Backbench Business — [25th Allotted Day] — Social Housing in London

Part of Business of the House – in the House of Commons at 5:24 pm on 5th May 2011.

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Photo of Karen Buck Karen Buck Shadow Minister (Work and Pensions) 5:24 pm, 5th May 2011

My hon. Friend is right, and that is extremely sad. In some cases, there appears to be a deliberate straying away from the original aims and objectives; in others, the kind of thing that he describes is a response to the constraints under which housing associations now operate.

All my right hon. and hon. Friends critiqued aspects of Government policy. A number of them drew particular attention to the risks inherent in the cuts to the local housing allowance. We heard from Government Members extreme examples of high-cost private sector tenancies. We agree. Indeed, the Labour manifesto stated that measures would be taken to deal with some of those extremely high costs. I completely accept that, but if it was the objective of Government policy why was it not confined to tackling the relatively small number of high-cost cases? I think I am right in saying that the Government have not even been able to tell us how many, if any, properties cost more than £100,000 a year, yet throughout the country—not just in London—nearly 1 million households will have their local housing allowance cut.

My hon. Friends the Members for West Ham and for Edmonton raised concerns about what would happen when people are displaced, particularly from the central London broad market rental area where only 5% of accommodation will remain affordable, and a knock-on displacement moves those families to highly stressed, poorer communities on the fringes of London and beyond. Many Members talked about social housing investment and tenure, and I shall return to those issues briefly.

We heard thoughtful and reasonable contributions from Government Members. I single out particularly the hon. Members for Ealing Central and Acton and for Battersea (Jane Ellison), not least because they are still here. They made good points. In some cases, there is shared understanding of the impact of the housing shortage, particularly in central London.

From the hon. Ladies and from the hon. Members for Hendon (Mr Offord), for Brentford and Isleworth (Mary Macleod) and for Carshalton and Wallington (Tom Brake), we heard support for Government policy on market rents and the end of security of tenure, which it is asserted, without significant evidence, will deal with the shortage of social housing that we are all concerned about. Frankly, that assertion is a triumph of hope over experience, and I shall spend a moment or two deconstructing it.

I am sorry that the hon. Member for Hendon is no longer in the Chamber. He revealed a little of the attitude towards social housing and social tenants that permeates so much of the Government’s thinking about the problem—that secure and affordable social housing traps individuals in deprivation and unemployment, and the language of welfare dependency reinforces that belief. However, as several of my hon. Friends said, the fact that social housing is now such a scarce resource means that people with social problems are concentrated in it. Far from being the problem for many vulnerable and poorer families, it is an essential part of the solution.

We all agree that the problems facing social housing in London are complex, long term and difficult to resolve. Anyone who claims to have a magic bullet is lying. We know that the supply of social housing has been squeezed for decades, principally through the non-replacement of right-to-buy stock during the 1980s and 1990s, but in retrospect it is a shame that more properties were not built under the Labour Government, as several of us have pointed out. It would be hypocritical of me not to say that, as I lined up many times during the Labour Government to make exactly that point. However, as has been said, we can be proud of the substantial investment made during those years in the decent homes initiative, which brought millions of homes to a decent standard.

The decline in supply is not the only problem. London is a global city; foreign, national and business money distorts the market, and the fact that house prices have risen so much over the decades has its consequences. One striking issue about social housing is that between 10 and 15 years ago there was a steady outflow of tenants buying their home, sometimes through right to buy but often in the private market, which has effectively silted things up, as people on modest incomes are no longer able to afford a house. The relationship between the private housing market, owner-occupation and the social market must be properly understood. The Labour Government invested in decent homes and new buildings, so by 2009, the lead-in time for planning and investment led to a high of 16,000 starts in London. We now know that that was the golden age.

The coalition Government have a package of investment and policy suggestions, which are likely to combine to cancel out almost all the hoped-for objectives. They want more social homes—don’t we all?—but they have made, as we heard, a 63% cut in the affordable housing grant. Consequently, the 16,000 starts peaked in 2009-10 and will fall away to nothing, according to the Homes and Communities Agency, in 2012. The Government want housing benefit to take the strain—to fill the gap in the affordable housing grant—but they also want housing benefit expenditure to fall. Those two things are incompatible.

The Government want to improve work incentives—don’t we all?—but they propose 80% market rents, which will make work incentives much harder to achieve. If it is hard to make work pay when rent is £100 a week, how much harder will it be when rent is £400, £500 or £600 a week? They want more social homes, particularly, as the hon. Member for Ealing Central and Acton said, more family-sized homes, but the overall benefit cap means that housing developers and housing associations do not want to build family-sized homes. The set of policies is completely incoherent. Something has to give.

The Government want mixed communities—don’t we all?—but they suggest throwing people out of their homes when they achieve a certain amount of income. What could be a worse work disincentive than saying, “If you earn a certain amount of money, you’ll be out on your ear”? What nonsense that makes of the concept of mixed communities. However, the Mayor of London proposes a £60,000-plus ceiling for access to socially assisted housing, which cuts across the stated objective of not allowing people with a decent income to be assisted with housing.

The Government want to tackle under-occupation—don’t we all?—but they are doing so in a way that possibly even some of my hon. Friends have not yet fully internalised. They propose doing so through a cut in housing benefit for social tenants who have one or more bedrooms more than they are deemed to need. That will hit 150,000 London households with an average of a £21-a-week loss in benefit. I do not have the London figures to hand, but I know that, nationally, if every single person affected by the proposed cut in housing benefit tried to avoid that penalty, it would mean that every one and two-bedroom property allocated in the social housing sector for the next five years would have to go to those households. That is clearly nonsense and would lead to a catastrophe of homelessness and overcrowding. Indeed, the Minister of State, Department for Work and Pensions, Chris Grayling let the cat out of the bag by making it clear that the policy’s intention is not to tackle under-occupation, but to save money. As far as the Government are concerned, the fewer people who move, the better.

The Government also want to end security of tenure. When I, like my hon. Friends, was on the campaign stump last year, and warning people that a Conservative Government would mean a move to market rents and the end of security of tenure, we were howled down and accused of lying. Our only error in robustly defending that position was not realising how quickly it would happen.

I have been remiss in not making the point earlier, but shadow Communities and Local Government Ministers, who are out campaigning today, are rightly opposing those measures in the Localism Bill.

The Government’s policy is fundamentally flawed and deeply incoherent. It will have the opposite effect, almost across the board, to what it seeks to achieve. At the very least, we know that the Mayor of London’s re-election campaign is on a cliff edge as new housing supply drops to nothing. We therefore look forward to a campaign that will replace the Mayor, who has talked the talk, but is not walking the walk. He will not deliver new social housing; he is not standing up for London tenants or those who face a housing crisis.

Although the crisis has been long building and slow burning, it is reaching one of the most critical points that I have ever known. Whether for people in social housing, people in the private sector waiting to obtain social housing, those in the queue or those facing homelessness, it is clear that the Government’s policies will do nothing to resolve that crisis. It will take a Labour Mayor and a Labour Government to resolve the crisis of social housing in London.