[Relevant documents: Fifth Report of the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Committee, Session 2003–04, HC 46–I, and the Government's response thereto, Cm. 6266.]

Motion made, and Question proposed, That the sitting be now adjourned.—[Paul Clark.]

I am grateful for the opportunity to debate the Select Committee's report "Decent Homes".

I suspect that this may be our last chance to debate Select Committee reports in this Session, so before I do so, I thank the Clerks who have served on various Select Committees that I have chaired for the past 10 years. I want to put on record my appreciation of all their hard work and all the work that has been done in the Committee offices—

Order. May I join the hon. Gentleman in thanking all the Clerks who have served me in all the Select Committees that I have chaired in the past 20 or so years for all their hard work, as this is probably the last chance that I, too, will have to thank them?

Select Committees play an important part in the work of the House of Commons, and the work done by the Clerks in the Committee offices makes all that possible.

I also thank Ben Kochan, the specialist assistant, who has worked hard on a series of reports on housing and planning for the Committee during the past 12 months. We are also grateful to the two specialist advisers, Peter Chapman and John Bryson, who have worked hard for the Committee. Specialist advisers are particularly important because they give up a great deal of their time to give personal tutorials to members of Committees.

Finally, I express my appreciation of the other members of the Committee. Sadly, not many of them are in the Chamber today, but I am grateful to my hon. Friend Mr. Betts for being here, and for the contributions made by all members of the Committee to the report.

It is a little sad that although we have been bidding for a debate on the report since we published it on 27 April 2004, it has taken us some time to secure one. Sometimes when we produce a report, the Government are very enthusiastic about doing some of the things that we want. The kindest thing that I can say about the Government's response to this report, however, is that it was a very firm thumbs down. I am disappointed, but I understand the Minister's difficulties.

Key to the report were the Committee's congratulations to the Government on setting the target for decent homes and for the very real prospects of achieving it by 2010 in the vast majority of cases. Such an achievement would be considerable. To live in homes that are inadequate saps individuals and families, children in particular.

There are a few caveats. We may achieve the target for most public sector rented accommodation, but I suspect that the Government have set a lower target for the private sector, and that only 70 per cent. of those homes will reach the decent standard met by the rest of the sector. That is a little disappointing, but we are making real progress. I have some sympathy for the Government in that, although it would be nice to install amenities such as a good bathroom, a good kitchen and other facilities in the private sector homes of elderly people, the disruption that that might cause them in the last few years of their lives may be disproportionate to the benefit that they would gain by having those facilities in their homes—facilities from which someone else will benefit.

One major disappointment is that the Government have encouraged local tenants to vote on whether they want their properties transferred to new housing associations—stock transfer companies—or arm's length management organisations, or to stay with the local authority. If people are asked to vote and, having heard all the arguments pressed unfairly to encourage them to transfer to an ALMO or a stock transfer company they still vote to stay with the local authority, it is mean and unfair for the Government to say, "If you vote to stay with the local authority, you're not going to get a decent home because we're not going to let the local authority borrow the money against the future rent income that is necessary to do the work."

There was a glimmer of hope at the Labour party conference, when the Deputy Prime Minister made it clear that he recognised the problem and said that there would be a fourth way, allowing local authority tenants who opted to stay with the local authority to get their houses up to the decent homes standard. Since the Labour party conference, there has been no indication that the Government will put the Deputy Prime Minister's words into practice, and that is disappointing. We will end up with a situation in which people who voted to transfer will almost certainly get a decent home, whereas those who voted to stay with the local authority will be penalised because they had enthusiasm for locally elected, democratic councillor control rather than for the appointment of people on housing association boards.

The hon. Gentleman is making a very important point. Will he explain how he wants the Government to change their policy to ensure that the fourth option is possible? For example, does he think that prudential borrowing powers, which were included in the Local Government Act 2003 for other aspects of capital powers for local authorities, should be extended to housing?

That is certainly one possibility. I find it crazy that, according to the Government, it is perfectly all right for a housing association to borrow money because that money will be repaid from the rents of the properties and the interest paid on it, yet it is wrong for the local authority to borrow money on exactly the same basis, with exactly the same guarantee that it will be repaid.

All sorts of nonsense come from the European Union and the Treasury about what counts as public borrowing. It is asserted that public borrowing is somehow bad, but private borrowing is perfectly all right. We should have challenged such nonsense long ago.

As usual, the hon. Gentleman is making a persuasive case with his fierce criticism of the Minister. I presume that he means that the money that local authorities borrow would be ring-fenced, so that a council would not borrow against its housing stock to spend on other services, but money borrowed against its housing stock would be ring-fenced and then reinvested in housing. Is that the point that he is making?

Very firmly. As I understand it, the housing accounts are already ring-fenced, so it is not a question of councils borrowing money against their housing stock to spend on casinos or anything else. You borrow the money to achieve the decent homes standard in council property that is rented by the local authority—

Order. As a former treasurer, I have not borrowed that money for a great many years—when the hon. Gentleman refers to "you", he is referring to me.

I am sorry, Mr. Deputy Speaker. Let me make it clear that local authorities should be able to borrow money to achieve the decent homes standard for all the stock in their area.

Does my hon. Friend agree that the biggest problem with the ballots is that there is no constraint on the local authority to spend the moneys that it receives on housing improvements? As the Minister knows, some of us would be much happier if that money was ring-fenced. If local authorities are to have their money ring-fenced for council stock, surely that should also be the case for stock that may go into the private sector.

Yes, I accept that argument. I do not want to spend too long on that subject, however; I just want to make the point that in our report we were disappointed that so far the Government have made no progress in that area.

The Select Committee is very pleased that we have a decent homes standard, but some elements were not perfectly thought out originally, and, although we hope the standard will be achieved by 2010, the emphasis was not quite right. It was a mistake to put so much emphasis on the need for kitchens and bathrooms to be less than 20 years old. I have made the point several times in the Select Committee and in the House. When I am in London, I rent accommodation in the Barbican, which is still council-owned. It was built in the late 1960s and early 1970s, and the standard of the bathroom and the kitchen, which are still the original rooms, is far higher than those being installed as a result of modernisation. The emphasis should be on not the age but the fitness of the kitchen or bathroom.

The decent homes target did not contain enough about energy efficiency. It had nothing about the quality of the estate that people live in. When people are proud of the house in which they live, the front garden—the area around the house—is crucial. Time after time, constituents have told me that they were desperate for housing, but when they were offered somewhere they did not even get inside the front door because they were put off by the appearance of the estate. I am disappointed that there was nothing about the environmental quality of estates in the original decent homes standard.

The final point missing from the decent homes standard is good noise insulation. It is not simply a question of the party wall. Although it is worrying that in too much rented accommodation one can still hear everything that goes on next door, which can be disturbing, often one can even hear everything that is going on in the next bedroom or a room in the same house. Again, that is unsatisfactory, particularly when one has teenage youngsters who need somewhere to study without constant interruption from a younger sibling. Noise standards are important, and they were not in the original decent homes standard.

The Select Committee said that to achieve the standard by 2010 is a good step, but we want a decent homes-plus standard. That is why I am particularly disappointed that the Government said "No way." I understand the difficulty: with two targets, there may be some confusion. However, the Government should consider adding to the decent homes standard, a decent homes-plus standard, and consider especially the question of the quality of the estate. If one wants good tenants who take pride in their property, the quality of their estate and the environment in which they live will be as important a consideration as the quality inside the house. The introduction of the decent homes standard now, with no addition, will create a tendency in local authority housing, stock-transfer housing and housing association property to put too much emphasis on getting things right inside the house, and not enough emphasis on the quality of the estate.

I wholly agree with the hon. Gentleman and, as I will say at length later, the report was excellent. However, how does he think the Government can solve the dilemma? They have not managed to do so in their response. One option would be to have a menu of standards from which tenants could choose. There would be no diminution of the Government's long-term target for 2010, but they could give tenants the power to choose the standards that they think are the most appropriate for the next few years.

There is a problem with that suggestion. Under the present procedure, where there is a stock transfer company, in theory the tenants can participate and argue for their priorities. That is not the issue. The problem with housing is that, almost by definition, the person living in the house at the time is reasonably satisfied, so the next tenant to move in is crucial. It is a good thing to have the target of a decent home by 2010, whoever is in the house now. That is why we must have the decent homes-plus standard, which will tell housing associations to ensure that the estate is managed in a way that tenants find attractive and will give them pride in it.

Many decent homes targets cost money, but energy efficiency is a double win because it gives people better comfort in their houses and makes a contribution to reducing greenhouse gases. I cannot understand why the decent homes or decent homes-plus standards cannot include the absolute requirement that soon after 2010, if not by then, measures for all rented stock guarantee the use of as little heat as is necessary to give people a decent standard of comfort. The same applies to noise, although I accept that there is no double win in that respect.

I was pleased that care and repair was mentioned. There is a third win. The oldest people usually live in the oldest property, and the third win is that if that property can be well looked after in terms of energy, perhaps people will not get sicker and have to go into hospital. We must pay attention to rehabilitation, and bring health into housing and not leave it merely as a contingency. Does my hon. Friend agree?

I certainly agree. To be fair to the Government, most of the decent homes standards include such things as removing damp and so on. It is important to get the most efficient heating into buildings.

My final point, which is not covered in the present decent homes target, is about turning rented property into what can be described as lifetime homes, which are suitable for people throughout their life: they are easy to manage for those with small children, and for elderly people and people who suffer any sort of accident. It is amazing that there are so many houses where little things are missing—for example, wide doors and a second banister to help people get up the stairs—which, if they were included, would guarantee that if people had an accident, or needed assistance in old age, the house was already adapted to their needs.

I am slightly worried that one of the temptations in achieving the decent homes target will be clearance and demolition. Obviously, if a house is knocked down it does not count as an "indecent" home. I plead with the Government to ensure that when clearance takes place, there is replacement. There is a shortage of rented accommodation throughout the country and thus a temptation for local authorities that cannot let their unpopular, walk-up, deck-access flats to knock them down, creating a space on the council or housing association estate. That is a major problem because it makes shops and other facilities less viable. It often produces a piece of ground that is, theoretically, landscaped but in practice is just a scruffy field on which mischief takes place. As the Government are driving towards the decent homes target, when there is clearance and properties are pulled down, they must ensure that those properties are replaced with the sort of homes that meet the standards and which people want.

I was lucky enough to go the sustainable communities summit and to see some of the ideas that the Deputy Prime Minister has for bringing in new housing. If the £60,000 houses can be built and put into the right place that will be another considerable achievement for the Government, but we must take care that those cheap houses do not become the slums of the future.

I want to mention briefly the stock transfer companies, some of which have done very well. On the edge of my constituency Pioneer Homes has done a remarkable job in turning properties around in Ashton, but most of the housing in Tameside is managed by New Charter of which the best one can say is that it has a rather patchy reputation. To return to the quality of the environment on an estate, I despair of persuading the company to do a little maintenance and repair on the Rose Hill estate, which would be greatly welcomed by the tenants.

In conclusion, we need to make it clear that we will not give up on tenants who vote to stay with local authorities. We will ensure that they get the decent homes target. I do not mind too much how the Government do that, but no one should be penalised for voting for local democracy by being told that they cannot have a decent home. The Government have done well to set the decent homes target, although perhaps there is too much emphasis on kitchens and bathrooms and not enough on making people proud of their estates. Fundamentally, we must recognise that we should create a situation in which a significant number of people can be proud of the fact that they live in rented accommodation and that it reaches the same sort of standards sought by owner occupiers.

