Affordable Housing

Estimates Day — [1st Allotted Day] — Supplementary Estimates 2006-07 – in the House of Commons at 12:46 pm on 7th December 2006.

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[Relevant documents: The Third Report from the Select Committee on the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions (now the Communities and Local Government Committee), Session 2005-06, HC 703, on Affordability and the Supply of Housing, and the Government response thereto, Cm. 6912.]

Motion made, and Question proposed,

That, for the year ending with 31st March 2007, for expenditure by the Department for Communities and Local Government—

(1) further resources, not exceeding £1,351,500,000, be authorised for use as set out in HC 2,

(2) a further sum, not exceeding £1,357,195,000, be granted to Her Majesty out of the Consolidated Fund, to meet the costs as so set out, and

(3) limits as so set out be set on appropriations in aid.— [Jonathan Shaw.]

Photo of Phyllis Starkey Phyllis Starkey Labour, Milton Keynes South West 12:48 pm, 7th December 2006

Access to housing, especially affordable housing, is a key issue for all our constituents and it is becoming ever more urgent. I am sure that we all know from our constituency case loads about the effect of the shortage of housing on individuals. It reduces the ability of young people to buy their own home and puts enormous pressure on social housing, especially social rented housing, and families are trapped in overcrowded and sometimes substandard housing. That was the reason why the Communities and Local Government Committee—although, at the time, it was the Select Committee on the Office of the Deputy Prime Minister—decided to devote its first large investigation to the subject of the affordability and supply of housing. I am sure that that is also the reason why there are many hon. Members in the Chamber. I know that a great many of them wish to speak, so I will try to keep my remarks fairly short.

Over the past 15 years, it is indisputable that the annual rate of house building has fallen while the rate of household growth has increased. There was an upturn in the number of houses built in 2005—there were 160,000 built, which was the highest number since 1994-95—but there is clearly still a need for further increases. Although there is a slight excess of houses over households nationally—the figure was 1.7 per cent. in 2003—that figure is falling and there is enormous regional variation.

The Committee endorsed the Government's view that the rate of house building must be increased if problems of house shortages are not themselves to increase. However, given that the latest estimates of household growth are even higher than before, at 209,000 households a year, the Committee questioned whether the Government's target of an extra 200,000 houses a year by 2016 was actually enough. We urged that the target should be regularly revisited and reviewed.

The Committee also thought that national figures were not especially informative, given that there was such huge regional variation. Some 60 per cent. of household growth is occurring in London, the east, the south-east and the south-west. There are already 3.5 per cent. more households than homes in London. The National Housing Federation, in an excellent leaflet that I commend to hon. Members as a source of statistics, highlights the scale of the "affordability chasm" in the south-east, such is the extent of the problem. Of course, the Committee accepted that there are housing hot spots in many other parts of the country and that affordability problems are both increasing and occurring in parts of the country in which they previously did not.

The Committee felt that it was absolutely crucial that regional and local house building targets reflected regional needs. We thought that they should not be just dictated by the market, but that equal weight should be given to the needs of local economies and environmental and social issues. In the regional and local context, this is not just a question of housing numbers. Additional housing should match local demand through both a mix of tenure and a range of housing sizes and types.

Photo of Mark Lancaster Mark Lancaster Opposition Whip (Commons)

The hon. Lady makes a powerful argument about housing targets. However, she will be aware that on the eastern and western flanks of the city that we represent, the planning authority is not the local authority, but an unelected, unaccountable quango. Does she agree that if any community is to be genuinely sustainable, it must have the support of local people, and that the planning authority should thus be accountable to local people, not the national Government?

M

Thank you for raising the issue that you did. Phyllis Starkey may have been speaking generally but the point of the unelected quango needs to be heard and I feel that it was completely overlooked in her answer.

Submitted by Maureen Winn

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

I hope that the hon. Gentleman will forgive me, but I am speaking as the Chair of the Select Committee. I am trying to represent the all-party Committee's report, which was supported by Conservative Members. I would ask that we do not divert the debate by concentrating on the city that both he and I represent. There will be plenty of other forums in which to deal with those specific problems in our city, which, as he knows, I feel as strongly about as him.

Photo of John Bercow John Bercow Conservative, Buckingham

Given that over the past five years house prices have risen sharply and that average earnings are about £5,000 a head lower in rural areas than in urban areas, does the hon. Lady agree that in legitimately seeking an expansion in the quantity of housing available in areas such as mine and others, it is important that the Government address in terms both the requirements for infrastructure in general and my constituents' concerns about water shortages, sewerage capacity and implications for the food plain?

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

Indeed. The Committee made recommendations on those matters, which I shall come to later.

As I said, housing planning needs to be related to regional and local economic planning. Employment and housing need to be related to each other. Account must be taken of the fact that employment has run ahead of housing in some parts of the country, while the reverse has been the case in others.

On housing tenure, the Committee noted that the major decrease in house building numbers has been seen in the provision of social housing. Of course, council housing stock has been eroded through the right to buy. We accept that home ownership is an aspiration for very many because it both meets housing need and provides a way of gaining access to wealth and equity. We also supported the Government's schemes to promote access to home ownership through shared ownership and equity schemes, but we felt that there had to be not only an increase in the supply of shared ownership schemes, but support for people to enter the market. Support for equity mortgages could otherwise just further price growth, which would not improve the situation.

We were worried that there was insufficient emphasis on the supply of social rented housing. When Shelter gave evidence to the Committee, we endorsed its target of building an extra 20,000 new social rented homes annually. We were worried that the Housing Corporation had enormously increased the proportion of its funding being spent on shared ownership. Although social rented housing still represents slightly more than half the housing provided by the Housing Corporation, we want investment in social rented housing to be protected by requiring the corporation to spend a certain percentage of its funds on such housing, rather than allowing the proportion to erode further.

A great deal of the pressure for housing growth is coming from changing demography. Again, demographic pressures vary from region to region, but, broadly speaking, there has been an increase in the number of one-person households, which has happened partly because we are all living longer and also because of changing family patterns and relationship breakdown. Those factors need to be reflected in the housing provided in regions. There are shortages in new family housing in many regions, especially social rented family housing. We want to make it clear that new housing must meet the increasing needs of the elderly population, by including provision for sheltered housing, and include housing for people with disabilities.

As part of building more sustainable communities, the Government have quite rightly put an emphasis on increasing density in new housing developments. That makes the best use of land and can be much more public transport-friendly. The Committee stressed, however, that that must not lead to a preponderance of smaller units and flats simply to achieve that density. There are examples in which high density has been achieved successfully while still providing family housing. We want the Government to ensure that funding streams are sufficiently flexible and that local authorities are encouraged to use their planning powers effectively to ensure that high density is achieved with a proper mix of housing sizes and tenures.

The Committee wants the best use to be made of existing housing and we urge the Government to increase their target on reusing empty homes. We were persuaded that further measures were needed to discourage the purchase of second homes in places such as rural areas and those in which in-comers purchasing second homes, who usually have higher incomes than the existing population, are driving up house prices and depriving local people of access to the housing supply. The Government have not been persuaded on either of those points.

Photo of David Taylor David Taylor Labour, North West Leicestershire

My hon. Friend refers to the priority of ensuring that empty housing is reused. Is not the greater use of under-occupied housing a parallel issue? In the estates for which I am responsible—no doubt my hon. Friend will have had similar experiences—I often find that three or four-bedroom local authority houses are occupied for long periods by an elderly person for want of either appropriate sheltered accommodation, or a financial incentive to free that house up for a family. What does the Committee have to say about that?

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

I do not recall the Committee addressing that specific issue, but it is dealt with in the points that we made about the need to take account of the increasing number of elderly people when planning what types of new housing—both housing for sale and social housing—is to be provided. One problem that local authorities have in persuading elderly tenants to move out of their present housing and into new properties is that they often do not have suitable, attractive sheltered housing. Clearly, no one would want to force elderly people to move out of their homes into less acceptable accommodation.

The Committee recognised that housing makes an enormous contribution to climate change, and that factors such as where and how new housing is provided could have an environmental impact. Planning plays a key role in facilitating methods of development that minimise effects on the environment, but the issue is not clear-cut. New build concentrated in and around urban areas, and in expanding urban areas—even if it is on a greenfield site, and so has a negative environmental impact in that way—can reduce commuting, if there is an excess of local jobs. That would have a positive environmental impact. It could make public transport a much more realistic alternative, as well as regenerating and revitalising our cities. That is an issue on which the balance must be struck locally. It is, of course, extremely important for the quality of life of people living in our cities, including new residents, that green spaces in cities be protected, and not used for urban packing.

Because of the upward trend in building regulations, new housing is much more sustainable than most existing housing. The Committee urged the Department for Communities and Local Government to sign up to a climate change public service agreement, and we want the code for sustainable buildings to be strengthened still further. The Government's moves on a commitment to zero-carbon housing are welcome.

Photo of Adrian Bailey Adrian Bailey PPS (Rt Hon Adam Ingram, Minister of State), Ministry of Defence

In the context of the debate on new housing and climate change, did the Committee examine, or make a recommendation on, the issue of changing building regulations to promote the use of geothermal heating, or any other form of heat-preserving structures, in developments?

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

Not specifically, but the Committee welcomed the fact that building regulations were being improved, and that the code for sustainable building has put much more emphasis on microgeneration and renewable energy. The Committee welcomed the measures that were being taken, but we thought that the measures should have gone further, and should have been faster.

Some evidence to the Committee, particularly from the midlands and the north, showed that freeing up development on greenfield sites could discourage development on difficult brownfield sites, which is often crucial to urban regeneration. The Committee recommended that planning policy statement 3, which at the time of our report was in draft, should restore the sequential approach to prioritising brownfield, but that is not a recommendation to which the Government agreed. They argued that local authorities can deal with that issue through the planning and local development frameworks.

Finally, on infrastructure—I am sorry that John Bercow has left the Chamber, but I am sure that he will read Hansard tomorrow—obviously, if new housing and new housing areas are being created, we need to create new communities. The provision of infrastructure such as roads, schools, GP surgeries and so on is crucial. In some parts of the country, such as Kent and the Thames Gateway, building land is available, some of which has had planning permission for quite some time, although that permission has not been implemented, because the area needs the infrastructure to make those development sites viable.

The precise mechanisms for funding infrastructure were not part of the investigation or of our report, but I am sure that hon. Members will note that the Government are today publishing—indeed, they may already have done so—the next stage in consultation on the planning gain supplement, on which the Committee has also reported. That could, in future, be a mechanism for providing a guaranteed source of funding for the infrastructure that will be needed when new housing comes on stream. In growth areas such as Milton Keynes and Ashford, there is already such a mechanism: the infrastructure tariff, under powers in section 106 of the Town and Country Planning Act 1990, which ensures that developer contributions come through, and that there is forward funding, so that infrastructure is provided in a timely manner—indeed, sometimes before the housing is provided.

Photo of Martin Linton Martin Linton PPS (Rt Hon Harriet Harman QC, Minister of State), Department for Constitutional Affairs

Does my hon. Friend not agree that it would be beneficial if section 106 agreements gave an exact definition of "affordable housing", setting out the criteria that would have to be met, specifying the bedroom groups and giving more detail? She may know of a case in my constituency in which affordable homes were offered at 90 per cent. equity, at a cost of between £300,000 and £400,000. Inevitably, they were taken up only by people on very high incomes, such as City bankers, yet because of the lax way in which section 106 agreements are drafted the homes still counted towards Wandsworth borough council's affordable housing target.

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

I am aware of that case, and there is clearly a concern—particularly in London, where land values are very high—that the affordable housing powers under section 106 are not operating as effectively as they might. In another report, the Committee urged the Government to look again at section 106 and to consider ways in which it could be used more effectively, as there seems to be considerable variation in the way in which local authorities use those powers. Some of them use the powers extremely effectively, but there is evidence that many do not.

Finally, I simply repeat that the issue is incredibly important to the people whom we represent, and to young people in particular, who unfortunately do not have the same expectations about being able to buy their own home that their parents may have had. The Committee's report provides an overview of the main issues in the subject, and gives key recommendations. I hope that, at the end of the debate, the Government will respond positively, not only to the recommendations, but to other issues that I am sure hon. Members will raise in the debate.

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government) 1:07 pm, 7th December 2006

Liberal Democrat Members welcome the rise in public and political awareness of the housing issue, which is clearly a major policy concern. We welcome the debate, and I congratulate Dr. Starkey and her Committee on producing a thoughtful, thorough and balanced report that is challenging and provocative in places. Its measured language sometimes disguises the fact that it points out that things are essentially going from bad to worse, and that in many respects Government policy is not yet fit for purpose—and, indeed, that the Government are perhaps not even properly engaged on the right issues.

The report, and other reports that have come to our attention, suggest that we have a problem with housing. There is not enough of it; it is not of the right type, in the right place or at the right price; and, in many ways, it is not sustainable economically, socially or environmentally. Clearly, putting all that right is not a simple job, and it cannot all be done by the Government or the House, however hard we try. There are, however, some clear messages in the Select Committee's report, and I hope that when the Government respond to the debate, they will pick up on those messages, as well as some of the report's more refined points.

As well as the Select Committee report, there has been the Barker review, a Shelter report, and a Town and Country Planning Association report—a range of documents, all of which essentially make the same key points. The first of those points is the deficiency in the provision of social housing in England. Some 600,000 social housing units have been sold through the right-to-buy mechanism, and although expanding owner-occupation is, of course, a good thing, it means that there has been a significant reduction in the social housing stock. In addition, since Labour came to power in 1997, the waiting list for social housing has gone up from 1 million to 1.5 million families. Some 525,000 families have been added to the waiting list for social housing at a time when 600,000 social houses and housing units have been lost in the sector.

