My hon. Friend—my good, long-term and hon. Friend—makes an excellent point, as usual.
I recently picked up a brochure advertising new apartments to rent in Bloomsbury. A two-bedroom flat costs £560 a week. That is £26,880 a year. Who can afford that sort of rent? A Russian oligarch, I am sure—even perhaps a Ukrainian oligarch—and perhaps a banker who spends their time advising tax swindlers on how to avoid paying more tax by investing in Luxembourg; and here I do not mention Mr Juncker. However, nobody who is contributing to the local community can afford £26,000 a year—no shopkeeper; no bus driver; no teacher; no research scientist at the shortly to open Francis Crick Institute; no nurse. As I said in my last speech on this issue, no new consultant surgeon at Great Ormond Street hospital or University College hospital can afford that sort of rent. As a new consultant, they get, at most, about £80,000 a year. After taking off their tax and national insurance, that leaves £40,000 a year. So somebody on £40,000 a year would have to pay £26,000 a year for a two-bedroom flat.
It is a ludicrous situation that is bad for tenants, obviously. People come into London, or go to their local hospital, relying on Great Ormond street or University college hospital to get the finest treatment and care in the land, but the people providing it cannot afford to live near those great hospitals. The situation is intolerable.
But it is not just bad for the local community and tenants; it is ludicrously bad for taxpayers, because private sector landlords are getting a public subsidy from the taxpayer of between £9 billion and £10 billion every year—that is what is paid out in housing benefit. It does not stay in the handbags and wallets of the tenants; it goes to the landlords. The last time I checked, agriculture was getting a subsidy of only £6 billion a year, but apparently it is okay for the private rented sector to get a £9 billion a year subsidy.
The Mayor of London now says that when he wants an element of “social housing” in a new development, it will count as such if it is going to be asking up to 80% of market rents. Most people cannot afford to pay that, so his programme does nothing for badly off Londoners. What we need to do is build more homes—homes that ordinary people can afford. We have the ludicrous situation where people who are homeless and the responsibility of the local authority cannot be re-housed by the local authority, because it does not have enough flats and homes, and so it places them in the private sector, where they have no security of tenure and pay ludicrously high rents, which are being met largely by the taxpayer. No economic theory can possibly justify anything as daft as that. The worst thing someone can say about something these days is that it is daft, and that situation is extremely daft.
Clearly, we need to put more effort into getting new flats and houses built. I have a madcap scheme to create more land in London by decking over all the deep railway cuttings and either building housing on them or using them as green spaces in order to justify building higher-density housing next to them. That is the only way in which we will create more land in the area, and we need revolutionary ideas such as that. In the end, however, we have to get a grip on house prices and private rents. Unless we do that, we are ruining—