[David Taylor in the Chair] — Rented Housing

– in Westminster Hall at 12:00 am on 6th November 2008.

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[Relevant documents: Eighth Report from the Communities and Local Government Committee, Session 2007-08, HC 457, and the Government response, Cm 7326.]

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

Photo of Phyllis Starkey Phyllis Starkey Labour, Milton Keynes South West 2:30 pm, 6th November 2008

In opening this debate, I should like to put the report in the context, first, of the work of the Select Committee on Communities and Local Government and, secondly, of the wider situation. While the report was being written, and certainly subsequently, a great many other reports have been published and there have been other developments that relate to the topic.

To put the report in the context of the Committee's work, it follows our earlier report on the affordability and supply of housing which focused largely on the housing numbers that are needed for affordable ownership, although it also recognised the additional numbers that are needed for affordable renting. Of course, we all know that home ownership is incredibly important and that the majority of people, if they do not already own a house, aspire to home ownership. That is not everyone, however, so it is extremely important to look at the social and private rental sectors which, between them, cover 30 per cent. of the housing stock and meet crucial housing needs. That is why they were the subject of the report.

The report was published in May 2008. We began the inquiry in autumn 2006, and held a total of seven oral evidence sessions and went on three visits. Our first visit, to an inner-London housing estate, was organised by my hon. Friend Ms Buck. We are grateful to her for organising meetings with a variety of tenants so that we could understand the problems that private sector tenants face in that part of London, although I am sure that the experience is relevant to other inner-London areas. Secondly, we went to the north-west, to Manchester, and looked, among other things, at city-centre housing developments and one of the pathfinder areas. Thirdly, we went on a visit to the Netherlands. It was extremely interesting to see how its social housing organisations operate, and we drew particular attention to a couple of lessons from the Netherlands experience in our report.

I should briefly mention other relevant reports and documents: Professor Hills's review on the future of social housing; the Cave review of the regulation of social housing; the Housing and Regeneration Act 2008; the Rugg review of the private rented sector, which is more recent; and the housing Green Paper. Of course, we have had the turbulence on the financial markets and the credit crunch since publication, so those developments are not reflected in our report. Clearly, the credit crunch has had a very serious effect on the housing market overall, but the Committee would insist that, despite the difficulties that people currently experience in buying houses and the effect on the rental sector, the underlying housing need, for both ownership and rental housing, remains unchanged. The Committee's recommendation that the Government fulfil their targets on new house building and, especially, that they deliver 50,000 more social rented properties, therefore still applies, although we recognise that the targets are now much more difficult to achieve.

I should like briefly to outline the key findings of the report and a couple of general findings, then go through tenants' experiences. I shall then make specific comments about social rented housing and private rented housing, as well as housing providers, and make some general conclusions. The two key general findings were, first, to remind the Government, if they need reminding, that rented housing is an important part of housing provision. The Committee thought that Government policy has up to now rather favoured the interests of owner-occupiers, and that it needs to give greater attention to the needs of tenants in both the social and private rented sectors. Secondly, the Committee wanted to stress the point that if we are committed to everyone having the opportunity of a decent home, at a price they can afford, within a sustainable community, that must apply both to people who rent and to those who buy.

Some of the experiences of tenants are shared across the social and private rented sector, but we recognise that there is huge variety of experience in both sectors, and that there are often big geographical variations. There is a general feeling that there is a view out there among the public, and perhaps in government, that renting is second best and, in a sense, a default option, and that ownership is what everybody aspires to. That is especially applicable to the private rented sector, parts of which have an image of being poor quality and of offering not many rights, and definitely not something people would want to be in if they could manage to be in their own home.

There are reasons why rental housing is an extremely sensible option for people, either throughout their lives or during certain phases. Most obviously, younger people at the beginning of their professional lives often want to move quite frequently from one area to another. It is not sensible for such people to get into home ownership; the rental sector, especially the private rented sector, gives those rather more mobile individuals the freedom to move around without the high transaction costs that people incur if they get into ownership and selling. The rental sector is also an option for elderly people who do not want the responsibility of maintaining a property. It also provides the option for many people on a low income of a decent home with security, which they would not be able to get in any other way.

We asked for rental to be recognised as a valid and valuable option, and highlighted various ways in which the experience of tenants could be improved. Certainly, it is important for social rented tenants that their housing is within mixed communities. The Hills report, I believe, highlighted the severe problems that arise when social rented housing is concentrated in areas with no other form of housing tenure, especially given that the shortage of social rented housing tends to mean that tenancies are offered only to families or individuals in extreme need, many of whom are extremely vulnerable. There tends to be a great concentration of problems, which reinforce one another and reinforce disadvantage, if we do not have mixed communities.

In the private rented sector, tenants feel strongly that the regulatory regime needs to be strengthened, particularly at the lower end. Several organisations pointed out that demand exceeds supply at that end of the sector, so the market does not work: individuals have to take whatever is on offer because there is not enough affordable private rented accommodation. That does not apply at the top end of the private rented market, which can operate well.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

I commend the hon. Lady on the Committee's report and good works. While she is encouraging thoughts of Leonard Rossiter as Rigsby in "Rising Damp", will she comment on the number of empty properties across the country? I believe that the latest figures for England put the number at something like 670,000, of which 80 per cent. is in the private sector. Does she agree that the Government's target to reduce the number of long-term empty properties by 25,000 by 2010 is inadequate, and that it will not go nearly far enough to address the problems that she is rightly highlighting?

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

The hon. Gentleman tempts me into studies that the Committee has not done. The Housing (Empty Dwelling Management Orders) (Prescribed Exceptions and Requirements) (England) Order 2006 allows local authorities to refurbish and make available empty properties that are not being used. The Committee has considered the need to examine that issue in future. When we do so, we will report to the House. At present, we do not have any detailed evidence on the matter.

I caution the hon. Gentleman against thinking that simply bringing empty houses into beneficial use would solve the problem, as the number of such houses is not sufficiently large. He gave us a snapshot figure that may include houses that have been empty for a relatively short time. Obviously, there will always be some empty houses that are being bought and sold or whatever. Therefore, it is an issue, but, numerically, it is not that important.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

My hon. Friend must be aware of the shortage of rented accommodation in the private sector, and of the way in which the exorbitant rents are often paid for through housing benefits. That means that we end up with a huge public sector subsidy to a private sector market, which is often providing the low-standard, if not disgraceful, accommodation for people in desperate need. Does she not think that we need to consider the rent levels that are being charged, particularly to the most vulnerable people? Such people end up in a benefits trap simply because they are in private rented accommodation.

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

I am coming on to that point later on, so I will be grateful if my hon. Friend waits until then for my answer.

In fact, my next point is about housing benefit, which was highlighted by my hon. Friend, and it backs up what he said. The tenants in Regent's Park and Kensington, North experience a problem that is particularly prevalent in London, and it may also apply in some other inner-city areas. There is a huge shortage of social rented accommodation. Councils are discharging their responsibility to house homeless families by using the private rented sector in which the rents are exorbitant, often for former council properties. The effect for the tenant is to trap them in worklessness, or at least in not working more than the 16 hours a week they are permitted to work without losing benefit. One tenant gave us a very graphic description of the insecurity that such a practice raised, which we have included in the report. She said that she had to be careful about the amount of work that she was doing. Were she to trigger the removal of housing benefit, she would be left paying a rent that was clearly out of her reach and that would require her to become a minor stockbroker to be able to pay. It is unsatisfactory that housing benefit in such a situation encourages, if not obliges, people not to work. That obviously needs to be sorted out. Moreover, councils are paying large amounts of money to private landlords.

Photo of David Drew David Drew Labour, Stroud

My hon. Friend will know that there have been changes to the way in which rent allowances work. We are now looking at a much wider geographical area, and I am experiencing the other side of the problem. People who used to receive a much higher level of housing benefit have been told that that benefit has been capped, and there is a difference between what they can pay and what the landlord is charging, so they face homelessness. There is therefore another side to the matter. We need to consider how to manage the changes, and it shows how complex housing benefit has become.

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

Absolutely. I am sure that the Minister will have noted that point and may respond to it in her speech.

The tenants to whom we spoke raised another point related to the social rented sector. There is an overall shortage of social rented properties, particularly of family-sized houses, which is partly a reflection of the right to buy. Obviously, the attractive properties are more likely to have been bought. In some areas, it is family housing that has been bought under the right-to-buy scheme, and it may even have moved on to subsequent owners. Councils are then left with a lot of smaller properties, including flats. As a result, many families with children are trapped in council properties that are too small. Councils are unable to offer them alternatives, so their only option is to leave social rented housing and move into the private sector, which they are not keen on doing because of the lack of security of tenure.

Finally, the private and social rented sectors need to increase the involvement of tenants in the management of their homes. The Tenant Services Authority was formed after the inquiry finished, and the Committee recently conducted a pre-appointment hearing with the chief executive and the chairman. The TSA will start to address the issues soon.

Photo of Andrew George Andrew George Liberal Democrat, St Ives

The hon. Lady will know that I joined the Committee right at the end of the production of its report. Is there sufficient evidence to expand the point alluded to by Mr. Drew, namely the disjunction between the local reference rent, as set by the rent officer—and the implications that such a rent has on the level of housing benefit that is payable—and the actual rents that are charged in the private sector? There is a big mismatch there. Does the hon. Lady accept that the significance of the poverty trap that she was talking about earlier is partly to do with the lack of gradation in the way in which housing benefit is made available?

Photo of David Taylor David Taylor Labour, North West Leicestershire

Order. Interventions should be short. Members have an opportunity to make a speech later.

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

I do not think that we heard much evidence on that specific point, although the Committee made a recommendation in relation to the single-room restriction for young people. The Minister has been listening to the interventions, and may seek to respond to them.

Let me summarise the main points that came out of our work on the social rented sector. The Committee strongly reiterates its previous recommendation that an extra 50,000 social rented homes are necessary every year significantly to reduce the backlog in demand. Building rates are still below that level, and the recent credit crunch has made the situation even worse. The consequences of the shortage of supply include what has been described as residualisation, to which I have alluded. If an individual is to be offered a social rented tenancy, they have to be in extreme need, which can lead to a concentration of individuals and families with extreme need in social rented housing, and has consequences for others who live in that area, as it reinforces disadvantage.

Mobility within the stock is extremely low. Tenants who are in a property which may be okay but not appropriate for their needs, either because their family has expanded or contracted or because their employment has altered, find it difficult to move to another property. The Committee wants the Government to explore every possible option to try to ensure that they meet the need for 50,000 extra social rented homes a year. Such an increase could come through planning gain, arm's length management organisations, and councils themselves.

Section 106 agreements are incredibly helpful in levering in private money to subsidise social rented and shared ownership housing, in addition to direct housing grant. We were concerned that some section 106 agreements have resulted in too high a proportion of new social housing being built as flats, when accommodation for families is usually what is required. We also believe that the Government should take action to ensure that new affordable housing is directed at the areas of greatest need, and not simply in the areas in which the developers choose to build market housing, although that may be the area of greatest need.

We believe that reforms are needed to enable councils easily to reinvest right-to-buy receipts in the construction and acquisition of new homes, and that the Government need to review the effect of right-to-buy sales on individual neighbourhoods. We drew that lesson from the experience in the Netherlands, which has a similar scheme to right to buy for social housing sales, but where localities agree to a strategy. If there is a shortage of social rented family homes, for instance, in a particular area, restrictions are put on the right to buy for that type of property. The scheme does not allow any particular type of property in great demand for social renting to be sold on the private market and lost to social housing.

We commend that scheme to the Government as a system that could be used where appropriate. In fact, we also suggested that the Government consider another aspect of the Dutch system, namely giving financial guarantees to social housing providers to mitigate their risks in non-core and income-earning activities. We are pleased that the Government have accepted that recommendation and agreed to look at the Dutch experience to see whether it is applicable here.

We also suggested that there is a need for measures to ensure the more efficient use of existing social rented stock and greater encouragement and support for social tenants who wish to downsize. Elderly people are often quite happy to move out of their social rented property into more suitable sheltered housing, freeing up a family home, but the right social rented properties might not be available for them to move into, or they may need help with moving costs. The latter would be a good investment if it freed up a family home.

We believe that the Government should make more progress with national mobility schemes and choice-based letting, and that they need to build on the decent homes programme, which has been extremely successful in upgrading social rented properties, to ensure that ongoing maintenance of social rented stock occurs at a standard that maximises supply and minimises the cases in which social properties are left vacant because they are in an appalling condition and the council does not have enough money to bring them up to standard.

In the medium to long term, the Government and the wider social rented sector must come to a conclusion about what they believe the role of the sector to be. Is it, as at the moment, simply to provide accommodation for those in the greatest need, or is it to be bigger than that and provide a much wider range of people with security of tenure and the chance to improve their livelihood? Unless the Government answer such philosophical points, we cannot come to a conclusion about how many more social rented houses we need and how important they are in terms of funding.

Photo of David Drew David Drew Labour, Stroud

I happen to be in an area that considered large-scale voluntary transfer and rightly rejected it. As a result, we now face the punishment—I put it no more weakly than that—of having some £6.8 million a year taken from our rents and put into a central pot. That is a source of aggravation for my constituents. There may well be some simplification in how the sums are managed, but it looks like a punishment to local authorities whose housing remained in local authority ownership, so Government must quickly resolve the problem.

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

Indeed. I shall come on to the housing revenue account. The social rented sector covers housing associations, arm's length management organisations and council properties, and there are advantages to all three.

Turning to the private rented sector, there were a number of points that we wanted to make. I reiterate that the private rented sector is extremely diverse. Large parts of it benefit from good-quality and excellent landlords and provide for real need. However, other parts are of extremely poor quality. For example, the private rented sector has the least fuel-efficient housing of any sector in this country. At the low end, some private rented properties are of very poor quality, have appalling management who offer poor service generally in respect of repairs and maintenance, give tenants little security and are, moreover, extremely expensive. We focus most of our attention on that unsatisfactory bottom end rather than the whole sector.

We think that there is a great need for more variety in the length of tenancies available. Many private tenants are concerned by the fact that tenancies seem to have very little security and that people are forced to move frequently. That is particularly important where people have been directed by councils to the private rented sector because insufficient council accommodation is available.