We know from reports, including some paragraphs of the Select Committee report, that 94,000 families are homeless or in temporary accommodation; another 500,000 are in overcrowded accommodation, especially in the south-east and London. However, every part of the country is affected, including my constituency in Greater Manchester. Some £14 billion has been stripped from the social housing budget as a result of right-to-buy sales. That money could have built a year's supply of housing, so the Liberal Democrats strongly endorse the construction of more social housing, as recommended by the Select Committee and by other reports, including the Barker report. It is essential that we tackle that problem.

Photo of Emily Thornberry Emily Thornberry Labour, Islington South and Finsbury

Will the hon. Gentleman therefore recommend that Islington council set an overall target of 50 per cent. of new-build social housing, as opposed to its present mealy-mouthed policy?

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

That sounds very much like our exchange in Westminster Hall a week or two ago. I shall come on to the question of the proportion of affordable homes that local authorities can or should provide in their planning agenda, but I should like to know whether the Government accept the 48,000 additional social housing units a year recommended by the Barker report? Do they prefer the 54,000 figure recommended by the Cambridge Centre for Housing and Planning, or do they advocate a different figure? The figures that the Department is using are clearly inadequate—a fact that the Select Committee report underlines.

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning)

The hon. Gentleman has been admirably clear about the increased housing supply that he would like, but how will it be paid for? Will it be funded by increased Housing Corporation grant, or by developer contribution, because, as Dr. Starkey suggested, suppliers of market housing provide a proportion of social housing? If it is the former, by how much should taxes increase? If it is the latter, how much additional market housing is needed to provide that additional social housing?

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

That brings us to the crux of the issue raised by the hon. Member for Milton Keynes, South-West. How can we use the planning and development system to lever in more social housing? I draw the hon. Gentleman's attention to South Shropshire district council and other councils that set a high affordability requirement for developers who submit proposals. My colleagues on South Shropshire council set a 50 per cent. requirement, of which 50 per cent., or a quarter of the overall total, is social housing for rent, enabling people to be taken off the rented social housing list and given accommodation.

Photo of David Howarth David Howarth Shadow Minister (Energy), Trade & Industry

Cambridge city council set a 50 per cent. affordability target, but it was not backed by the inspector, so it fell to 40 per cent. The inspector said that the system is constrained by national policy. Contrary to what Emily Thornberry said, the problem is rarely local policy, but the national policy framework. I hope that the Minister will deal with that point in her speech.

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

I thank my hon. Friend for raising that serious matter. Many local authorities would like to go further and faster in setting affordability requirements in their area.

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

May I finish my sentence? That is what residents want, too. In surveys across the country, the majority of residents—some 68 per cent.—say that more affordable housing should be available in their area. There is therefore public will for such provision and, in many cases, local councils are willing to deliver. It is true that national guidelines have been used to inhibit that development. Will the Minister tell us how PPS3 and the affordable housing paper that she has just published will help? Will she scotch the rumour that the planning Bill will include measures to remove those decisions from the local level and subject them to national regulation? Will she agree that affordability should be determined by local planners, and if planners wish to opt for high levels of affordability they should be permitted to do so?

Photo of Philip Dunne Philip Dunne Conservative, Ludlow

I am grateful to the hon. Gentleman for giving the example of South Shropshire district council, which is in my constituency, and on which I have the great pleasure of continuing to serve as a local councillor. Regrettably, however, its policy is not the uniform and unqualified success that he would like to portray. I should like to highlight two issues. First, several developers are keen to apply for developments in the district but have been deterred by the significant affordable housing requirement—they cannot make the figures stack up.

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I am reluctant to intervene on the hon. Gentleman, but he appears to be gently embarking on a speech. Perhaps he should leave it there, as I know he is seeking to catch my eye.

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

I was warned in a dream that the hon. Gentleman had some information. Having visited south Shropshire and talked to residents, I gained the impression that the programme was popular and successful. I am sure that he will contradict me if I am wrong, but, whatever some developers believe, there is no shortage of developers willing to invest in the area. I am not surprised, because it is an attractive area in which housing demand is high. Another issue highlighted by the Select Committee report is the shortage of housing units in most areas.

Photo of Andrew Slaughter Andrew Slaughter PPS (Dr Stephen Ladyman, Minister of State), Department for Transport

Before the hon. Gentleman moves on from social housing, may I point out that Members with an interest in the subject have sought to intervene, because we have an academic interest in discovering what Liberal Democrat policy is? If he is taking refuge in the slogan, "Leave it to the locality", does he agree with the Shelter target of additional affordable homes in London? Does he agree with the Mayor's target of 50 per cent. affordable housing, and does he agree that 70 per cent. of such housing should be social housing for rent?

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

There is clearly a separate but significant problem in London, some aspects of which have already emerged. There are more households than homes. In some areas, second homes are a problem. Indeed, most Members in the Chamber probably have a second home in London, which, to some extent, contributes to the problem. Clearly, we need more social housing in London. I do not want to enter into a debate about the proportion, but I readily agree that we need more social housing, including a significant fraction in London.

Moving on to the broader issue, there are not enough homes for families to live in. The number of households created every year exceeds the number of homes being built by 10,000 to 30,000. The balance of the figures might change slightly, but there is clearly a problem. The Select Committee report predicts that the gap will widen, and that the issues that need to be addressed will become more serious.

Reference has already been made to tackling the issue of empty homes. I welcome the legislation that the Government have introduced to improve empty homes management, but I note that there are still almost 700,000 empty homes in this country. A significant fraction of those empty homes are in London and the south-east, and a significant fraction of them have been vacant for more than six months. There is more to be done, and the rate at which empty homes are being brought back into use is far below what could and should be achieved.

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning)

Will the hon. Gentleman tell us where Britain stands in the European league table for the proportion of empty dwellings? It would be instructive for the House to recognise that we have fewer empty homes as a proportion of our total housing stock than other EU countries.

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

Plenty of British citizens are going all over Europe to buy up second homes, such as deserted farmhouses in Italy, France, Germany, the Greek islands or anywhere else. It is true that some other countries have a building stock that exceeds their requirements. The point is not where we stand in relation to France, Italy or Spain, but where we stand on homeless families and families living in overcrowding—in many cases, new immigrant families in London live in appalling conditions.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

On the point made by Michael Gove, if Britain has fewer empty homes, it could be a result of the desperate shortage of housing in so many areas. Britain is more urbanised than many other European countries, and people are living in unfit houses in town centres, which is happening in my constituency.

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

The hon. Gentleman has probably answered the intervention by Michael Gove better than I have.

I would describe the third area touched on by the report as the risks and rewards of home ownership, which is a difficult subject for this House to discuss. We are all in favour of a home-owning democracy, but we must recognise that that brings some significant risks, both at the micro level of the individual and the family and at the macro level of the economy. I am sure that the Minister will be happy to say that since 1997 an extra 1 million families have taken up owner-occupation, some 600,000 of whom have done so under the right to buy. Now, 71 per cent. of all families live in owner-occupation, which is the highest rate in western Europe—it is also higher than the figure for the United States, which might be thought of as the ultimate property owning society.

Interest rates are about half the average level of 10 or 15 years ago, and employment is at an historically high level. As a consequence of those two factors, people can undertake a greater level of mortgage debt. At the same time, we have experienced problems with pension funds, which will be the subject of a debate later this afternoon, and that has undermined confidence in pensions in many ways. There has been some stagnation in the stock market, which has made direct investment less attractive. Taking all those factors together, investment in housing has been very attractive.

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

Before the hon. Gentleman moves off the subject, will he tell us about Liberal Democrat policy on the right to buy? Did the Liberal Democrats support the cuts in the maximum discount in recent years? And is it Liberal Democrat policy to support the restoration or extension of those discounts?

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

I am being encouraged to say no, but I do not need any prompting. The money raised from the right to buy should be reinvested in social housing, and the fact that that has not happened is to the discredit of the Labour Government, whom I would have expected to do that given their philosophy and background.

Housing is a very attractive investment, as well as being a route to secure ownership. Deposits are much larger than they were 10 years ago, and parents are increasingly helping their children to put up the deposit. Multiples of earnings are at record highs, and the position is supported by households who earn double incomes. The whole pyramid—the Select Committee report hints at this and took evidence on the point—depends on the long-term security and price expansion of the home-ownership market. There is clearly a tension between securing that and making housing affordable and accessible.

If we were to follow the Barker report view that we should go for a 1.1 per cent. increase in house prices, which would match the European average—I understand from the hon. Member for Surrey Heath that that is the comparison that we should use—we would need to construct an additional 140,000 homes each year on top of the existing numbers to suppress that price bubble. The Government might introduce such a policy, and this House might approve it, but there is still a major tension between maintaining vigorous and sustained growth in house prices in order to sustain the economy and the security of those who are already on the ladder and making the ladder long enough at the bottom for new people to get on it.

Photo of Andrew Love Andrew Love Labour, Edmonton

As the Select Committee report states, the Government's objective is to increase the level of supply to try to ease price pressures. Andrew Stunell appears to be suggesting demand-side measures. Will he elaborate on which demand-side measures he is thinking about?

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

My point is that in attempting to solve one problem we must be careful that we do not create another. I am simply drawing hon. Members' attention to what is in the report and making sure that we do not invest in policy measures in one direction that cause damage in another.

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning)

I am grateful to the hon. Gentleman for giving way for the third time—he has been very generous. He has pointed out some of the strains in increasing housing supply too much. What would be an appropriate increase in overall housing supply as far as the Liberal Democrats are concerned? When it comes to the specific question of affordability, to what extent is the constraint on available land a factor in affordability, and what is Liberal Democrat thinking on releasing new land for development?

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

I thank the hon. Gentleman for his inquiry. We have some answers to those questions. If one puts together the different points made by the Select Committee, it is clear that the major area of expansion for new homes needs to be in the social housing area, not to suppress what is done in the private sector, but to restore what is done in the social sector. As the report states, the level of house building in the private sector has, broadly speaking, been the same over the past 10 years. The problem has been the shortage of social housing. That is clearly an area that needs further Government attention.

Significant measures need to be taken to make our housing stock more sustainable, at a time when it contributes 27 per cent. of carbon dioxide emissions to the atmosphere. I hope that the Minister will be able to give us credible reasons why the Thames Gateway is not required to be wholly sustainable, why the decent homes standard need not have a sustainability requirement built into it, and why the code for sustainable homes is so weak and feeble. The report refers to the need for building regulations to be upgraded to address those points. This is probably the fourth or fifth time that we have debated this, and I would be interested if the Minister told us what approach the Government plan to take on the Sustainable and Secure Buildings Act 2004, which gives them some of those powers.

Having referred to the economic and environmental sustainability of the housing market and the housing sector, I want to say a few words about social sustainability. In expanding housing development, we must not bring back the housing-only estates that were the plague of the '50s, '60s and '70s; instead, we must build sustainable communities that incorporate not only public transport but employment, education and public service access. It is important not to recreate the difficulties and problems of previous generations.

In some parts of the country, the problem of second homes is grievous; some of my hon. Friends feel that greatly. Equally, in other areas there is poor demand, which the pathfinder measures are designed to solve. It is a complex situation. Even in the north-west, we have pathfinder projects less than 40 miles from places where excessive demand for second homes is squeezing out local populations. Housing is not a liquid market, and it is not easy to match demand and supply, even over a very small area.

In producing this report, the Select Committee has done the House and the Government a service by analysing the problem and providing a critique of current policies. I look forward to hearing the Government's response.

Several hon. Members:

rose—

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. Before I call the next hon. Member, I remind the House—Front Benchers, Back Benchers and those who are seeking to intervene—that today's business is so structured that time is limited in both debates. Perhaps hon. Members will bear that in mind when making their contributions.

Photo of Andrew Smith Andrew Smith Labour, Oxford East 1:32 pm, 7th December 2006

I welcome this debate and congratulate my hon. Friend Dr. Starkey and the Communities and Local Government Committee on their report on affordable housing.

To meet the needs of my constituency, we need much more housing of all kinds. When mid-terrace former council houses on estates are selling for more than £180,000, there is indeed an interesting debate to be had about what is affordable. I note from the excellent Housing Federation booklet that my hon. Friend commended to the House that while the average house price in the south-east is 8.9 times the regional average income, in south Buckinghamshire and Oxford the ratio is more than 12 times, making it virtually impossible for many people in my area to buy a house. We certainly need housing of all kinds. I strongly endorse the Committee's conclusion that

"the overwhelming need is for social rented housing to make up for the shortfall in supply".

There is a compelling case on social, economic and environmental grounds for substantially more such housing in central Oxfordshire and for the review of the green belt that is necessary to enable suitable sites to be identified and developed.

The social case for additional housing is well documented in the strategy put forward by Oxford city council, and it is evident in every one of my advice surgeries, as I am sure that it is in those of my hon. Friends. High house prices, high rents and a shortage of social and affordable housing condemn thousands of people in our city to unacceptable living conditions. They make it very difficult for people working locally to live anywhere near their place of employment, and cause recruitment and retention problems for private and public sector employers. City council homelessness statistics show that the proportion of households in temporary accommodation is running at more than twice the national average. The need for more affordable housing is regularly raised with me by the chamber of commerce, the universities, the hospitals, other employers large and small, and the trade unions. Annual completions of affordable housing in Oxford, for rent and social ownership, have been running at about 150 a year, but a rate many times that level is needed to make real inroads into housing need. One important need that is often overlooked in the understandable focus on homelessness and temporary accommodation relates to the plight of families with children who are already in social housing, but are stuck in cramped maisonettes and flats and face a wait of years if they are ever to get a transfer to a house with a garden.

Photo of David Drew David Drew Labour, Stroud

My right hon. Friend represents an urban area, but it is just as much of a problem in semi-rural areas such as mine, where people are effectively driven out and have to go to the market towns, where they end up in overcrowded maisonettes and flats. It is really awful, and we must do something about it.

