May I express my great pleasure at speaking under your chairmanship for the first time ever, Ms Clark, and my gratitude for being able to talk on the supply of public or council housing, and housing association or social housing.
We have a crisis building up at the bottom end of the housing market—public housing for rent—which hits those who cannot afford to buy. That can be up to two fifths of the population, depending on the area. The cause is, effectively, 30 years of disinvestment in housing, starting under the 18-year Conservative Government with the right to buy, which substantially reduced the public housing stock. The right to buy is welcome, of course, but should be paralleled by a policy of building one home for every home sold off, to maintain the stock of public housing. There followed 13 years of under-investment by the succeeding Labour Government, who did not invest enough in housing, and who bribed and bullied councils into privatisation. The problem now is that that long period of disinvestment and under-investment is being followed by the neo-liberal policy of the coalition.
“We support social housing, we protect it and we respect social tenants’ rights.”
That, however, was the prelude to a neo-liberal policy of running down the public sector, building up the private rented sector, and cutting public spending on housing. The result is that we are now building up to a housing crisis that will severely hit those who cannot afford to buy.
I am delighted by any building of council houses, but the figures today from Inside Housing show that public housing construction orders are down to their lowest level for many years. Any initiative that produces council housing and new building is welcome, but it is in the context of low public housing build, which is the essence of the problem.
What used to be socially mixed council estates, with people at all levels of the social scale—from top to bottom, almost—are becoming, because of the disinvestment and under-investment, dumping grounds for the poor and the needy, which was not their purpose. The housing stock has shrunk and, given the Government’s announced policy of selling off at even more substantial discounts, will shrink further; the houses cannot be replaced at the discount level being given. The waiting lists are already at nearly 5 million individuals— 1.8 million households—and many will never get the housing that they are waiting for. Also, homelessness applications are up by about a quarter. The English housing condition survey says that 391,000 children are living in overcrowded conditions—a figure that is up by about 18%. Housing costs are now at their highest level ever as a proportion of income, and they will be pushed up further, for the people whom we are talking about, by the coming rent increases. Housing build starts are at their lowest level since 1923; there is a pathetic number of council housing starts.
I congratulate the hon. Gentleman on obtaining this important debate. As he will be aware, a call went out in December last year to farmers and rural councils to help with the social housing problem, but that in itself is not enough to deal with the more than 10,000 people on the waiting list.
The hon. Gentleman is exactly right, of course. A number of calls, initiatives and gimmicks are being pursued, but there is no firm conclusion, in terms of house building.
I congratulate the hon. Gentleman on securing this important debate and on the passion he has shown on the subject for many years. He referred to some of what is being done as a gimmick, but in terms of substance, does he welcome this Government investing £4.5 billion in affordable housing over the next four years? That will help to increase supply and provide a major boost to people on housing waiting lists.
Of course I welcome the statistic that the hon. Gentleman read so brilliantly from the brief, but those are hypothetical houses not yet built, and the problem is now. The situation now is that starts are at their lowest level since 1923, and that is what we need to deal with.
May I join in the tributes? The hon. Gentleman has a great record on the issue. However, we all understand the difficult position that the country and the Government are in. The previous Government were hopeless when it came to new council housing build; as he knows, they had the worst figures of any Administration since the war. Can he accept that, given the depth of the recession, the Government’s initiatives are moving in the right direction? We should unite at least in encouraging them to ensure that we have more council and social housing, certainly including at rents that his constituents and mine can always afford.
I will come to that point, which is wrong. Hopes are not houses. The Government might have the intention to build an increased number of houses, but the problem is now, and it is getting worse. A crisis is building, to which the only answer is to build more public housing for rent now. That is not being done; it has not even been started. House building is so low that the tragedy will become worse in the next months and years. The right hon. Gentleman is correct in that the Labour Government’s record was pathetic. At the end, we managed to persuade the then Prime Minister—often a difficult job—that we had to build council houses and had to have a building programme. That was initiated by my right hon. Friend John Healey. That was responsible for growth, and for jobs in the recovery from recession, but it was immediately cut by the incoming coalition Government, who had initially promised to maintain that building programme. They stopped it, and began a deliberate policy of diminishing, demeaning, draining and dumping social housing and those who live in it.
I say “diminishing” because of the 60% cut in funding for building social housing. Even that spending is predicated on higher rents providing revenue. That meant that areas such as Grimsby and north-east Lincolnshire got nothing, which is unprecedented. We wanted to build, but we could not, because no money was available as our rents were too low. I say “diminishing” because of the cuts in housing benefit, the cost of which is high only because the building rates have been so low. If we had built social houses over the long term and on a sufficient scale, we would not need to pay housing benefit to the homeless and to move them into expensive accommodation, and would not have the kind of abuses that are serialised every day by the Daily Mail . It is failure to build that has made the housing benefit bill so high.