We believe that the Government should have responded to the Law Commission's findings and its suggestion of a common tenancy agreement that would apply across the social and private rented sectors and give more security. The Government have still not responded to the findings, and we wish that they would. I note that the private rented sector report by Rugg and Rhodes suggests that there should be more concentration on the reasons why tenancies fail, rather than a focus just on the contract.

The Committee recommended at the time that greater research should be done on the effect of buy-to-let investment and how the resources of public sector bodies could be used to direct private sector investment into appropriate areas to create more mixed communities. We noted that poor management often occurred with what the sector called "pop and mom" landlords, or private individuals who bought one, two or three properties as a way—so they thought—of accumulating capital. Such properties were often extremely poorly managed. Personally, I think that the credit crunch has reduced the urgency of some of the Committee's concerns about how buy to let operates, but some still remain.

We are concerned about the regulation in general of the private rented sector. Again, the Rugg and Rhodes report suggests light-touch regulation across that sector, and the Committee agrees. The licensing regime for homes in multiple occupation definitely needs to be strengthened, and local authorities should be encouraged to prioritise problem landlords in the HMO—houses in multiple occupation—sector. We think that that would provide a good foundation for introducing a system of accreditation for landlords and letting agents, devised by trade bodies and enforced by the involvement of local authorities, with ultimate oversight by the TSA. That would be in line with what the Rugg report suggests. Interestingly, it is also favoured by the Association of Residential Letting Agents, the body representing landlords, because good landlords have an interest in the proper policing of bad landlords.

We made a number of points relating to housing providers. We believe that regulation in the social rented sector should minimise administrative burdens and free up resources for the vital task of maximising supply. In the private sector, we want the Government to consider reforms to the regulatory and taxation systems to incentivise the supply of new rented housing and better management of existing housing. We also stress that the Government need to reform the housing revenue account system as soon as possible to remove perverse incentives and enable councils to use the system to fund the construction and acquisition of more social housing.

We want housing associations to be able to use their surpluses to increase the supply of social housing. They should also be enabled and encouraged to diversify into other private and social enterprises, backed up by Government support where appropriate. We commend the efforts that a number of social housing providers are already making to avoid the negative consequences of polarising worklessness, and also the work that they are doing with their own tenants to encourage and support those tenants who are not in work to get into work. We highlighted the need for allocation schemes, whether they are run by housing associations or by councils, to be designed to enable the movement of tenants who are genuinely making an attempt to become more engaged in employment, thereby allowing them to move nearer to their work and minimise transport costs.

Regarding housing benefit, we highlighted a number of reforms to the system that we thought were essential. However, we also cautioned the Government in making those reforms to ensure the continued viability of the "temporary to settled" schemes that a number of councils are using, whereby housing benefit money is effectively used to enable the properties that are being used in the private sector to finish up in the social housing stock.

I have obviously skated over a huge amount of work that our report covers. Rented housing is a huge and complex issue, and the report made more than 60 recommendations or conclusions. The Government response to our report has been broadly positive, but there is a certain lack of detail in many areas. Perhaps perfectly reasonably, the Government have referred us to documents or reports that are not yet published, including the housing reform Green Paper, which is due at the end of the year, and the review of housing finance, which is due in spring 2009. The Committee will look at such documents as they appear, and will check whether or not they respond to the recommendations in the report that have not yet been responded to.

In conclusion, I believe that this report has come at a crucial time for housing policy. The creation of the new regulator of social housing, the Tenant Services Authority, is very welcome and the Committee hopes that it will eventually become responsible for tenants in all social housing. In addition, the Homes and Communities Agency, which was formed by the amalgamation of the Housing Corporation and English Partnerships, is particularly necessary, given the extra strain that the credit crunch is placing on the public sector in its attempts to take forward regeneration and create new housing. We believe that all those developments are significant milestones in the progress of the Government's housing policy and many of our recommendations will fall to the HCA or the TSA to implement. I therefore commend the report to the House. I am interested to hear the points that other Members wish to make, and I hope that we all agree that there is a need to increase the quantity, and improve the quality, of the supply of both social rented and private rented housing.

Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield 3:03 pm, 6th November 2008

I offer heartfelt congratulations to the members of the Select Committee on producing this absolutely outstanding report. One reason that I welcome it so much is that it says exactly what I have said for the last seven years, since I entered Parliament. However, the members of the Select Committee are not the usual suspects. Normally in the last few years, when hon. Members such as myself, Mr. Mitchell and a number of other people have stood up in Parliament to say these things, we were all too often dismissed by the Government and Conservative Front-Bench spokesmen as the same old suspects saying the same old things, locked in the same old memory of the past and not living in the real world.

However, this report says with great independence and in great detail, which is based on great research and great evidence, exactly those things that I have been banging the drum about for the last seven years, although so far it has been to absolutely no avail because the Government have not listened or given an inch of ground. So I really welcome what the Select Committee has produced, after taking a great deal of evidence from a great number of expert witnesses and others who are involved in the field. I know the process that is involved from being a member of the former Education and Skills Committee and a current member of the Children, Schools and Families Committee.

We have just heard an exposition of what the report says and I would just like to highlight some of the points that were made in summary. First, the report says that people in rented housing are 30 per cent. of the people in the UK. Seventy per cent. of people in the UK are owner-occupiers, which is the highest rate in nearly all of Europe, although I believe that figure has fallen slightly in the last year or two, to about 69 per cent., and, given the current economic conditions, it will probably fall some more. Nevertheless, the figure for owner-occupiers is among the highest in Europe.

As the report says and as we have just heard, there really has been an emphasis from the Government that only owner-occupation matters, and that people who rent are somehow inferior and they should all rush out to buy their houses. Owner-occupation is certainly a worthwhile aspiration. Obviously, most Members of Parliament are owner-occupiers. The aspiration is to own property, invest in property and in the long run to make money out of property, although, of course, as we are seeing at the moment and as we saw in the period between 1990 and 1992, it does not always work that way.

For people to be part of a property-owning democracy is a great aspiration and one that should be encouraged. In recent years, however, a number of people have asked repeatedly, "Have we gone too far? Are we pushing too many people into owner-occupation, including people who cannot actually afford it?" As we are seeing, we have hit the buffers on housing this year, with negative equity and people who took 125 per cent. and self-certified loans from Northern Rock that they just cannot afford to repay. As soon as problems arise, we get massive, soaring repossession rates and people then come in to councils asking to be rehoused, but the councils have to say, because of Government policies over the last 11 years, "Sorry, we don't have the houses for you." I will also return to that subject later.

As an aspiration, therefore, owner-occupation is certainly a good thing, but have we gone too far and have we created a lot of problems that we are now reaping the whirlwind of in the current economic crisis and the recession that we are just entering?

So I have highlighted those figures on owner-occupation and renting. As the report goes on to point out, the Government have a responsibility to ensure that tenants, as well as owner-occupiers, have the opportunity of a decent home at a price—a rental price, obviously, in the case of the rented sector—that they can afford, and within a sustainable community.

We must say that a lot of the remaining social housing in this country has tended to have a ghettoisation effect. It has become housing of last resort—housing for very poor people, and therefore there is a concentration of social problems with social housing. That is because people can only get housing through councils now if they are at the very bottom of the ladder, in absolute desperation and have myriad problems. If those problems are concentrated into limited areas, of course they will multiply and create further problems.

Photo of David Drew David Drew Labour, Stroud

The hon. Gentleman will not be surprised to hear me say that there is a marked disparity between the urban and rural parts of our society now, quite simply because we have driven people out of rural areas. As we have sold the council houses, we have not replaced them with social houses through housing associations. It is a great tragedy: those rural areas are so much the worse because of the lack of variety of housing there.

Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

The hon. Gentleman is absolutely correct. This is an issue that is a bit like the post office debate, where people say that if post offices are lost it is a disaster for rural communities. Well, I keep saying that it is a disaster for suburban communities too. With housing, it is undoubtedly a disaster for some of the communities in my constituency, which is an urban area; it is doubly disastrous in rural areas, where social housing is the only alternative housing but that alternative has gone completely. That is a point that I will return to later.

As we have heard from Dr. Starkey, who is the Chair of the Committee, and in the report itself, we have now reached a point where renting is seen as second best in many cases. That perception is very unhelpful to the people who are in the rented sector, especially the social rented sector. Those people's needs and aspirations are surely just as important as those of home owners and people who can afford to be home owners, especially to a Labour Government. Clearly, however, in the last 11 years those people who are renting have not been as important; they have been at the bottom of the pile and treated as rejects.

In the private rented sector, there is a particular problem in that some landlords—the report says that it is a minority of landlords—are not fulfilling the obligations that they have to tenants to provide, in return for the rent that they receive, a decent home. The Government need to take stronger action in providing guidance, regulation, monitoring and inspection to improve the lot of private rented tenants. Again, that is a point that I will return to later.

During the debate in November 2007 on Second Reading of the Housing and Regulation Bill, I and others pointed out that that Bill was looking very much at the social rented sector and was not particularly covering the private rented sector, so there was a need for the Government to take action on that sector. During that debate the point was made that in previous years—in the 1980s—the private rented market almost collapsed because of various Government policies, so Governments have since then been very cautious about regulating the private rented market, in case they drove private landlords out of the market altogether, as happened some 20 or 30 years ago. However, given the state of the housing market today, and the way things have moved, that is the least of our worries, and we need to consider regulating the private rented sector more. Shelter has produced lots of research material on that, and we discussed some of that in November on Second Reading as well.

Photo of Andrew George Andrew George Liberal Democrat, St Ives

I entirely agree with my hon. Friend. He introduced his comments by saying that renting, especially private renting, was perhaps perceived to be second best. I agree with him about regulation, but does he agree that one reason for that perception is the introduction of shorthold tenancies and the consequent lack of security, within the private rented sector especially?

Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

Absolutely; that is a point I wanted to make later, so I may as well cover it now. It is an issue raised by people who come to my constituency surgeries, and I know it arises elsewhere, because other hon. Members have mentioned it in parliamentary debates. Shelter and other bodies working in the sector have a lot of documentation about it. Private rented accommodation is often inferior and substandard anyway, but even when it is good it is often offered on very short-term tenancies. With the present incidence of repossessions and negative equity more and more families will become homeless. For families, especially those with school age children, the impact on family life, education and social stability is appalling when they move into short-term private rented accommodation and must move on three or four times within a year, 18 months or two years, so that the children suffer disruption and may have to change schools, depending on where the family ends up after each move. The Government need to return to that issue, which they did not do at the time of the Housing and Regeneration Bill.

The summary of the report comments:

"More family homes are needed in the social rented sector to address overcrowding."

It could have gone a bit further, because the issue is not just overcrowding but the non-existence in many areas of family houses for social rent. To take the example of Chesterfield again, last year—I keep saying things happened last year, but now I probably mean the year before—in a period of 12 months in the whole of Chesterfield, where there are roughly 50,000 houses, 100,000 people and 10,000 council properties, exactly 49 three-bedroomed family homes became available from the council to let to social tenants. However, the number of families who applied from the waiting list, who were in flats, sofa-surfing at their in-laws and so on, and needed that family accommodation, massively outstripped the 49 houses that became available. It is not just a matter of making more family homes available in the rented sector to ease overcrowding; it is a matter of making more available to get people out of one-bedroomed flats, or situations in which they are sofa-surfing at relatives' and friends' homes. Those situations have led to marital breakdown in some cases that I have heard about at my constituency surgery, because of the tensions affecting young couples with children, who sleep one week at the home of one set of in-laws, and the next week with the others, or who move into the houses of their brothers and sisters. That creates immense pressures. Massive neglect of the situation is creating huge social problems, with all the knock-on effects on children's education, including failure in schools. Again, I speak as someone who was a teacher for 22 years who as a head of year with pastoral care responsibilities often had to deal with some of the results.

The summary goes on—and this is one of the few parts that I disagree with:

"An increase in the supply of social rented homes of some 50,000 a year will be necessary to reduce significantly the backlog in demand."

I am not quite sure what figures that statement is based on, because the Barker report, for the Government, said that an absolute minimum of 46,000 new socially rented homes a year was necessary simply to stand still—not to reduce the backlog. According to those figures 50,000 homes a year would not significantly reduce the backlog. It would make a small inroad into it. However, perhaps we may make a comparison with what has been achieved in the past 11 years: councils have stopped building entirely; they built 4,000 houses in the past 11 years and 300 last year, which is the lowest number since before world war one. The Government say, "It is okay, the registered social landlords—the housing associations and so on—will fill the gap from the private sector or semi-private sector." They have not, of course. They have built an average of 22,000 a year in the past 11 years. That is nowhere near the 46,000 minimum that the Barker report says is needed, the 50,000 that the Select Committee report says is needed, or the average of 100,000 to 120,000 that councils built in the first 50 years after the second world war.

The housing associations have failed, and they are the flagship of the Government's policy in the past 11 years. They failed to replace the houses that have been lost, let alone to get waiting lists at a steady level or start cutting them. Those waiting lists have nearly doubled from 1 million in 1997; they will approach 2 million in the next year or two—very rapidly with the negative equity and repossessions that we are now experiencing.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

The hon. Gentleman must be aware of the problems of housing association finances: increasingly the associations are under pressure either to borrow in the private sector and build, or build for sale or sell off existing properties or land. That means in effect that they become socially owned property companies, rather than organisations with the aim—which was their original aim and should continue to be their aim—of providing housing for people in desperate housing need.

Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

Indeed, the hon. Gentleman is quite correct. There are some terrific housing associations. There are some that have kept fairly true to their purpose, even as they have grown massively, as a result of recent Government policy. However, some have become, effectively, property management companies, whose particular interest, and only way of keeping afloat financially, is, as the hon. Gentleman says, to build houses and sell them on. We must in all seriousness ask, about many of the housing associations now operating in the environment created in the past 11 years, what their financial books look like. If much of their financial planning was based on building sets of houses of which at least half would be sold, a quarter would be rented at perhaps a little above market prices, and a quarter socially rented—that financial model is falling apart at the moment.

I know that some housing associations are worried about their viability and whether they will survive in the next year. How can they continue to build new houses even at the pathetically low average level of 22,000 a year that they have managed for the past 11 years if their funding is partly predicated on being able to sell at least half what they build to generate more money to build the next lot? The Government's policy of putting all their eggs in that basket has failed over the past 11 years. Waiting lists have nearly doubled; only 22,000 homes a year have been built, which is way below what is needed. Now the approach has hit a brick wall, given what is happening economically.