Photo of Andrew Smith Andrew Smith Labour, Oxford East

Yes, indeed. Moreover, it sends out entirely the wrong signal. These are hard-working families paying their rent and abiding by the tenancy conditions, yet they are stuck for an unacceptably long time in unsatisfactory accommodation. The situation must change.

Acute pressure on the existing private housing stock is also having damaging effects. In my area, it is leading to subdivision of houses and excessive multiple occupation, exacerbating the shortage of family housing and often damaging the quality of life in residential areas. I therefore welcome last week's statement by my hon. Friend the Minister for Housing and Planning giving new emphasis to the importance of family housing and gardens, because precisely such housing and gardens are being relentlessly eroded in my constituency. What is more, the tight constraints of the green belt— [ Interruption. ] It would be good to have the support of the party of Mr. Hands, who is making sedentary interventions, when it comes to the need to review the green belt in central Oxfordshire. The tight constraints of the green belt impose a pressure-cooker effect on residential areas that can be relieved only by meeting more housing need and demand though new development on the edge of Oxford—for example, to the south-east and to the north. The Minister's recent announcement of £1 million of growth-point funding towards city centre housing was welcome, as it can help to create 600 to 1,000 new homes. However, the scale of housing need and the demographic and employment trends are such that the provision of some 2,000 dwellings or more a year for the next 20 years is the sort of expansion that we really need.

The economic case for land to be allocated for more housing is equally strong. As a globally recognised location with excellence in many areas of research, medicine, bioscience and other applied sciences, as well as publishing, and outstanding achievements in the automotive industries by BMW and Unipart, Oxford has the potential to make a still greater contribution to the regional and national economy. It would be a terrible waste for all that to be held back by unduly restrictive planning policies. The south-east plan must give full recognition to Oxford's enormous potential and realistically address the land provision and transport infrastructure that is required for it to be fulfilled, including regional links such as the east-west rail line.

The environmental case for housing growth in central Oxfordshire is also strong. Urban extensions to Oxford are far and away the most likely to be sustainable, with shorter journeys to work, and a higher proportion undertaken by means apart from the private car than in any other location in Oxfordshire.

The Select Committee report has some interesting comments about environmental sustainability and minimising the adverse impact of new housing. I believe that we need to move beyond old assumptions about growth always damaging the environment. We are an innovative and creative country, and we must hold to and fulfil the ambition to design new development, with supporting transport and other infrastructure, in ways that minimise pollution, conserve energy, incorporate power microgeneration and increase biodiversity. The Chancellor's commitment yesterday on carbon-neutral housing is a welcome step in that direction.

I endorse what the Select Committee report says, and the comments of my hon. Friend the Member for Milton Keynes, South-West in her excellent speech, about forward funding for transport, health services, schools and other physical and social infrastructure, and the importance of the need for next year's spending review to address that. I support the Minister for Housing and Planning and her colleagues in the representations that I am sure that they will make.

It is crucial to knock on the head the myth that those of us who strongly support more house building somehow do not care about green spaces or want to concrete over south-east England, and all the other nonsense that is trotted out. Nothing could be further from the truth.

The beautiful setting of Oxford and the quality of its environment depend more on the green wedges coming into the heart of the city than on the rigid preservation of existing green belt boundaries. Land on the edge of the city, which makes a high quality contribution to the landscape and ecology of the area, must of course be strongly protected and safeguarded. However, other areas of the green belt do not fall into that category. Where extensions are made to the city, an integral part of the plan should be to extend and safeguard the green wedges, for example, along the flood plains and out towards Shotover, so that development is balanced by the proximity of open space and attractive landscape.

Oxford is in the fortunate position of having the potential to grow in those sectors of high added value that the Chancellor mentioned yesterday—with all the attendant benefits for living standards and welfare—while enhancing its environment and the quality and availability of housing. That is an enormous opportunity and responsibility, and we look to the Government to play their full part in fulfilling it, so that, through enlightened planning policy and investment, we secure for all our citizens the affordable and decent housing to which they should be entitled in a civilised society.

Photo of Philip Dunne Philip Dunne Conservative, Ludlow 1:43 pm, 7th December 2006

I take on board your earlier comments about trying to be brief, Mr. Deputy Speaker.

I represent a rural constituency. As most hon. Members appreciate, concerns about affordability are not restricted to urban areas. In our sparsely populated rural area we experience many problems similar to those in urban areas. The main difference is lack of delivery in rural areas. House building has focused in and around urban areas, and funding from the Government to support affordable housing has followed. That was brought home to those of us who serve on the Public Accounts Committee—it is good to see other members of it here—earlier this week when we considered the National Audit Office report, "A Foot on the Ladder: Low Cost Home Ownership Assistance", which forcefully made the point that house prices are rising fast and incomes are relatively static, especially in rural areas, and the problem is getting worse.

The NAO identified £112 million of efficiency savings that could be made from the implementation of the Government's policies on supporting affordable housing. Redeployment in the way that the NAO suggests would help more than 4,000 people into affordable housing. I hope that the Department will take note of that and try to implement some of the recommendations.

I have recently been lobbied by the Midlands United group of housing associations, which has made a submission to the Chancellor for the comprehensive spending review, pointing out some of the impact of the lack of priority afforded to the midlands, especially rural areas, in recent years. The east and west midlands have almost one fifth of the country's housing stock but receive less than 15 per cent. of public funding for housing. Last year, just under 30,000 new homes were built in the midlands, but only just over 3,200 were affordable homes. That is not good enough. The needs of the area are acute.

One reason for the lack of priority is that no funding has been provided through the Government funding mechanisms for key workers who live outside London, the east and the south-east. That means that, of the £470 million that the Government spent last year on their affordable housing schemes, £221 million was spent on key workers, but not a single pound was spent outside those areas. None of that was spent in the midlands or in the north. One reason for that is that we are labouring under an excessively centralised housing allocation. The new regional spatial strategies grant unelected regional assemblies the ability to allocate houses according to their priorities. Not surprisingly, that tends to focus house building and growth on the larger population centres. For example, in the west midlands, a preponderance of housing is being allocated to the urban areas, leaving the rural areas to pick up the scraps.

I agree with Andrew Stunell that we should consider local determination based on local priorities, and provide much more flexibility for local authorities to decide how many houses they should build and where they should build them.

Photo of Andrew Stunell Andrew Stunell Shadow Secretary of State for Communities and Local Government, Liberal Democrat Spokesperson (Communities and Local Government)

Does the hon. Gentleman agree that in many rural areas outside the green belt, local communities would welcome the addition of affordable housing but find themselves restricted by the current national guidelines and regional rules?

Photo of Philip Dunne Philip Dunne Conservative, Ludlow

Yes, I agree. I was about to cite the example of South Shropshire, which the hon. Gentleman used earlier. This year, the district is restricted to 136 units of housing compared with an average in the past 10 years of more than double that. As a member of that local authority, I can report that we are arguing for reverting to between 200 and 250 housing units in the next allocation from the regional assembly.

The problem in rural areas, as in other areas, is compounded by homelessness. Again, the hon. Member for Hazel Grove mentioned that. The housing association in South Shropshire has approximately 2,000 units. About 10 per cent. come up each year as people move on or move out. Approximately 200 units are therefore available each year. However, between 200 and 230 families present as homeless in South Shropshire every year. Given the proper priority to house the homeless, there is an almost static market in the existing social housing structure in the district. The need to lever in additional affordable housing through social housing and affordable schemes is pressing in my area, as it is in many others.

Dr. Starkey, the Chairman of the Select Committee, referred to the density guidance as a positive measure to try to improve availability. That may be correct in some respects, but I am worried about using a blanket density minimum throughout the country. In the few areas in my constituency that are able to put up housing, there is now a requirement to build at the same level of density as applies in the cities. Consequently, three and four-storey blocks of flats are being slapped into little estates on the edges of small towns or villages of predominantly single-storey bungalows or two-storey houses. Those flats are completely out of character with the rural conditions in which they are situated. The Government need to look carefully at this prescriptive centralising approach; they should be more prepared to show flexibility in rural areas.

The hon. Member for Hazel Grove applauded the measures relating to the affordability percentage, but the experience of imposing a 50 per cent. affordability criterion in South Shropshire has not been as rosy as he might have anticipated. The project is still in its early stages, so that might change over time, but we are now three years into the project, and we are on the third set of revisions to the plans put forward by the Liberal Democrat administration. Developers are not flocking to South Shropshire—far from it. They are giving it a wide berth, and choosing to develop in neighbouring authorities where no such constraint exists to put pressure on their profit.

Photo of Roger Williams Roger Williams Opposition Whip (Commons), Shadow Minister (Environment, Food and Rural Affairs)

I note the points that the hon. Gentleman is raising, and I am sure that the plans are improvable. Does he not agree, however, that an important issue in connection with affordable housing is land values? The policies of his district council can ensure that developers have a realistic view of land values, and can therefore purchase it at such a price as to make their developments of affordable housing reap rewards for them.

Photo of Philip Dunne Philip Dunne Conservative, Ludlow

I accept that land values play an important part in determining the overall cost of housing, but I do not accept that that policy is having the effect of reducing land values. The problem is that, because of the restricted number of units that we can build, the land values rise whenever consent is granted. The land value for affordable housing rises as well, because that is the only kind of housing that can be built. So the policy is not having the desired effect that the hon. Gentleman suggests.

Photo of Anthony Steen Anthony Steen Conservative, Totnes

The problem in Shropshire that my hon. Friend has mentioned is mirrored in south Devon, where the Liberal-run council in Torbay has been insisting on 40 to 50 per cent. affordable homes in each development. As a result, perfectly good sites are not being developed, because the private developers are saying that they cannot possibly manage to subsidise so many homes—subsidy is what affordable housing is all about, after all—out of the profits of the private houses that they are building. The consequence is that the private housing prices go up, and the subsidised houses never get built, because the developers do not want to build them. So we are on a hiding to nothing. The whole concept of affordable homes—subsidised homes—is a total myth.

Photo of Philip Dunne Philip Dunne Conservative, Ludlow

I am grateful to my hon. Friend for that intervention, which illustrates well one of the unintended consequences of these policies. I can give the House another example from my constituency. The largest development that has been consented is in a town called Cleobury Mortimer, where 112 houses were consented. This happened just before the introduction of the 50 per cent. policy, but more than one third of those houses were to be affordable. They have not been delivered, however. The builder had secured the opportunity to fund the affordable housing through the construction and sale of the open-market housing, but because of the high proportion of affordable housing in the scheme, he did not find it attractive enough to be able to sell the open-market housing. The entire scheme is therefore stymied, and is at present stuck. We are therefore delivering neither affordable nor open-market housing, despite having that large consent in that town.

I have touched on some of the potential solutions to those problems, and I want to finish by highlighting one or two in greater detail. It is important to give a fair allocation of public housing grant to areas across the country, not only for social housing but in low-cost assistance. There are just as many key worker categories and jobs needing to be filled in rural areas as there are in urban areas, and it seems quite wrong that Government policy should prevent that from happening.

Local authorities should be given more control over the number of houses that they are able to consent to each year. They should be less prescriptive about density, and more imaginative in the way in which they allow houses to be reconfigured. Examples include dividing a reasonably large house into two to provide a retirement flat for elderly parents or, in our area, allowing farmhouses to be divided into two to provide separate dwellings within the same house for parents and children, when the children start to have children of their own. Such reconfiguration should be permitted without imposing the requirement to sell the houses. A local authority could impose a section 106 agreement to require the two units to be sold together, thus preventing the opportunity to make capital gain, which seems to be the fear of so many of our local planning officers.

There should be much more flexibility over the supply of land outside the green belt. Areas such as mine have acute housing need. Indeed, the housing needs survey found that we should be building 287 affordable houses a year, but we are building less than half that number in total at the moment. The local authority should have the flexibility to allow some greenfield development, or to change the definition of brownfield to encourage farmyard development, for example. There should be more local determination. I agree with Mr. Smith that supply is part of the key to this issue, in terms of pricing and availability. We need the Government to show flexibility on this matter.

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North 1:56 pm, 7th December 2006

I congratulate my hon. Friend Dr. Starkey, the Chair of the Select Committee, on its report, and on the fact that the Committee is also undertaking an inquiry into the social housing element. I shall be concentrating on social housing in my speech today. Like other hon. Members, I want to emphasise that a key issue is supply. We have seen a 30 per cent. fall in lettings in the social housing sector since 1999-2000, and a decline in the overall stock in the social rented sector of 238,000 units, mostly as a consequence of the right to buy.

We have seen a welcome upturn in new housing provision recently, particularly in London but also in other parts of the country, but this has to be considered in the context of a continuing fall in supply that outstrips provision. Last year in London, for example, 6,037 additional affordable homes were constructed, but 11,549 were sold through the right to buy. It is important that we consider both sides of the equation and concentrate on the broader picture if we are to address what is nothing less than a crisis in the provision of social housing to meet the needs of our population.

I want to make a couple of remarks about the impact of the fall in provision of social housing on community cohesion, a subject that is dear to my heart. There is no doubt that many cities—London in particular—are experiencing an exacerbation of community tensions as a consequence of the competition for the scarce resource of housing. We must also recognise that the impact of homelessness and overcrowding falls disproportionately on black and minority ethnic communities. The figures show that 12 per cent. of white households live in overcrowded accommodation, while 35 per cent. of black and minority ethnic households do so. The figure for Bangladeshi families is 62 per cent. The impact is disproportionate. Not only do our minority communities—particularly our Muslim communities—bear the brunt of housing need, but the settled migrant communities and white households in parts of London that are experiencing changes in their communities as a result of population movement are themselves deeply anxious about those changes and resentful of the fact that their sons and daughters are unable to obtain properties either to buy or to rent.