As a member of the Select Committee that produced the report, may I begin by echoing the Chairman's thanks to the Clerks and specialist advisers who have served us very well on this and other inquiries? It is also an opportune moment, as it is probably my last chance to do so, to place on record my thanks and those of the other members of Committee to my hon. Friend Andrew Bennett not merely for the way that he has chaired this inquiry, but for the way that he chairs the Committee in general.

All members of the Committee appreciate how my hon. Friend's chairmanship is genuinely inclusive. We feel part of a Committee, not simply people who come along to sit in meetings and go through an agenda that has already been agreed. He shares with us the formulation of the agenda, the inquiries we should carry out and how we should go about them in a very open way. He involves all of us in the wash-down meetings that we have afterwards to discuss how inquiries are going. He makes us feel a genuine part of what is happening. My heartfelt appreciation and thanks go to him for the way he has chaired the Committee in this Session of Parliament. I know that those thanks would be echoed by other members of the Committee if they were in the Chamber; we all feel very strongly that he has done an excellent job.

I should also like to echo what my hon. Friend said about how much the Committee welcomed the fact that we had a decent homes standard at all. When I first read it in the Labour party manifesto, I wondered whether we were really going to do it and whether it was perhaps a bit ambitious. The Government have set out, for the first time, the right of tenants to a decent home and the fact that resources will be made available to deliver those targets.

It is a long way from the dark days of the 1980s when some of us had the unfortunate pleasure—I am not sure that "pleasure" is the right word—to go to meetings with Ministers such as Nicholas Ridley to argue about whether the backlog of disrepair in local authority housing was £16 billion, £17 billion, £18 billion, or whatever the latest surveys found it to be. That was disheartening, because we knew that not only were the backlog of disrepair and the level of poor standards enormous—that meant that tenants really suffered from bad housing—but that the problems were getting worse every year because the Government had no intention of doing anything about them. Some of us remember that as the time that the then Government's only housing policy was the right to buy and they focused on that to the exclusion of everything else.

The fact that we now have a target—I shall come on to discuss some concerns about elements of it—embodies a genuine general commitment by the Government to improve the standard of housing as a whole. We should not just be thinking about the issues that are specifically mentioned in the decent homes target, but the wider commitment to carry out repairs to deal with improvements and bring housing up to a better standard.

It has to be recognised that the Government have not merely set a target, but provided resources through the spending of capital receipts. We all know about the promises that the then Minister, Michael Heseltine, made when he said that capital receipts would be ploughed back into local authority housing; we suddenly found that they had been taken off the table and were used to pay off debt, and the houses—apart from 10 per cent. of them—never received any benefit in terms of improvements made to properties in the local authority sector.

We have seen capital receipts, money coming into ALMOs and stock transfer money as well. Mr. Hayes has temporarily—I hope—left his seat. It would be interesting to hear whether the Conservatives are prepared to commit themselves in the future, if by some mischance they were to win a general election, to keep on trying to deliver decent homes standards. What would their expenditure commitments be in order to do that? Although they have made commitments to carry on with the planned level of expenditure on education, health and the police, some of us suspect that in order to find their £35 billion of cuts, housing would be one of the great losers in that exercise. The decent homes standards and other important investment in housing would go by the board.

Perhaps I can help the hon. Gentleman in the absence of our Conservative colleague. I have looked at the Conservatives' expenditure plans in some detail. Is he aware that they want to cut social housing expenditure by £1 billion and that their policy on the right to buy would cost £1 billion a year, as costed by the National Housing Federation? That would leave the Conservatives with a £2 billion gap in their housing budget. Given that fact, does he think that they would be able even to begin to address the decent homes issue?

I thank the hon. Gentleman for his intervention. Although I do not always agree with the financial calculations of the Liberal Democrat party, I am happy to agree with them fully on this occasion. There would be a major problem not only for a Conservative Government, who would not be very interested in the consequences, but for tenants who found that the money they thought was going to be spent on their homes in the next few years to bring them up to a decent standard would be taken away by a back-door route that had not been spoken about openly and up front.

I shall go on to say a few words about the fourth way in a moment—the Minister would probably expect me to do so—but I have to say that it is now very pleasant indeed, and a genuine pleasure, to go to meetings with tenants and tenants groups. In one meeting in my constituency a few weeks ago, the local area manager, Graham Bows, who previously worked for the council and now works for Sheffield Homes, was able to stand up and say, "I've worked in housing in this city for 30 years"—I have known him well for all that period—"and I can actually get up at meetings now and say it is not a question of whether you're going to get the work done, but when you're going to get it done. Because we have the commitment and the resources from central Government, we can actually talk about timetables for delivery projects, instead of saying 'perhaps if we get something in a few years' time, something might happen', knowing that it probably won't." That is a fundamental change, which also creates a much better relationship between landlords and tenants as they can sit down and plan ahead with the certainty that the Government will actually back what they are trying to do together to deliver improvements to housing.

I was pleased to help shape the policy in Sheffield, which was a novel one of its kind to begin with but has now probably been replicated elsewhere. There is a city-wide ALMO and the local authority still has its homeless responsibilities as well as taking responsibility for allocations, so we do not get competing allocations policies from different parts of the city, which is important. In each area, there has been genuine consultation and tenants have a right to opt in to the ALMO and bring about an area management arrangement for their particular part of the city. In most parts of the city, the tenants have voted by large majorities for that way forward, although, in some parts, stock transfer is favoured by a few estates.

I have to say—I do not know whether Mr. Davey will want to intervene on this occasion—that the development of the ALMO model and the fact that the houses remain in the ownership of the local authority was crucial in terms of getting tenants to accept that as a way forward. It was also crucial in helping Labour to win back control of Sheffield city council, because tenants absolutely rejected the idea of the Liberal Democrats that the whole city's housing stock would be put through the stock transfer route. So, there were political implications as well. My colleagues in the Labour group on Sheffield city council are to be commended for the way in which they have gone about the consultation, openly discussed things with tenants and created a model that the vast majority of tenants feel comfortable with. They might have preferred to remain with the council, but, if the model is a second-best option, it is a very good second-best option as far as most people are concerned.

Does my hon. Friend agree that the Government have made it clear throughout that it was never their intention that one aspect or another of the different models—ALMO, the private finance initiative or whatever—should apply necessarily across the piece in one town, city or area? It would be wrong for any authority leading a discussion on stock transfer to say that one model or another should apply everywhere. The authority should consider the whole of its estate and work out which solution is best for which bit.

Yes, that has been the Government's approach. There has always been a strong element of choice, with one unfortunate exception, which I will come to in a minute. It is quite right that tenants should have that fundamental choice about who owns their home. They should not be forced into a change of ownership of the housing if that is not what they wish.

The model is working well in Sheffield, and the area dimension means that there are the benefits of a city-wide board, but also of strong area association. Local people can really get involved in the management of their houses on a scale by which they can have a real influence over what is happening. It is desperately sad, however, that the fourth way has not been worked at a little longer and harder, and a solution reached—for reasons that my hon. Friend the Member for Denton and Reddish has already mentioned. When we had the inquiry, there was no evidence at all—if the Minister can produce the evidence, that is fine and I will examine it—that councils are worse landlords than any other bodies, and certainly than housing associations. The Audit Commission believed that to be the case as well, when it gave evidence.

There is no evidence that splitting strategy and management delivers a better housing service. There is a belief, but there is no evidence, as far as I know. I know that Ministers go round saying, "Look at the benefits from the money now coming in." I think that Sheffield's ALMO has just got a three-star rating. The Minister has written to Members to say that he is really pleased with the progress that it has made, and, of course, it has made such progress. However, the ALMO has a lot of money to spend—quite rightly. Therefore, it is almost certainly going to deliver better management with the money that it has compared with what the council had to offer. It is basically the same organisation that runs the houses now. Things have just transferred over.

Given that money for ALMOs does not come outside the public sector borrowing restrictions, giving councils the same money would not have affected the public sector accounts at all. One thing slightly worries me given that, almost uniquely in Europe for a wholly owned arm's length company, ALMO expenditure counts against public sector borrowing. I think that there is only one other country in the European Union—or certainly in the European Union before the accession of the most recent members—where that definition applies. It does not apply in Germany, where arm's length companies of both local authorities and the state do not count when borrowing against the public sector controls. That is one of the ways in which the German Government find their way around the Maastricht criteria. Given that, according to our definitions, ALMO borrowing counts against Government borrowing, if tenants keep on voting for ALMOs in more and more local authorities, is there a danger that, at some point, the money will run out and stock transfer will become the only option? Perhaps the Minister could give some reassurance on that point.

I am grateful for the reassurances that the Minister has given that any review of ALMOs will not entail the possibility of the homes that they manage being transferred out of local authority ownership, because that is a concern as well. I thank him for addressing that. I should certainly like to see the prudential guidelines, which allow borrowing against future income streams in local government services other than housing, to be extended to housing as well. In many cases, that approach would enable local authorities to continue to run their housing stocks. Those issues were never satisfactorily addressed. However, the fact that we have a difference over the fourth way should not cloud the general support for the concept of decent homes and for the Government's provision of extra resources.

I move on to decent homes-plus. I was a little disappointed, because the Government could have had a little more enthusiasm for the concept. We take the point; as we discussed carefully in Committee, we do not want to muddy the waters and say that the current decent homes standard should be increased for 2010. We did not think that that would be helpful; moving targets does not help to achieve them. However, I think that the Government were a little dismissive in saying, "All right—we understand that that is an aspiration, but we are not going to do anything about it at this stage."

The Government could have said that there ought to be a new target in future and that, in the next couple of years, they would start, at least, to consult about what that target should be. If we are to think of a target for 2015, perhaps, rather than for 2020, we ought to set it in, say, 2007. That would be an aspiration. A firmer commitment from the Government would have been appreciated.

When criticisms were made that the standards for thermal comfort were not high enough, the Government said that the current standards were thresholds, rather than the standards to be achieved. Yes, that is acceptable, but if we agreed a decent homes-plus standard, that would be a further target to aim at, even for 2010. It could be looked at every time an improvement to a house was made. I hope that the Government will reflect on that and see the decent homes-plus standard as very useful for the longer term and, perhaps, for raising the standards to which work is done in the meantime.

I shall say a few words about the environment, which is absolutely crucial. One can spend lots of money improving the fabric of a property and its internal amenities. However, the problem is also that of run-down areas where the grass is not cut regularly, cars run over the verges, and there are no trees, a poor standard of lighting and little back alleys where people gather. The Government are now doing something about that.

Does my hon. Friend accept that one of the concerns of a number of us who represent London constituencies—a concern that applies to some other parts of the country as well—is that properties made up of flats, and estates with a very high concentration of flats, have a relative disadvantage because of the amount of money that needs to be spent on communal areas and security upgrades? Very welcome as the decent homes programme is—it is celebrated by tenants in my constituency—that relative disadvantage leaves some of us with such city estates in our constituencies to face a struggle.

I absolutely accept that, and there are such flats in my constituency. If there are security issues for those flats as well as issues of the general environment, the green environment and the roads, dealing with them will involve additional expenditure. If that is not spent, much of the other money spent on the internals of a property will almost be wasted. People would just give up. If an area is run-down and people do not feel secure, tenants will not feel great commitment to the properties. That is also true in the private sector. Estate agents use the phrase "Location, location, location" to describe whether they can sell a house easily and whether it will be an attractive proposition to buy. The phrase is also true for rented property, and we ought to take the environment issue very seriously.

The Minister will correct me if I am wrong, but my understanding is that when an ALMO is created, about 5 per cent. of the funds allocated can be spent on the environment. That is not sufficient in many cases. Stock transfer can raise an awful lot more money, but there is a real problem. I know that neighbourhood renewal and other sources of funding can be brought to bear to create sustainable communities, but the Government should look at the issue. Expenditure on the homes would be even better and more worth while if another 5 per cent.—or more in estates with flats—were allocated for the environment around the homes. That is a real issue, which has been raised with me by Sir Bob Kerslake, chief executive of Sheffield city council. He says that that is one of the downsides of the ALMO compared with stock transfer. That issue needs to be addressed.