The report says:

"The Government must be prepared, if necessary, to raise investment in new supply still further."

If that was true in April, before the extent of the crisis that we are approaching became publicly acknowledged—that we are entering a recession with the housing market collapsing and repossessions soaring as the figures every fortnight show worse levels—it is certainly true now. It will be even more true in the next six months to two years.

The report states:

"The right to buy has enabled many families to get on the housing ladder who would not otherwise have been able to do so."

I agree with that, which might surprise those who accuse me of being an old-fashioned socialist dinosaur. The right to buy had potential to be a great ladder to enable people to enter a property-owning democracy. When I was elected as a councillor in Chesterfield in 1987, the Labour councillors who ran the town then—no longer—were all in high dudgeon about Mrs. Thatcher's right-to-buy policies. I used to say to them in discussion, "I cannot understand why you as a socialist party did not introduce this when you were in government. Surely, you use taxpayers' money to build socially rented houses; people who have lived in those houses for a good length of time buy them at a discount and get on to a housing property ladder that they would never have been able to afford in normal circumstances—or even dreamed of or aspired to." I thought that it had a lot to offer. I have discovered since I entered Parliament—or I am told, and hon. Members may be able to tell me whether it is true—that the Labour Government of 1974-79 considered such a policy for the 1979 manifesto, but that Tony Benn, the Member of Parliament who preceded me in Chesterfield, who was at the time rather powerful in the Labour party, stopped it because it smacked too much of capitalism. I think that it would have been a sensible socialist or social democratic policy to adopt.

The huge caveat of course is what has happened with the right to buy, both in the 1980s and in recent years. One problem is that the money has not gone back into building new social housing, to replace what has been taken. It has not been recycled into providing more for people who need it.

Secondly, although the discounts are lower now, they were ridiculously high when they were introduced. They were massive, and from a purely selfish, personal point of view people would have been foolish not to take up the opportunity to buy their properties. I noted at the time that all the Labour councillors who used to object so bitterly in 1987 bought their council houses over the next few years. The discounts were so big that it was not economic reality. A Conservative Government were giving away taxpayers' money and public investment and property on a massive scale—a scale that we did not see again until the banks were bailed out recently. The discounts were too large and the money was not recycled into building new properties. Local authorities were given no say and no flexibility, and the situation is still the same.

A local authority in one part of the country, even today in our current state, might say, "Yes, we have a place for the right to buy in certain areas of the town and certain types of property. We have more than we need, and we would like to get some properties sold and recycle the money into building new social housing in another part of town." Another local authority might not, because as Mr. Drew said in an intervention, the scheme has been a disaster in rural areas.

Surely very few local authorities representing rural areas such Cornwall, Devon, the Lake district or the glorious Peak district in Derbyshire, on Chesterfield's doorstop, are happy with the fact that they have virtually no social housing. The council houses that used to exist in the Peak national park and other highly desirable rural areas have all been bought, then sold on at a massive profit and are now second homes and holiday homes. Local people such as farm labourers, low-paid workers and the children of people who settled in those areas cannot get into the property market. I am sure that my hon. Friend Andrew George will talk about that in more detail if he makes a speech later.

Photo of Andrew George Andrew George Liberal Democrat, St Ives

It is certainly true in my area that a lot of former council properties are now second homes. My hon. Friend has said that he agrees with the right to buy, but does he agree that rented housing in the intermediate market is also important? We cannot consider one in isolation from the other. It is important that the Government help by enabling shared equity, mutual housing and other means of constructing a new rung on the housing ladder. That will enable them to get into the market without having to make the stratospheric leap that is currently required in many parts of the country.

Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

Absolutely, and before people misquote me and say that I support the right to buy, I did give three massive caveats. I certainly do not support it as it was introduced in the 1980s and as it has operated so far, because the discounts were too great—that has been tackled—because the money is not recycled and because local authorities have no freedom to express an opinion on local decisions and on what is right for their area.

As my hon. Friend points out, we must consider the whole package of what is happening in the housing market. One success of the housing associations in recent years has been some flexibility in the offer of shared purchase, with houses being partly rented and partly bought. However, there tends to be a brick wall for people in such schemes. A young couple in my constituency were hit by last summer's floods in Chesterfield. They had just started a family and had gone up to the limit in buying part of their house from a housing association. They could not afford contents insurance and when the floods happened, hitting about 500 houses in Chesterfield badly, all their contents were wiped out. They could not replace them, and they could no longer afford to pay their part of the mortgages. They came up against a cliff face, and it was all or nothing, as my hon. Friend points out.

We must consider the whole package of housing measures, not just certain things in isolation. There must be a lot more flexibility for people to step up and down in the percentage of their house that they own and the percentage that they rent. They must not be allowed to fall off a cliff because they cannot maintain their mortgage payments on the 25 per cent. or 55 per cent. that they own.

Extending such a scaled system to the right to buy would be fantastic if a local authority thought that the scheme was sensible in its area, if the discounts were of a sensible level and if the money all went back into building social housing. So far, none of that has happened. I am therefore utterly against the right to buy as it has been practised, but not as a principle if it were done in the right way. The Select Committee report states that the Government should revisit that matter, perhaps examining examples such as those in the Netherlands, from which we could learn something. Let us examine the matter seriously, not just cherry-pick the bits that particular parties want at particular times.

The report mentions allowing more flexibility for tenants to downsize, and we have heard the example of pensioners living in family houses. They may have brought up a family, but their children have left home. Perhaps it is a single pensioner whose partner has died. Plenty of people in those circumstances have come to me over the years. They want to downsize, and by and large they want to move to an old folks' bungalow. Occasionally they want to move to a flat, but most are not keen on flats because there tend to be noisy youngsters living upstairs, who have a different lifestyle and come in at 1 o'clock in the morning.

If Chesterfield borough council were able to build old folks' bungalows and decamp pensioners who are rattling around in family houses with gardens that they cannot maintain and stairs that they cannot climb, we would get two houses for the price of one. However, it is one of the evil councils that followed their tenants' wishes when they voted against privatisation, so it still manages the housing stock directly. It is not allowed to borrow money to build, or to get new social housing—it is not allowed to do anything, basically. We therefore cannot offer such downsizing.

A matter that is not covered in the report is one about which various Ministers have speculated in the past couple of years. They have leaked to the press suggestions that we ought to force on some council tenants the reverse of that downsizing. They suggest that we ought to force tenants out of their council houses when they start to earn a bit more money, because they can afford to buy or rent privately and social housing should really be only a last resort. That is addressed in one of the report's first points, as I mentioned earlier.

Ministers have floated that idea as a stalking horse a number of times in the past couple of years. We thought that it had died, but we understand that it is perhaps being floated again at the moment. However, I have not come across that problem in Chesterfield, which is a fairly poor constituency with a large number of council houses. I cannot think of anybody in Chesterfield who earns large sums but chooses to stay in a council house on a council estate instead of buying a house somewhere else. They are not exactly bed blocking, as we would say about the NHS. People who could easily go and buy a nice, luxury house in the private sector are not blocking the valuable, limited, scarce resource of social housing for which another family is desperate. It is not really a big issue, as far as I am aware, yet the Government seem to have been rather hung up on it in the past two years. They seem to think that perhaps they ought to alter the letting system and tenure rules to force people out of council houses if they earn a little too much. How can the Government say on one hand that they want social housing estates to be mixed and pepper-potted, and to cover the whole range of society rather than be ghettoised areas, and on the other hand that as soon as people earn a bit more than average, they will be forced out to buy a house somewhere else?

The report discusses allowing councils to be more flexible in introducing choice-based letting schemes. Who can argue with that? Of course tenants should have choice in where they go to live, but in Chesterfield, as in every council area around the country, there is a very long waiting list, and only people who are desperate and in dire social need reach the top of it. Then their choice is pretty limited, because the council does not have much to offer them.

Different parts of the Government and various pieces of legislation are rightly telling councils to give priority to people who have been in the armed forces. People who went into the armed forces 10 years ago, for example, may have moved around the country or lived around the world. When they come out of the armed forces, they are not on the housing ladder because they have been in military establishments. They want to go back and live in their home area, but the council says, "You're not on our waiting list, which is already three times longer than the number of houses we have, and you have no recent link to this area, so you're not a priority." It is right that councils should give priority to such people, and I have signed up to that.

The Select Committee on Children, Schools and Families, on which I serve, is currently examining the subject of looked-after children. We are considering the situation for children leaving care—they used to be aged 16, but now it can be pushed on to 17, 18, 19 or even 20, which is good. All too often they used to end up in the worst council flat, because that was all that was available. A child who has been in care and gone through traumatic times and had a bad deal educationally because of their disturbed background should be given some priority in getting decent, supported housing. Who can argue with that? I am pushing for that in the Children, Schools and Families Committee.

There are all sorts of similar examples. Prisoners coming out of jail all too often end up in poor accommodation and go straight back into crime because of their circumstances. Councils ought to provide decent housing for released prisoners. Again, who can argue with that as a sensible policy to reduce offending?

I have given four reasons why councils should be doing more and more to give good housing to people in various categories. But what have the Government done for the past 11 years? They have halved the number of council houses and prevented councils from being able to do any of those things. Yet they keep on heaping on the requests, saying that councils should give priority to one group or another. The councils cannot do that if the Government cut the amount of social housing all the time. A huge social crisis is being created, and we are starting to reap a whirlwind.

The report goes on to deal with the private sector. It has already been discussed, so I will not make any comments on it apart from saying that, of course, as with council and housing association social housing, there will be more and more demand for private rented sector housing because of the massive, soaring repossessions that we now face.

The report states that the Government must remove impediments to local authorities exercising their place-shaping role to build on land that they own, and to provide the housing that is needed. That is a polite way of saying that the Government must reverse their entire policy of the past 11 years. As the hon. Member for Stroud said, if tenants vote against privatisation—if they say that they want to stay with the council—as they have done in more than 100 authorities in this country, they are penalised.

In Chesterfield, as in the example that the hon. Gentleman gave, a percentage of the rents—it was 14 per cent. but is climbing year by year—is taken away by the Government to spend somewhere else in the country. When tenants come to me and ask why they cannot have something done to their house, why they cannot have fencing to stop criminals nicking and selling all the garden ornaments and so on, the answer is because 14 per cent. and rising—I know of another council where it is 48 per cent.—of the rents in Chesterfield is taken away to be spent in another part of the country. The money is not spent on the council housing of the people who are paying the rent—it is stolen and spent elsewhere.

On right-to-buy, 25 per cent. is kept by the council, and 75 per cent. goes to the Government. Because the council manages its own properties, it cannot get access to Government money through what was the Housing Corporation—it is now changing—because it is for arm's length management organisations and housing associations.

Mr. Betts, who is planning to speak later, made the point when we were debating this matter on the BBC in Yorkshire that the disgraceful division between housing associations and ALMOs, and council housing should be ended. That was in response to something that I said. I absolutely agree: we should end it, because, at present, people in council-run council houses in Chesterfield are utterly and disgracefully discriminated against by this Government. They cannot get access to money for modernisation, repairs or building new houses that ALMOs in Sheffield have had access to in the past and that housing associations get.

On a level playing field, taxpayers' money should go to the people who need it rather than to the ones who signed up to the Government's agenda. If people say through the ballot box that they do not want to go down that road, they should not be penalised.

If a housing association took over Chesterfield's 10,000 houses tomorrow, it would not have any of its rent taken away. It would keep it all. It would get 75 per cent. of right-to-buy money, not 25 per cent. It would be able to borrow money for more building and investment, and it would have access to Government money—taxpayers' money—for more building and modernisation. All of that is denied to tenants in Chesterfield and more than 100 other authorities where tenants have said that they do not want to privatise. The report uses polite language to say that the Government must reverse the discriminatory and punishing regime that attacks tenants who have the cheek to vote against what the Government want.

I could say much more about the report, but other Members may make many of the points. The report states that it

"comes at a crucial time."

As I said, it was a crucial time in April. As the report points out, Oftenant and the Homes and Communities Agency had just been set up under the Housing and Regeneration Act 2008. That was a crucial time, but, since then, the economy has entered recession. Since then, the warnings that some of us were giving last year about the early signs of negative equity and repossession have been hitting newspaper headlines every couple of weeks as the figures get worse and worse.

Where will people go when they are repossessed and homeless? They will go to the council and say that they desperately need rehousing, but, in Chesterfield, for example, the council will say, "Sorry, but our waiting list has trebled in the 11 years since the Labour Government came to power, and our social housing has halved over the past 20 years because of right to buy taking properties out of the system and not replacing them. Although we sympathise enormously, our hands are tied behind our back as far as helping you out."

If the report was superb and timely in April, it is now being debated at a time of utter crisis. The Government must read it and reverse their entire policy of the past 11 years.

Photo of Emily Thornberry Emily Thornberry Labour, Islington South and Finsbury 3:34 pm, 6th November 2008

I represent a constituency in inner London where it is difficult to understand the claims that there is anything wrong with being in rented accommodation. One has to be very rich to live in Islington. Indeed, as house prices have gone up, people who move to Islington have to be increasingly rich, so the rich in Islington get richer. On the other hand, those in social rented accommodation—we have had very little private rented accommodation until recently—have to be poor and desperate, and, as the crisis deepens, they have to be increasingly poor and desperate. One has to be very rich, very poor or just lucky to live in Islington. I represent a constituency that is becoming increasingly divided—I see it happening before me.

Many of our problems begin and end with housing. My hon. Friend Jeremy Corbyn and I, along with many other inner-London MPs, speak with huge passion because every week and every day people come to us with housing problems. If they come with other problems, we can help, but if they come with housing problems, often all we can offer them is tissues. They sit and weep, and we feel as though nothing can be done.

Over the past 10 years, social housing in Islington, which represents about one half of the housing in my constituency, has been done up, and that has been fantastic. We should be extremely proud of the decent homes programme. When I first went around estates in Islington some 10 years ago, they were disgusting. The public spaces were appalling and the roofs leaked—they were dreadful. Now, the estates are something to be proud of.

The difficulty is inside the flats, where people are desperately overcrowded. The problem is that it is not possible for people in social housing in Islington to move out of Islington into other social housing, because the transfer systems that were supposed to be available do not really work. That means that once someone is in social housing in Islington, they are stuck, and always will be stuck.