Photo of Sadiq Khan Sadiq Khan Labour, Tooting

Has my hon. Friend read "The New East End", published earlier this year? While it confirms that that is one of the reasons for the hostility felt by white working-class east Londoners towards east Londoners of Bengali origin, it also makes the noteworthy observation that the hostility is directed at the system rather than the players. It is worth thinking again about the 1968 legislation whereby need trumps entitlement.

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

I have indeed read the book, which provides an excellent analysis and should be required reading. Although, sadly, individuals sometimes bear the brunt of the grievances of those whose needs are not met, the failings of the system are to blame.

I am concerned about recent evidence of the difficulty of obtaining temporary accommodation to meet the needs of homeless families in my borough. Placements in such accommodation are often responsible for the community tensions that I have described. As I have already mentioned briefly to my hon. Friend the Minister, I have seen an increasing number of families in temporary accommodation lose homes—either temporary settled homes or private rented accommodation—in my borough. They are then moved, sometimes after 12 or 15 years' residence, to temporary accommodation in Dagenham, Barking or other parts of east London because my borough has been unable to find them the temporary accommodation that they need.

What is particularly galling is that on a number of estates in my area up to half the council accommodation has been sold through the right to buy, and is now in the hands of individuals and property companies buying to let. That engenders endless frustration. We frequently find ourselves re-renting flats that were available for social accommodation as temporary accommodation at £400, £430 and £450 per week, while next to them stand former council flats that could have been rented for £90 a week. The housing problem is not the only consequence: housing benefit expenditure on temporary accommodation has risen from £82 million a year in 1997 to £1.2 billion today.

We are pouring public money into temporary accommodation, often via the right-to-buy sector, in order to keep people in accommodation much of which is still sub-standard. My recent experience confirms that those families are not settled in long-term temporary accommodation, but are being moved from pillar to post. They are being moved from a borough that has been their settled home. We are pulling their children out of school, and taking them to the boroughs where community tension is strongest. That makes no sense as housing policy or as social policy, and it makes no financial sense. We must do something radical to stop it.

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

As the hon. Lady may know, earlier this week the Chairman of the Select Committee and I visited her arm's length management organisation, CityWest Homes. On 31 December, Westminster city council will become the first council in Britain to meet the decent homes standard. Will that not go some way towards improving the conditions she has described?

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

If the council has met the requirements of the decent homes initiative, that is entirely due to the Government. The Government devised the initiative and provided the money for it. I celebrate the fact that tens of thousands of tenants in my constituency and my borough have been given new kitchens and bathrooms and had their homes upgraded thanks to the generosity of a Labour Government, and I am grateful to the hon. Gentleman for giving me an opportunity to say so.

Photo of Andrew Slaughter Andrew Slaughter PPS (Dr Stephen Ladyman, Minister of State), Department for Transport

Is not the Conservative party's attitude to the decent homes programme summed up rather more clearly by a comment from a Tory cabinet member of Hammersmith and Fulham council? When asked about the programme, he said "It saddled us with £192 million of debt", thus demonstrating not just a complete misunderstanding of the basis of its funding, but the fact that the council did not want it in the first place.

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

My hon. Friend has seen a very deleterious change in housing provision and policy in his borough since the Conservatives took control in May, and, sadly, tenants and others in housing need will bear the brunt of that change.

My hon. Friend the Minister has been enormously sympathetic and of great practical assistance in responding to the problem of overcrowding. Westminster is one of the boroughs with the highest levels of overcrowding in the country, and the words "Shirley Porter" are not entirely out of context in that regard. Unfortunately, despite my hon. Friend's support, the situation is not only bad but deteriorating.

In the last fortnight, I have been visited by people from three new households. Families of six are sharing one-bedroom flats. Can Members imagine the pressures that that causes? Children risk growing up in surroundings in which they cannot study, in which they have no privacy and in which any illness will spread like wildfire. Overcrowding has been known to cause tuberculosis to spread among family members. Mothers tell me that their teenage sons have left home and are on the streets because they cannot bear to return to a household where they cannot retreat to a bedroom of their own—in which they may have to share a bedroom with a 12-year-old sister. Indeed, there may be four or five family members sleeping in a single bedroom. That is intolerable.

My hon. Friend has announced investment in loft extensions and deconversions. I welcome that, and the planning changes that will help us to deal with overcrowding. We should, however, bear in mind that the Housing Corporation's programme for 2006-08—new housing supply is, of course, entirely driven by the Housing Corporation—contains provision for 3,300 homes with three or more bedrooms. That represents a 1 per cent. increase in the supply of property in that band. There are 13,867 households waiting now, even before the inevitable pressures gain momentum. We are still in the foothills when it comes to meeting that crying need.

As my hon. Friend knows, some housing need in London is met through sub-regional housing partnerships, because not all boroughs can meet their own needs. That is, I think, a strong argument against allowing entirely local determination for planning provision. Some of the boroughs in our sub-regional partnership are playing deeply deceitful games. All the anecdotal evidence shows that outer London boroughs are designating almost all their new housing developments "disabled housing" in order to deny the legitimate expectations of central London boroughs to draw on that stock. I hope that my hon. Friend will pursue the boroughs that engage in such practices. If we cannot rely on the meeting of demand in the round rather than simply in our own boroughs, and if local authorities are implicitly encouraged to take part in those games, we shall not be able to meet our housing needs.

It is entirely right for us to try to fulfil the legitimate wish of young families to buy their homes, but I have a few caveats. The first relates to the way in which home ownership has squeezed out the investment that is required to meet the needs of homeless families, those in overcrowded accommodation and those in social housing generally.

Secondly, there are real risks in promoting home ownership to categories of people who cannot afford to sustain it. The Minister knows that I had a recent Adjournment debate on the impact of major works and service charges on council leaseholders, some of whom are in serious need. A steady flow of households have bought into temporary accommodation and then found that they could not maintain their homes because of service charges or major works bills or, for instance, a young family who were overcrowded in a one-bedroomed shared ownership property have been unable to stay. Some families have lost their shared ownership property and have had to present themselves as homeless as a consequence. It is therefore important that we do not see such ownership as a panacea.

It is often not recognised that shared and affordable home ownership involves subsidy. There is a slight political tendency to see those in social housing as feckless poor who get handouts from the state, as opposed to entrepreneurial home owners. In fact, however, we are subsidising shared ownership by £50,000 per unit in London. That may or may not be the right choice, but it is important to understand that all forms of affordable housing investment have financial consequences.

The Mayor's housing strategy for London, which I very much welcome, also strongly emphasises the targeting of investment in home ownership towards intermediate housing to meet the needs of families. He estimates that there are 91,000 tenants in London who could buy their own homes but need family-sized homes. Shared ownership is too heavily skewed towards small units such as studios and one-bedroom flats, which do not allow families to grow and stay in central London.

The Government's children strategy is based on the concept that every child matters. Demonstrably, and sadly, every child does not matter at the moment. Children in homeless families and in grossly overcrowded accommodation do not matter in the sense of receiving the kind of support and investment that would get them out of a crisis situation. Next year's comprehensive spending review is our last and best opportunity to put an end to the worst crisis in public policy.

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham 2:12 pm, 7th December 2006

I am a member of the Select Committee that produced the report, although I was not a member of the Committee for the duration of the inquiry. I, for one, do not agree with all the report's findings, but I hope that it has been a helpful contribution to what is becoming a more extensive and pressing debate. I am also vice-chairman of the all-party arm's length management organisations group, and I represent a constituency in which about a third of housing stock is social housing, which is well above the national average but round about the London average.

My position is to support in general more house building. It seems that some of that building will inevitably have to be on greenfield land, which I support somewhat reluctantly, although it is not the same as supporting construction on green belt land, about which I have severe reservations, as I do about the Government's approach announced earlier this week.

My constituency suffers badly from the phenomenon of lack of affordability of private housing. The Evening Standard on 4 December included an article entitled, "Has it ever been harder to buy a house in London?" The picture that accompanied the article is of Wingate road in Hammersmith W6. According to the caption, a four-bedroomed house with garden, with an asking price of £750,000, was sold for £866,000 within a week. Affordability is a very large issue in my constituency. In central London, the average home price, as distinct from house price, is about to break through the £500,000 barrier.

I also want to reflect on another phenomenon that is getting coverage and interest at the moment: flight from London. That is a growing problem, and a report in the Evening Standard today says that about 250,000 people per annum are leaving London. My constituency has one of the highest population turnover rates in Britain of 20 to 25 per cent. each year. It is also now the second largest constituency in Britain in terms of population, after the Isle of Wight. Therefore, a lot of people are moving out, but even more are moving in.

My constituency is also the second youngest in Britain after Battersea, and is among the top 10 for the location of young professionals. I want to address many of my comments to the problems that face young professionals and young families in getting on the housing ladder, including the private rented sector, in London and the south-east.

Photo of Andrew Slaughter Andrew Slaughter PPS (Dr Stephen Ladyman, Minister of State), Department for Transport

I appreciate that the hon. Gentleman is off to Chelsea, so one hears, and that Wingate road and similar roads might be my problem rather than his after the next election, but does he acknowledge at all the need for social housing in his constituency, or like his colleagues who have newly taken over Hammersmith and Fulham council, does he consider only young professionals and the need for housing for sale, which is clearly substantial?

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

I thank the hon. Gentleman for that intervention. He and I had numerous such conversations over many years at Hammersmith and Fulham council. May I say that his adoption as the Labour party's prospective parliamentary candidate for Hammersmith has cross-party support, and I wish him all the best in his attempts to represent roads such as Wingate road. I am certainly not addressing other issues to the exclusion of social housing. I merely wanted to emphasise some private sector housing issues in London. I am fairly sure that he will speak later about many of the issues facing the social housing sector, which I will certainly not ignore.

We need more social housing for rent, but that cannot be the only solution. The Government have a terrible record, especially in London, on social housing completions and lettings. Affordable housing completions are down from 45,000 in 2000-01 to 32,000 last year. Since 1997, new social lettings in London have almost halved under Labour. The problem is very serious. The Labour party, however, is pretty much proposing that social housing for rent is the only solution to this country's housing affordability crisis. In that regard, I must diverge from the opinions expressed by Labour Members.

Photo of Sadiq Khan Sadiq Khan Labour, Tooting

Is the hon. Gentleman not being a bit disingenuous? His hon. Friend Mr. Dunne referred earlier to the Public Accounts Committee, which this week examined a report that confirmed that £500 million has been spent each year, over the past few years, on low-cost home ownership. Could he be more generous in his praise for this Government's ability to help people to get a foot on the home ownership ladder?

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

That expenditure is certainly welcome but, unfortunately, it is simply not making enough impact. The impact in constituencies such as mine is very small. I shall refer later to some of the low-cost home ownership initiatives, including shared ownership, in my constituency, in a development that is not too far from the hon. Gentleman's constituency.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I hope that the hon. Gentleman will not unwittingly mislead the House through a rather selective use of statistics on housing completions in London. He will know that in the year that he chose as a baseline, the housing market was in a state of total collapse, and as a result the Government of the day invested in what was known as the housing market programme to try to rescue it. That resulted in a spike in social housing output in London in that year. If he looks at the statistics, he will see that the figure of 6,000 social housing homes completed last year in London is the highest for more than a decade. Will he give the Government credit for that?

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

It is certainly helpful to have more social housing completions in London, but the Government do not really have a good record on the issue. It is interesting to take an intervention from the right hon. Gentleman, who, I think, was one of my predecessors as the MP for Fulham. If I am not mistaken, his slogan at the time was, "Nick Raynsford lives here". He moved out soon afterwards, and he would have great difficulty affording to move back into the constituency owing to some of the problems that I have outlined.

Photo of Michael Wills Michael Wills Labour, North Swindon

The hon. Gentleman is saying that there is not enough social housing; presumably his party would spend more money. If so, could he explain how he squares that with the third fiscal rule to which his party is also committed?

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

I am talking about a general desirability that there should be more social housing and more low cost home ownership in London and places such as my constituency.

The disparity between average social rents and average private sector rents is enormous. The national disparity is about 70 per cent. In London, the figure falls to about 48 per cent; the average social rent is about 48 per cent of the average private sector rent. One of the consequences is that those in lower paid jobs simply cannot afford the private sector rent, but because they are in work they, almost by definition, have very little chance of accessing the social rented sector in constituencies such as mine.

I want to talk about a specific development in my constituency, which to a large extent—

Photo of Emily Thornberry Emily Thornberry Labour, Islington South and Finsbury

Before the hon. Gentleman moves on, I would be interested to hear his ideas as to how people on low incomes can live in London in anything other than social housing. The average income of people living in council estates in Islington is £6,290, according to the housing needs survey. Where could they live apart from council housing?

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

The hon. Lady misunderstands my point. I am referring to people who are not currently in social housing and are generally in lower paid jobs and who simply cannot afford private sector rents. There is a big gap between those with access to social housing in London and those who are able to afford private sector housing for rent. I wanted to address those people specifically.

Imperial Wharf in my constituency has been cited as a model by many who are promoting the idea of imposing a blanket rule of 50 per cent. social housing for rent across London and the rest of the country. Imperial Wharf is the largest residential housing development in west London in the past 10 years or so, with 2,200 to 2,300 homes. It was the first large development, as far as I am aware, that had a 50 per cent. requirement imposed on it by the council through the developer, St. George. It was approved in 1999 and is now nearing completion. It is a good time to review the nature of the Imperial Wharf development. I think that the London Mayor, Ken Livingstone, has been to visit it, as have various Government Ministers.

Imperial Wharf has been a terrible example of what can go wrong as a result of imposing an arbitrary 50 per cent rule. The prices of the 50 per cent. of houses in the private sector are incredibly high. It has been marketed as London's biggest affordable housing development, but private sector homes have been on the market for between £500,000 and £1.25 million. That part of the development fails in terms of affordability.

