Affordable Housing (Cumbria)

Part of the debate – in the House of Commons at 2:53 pm on 27th October 2005.

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Photo of Phil Woolas Phil Woolas Minister of State (Local Government), Office of the Deputy Prime Minister 2:53 pm, 27th October 2005

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.