said, and I commend him in other ways as well. I commend him for his election result, which we all watched with interest, and I am happy to commend him for his Lancastrian roots. However, I have to disagree with his choice of football team. I am afraid that he is a Blackburn fan—which is a little way down the road from my own home town—but he cannot be perfect.
The hon. Gentleman has raised some important questions in this debate. I want first to set out the national approach, and then to consider the situation in Cumbria. I shall then try to address some of the specific points that he has raised. It is well known that the Government are committed at national level to addressing the need for more affordable housing. The background to the problem is deep rooted and long standing. Let me give a couple of statistics. Over the past 30 years, the number of households has increased by 30 per cent., but in the same period the number of new homes built has fallen by 50 per cent. That has widened the gap between demand and supply, so there is little wonder that the long-term house price trend is so much higher in this country than in others. That, of course, is set out in the Barker report, which is extremely important for the Government and for the country.
On the supply side, we have, as is known, a strong strategy to increase housing supply, which is set out in the communities plan. Much public comment has been made on that plan delivering results in London and the south-east. I should put it on the record that there was a 36 per cent. increase in the number of new homes being built per year between 2001 and 2005, combined with increased densities in house building—it is important that that is achieved—and a significant increase in re-use of brownfield sites. There are those who say that the policy is to build over England's green and pleasant land, but that is a cliché that perhaps makes for an easy headline and it is not borne out by the facts. The hon. Member for Westmorland and Lonsdale has not accused us of doing that, although others have.
This policy is addressing one cause of the affordability problem, which is that, over several decades, we simply have not built enough new homes. The underlying reasons for the increasing number of households are well known and they include more single people and longevity. Let me again put it on the record that Government policy is in favour of longevity. This is a good thing, not a bad thing, but it presents us with some difficulties.
On the other side, however, a range of measures are necessary in addition to a stable market and increasing supply. Since 1997, we have doubled the investment in affordable housing for rent or purchase, and £5 billion will have been spent over the three years to 2006. That investment will support the delivery of our new range of simpler, more affordable, more accessible home ownership schemes.
In the short term, through our new homebuy scheme, we will help more than 100,000 households—that is a lot of people, not just 100,000 of the population—to own their own home by 2010. Homebuy will provide a flexible shared equity-based product, which will increase access to home ownership for those priced out of the market. It will also provide opportunities for social tenants to buy a share in their home. Homebuy will reinforce the longer-term strategy by increasing home ownership opportunities for key workers and other first-time buyers now.
Empty homes are also a factor in contributing to an adequate supply. Over the last decade, the number of vacant dwellings has dropped by nearly 180,000, but there are still 690,000, according to the latest figures, which are from 2004. There remains more to be done, which is why we have recently provided local authorities with a new weapon in their armoury—empty dwelling management orders. I would encourage all hon. Members to pay attention to this bit, because their advice surgeries will be full of complainants, such as landlords who have been abusing their position, who want their help.
Empty dwelling management orders support the efforts of local councils to get empty dwellings back into use. There are also tax incentives to support the use of space above shops, the conversion of properties and the renovation of properties that have been empty for three or more years. I hope that there is support for the orders across the House, although it impossible to say whether the official Opposition support them. They have probably gone to their second homes, and I hope they are paying 90 per cent. council tax on them.
Many initiatives focus on the urban areas where key workers and first-time buyers have found it difficult to find affordable housing, but rural areas have not been, and will not be, overlooked. Current schemes are designed to be flexible enough to respond to the needs of rural communities as well as urban ones. Second homes, for example, are often of particular concern. We have heard the stark statistics—I pay tribute to the hon. Gentleman for putting them on the record—and other rural areas face similar problems.
Since last April, councils have had the option to reduce the 50 per cent. council tax discount on second homes to a minimum of 10 per cent. We understand that many authorities have chosen to do so—we are not saying that councils must do so, but they have that choice, depending on their local circumstances. I wish that some of the newspapers that, under the Freedom of Information Act 2000 introduced by the Government, report the allowances of Members of Parliament, would point out that those of us who have second homes in fact voted to increase our own taxes quite substantially—I am not sure whether all Members realised what they were doing at the time. It is perhaps not a flippant point, Madam Deputy Speaker, and I have wanted to put it on the record for over a year now. I thank you for allowing me a wide berth on that.
To return to the debate, the Rural Affordable Housing Commission, established jointly by the Deputy Prime Minister and the Secretary of State for Environment, Food and Rural Affairs, is now examining issues, problems and solutions across the country in rural areas, and will make recommendations based on good practice. Elinor Goodman, chair of the commission, was at a well-attended seminar in Keswick last week as part of the Commission for Rural Communities' housing inquiry. Tony Cunningham, whose constituency is affected by this debate—and who, I am delighted to see, is in his place—says that he was delighted to see that, and I welcome his support.