I have visited a large shared ownership development for key workers called Mallard House a few times. It was featured in the Evening Standard a couple of years ago as Britain's most expensive shared ownership scheme; I cannot remember the exact prices but they were in excess of £300,000. The newspaper went door to door trying to find out who lived in this "key worker" housing unit. A total of three people in the 80 units could in any way be defined as key workers. The development simply has not been a success, because the shared ownership has been made far too expensive.

Photo of Sadiq Khan Sadiq Khan Labour, Tooting

Is the hon. Gentleman saying that the reason for the high prices is the greed of the developer resulting from a lack of definition of affordable housing, or that the developer is using the high prices to subsidise the affordable units?

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

Unless we make the private sector housing extremely expensive at a riverside site such as that, it will be difficult to deliver a large amount of social housing for rent. The hon. Gentleman's optimistic confidence in the 50 per cent. rule across London will turn out to be gravely misplaced.

Photo of Andrew Slaughter Andrew Slaughter PPS (Dr Stephen Ladyman, Minister of State), Department for Transport

The hon. Gentleman is being very generous with his time. I do not agree that the poor should not be able to live in prosperous areas, which seems to be what he is saying about riverside developments, but I am also worried that he is anticipating my speech. If he is saying that affordable housing in such developments is too expensive, surely what is needed is more intervention to ensure that there is more affordable housing, not less. Will he join me in condemning the Conservative council in Hammersmith and Fulham, which said that, in every case, it will prioritise expensive shared ownership housing over social rented housing?

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

We have had these exchanges for about seven or eight years. The hon. Gentleman approved the Imperial Wharf development in the first place, so it is perhaps understandable that he is a little touchy about it. It is certainly not the objective of anybody to have very expensive and over-priced private sector homes put on the market in my area of London. There is a real crisis facing the hon. Gentleman's constituents as a result of the lack of affordability throughout west London, which is one of the main reasons for the flight of 250,000 people from across London per annum.

One of the people who would disagree the most with the hon. Gentleman is the former Labour councillor for the Sand's End ward, which covers the development to which I referred. Sadly, he lost his seat by more than 700 votes in May. He described the units of social housing for rent as completely unacceptable, of poor construction and very small. He called them unacceptably small, and it is a shame that his voice is no longer being heard speaking out against such developments, which he thinks have been catastrophic failures.

Moving on, I wanted to look at how we could make private sector home ownership in constituencies such as mine more viable. First, we need more house and home building across a variety of sectors.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

The hon. Gentleman is talking about the quality and size of housing. Was it not the Conservative Government who abolished Parker Morris standards? Is he suggesting that they should be reinstated?

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

That will be a matter for the Conservative party's ongoing policy review and we will look at it very closely.

There is a need for more homes across a variety of sectors and Labour's approach—that rising house prices will necessarily lead to a generation of more units of social housing for rent—is simplistic. We need a greater diversity of housing in constituencies such as mine. We need to speed up the planning system and make it more flexible. The planning gain supplement will almost certainly not be the solution; in general, taxing home building will not be the solution and previous attempts to capture the uplift in land prices for the Treasury generally have been a failure.

The Labour policy that, as a hard and fast rule across London and perhaps across Great Britain, 50 per cent. of new stock is to be social housing for rent is misguided. It is strongly contested by some London Labour councils. The London borough of Newham has, I think, come to the conclusion that what it needs is more lower cost private sector home ownership of the sort that I describe, in order to create a better balance in that borough. Such councils argue that they want to increase home ownership and shared ownership.

There are also genuine problems to do with stamp duty being too high and with the threshold for inheritance tax being too low, but that is probably a matter for a separate debate. There are people who are paying inheritance tax on former local authority right-to-buy properties on estates such as Sulivan court in my constituency. The original intention behind inheritance tax was not that people who bought their council flats under the right to buy in the 1980s and 1990s should later leave an inheritance tax bill to their children.

What we need across Britain is a much more liberalised approach to land use, and especially urban land use. There has been a lot of over-classification. In my constituency, the previous Labour council has classified some areas as key local shopping areas. The Dawes road is full of unused shops—disused retail frontage—which could, with a little more imagination, be transformed into residential property.

Photo of Sadiq Khan Sadiq Khan Labour, Tooting

The hon. Gentleman talked about more imaginative use of land. Is he therefore surprised that some of his party colleagues have, for example, signed an early-day motion objecting to new homes in West Sussex, and that there is opposition from his Front-Bench team to new homes in Surrey, and that Essex MPs are opposing increased housing for Essex, and that, in another early-day motion, Hertfordshire MPs oppose increased housing in Hertfordshire? How persuasive is he with his fellow Tory MPs?

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

I welcome that intervention repeating comments in the parliamentary Labour party brief. It is our view that local considerations should be taken into account. I am speaking about the problems of inner London, and those faced by my constituents. It is not for me to dictate what the policy—

Photo of Sadiq Khan Sadiq Khan Labour, Tooting

Will the hon. Gentleman give way?

Photo of Greg Hands Greg Hands Conservative, Hammersmith and Fulham

No, I shall not do so again. I have been extremely generous and several Members are waiting to speak.

We need more market forces in home building. There are significant supply and demand issues. We need more housing of all types. I wish there to be greater liberalisation of the system. We also need to do far more to help young people and young families—such as those in my constituency—access private sector housing and home ownership.

Photo of Michael Wills Michael Wills Labour, North Swindon 2:32 pm, 7th December 2006

I shall endeavour to follow the guidance on brevity, Mr. Deputy Speaker, and I should apologise in advance for my imminent absence from the Chamber as I am required to attend a Committee sitting. I wish to make a few remarks on how the affordable housing problem affects my constituency in Swindon; it is not just a problem for London and south-east, as we have heard.

Swindon desperately needs more affordable housing. More than 5,000 names are on the waiting list for social housing, and thousands more people, especially younger people, are unable to buy their own homes. The average price of a new home in the Swindon area is now more than £205,000. As a result, many young people in my constituency cannot afford to buy a home in the neighbourhood in which they grew up.

In our debate, we have heard much about the appropriate target for affordable housing. That is not the issue in Swindon; the issue in Swindon is whether the target that has been set will be met. In its local plan, Swindon borough council is committed to ensuring that 30 per cent. of all new housing is affordable, yet the borough council agrees new development after new development with levels of affordable housing either well below that or with none at all. Every development that is permitted without such a level of affordable housing is a wasted opportunity for my constituents. About 2,000 new houses are being built in Swindon every year; their total sales value is more than £400 million. The fact that, despite such a huge figure, so few affordable houses are being built is a blow for every one of my constituents who yearns to own their own home but cannot afford to do so.

It is imperative that that neglect of affordable housing is reversed, because Swindon borough council is about to embark on a massive expansion of housing in the town; the total could be about 35,000 houses, with a current market value of about £7 billion. How much worse will the situation be in terms of social division and all the wasted opportunities for home ownership if the council does not ensure that at least 30 per cent. of that huge expansion is affordable?

Sadly, there is, however, very little evidence that the council has grasped the urgency of the situation. Last year, it launched a flagship statement—50 promises to the people of Swindon—by which it said it wanted to be judged. Sadly, it did not commit itself in those 50 promises to meeting its own target of 30 per cent. of new houses being affordable; it committed itself to only 16 per cent. I have gathered thousands of signatures on petitions calling for the council to ensure that more affordable housing is built, but the council has ignored those petition signatures.

I do not know the reason for that neglect. Is it because the council values affordable housing less highly than other planning gains, or is it ineffective in its dealings with developers? However, there is certainly a widespread perception among my constituents, which I share, that the developers that have made, and are about to make, billions of pounds out of building houses in Swindon have given very little back. Whatever the reason for Swindon borough council's current failings on affordable housing, it must do better.

I congratulate my hon. Friend the Minister and her Department on the new planning guidance. It is certainly a step in the right direction in encouraging local authorities to ensure that more affordable housing is built, but what more can Ministers do to force local authorities to meet the targets that they have set in their local plans? The new planning guidance does not spell out the penalties for such failings, and I will be grateful if she undertakes to spell out what they could be, so that local authorities know that they cannot go on ignoring—as Swindon borough council is—the needs of all those who depend on affordable housing to make a home for themselves and their families.

I would also be grateful if the Minister undertook to devise a timetable for such interventions, because the longer a local authority delays in meeting its targets the more difficult it will be for it do so. Every development that is agreed with levels of affordable housing below the target simply raises the hurdle higher for subsequent developments and makes it all the less likely that overall targets will be met within the time scales of the local plan. Everybody should be able to afford their own home and I ask the Minister to put measures in place to persuade Swindon borough council—if necessary to force it—to make sure that everyone in my constituency can do so.

Photo of John Pugh John Pugh Shadow Minister (Health) 2:38 pm, 7th December 2006

It is of course very unusual for Members of this House to talk and not to know exactly what they are talking about; it is almost unprecedented, in fact. But we are all in that situation with regard to affordable housing, because there is a central question: affordable to whom, and affordable where? That means different things in different places to different people. Although I am a member of the Committee and participated in the report, I can talk authoritatively only about the situation in my constituency of Southport and the north-west. Week after week, I meet young couples who can neither rent nor buy appropriate property. They are inadequately housed with relatives, and in some cases are potentially homeless. They do the rounds and get on long council housing waiting lists and approach the housing associations, and by and large, they do not get very far.

I will set aside the general problem that many Members experience of constituents whose children would, in the normal run of things, expect to have houses in future, but who—like my own children—find themselves with no mortgage, no pension arrangements and a certain amount of debt as a result of going to university. Instead, I want to focus on the immediate needs of the people who come to see me about housing. Generally, they are low-waged couples with children. My constituency is a relatively affluent seaside resort, but even in affluent-seeming resorts there are, in general, low wages in the care, retail and leisure sectors. Such people cannot commute a long way to get to work; they have to live locally, because commuting is expensive. They often have school-age children and caring responsibilities locally, and they depend on family networks for child care themselves. So in my constituency, we have the phenomenon of people with jobs who have needs, and simply not enough houses. It is a north-west housing hot spot.

A well-documented study has established that the housing situation has been a restraint on the economic growth of the town. It causes migrant workers with low housing needs to be drawn in to fill the gaps, and it results in a less balanced community, with more elderly people and fewer younger families. There is a very serious supply problem. Research throughout the country shows that the affordability crisis is fundamentally caused by a lack of supply; however we dress it up, that is what it boils down to. The situation is different in Southport.

Photo of Anne Main Anne Main Conservative, St Albans

It is not just a question of supply. In areas such as mine the average house price is £300,000 and it is not possible to build enough houses to bring prices down. Surely the hon. Gentleman agrees that we need to look at all the levers, and perhaps consider increasing the role of the rented sector. Does he agree that we cannot simply ensure that people can afford to buy houses if prices are that high?

Photo of John Pugh John Pugh Shadow Minister (Health)

I do not disagree. My argument is that the fundamental problem is the lack of supply, as my hon. Friend Andrew Stunell said at the beginning of the debate. There are other problems, which need to be resolved, but anyone who compares the data with international data will see that the UK has a supply problem.

In Southport, the supply problem does not relate to land. Land is available for development—there are big and small plots—without encroaching on the green belt to any great extent. In fact, the causes of the problem lie elsewhere. At one time, they to some extent resided with the builders, who preferred to build luxury flats, often demolishing Victorian houses to do so, and to build for the rich and the retired, thereby bringing such people into the community. That was to some extent stopped by Government planning guidance. We now have planning restraints, housing targets and Government guidance, which we must come to terms with. Paradoxically, the problem now is the restraints and targets, coupled with a lack of support from the Housing Corporation.

Southport is part of Sefton, which is a council with a pathfinder area in Bootle. It might plausibly be argued that my constituents could simply move south to Bootle and re-populate the city. That might seem an attractive analysis if we take the example of London, but on the ground the situation is very different. There are serious flaws in that plan, as I hope the Minister will accept. Pathfinder development has been slow and far more expensive than anticipated. As we all know, houses on whole streets that could in the past have been bought for very limited sums now cost £60,000 each. Culturally, Southport and Bootle are very different communities, and the pathfinder area and the surrounding region have their own affordability problems. That is quite apart from the question of whether my constituents could afford to travel to work in Southport, and whether they would want to uproot their children and abandon family networks. In my council area, we cannot simply expect the jobs to follow the housing—that is not plausible and it is not going to work, any more than the suggestion in the Eddington report that economic growth will follow is plausible. It is too simplistic. We need sustainable, local and subtle solutions.

We have made some progress in getting that point across. It is certainly understood by the council and English Partnerships. The regional development agencies seem to have wised up, and the Housing Corporation has caught on. The Minister for Housing and Planning also seems to have accepted the point intellectually. There may be a few difficulties with the Planning Inspectorate, but the argument is being won.

There is an unassailable case for less rigidity and more flexibility—for empowering and encouraging local, sustainable and pragmatic solutions. That is the case in theory; on the ground, however, nothing very much is happening. I shall return to my constituency tonight and find tomorrow that I have the usual depressing series of cases, with often very futile outcomes.

Photo of Richard Burden Richard Burden Labour, Birmingham, Northfield 2:44 pm, 7th December 2006

Like other hon. Members, I warmly welcome the Select Committee's report and congratulate my hon. Friend Dr. Starkey on her introduction. I add my voice to those that have emphasised the importance of the point that the report makes about the need to increase radically the amount of social rented housing units to be built in the future. Shelter has urged that for some considerable time and I am pleased that the Committee endorsed it. I know how passionately my hon. Friend the Minister feels about it and she has rightly said that it will be considered during the comprehensive spending review. I have no doubt that she will make her points during that review and it is important that the message is also sent—from, I hope, both sides of the Chamber—that we wish to see a step change in the good work that is already being done by the Government.