I shall just say a few words about the private sector. We are still in an inadequate position, particularly as regards the private rented sector. I understand the differences with owner-occupied properties, but tenants in the private rented sector have as much right to a decent home as people in the local authority and socially rented sectors.

On the 70 per cent. target, if the Government had said, "Well, it's 70 per cent. because we know it's much harder to get there in the private sector, but our aspiration is still to get to 100 per cent. and we'll get there by, say, 2015," we could understand that 70 per cent. was a stepping stone along the way. However, to have 70 per cent. as an absolute target, and then to have it for only 70 per cent. of the private homes occupied by the most vulnerable people on benefits is not as worth while as the target of 100 per cent. for the socially rented sector by 2010. I do not know whether we should have a target that a house may meet one day but not the next, because the circumstances of the person in the house change, or because the people themselves change, and so are no longer in a vulnerable group. I am not sure how meaningful it is to combine the circumstances of the individual tenant, in terms of their income, with a target related to the fabric of property. The mixing of the two creates a moveable target that is difficult to monitor.

If we are to be a bit braver about what we are doing with the private rented sector, we will need a few more enforcement mechanisms. It is quite right that there should be enforcement mechanisms in the private sector, but they do not cover all the issues covered by the decent homes standard; that is another issue that we raised in our report, and I was not absolutely convinced by the Government's response on it.

I hope that we have produced a good report for debate. We are very supportive of the Government's overall intentions, the extra money that has come into housing and the higher priority given to it. We have one or two concerns, and although we probably will not make progress on the fourth way after the arguments that we have had on it, at least matters such as decent homes-plus, how we address the environment and problems in the private rented sector are issues that the Government might care to reflect on further. I hope that we can make a little more progress on them.

Every week in Tower Hamlets I visit homes where people become ill because their housing falls below a decent standard. What does that mean? It means damp, cold, overcrowded conditions. Those people cannot decorate their homes because the paint will not stay on the walls. They cannot stay warm in their homes because they do not have central heating, or in some instances because the windows appear to be open holes. They cannot socialise in their homes because there is simply no room for that. Thousands of constituents have implored me to come to see their homes to see the beds in the living room or the cot in the bath, and to see that they do not, in their view or mine, have a decent home or even a decent family life.

It is not surprising that so many people in Tower Hamlets have such a harrowing experience with housing. In England, 33 per cent. of households live in non-decent homes, 22 per cent. of which belong to social landlords. In Tower Hamlets, 70 per cent. of housing stock falls below the decent homes standard. Last year, the figure was 75 per cent., so in one year there has been a 5 per cent. improvement in the number of homes meeting the decent homes standard. The Government must be commended on that. It has happened for specific reasons: because they have put more money into social housing, and because of a combination of repairs to older homes and new build programmes that would not be taking place without that extra Government investment.

My concern is not just about the homes falling outside the definition, however; it is also about a number of important aspects that have been left out of the definition. In my view, it is critical that the decent homes standard includes the communal areas, which we have heard about, and the quality of the estate. A home will not be viewed as decent if someone has to step over broken syringes and excrement to get to their front door. These issues of security are among the most important that tenants flag up as allowing them to believe that they have a decent home. Their homes are not decent if they do not have the level of protection given by a decent infrastructure around them.

Does my hon. Friend agree that last year's 3.4 per cent. increase in London's regional share of the management and maintenance allowance was indisputably welcome, but is a cause for concern when compared with the 13.9 per cent. increase for the whole country? Will she join me in asking our right hon. Friend the Minister to reconsider the regional allocation of the funds?

I thank my hon. Friend for that intervention. She has raised one of the most important issues, which I will discuss in a moment.

I was talking about the state of estates, which is reflected in the money available to spend on them. I am concerned that lift maintenance also falls outside the decent homes standard. The lives of people in Tower Hamlets are ruined, and pensioners and parents with young children are literally made prisoners in their homes when the lifts do not work, but that has not yet been taken into account. The cost for Tower Hamlets to service lifts on its estates between now and 2010, which is only five years away, is £26 million. That reflects the fact that more than 12,000 properties—more than a quarter of all our housing stock—are in lifted blocks of at least six storeys. None of that money counts towards decent homes, yet it is pivotal to the creation of decent homes-plus, as we have heard. The Minister has been extremely helpful to many of us in arguing the case against deprivation, overcrowding and the social exclusion aspects of housing, and I ask him to consider what has been left out of the decent homes standard, particularly in relation to communal areas, security and lifted blocks.

As I said, the Minister has been very helpful about overcrowding, but so far as I am aware—he will correct me if I am wrong—solving the problem of overcrowding is not part of the Government's decent homes agenda. In other words, a one-bedroom flat is perfectly decent if one person is put in it, but not if a family of eight is put in it. Tackling the problem of overcrowding is therefore fundamental to attaining the Government's decent homes standards.

This will be my last intervention. Does my right hon. Friend the Minister accept that some registered social landlords are under pressure to meet the targets of the decent homes initiative and to develop stock to address housing problems such as homelessness and overcrowding? The Peabody Trust, for example, has its own financial problems and is disposing of up to 1,000 street properties at a time of overcrowding and unmet housing needs, so meeting the decent homes obligations will, in some ways, undermine its capacity to meet housing needs. Perhaps he will be kind enough to consider ways of resolving these problems, so that RSLs do not dispose of street properties in particular, which are usually of a size that can meet the requirements of the families about whom my hon. Friend is talking.

Many of my constituents would also be grateful to hear from the Minister what further steps the Government are taking to tackle the problem of overcrowding, which blights the lives of so many families in Tower Hamlets. My hon. Friend makes a very important point about housing association stock. I will return to that point in a moment.

I said earlier that I would come back to the maintenance issue. The single biggest cause of poor quality housing is lack of maintenance. The communities plan includes £2.8 billion to bring council homes up to a decent standard, and that is greatly to be welcomed. None the less, that must be set against the £19 billion backlog that was inherited in 1997—a backlog of disrepair and underinvestment. The Government have said:

"Our new rates of funding improvements in the management and maintenance of the council stock will mean support will be £500m higher in 2005–06 than would have been the case."

However, as my hon. Friend Ms Buck pointed out, the overall changes to the management and maintenance allowance that have occurred mean that, although the average increase is about 13 per cent., some areas with the worst housing have received a lower percentage. In London, for example, which has the highest number of children living in poor quality housing, we have had a fraction of that amount. It is strange that the Government should not recognise the need in areas that have some of the lowest income families and some of the worst social housing—some are in London and some in the north. In my view, simply to ignore the situation in London seems absolutely desperate.

In Tower Hamlets, much of the new money that the Government have invested is making differences that people can see. People will not necessarily believe what politicians say, but they do believe their own eyes, and they are seeing new homes being built today in Tower Hamlets. In that context, I want to mention the quality of new build. Constituents have complained to me about the lack of noise insulation, and such issues seem to be storing up problems for the future. There are also issues related to energy efficiency. I cannot think of a worse way to save money than by not investing in energy efficiency.

The last thing that I want to say brings me back to my first point—the quality of estates. In Tower Hamlets, a lot of money is being invested in improving the overall built environment, not only with bricks and mortar, but by putting in place local area partnerships involving all the organisations. That means working with local authorities; with the police on safer neighbourhood schemes; with the schools to get extended school areas; and with health authorities to set up new health facilities on estates near to the people who need them. Such measures are improving the quality of life in Tower Hamlets.

The Government must look at the omissions from the decent homes standard, however, which could reduce the effectiveness of their programmes in other areas. Can the Minister tell me what further measures the Government will take to improve the quantity of housing stock available in areas such as Tower Hamlets, particularly in relation to what we heard earlier about affordability and low-cost home ownership? We have heard the Government's proposal for a possible £60,000 house for first-time buyers. In Tower Hamlets, the average house price is about £250,000 and the average income is about £12,000. That £12,000 figure takes into account people in Canary Wharf, for example, many of whom earn a lot more. One can therefore imagine how low the incomes of many of those families are. Will he also consider increasing the number of people from lower income groups that have access to decent homes through some of the shared home ownership schemes?

I am sorry to interrupt the hon. Lady's flow, but she will be aware that investment in low-cost home ownership has plummeted since 1997. Housing Corporation support for the scheme, which she will know was established under the previous Conservative Government, has been steadily reduced. There are now 60,000 applications a year for the scheme, 50,000 of which are disappointed, because the Government have failed to support it. That even allows for the key workers scheme.

Obviously, while I will consider the point made by the hon. Gentleman, it makes me almost have an apoplectic coronary heart attack to hear Conservative spokesmen talking about access to homes in a place such as Tower Hamlets, where few new homes of any description were built during 18 years of Conservative government. The issue of home ownership has been examined in Tower Hamlets and the key worker schemes there seek to address it. My point is that the threshold to access such schemes should be brought within the reach of people on average and below average income. Currently, they are not brought to that level; they are nowhere near it.

My specific request to the Minister is about making home ownership genuinely affordable. For example, £60,000 would be affordable these days for someone earning £16,000, given the increased ratio between salary and mortgage, as opposed to the 1:3 ratio that prevailed when I and other people bought their homes. Will he consider making more decent homes available to people on lower incomes through shared ownership schemes?

I congratulate members of the Select Committee on producing one of its best reports during this Parliament. It might be that reports get better as a Parliament progresses. The Chairman, Andrew Bennett, and his colleagues have done an excellent job in analysing this important part of housing policy.

The decent homes standard is on the face of it a reasonable objective. One cannot have any criticism of the objective of wanting to ensure that the housing stock, particularly the social housing stock, is brought up to scratch. In their constituency surgeries, most MPs will come across housing problems week in, week out; they will come in many shapes and forms, but the quality of homes is a big one.

There is no disagreement with the Government about the need to improve housing standards. The question is whether the decent homes standard is the right way in which to do that. It has had some advantages. It has helped to focus the minds of the housing associations and people in local authorities, and ensured that they were at least thinking about how they could marshal resources to make improvements. It has had that effect, but has it gone much further?

It is interesting that the hon. Member for Denton and Reddish earlier in his arguments focused on the fourth option, and that was picked up by Mr. Betts. We are ultimately talking about the cash that is available for improving the housing stock. We all know that successive Governments have examined different ways of trying to ensure that the housing capital investment was kept off the balance sheet; we understood about the huge backlog.

The huge backlog goes back to the plans of the then Conservative Opposition, which were put together by the noble Lord Lawson, for the 1979 Conservative Administration. It was clear—and this can be read in his memoirs—that they intended to cut back on housing investment. It was their No. 1 strategy for saving money in the early Thatcher years. That continued for a long time and built up the huge backlog.

We all know that whatever the option is—an arm's length management organisation, a stock transfer, a public finance initiative, or whatever—it is all about getting that huge backlog put right. We understand that the Government want to do that by making it not appear on the balance sheets. However, as the hon. Member for Sheffield, Attercliffe made clear, that is in many ways an accounting exercise, not a real one. I share the concerns that he and other Labour colleagues raised. The Government must look at a fourth option; indeed, they must look at a fifth option, as many more options exist than those currently on the table.

For example, we could consider the idea of creating mutual housing associations, in which the tenants had not just a vote but control and membership of the housing association. That would be a very different model from a simple stock transfer, and would be attractive to many communities. The Government must unlock themselves from their limited options to see whether there are other ways of creating the cash that is needed to improve homes.