Other cuts are already affecting new claimants and, from April, they will start to affect those who renew their housing benefit. First, there was a cut for adult dependants at home, which was designed to force kids—adult children—out of the household and into a single person housing market that is not there. The bedroom tax, which comes in in April next year, is a cut in housing benefit of 15% for those with a spare room, and of 25% for those with two spare rooms, to force tenants to move to smaller accommodation, which is not there, or into the private rented sector.
There is the renewal rate for under-35s from April next year, who will be getting the shared-room rate for single people. Then universal credit and caps will come in, which will produce even more difficulties, not so much in Grimsby but certainly in London and the big cities. That is the “diminishing” part of the argument.
The demonisation part is that council tenants are being treated and regarded as subsidised scroungers living on state subsidy. In fact, the Localism Act 2011 ends secure and assured tenancies, which are the basis of establishing a settled community and a good life on a council or housing association estate. It replaces them with short-term tenures. That means that if the family get better off—if the head of the household or members of the family get jobs—and income increases, the tenancy will not be renewed.
I thank my next-door neighbour but one for giving way. On the issue of longer-term tenancies, as the hon. Gentleman will know, my hon. Friend Martin Vickers and I have joined him in the Lobby on the issue of short-term tenancies. However, what he has not said is that it will be up to local councils to decide whether to offer them, so there is an element of local democracy. It may be that our councils in north Lincolnshire decide not to do that. Secure tenancies have not gone completely; it will be up to local councils to decide whether to continue to offer them.
I am a grateful for that point. I am also grateful that, for a period, in Humberside, we have agreed on the issue of short-term tenancies. I hope that the measure will not be enforced by councils, but several are already making arrangements to enforce it, and others are being campaigned against by tenants who wish to persuade them not to enforce it. We will have a patchwork quilt over the country, but the net effect will be that in many cases, people are forced out, and are forced into accommodation in the private rented sector that is not there.
I want to ensure, following the last intervention, that anybody who reads this debate is clear about the position. It will be up to every council to decide whether all or some of its properties do not have secure tenancies. Southwark council—one of the largest social housing landlords in the country—should, in my view and that of my colleagues, keep the policy that everybody in Southwark council housing should have a secure tenancy in future. If it wants to do that, there will be no risk to any of those people. The scandal is people who have salaries or incomes of £100,000 and are in council properties; some of them are not very far away from the hon. Gentleman and from me.
There are problems and abuses in any system; in the tax system, for instance, there are myriad abuses that are not being dealt with effectively. The general principle should be that tenancies should be either secure for council house tenants, or assured for residents in housing associations. It is up to councils, as the right hon. Gentleman says, to decide. I hope that they will decide to maintain secure tenancies; that is the only basis on which one can have a safe, secure, settled community of people who are assured that they will be able to stay in their houses and that their kids will not have change schools.
I am grateful to the hon. Gentleman for giving way, because I think we agree more than we disagree on this subject. Will he explain why, for 35 years—from 1945 to 1980—successive Governments were of the view that council housing was an important part of social society, and why, from about 1980 onwards—this includes the previous Labour Government—successive Governments have turned their backs on council housing? I do not understand why that social phenomenon or change has happened. Can he explain?
The hon. Gentleman has asked a difficult question. I do not know the answer. I take it that there was an element of financial stringency—a desire on the part of the Conservative Government to cut taxes, which meant cutting Government spending and therefore spending less on public housing for rent. Certainly, the Labour Government did not spend enough on housing because their priority was to put money into the health service and education, which, after a long period of disinvestment, did get a lot more cash from the Labour Government. The financial situation was pressing in that direction. Also, there was clearly a feeling that we had built enough. That feeling was wrong, because building public housing for rent is a means of providing employment, maintaining full employment, stimulating the economy and providing for social need.
There was another element; it was not quite as the hon. Gentleman suggests. As he will know from the time he spent in council housing in Hull for “Tower Block of Commons”, there was also a social change, which meant that a lot of people did not want to live in council housing. Consequently, in Hull, where I was a councillor for 10 years, we had hundreds of houses that we could not let because people simply did not want to move into them. It is not quite the case that we simply abandoned social housing the 1980s.