Whenever I speak about housing in Islington, I talk about the last housing case. I do not want to be guilty of exaggeration, or use a case that is not representative. Sitting on my desk at the moment are two cases involving young women with similar problems. Both are teenage daughters who live in housing association accommodation in my constituency. Both girls have babies and share bedrooms with younger sisters. They cannot get rehoused because the housing associations of which their parents are tenants have sons-and-daughters systems, but they will not allow those girls to move into one-bedroom flats, because, if they did, they would automatically be overcrowded.

We have choice-based lettings in Islington, but there is no choice, and there are no lettings. The girls do not have sufficient points to get a two-bedroom council flat. They are not able to move into a one-bedroom flat because they have a baby and ought to have a two-bedroom flat, but there are no two-bedroom flats available, so they live with younger sisters—one sister is 10 years old and the other is 12 years old—who are fed up with having to share with their older sister. They are even more fed up now that there is a baby in the bedroom as well.

That is the reality. Those are the two cases sitting on my desk now. I do not ever want to exaggerate how bad the housing crisis is in Islington, but I do not need to. I just need to talk about present circumstances. Therefore, it is of great importance to me that I have the opportunity to serve on the Select Committee that has produced this report. For the majority of my constituents, the increase in the supply of rented housing is of vital importance.

I have not yet bent the ear of my right hon. Friend the Minister about affordable housing in the Islington context, but I warn her that I will. In Islington, it is simply not affordable to buy, nor is it affordable to part-buy. Hybrid forms of key worker housing may work in Darlington and in other parts of Britain, but, in the Islington context, house prices are so high that buying part of a flat and renting the rest is unaffordable, particularly for a family that needs three bedrooms. The price is simply too high.

I had one case of a firefighter and his wife, a nurse, who was training to be a midwife, with had three children. They lived on the Finsbury estate in a two-bedroomed flat and were overcrowded, so they wanted to go for key worker housing or part-ownership. My senior caseworker and I spent a great deal of time trying to find some alternative means for them to stay in Islington, whether through part-ownership, key worker housing or anything else. We spent many months doing that and we looked at all the different solutions, but nothing was affordable within their pay range. The only thing for them to do, as we were advised, was to apply for part-ownership out east, which they would be able to do when the woman finally qualified as a midwife. I cannot even remember where the place was, but it was somewhere east of Tower Hamlets; I am afraid I get a little foggy once we get to the other side of town. That was the only accommodation that would be affordable for them as a family.

The point is that key worker accommodation may be affordable if people only want a one-bedroomed flat. A new teacher trying to get key worker accommodation in Islington may be able to buy part of a one-bedroomed flat, but that is not possible for a key worker with a family. That is our problem. That is why inner London is lobbying for social rented housing; nothing else works for us.

The difficulty is that, within the Islington context, a two-bedroomed flat in social rented housing might cost some £75 a week. So of course some of my constituents can move into private rented accommodation—indeed, such private accommodation has become increasingly available, not least because housing benefit will pay up to £300 a week. However, the private sector is charging £300 a week for rented accommodation and the rent in the social rented sector costs £75 a week and the Government are paying for them both. This is wrong and we have to find a solution to it.

One would hope that, with the credit crunch, perhaps the poorer half of Islington might benefit at last, in that land prices will go down and many builders will be out of work and, when all else fails—when the markets fail and businesses fail—in the end, all that we have is government. In those circumstances, perhaps the Government will be able to step in and, perhaps, having had 10 years of boom in the private sector and with a downturn in the market, now might be the public sector's chance, and the chance for the poorer half of my constituency to get some new accommodation. If that is so, those girls who are stuck with their little sisters might, at some time, get a chance to move somewhere else.

Unfortunately, it is never as simple as it looks. The more I look, the more I realise that this difficulty has to be managed carefully. One of the most important sources of new build is housing associations. I understand that, in the early 1990s, grant rates for housing associations to build were at 70 per cent. That grant rate has now gone down to about 40 per cent. The difficulty is that, in those circumstances, that is not now a viable business proposition for housing associations, without cross-subsidies from other sources, including, as I understand it, building other flats and selling off parts of a development or selling off part-ownership and, therefore, being able to subsidise developments. Every new home being built by housing associations is subsidised, I am told, to the tune of £25,000 a flat.

When it comes to the larger homes that my constituents so desperately need—the three-bedroomed plus homes—the price is even greater and the problem then is that, if housing associations are asked to deliver a certain number of units, it is often far too easy for the larger units to be overlooked. If one four-bedroomed flat is provided, it provides accommodation not just for one family, but for the family below in the chain: so a family may move out of a two-bedroomed flat into a four-bedroomed flat, freeing up the two-bed one; then the two-bed is freed up, so the family from the one-bed can move into the two-bed; then the girl with her baby in a bedsit can move into the one-bed; and so it goes on. Building larger accommodation means providing accommodation all the way down the chain. That is why it is so important that, in terms of policy, we emphasise and prioritise the building of larger flats to give families a chance.

The difficulty is that the cross-subsidisation that the housing associations have been getting from selling off other properties is now drying up because of the credit crunch. I am informed that at the moment the housing associations have a debt of some £51 billion and it is anticipated that they will increase that borrowing by another £12 billion to deliver the Government's affordable housing targets. Unless this is managed carefully, the sector's financial health could be a cause of great concern.

Many things can be done to assist housing associations. We have to use more public land and we have to stop the selling off of public land to the highest bidder. We have to begin with a policy whereby if public land has to be sold, it should not be sold to the highest bidder but should be sold for the greatest public good. That principle could be established.

Moorfields school in my constituency is a large plot of land that stands next to Braithewaite house, a successful block of flats used by families, on one side of the road, while round the back a new development at Old street is potentially coming. That development is to be a massive great tower block largely comprising luxury flats: the 50 per cent. rule does not seem to apply to Islington council. That large plot of land in between those sites could be used for social rented housing and for some of the 13,000 families desperately waiting for housing in Islington.

I have been mentioning 13,000 families since I was elected. I was surprised that so few families were being added to the list until families came to see me—and I know they go to see my hon. Friend the hon. Member for Islington, North—and complained that it is almost impossible to get on to Islington's waiting list these days. That is becoming such an increasing embarrassment, because my hon. Friend and I, and many other colleagues, are making a huge fuss about this large number of families on the waiting list for housing within Islington, with nothing being done about it, while the local authority is selling off Moorfields school, for example.

The local authority is also selling off a site in Elthorne street that was owned by the council; it was a factory and then became a site for many little businesses and local employers. The council sold it off for £1 million and it has recently given planning permission for that property to be made into 17 luxury flats. That publicly owned building will now never provide any housing for those two girls and their daughters living with their little sisters. Now that public land has gone we will never get it back; we will never have the opportunity to house families there. We must do something about this and we must stop the sell-off of public land simply for the sake of keeping the council tax down. We must prioritise. We cannot just wring our hands and say, "Oh, it's such a terrible problem; it's such an enormous problem. There's nothing we can do." We have to do something about this and we must ensure that there is somewhere for these 13,000 families to go.

The first issue to consider is the sell-off of land. Public land should be prioritised and used. There may be opportunities available for us to work in partnership with housing associations to build more social rented housing, particularly given that the subsidy that the housing associations have been able to provide so far may be weakening with the increasing credit crunch.

On other sources, housing associations could be allowed to buy land that may be owned privately but is not being built on, whether due to developers not having the wherewithal, means or imagination to build on such sites. The Government might be able imaginatively to change the rules so that, in such circumstances, housing associations could step in. Or they could step in where planning permission has been given but little progress has made on a site and, rather than wasting that land—given how many people are in desperate need of rented accommodation—allow housing associations to step in at that early stage.

There are other opportunities available, when developments have begun and have gone a long way down the line. Again, it may be possible for housing associations to step in at that point, but there are two difficulties in relation to that. First, I am glad to learn that the environmental standards we expect for social rented housing are higher than for private rented housing.

A housing association cannot simply buy flats that have been built for the private sector, because they may not be good enough—the environmental standards may not be good enough, and the rooms are often too small. We manage the size of social rented flats, but we do not manage the size of private rented flats. Those are complications, but with careful management, it should be possible to fix part of the problem, and ensure that the downturn in the market does not mean ever-increasing numbers of people in desperate need of social rented housing.

It has been suggested that housing associations may be able to step into the gap that will be created by the credit crunch, but that alone would not be sufficient, even with the whole £20 billion that has been earmarked for the building of affordable housing in the next three years. It would only shore up one in 10 of new buys yearly. That is not enough on its own, but if we had a goal of ensuring that we relieve some of the pressure in the social rented sector by being imaginative and giving housing associations a greater lease, allowing them to do more than they can at the moment, and by taking a realistic look at the effect of the credit crunch, and accepting that they will not be able to subsidise things in the same way as they have in the past, we may be able to go some way towards assisting some of my more desperate constituents.

In the past 10 years, only one in seven new developments in Islington has been social rented housing. That is not fair, and I hope that in the next 10 years we will be able to increase the amount of social rented housing in my constituency. Half of my constituents are largely my people, and when I go round social housing and talk to them, they look to me and Labour MPs such as me to provide a solution. I hope that with the downturn in the market we may be able to think laterally, and give them some help.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe 3:52 pm, 6th November 2008

As a member of the Select Committee, I welcome the report, and agree with it. As has been said, we took an awful lot of evidence and made many visits throughout the country to ensure that the report was factually based on people's experience in their daily lives and the struggle that many of them have in achieving their goal of becoming a tenant with affordable, social housing. As my hon. Friend Emily Thornberry said, the problem is more acute in London than elsewhere, but that does not mean that it is not acute elsewhere. Certainly, in Sheffield, the change over the years in the shortage of available rented housing is only too obvious for anyone to see, particularly Members of Parliament at their surgeries. I agree with my hon. Friend that one's heart almost sinks when someone comes in with a housing problem, because one simply does not know where to begin to help them, and often cannot do so because they are one of a number of people in real need trying to access an increasingly short supply of rented housing.

The Committee rightly agreed with the overall target of building 3 million new homes by 2020, and increasing the number of social rented homes that are built each year to 50,000. Eventually, we may have to increase those figures further, but they seem to be a good starting point in support of the Government's targets. Paul Holmes commented on the shortage of available property in his constituency. I asked Sheffield Homes, the ALMO that covers most of the rented stock in my constituency, to provide some figures for last year. I asked for the figures for three-bedroomed family houses because, as a result of the right to buy, there is a disproportionate number of flats compared with houses in the housing stock, because, by and large, the houses have been sold. The figures, which excluded allocations to homeless families and people whose homes had been demolished—there is a demolition programme in south Sheffield for system-built properties from the 1970s which are no longer fit for purpose—showed that there were only three allocations from the waiting list to people wanting three-bedroomed family homes in the whole of my constituency last year. I receive more requests for help from people wanting such accommodation in a month than is available in a year, and I accept that I see only the tip of the iceberg.

It is right for the Government to respond to the current housing pressures, which came after the report was produced. Part of the £2 billion package of help for the housing market may be used by councils to buy vacant property in the private sector for social letting, or to start building new homes. The Government must quickly rethink that package, welcome as it was, because, as we have heard, there is evidence that some housing associations are having problems in getting their schemes under way for the simple reason that they rely on packages of funding, some of which are used to build houses for sale. That helps to cross-subsidise rented properties. As the value of houses for sale has fallen—and selling them may be a problem—they will find it difficult to raise funding to get those packages away. Some of them are having problems because of the lack of funds in the wholesale market anyway. At the same time, private sector schemes throughout the country are not starting—work has stopped on schemes in the Darnall area of my constituency—and if they have section 106 agreements, the houses covered by those agreements will not be built either. It is likely that there will be a fall in the number of housing association properties being built, and the Government must address the issue urgently.

It is right that housing associations and local authorities should be able to access money through the package to build more homes, but if fewer homes are being built under other financial arrangements, the Government may have to step in quickly and increase the available funding. The enormous pressures on social housing that we are already experiencing, and the fact that many people who wanted to buy in the private sector as first-time buyers cannot now access mortgages because of the requirement for larger deposits, produce additional pressure, because tenants cannot move out of social housing and owner-occupiers who want to move into social housing cannot do so because the option of owner-occupation has been postponed, at least for the time being.

The Government must ask local authorities what they are doing to access funds that have been made available. Many local authorities do not recognise the need, or they lack the systems, to buy up empty properties, which is a fairly quick way of providing extra social housing. I do not see much evidence of local authorities getting their act into gear to access funding for that purpose, or stimulating their ALMOs or housing associations to do so. It will be interesting to hear whether my right hon. Friend the Minister has any figures to show how much of that money has been spent on the purchase of vacant properties.

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

Has the hon. Gentleman heard, as I have, discussions among registered social landlords about the fact that it is almost impossible for anyone to get their hands on the money to make those purchases?

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

I have not been told that by an RSL, but it would be interesting to know how much money has been allocated and whether the Minister is aware of any problems in accessing it. I am sure that it is not the Government's intention that it should sit in the Treasury's coffers, but if there are obstacles, they should be dealt with quickly. It would be a disaster if properties were empty and families were without adequate housing, and we could not put the two together when the money was available.

Section 106 funding will continue to provide a lot of social rented housing. I have been critical of my council in Sheffield for being far too slow in changing its planning policies to reflect the need for section 106 agreements to provide social rented housing as part of new private sector housing developments. The horrible irony is that just as the council changed its policies to require a greater percentage of social housing on private developments, the credit crunch came along and builders stopped building new private houses. That is sad.

The Government should recognise that in the longer term, when the housing market is back in gear, section 106 agreements will provide quite a lot of social housing. They should say to local authorities, "Do you, as part of your planning policies, have section 106 agreements clearly labelled as something you intend to use when you give planning permission for private houses?" How can good practice be exchanged between one local authority and another? One thing about Section 106 agreements is absolutely obvious, and when we went around the country and collected evidence it was there for everyone to see. There is an enormous disparity in local authorities' achievements and policies on section106 agreements.