If we are to increase effectively the supply of affordable housing, it will involve a partnership between the Government, housing associations, social landlords, developers and, obviously, local government. I wish to say one or two words about the situation in Birmingham. There is no doubt, as Mr. Dunne said, that overall housing investment in the west midlands needs to go up, and go up radically. But I have some concerns about the policies being pursued by the current administration on Birmingham city council. That is not to say that the previous administration, which was Labour, got everything right. It did not and other hon. Members and I had criticisms of it. Some of those points were brought out in a seminal report by Anne Power, who chaired an independent commission on council housing in Birmingham. Had the Labour administration remained in power, some important progress would have arisen from that report, but sadly the present administration has decided not to take up its recommendations.

The Conservative and Liberal Democrat coalition that now runs Birmingham does not get everything wrong, however. It does some things right, but I have major concerns in two areas and I would appreciate my hon. Friend the Minister's comments on them when she replies to the debate. The first is the approach to meeting the decent homes strategy for the city. The way in which the council is approaching that might not be sustainable and could have a detrimental impact on the supply of affordable homes in the city. The second is the council's whole approach to tackling homelessness.

The council has based its decent homes strategy on what it calls positive retention, which appears to be financed by a rush of land sales. I hope that I am proved wrong, but it is not clear to me that the figures add up in a way that would make the programme sustainable in the medium term. That is why it was wise of my hon. Friend the Minister to advise the council, in her letter of 20 October, that she is asking officials closely to monitor the programme to ensure that it is on target and continues to be financially viable. There are some concerns that it might not be so.

The problems extend beyond whether the figures add up. There is also a real concern that the Conservative-Liberal Democrat administration's desire to raise as much money as possible from land sales could be pushing up land prices in a way that is not necessarily helpful in promoting house building in the social rented sector and the social housing sector generally that the Committee's report recommends and Birmingham certainly needs. Another unwelcome consequence of the administration's approach is that it is centrally driven and could end up inhibiting the development of the effective community engagement and locally based housing initiatives that are so important to building mixed, sustainable and safe communities. The independent housing commission that I mentioned emphasised that approach as very important.

We have been pioneering that approach in my constituency of Northfield on a cross-party basis and I hope that the city council does not try to stifle what is being done or subsume it into models imposed from above. I have some concerns about that because I know that my hon. Friend Steve McCabe—who, as a Whip, cannot speak for himself—has real worries about the way in which the city council has terminated a management agreement for the largest tenant-managed co-operative in the country in his constituency. I do not dispute that there are serious allegations against that management co-operative, but my hon. Friend the Member for Birmingham, Hall Green maintains that the city has gone about trying to tackle the problem in an unacceptably heavy-handed way. Moreover, its procedural approach appeared questionable and in some cases to be contrary to the rules of natural justice—to the extent that my hon. Friend has had to refer the matter to the ombudsman and the district auditor. Once again, I hope that my hon. Friend the Minister will look at the matter in the coming period.

Last year, I was fortunate enough to secure an Adjournment debate in Westminster Hall on Birmingham's management of its homelessness service. Local authorities such as Birmingham have Government targets to reduce the number of families presenting as homeless, but the problem that I identified in that debate was that Birmingham seemed more concerned about meeting the letter of the target than its purpose. In other words, a big part of the city's strategy appeared to be based more on reducing the number of families recorded as presenting as homeless or threatened with homelessness than on identifying the number who are in fact homeless or threatened with homelessness and helping to overcome that as well as possible.

That approach led the council to adopt a series of what I can describe only as "gatekeeping" measures that made it more difficult for families threatened with homelessness to be so recorded in its figures. In the Westminster Hall debate, I drew attention to the most ludicrous aspect of the matter: even when landlords were acting lawfully in giving tenants notice to quit and the tenants involved felt that that was reasonable, the council was forcing them into unnecessary disputes and costly court actions. I pointed out that, in adopting that strategy, the council was not tackling the problem of homelessness.

I accept that some improvements have been made since then, and that useful work has been done on an advice and referral service called Home Options that is being adopted by the council and some of its partners. The council recently nominated itself for a Chartered Institute of Housing award. It did not win—despite what its press release said—but it did reach the final shortlist.

However, problems remain: as far as I can tell, for instance, Birmingham city council is still forcing landlords and tenants into the unnecessary and costly court procedures that I described earlier.

There are other, more fundamental, problems. Birmingham city council still seems to think that reducing the number of families whom it allows to register as homeless or threatened with homelessness is the same as reducing the numbers who are in fact homeless or threatened with homelessness.

Another difficulty has to do with schemes such as Home Options. Such schemes have some good points, as I said earlier, but problems arise with the highly misleading statistics that the council gives for the number of cases in which it considers a scheme has prevented a family from becoming homeless. All too often, they deal with cases that are referred by housing department staff to some other agency, either internal or external. Any such case that is not sent back to the housing department is recorded as one in which homelessness has been prevented.

A statistic derived in that way might mean that a case of homelessness has been prevented, but it might not—the result might simply be that an applicant has joined the ranks of the hidden homeless. Housing organisations such as Shelter are aware that the hidden homeless exist, and all hon. Members know the same from their casework, but all too often those people do not show up in the statistics.

My right hon. Friend Mr. Smith and my hon. Friend Ms Buck have also spoken of the hidden homeless. I stress that I am not talking about cardboard city: I am talking about young people sleeping on friends' floors, and about families who are forced into already overcrowded accommodation with relatives, with all the stresses, strains and family breakdowns that that involves. Such cases might not show up in the statistics, but that does not alter the fact that they are real.

Birmingham city council has just published a scrutiny report on its homelessness service, and I commend it for that. The report makes some useful points, although I hope that the council will publish the evidence on which it is based. It says that the council wants to review the situation in the coming year. I hope that the review will ask some searching questions about exactly what the statistics the council uses are based on. I ask my hon. Friend the Minister to keep a close eye on Birmingham and this issue to see whether, in reality, the claims that the council makes for itself reflect the whole picture.

I also ask my hon. Friend at least to consider changing the target that applies to councils to one that obliges them to focus their efforts on preventing homelessness and tackling it where it is unpreventable—rather than one that relies on recorded homelessness presentations, which can lead to overly restrictive definitions of what that means by particular councils and to overly restrictive definitions of what constitutes temporary accommodation. I know that organisations such as Shelter are worried about that. It is not a problem that applies only to Birmingham, but it is an issue that we need to address.

I say those things because I think that they are necessary, but, of course, they are entirely without prejudice to my plea for more socially rented homes. However the homelessness service is managed, without the necessary supply of affordable homes, particularly in the social rented sector, we will not have the necessary properties. I hope that my hon. Friend will look closely at Birmingham. It is making some improvements, but I still have significant concerns—as do others—about the way in which the housing policy is being managed.

V

The main effect of increase radically the amount of social rented housing units will be to further distort the housing market.

Of course pressure groups like Shelter are advocating such a ridiculous policy - it will make housing even more expensive, it will make more people homeless, and it will make more people dependent on charities like Shelter - an organisation who's chief executive lives quite comfortably in central London on a £73,000 salary.

Submitted by Vaci Read 1 more annotation

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Arts and Culture, Shadow Minister 2:56 pm, 7th December 2006

I, too, welcome the Select Committee report. As my hon. Friend Andrew Stunell said in his opening comments, it is the latest in a long line of reports from all sorts of bodies that have highlighted the appalling problem in terms of affordable housing, both to buy and to rent. Like Mr. Smith, earlier, I would like to focus on the part of the report that talked about the vital need for more social housing to rent to help to address those problems. That is one part of the problem. We have heard endlessly from Conservative Members about how we need to look to the private market to solve all the problems. However, social housing to rent is a crucial part of trying to deal with the difficulties.

The lack of social housing is down to a failure to build in recent years. Unbelievably, the present Government have a worse record than the Conservative Government in terms of building social housing. For every three properties that are sold under right to buy, only one is built to replace them. That leaves a big void in the market for the poorest families, who cannot afford expensive private rented accommodation or expensive mortgage prices.

Photo of Brian Iddon Brian Iddon Labour, Bolton South East

Will the hon. Gentleman admit that this Government have done far more than the Conservative Government to refurbish clapped-out stock?

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Arts and Culture, Shadow Minister

The hon. Gentleman is quite correct: such money as has been spent has been focused primarily on improving old stock—sadly, almost entirely to the neglect of providing new stock.

As we heard from my hon. Friend the Member for Hazel Grove, in the last five or six years, council-house waiting lists have soared from 1 million to 1.5 million. That has a huge effect, both on the price of housing at all levels and in terms of the human cost on individuals. It puts pressure on the market price, both to rent and to buy. For example, when people look for private rented accommodation because there is no social rented accommodation, it pushes the private rents up to unaffordable levels, or allows exploitation by unscrupulous landlords. Equally, some people buy second, third or fourth properties to rent, as an investment. I seem to recall that the Prime Minister bought two or three flats in Bristol for precisely that purpose. That also drives up prices in the property market. The lack of social housing has a detrimental effect, both on private rent levels and on private house prices.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods PPS (Rt Hon Hilary Armstrong, Minister of State (Cabinet)), Cabinet Office

Will the hon. Gentleman accept that the problem of a lack of affordable housing is not necessarily a problem of this Government? The Liberal Democrat-controlled Durham city council in my constituency is delivering only a fraction of the social housing that it should be delivering, because it refuses to apply its local housing policy 12 to get a development contribution from the developers. It is simply not using the means that are available to deliver social housing.

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Arts and Culture, Shadow Minister

I am not sure whether the hon. Lady was in her place earlier in the debate, but we had a number of exchanges on precisely that point—that councils have powers to require affordable housing. It can sometimes backfire when developers will not deal with those developments and properties because of those requirements.

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Arts and Culture, Shadow Minister

I am not giving way, as we have already had exchanges on the subject.

I disagree with the argument that the problem is not particularly associated with this Government. As I said in my opening comments, problems with social housing have—unbelievably—been worse under the Labour Government over the last 10 years than they were even under the Conservative Administration, who already had a pretty bad record.

I have highlighted problems with the level of private rents and the price of housing on the private market, but the human cost—for the 30 per cent. of the population who do not own their own homes and often have no hope of doing so—is so much more. My hon. Friend Dr. Pugh mentioned constituency surgeries, and tomorrow I shall conduct my usual Friday surgery. Almost inevitably, I will hear the same stories every Friday from pensioners living in council flats or council family homes. They may have lived there for 30 or 40 years, seen their children grow up and leave, and they may have lost their partners. The house is too big, the garden cannot be maintained, yet they cannot move out. They would love to live in an old age pensioner's bungalow, but the council is not allowed to build or provide them. The next person to come along to my surgery may have a young family and live in a council flat or private accommodation that is overcrowded with children. The family wants to but cannot move into a council house and certainly cannot afford to go to the private sector. As I say, the human cost is enormous.

I have repeatedly asked over the past five or six years: what is it about this Government, that they have such a dogmatic new Labour ideology that they oppose the principle of social housing in the form of council housing? First, in 1997, they effectively stopped council house building, and then tried to force every council in the country to privatise its council stock. More than 100 councils, including Chesterfield, have not done so, because their tenants chose democratically to stay with the council rather than privatise, but the Government are now vindictively penalising them for taking the "wrong" democratic choice.

I have raised that matter twice at Prime Minister's questions, only to be told that I should celebrate choice. I do. If tenants choose to move away from the council because it is so badly run—I have certainly seen badly run councils—that is their choice. However, if tenants choose to stay with the council, as they did in Chesterfield and more than 100 other councils, their choice should be recognised and supported by a Government who claim that they support choice.

Both Conservative and Labour Members raised the question of where the money for more social housing comes from. Let me stay with the particular example of Chesterfield, one of the 70 per cent. of councils that retain stock and are judged by the Government to be in surplus financially in respect of council houses. That is strange in itself.

On the one hand, the Government and the Minister tell Chesterfield that it has too much money from its council rents, so some of it will be taken away to spend elsewhere. On the other hand, as we heard in respect of Birmingham earlier, the Government office for the east midlands comes along with a jackboot every two or three months, complaining that there is not enough money to bring all an area's houses up to the decent homes standard within the requisite time scale, so it has to privatise. Surely we cannot have both. Either there is too much money in the council house budget from rents, with the Government taking it away to spend elsewhere—including on Olympic infrastructure in London under the Office of the Deputy Prime Minister—or we do not have enough money and they want to force us to privatise. It cannot be both; that is totally impossible. It has to be one or the other.

Photo of David Howarth David Howarth Shadow Minister (Energy), Trade & Industry

There is also the example of Cambridge city council. Under my leadership in the early part of the decade, it went debt free, but it is still being penalised by the Government by what is called "negative subsidy", so council tenants in Cambridge have to subsidise the rest of the country.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. I remind the House that agreement has been achieved to divide our time between the various subjects of debate. To ensure that other subjects are adequately discussed, I appeal to hon. Members not to extend our current debate for too many more minutes, which would upset the balance of the day.

Photo of Paul Holmes Paul Holmes Chair of the Parliamentary Party, Cross-Portfolio and Non-Portfolio Responsibilities, Arts and Culture, Shadow Minister

I accept your strictures, Mr. Deputy Speaker, and in view of the number of interventions that I have already taken, I shall certainly not take any more.

Let me conclude as quickly as possible. Chesterfield council was told that it had too much money in council house rents, so in the last financial year £3.2 million—14 per cent. of all the rents paid by Chesterfield's tenants—has been taken away to spend somewhere else in the country where it is desperately needed. Yet if the council privatised tomorrow, the privatised landlord could keep the money. How can it be that today the money must be redistributed elsewhere in the country, but tomorrow, under a private landlord, we could keep the lot? Chesterfield council was told that 70 per cent. of its right-to-buy receipts must be taken from it by the Government to spend somewhere else, yet if it privatised the system tomorrow it could keep all the money. How can it be that today a total of £9.2 million must be taken from Chesterfield to be spent elsewhere, including—insultingly—on the Olympic infrastructure in London two years ago under the former ODPM, yet tomorrow it could stay in Chesterfield, with a private landlord? The situation is ridiculous.