But it is the case that a failure to invest made the estates less attractive to live in. Had those estates been updated, modernised and refurbished in the way that was needed—that was certainly needed on the Orchard Park estate—they would have been more attractive places to live in. In the ’70s, they were very much mixed communities, as all the statistics show. It was because spending was cut that they became unattractive. Housing there was also less available, due to sales, which picked the eyes out of many of the estates. That was the reason why people did not want to move in. That movement was coupled with the fact that the Government were spending less, so the housing was less attractive. They were disinvesting in the policy. I do not have the answer to why Governments were doing that—they should not have done it; it was socially divisive and damaging to other social services—but that was the reality. We were spending less, we were not building, and we were not refurbishing or modernising. There was a big modernisation under Labour, to be fair, which brought in private capital by privatising the estates. Again, that was inadequate to deal with the scale of the problem and the disinvestment that had taken place.
I want to resume my thread and talk about draining public sector housing. The new proposals for giving councils control of their housing revenue accounts involve them paying substantial sums to buy back, in order to pay off historical debts. However, that historical debt has in fact been paid off many times over the years. For instance, in the years when daylight robbery applied—that was begun by a Conservative Government, and was carried on for too long by a Labour one—£13 billion was drained out of housing revenue accounts by that system of financing, and the draining has gone on since. The Government were abstracting £1.6 billion every year from housing revenue accounts to pay off historical debts, they said, and to redistribute. The proposal that historical debt has to be repaid by councils that want to run their own revenue accounts is fallacious. It is an attempt to squeeze council financing of development of new housing once again.
The whole programme is imposing sacrifices on those least able to bear them: the poor, the low-waged, the disadvantaged and the handicapped. Given that the approach is to spend so little on social and council housing, the question is: why should those who are not responsible for the financial crisis and the recession be forced to bear the burden of paying for it? That question is never answered. The Department for Work and Pensions’ own risk assessment shows that the benefit cuts are hitting the vulnerable, the sick, the young, and the low-paid. That whole package, plus the other changes, results in fear, homelessness and insecurity. It will also result, particularly in London, in a kind of ethnic cleansing, because the cuts will hit racial minorities who have bigger families harder than other sections of society. People will be forced out to the private rented sector.
The private sector is not rent controlled. We need to restore rent control and regulate conditions more tightly to control the incipient development of Rachmanism and exploitation. Rents are too high in the private rented sector, yet in the public rented sector they are being raised to 80% of private sector level.
I endorse the points raised by the hon. Gentleman. Does he share my disbelief in the fact that many council houses that have been sold are being rented out by the current owners, yet the rent—which is paid for by housing benefit out of the public purse—is set at a grotesquely higher level than would be paid were the property still a council house?
Absolutely. The system causes instability and damage to the estates. People cannot keep up with their payments, so houses are repossessed and sold at auction. Somebody buys those houses as a speculative venture because they are cheap; they put in any kind of tenants because there are no controls, and those tenants claim housing benefit. The rent goes up, and the public sector is drained to pay for that folly. That is the result of many years of sales. I agree with the hon. Gentleman. We need to maintain controls and regulation in the private sector, because otherwise we will have the return of Rachmanism and a situation where Cathy has to come home time and again. “Cathy Come Home” came out in 1966, and followed a long period of difficulty in the private rented sector. Such difficulties are now returning, and we need to dramatise the situation to get the same kind of public reaction that “Cathy Come Home” received.
The situation is hitting the low-paid, the poor, the unemployed and the vulnerable—exactly those people that any civilised society should be helping. It is also hitting other sectors. How can we have good health without good housing? If people live in overcrowded, unsanitary and damp conditions, a health problem will arise. Good housing is the basis of a good health policy. How can we have a good education policy if kids are being shunted from school to school as their parents are forced to move, or if they do not have room at home to study or work in? It is impossible. How can we maintain stable, crime-free communities in which people want to live together, if they are being moved in and out as if they were in a transit camp? People need housing, but they are being shunted around because they cannot afford to pay for their housing, perhaps because of the bedroom tax or cuts in housing benefit, or because a decision by the council means that if they improve their position, they will have to move out of their home. Those policies will produce instability, insecurity and disturbance of the worse possible kind, and will turn places into transit camps.
The only answer—this point is central to the whole debate—is to build big, to build now and to build more than we ever did. We must build affordable, high-quality, public rented housing. It is the cheapest housing to build and run; it returns money to the councils because the rents produce more income that it costs to maintain and manage the estates, meaning that councils will make a profit. Rents are not set to maximise the income of private individuals, but are fixed at an acceptable social level that people can afford and will provide a return to the council. That is the kind of housing that we should be building for people who cannot afford to buy, and that should be the priority.