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

Is it not also the case that, in London, if the 50 per cent. rule that was introduced under the previous Administration at City Hall is abandoned, one local authority will be played off against another? The only way to have the 50 per cent. rule across the whole of London is for all of London to agree to it. Ken Livingstone's target has been abandoned, which is a great shame.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

I agree. Without knowing all the details of what has happened in London, I can see the obvious problems. If there are competing housing policies in different London boroughs, there will never be an overall strategy for London as a whole.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

On the point about section 106 money, in its investigations, did the Committee come across much evidence of unspent section 106 money that simply sits in local authority coffers for years doing nothing? Worse, did the Committee find instances in which developers sold on, and sold themselves out of, a section 106 requirement, thus preventing the public from benefiting from what should be a social benefit?

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

I have certainly seen figures from the Department in the past that show there is some disparity between the section 106 agreements that are reached and the number of houses that are eventually built. Again, that is something Ministers may wish to look at.

I shall make two other points about section 106. There is still nervousness about the effect of the community infrastructure levy on section 106 agreements for social housing. I support the community infrastructure levy, as it is right to have a policy that ensures that the public purse benefits from the private gain from planning permissions. We have received assurances from Ministers about the interaction between section 106 agreements for social housing and CIL, but we still seek reassurances that there will not be any adverse effects.

As I am sure my hon. Friend Dr. Starkey, the Chair of the Committee, will testify, when we travelled around the country, the Committee saw how section 106 agreements sometimes lead to the provision of nice-quality landscaped private sector housing in a development, but that somewhere at the back of the site—almost as an embarrassment—a few social housing units are tucked away so that no one can see them. In some cases, a wall is built around such units to separate them from the private housing and prevent too much contamination between the two lots of residents. That must stop. Local authorities must be required to ensure that where provision for affordable social housing is made, it is done in a way that does not lead to an obvious "us and them" feeling about the scheme. At a recent public meeting about how to develop a new site in my constituency, such an attitude was shown by a constituent who said to me, "We aren't going to have any of those people living here, are we?" Unfortunately, those attitudes exist and local authorities have to stand up to them and ensure that we have mixed communities.

On mixed communities, I want to discuss the point that the Committee made about the right to buy. We could all rewrite history in relation to the right to buy. When I was a member of Sheffield council, I was chairman of housing at the time of right to buy and we resisted it. I accept that there is a place for the right to buy and I am close to agreeing with the hon. Member for Chesterfield on the matter, which worries me slightly. I can see that the right to buy has helped some people on to the housing ladder and that it has introduced a mixed tenure into some areas that were monolithic and contained only council housing—we had enormous estates in Sheffield. However, there is a disproportionate tendency for right to buy to prevail on smaller estates that are in the nicest areas. That has obviously happened because such areas are where people want to buy—they have nice properties that will increase in value after purchase.

Even in urban communities, we are in danger of creating areas in which, although there were relatively few council houses to begin with—probably only 20 per cent. of the stock—more than half of those houses are sold. In such areas, there is now only a residual number of council houses or, in some cases, where stock transfers have taken place, social rented houses are owned by a housing association. In those circumstances, if the right to buy is simply allowed to continue, regardless of the demand for rented properties and the limited supply, that will ultimately have an effect that is opposite to the creation of mixed communities. Monolithic communities of owner-occupiers will be created and there will not be any opportunity for people who cannot afford to buy to live in those areas.

That is a real worry in parts of my constituency—for example, in the old mining village of Mosborough. That village has a heart to it, and part of that heart is a small number of rented properties that are owned by Sheffield Homes, which is an ALMO. Enormous numbers of private homes have been built in the area and many people have said to me, "I'm now quite well off and have moved on and got my private home, but I come from a poor background. I'd like my mum and dad to come and live near us, but they are council tenants and there aren't any council properties in the area, so we can't live in the same area together." That is a real problem.

The Committee referred to the Netherlands solution: where there is a shortage of houses to rent in an area, a housing strategy ought to be developed with the local council and housing providers. That is particularly the case in relation to certain types of houses, as there might be plenty of flats but a shortage of family homes. The strategy should state that because of the enormous shortages, if we continue with the right to buy, no houses of a particular type will be left to rent. In those areas that are affected we should be able to suspend the right to buy, at least for certain property types, to try to ensure that we allow people who cannot afford to buy to live in those areas and keep a mixed community. The Government have said they will consider that matter in their response, which I welcome. I hope that they will look at that issue and introduce policy changes.

I hope that we can return to a situation in which councils and ALMOs can start building houses. It is possible to access the funds that the Government have made available, and there are three pilot projects. Again, I would be grateful if my right hon. Friend the Minister explained where we have got to with the pilot projects that were established to try and let ALMOs build houses—if she is unable to do so today, would she do so in due course? I know that Sheffield Homes, together with Sheffield council, was awarded a social housing grant last autumn. I am not aware yet whether they have an agreed plan for what to do with the money, let alone whether they have started building any homes. After a year of a chronic housing shortage, I understand that that grant is still sitting somewhere in the treasury coffers in Sheffield and that it is not actually doing anything.

It is important to introduce pilot projects, and I welcome the fact that the Government have decided not to include them in the housing revenue account—that was an important step. However, while I am on that subject, the housing revenue account is the biggest obstacle to making any sense of housing finance in this country. A review is under way on and, the other day, my right hon. Friend the Minister told us, when giving evidence to the Committee, that it will be next year before we sort the matter out. However, I cannot stress too strongly—and everyone else who has spoken has mentioned this—that in terms of the rules, the housing revenue account is a disaster, as authorities have no idea where they will be in future years.

There is the possibility of redundancies at Sheffield Homes because its subsidy system has changed drastically over a three-year period. There is an inability to plan ahead and there is no relationship between the service its tenants receive and the rents they pay. Sheffield Homes cannot say to its tenants, "We'll improve the service if we can increase rents by £1 a week." Neither can it say to an individual tenant, "We'll put a central heating system in if we can increase your rent by £2 or £3 a week." There is no connection between the service provided and the rent charged.

It is a bureaucratic nightmare which, I accept, is difficult to resolve because there are losers and winners— unless the Treasury can be persuaded to put some funding in to unscramble the whole thing and get back to having a more direct relationship between what tenants pay and the service that they receive. No doubt my right hon. Friend has been brought up to speed on some of these things in the past few weeks, but I am sure it is one of the more complicated things she has had to consider so far. That issue is a nightmare and it needs to be addressed.

Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

On that point, the review is under way, but it might take a year to complete and more time to implement—if it is possible to implement it. However, in the meantime, the Government have announced that for the next two years they want to carry on and make the situation worse by increasing rents by 6.2 per cent., which is well above inflation. In Chesterfield's case, increasing the clawback means that every penny will go to the Government rather than into tenants' houses. Does the hon. Gentleman agree that the Government should suspend that increase until the review has been completed, rather than digging a deeper and deeper hole?

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

The system is completely inadequate. Unfortunately, as long as the system exists, the Government will use it and there will continue to be perverse consequences. I do not think that the Government should set rents at a national level—that is the problem with the housing revenue account. I just hope that we can get out of it as quickly as possible, as it is a disaster. The previous two Housing Ministers recognised the principle that we need to do something about it; it is a question of finding the mechanism to achieve that.

With regard to other issues that needed to be addressed, we mentioned the Hills report, and we look forward to the Government's recommendations. In relation to allocation policies, it is important that we make best use of the housing stock. There is a problem with under-occupation. We need to make transfers easier for people who have outgrown their family houses because their children have moved on and there are now only one or two older people living in them. If we can make it easier for them to transfer to purpose-built elderly persons' accommodation by building more such accommodation, that would be useful. I very much welcome Hills's comments about getting more recognition of such matters in housing allocation systems. I understand that that is very difficult to do in London, because the crisis is even more severe there, but in places such as Sheffield we could give more priority to people who want to move for good reasons.

The classic case is the elderly couple who say, "We look after our grandkids when their parents go to work and it would be easier if they lived nearer to us. A house has become available down the road and they only live four miles away. Why can't they move?" Then suddenly they find that a homeless family who have been on the list for a few weeks turn up and occupy that house as the new tenants. Often, people just do not understand that. They say, "Well, why couldn't that homeless family, who have been on the list for only a few weeks, move to the house that my son and daughter-in-law were in, so that they could move nearer to us?"

There is a logic to that thinking. We need more flexible allocation policies, because transfers have almost dried up. People know that if they are allocated a house as an ALMO tenant in Sheffield, they are almost stuck there. The chances of being able to move or of having a choice to move anytime in the future have almost gone. There are issues to be addressed in that respect. As has been said, decent homes has been a wonderful policy. The other day, I was with an elderly couple whom I have known for years. They moved into their pensioners' flat and then had the kitchen and bathroom done up and new windows put in. They think that all their Christmases have come at once. They are absolutely delighted. I saw the smiles on their faces and their great pride in their home. Sheffield Homes has done an excellent job; the quality of the work is good.

We need to know where we are going from here, because ALMOs such as Sheffield Homes are thinking about their work programme for the future, and are again looking at reducing staff. It is always a problem in the construction industry that there are peaks and troughs in the work load, which make it impossible to continue such programmes. I welcome the setting up of the Tenant Services Authority. We had a good Select Committee evidence session with the new chief executive and chair the other day. I hope that they will drive up the quality of management in many housing associations; the Housing Corporation has not been tough enough on those issues. I welcome the commitment that they have given, which we explored in our evidence session, to try to link the funding of the building of new houses by housing associations to those housing associations that have a good track record of management. In the past, there does not seem to have been a great link-up and associations with poor management records often received funding to build more houses.

I look forward to ALMOs coming under the TSA remit, to which I the Government are committed, perhaps in the next two years, so that we have a consistent regulatory approach. The TSA can do quite a lot to link housing associations and ALMOs together, so that there is greater co-ordination of management approaches, particularly on open space or in areas where housing associations have very few properties and do not have a local presence. In such circumstances, they can contract out their management to other associations or ALMOs. I hope that the TSA will encourage them to go about that process to improve management quality. We recommended that the housing ombudsman should cover all aspects of housing, including local authorities and ALMOs, so that there is a consistent approach in relation to the ombudsman service as well.

I shall make a few comments about the private sector. It is such a mixed bag of housing of differing quality, and a more consistent approach is needed. I am pleased that the Rugg recommendations largely go along with our recommendation of a light- touch licensing arrangement for all private sector housing, which would be a massive step forward. At the same time, the Government should consider improving the licensing arrangements for houses in multiple occupation. The definition whereby there must be five persons or more, or three storeys or more, before an HMO qualifies to be licensed under the arrangements is far too narrow. Many HMOs in Sheffield do not have three storeys, but they still need to be part of the licensing arrangements. I hope that the Government will reconsider that. I hope that they will also accept the Rugg recommendation on the regulation of letting and management agents. It is perverse that if someone buys a house through an estate agent, they have access to a redress scheme, but if the same agent lets them a house, they do not have access to such a scheme. We should put that right.

Another issue arising in the private sector is a particular problem in London. I think that we were all shocked when we went to the flat in Westminster and talked to the woman there. Her rent had just been increased to £400 a week for a property that had been built by the local authority with public funding. It had been bought under the right to buy, sold on to a private landlord and then passed back to the local authority to be let to a homeless family and managed by a housing association. [Interruption.] That is quite right. The public sector was paying £400 a week in housing benefit to keep the person in the property, which is absolute nonsense.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

And it was built by the public in the first place.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

Indeed. What we saw in evidence from Local Space, which is operating in a number of London boroughs, is that that organisation has established a housing association that accesses exactly the same money as the private landlord would have accessed and it buys properties and allocates them, through the local authority, to homeless families. It uses the benefits that are provided by the Government, through the local authority, to purchase properties that will eventually come back as part of the social housing stock. I know that there are difficulties: it is still operating on very high rent levels, which creates the disincentive-to-work problem, so it is not a perfect solution, but in terms of money going in to buy the houses for the public sector rather than going into the profits of a private landlord, it is at least a significant and different way forward. The Government have had a look at that, and I think that they have generally welcomed it. I am sure that we could encourage such a system in other parts of the country as well.

An issue that we did not discuss very much, but which is clearly back on the agenda, is energy efficiency. In the past, the Select Committee was critical of the fact that the decent homes standards did not go far enough on energy efficiency. I raised that point in the Committee the other day and I will raise it again. Everyone welcomes the additional money available for energy efficiency. We welcome the Warm Front plans, whereby people who are in priority need because they are on benefit or are pensioners in the private sector, whether they are owner-occupiers or private tenants, can access funding if they have out-of-date and inefficient heating systems to install new systems.

That money, however, is not available to social housing tenants. That is unfair, and it is discriminatory. These are some of the poorest people in the community, and for all the insulation that is put in, if people still have an inefficient heating system, they will be in fuel poverty. The Government could act quickly to extend those schemes to social housing tenants, then consider standards of energy efficiency more generally when we come on to consider decent homes plus, which I hope the Government will eventually announce.

I think that we did a good job. I particularly congratulate my hon. Friend the Member for Milton Keynes, South-West, who chairs the Committee and went to enormous trouble to ensure that we had a comprehensive set of witnesses and that a lot of evidence taking was done outside the House, in various communities up and down the country. We made many recommendations, but I will just emphasise the point on which I do not agree with the hon. Member for Chesterfield. That is not a condemnation of Government housing policy but recognition of the fact that many good things have been done, but there are still many big issues to be tackled. That is what the Committee is suggesting to the Government. We still have a lot more to do and we look forward to a positive response.

K

Clive Betts said 'We welcome the Warm Front plans, whereby people who are in priority need because they are on benefit or are pensioners in the private sector, whether they are owner-occupiers or private tenants, can access funding if they have out-of-date and inefficient heating systems to install new systems.'

This is completely untrue as far as private tenants are concerned. Landlords are responsible for the costs of repairing or replacing faulty heating systems as a result of the Landlord & Tenant acts and the tenant cannot be awarded any funding for these purposes.

Ken T.

Submitted by Ken T.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North 4:18 pm, 6th November 2008

First, I welcome my right hon. Friend the Minister to her new position, in which she is responsible for housing policy. I very much welcome that and look forward to hearing what she has to say. Having been in the House even longer than I have, she is well aware of the enormous pressures and needs that exist in relation to housing. They come up in every advice surgery, which MPs hold regularly.

I want to make a number of points, but I shall start with a general observation. In this country, there is a national obsession with home ownership that does not apply to any other country in Europe. Government policy, banking policy and everything else is directed towards home ownership. The assumption was that with home ownership, people automatically made themselves richer throughout that period—and through most periods since the second world war that has been the case. Now, for most of the country, it is certainly not the case.