Why is the policy so incomprehensible and vindictive? First, there is the new Labour dogma that the public sector is bad and cannot deliver anything, as we see with Labour's increasing attempts to privatise both education and the national health service. Secondly, the root cause is the Chancellor and the public sector borrowing requirement, which was confirmed by senior officials at a meeting of the Defend Council Housing group on 21 November, attended by several Labour MPs. Only yesterday, the Chancellor was boasting about how low our PSBR is. I do not understand that claim. If public borrowing builds hospitals, schools or council housing it is debt, and therefore bad, but if it is private borrowing it is economic growth, and therefore good. The money is the same, although it costs more to borrow privately than publicly—but private is good and public is bad. That is voodoo economics of the highest order.

Recently, localism has been a popular buzzword with both the Government and the Conservatives. If the word means anything, however, it must mean a shift in the balance—from London to the regions and local councils. The UK, and England in particular, is the most centralised democracy in the western world: 90 per cent. of the money raised by the Chancellor, in London, is handed out with strings attached. In Scandinavia, France, Germany or any state in the USA, people would react with blank incomprehension if we described our system. They run their local services, borrowing locally, prudentially, to raise money for them. They would not understand the idea that Oslo, Paris, Berlin or Washington should tell local communities how to run their health, police, fire, housing or education services.

In the last financial year, £9.2 million was taken from Chesterfield's council tenants. The council could be building new houses with that money and refurbishing its stock. The council could be prudentially borrowing and using rents to meet the tremendous housing needs of Chesterfield. Under a local system, Birmingham, Southport, and all the other places we have heard about that are in the same position, could meet local needs. Will the Minister explain why a Labour Government continue vindictively to penalise and punish people in Chesterfield, which is primarily a poor working-class community?

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning) 3:07 pm, 7th December 2006

May I begin by thanking Paul Holmes for his speech? When the right hon. Tony Benn stood down as Member for that constituency, many of us felt that something would be missing from the House, but I am delighted that the spirit of Bennism is alive and well in Chesterfield. As the hon. Gentleman was speaking, I was looking at Mr. Laws, the standard-bearer of economic liberalism in his party, and saw a frown pass across his features—I can quite understand why.

I thank Dr. Starkey for the masterly way in which she summed up the views of her Select Committee. She chairs it with grace, and the degree of work that she has put into the subject and the attention she gives it reflect her lifelong commitment to dealing with questions of local government and housing. Conservative Members do not share all her analysis or all her prescriptions, but we are grateful to her and her Committee for their work.

The high standard of the hon. Lady's speech was reflected in almost all the contributions on both sides of the House. The hon. Members for North Swindon (Mr. Wills), for Regent's Park and Kensington, North (Ms Buck) and for Birmingham, Northfield (Richard Burden), Mr. Smith and Mr. Drew each drew attention in their remarks to the problems faced by their constituents. They did so with eloquence and passion. No less eloquence and passion was displayed by my hon. Friends the Members for Ludlow (Mr. Dunne) and for Hammersmith and Fulham (Mr. Hands), who also pointed out the vital importance of increasing housing supply, in particular to deal with the needs of the vulnerable.

Sometimes, Labour Members have allowed their Olympian objectivity to lapse and have sought to caricature the Conservative party as restrictionist on housing supply. Any fair-minded observer who had heard the contributions made by my hon. Friends would be in no doubt that we are the party of increasing housing supply and helping the vulnerable.

Photo of Sadiq Khan Sadiq Khan Labour, Tooting

On that point, will the hon. Gentleman explain why, in the past Session, he signed early-day motion 519, which opposed new homes in Surrey?

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning)

The hon. Gentleman once again shows his attachment to the parliamentary Labour party brief—he would be lost without it. I am proud of the early-day motions that I have signed. That particular early-day motion expressed concern about the insensitivity of development.

I have had a meeting with the Minister for Housing and Planning to draw attention to the lack of development in my constituency. I asked her to take action to deal with the problem caused by the way in which Natural England—formerly English Nature—has instituted a moratorium on all residential development in my constituency. I want a bipartisan consensus on lifting that moratorium. When the Minister makes her speech, perhaps she will turn her attention to what the Government are doing to jolly along Natural England, which is one of their quangos, to ensure that there is more house building in my constituency. In a Westminster Hall debate—sadly, Mr. Khan could not be present—I called on the Under-Secretary of State for Communities and Local Government, Meg Munn, to press the Minister for Housing and Planning to find out what could be done to ensure that there was more house building in my constituency and neighbouring constituencies. I await the Minister's comments with interest.

As the debate has demonstrated, there is a widespread consensus in the House that we need to increase housing supply, not least because projected future household growth outstrips the growth in new housing completions. That is a problem both for those who want to own and those who want to rent, whether that is in the private or the social sector. For those who want to own, the price of the average house is such that both partners in any relationship would need to earn more than the national average wage of £24,000 to have even a chance of getting on the housing ladder anywhere in the country.

As many hon. Members have acknowledged, we have a problem with social housing. The Chancellor has indicated that when it comes to the comprehensive spending review, he might turn from the clunking fist into Father Christmas. However, as several hon. Members have pointed out, the Government should not be over-proud of their record on social housing. Some 94,000 people are in temporary accommodation today, but the figure was half that—only 41,000—in 1997. The Chancellor has a target of halving the number the people in temporary accommodation. That is an admirable goal, but if it is met, we will only be back to where we were when this Government took over.

The number of social housing completions has been consistently lower under this Government than it was under the last. I admit that housing policy was never perfect under previous Administrations. However, even in the 1990s, the number of social housing completions under all Conservative housing Ministers ran at between 23,000 and 30,000. The figure has never reached that level under this Government; it has ranged between 18,000 and 13,000.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

As part of the hon. Gentleman's review of housing policy, will he reflect on the legacy that the Conservative Government left behind in the form of a £19 billion backlog of disrepair in the existing social housing stock? Does he seriously think that it would have been responsible for the incoming Government to build new, rather than repairing the derelict properties that we inherited from his party?

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning)

The right hon. Gentleman is a former Minister for Housing and Planning, and I pay respect to the thoughtful way in which he has dealt with the subject. The decent homes standard has played a significant part in improving stock across the board. However, increasing supply is one of the key things that the Chancellor and the current Minister for Housing and Planning have put at the heart of their policy. I regret that the focus on improving housing standards was at the expense of increasing supply. It is only now that the Government are playing catch-up with the estimable record of the Conservative Government.

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning)

I must try to make progress, given the time constraints that we face.

As well as discussing social housing, it is appropriate to acknowledge that the Government have put a great deal of emphasis on low-cost home ownership schemes. We heard an entertaining exchange between Mr. Slaughter and my hon. Friend the Member for Hammersmith and Fulham about low-cost home ownership and some of the strikingly high-cost schemes that sail under that banner.

The Government's record on low-cost home ownership schemes is disappointing. Yesterday, the Chancellor announced with a fanfare that he wished to double the number of those taking advantage of shared ownership to 160,000. I do not know where he got those figures from, but it was clearly not the Department for Communities and Local Government, because according to answers from the Department, the number of homes sold under the Minister for Housing and Planning's own social homebuy scheme in September was just one. By November, that had increased dramatically to five. I congratulate the Minister on that 500 per cent. increase. I am concerned, however, because the Housing Corporation allocated £15 million of public money to the scheme. Never in the field of house building has so much been spent so badly to provide ownership for so few. The Government's failure, both in respect of that scheme and in so many other areas, is no accident, nor is it the consequence of neglect.

Photo of Andrew Slaughter Andrew Slaughter PPS (Dr Stephen Ladyman, Minister of State), Department for Transport

The hon. Gentleman, whose attitude is always refreshing, seems to be in favour of meeting housing need, and he rather casts aspersions on home ownership. He talked about people on waiting lists, overcrowding and people in need, but does he accept that most of those people will need social rented housing? I ask him the same question that I put to Andrew Stunell: does he agree with the Mayor of London's target of 50 per cent. affordable housing, 70 per cent. of which should be affordable social rented housing? Will Michael Gove disassociate himself from Tory councils such as Hammersmith and Fulham, which say exactly the opposite—that wherever there is an opportunity, housing should be for sale, not for rent?

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning)

Invited to choose between the Mayor of London and Conservative-run Hammersmith and Fulham council, I shall side with Hammersmith and Fulham, not just because its mandate is fresher and more resounding, but because one reason for the failure at the heart of Government policy is their over-reliance on targets. I mentioned that the Government's failure was no accident, and was not the result of conscious and amoral neglect, but springs from a philosophical and ideological problem: the Government centralise and micromanage, and they have too much of a statist approach to every aspect of policy. The same clumsy clunking fist that is responsible for failure in other areas is responsible for the failure in housing.

Photo of Andrew Pelling Andrew Pelling Conservative, Croydon Central

Does my hon. Friend note the fact that the Mayor of London does not set 50 per cent. targets across London, as he recognises that there should be a degree of flexibility? It is the lack of flexibility in the Government's approach of setting national targets, and targets for units in areas of social housing, that has resulted in a huge shortage—a crisis—in the supply of family housing.

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning)

My hon. Friend makes an excellent point. One of our key problems is the national criteria, which do not take account of specific local factors. There is a lack of family homes, and an over-supply of flats in comparison with family homes, not just in London but further afield. On previous occasions in the House my right hon. Friend David Maclean, and Mr. Beith, have pointed out that there is, effectively, a moratorium on development in their areas, because housing targets for their regions have been met, and the targets are treated as ceilings, not floors. One of the unfortunate consequences of the regional spatial strategies over which the Minister presided is that many communities that wish to expand and to build new housing, both market and affordable, in order to keep the community sustainable, are prevented from doing so. Essentially, national and regional policy has restricted growth in areas where it is genuinely popular.

I recognise that there is some resistance to house building in certain parts of the country, but I submit that the right thing to do is to operate by consensus rather than confrontation; that is always the right way to proceed. I notice that Mr. Raynsford is smiling. May I remind him of what he wrote in a recent article entitled "Decent Homes in a Sustainable Environment: Priorities for Labour Policy"—a title that clearly suggests that, under this Government, we have had neither decent homes nor a sustainable environment? He points out that

"indiscriminate and indifferently designed greenfield developments of low-density executive houses gave the English language the memorable phrase 'concreting over the countryside', and fuelled an anti-housing backlash.

In a context where performance was judged by numbers, quality was the obvious casualty while sustainability and energy efficiency rarely if ever got a look in."

The right hon. Gentleman's critique of his Government's policy was prefigured by the comments of the Leader of the Opposition.

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning)

The right hon. Gentleman is eager to speak. How can I resist?

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

If the hon. Gentleman did a little more research, he would discover that I was referring specifically to the house-building trends of the 1980s and early 1990s, following the policies adopted by the Conservative Government, who provided a free-for-all for indiscriminate greenfield development at very low density.

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning)

I am afraid that the right hon. Gentleman's words accurately describe the Government's policy, because he rightly drew attention to increased resistance to development in some areas. Whatever measure of public opinion we use, resistance to new housing development has grown since the Conservatives were in office. As I pointed out, although there might have been flaws with past policy, they have increased and worsened under the Government. Much as he tries to do so, the right hon. Gentleman cannot rewrite history, or eat his own words. The cap fits the Ministers whom he is compelled, however reluctantly, to support.

If we are to build an enduring consensus on the housing supply, we must consider four factors that have increased resistance. People are concerned about the lack of infrastructure for new housing development; they are concerned, as the right hon. Gentleman pointed out, about the aesthetic quality of new development; they are concerned about the environmental impact of new development; and they are concerned, too, that new development will be accompanied by additional costs, but not additional benefits. On infrastructure, proposals have been introduced for a planning gain supplement. I hope that the Minister will enlighten us and explain how benefits from the PGS will be split. Will the PGS, as Kate Barker suggested, be an entirely hypothecated tax so that benefits will go to the communities where new developments are built? A simple yes or no will suffice, because local communities want a guarantee that they will receive the cash that they need.

I echo the words of the right hon. Member for Greenwich and Woolwich, and of the Prince of Wales, who pointed out we can overcome resistance with improved design and by working with communities. The Prince of Wales's affordable rural housing initiative has resulted in successful housing developments of the highest quality that are not resisted but welcomed by communities. What is the Minister doing to improve design quality? As for the environment, yesterday the Chancellor discussed his proposal to exempt new carbon-zero homes from stamp duty, but on last night's edition of "Newsnight" the Chief Secretary to the Treasury said that fewer than two dozen homes, on one development, meet that criterion. [ Interruption. ] The new incentive will be removed, Clive Efford will be interested to know, after just three years. Will the Minister use her formidable skills of persuasion to bend Treasury Ministers to her will to ensure that we apply genuinely environmentally friendly taxation and regulation to new housing development?

Finally, on the question of incentivising house building and working with local communities to ensure that they welcome the house building that many enlightened civic leaders accept is necessary, I hope that the Minister will add her voice to those calling for publication of the much-delayed Lyons review, so that we can discover what appropriate local government finance incentives we can use to encourage house building. Sir Michael Lyons has laboured long in the vineyard, but yesterday, I am afraid, the Chancellor told us that we would have to wait another few months before his report was published. Why on earth the Government are scared of the subject of local government finance, I do not have the faintest idea, but I look forward to hearing from the Minister.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing and Planning) 3:24 pm, 7th December 2006

May I congratulate my hon. Friend Dr. Starkey and her Select Committee on an extensive and weighty report that raises a series of important issues? It is testament to the significance of those issues that many Members have attended our debate.

Hon. Members will be aware that since 1997, we have had low mortgage rates compared with those of past decades, and greater economic stability, in contrast to earlier housing market crashes, which has made it possible for far more people to become and remain home owners, rather than face the repossessions that took place in the past.