The excellent portfolio holder for housing in Medway said that the way forward should involve
“More financial encouragement for social renting tenants to become owners of newly built or renovated homes, thereby freeing up socially rented properties.”
Does the hon. Gentleman agree?
I do agree; I always have. Interestingly, before Grimsby council became North East Lincolnshire council, it was one of the first authorities to sell council housing to tenants. When I was in the New Zealand Labour party, we argued for years over whether state housing should be sold to tenants. We finally decided that it should be, and pioneered that policy in New Zealand, which was welcome. Such policies work provided that each sale of a council house is replaced by a build, so that the stock remains constant or builds up. That is the criterion; it is not about selling off houses ad lib to pick out the eyes of the estates. It must be a policy of sell and build.
The Government say that we cannot afford to build. We can afford foreign wars, high-speed trains and Crossrail, but we cannot afford decent housing for our people. Decent housing is an investment; that is why we should build. We could finance it through municipal bonds—that is how council housing used to be financed, and that is what happens in other European countries. Houses are secured by the asset created by the bonds. We could let pension funds invest in social and public housing; we could even use the revenue created by printing money, or quantitative easing. At the moment, money created by quantitative easing goes into the banks and is stashed away in the reserves. Why should it not be used to pay for contracts for social and council housing, which will house people and create an investment, from which we can derive income that can be secured? There are all sorts of ways to invest in housing, but if we do not invest, we slide into crisis.
I shall conclude on an important point: if we invest in housing, we stimulate the whole economy. Look at what happened in the 1930s when recovery from the depression, which was as bad as this one, was precipitated and stimulated by building the houses in which many of us—including me—were brought up. That changed the face of England in the 1930s; it stimulated the economy, created jobs and took us back to higher employment. Housing policy launched the recovery that was sustained by rearmament from 1938. Housing could do the same now, because it creates jobs and demand. People have to furnish their houses and provide everything in them, and that stimulates the entire economy. Everything—social need and economic sense—points to a big housing programme, particularly for social and council housing. Since everything points to such a programme, why are the Government not building? Why not begin that building programme now to stimulate the economy and serve the people?
It is a pleasure to serve under your chairmanship, Ms Clark, and I congratulate my neighbour—indeed, my own MP—Austin Mitchell on securing this debate. As my hon. Friend Andrew Percy said earlier, the hon. Member for Great Grimsby has a long history of campaigning on these issues.
I was first elected to Great Grimsby borough council in 1980. That seems a long time ago, but the hon. Gentleman was already entering his fourth year as a borough member. I was put on the housing committee and I recall that we had some rather heated exchanges. Many of the hon. Gentleman’s colleagues were strongly opposed to the right to buy, and frustrated many of his constituents in their aspirations to buy their council property. He will correct me if I am wrong, but I recall that he always favoured the right to buy. In the 1970s, Great Grimsby borough council had an enlightened Conservative administration. I must declare an interest because my parents bought their council house at that time. I speak, therefore, as a council house Tory, of which there are a number in this House, and I can bring some personal experience to the debate.
We lived in a privately rented property in Cleethorpes. My parents were then allocated a council house in Grimsby, when I was about five or six years old. I can remember my mother telling me many years later that one of the most important things about the move from the private to the public sector at that time was the security that it gave them.
As my hon. Friend the Member for Brigg and Goole pointed out, he and I joined the hon. Member for Great Grimsby in the Lobby opposing reductions in tenancies. The situation that the Government have arrived at now is much more acceptable than was originally the case. As Simon Hughes pointed out, we now have a satisfactory situation. However, security is important, not only from the individual tenant’s point of view but, as the hon. Member for Great Grimsby pointed out, for creating settled communities.
We must recognise that, as with most things in life, there needs to be a balance—a mix between the private and public sectors. I agree with the hon. Gentleman that more public sector housing is needed. I think that it is perfectly acceptable to have a mix involving housing associations, direct council building and various other partnership arrangements that can enter the equation. I very much favour the Government’s plans to extend the right to buy. We need to recognise the aspiration of many tenants to get a foot on the property ladder, and the benefits that that can provide. However, security, as I said, is important. We must recognise that homes are not just bricks and mortar. They are genuine homes and they contain all the memories of the tenants. It is vital that we recognise that.
A week ago, the hon. Gentleman and I were in north-east Lincolnshire with the Minister of State, Department for Communities and Local Government, my right hon. Friend Greg Clark. Indeed, we drove from Grimsby to Cleethorpes and were pointing out to him the urgent need to bring more commercial properties that are no longer used as retail outlets into the housing market. I know that the Government intend to ease the planning classifications that restrict that, but more needs to be done. We need to recognise that many commercial properties, as I pointed out on the route from Grimsby to Cleethorpes, are no longer in retail use. They are sound properties and could be brought into use, at a reasonably modest cost, as residential properties. Some sort of partnership between the private and public sectors could determine that.