We treat rented accommodation, whether council, housing association or private rented, as an inferior form of living, and those who live there are condemned by people who say, "Well, do you know they still rent their own home?" or "They're still in casual housing." We need to get away from that mindset and those attitudes. We need to ensure that everyone has somewhere decent and affordable to live, and we must try to reduce the use of that kind of language.

It is no accident that both Islington Members are here this afternoon. We represent inner-city communities, which have an interesting combination of people. Some in our boroughs are extremely rich—they have the image of being wealthy, aspirant people. The reality, however, is that the majority of people are not wealthy. Unemployment is well above the regional and national averages, and the housing crisis is acute and serious for many. In common with other London MPs, we have the phenomenon of very poor people living in grossly overcrowded accommodation literally next door to someone in a £1 million house. That sort of social division is getting worse across the piece.

My advice surgery, like those of my hon. Friend Emily Thornberry and others, is dominated by people who live in appalling conditions. People living in grossly overcrowded accommodation or in private rented accommodation have a sense of hopelessness. Although some policies suggest that they should move away from crowded inner-city areas and live somewhere else, it is not as simple as that. If they have family connections, if they wish to look after older relatives or if they have education or careers to follow, it is not that simple to move. We must ensure that public policy operates in a way that provides housing for those who desperately need it.

There are three general housing matters that I want to mention. My community, like others, has seen a big increase in the number of private rented properties over the past 10 to 20 years. The number of places offered for social rent either by the council or by housing associations has consistently fallen throughout that period, mostly as a result of right to buy, although demand for right to buy has more or less disappeared of late. There has been a slight increase in social rented accommodation, entirely through housing associations, although I welcome the fact that my local authority is, for the first time, about to build 100 council homes in the borough.

The one sector that has increased phenomenally is the private rented sector. In my constituency, roughly one third of the population own their own properties; the rest are a combination of council and housing association or private rented properties. Private rented accommodation varies between the good, the adequate, the awful, the truly appalling and a national disgrace. I would be grateful if the Minister could give us some hope on the latter types.

Many people living in private rented accommodation come to my surgery, and even if they are on housing benefit, I always ask what rent they are paying. Some people do not know, so I have to dig through the paperwork and find out from their housing benefit papers. The highest that I have come across is £425 a week for a former local authority property, but the local authority property next door is rented every week to a local authority tenant for about £110 a week. As my hon. Friend Mr. Betts said, who gets the difference? The private landlord is making £300 a week. Frankly, he does not deserve it. The place is not particularly well managed. It is an outrage. We are paying £300 a week, an excessive subsidy, to someone who was fortunate enough to be able to buy the property under the right-to-buy scheme. It is immoral.

Then one moves into the private rented sector. Victorian houses have been bought up by landlords at various times and converted into three, four or five flats to absolutely minimal standards—just enough to get through building control regulations—and with no energy efficiency measures and so on. The landlords do not bother too much with maintenance, because they know perfectly well that the local authority is no longer housing new applicants in local authority or housing association properties. Local authorities have introduced an arbitrary date—in my borough it is 2005—and said that after that date people will be allocated housing only in the private rented sector.

As a result, families are placed in private sector rented flats. The rent could be anything from double the local authority equivalent to three or four times that sum, depending on what the landlords can get away with. The condition of many of those places is disgusting. They are rat-infested, mice-infested, and there is a lack of repairs and so on. The tenants, many of whom are vulnerable, are frightened. They are frightened to contact the landlord, and they are frightened to argue because they do not know what will happen as a result. We are paying the rent through housing benefit, and we are subsidising the worst sort of spiv landlord, whose tenants are living in disgraceful conditions. What is going on is plain wrong.

Then I think, "Hang on. For £300 a week I could get a very large mortgage." Instead, we are throwing the money down the drain and into the private sector. Because the mindset of public policy is inadequate, there is no investment in housing for people in desperate social need. I would be grateful if the Minister were to acknowledge the problem—I am sure that she will—and acknowledge the need for greater control on the condition of those properties.

We also need an examination into—I must choose my words carefully—the over-convenient relationship between local authority housing departments and local letting agencies. The local agencies may get in touch with the housing department and offer 50 flats. It is easy for the housing departments to say, "Okay, we'll take your 50 flats," and not bother to examine them too closely. It is the tenants who lose out. We need some changes.

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

I wonder whether the hon. Gentleman shares my despair over the fact that, during the past 10 years, so much less affordable and social housing has been built than was built during the 18 years prior to that.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

The hon. Gentleman tempts me to move away from the main narrative of my speech. All I would say is that I was a councillor in the London borough of Haringey during the 1970s and early 1980s, and I was proud when we managed to complete 1,000 new dwellings in one year. We were taking people off the waiting lists and rehousing them. Then Margaret Thatcher became Prime Minister; house building stopped, right to buy came in, and bed-and-breakfast and hostel accommodation returned. Let us not talk of the golden days of the Thatcher Government, because they were not golden for people in housing need. They may have been golden for those who wanted to make a fast buck at the expense of the public sector. That is all that I have to say, and I am sure that the hon. Gentleman is entirely satisfied by my response.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

There is more if it is wanted, but I think that that is quite enough for the moment.

Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

I agree with what the hon. Gentleman has said about the Conservatives' bad track record, but surely he agrees that it is even sadder that the record is worse after 11 years of Labour than it was after the bad record of the Tories?

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

What I am disappointed about, and what makes me angry and determined to see change, is the need to build many more houses for rent. I am sure that everyone agrees that the Government have done well with the decent homes standard. We have made our estates much better, and improved them a great deal, which is good. However, we have not done anything like enough in building for social rent. That is the thrust of the report, and it is the thrust of what every hon. Member has said today. On that we are agreed. The hon. Gentleman has heard what I have said, so he is well aware of my views.

I hope that the Minister will give us some good news on the Government's attitude to council housing. I am a member of the all-party group on council housing along with the hon. Member for Chesterfield and others. We need to stop discriminating against local authorities and local authority tenants, who have freely chosen not to transfer to a housing association or to establish an ALMO. That is their right. It is unfair that local authorities such as Camden, Chesterfield and one or two others, where there has been no stock transfer, should end up losing grant and support, because they end up paying far more.

I hope that the Minister will be able to say something about reform of the housing revenue account. It is an arcane and difficult thing to understand, and most people switch off as soon as it is mentioned. However, through its method of operation, it is taking a great deal of money out of tenants' pockets and giving it to central Government. It is like a Government levy.

In my former life as a councillor and as an MP I have never been particularly in favour of right to buy, because it ends up taking properties out of the social rented sector. However, it is important to emphasise to local authorities that they now have the power to buy back under the right to buy, if they want to. Very few of them seem to be aware of that, and even fewer of them seem to be doing it.

We must recognise that the right to buy creates a number of problems. My hon. Friend the Member for Islington, South and Finsbury and I are inundated by problems in relation to leaseholders, who are often not wealthy by any manner of means. When those people bought their flats in the 1980s or early 1990s, either the situation was not explained to them or they were not aware or did not bother to read the fine print of what they were getting into, but they seem to be totally shocked every time a capital expenditure bill comes along for a new roof or other work being done. There are then enormous arguments and debates between tenants and local authorities about who will pay for the capital repairs.

Leaseholders often are not wealthy—indeed, some are very much up against it, particularly if they are older—and they are absolutely terrified when they get a bill for £5,000 or £10,000 for their proportion of the capital expenditure. We need to think very carefully about that issue and take a much more sensible approach. We also need a much more robust system to work out what the charging mechanisms are. One gets the impression that some local authorities are desperate to meet the decent homes standard—I have no complaints about that—and are not pushing the contractors hard enough on the price being paid. There are some big issues in that regard that have to be dealt with.

I want to discuss rent policies. I represent an area in which about 40 per cent. of the community lives in council and housing association property. Income levels are such that at least 80 per cent. of that population has no chance whatsoever of buying their own property. For them, the only way out of a housing crisis is through local authority-inspired renting—either through nomination to a housing association or, in our case, through Homes for Islington.

People who live in grossly overcrowded accommodation suffer in many ways. Children suffer because if one child gets the flu, they all do. If one person gets a cold, everyone gets it, because they are living in such overcrowded accommodation. That is bad for their health and for their children's well-being. Having inadequate space to play is damaging to young children. Children from 11 upwards and young teenagers feel embarrassed when they live in overcrowded places. They cannot bring their friends home for tea or to stay over because there is no space for anyone to come in, and they hang around on the streets outside instead. There is nothing wrong with young people socialising, as that is part of growing up, but when their only option for doing so is to hang around in the streets, we end up with the levels of youth disorder and crime that we have at the moment. Those children then underachieve at school, are excluded and end up being over-represented in young offenders institutions. We are creating social disorder, crime, misery and poverty by not investing enough money in decent housing for everyone in our society and communities. I welcome the fact that the Select Committee report has looked at those issues.

On letting policies, I understand the need for priorities. However, when someone comes in to my advice bureau to talk about their housing problems, I find myself—as I am sure other hon. Members do—deftly asking, "Are you ill?" If they say, "Not really," I ask, "Well, how not really not ill are you?" and I try to work out a hopeful way of getting them some medical points. That is wrong really, but everyone does it, because it is a way past a shortage. We go through all that, and get letters from schools, doctors, psychiatrists and social workers, and then it all ends up being rejected, and they get nothing because they are not ill or bad enough. Then they will come back two years later, psychiatrically ill because of the stress that they have been put through, and we end up re-housing them in the end.

We re-house on the basis of need, taking into account whether children or elderly people are involved and whether there is disability or illness. A large proportion of households within our society—indeed the fastest-increasing proportion of households—contain single people. They get absolutely nothing under housing policies anywhere in the country that I know of. There might be places in which they do, but I do not know of them. We must recognise that single people have rights, needs and demands, just like the rest of the community. They should not be discriminated against because they are single.

The Select Committee has said that we need to build 50,000 units a year, and the Government generally accept that figure. I have no idea where that figure came from, but we could be far more ambitious, because there is desperate need. If the credit crunch is to mean anything, surely it is that the money that the Government have set aside to allow local authorities and housing associations to purchase is important and that it must be spent on purchasing properties, where properties are of adequate value, and available land. We must use this time and this opportunity to build housing for people who are in desperate need. That would solve three problems: it would house people who are in desperate housing need; it would provide work for building workers and building companies; and it would help to regenerate the economy, as the knock-on effect of the building industry is considerable.

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

Pages 25 and 26 of the report explain exactly where the 50,000 figure comes from. That was the target proposed by Shelter in its evidence to the Committee, and it was on the basis of that evidence that the Committee came up with the figure.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I would not dream of arguing with Shelter. I am sure that it is absolutely right, but why cannot the figure be higher? However, I understand the point behind it.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

I am like that; I was born generous.

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

I agree with the hon. Gentleman about the 50,000 figure. Is he aware that in 1992, during the last recession, 60,000 affordable homes were built in one year?

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

Yes, I am aware of the number that were built during that period, and I want us to build far more properties now. That is possible, and I hope that we can do it. The responsibility to do that rests on us all.

By underfunding housing associations and requiring local authorities to sell capital assets and land, we have got into a situation in which social housing, be it housing association or council-owned, has become an add-on to private sector developments and interests, rather than being a social good and a social objective in its own right. I absolutely agree with the points that my hon. Friend the Member for Islington, South and Finsbury has made about the disposal of capital assets by local authorities. There was a time, up until 1980, when any public authority—be it a publicly owned industry, such as the railway, telephone and water companies, or a local authority or health authority—that was disposing of any public assets had to offer them to any other public authority first, giving them first refusal. That was a good way of getting hold of redundant railway, water authority or other land to develop social housing. The Conservative Government, of whom Grant Shapps is so proud, abolished that rule very quickly after winning the 1979 election.

It is time for us to go back to protecting public assets for public good, so that we can deal with the housing crisis. The financial crisis is terrible, but it presents an opportunity to deal with the pressing social need to ensure that everyone in the country has somewhere decent, secure and safe to live.

Photo of Dan Rogerson Dan Rogerson Opposition Whip (Commons), Shadow Minister (Communities and Local Government) 4:38 pm, 6th November 2008

It is a pleasure to serve under your chairmanship, Mr. Taylor, in such an important debate. I am very pleased that the Select Committee chose to conduct this inquiry and to provide us with a report, and that we have been given the opportunity to debate these issues. It is slightly depressing, however, that we have not moved forward hugely in the past few years. I have heard this debate several times in the few years that I have been here, and many of the issues that we are discussing today have been issues for some time. They are not newly emerging trends.

I congratulate Dr. Starkey and her Committee on the report. She picked out a number of key findings, some of which I shall return to later. I hope that she will forgive me for not responding directly to her comments now, because I shall talk about the report later.

The hon. Lady was keen to point out at the start that we are now operating in a slightly different context to when the report was written. As many hon. Members have pointed out, that has huge implications on how housing development will be provided, on the response of the private sector and on how the requirements for rented accommodation will be affected, should even a small number of people now become able or choose to get into the housing market.

My hon. Friend Paul Holmes has done a huge amount of work as a Front-Bench spokesman, as a member of the all-party group on council housing and as a constituency MP with a huge interest in those matters. He rightly pointed out the human cost of inadequate housing, and the loss of potential, productivity, educational opportunities and social and community benefits for all those whose lives are affected. That point was echoed by other hon. Members, including Jeremy Corbyn who spoke about the potential for inadequate housing to send young people in particular down a path that we would love to guide them away from.

My hon. Friend the Member for Chesterfield talked about the size of the task that faces us, and he had strong words to say about housing associations. I agree with him, and the Liberal Democrat party has supported the option of councils being able to build again in recent years. Although they can vary, some housing associations do fantastic work and have made great moves to increase tenant involvement and participation, and to find other ways in which they can support their tenants, be that financial support or something else. I had the pleasure of speaking at an event not far from this House, and of launching a report on housing in the south-west by the National Housing Federation. Much good work is done by housing associations.

Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

To clarify, as I have said, many housing associations do a good job. As my hon. Friend has said, many of them are starting to help tenants train for skills for work and to give them financial advice. It just strikes me as an irony that that is what councils used to do before their budgets were cut so much that they could no longer afford to do so.