As the hon. Member for Denton and Reddish said, there are some real problems with the decent homes standard. I am concerned that the Government are approaching the matter in a narrow-minded way. They are not saying, "Hold on a minute, we set those standards a few years ago. We were wrong; there is clear evidence that we were wrong. Let's change them." I can say, for myself and on behalf of my colleagues, that we would not criticise the Government if they changed the decent homes standard in a sensible way—if they looked at what was happening and decided to adjust it. That would be a sensible thing to do, and I hope that the Conservative spokesman can give that pledge as well.

One point that the report set out well was the need to take account of everything—not over-investing in replacing kitchens and bathrooms that are not out of date; modern standards, such as ensuring that thermal criteria, noise insulation and materials are right; neighbourhood standards and—something that has not been mentioned today—access for elderly and disabled tenants, tackling the life homes standard within the decent homes standard. There is space to do that.

The question is, if the standard is to be changed in the sensible ways that are set out, how will that be done? That is why I intervened on the hon. Member for Denton and Reddish. In the report, the Committee deals with that question by saying that the standard is not perfect, so we must change it. It comes up with a new standard, decent homes-plus, which makes sense and certainly meets some of the criticisms. However, the Government's response is fairly weak on that point, and I hope that the Minister can say a little more about it. When dealing with the set of recommendations relating to decent homes-plus in their response to the report, the Government could only say:

"ODPM's implementation guidance encourages social housing providers to engage with tenants at a local level and, where appropriate, provide enhanced local solutions—a 'Decent Homes Plus', which may address many of the Committee's concerns."

I have to say that that is one of the weakest replies I have seen in a Government response to some pretty well-argued and stringent criticism.

The Government must go further. I was trying to press the Chairman of the Select Committee on how the Committee wanted to approach decent homes-plus. Clearly, it would mean more money. Let us not beat about the bush; if standards are to be improved over a similar timetable, the cash has to come from somewhere. He said two interesting things. He suggested that energy efficiency would save money in the long term. That is a fair point, although I am not sure whether the Chancellor will be quite as impressed when he plans the spending review and annual expenditure limits. He also said that, in his view, there should not be any choice about the matter, and that the standard existed because we were worrying about future tenants, not existing tenants. I want to take him up on that point, because if we are to push the decent homes standards further and improve the number of criteria that will be counted in it, we must be realistic about the public expenditure implications, and what can or cannot be afforded.

Even if there were a fourth or fifth option, would there be the cash to meet a decent homes-plus or decent homes-plus-plus standard, whatever it is called? The best way—the only way—to deal with the dilemma of budget restraints and the desire that I am sure is shared across the House is by empowering the tenants and asking them what is most important for them and their estate.

I am interested in the hon. Gentleman's observations. Of course, the Select Committee itself said that—the Chairman of the Committee is probably mentioning it to the Minister as I speak. The report makes it clear that tenant involvement, not just at the consultation level but at the management level, in real decisions about the future of the estate, is a central task in improving standards such that people are comfortable with them.

That is right, but the Committee and certainly the Government are not taking the logical next step. If money is available under whatever option, surely the housing provider should say to the tenants, "There is money to improve your homes and a range of things that we could do. Tell us which you prefer. We cannot do everything at once, but you are the tenants, these are your homes, you live there. What do you think is best for the community?" The process will not be easy, as some tenants will want one thing and others will want another thing. It may be difficult to manage, but it will empower the tenants.

As the hon. Member for Sheffield, Attercliffe said, the great thing is that money is available. He spoke about meeting tenants who were satisfied that things were happening, but he described that in an interesting way. He said that the housing managers were able to go to meetings and tell tenants that something was going to happen. I want housing managers up and down the country to go to meetings and say, "Tenants, these are the options, this is the budget, how should it be spent?"

I am grateful to the hon. Gentleman for giving way a second time. I am not unsympathetic to the case that he is making, but I have two questions. First, does he envisage that the outcome of that consultation process and involvement would be an aggregate result? If the general view of the tenants was that they wanted the neighbourhood cleaned up, more trees planted or more graffiti removed, would housing managers go with that, even if it were not everyone's view? Or, if the hon. Gentleman envisages every individual request being met, how would that be done?

With your indulgence, Mr. Deputy Speaker, the second question is about choices made by this generation of tenants that would not be the choices of the next generation. How would the hon. Gentleman handle the problem of someone saying that they would like something changed in their home that the incoming tenant would not feel is a priority or appropriate?

On the second issue, I do not have a crystal ball, and it would be difficult to imagine such a situation. That is why I was not totally convinced by the answer to my intervention on the hon. Member for Denton and Reddish. We should ensure that the existing tenants, who probably know their homes and communities better than anyone else, are driving the investment.

The hon. Member for South Holland and The Deepings said that there may be some tension between the individuals who want investment in their own property for whatever reason and those who want investment in the community. Of course, there will be tension, and, ultimately, someone will have to take the decision. However, I do not understand why the menu cannot be put to the tenants so that they can discuss among themselves what the priority is. As we have heard, kitchens and bathrooms are often of adequate standard, and they would probably be the same for most of the estate. If that were the case, tenants would not go for that but would go for something else such as energy conservation measures or a new playground for the children.

I think that the hon. Gentleman is missing the point. The purpose of the inquiry on decent homes was to set a minimum standard. As far as the Committee is concerned, the decent homes-plus standard is also intended to set a minimum standard, not to say to tenants that there is a menu of things from which they can choose. It is important to raise the standard of housing in general.

I just put a caveat to the hon. Gentleman about consulting tenants. One of the early inquiries of the Select Committee had to do with empty homes, particularly abandonment in the north of England. During that inquiry, we visited some houses in Harpurhey. More than £80,000 was spent on each house to make it exactly what the tenants wanted. The problem was that, although that was what the people who lived in the houses when the investigation was done wanted, a lot of those people moved away during the modernisation and many did not come back. We must ensure both that housing, particularly in this sector, reaches those standards, and that what is done will suit other people as well as the existing tenants.

I do not think there is much difference between us. All that I am saying is that if the hon. Gentleman and his Committee want to ratchet up the minimum, that will have to be paid for. That money will not come all at once; however generous the Government prove to be, there will not be a slug of money so that all the necessary work can be done over the next two or three years. The works will have to be timetabled. All that I am asking is why not involve the tenants in deciding on the timetable for reaching the minimum standards, so that they can choose what is most important to them?

The hon. Gentleman makes a point about future tenants. I am not saying that they should not be taken into account, or that whatever the original tenant wants should be done. That could result in perverse decisions being made, as he implies—perhaps that was the case in the community that he mentioned. The Committee came across examples of where the decent homes standard had produced a lot of investment but the tenants on whose homes the money had been spent were not happy. That is nonsense. All that I am arguing is that we should try to invest the money in the tenants' top priorities. That would produce a better long-term outcome for the tenants, the future tenants and the taxpayer.

In practice, I think that that is happening. If I gave the impression that the area manager I referred to was standing up to tenants and saying, "This is what we will do for you," that is not right. He was saying that they now have the money to do things, but Sheffield has had a long history of tenant involvement in area committees and area budgets, and, uniquely, of a tenant levy that helps fund local tenant associations. The decent homes standards are a benchmark or framework, within which lots of important improvements—such as replacing windows, which is a top priority in my constituency—go ahead at the tenants' request.

I am sure that that is the case. We cannot generalise about housing. We all know that local authorities or housing associations undertake different projects using very different approaches. It happens even within our constituencies. Housing is very varied, and I am sure that there are councils and registered social landlords who are producing best practice.

In my constituency, two attempts have been made in the past 15 years to persuade tenants to vote for stock transfer in order to get a huge amount of money invested in social housing in Kingston. Both attempts have failed—most recently last year, and by quite a large majority. That leaves us in a dilemma, because the Government are not providing a big slug of money to local authorities to help council tenants such as those whom I represent. My tenants want to stay with their local authority because it is a good authority, but now it does not have sufficient cash. It is looking at a range of schemes—such as arm's length management organisations and private finance initiatives, or other smaller-scale stock transfer—to see if it can meet the decent homes standard, but it is in a real bind. Council tenants who come to my surgeries frequently say, "We need this extension or adaptation, but the council says it does not have enough money." It is difficult to reply, "Well, you voted no." Just because they exercised their democratic right and voted no does not mean that they should be excluded from having a decent home.

The Minister must address that fundamental question. A few months ago, some disturbing rumours were going around that the Government intended to address it by deciding that tenants who voted against stock transfer would be outside the decent homes standard. I hope that he can put it on the record today that that is not the case, and that the fact that tenants vote no does not mean that they are not entitled to have a decent home, or that the Government will not help them have one by 2010. It would be extremely helpful if he were to put that on the record, because then I could say to my constituents who are council tenants, "The Minister has today promised me that you will have a decent home by 2010." I look forward to his doing that and ensuring that the Chancellor and the Deputy Prime Minister provide that cash.

The Committee made an important point about the private sector in its report, and although it mentioned the Housing Act 2004 it did not say much about it. I was slightly surprised about that. However, the Act is a crucial lever. The report refers to the need for environmental health officers and to giving local authority departments the money to enforce the new standards. Will the Committee Chairman say how he thinks that the 2004 Act can help deal with that?

First, we produced a fairly comprehensive report on the draft Bill in 2003. I should remind the hon. Gentleman that we took the evidence for the report in spring last year and published it in April, at which point the 2004 Act was still being fought through in Committee. We were hoping that some significant improvements would come through in the end.

I accept those points, and I hope that the hon. Gentleman will accept that my colleagues and I worked hard to get those improvements to the 2004 Act—the empty property management orders and tenancy deposit schemes. I hope that those new powers will be a major improvement in the private sector, and that the Government will go further.

During our debates on the 2004 Act, it emerged that the one thing that the Government had not addressed was how to improve the professionalism of landlords. That is difficult to deal with. There are some professional landlords with large portfolios of rented accommodation of varying standards, many of whom are very good. Some companies manage large portfolios. A multitude of landlords—tens of thousands of people—manage one or two properties. The trick in trying to improve the quality of the private rented sector is not simply to impose more regulations, as welcome as those in the 2004 Act are, but to improve the professional qualifications, training and advice that is open to private landlords.

The hon. Gentleman has now moved on to a different, important area. Does he agree that that is much more likely to be achieved by self-regulation, and that some of the regulations are necessary, but the burden of regulation faced by landlords has been unhelpful? We should be moving towards more self-regulation, to raise the standards in the way that the hon. Gentleman talked about.

I am slightly surprised to hear the hon. Gentleman say that, because I remember having many debates with him in the Standing Committee on the Housing Bill and there was, through most of our discussion, a genuine agreement that the Government were taking sensible regulatory steps forward.

We Liberals said, "No further. Go as far as is proposed, see how the measures work and whether they can be enforced properly and then review the situation." We decided that, rather than impose further regulation, we should work with the landlords while we waited to see how the regulation worked and what, in the light of professionalism on the landlords' side, was the next step and the best way forward.

Perhaps the hon. Gentleman has misunderstood me, or perhaps I did not make myself sufficiently clear. He is right about the latest tranche of regulations, but there is a cumulative effect, because landlords are regulated and controlled in all kinds of ways. I am concerned about the cost and disincentives of that cumulative burden. He is right about our attitude towards the recent tranche of regulation, but does he agree that eventually regulation will become intolerable for many landlords and may have a damaging effect on the sector?

If the Government continue to return with more regulations, the hon. Gentleman may be right. They should not do that. We should see how this completely revamped system beds down and how we can help landlords improve standards more generally.

I do not want to say much more. The decent homes standard has been a welcome programme, and the report shows how it can be improved. I only hope that the Government think again about their reaction to the report. Whether we are talking about the fourth option or the definition of the decent homes standards, their response was inadequate. In many ways, the Chairman of the Committee, while making some fierce criticisms, was understating his concern and the Committee's. Certainly I thought on reading the report that there was a real chance for the Government to make amends and to go forward. I hope that the Minister will tell us today that the Government's response to this very good report can be considered again.