The hon. Gentleman made a point about self-invested personal pensions, on which there were a couple of interventions. I believe that there is a deep misunderstanding on this matter. He referred to an "unintended consequence" of my right hon. Friend the Chancellor's policy. I must tell the House that very little, if anything, that my right hon. Friend the Chancellor does is unintended or not thought through. There are limiting factors in relation to SIPPs. We do not believe that the transfer of a pension fund into property will have the negative impact to which he refers. People who go for SIPPS and see property as a form of investment are a tiny minority. Under the scheme, one does not buy a second home as part of one's pension and use that second home as a holiday home or whatever; the property is owned by the pension fund, and any call on that property is paid out of the pension fund.
Of course, the hon. Gentleman will raise the question of enforcement, which is an important point, but we do not believe that the concept of SIPPs will lead to the sort of consequences that he and Danny Alexander fear. Responsible financial advisers and other commentators are making it clear that SIPPs is likely to be an attractive option only for a minority and will not produce substantial changes in behaviour.
Let me turn to the meat of the debate. Clearly, Cumbria is one of the most beautiful parts of our country—it is not the most beautiful constituency, but it might be the second most beautiful—[Interruption.] Perhaps it is the third most beautiful. I shall not start a bidding war.
It is clear that unique challenges are involved in trying to provide affordable homes for local people in the Cumbria area. Owing to the attractiveness and quality of life on offer in the Lake district and surrounding areas, demand for housing is extremely high, much of it coming from outside the immediate area. The link between local income levels and the cost of housing has been broken. and for many years local people have struggled to find a place on the property ladder.
The Government have been concerned for some time about the position in Cumbria and are committed to doing what they can to help. My right hon. Friend the Deputy Prime Minister has taken a personal interest in the matter, and has met local stakeholders twice to listen to their concerns and recommend new approaches to tackling the issue. That reflects his long-standing personal commitment to the Lake district and its surroundings.
Since those meetings, the Government office for the north-west and the Audit Commission have been working closely with local authorities and registered social landlords in Cumbria to promote a more strategic approach to affordable housing provision. As a result, a group of the county's local authorities known as the Cumbria strategic housing group have succeeded in attracting an additional £4 million from the North West Regional Housing Board for 2005–06 specifically for the provision of new homes in the area. That reflects the high priority that the board gives affordable housing provision in the new regional housing strategy, and is in addition to the mainstream Housing Corporation investment of over £20 million for new affordable housing in Cumbria in 2004–06.
No one is suggesting that local partners have been inactive. For example, South Lakeland district council has dedicated its increased council tax receipts from second home owners—a consequence of the change on which the hon. Gentleman was gracious enough to congratulate the Government—to the provision of affordable housing. As a result, the council expects to invest around £950,000 this year in a variety of schemes, including funding for the improvement of properties and their conversion to affordable housing for rent.
However, although finance is clearly important, this is not simply an issue of public funding. The new planning policy statement 3 on housing, due to be published for consultation shortly, will strengthen our ability to provide affordable housing through the planning system. That is a postcard that the hon. Gentleman can take home with him. Officials at the Government office for the north-west have been working with Cumbrian local planning authorities, encouraging them to make the maximum use of existing planning powers to secure affordable housing.
The forthcoming joint structure plan for Cumbria and the Lake district proposes a new policy requiring 50 per cent. of new homes built outside the national park area to be affordable, and 100 per cent. of new homes built inside the national park to be secured in perpetuity either for occupation by local people or as social housing. The structure plan also proposes to introduce the concept of allocating sites specifically for social housing in the national park. This is the first time that that approach has been adopted in Cumbria. It extends the existing "rural exception sites" approach, which is a familiar route for the provision of new affordable housing. The revised structure plan is due to be adopted in January 2006.
We should not focus entirely on new housing. The Government's commitment to providing decent homes by tackling the huge backlog of under-investment in our housing stock is also having a significant impact in Cumbria. Additional public sector investment of £21 million has been supplemented by a further £85 million of private sector investment. That has helped to ensure that by 2010 Cumbria's social rented housing will meet the decent homes standard.
I hope that the hon. Gentleman, the hon. Member for Workington and other Cumbria Members with a direct interest will welcome the joint structure plan.
The hon. Gentleman asked whether we could find ways to change planning law and to provide a cap. As I said, the new policy consultation will propose some changes. I am not sure that his scheme is workable, but I invite him to respond to the document.
The Government and the regional housing board are only too aware of the need to continue our push to provide affordable housing in Cumbria. We need to maintain sustainable, balanced, mixed communities where people on lower incomes—especially the young and the old—can access local housing at reasonable cost. The longer-term impact on local services and the rural economy will be severe if people on even average incomes are no longer able to afford to live and work in those communities. We are committed to a varied set of actions to address what is undoubtedly a complex issue. With the help of local partners, the regional housing board, the Housing Corporation, local planning authorities and others, I am confident that we can continue to deliver real progress for the people of Cumbria.
Question put and agreed to.
Adjourned accordingly at eleven minutes past Three o'clock.