Photo of Dan Rogerson Dan Rogerson Opposition Whip (Commons), Shadow Minister (Communities and Local Government)

I have given my hon. Friend the opportunity to emphasise his earlier point. Through the policies of the previous Government, and those of the present one, we have put all our eggs in one basket. We have not allowed a broad spectrum of ways in which to tackle this issue, such as allowing local authorities to become more directly engaged.

My hon. Friend spoke about the right to buy, and the potential benefits of giving people who wish to have it access to home ownership. My parents had a council house when I was born; they went on to buy a first small property and later to buy plots of land and build. Historically, there was more movement in and out of council houses. As the Hills report states, council tenants used to include a broader spectrum of incomes and levels of engagement with the community. It has always struck me that as a country, we got out of the housing market just before a huge increase in property prices. As an investment, that was a bad decision, and perhaps we are now perhaps suffering from that.

The Government's decisions in other Departments have created problems. In my constituency, there is housing that was owned by the Ministry of Defence. Under the Conservative Government, it was passed over to Annington Homes. I have corresponded with Annington Homes. It is acting to deliver on what it has been asked to do, but there are now empty homes because the MOD has not released them for disposal. That is in the context of huge housing need in towns such as Newquay.

Emily Thornberry talked about the stark divide in wealth and the overcrowding in her constituency. She also referred to choice-based letting, which is crucial. It would be wonderful for choice-based letting to become the reality, because people would be empowered to choose between properties. The reality is that people are allocated a property through the system. There is very little choice because of banding systems and people can apply only for certain properties.

In my constituency, a council has just taken someone off the list—it has a policy of doing that if someone has not applied for all the properties for which they could have applied. That is a move away from choice-based letting. I understand why the council might choose to do that if the allocated temporary housing is in a particular location and is very high cost, but that system is a problem. It means that choice-based letting does not function in the way in which it was intended to do.

The hon. Lady also made a good point about the need to prioritise family housing. In this period, there has been a big move towards single-person households. However, the fact that more single-person households are being created—people are living longer and so on—does not mean that all single people will go and live in the one-bedroomed flats that are being built. In many such cases, people are in the private sector and stay in larger accommodation. There are families with nowhere to go.

Mr. Betts talked about the right to buy and size and location. He also mentioned section 106 agreements and the interaction with the community infrastructure levy. He and I both served in Committee on the Planning Bill as it went through the Commons, and it still remains to be seen what that interaction will be. He is right to say that that could become an issue, especially if we have a slow down in private development. There are scarce resources that people are fighting over for investment.

The hon. Gentleman talked about local decision making on policy, which the Liberal Democrats support. Under the previous and current Governments, there has been a centralising tendency. We must restore the capacity and ability for local authorities to take more strategic decisions in their own areas.

The hon. Member for Islington, North talked about the push to get people into home ownership that, rather perversely, has taken place in this country. The last Housing Minister but one still argued strongly that we should take that approach, that people aspired to own their own home and that public policy should be about helping them to achieve that. I think that a lot of people have been pushed into that route as it was the only one available for them get anywhere near the sort of housing that is appropriate to their needs. We have 100 per cent. mortgages, and I am sure that all hon. Members—as well as the citizens advice bureaux—are getting calls from people who now have negative equity and cannot afford to pay those mortgages. A huge crisis is just around the corner, and we need to deal with it.

The hon. Gentleman pointed to the issue of leaseholders who, following the right to buy now have problems due to the investment that is necessary on their properties. I remember that being a problem when I was a councillor for an area that had a lot of social and ex-social housing.

We must be honest about the fact that we, as a country, and the Government are providing a subsidy. We must choose whether to continue to do that, largely through housing benefit which, as the hon. Member for Islington, North has said, effectively goes into the pockets of private landlords, or whether we should return to the provision of social housing in a far bigger way. We should look at making social housing available to a range of people, not necessarily those who have, in the words of the letting service in my area, "emergency status." We have had bronze, silver and gold bands for people to move through on a points system. Even those on the gold band who are greatly in need of housing might have to wait up to 18 months for a property to become available. There are people with medical emergencies who come in above them.

The Tenants Services Authority has a great deal of work to do, and I look forward to seeing how its role will develop. I have been able to meet a representative to talk about what it plans to do. That is important, as is how the authority will interact with local authorities. There are options for it to take an enhanced role.

The hon. Member for Milton Keynes, South-West referred to "residualisation." That returns to the point about who social housing is available for and whether it should be available for a broader cross-section of people. Recommendation 31 in the report focuses on that and the fact that we should be having a broader discussion on how social housing can be used. I have already referred to family housing, but we need to revisit that. Of course, that debate interacts with the planning system, the regional spatial strategy process and interactive local development frameworks. Arguably, sometimes, in areas where there are higher housing targets, those things empower developers more than local authorities in the negotiations to come up with the right solutions.

The report also talks about the private rented sector. Some very complicated housing benefit issues need to be resolved, as many hon. Members have been keen to point out, but most people agree that we are not really achieving the best value for money in using the private rented sector as a tool to deliver for our constituents.

Tenure is a key issue, especially in relation to families, as my hon. Friend the Member for Chesterfield has said. Recommendation 36 relates to what the Law Commission had to say. Some valuable work needs to be done on that, and hope that the Minister has the opportunity to do it.

The Rugg and Rhodes report asks why tenancies fail, as the hon. Member for Milton Keynes, South-West has said. It is not necessarily that they fail, but smaller investors in buy-to-let do not take the long-term point of view; because they want a shorter-term profit. Recommendations 65 and 66 address real estate investment trusts. There could be many benefits from making a residential REIT work, in that it could provide a more structured way for people to invest, which would hopefully encourage a longer-term investment and allow better-quality private rented accommodation, and accommodation that could be targeted at more specific groups. Some hon. Members have discussed studentification in their constituencies, meaning when terraced housing or whatever has largely gone over to students, and the effect that that has had. Quite often, it is not appropriate accommodation for students and their interests are not best looked after. There is a lot to be won from investigating the possibility of private tenancies targeted at particular groups.

I welcome the Minister to her position—I apologise for not doing so at the beginning of my remarks. She has a huge amount to do and, given the economic circumstances that we face, she has only a short period in which to get to grips with it and to have a real effect. My party wants an attractive rented sector to get over the problem of people being pushed into home ownership, when that is not appropriate. We want the sector to be responsive to the different needs of different regions, people and families, and we want it to provide people with decent, affordable places to live with a sufficient length of tenure.

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party 4:52 pm, 6th November 2008

May I begin by saying how much I welcome the Committee's work and how interesting it was? I congratulate both the Chairman of the Committee and other Members who worked on the report. I agree with an awful lot of the report—the vast majority—and it is a good, thoughtful piece of work on the private rented sector.

I also welcome the Minister to her new position. It is the first opportunity that we have had properly to debate a housing issue, and I look forward to many other occasions. Indeed, I hope that our debates continue longer than they did with her two predecessors—she is third Housing Minister that I have faced in 2008 alone. I hope that they give the Minister a greater chance to get used to the portfolio.

The scope of the review, and the detail in the Government response, mean that it is impossible to cover many of the interesting recommendations and responses in the short time that I have available. I therefore thought that I would simply pick out a few things on which there should be greater clarity, particularly on the Government response to the Committee's excellent work. When we look at any area of housing, but especially the private and public rented sectors, we find that the overall supply of housing is the critical thing—it is the driver for everything else that happens in the sector. That was mentioned several times today.

I wonder whether, actually, this afternoon is a useful point at which to clear up an area of confusion. Comments by the new Housing Minister last week rather set the cat among the pigeons. She told a recent meeting of the Committee:

"I think the most challenging of the targets was the 3 million" homes by 2020. There is no doubt about that, but she added:

"but that was an ambition actually".

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

The Minister indicates that it was always an ambition, but that is not what the Prime Minister said on 11 July 2007, when he announced the draft legislative programme. He said that there would be 3 million homes by 2020 and that:

"For England, we will raise the annual house building target for 2016 from 200,000 houses a year to 240,000 new homes a year"—[Hansard, 11 July 2007; Vol. 462, c. 1449.]

It was clear that the Prime Minister thought that it was a target. The Secretary of State for Communities and Local Government, on the 27 November 2007, when she was talking about the planning White Paper, very specifically mentioned achieving the target for 3 million homes—there was no ambiguity about it. The Minister's immediate predecessor, Caroline Flint, said:

"We believe that a total of 3 million new homes needed by 2020 will be delivered by 2020", and, what is more,

"we will deliver the target of 2 million by 2016".

Photo of Margaret Beckett Margaret Beckett Minister of State (Department of Communities and Local Government) (Housing)

To save the hon. Gentleman from reading another 15 examples of where the word "target" was used, may I just say that my understanding was that it was always an ambition? Most people use the words "ambition" and "target" relatively interchangeably. My main point to the Committee was that nothing has changed, in that we are not abandoning the desire to press on to provide greater social housing, which a number of people argued we would have to do because of present economic circumstances.

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

I do not think that we have time to get into a lengthy discussion about whether the words "target" and "ambition" are interchangeable. If they are as interchangeable as the Minister says, I invite her to use the word "target", if that is what she means, when she responds.

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

Will the hon. Gentleman inform the House whether his party supports the Government's target or ambition to have that number of houses built in that period of time?

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

As the hon. Lady knows from sitting opposite me for hours in Committees, we want to see more homes built. In fact, we have a very proud record of building more homes. We do not think that the way to do that is to set a top-down, centrally driven, Whitehall-dictated target to build homes. She has heard me say this before: if I were to ask the appropriate Minister what the tractor building target was by 2016 or 2020, the Minister would look at me as if I was mad. Governments do not have those types of targets. They do not have targets for car production, for example, but, for some reason, they have a target—which now turns out to be merely an ambition—for house building, which makes no sense.

If one wants to know why it makes no sense, one has only to look at the situation in the year since the target was set. The simple fact is that it will not be reached and it turns out in fact not to be a viable approach to house building. With the benefit of hindsight, we can see that the housing shortage was being promoted not only by the severe lack of house building, especially in the past 10 years and, I concede, previously—I will return to that in a moment—but by the excess credit that was allowed to build up. That enabled people to take out mortgages and do all sorts of things related to private rented sector, such as take out buy-to-let mortgages at 125 per cent. and four, five or six times salaries. The Treasury and the man who is now Prime Minister failed to call time on those banks and took the ability to do so away from the Bank of England. It is not only a question of total housing targets, but of demand that was built at an expanded, bubbled price.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

May I help the hon. Gentleman to understand the difference between homes and tractors? Could it be that in law, many people have a right to a home—everyone ought to have a right to a home—but it is not quite so necessary for people to have a right to a tractor?

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

That is a better explanation than I have had from any Minister so far, so I certainly accept it.

The fact is that fewer homes have been built every single year in the past 10 years—let us leave out the credit crunch, which constitutes exceptional circumstances—than in the previous 18 years. I will give the figures to hon. Members. Something like 145,000 homes have been built in each of the past 10 years. That compares rather unfavourably with the 175,000 that were built every year during the previous 18 years. As if that is not bad enough—and I was seeking the views of Jeremy Corbyn on this earlier—the number of affordable homes has collapsed compared with the previous 18 years. The Government have not built as many homes in the affordable bracket in a single year as we did every single year in the previous 18.

I do not want to get buried in a debate about the past and claim that everything was rosy. The report makes some very intelligent remarks about the impact of right-to-buy schemes when the money was not reinvested, and the impact now of such schemes when the money is being spent on things such as the decent homes standards, which will not be met. In any case, we know that the amount of housing, particularly council housing, that has been built has crashed. Just before we left office, we built 1,550 council houses a year. Last year, 263 were built across the country. The big macro picture shows us that there is not enough rented housing. I estimate that the number of homes built over the past 10 years has dropped by about a third of a million.

I want to use the rest of my time focusing on the specifics of the report, and asking questions of the Minister. I notice a bewildering array of different targets in the Government response. For example, it says that

"we have made substantial progress over the last ten years" in increasing the supply of affordable housing. As we have just discussed, that is completely untrue. The report then goes on to discuss targets. It says that 70,000 "new affordable homes" will be built per year by 2010-11, of which 45,000 will be social homes. The next paragraph says:

"We remain committed to a substantial increase in social housing and 50,000 units a year remains our long-term aspiration."

In that context, long term means about a year and a half. I am confused as to which of those figure we should be relying on. Will the Minister tell us when she responds? Moreover, will she tell us whether they are aspirations or targets as the figures seem to fall into both camps?

The report refers to the national mobility scheme, which collapsed and was never put back into place. Will the Minister tell us what steps are being taken to set up a national mobility scheme, because that is not mentioned in the response?

The housing benefit issue, which is mentioned on page 9 of the report, is that, in so many cases, it is much better not to work. I had a very memorable trip to an area in Hastings, which has an horrific problem—in common with a lot of our seaside towns—of poor- quality houses in the private rented sector. People were being paid housing benefit when they desperately wanted to work instead. I met people who were accepting the pay cut and going out to work. In the response, the Government say that they are undertaking a review which they expect to conclude next month. Will the Minister tell us whether that review will report on time?

The housing reform Green Paper has also been promised by the end of the year. I imagine that it will come in the Queen's Speech. Will the Minister confirm whether we can expect to see that, because I think that we have all heard rumours of a delay?

I understand that the report was started in 2006, reported in May and responded to in September. Since that time, we have had a tremendous crash, to which many hon. Members have referred. Will the Minister confirm whether she has had the opportunity to inspect housing association books or to discuss with the Homes and Communities Agency the significant financial pressure that a number of associations may be under because of the crash in the value of their portfolios?

The issue of the right-to-buy receipts is very contentious. Every time the matter is raised, people take very specific positions. We have seen that in today's debate. However, it is pretty obvious that we must ensure that right-to-buy receipts are recycled to pay for more affordable or social house building.

The Government response mentions a review that has been set up to consider the right-to-buy receipts and how they should be spent. After talking to my own council in Welwyn Hatfield and to many others across the country, we know that 75 per cent. of those receipts are returned to central Government, which means that there is no way in which local authorities can continue to invest and build affordable housing.

Photo of Dan Rogerson Dan Rogerson Opposition Whip (Commons), Shadow Minister (Communities and Local Government)

We welcome this move from the hon. Gentleman's party. Will he concede though that the horse has bolted on this one? So many places have already gone through the right to buy. Given that property prices have increased so much, the numbers taking on the right to buy are so much lower now that it will not have such a significant effect.