As ever, I draw attention to my entry in the Register of Members' Interests. Also, as this may be the last time that the Minister and I clash across the Chamber, let me say how much I have enjoyed our exchanges, discussions and debates. They have never really been arguments. As Oscar Wilde said, arguments are always vulgar and often persuasive. The arguments between the right hon. Gentleman and I are never vulgar, and mine are usually more persuasive than his, but it has been a pleasure. I hope that this is not the last occasion on which we cross swords, but it may be.

Ms King—we must not forget Bow, certainly not with an election in the offing—made an important point about housing availability and affordability, and about house building. It would be wrong to debate decent homes outside that context, because one of the greatest indictments of the Government has been the collapse of social house building. That is a damning indictment of this Government and this Minister.

Hon. Members will be as acutely aware as I am of the facts. I have the table here that shows that in the mid-1990s we were building just under 40,000 new social houses a year, but in recent years we have built just under 20,000 each year, so there has been a collapse in social house building under Labour's stewardship. That has created a significant problem in the form of the number of people housed in temporary accommodation. I know that it is a cause of great distress to you, Mr. Deputy Speaker, as it is to me that the number of such people has reached a record 100,000, according to ODPM figures from December. That is the highest the number has ever been.

It is true that Governments have often inherited a rising trend when such figures have been announced. It is sometimes true that people make cheap political points because a figure has been reached when in fact the trend was established under a previous regime. However, the trend for people housed in temporary accommodation was falling until 1997. The Government have reversed a falling trend, and we now have that appalling figure, so there is a real problem with social house building to which the hon. Lady was right to draw attention. I shall deal with that issue and affordability before coming to the comments of the Chairman of the Committee and of the Committee itself.

I just want to get things straight. Is the hon. Gentleman saying on behalf of the Conservative party—I am sure that he would like to confirm this—that under its spending plans, a Conservative Government would remain committed to the decent homes standard and all the funding associated with it, and would also provide extra resources to build even more social homes, which he says are needed?

I am grateful for the hon. Gentleman's remarks. I shall come to our position on the decent homes standards in the middle part of my extremely long and interesting speech. To deal with his other point, our position is crystal clear. I know that he takes to bed every night—as you do, Mr. Deputy Speaker—the Conservative action on housing pamphlet, "The Right to Own", which I published at the end of last year. That pamphlet makes it clear that if the Housing Corporation's approved development programme were divided 50:50 between houses to rent and low-cost homes, as the hon. Lady suggested, there would be about 12,500 more homes built each year—a combination of Housing Corporation homes to rent and new houses built under the low-cost home ownership scheme.

We know that 60,000 people apply for that scheme every year and that the vast majority of them are disappointed. Among the generality of the population, we know that, according to independent surveys, about 85 to 90 per cent. of people want to be home owners. Our target should be ambitious. We have changed the proportion of people who own their own home over the past 25 years from about 60 per cent. to 70 per cent., so why should we not aim, on a non-partisan basis, to change that proportion over the next 20 years from 70 per cent. to 80 per cent. by reconsidering shared equity?

The way to make home ownership accessible is not by building "affordable houses", but by making the houses that best suit people's needs affordable to them as individuals and families. That requires a fresh look at equity. I echo the plea of the hon. Lady for real effort to be put into invigorating the mortgage market and for Government support for shared equity homes, so that people can take that first step on to the ladder; it is a question of bringing the ladder closer to them.

Order. May I disappoint the hon. Gentleman and say to him that my bedtime reading is much more likely to be J. P. O'Brian or Bernard Cornwell than the particular volume that he referred to?

I am cut to the quick; I never thought for a moment that you, Mr. Deputy Speaker, would place anyone above me in terms of your reading preferences, but I stand corrected.

I understand why the Conservative party is hung up on the idea of home ownership, but perhaps the reason why more people appear to have wanted to buy their own homes is the poor quality of rented accommodation. When we have good quality rented accommodation and estates, a lot of people may see the advantages of rented accommodation. Home ownership has not been the greatest of things in one or two northern cities where house prices have steadily fallen rather than risen as in the rest of the country.

I hope that I am not being impertinent in asking the hon. Gentleman whether he lives in his own home or rents.

I have bought my house and it has been a fantastic investment, but the success of such an investment involves choosing the right area to live in and the property prices rising. Home ownership is not necessarily good for society. I will probably have a huge amount of money tied up in my house when I die, and my kids will no doubt be pleased with that. I suspect, however, that as far as I am concerned, it might have been better if I had been renting during the later years of my life and had had the money to spend.

Order. Will the hon. Gentleman explain which bit his kids will be pleased about?

Both, I think.

You are on impeccable form today, Mr. Deputy Speaker, if you do not mind me saying so. We are ranging widely from your preferred reading matter to the hon. Gentleman's life story.

The fact that the hon. Gentleman chose to buy his own home, as I suspect most Members here today have done, is perhaps indicative of a natural human desire to acquire a property and pass it on to the next generation. That is not unhealthy. Associated with the acquisition of property are many other good things such as security, responsibility and a stake in society, but he is right that that is not to say that we should either reject those who need to rent or neglect the quality of the properties that they rent.

My analysis has revealed that, unsurprisingly, most people's housing needs change in their lifetime. We start off single, we often—perhaps usually—get married or find a partner, to use the modern idiom. If we are fortunate, we have children, and we then get old and end up—I hope not too soon—rather dependent. I started off living in a council house on a high-quality council estate. It was an idyllic childhood—a golden age, one might say. I was a tenant in the private rented sector when I was a student, then I had a small private house, then a big private house, and now I have a very big private house. One day I will move into a bungalow, and perhaps I will end up dribbling while being fed in a supported home. That is not an unusual pattern. People's housing needs change, and the houses available to them must reflect those changing needs.

The hon. Gentleman is right: there is a proper role for the rented sector, both private and public, and it is necessary that property is available in sufficient quantity and quality. That is really the subject of our debate: there clearly is not sufficient quantity at the moment. The number of social houses being built is not adequate to meet demand. My point is that, over a very long period, by adopting policies such as looking again at equity, we may change demand by altering the proportion of the population who own and therefore the proportion who want and need to rent. That is a perfectly reasonable ambition, given that most people say that that is what they want to achieve. Why should we not help people achieve their aspirations?

The Government are on weak ground in this debate in terms of their record on social house building. That could be altered if we adjusted the way in which the Housing Corporation funds the construction of new homes and if, as I have said, that funding was weighted more heavily towards the development of shared equity homes under low-cost home ownership schemes. I am more than happy to make those figures available to the Minister—I am sure that he has them—and other hon. Members, so that they can share my disappointment with him and his record.

The Government have said that the reason why they have not built many social homes is that they have chosen to prioritise investment in existing stock. They have a fair argument: that we have the oldest housing stock in Europe and that some of our public sector housing is not of sufficient quality. That is the case for all kinds of reasons.

I thank the hon. Gentleman for giving way and apologise to you, Mr. Deputy Speaker, for arriving late.

Would the hon. Gentleman consider the £19 billion backlog of disrepair caused by the previous Government to be part of that argument?

I was about to say—with typical generosity—that one reason why we face a challenge is the policies of a range of previous Governments on maintaining housing stock. If one considers housing stock, one must consider a long period, because houses do not deteriorate in 10 or 15 years; their condition changes gradually over a long time. To be fair, the problem partly results from the age of our housing stock, particularly in the public sector. Large amounts of public sector housing were built between the wars—under Conservative Governments, incidentally—and again in the 1950s. Harold MacMillan was the Conservative Housing Minister at that time, and he was proud of his house-building record, and particularly of the role he played providing houses for vulnerable people.

House building and housing investment are long-term issues. The hon. Gentleman is right and the Government make a fair point when they say that there is a need to invest in the existing stock. They have chosen to prioritise that above social house building. They probably could have done more of both if they had adopted measures such as those that I have described in respect of the way in which the Housing Corporation uses development money. It is not too late to change that, and an incoming Government with an enlightened Housing Minister could take action quickly to correct those failures.

There are profound concerns about the decent homes standard that formed the background to the Select Committee report. Some of those concerns have been expressed in our debate today, and some are to be found in the Committee's findings. The criticisms are pretty damning. Although they were delivered with the grace and style for which the Chairman of the Select Committee has become so well known, when one strips bare some of the niceties, one finds that the Committee makes it clear that it finds the Government's current policy unsatisfactory in four or five ways. It stated:

"We believe that the Decent Homes standard is set at too basic a level, and that by 2010 it will be seriously out of step with reasonable tenant expectations."

The Government say in their response that that is a baseline. That argument is fair enough, but the real problem with the standard is that it will probably not address the things that most people regard as fundamental. Some of those things have been mentioned. There has been talk of insulation standards, for example. It would not be particularly costly to introduce some of the basic energy conservation standards that would make a real difference in terms of both the cost to the household and the welfare of the people who live there. But that is not part of the standard.

We have heard—I shall return to this issue—that things that happen outside people's front doors are not addressed by the decent homes standard. People are often pretty comfortable about doing things for themselves if they feel they have some control over them. People should have adequate bathrooms and kitchens and all those basic things, and some people feel that they can deal with those things for themselves as long as they get some help and support, but it is different when they walk outside their front door and face graffiti and a vandalised neighbourhood. They may fear going out because of crime or feel that there is no sense of community. Such conditions are perceived by them and by the Committee as largely outside their control. That is why the Committee highlighted both the paucity in the decent homes standard and the need to go beyond it by looking more widely at the other issues that affect people's quality of life.

I shall deal later with how my party might address that issue, but I should like to put on the record the Committee's criticism of the Government and their failure to be as ambitious as they might have been in providing improved standards for people in social housing. The hon. Member for Bethnal Green and Bow and Mr. Davey also drew attention to that point.

The Committee's second criticism—its Chairman made it clear that this was a central criticism—was:

"We believe that the target of achieving Decent Homes in the social housing sector is being used as a Trojan Horse by the Government in a dogmatic quest to minimise the proportion of housing stock managed by Local Authorities."

That was echoed by Mr. Betts, who said that there is no evidence that councils are worse landlords than housing associations.

I am sure that it is right that there is no evidence that local authorities are worse landlords. The fact is that if the Government have £100,000 to spend on housing and give that money to a local authority, they can build, say, two units at £50,000 each. If they give that money to an RSL, they can build three units. The time that it takes to reduce the numbers of non-decent homes will therefore be increased by one third if the money goes via local authorities instead of RSLs.

The hon. Lady is attempting to take us on to the issue of house building; I was really talking about the management of stock, which the hon. Member for Sheffield, Attercliffe highlighted. We have already spoken a bit about house building, and the hon. Lady is rightly concerned about it. It is important that we are much more open-minded about how social house building happens. For example, in rural areas, through extending the rural exception site policy, I want to allow private sector developers to cross-subside the provision of social housing through the provision of market housing. That is one example of how we might get more investment in the provision of social housing in areas such as the one that I represent and live in. So there are all kinds of ways in which we can be more open-minded about how we attract additional funds for the provision of housing.

With respect, I am grateful for the hon. Lady's comment, but I do not want to be too distracted from the central point made by the hon. Member for Sheffield, Attercliffe, which is at the heart of the Committee's criticism: is it appropriate for local councils to be landlords? Are they as good at managing housing as other registered social landlords? I have to say that my local authority, Conservative-controlled South Holland district council, is a very good provider of rented housing for the people who need it in my area. As I have gone around and seen other councils, I have found that many of them are good providers and managers of rented housing, too.