The report also makes it clear that we face serious pressures from rising house prices across the country and that there is a serious underlying need to build more new homes for the future, so that the next generation can have homes as well.

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As constituents that are experiencing this brave new world of housing growth. It is as well to remind members the genuine concerns of the communities that these development's are affecting. It is no good resolving one problem and creating ten more, lack of infrastructure for the chosen development areas will haunt us for years to come. Inappropriate choose of location leading to the demise of established communities . More dependency on out working leading to more traffic and pollution. The demise of rural areas to be replaced by urban sprawl. Cities and large towns becoming modern slums with urban...

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Photo of Clive Efford Clive Efford Labour, Eltham

I commend to my hon. Friend the report published this week by Shelter, "Against the Odds", which highlights the fact that 1.6 million children are living in bad housing. The consequences for those children are that they are twice as likely as other children not to have GCSEs when they leave school; they are twice as likely to be excluded; they are five times more likely to have nowhere to do homework; and they are three times more likely to experience poor health in their lifetimes. Those children pay with their lives for poor quality housing, and if we do not deal with the issue in the next comprehensive spending review, the problems will continue. Will the Minister urge my right hon. Friend the Chancellor to tackle that particular issue in the comprehensive spending review, because there is a growing crisis that we have failed to address in the past 10 years?

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing and Planning)

My hon. Friend is right to draw attention to the extremely important Shelter report, which shows the significance of housing in people's lives. We have lifted almost 1 million children out of bad housing as a result of the decent homes programme—many children used to live in unacceptably bad council housing—but he is right that we need to build more homes, which means more social housing, more private housing and more shared ownership homes, if we are to address the needs of young children, who need better housing for the future.

Photo of Andrew Love Andrew Love Labour, Edmonton

One of the issues raised in the report is the priority given to finance for affordable housing compared with finance for low-cost home ownership. Will my hon. Friend make a commitment that both matters will be accorded a similar priority in the comprehensive spending review?

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing and Planning)

The Chancellor has said that social housing needs to be a priority in the comprehensive spending review. I think that we need more shared ownership housing, too. The shared equity task force report, which was published yesterday, sets out better ways in which to bring more private sector investment into shared ownership schemes, which will give us the opportunity to concentrate public sector investment increasingly around social housing.

That is an area of contrast between the parties, because, as my hon. Friend may be aware, the shadow Chancellor said in February that increased shared ownership should be funded from some of the Government money that is going into social housing. I disagree with that, because I think that we need more social housing and more shared ownership. We should not reduce social housing in order to deliver the shared ownership that we need.

Demand for housing has grown steadily, and the house building industry has failed to respond. Over the last 30 years of the 20th century, the number of households increased by 30 per cent., while the level of new house building fell by 50 per cent. The figures that we have set out for the future suggest that if we continue with the rate of house building over the past few years, the proportion of 30-year-old, two-earner households able to afford their own home on the basis of their earnings will drop from more than 50 per cent. today to nearer 30 per cent. in 20 years' time, which is simply unsustainable. It would be unfair to deny future generations the opportunity of home ownership, which previous generations have had. In that circumstance, many of those people would still have the chance to get on to the housing ladder, but only because of gifts or inheritance from parents or grandparents, and it would be unfair if someone's chance of becoming a home owner were to depend on whether their parents or grandparents were home owners before them. That is why the Select Committee report is so important.

It is interesting that many hon. Members on both sides of the House have discussed the need to build more homes, which is very new. I remember the debates on the issue 12 or 18 months ago on the Floor of the House and in Westminster Hall. We were arguing for far more houses, but Opposition Members told us that there was no need for new homes and that we did not need the Barker recommendations.

I think that we need to build more homes. We have already increased the level of house building from 130,000 new homes four years ago to nearly 170,000 new homes last year.

Photo of Andrew Slaughter Andrew Slaughter PPS (Dr Stephen Ladyman, Minister of State), Department for Transport

I am delighted to hear what my hon. Friend says. Several hon. Members have mentioned the Shelter report. Will she look again at the persuasive case that it makes for an additional 20,000 affordable rented homes? Will she consider the whole issue of affordability, given that rented homes are the only possibility for many people in housing need? In view of the remarks by Mr. Hands, will she consider the fact that shared ownership housing must be affordable? It currently stands at 60 to 70 per cent. of market price, which is not affordable to anybody in housing need if market prices are in the range of £800,000, as in Hammersmith and Fulham.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing and Planning)

My hon. Friend is right. I shall say more in a moment about the need for more properly affordable social and shared ownership housing.

On the overall level of house building that is needed, we believe, given the growing number of households with people living alone and an ageing population, that we should be building at least 200,000 new homes a year. The Select Committee said in its report that we should go further. Conservative Members have continued to refuse to say how many new homes they think should be built. Indeed, Mrs. Spelman, when challenged, has repeatedly denied herself the opportunity to say whether she agrees with or supports the 200,000 new homes that we suggest, although she has said:

"We need to build more houses, but not on the scale that Barker recommended."

I know that Michael Gove is never coy, and I am sure that he would love to take this opportunity to join the consensus in the House and tell us how many homes he thinks are needed for the next generation and how many he thinks we should be building a year.

Photo of Michael Gove Michael Gove Shadow Minister (Communities and Local Government) (Housing and Planning)

It is an intoxicating pleasure for me to get a cheer from the Labour Benches when I rise; I hope that it will not be the last occasion.

I think that Miss Barker's estimate of 200,000 is a fair estimate of the level of potential future housing need, but I would not like our ambitions to be limited by that target, because I fear that, as has so often happened in the past, targets can distort delivery. Miss Barker's work has been useful, but I do not want us to be tied down by any arbitrary target. We should respond to local need instead of being bound by a specific national straitjacket.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing and Planning)

I interpret that to mean that the hon. Gentleman does indeed think that we should probably be building somewhere in the region of 200,000 new homes a year but needs to give himself a little wriggle room in case he comes under pressure from his boss, the hon. Member for Meriden, who has opposed the level of building that we suggest. Clearly, hon. Members take different views on this; certainly, the hon. Members for Surrey Heath and for Meriden have done so, as they are welcome to.

Photo of Mike Penning Mike Penning Conservative, Hemel Hempstead

I oppose the house building that the Government propose in Hemel Hempstead on the site of the hospital that they are closing.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing and Planning)

I cannot comment on the individual site that the hon. Gentleman mentions. It is true, however, that Conservative Members from all parts of the country are continuing to oppose increased housing in their areas at a time when 45 towns and cities have come forward just in the past 12 months to say that there should be significant increases in new homes in their areas, and regional assemblies across the country are proposing increased house building. As Dr. Pugh said, this affects not only London and the south-east but areas such as the north-west, the north-east, and Yorkshire and Humberside. We should be building additional homes in every part of the country. It is a shame that the only regional assembly to propose cuts in the level of house building is the Conservative-led south-east regional assembly.

Photo of Sadiq Khan Sadiq Khan Labour, Tooting

Speaking of nimbyism, Wandsworth council is discharging its responsibility for providing affordable units by providing studio flats costing £325,000. Will my hon. Friend agree to meet my hon. Friend Martin Linton, members of the Wandsworth Labour group and myself to discuss the unique problem of how Wandsworth discharges its responsibilities?

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing and Planning)

I would be happy to meet my hon. Friends and I am sorry to hear about their difficulties. We expect local authorities to take seriously the need for affordable housing that is genuinely affordable in their areas.

I should like to deal briefly with some of the other points that the Select Committee raised and that were mentioned in the debate, especially climate change and the way in which we ensure that, as we build the additional homes that we need for the future, they are properly sustainable for the next generation. That means that we must build to much higher environmental standards. The Committee highlighted that and referred to the need to improve the code for sustainable homes. We are doing that and we will publish it next week.

We shall also publish a new planning policy statement on climate change as well as the revised code for sustainable homes. We will set out a timetable to introduce the code standards into building regulations, as the Committee suggested, to achieve the targets that the Chancellor set so that, in 10 years, all new homes should be built at a zero carbon rating. No other country has set that sort of timetable or ambition but I believe that we need to do it to drive the environmental technologies of the future and ensure that we are building the homes of the future.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

I am glad about my hon. Friend's announcement about the sustainable building code and yesterday's announcement about the zero rate of stamp duty land tax to encourage such development. That is especially pleasing because the policy would apply throughout the UK. Yesterday's announcement also referred to measures to encourage energy audits and loans to allow people to carry out work in their houses. As energy and housing—

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. I have previously appealed for brief interventions. Long interventions rob time from the second debate, in which a great many hon. Members, even on the hon. Gentleman's side, wish to participate.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

I should be grateful if my hon. Friend commented on the implications for Scotland as well as England and Wales.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing and Planning)

My hon. Friend is right that we need to work on carbon emissions from existing homes as well as new homes. We are already investing in Warm Front and we want to expand the programme to improve existing homes.

The announcements next week will be primarily about new homes but in the new year we want to take forward further work on existing homes, too. Last week, we published a new planning policy statement on housing, which responds to many issues raised by the Committee and in the debate.

Photo of Emily Thornberry Emily Thornberry Labour, Islington South and Finsbury

Will my hon. Friend join me in condemning the Liberal Democrat council in Islington for refusing once more to set a target for the overall amount of affordable housing to be provided in Islington, despite the publication of the new planning policy statement? I refer to a council meeting that took place two days ago.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing and Planning)

We expect local authorities to start responding to the new planning policy statement on housing. They will need to take account of it in developing their new local development frameworks—their local plans for their area. My hon. Friend has raised the matter many times and we have set out the need for councils to consider asking for affordable homes on smaller sites, not simply on large sites, where that is viable and housing is needed. We should try to provide more affordable housing through the planning system. Some research suggests that two thirds of homes are currently built without any contribution to affordable housing. That is why we have made it clear in the new planning rules that more should be done throughout the country to achieve the goal.

Photo of Anthony Steen Anthony Steen Conservative, Totnes

I need some clarification to help me understand something. The Minister talks about affordable homes. Does she mean subsidised homes—those that are subsidised by the public and private sectors? If so, why does she keep calling them affordable? They are not affordable.

Photo of Yvette Cooper Yvette Cooper Minister of State (Department of Communities and Local Government) (Housing and Planning)

I suggest that the hon. Gentleman examines the new planning guidance that was published last week. It clearly sets out what we mean by affordable housing. We use the term to mean subsidised shared ownership schemes and social rented housing. However, they could be subsidised purely by planning gain—in other words, by the private sector—or by the public sector. We have changed the definition in the new planning guidance to concentrate more on schemes that are genuinely affordable rather than allowing developers to describe low cost home ownership schemes, which are simply smaller, market properties, as affordable when, in many cases, in practice they are not.

Hon. Members have talked about the need for more social housing, and we take that matter very seriously. I want to make it clear to those hon. Members who mentioned investment in existing homes as well as in new homes that we will have invested £40 billion by 2010 in improving council homes and social housing across the country. That includes a more than 30 per cent. increase in funding going directly to councils. Paul Holmes expressed concern about direct funding to councils; we have increased it by 30 per cent. in real terms to help them to improve their council housing stock. We are also going further with arm's length management organisations and other stock transfers.

I have to say, however, that if we had not inherited council homes that were in such a shocking state of disrepair in 1997, with more than 2 million families living in homes that did not meet basic standards of decency, we could have spent a hefty chunk of that £40 billion on new social housing. The shocking legacy of the 1980s and 1990s under the Conservatives is still being felt right across the social housing sector.

We need to go further by investing in more social housing, and we have said that that will be a priority for the spending review. We also need to look at ways of levering in additional resources through planning gain. We take seriously the need to look at all aspects of improving housing. My hon. Friend Richard Burden raised specific issues relating to Birmingham, and we are making clear to Birmingham the importance of its demonstrating that its approach continues to be sustainable.

There needs to be more shared ownership, and we are increasing to 160,000 the number of families who can be helped into shared ownership, including key workers and other first-time buyers, partly as a result of levering additional private sector investment into shared ownership schemes. My hon. Friend Ms Buck raised the issue of temporary accommodation. She will be aware that we have set up a scheme to start buying back social housing, funded by savings from housing benefit. Clearly we also need to ensure that we provide the billions of pounds needed for infrastructure. We are already doing that across the Thames Gateway, and we are consulting on ways to raise this further.

Members have raised particular issues relating to family homes. The new planning guidance clearly states that we need more family homes, and that we need to concentrate more on the needs of children, who have different needs from the rest of us in terms of gardens, parks and play areas. We need more family homes in our cities, where we often see a great deal of investment in flats but not the additional investment that we need in family homes.

We recognise that Conservative Members have taken different views on this matter in the past. A recent edition of Inside Housing carries a fetching photo of the hon. Member for Surrey Heath, alongside his suggestion, "Let's build on farmland", rather than in towns and cities. In the same article, however, his boss, the hon. Member for Meriden is quoted as saying:

"Every sod of turf torn up from a greenfield site to make way for new housing development is an indictment of the government's failed housing policy".

In response to that, even the Campaign to Protect Rural England said:

"Who is controlling Conservative policy? Who indeed?"

Perhaps it is Mr. Cameron. Speaking to the Conservative party conference, and claiming to represent the next generation, he said:

"We are to be the party of aspiration. And that means building more houses and flats for young people".

However, speaking to Age Concern just three weeks later, he said:

"We need to change the planning rules so that we get fewer small flats and...fewer homes designed for young, single people".

That represents a complete flip-flop in the space of just three weeks. The hon. Member for Surrey Heath might not agree with his boss, but his ultimate boss, the right hon. Member for Witney, does not even agree with himself.

We have made it clear that we need to build more homes for the next generation; we agree with the Select Committee report on that. We only hope that Conservative Members will demonstrate a little more consistency in supporting us as we build the new homes that the next generation needs.

Question deferred, pursuant to Standing Order No. 54, (Consideration of estimates).