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

There is still a significant number of council-owned homes. My council has about 9,500 such homes. The figures elsewhere are still pretty big. There are also right-to-buy schemes in housing associations and in other situations. If we are to get sustainable, long-term, affordable social housing built, we have to have the money reinvested. I take a pragmatic view on the matter. We should do whatever is necessary to get new homes built. There has been a complete and utter failure to get new house building going, which has had a huge impact on the social and private-rented sector, and we need to fix that position.

Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

Will the hon. Gentleman clarify whether his party—should it have the power—would allow local authorities to decide whether a right-to-buy scheme is correct for their area rather than imposing it from the centre? The Conservative party has suggested extending right to buy to all housing association properties. Is such a policy on or off the agenda?

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

Localism is the way forward. Areas need to develop in a way that suits them. The response says that community land trusts—or something that sounds like that—are a very good way of ensuring that individual areas can do their own thing and invest in the way that they want and keep the land in public ownership or in a trust ownership in perpetuity for the benefit of people in the future. None of us can deny that there is a big debate over right to buy. If one did not believe that public housing had seized up, that there was a record waiting list of 1.7 million families and that some of the reason is that people are not moving out of homes that are no longer suitable for them and their families, one would not have grasped the scale of the housing problems in this country. We know that 1.7 million families—perhaps 5 million people—are on a public waiting list, and that that has to be tackled. I think that right to buy has a part to play and that could extend into registered social landlords. However, we have to ensure that when such properties are sold, the money is reinvested in producing more affordable and social housing. That makes perfect sense.

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

The hon. Gentleman has caused a degree of confusion. Is it the Conservative party's policy to have right to buy with no subsidy, so that the money can be reinvested in building? In other words as one house is sold, another is built. Is that Conservative party policy, or does the hon. Gentleman believe that there should be a substantial subsidy as well?

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

Realistically, we cannot sell one property and then build another. The maths do not work out. The Homes and Communities Agency has an £8.4 billion budget over three years. That money is supposed to be spent on affordable housing. Will the Minister tell us how much of that money has been allocated and how much of it has been spent?

Perhaps we can find out at the same time when the three-year period for that £8.4 billion started and at what point it will end. I have been in conversation with the chair and the chief executive of the new Homes and Communities Agency, and it is clear that they do not understand the budgets and cannot get their heads around the figures. I have requested detailed financials from the agency—a body that will spend some £15.5 billion in public money a year, £8.4 billion of which will go towards affordable housing over three years—and it does not know how the numbers are made up. Will the Minister be kind enough, either to tell me today or to send me a note in future—I understand that this is unexpected—to explain how the budgets will be separated?

To answer the intervention accurately, of course public money must go into it. I had a similar intervention from the hon. Member for Islington, North. When we were in power, we built 60,000 affordable homes in 1992, a year of recession. Even the Government's targets mention only 45,000 or 50,000, variously; it is hard to know which. The reason why we built more was pointed out earlier. It is because we put more public subsidy into it, and because the system that delivered housing was not top-down but bottom-up. It did not rely on Ministers thinking that they knew best and directing regional assemblies to plonk down housing in localities; it worked with local communities to deliver housing. We know that there is a better way to do things; we have seen it in operation. I invite the Minister to share, as the Government have tended to do in the past year, in some of the Conservatives' better ideas on housing. Perhaps we can work together to create the affordable housing and better rented sector that we need in this country.

I want to ensure that I give the Minister adequate time to answer this flurry of questions, so I will end by asking her just a couple of questions. Last year, the Conservative Homelessness Foundation produced a report showing that 130,000 children in this country are now homeless. That is twice as many as 10 years ago. Does she think that there is anything in the review of the rented housing sector that would be of help and comfort to those 130,000 homeless children? Is there a measure or some response that I have not picked out that would reassure them that the Government are on the problem?

Finally, as has been mentioned, there is dramatically less housing overall than in the period preceding this Government. Will the Minister do what neither of her predecessors seem prepared to do and admit once and for all that the problem with housing is that too little has been built in the past 10 years? With the admission of that problem comes the resolution to the problem of the private rented sector and much else besides.

Photo of Margaret Beckett Margaret Beckett Minister of State (Department of Communities and Local Government) (Housing) 5:12 pm, 6th November 2008

It has been a fascinating debate. I may as well say at the outset that the chances of me answering in 15 minutes the plethora of questions that have been aired are not high, although I will certainly do my best to deal with the main issues: the subject, the Select Committee's excellent report—which, like everyone else who has spoken, I commend—and the general discussions that we have had and will have about the overall issue of housing supply. The Chair of the Select Committee, in giving her masterly summary of the report's key points and picking out some of the issues that interested her, reminded us all forcefully of the key importance of the subject. As I said, I will say something about the key points of this debate rather than dealing with all the detail of the specific issues raised.

Hon. Members will be aware that we have already taken forward many of the recommendations made in the report. I will endeavour to update the Committee on that and on what progress has been made, but it is worth first making a point that I believe was made by the Committee Chair at the outset and was touched on but not dwelt on during our exchanges. It is not in dispute that in the public mind, and perhaps particularly in media commentary, renting a home is often seen in this country mainly as a stepping stone to home ownership. For many people, that is undoubtedly true and may remain so. However, I completely accept and have always held the view that rented housing also plays a much wider role in our society than that common assumption acknowledges.

A huge variety of people, from those starting out in their careers to retirees and wealthy professionals to those on housing benefit, all gain—in their different circumstances, and perhaps for different reasons—from the greater flexibility and choice that can be found in rented housing, including in the private rented sector. Social rented housing also plays an invaluable role for those who need greater security or stability than can be found in the private rented sector but who cannot sustain private home ownership. My hon. Friends the Members for Islington, South and Finsbury (Emily Thornberry) and for Islington, North (Jeremy Corbyn) both made powerful points about that in the context of constituencies such as their own. Many people cannot sustain private home ownership and are unlikely to be able to do so for some considerable time to come, if ever.

Because of the many benefits and the wide variety of people that it supports, rented housing must not been seen as second best. The Committee report made that point and dwelt on it, which is welcome. It is good that it has come through clearly and that it is common ground in this debate that all who rent their homes, whether in the public or the private sector, ought to get the best possible quality and service. The Government and the Select Committee are in complete agreement.

The Committee's wide range of recommendations fall broadly into three categories: that we should increase the supply of both private and publicly rented homes—most of today's exchanges have dwelt on that—that we should improve the quality of homes in the private sector and that we should improve the quality and service available in social housing. I shall take each of those broad themes of the report in that order.

Last year, we committed to the biggest home-building programme for many years, perhaps for decades, whose ambition was 3 million new homes by 2020, with a particular focus on affordable and social housing. As has been said, over the next three years, we will invest more than £8 billion in the programme. I have not had any specific discussions with the new chair and CEO of the HCA, to whom Grant Shapps referred, not least because the HCA will not be set up until 1 December. I was interested to hear what he said. From the little that I have heard, I would be surprised if it were true. I do not know Sir Bob Kerslake very well, although I know that is not necessarily the case for other Members on the Committee, but from my relatively brief acquaintance with him, I do not get the impression that he is a man easily confused, especially by worries about the amount of money available to him and how to use it. I look forward to hearing from Sir Bob Kerslake whether that is indeed how he feels.

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

The organisation will spend £15.5 billion in public money and will be answerable to the Minister, or at least to the Secretary of State. I would be most grateful if she agreed to investigate the budgets and send a note.

Photo of Margaret Beckett Margaret Beckett Minister of State (Department of Communities and Local Government) (Housing)

I am not sure whether we are not slightly at cross purposes. Yes, the agency will report to me, and of course I expect over time to have many discussions with the agency about what it can do, the scope, how it uses its resources and so on. What I thought that the hon. Gentleman was asking me, amid his plethora of questions, was whether in the three and a half weeks that I have been in this post I have been examining books of housing associations. I freely admit that that has not been my earliest priority. However, as someone who has in the course of a chequered career been shadow Chief Secretary to the Treasury, among other things, I take a keen interest in value for money and how public money is used, and I will always do so, not least in this sphere.

As has been said, the Government's aim is to deliver 45,000 social homes a year by 2010-11. I am not sure how the confusion arose in the hon. Gentleman's mind, but the figure of 70,000 homes that he mentioned, which is in the Government's response, is the overall number of affordable homes, including those for purchase. The figure of 45,000 relates specifically to social housing for rent. Almost 25,000 social homes were delivered during 2006-07, and I understand that the expectation for 2007-08—we do not have final figures yet—suggests that we are on a reasonable trajectory to meet our target. Of course, that was before the global economic crisis, and we will all have to reassess that trajectory.

Paul Holmes asked me a series of questions. Actually, he did not ask questions, he made a series of sweeping assertions about the Government's complete failure, as he sees it, to act at all on the provision of social housing. He asserted, for example, that councils are prevented from building, which is certainly not my understanding. Indeed, other hon. Members have referred to building that has taken place in their local authority areas, so it would appear that that prohibition applies in Chesterfield but nowhere else. He rather ignored our target of 45,000 and the figure of 50,000 to which the Select Committee urged us to aspire. We do indeed aspire to that, and we will consider how we can deliver it. Both those targets clearly show that although I would like the Government to do more, to assert that nothing has been done is too sweeping.

Both the hon. Gentleman and my hon. Friend the Member for Islington, South and Finsbury mentioned larger homes, and my hon. Friend Mr. Drew, who is sadly no longer in his place, mentioned rural housing. On each of those matters, the Government have targets. We have provided for rural homes, particularly in smaller settlements, and for larger homes. The Housing Corporation was set a target for the completion of larger homes in its current programme, including in London. None of that should be taken as suggesting that I am happy with current provision. The Select Committee is not either, and no one can be. However, it is going too far to say, as the hon. Member for Chesterfield appeared to—I hope that I misunderstood him—that nothing has been done.

Photo of Paul Holmes Paul Holmes Liberal Democrat, Chesterfield

Page 25 of the report shows that a target of building 50,000 homes—it is only a target—would, according to Shelter and the Barker report, only accommodate extra annual demand. It would not clear the backlog of 1.7 million people on the waiting list. A target does not excuse the Government the fact that in the past 11 years, they have failed to build more than an average of 22,000 homes for social housing. That has allowed the waiting list almost to double, which is a clear Government failure. If councils could build only 260-odd houses last year, that does not exactly show that the Government are encouraging the building of council houses.

Photo of Margaret Beckett Margaret Beckett Minister of State (Department of Communities and Local Government) (Housing)

I think that the hon. Gentleman is perhaps resiling slightly from his rather more sweeping assertions. He is now saying that the targets were not high enough, and that not enough was provided. I share that point of view, which is not the same as saying that nothing has been done and that it has all been an utter failure. I remind him that one of the features of the investment that has been made in housing under this Government has been the enormous scale of the decent homes programme, to which a number of hon. Members have referred.

We have been responding positively to the recent economic turbulence and looking for new ways to ensure that delivery remains on track. For example, we will be spending £200 million on buying unsold stock from house builders and making it available for affordable housing programmes. Already £72 million has been allocated under that programme, buying more than 2,000 properties. We have also brought forward £400 million of planned spending so that we can deliver up to 5,500 new social homes in the next 18 months. I know that the Committee has recognised that the house building programme will be more challenging in light of the current economic climate. There is no question but that the turmoil in the financial markets has seen mortgage lending plummet, and that that has had severe consequences for the house building industry. No portion of the housing sector can be shielded totally from those consequences.

I welcome the thrust and the tenor of this afternoon's discussion, because our longer lives and changing lifestyles and the tremendous mismatch between supply and demand mean that continuing to increase the supply of housing must remain the first priority for the Government, as I know it is for the Committee. The context of delivery might be changing, but the underlying need is not. The decent homes programme was important, and I hear what my hon. Friend Mr. Betts says about the need for it to be maintained. I absolutely agree with the Committee's members, almost all of whom have said that supply is key to each and every one of the housing problems that arise.

The report also mentioned the private rented sector and the quality, as well as the quantity, of social housing. Hon. Members have referred to the independent review of the private rented sector conducted by Julie Rugg, which reported recently. It recognised the important role that private rented housing plays in meeting housing need, and many of the recommendations chime with those made by the Select Committee. The report showed that although the vast majority of people are satisfied with their experience, there is still much more to do not only to protect the most vulnerable from the minority of unscrupulous landlords but to professionalise the sector more generally to raise the standard of service.

I accept entirely the point made by my hon. Friend the Member for Islington, South and Finsbury, and acknowledge the scale and importance of the problems that can sometimes arise. We are urgently considering the report's recommendations, including whether a light-touch licensing system for landlords and mandatory regulation for letting agencies would better help protect the interests of consumers and of good landlords. I recognise that that was the thrust of the Committee's remarks.

The quality of social housing was another theme of the report. Again, I recognise the concern that was raised in the debate. The Government accept, and will seek to deal with, some of the issues involved.

We touched, although perhaps no more than that, on the housing benefit system. The report noted some of the unintended outcomes of how the system currently operates and the widely felt concern that it can be a disincentive to work. We are working on a comprehensive review of housing benefit with the Department for Work and Pensions. I am not sure that anyone said that it might be finished by next month, because it needs to be truly comprehensive, but we are certainly keen for that work to take place. I have always been a strong believer in evidence-based policy making, and evidence is undoubtedly required for it to become a reality.

The Committee welcomed moves on greater tenant empowerment, and we have continued with that. I look forward to the new Tenant Services Authority championing tenants' interests as well as being responsible for regulation, as I am sure the Committee does. We accept the Committee's view that there ought to be one regulator for all types of housing, and we are committed to achieving that as soon as possible as well as setting up the national tenant voice.

The Select Committee raised many of the issues that emerged from the Hills review. Its members know about, and have recognised in the debate, the many initiatives to at least begin to address some of the concerns that that study threw up. The main point that has run through the debate, and through the Committee's report and the Government's response, is the overwhelming importance of housing supply. There are a number of matters on which we need to examine the current systems, so that we can try to address some of the problems ably raised by members of the Committee, but supply is key.

The sitting having continued for three hours, it was adjourned without Question put.

Adjourned at half-past Five o'clock.