I was in High Wycombe recently, and I have also visited that splendid borough of Wandsworth, where I spoke to two very good local campaigners from Battersea and Putney—Dominic Schofield and Justine Greening, both champions of the interests of local people—who tell me that Wandsworth does a good job of managing housing. There is a prejudice that somehow local councils are automatically bad landlords, and it seems to underpin Government policy. The report itself mentions

"a dogmatic quest to minimise the proportion of housing stock managed by Local Authorities. "

I do not understand the logic of that approach. However, that is not to say that we do not have to be open-minded about the subject.

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The hon. Lady is going to tell me that she does not think that councils are good at managing houses.

The point that I was trying to make, but failed to make clearly, is that the Government prefer to put money through RSLs rather than local authorities because, under the current rules—there have been arguments that the rules should be changed—more units are obtained. The criticism that the Committee made was that the Government are pushing things in a certain direction. I urge the Government to push things more quickly in that direction, because otherwise yet another generation of children in Tower Hamlets will grow up in slums.

That brings us neatly to how these things are financed. The interesting view has been expressed that we should look again at how local authorities can borrow money to support the management and improvement of housing stock. The Chairman of the Committee made that point himself. The hon. Member for Sheffield, Attercliffe, the Committee and hon. Members have said that there should be a level playing field in that regard and that local authorities should be able to invest in housing stock on the basis that they can borrow money against the value of their assets. That is what the hon. Member for Sheffield, Attercliffe argued. The Committee argues that that point has some force, and I would be interested to hear in the Minister's response why he feels that it does not.

Will the hon. Gentleman give way?

The hon. Gentleman came in late, but I am ever generous, and am quite happy to let him have another shot.

I thank the hon. Gentleman for giving way. I have been listening carefully to his argument. He seems to be expressing some sympathy with the need to spend more money on social housing, whether to own or rent. Earlier, he seemed to have sympathy for the need for a higher decency standard in housing, which would, of course, cost money. He now seems to be expressing support for a fourth option of councils doing development, which would again cost more money. In adding all that up and taking into account the fact that it is official Opposition policy to reduce the budget in housing, how does he make his sums work?

The hon. Gentleman either was not listening or did not understand what I said about social house building, but he did come in late, and I know that this debate was not one of his priorities this afternoon. Notwithstanding that, I shall repeat what I said: if the Housing Corporation approved development programme money were divided 50:50 between low-cost home ownership schemes and houses to rent, 12,500 more homes could be built by the Housing Corporation each year at no extra cost to the Exchequer. Is that clear? There is no extra cost.

In respect of the decent homes standard, I said that I would come on to talk about what the Conservative party was going to do. What I said about the Committee Chairman's suggestion—I hasten to add that it is not my suggestion—that local authorities should operate on a level playing field in terms of their permission to borrow is that it had some merit and that I was interested in the Government's response to it. That is pretty clear, too.

I shall talk in a moment about our view of what we call the decent communities standard and how it might be funded. The hon. Gentleman will perhaps be even clearer when I have finished.

Does the hon. Gentleman accept that in respect of the 50:50 split, the issue depends on where the houses are being built and how much that costs. For example, there is a great difference in land prices and building costs between St. Helens and St. Albans. The Government did not build as many houses as they needed and as many of us would want, but they are building houses where they are most needed now—in the south-east and the London area—but that means that there are fewer houses per pound than if they were built more generally.

Yes, that is true, which is why I used average or typical prices. The hon. Gentleman is right that there are regional variations. On the land issue, he talked about savings in the housing budget. The vast bulk of the savings in the James review, to which the Minister will no doubt refer in his reply, come from the release of public sector land, which should be released and made available; to judge from the Red Book, that is what the Chancellor thinks, too. The end of the regional development agency land banking could also create a very large extra sum. The savings are detailed in the James report, which I should be happy to make available to the hon. Gentleman and to Mr. Love.

Mr. Pollard is right: of course there are local and regional differences in the cost of building houses. That is one of many reasons why the £60,000 house is such nonsense. It is also nonsense because of the notion that every nurse or teacher wants to live with another nurse or teacher, and that only people in the professions chosen by the Deputy Prime Minister will live in the houses that he defines and designs, and in the places where he wants them to live. What a monstrous suggestion.

Incidentally, it is interesting that the James review is predicated on all the land being sold, but the Conservatives are against building more houses and criticise the ODPM for concreting over the countryside. It would be interesting to know how they make those two policies add up.

The hon. Gentleman said that the fourth option had some merit. We are only a few weeks away from the election, and he has obviously been studying housing policy. Will he tell us whether the Conservative party is in favour of the fourth option?

The hon. Gentleman raised two specific points. On the first, about extra building, the Government's brownfield development target is 60 per cent., which they have exceeded: the current figure is about 67 per cent. Barratt Homes tells me that 80 per cent. of the houses that it builds are on brownfield land, and in the south and south-east the figure is 90 per cent. The redesignation of brownfield land for residential building from that allocated for employment purposes would free up many residential development opportunities. If he considers the amount of land that is designated for employment purposes against the amount that is identified for residential building, he will see that in all but two regions more is designated for employment, and in every region of the country the take-up is less for employment development.

To make it straightforward, what that means is that many sites remain undeveloped because they are designated for employment development, not residential development. Many local authorities acknowledge that and most developers know it too. The ODPM considered the issue very recently. Many brownfield opportunities in most parts of the country are going to waste. They could be developed for housing. So the idea that the only housing one can build is on green fields is something of a distortion at the very least.

May I give the hon. Gentleman an example from my own constituency? Borras Construction built an office block five years ago and has tried to flog it, rent it and do other things, but it cannot. A planning application was submitted to the local authority, which said that the site was an employment-designated site. It could be guaranteed that there would be 100 per cent. affordable units on the site and still the local authority would stand in the way.

I will not make any comment about the hon. Gentleman's local affairs because that would be discourteous, but I am interested that he has some sympathy with the case that I am making about the need to rethink both the target for brownfield development and how we achieve that target through the more practical designation of appropriate land.

I am being encouraged to go off on a tangent by these pithy and interesting interventions, but I must return to the matter in hand because you will criticise me if I do not, Mr. Deputy Speaker.

The Committee went on to say:

"The Government must put its money where its mouth is and leave it up to tenants to decide who should . . . manage their homes. The Government should provide a level playing field in terms of funding so that tenants and Local Authorities have real choices."

It also said:

"In the private sector, the limitation of the Decent Homes target to just 70 per cent . . . makes little sense."

The Committee's detailed recommendations, which I have studied, make it clear that it has a more open-minded view about who should manage housing than the Government. It feels that there should be much higher levels of tenant involvement—that was echoed by the hon. Member for Kingston and Surbiton, who made an interesting point about the form that that might take—and it suggests that the decent homes standard should be more ambitious in breadth.

How might that be achieved? It could be achieved by establishing a decent communities standard that would consider all the factors that comprise a high quality neighbourhood. Such a standard would necessarily involve a series of Departments and it would certainly involve the private sector, the voluntary sector and a range of local authority departments. It would not all be funded by the Government—far from it. It may be that some of the things that the Government do actually stand in the way of achieving decent communities. We are talking about what the Government do and should not do. The private and the voluntary sector may well be able to take on some of the things that the Government do and relieve some of the cost burden from them accordingly.

The important thing is that the standard would identify the things that the community believes are fundamental to delivering an acceptable quality of life. We have heard repeatedly this afternoon that that is not just about what happens behind people's front doors. Improving housing stock is important, but it is not the only thing that is important. When I look back to the halcyon days on the estate where I was brought up, I can see that it was because of the quality of life, in all kinds of respects, that I had a happy childhood. It was about the availability of appropriate opportunities for people to socialise and to play, and about the little platoons that make up a civilised society—all those small organisations that require support from the Government and should not be over-regulated by them. It is also about the maintenance of good standards of law and order, and about the physical condition of the neighbourhood: how it is maintained in terms of graffiti and vandalism, planting and all the other small but important things.

That is partly about local government, and the Government should act as the catalyst for much of it. However, as I said, it is also about the communities themselves and supporting the voluntary sector strongly in bringing such things about. We should not always assume that this is about spending more money, because that does not always yield the best results.

I do not want to diverge too far from the Select Committee report, but I point out that the Government's liveability fund is very welcome in helping to address many of the environmental issues that exist in neighbourhoods. The hon. Gentleman mentioned the James review; will he reassure us that the funds that make communities safer, greener and cleaner would stay in place?

When the James review was being drawn up—and, as I imagine, when the Gershon review was drawn up—those involved in the process were in discussion with those in spending Departments to find a balance. Many of the savings outlined in the James review in respect of the ODPM will be reinvested in our area; that was made absolutely clear in those discussions. Where we choose to reinvest them and how we target them will be a choice that I shall be forced to make in few weeks' time when I move into the Minister's office, but I am not going to reveal in detail how we will go about that. Some of it will depend on the circumstances that apply when we come to power. The hon. Gentleman is right that it would be wrong to assume that all the James money will leave the ODPM; a lot of it will be reinvested to support a range of important and worthwhile projects.

Several hon. Members:

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It is not appropriate for me to debate Conservative party policy here. This is a debate about a Select Committee report, and I will not be encouraged by mischievous interventions by Labour or Liberal Democrat Members, thus receiving criticism from you, Mr. Deputy Speaker, for going off the point.

Order. The question before the House is that the sitting do now adjourn and nothing more.

Ah well. But it would not do any favours to those who spent so long drawing up the report for me to give a long and detailed description of the nature of Conservative policy. I know that the Minister will want at least an hour to respond, so I want to draw my remarks to a conclusion fairly shortly.

Will the hon. Gentleman give way?

Just briefly, because the hon. Gentleman is so charming.

It was a nice ploy of the hon. Gentleman to try to avoid my intervention, because I want to raise precisely the point that I asked him about at the beginning of his speech. He talks of a decent communities standard, but I am unsure about whether that is an extra spending commitment to spend more on the environment around houses or whether he is saying that the Conservatives will spend more on the environment around the houses, but less on the houses themselves. Is he proposing a total spending reduction? He referred to money from the private sector coming from somewhere for something. Would he be a little more precise? Is such money going to replace lots of public funding, and if so, how? I do not really see it myself.

That is a perfectly reasonable question and I shall answer it, I hope, with equal reasonableness. When we published the document that I mentioned earlier, which deals largely with demand-side issues and housing market mechanisms, we said that we would publish a second series of policies. They will be published this month, and they will address some of the issues we have talked about today, such as the availability of brownfield land, how we would enable additional house building where it is needed and the way in which we would enable the decent communities standard to replace the decent homes standard. All those things will be set out in detail; they will be announced and made available for the hon. Gentleman to scrutinise. They will be exciting and attractive, and on their basis I imagine we shall attract many votes in his constituency and elsewhere. He must wait and see; he will get the second tranche of Conservative policies in housing and planning before he has to decide how he votes in the general election.

The Select Committee went on in detail—I will not go through all the details because hon. Members have had a chance to read the report—to identify why it thought that the Government were wrong in the respects that I have highlighted. My view is clear: the Government chose to aim for a decent community standard that would improve the stock to a baseline figure. They now need to think again about whether that baseline figure is sufficient to improve the overall quality of life in a community, and to think again about the management of housing and about whether local authorities should be supported in continuing to manage stock. They also need to think again about enabling tenants to be properly involved in those decisions, and about how tenants can play a greater role in shaping the future of their neighbourhoods, their housing and their communities.

The Government need to think again about how to fill the gap between how many social homes are needed and how many they have managed to build; it is a pitiful number. Unless they think again very quickly, I am afraid that their failure will cost them dear. They now have weeks, not months. I suspect that they do not have time to get this right and that it will require a new Government with a new vision and new and bigger ambitions to fulfil what the Select Committee wants to be fulfilled. More importantly, that is what the British people deserve.

I thank the members of the Select Committee on the Office of the Deputy Prime Minister and other colleagues for their contributions to the debate.

I pay particular tribute to my hon. Friend Andrew Bennett, whose contribution will have been his swansong, at least in this Chamber. I congratulate him on his work as Chairman of the Select Committee, and his long and distinguished parliamentary career. He has played a distinguished part in addressing housing issues, but I hope that he will forgive me when I say that the contribution I shall most remember him for is his wonderful achievement—the right to roam in our countryside. I heartily congratulate him on that.

We have had a wide-ranging debate from, if I may say so, a thrilling cast of characters. Even my hon. Friend Mr. Drew made a fleeting appearance, and my hon. Friends the Members for Edmonton (Mr. Love) and for St. Albans (Mr. Pollard) also put in a late but welcome appearance. Old chums, one and all. Anyway, enough of this love-in.

The policy pickings from the dishes of the Opposition parties were a trifle meagre. I am genuinely very fond of Mr. Hayes, but why do I always feel that he is making it up as he goes along? As I listened to the hon. Members for Kingston and Surbiton (Mr. Davey) and for South Holland and The Deepings, I was reminded of the survey of housing professionals carried out by that august journal, Inside Housing, in the new year. I am pleased to say that housing professionals subscribing to it exhibited extremely high levels of support for the Government's sustainable communities policies. When asked about how they intended to vote, 69 per cent. said Labour, 3 per cent. said Conservative, and 2 per cent. said Liberal Democrat. That is a ringing endorsement of our policies from the people who really know about housing.

Many important issues have been discussed in this debate, but I would hate us to lose sight of the big picture and of the Government's commitment to meeting the decent homes target. We have 4.1 million social homes in this country. That is a tremendous asset, which is worth about £400 billion and is an immeasurable asset to the community.

The impact of decades of neglect and underinvestment under the Tories left us in 1997 with a £19 billion backlog of repairs and 2.2 million homes that did not meet the decent homes standard. This Government responded to that challenge by radically changing our approach to housing policy, building in far greater flexibility and capacity for investment than ever before. Let me remind the Chamber of the results of that radical change. Since 1997, we have reduced the number of non-decent social homes by 1 million and we have increased the proportion of vulnerable households in the private sector living in decent homes to 63 per cent. We have increased investment massively. Local authorities have invested more than £13 billion in bringing their homes up to a decent standard, and a further £5.3 billion has been levered in from the private sector through transfer.

On top of that, local authorities' plans indicate that by 2008 they will invest a further £11 billion in their stock. Indeed, between 1997 and 2005–06, the average investment per council home will have increased by 55 per cent. in real terms. We are on track to meet our target of providing a decent home to everyone living in social housing and to 70 per cent. of vulnerable households in private accommodation by 2010. By the time we meet our target, we expect that local authorities and housing associations will have spent about £42 billion on ensuring that their tenants live in decent homes.

I hear what the Minister says, and I am fond of him too. Does he regret the halving of the number of social houses being built? That is what his Government have done.

If the hon. Gentleman wants to go down that road, why should I not give him a few facts to reflect on? As usual, he drew attention to the levels of social home building in the early 1990s. However, he omitted to point out that in the year that he always selects—1992–93—there were higher levels of affordable housing than now because of mass unemployment and negative equity. At that time, there were historically low levels of new build in market housing. The wonderful year of 1997–98, when we came to power, is the most sensible point of comparison between what his Government and our Government have achieved.

Remember, the Tories halved investment in social housing between 1992 and 1997—that was the base line that we inherited. In 2003–04, we built more new market homes than in 1997, and we shall continue to do that from next year onwards. Yes, we shall not begin to exceed the levels of social homes that we inherited in 1997 until 2007–08, but, as my hon. Friend the Member for St. Albans rightly said, we have been building more homes in the south-east, where they are most urgently needed, and where, since 2003–04, we have been exceeding the level that we inherited of new social homes built.

Of course, building in the south is an expensive business. Land costs, labour costs and construction costs are at their highest there. That is why, although we will double our investment in social housing over the period to 2008, we will build 50 per cent. more social homes for renting than at present. That record is highly defensible, and I find it difficult to see how that fanciful notion—a Conservative Government—would build more affordable homes than this Government.

The hon. Member for South Holland and The Deepings has tempted me to do this, and I shall go for it. The James review pledges to cut £1 billion from the sustainable communities fund. That is in black and white on a document that I have drawn down from what I believe is known as the Conservative party website. It says, "Less talk, more action", and it asks people to make a donation. It states in black and white that the "sustainable communities plan" would be scrapped, "saving another £1 billion." The document is absolutely irresistible, and I shall not resist it. It goes on to state:

"Conservatives will reverse the culture of Whitehall targets and central government control. Local decisions should be taken by local councillors and held to account by local people."

That from the party that passed more than 50 Acts of Parliament to destroy the power of local government. However, enough of that; I shall come back to my main theme.

I was saying that our target for decent homes is not merely about bricks and mortar but about individuals and their right to live in a secure and stable environment. Therefore, it is a vital part of the Government's commitment to creating safe, sustainable communities. Last month, as all present will be aware, the Deputy Prime Minister launched "Homes for All", our five-year plan that sets out the way forward for housing. The decent homes target is an integral part of it, and I am confident that we are all agreed that the decent homes strategy is of tremendous importance to our communities and neighbourhoods.

I would like to address some specific, and often contentious, issues. The fourth option was highlighted by my hon. Friends the Members for Denton and Reddish, and for Sheffield, Attercliffe (Mr. Betts) and by the hon. Member for Kingston and Surbiton. I want to take this opportunity to assert again the Government's position on the so-called fourth option. The Select Committee was deeply concerned at what was referred to as a "Catch-22" situation. It recommended that there should be a "level playing field", with local authorities that manage their own stock having access to direct investment.

It is the Government's contention that our decent homes programme is the best way forward. It provides three innovative and flexible ways to support local authorities that need additional funding to ensure that their stock meets the decent homes standard. Of course, some local authorities will be able to meet their target on decent homes using mainstream housing funds, their own resources and, perhaps, some prudential borrowing. However, our sustainable communities plan, which was published in February 2003, made it clear that where additional funding was needed, local authorities could not expect increased investment unless they engaged in the options appraisal process.

The fact is that it is not Government policy simply to throw money at a problem. That would be irresponsible and in the long term it would not work. We are under an obligation to ensure that where we provide extra resources, we also drive up performance, allow tenants to have their say about how those extra resources are spent and secure value for money. The truth is that authorities up and down the country are now telling us that the separation of management and strategic function is delivering better services to tenants and that they are now able to take a more strategic view of their wider housing responsibilities.

I am afraid that if the Minister tries to caricature the Select Committee's report and people who support the fourth option as throwing money at the problem, he is not engaging in a mature debate. A housing association is able to borrow on the capital markets against future rental income. All the people who support the fourth option are saying, "Give that freedom to local authorities". It is not throwing money, but allowing authorities to borrow prudently, according to guidelines set down by the Chartered Institute of Public Finance and Accountancy and others, to ensure that they have extra cash available to meet local housing needs. I do not think that that can be caricatured in the way that he has just done.

I will say two things to the hon. Gentleman. I think that I am right in saying that he is a former spokesman on Treasury matters. As such, he will know that these matters are strictly controlled by Treasury rules. We might want to debate those in a separate context, but the blunt truth is that they are the rules under which we operate. The prudential borrowing regime has given local authorities greater flexibility, out of which a number of them have now decided that they can go forward in meeting the decent homes target, while retaining the stock.

I also need to say to the hon. Gentleman—I put this to him very seriously—that it would be quite wrong for the Government simply to accede to a request for additional funding for decent homes from a local authority, without considering the quality of that authority and its capacity to deliver on decent homes. He knows very well that there are many local authorities whose performance in housing delivery, maintenance and services to tenants is not very impressive. Is he really saying that in such circumstances, which might involve a no-star or a one-star authority, the money should simply be made available, without the Government imposing any quality requirements?

Will my right hon. Friend reflect on the remark made by my hon. Friend the Member for Sheffield, Attercliffe that there is lots of evidence that some local authority housing departments are extremely well managed, and that in many cases staff have moved over to stock transfer companies or arm's length management organisations? They are exactly the same people. They did not suddenly become good managers because they moved over; what happened was that they got some resources, which enabled them to manage. Where a local authority is prepared to put in place first-class management, please can it borrow some money so it can show that democratically controlled local authorities can do as well as, if not better than, quangos?

I do not think that we will be able to agree on this subject. Let me say two things. First, as my hon. Friend well knows, we have made a requirement, particularly with regard to ALMOs, that local authorities should achieve at least two stars before funding is allocated to them. That has undoubtedly had the effect of driving up the quality of local housing delivery. Secondly, when I last looked at the statistics for the nine local housing authorities with three stars, seven had already moved over to ALMO or stock transfer. The truth is that the best local authorities are actually getting on with the job of delivering decent homes under the options that we have presented to them. Our policies are succeeding.

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May I just move on a little?

Since 1997, tenants from more than 100 authorities have chosen, and benefited from, stock transfer, with further positive ballots awaiting transfer. Fifty-eight ALMOs are up and running or are being set up, with 33 already delivering decent homes. Eight local authorities are pioneering the housing revenue account PFI schemes as pathfinders. We are continuing to see a good response. Earlier this year, we received 66 applications from 38 local authorities for places on the transfer, PFI and ALMO programmes. That does not demonstrate that our options are not working.

I would like the Minister to address a point I made. He is clearly ruling out the fourth way—my hon. Friend the Member for Denton and Reddish made a good point about that—so let us focus on the choice now facing tenants. If the majority of tenants choose ALMOs and we get more and more requests for them, given that ALMO expenditure is covered by the Government's borrowing requirement, does the Minister guarantee that all those choices to go down the ALMO route will be honoured and the Government will fund them, so that all those tenants' homes will be brought up to a decent standard?

We are confident that we have sufficient allocated funding in the current spending round to deliver on the expected levels of ALMO applications in that period.

What would the Minister say to council tenants who live in an area of my constituency where a survey was undertaken? Their authority is small but well managed, and its housing stock is in good condition. They voted overwhelmingly in favour of staying with the council, even though the council suggested to them that moving to an ALMO might be a good decision. Therefore, we are not sweating that asset very well. How do we get over that problem? There are many small local authorities with relatively few homes. My authority does not have 120,000 homes, as some of the larger ones do; it used to have 13,000, but it now has only 5,500, following the introduction of the right to buy.

I have to say to my hon. Friend that we respect the decision of those tenants. They have made the choice to remain with the local authority, presumably in full knowledge of the implications of that for their housing. That is simply a reality. This is not a new announcement; the Government have consistently adopted this position, as have I. What we always say is that it is open to local authorities to revisit those issues. An obvious example of that is the case of Birmingham, where tenants voted against a transfer proposal a couple of years ago. I have been to Birmingham, and have seen the good work that is now taking place; the focus is on 11 housing districts corresponding to constituencies across Birmingham and tenants are being seriously engaged—I suspect that that did not happen in the past. It is always open to local authorities to revisit those issues.

Let us be clear that notwithstanding the preoccupation that hon. Members have with the issue of the fourth way—that is a diminishing issue, as we get closer to the completion of the stock options appraisal process, with the deadline of July 2005—we need to remember that our policies are bringing in hugely increased investment. We are vastly reducing the numbers of households who live in non-decent homes and our policy options are supported by local authorities and by tenants.

I suspect that I may be the only one on the Minister's side who is sympathetic and supportive to the Government regarding—

Hello.

There are others. I am sympathetic to the Government's position on the various options under option appraisal. I want to put one concern to him—he addressed it earlier, but I want to press him further. We may assume that the transfer programme has encountered some difficulty. The Minister has already indicated that the PFI programme is still at the pathfinder stage and said that the ALMO programme was able to address that in terms of funding. Can he give us an assurance that he will be able to reach the decent homes standard by 2010?

Yes, I can give that assurance. We are confident that we are on target to meet the decent homes standard across the piece by 2010. I believe that in the course of my remarks I have demonstrated that there is no fourth option, that we do not need a fourth option and that we will not provide one. I fear that, as colleagues, we will have to agree to disagree on that subject for the future.

I shall now take up some of the other issues raised by hon. Members. My hon. Friends the Members for Denton and Reddish and for Sheffield, Attercliffe mentioned decent homes-plus. The Select Committee recommended that we should consider formalising a decent homes-plus standard. I can understand why people would want to do that, but I believe that it would be confusing to consider introducing a new standard at this stage, when we are only part way towards delivering on the current one.

As I have said already, the problem that we faced in 1997 was massive and our target—to undo the damage caused by those years of neglect and under-investment—is challenging enough. To move the goalposts at this stage, when we are on track to meet our target in 2010, would be unfair and unreasonable.

As the Committee recognised, and those in the House will know, the decent homes standard is not, and was never intended to be, an aspirational standard. It is the baseline below which action must be taken, not a standard to which work should be carried out. Naturally, many tenants aspire to higher standards, and we know that, where work is carried out on homes, a higher standard is often attained.

I cite a couple of cities close to my heart—Bradford and Leicester—where I have visited projects in progress. Folk in those cities will proudly say that they are providing decent homes to the Bradford standard and—in the case of my birthplace—to the Leicester standard.

However, tackling all the homes that remain in a state of non-decency, despite the tremendous progress we have made since 1997, is a major challenge within the limits of what is affordable. It would therefore be unjust to take on the refurbishment of more properties, which would be a consequence of raising the baseline, while more than 1 million social tenants still have homes that do not meet the minimum standards of decency. Nevertheless, it is perfectly clear that we shall have to think beyond 2010. After all, stock currently identified as decent is likely to deteriorate, and aspirations are likely to rise. However, we have on our hands a hefty undertaking to meet the existing decent home standard; that task is sufficient for us to focus on now.

Colleagues have raised the issue of the environment, particularly in relation to ALMOs, and my hon. Friend Ms King referred to the issue of communal services. Certainly, the issue was brought home to me last week when I was in Sheffield, looking at the progress made in delivering decent homes. Colleagues who spoke on the subject conceded that allowance is now being made for the environment. The argument is that 5 per cent. of the budget is insufficient, but let me give the House an assurance that the Government will continue to think hard about those issues, although my hon. Friends have been correct to suggest that greater investment in the environmental circumstances of social housing is available under transfer and PFI.

Let me also say a word about decent homes in the private sector—another issue raised by my hon. Friend the Member for Sheffield, Attercliffe. We take non-decency in the private sector very seriously. It is only right to focus on vulnerable households. The target of providing a decent home to 70 per cent. of them by 2010 reflects the complexities of the target and the level of resources available to deal with it. We are trying to maximise the resources available by encouraging local authorities to develop new means of providing financial assistance, such as loans and equity release.

The target that we have set for private sector decent homes is challenging but achievable, given the more complex picture of responsibilities in the private sector and the scale of the problem. We shall, of course, keep the target under review in the light of progress made towards meeting it. However, I must tell the House that we are well on course to achieving our target to make decent 70 per cent. of the homes of vulnerable households in the private sector by 2010, and to reach 75 per cent. by 2020. The 2001 baseline was 57 per cent. and the 2006 milestone was 65 per cent. The 2003 English house condition survey shows that the target percentage has increased to 63 per cent.

Progress is being made through local partnerships to develop new ways of tackling the housing problems that they face. We have allocated £60 million to kick-start funding to support the development of new loans schemes, such as those run by HouseProud in London, Art Homes in the west midlands, and the Wessex Reinvestment Trust in the south-west.

Let me now turn to the issue of overcrowding, which was raised by my hon. Friend the Member for Bethnal Green and Bow. I pay tribute to her diligence in these matters, not least because she went to the trouble of submitting evidence to the Select Committee on the decent homes inquiry. That is characteristic of her long-term, extraordinarily high and passionate commitment to housing issues. On overcrowding, we expect to consult on our thinking on the proposals shortly and on the amendments that I was pleased that we were able to make to the Housing Bill, very much at her instigation.

I draw my hon. Friend's attention and that of the Chamber to new draft PPG3 on housing, which requires local authorities to shift the focus of the new provision of housing from simple numbers of dwellings to the required mix of households. That new emphasis will allow local authorities to work with house builders and developers to deliver larger houses. My hon. Friend has spoken eloquently on many occasions about the need for them.

Yesterday I visited a family of eight people living in two bedrooms. They take much heart from hearing that the Government really are putting into action the promises that measures will be taken to reduce overcrowding, which has crippled so many lives.

I am grateful to my hon. Friend for those words as well. As a London Member, I recognise the deep-seated problems that she faces in her constituency and I fully acknowledge that the pressures are much greater in Tower Hamlets than in any other part of London.

As the hon. Member for Bethnal Green and Bow said, overcrowding is exacerbated by the lack of available housing. We discussed the failure to build social housing. In fact, contrary to what the Minister said, this Government's record is the worst since 1947. There is no year since 1997 in which they built more, or even as many, social houses than were built in any of the previous years.

The hon. Lady also made a point about low-cost home ownership. Will the Minister reverse the Government's policy of running down schemes that facilitate low-cost home ownership? A graph for the take-up of low-cost home ownership shows that it has fallen every year under this Government's stewardship.

Let me make several points in response to the hon. Gentleman's intervention and on the issue of low-cost home ownership, which was also raised by my hon. Friend the Member for Bethnal Green and Bow. I remind the House that by 2008 we will have delivered 75,000 new homes for social renting. That is an increase of 50 per cent. on current figures, and it reflects a doubling of investment in housing in comparison with 1997. The truth is that, since 2001–02, we have been building homes for low-cost home ownership and intermediate renting at a higher level than we inherited. That is the simple reality of the situation.

In response to my hon. Friend, I can say that via the key worker living scheme, social homebuy, the first-time buyer scheme and other low-cost home ownership initiatives, we expect to have brought 80,000 people into low-cost home ownership by 2010. However, it is always a matter of resources. We do our best.

There is no doubt that housing has risen to the top of the political agenda. We dispose of a massive £38 billion budget for sustainable communities, which I believe will be maintained in the future. I hope that it will be possible in the long term to meet the aspirations for home ownership of those who are on lower incomes, and to meet the aspirations for social renting of as many as possible of our fellow citizens at various income levels. However, we must recognise that all those aspects of housing delivery demand resources. The House will be familiar with the Government's commitment in "Homes for All" to halve current levels of temporary accommodation by 2010.

The hon. Member for Kingston and Surbiton spoke about a menu of choices, which seems to be the main new element of the Liberal Democrats' policy on decent homes. It is an interesting proposition. Indeed, I would argue that it is largely implemented already.

We must be clear that any decisions made by local communities should be applied across the board. This is perhaps the point that my hon. Friend the Member for Denton and Reddish was getting at when he said that we had to think about future occupants. As a constituency MP, I am sick and tired of constituents coming to me and saying, "Every other flat in the block has central heating. Why doesn't mine?" Under some crazy decision-making process years ago people were allowed to choose whether to have central heating. We all know that it is now phenomenally expensive to introduce central heating into single blocks. Whichever direction we take, the solutions will have to apply across the board.

I make no apology for the emphasis that the Government have placed on the provision of modernised kitchens, bathrooms and central heating where necessary in terms of the decent homes programme. People can be sniffy about the standard that decent homes offers, but if one visits the homes of tenants that have been modernised under the programme one finds a phenomenal gratitude for and delight at the improvements to their homes. I have observed and expressed more joy about more modernised bathrooms and kitchens than I have had hot dinners over the last two years since I became the Minister responsible for housing.

To revert to the point made by the hon. Member for Kingston and Surbiton, I would argue that such choice is intrinsic to the stock option appraisal process. It is out of the process of discussion about the aspiration of tenants that decisions about retention, ALMOs, stock transfer and PFI are reached. If it is suggested that the options appraisal process, as it operates at present, does not allow tenants sufficient say in how their homes should be maintained and managed, I would point out that tenants are absolutely at the heart of the options appraisal process. The need to engage with them and to seek their views on the future management of their homes is vital to our policies.

All local authorities are obliged to draw up communications strategies that set out in practical terms exactly how they intend to involve tenants and other stakeholders. However, we go further than that: we also ensure that tenants are properly equipped to make informed decisions about the options open to them. We recognise that it is fundamental to tenants' rights that they can access impartial information, without bias towards one option or another. This is why we encourage local authorities to use an independent tenant adviser to ensure that tenants have a clear picture of the process.

Tenant engagement does not stop once a decision has been made. Tenants make up around one third of the governing bodies of transfer housing associations and ALMOs, broadening tenant participation to estate and neighbourhood level. The involvement of tenants at board level inevitably leads to a closer engagement in the management of their homes, but we expect ALMOs to continue increasing opportunities for tenants to get involved as part of the overall service they provide.

I can tell my hon. Friend the Member for Sheffield, Attercliffe that tenant satisfaction is increasing. For example, a tenant satisfaction survey in 2000 found that 85 per cent. of transfer tenants were either very or fairly satisfied with their landlord. Fewer than one in 10 tenants surveyed felt that the service previously provided by their local authority was superior. As I draw my remarks to a conclusion, let me say that the Select Committee report provided a degree of challenge to our policies for delivering decent homes.

The Minister has not talked about the infrastructure implications of the new build. The East of England regional assembly has suddenly announced that it does not support the extra house building because the infrastructure cost implications of the new build would not be met. Every secondary and primary school in my constituency is full. Our population is increasing. We want to build more houses but the infrastructure is not there. We need to balance the two.

My hon. Friend is right. I have not mentioned infrastructure because it is not the subject of our debate, but he makes a fair point about the need for infrastructure in the growth areas. We recognise that new housing growth must go hand in hand with the provision of new hard and soft infrastructure. The hard infrastructure will be by way of transport provision, and I draw my hon. Friend's attention to the fact that, as a result of the multi-modal studies, my right hon. Friend the Secretary of State for Transport last year announced a colossal £3.1 billion of new investment in transport infrastructure in the growth areas in the south of England.

In addition, my hon. Friend will be aware that my Department, jointly with the Department for Transport, administers a committee infrastructure fund worth £200 million. That is also devoted to providing key transport infrastructure in the growth areas. As we experience housing growth, health and education provision must not follow, but must be introduced simultaneously. The fact is that last year the Department of Health doubled investment in primary care trusts in the housing growth areas to £40 million, precisely to meet the growth anticipated. The Department for Education and Skills is working closely with my Department to develop a programme of education and skills provision that will respond to housing growth in London and the wider south-east. That was a bit of a digression, but I hope that it was helpful to my hon. Friend.

I was saying that the Select Committee's report provided a degree of challenge to our policy for delivering decent homes. We remain confident that the measures that we set in place provide local authorities with the innovative and flexible support that they need to bring all their homes up to a decent standard. It is important to consider the real human impact of this strategy. What ought to take priority in our minds are the enormous benefits that our policies are having on individuals, families and communities. As I said, I have had the opportunity to see the results of these policies on the ground, and the results for the tenants, in the homes that they want, need and deserve.

Question put and agreed to.

Adjourned accordingly at twelve minutes past Five o'clock.