The other point that I want to make was touched on by the hon. Gentleman. This issue affects Shoreline Housing, the main social landlord in our north-east Lincolnshire area. I am referring to the fact that it receives no Homes and Communities Agency funding at all during the current four-year period. As the hon. Gentleman pointed out, that is because of the low rents in our part of the country. That makes it virtually impossible to balance the books, as it were, in strictly economic terms. I have written a letter to the Minister of State, following his visit last week, on that issue. We need to keep a close eye on it.
To sum up, the points that I want to make are these. We need a mix. We need to provide security for tenants. We need to bring commercial properties into use as residential properties. I hope that the Minister will take away the points that I have made specifically about funding in north-east Lincolnshire.
I am grateful to be able to take part in the debate. Since I was elected to Parliament, I have probably spoken more about the need to increase the supply of genuinely affordable housing than about any other subject. I have done so not because I have any great expertise in that field, but because I know how desperate my constituents are to find homes that they can afford. Successive Governments have failed to appreciate the scale of the housing crisis. My fear is that the policies of the current Government will just make it worse.
Every fortnight, I sit in my advice surgery in south-east London and have the same conversation over and over again with families living in massively overcrowded accommodation who want me to help them find a home. Some will already have a council home or housing association property, but many more will be renting in the private sector. Most of the people who come to see me are in low-paid, often part-time work and are juggling the pressures of bringing up their family while holding down a job.
I see mums who are on the edge of nervous breakdowns because their families are living in damp, depressing flats. I see dads who feel powerless to find their children a decent place to live. I often see children who are sharing a bed with their siblings, and sometimes I see children who have no bed at all. I also see families who live in a single room in a shared house. I say to myself that in 21st-century Britain, that cannot be right.
I often ask the constituents who come to see me what they do for a living. I ask them outright how much they earn. Obviously, their answers vary, but in the eight years for which I have been holding advice surgeries, first as a councillor and now as a Member of Parliament, not one of the families who have ever come to me for help with housing could afford to buy a property in London. For the vast majority of people who come to see me, even shared-ownership homes and part-rent, part-buy schemes are way out of their league. To access those homes, people need to be earning thousands of pounds more than many of my constituents are earning.
Increasingly, people have been turning to the private sector to meet their housing needs and have been resorting to housing benefit to help them cover their rent. In Lewisham, private rents are basically double what social rents are, so for many of my constituents the private sector becomes an option only if the state pays money to their landlord. Yes, we have heard a lot about the housing benefit bill going up, but let us think about this. If private rents in my constituency are double the social rents, there is no surprise in that. Our failure to build adequate amounts of social housing has resulted in our lining the pockets of private landlords on an industrial scale—and make no mistake: the policies of the current Government will make that situation worse.
Social rented homes in my constituency are a hugely sought-after commodity. Demand massively outstrips supply. If I had a pound for every time I have explained that in my surgeries, I would be a rich woman. In London, 350,000 people are on waiting lists, yet only a tiny fraction of those people will actually be able to move each year. If we are to meet the housing needs of my constituents, we must dramatically increase the supply of social housing. I am relaxed about whether that is housing rented out by councils or housing associations, but I am clear that it needs to be genuinely affordable.
What are the current Government doing to build more social housing?
I regret the line that the hon. Lady is taking, because I thought the purpose of the debate was to try to secure consensus—unanimity—on the way forward. However, as she wants to make a critical point, will she confirm that the previous Labour Government built fewer council houses than the Thatcher Government?
I can confirm that in the last five years of the Labour Government, 256,000 affordable homes were built. [Interruption.] I obviously heard the hon. Gentleman when he asked me about council housing and I have said previously that if properties are genuinely affordable, I do not have a problem with whether they are council houses or housing association properties. He talks about the purpose of this debate. My reason for coming to the debate was to scrutinise the policies of the current Government, who I believe are failing. I am sorry if the hon. Gentleman does not welcome my tone, but it is important to put these things on the record.
Let us look at the facts of what the Government have done over the past two years. The national affordable house building programme has been cut by 63%, and there is £4 billion less to spend on new affordable homes between now and 2015 than there was between 2008 and 2011, when we spent £8.5 billion. Some 259 new social rented homes were started across the whole country between April and September last year—a 99% fall on the same period the previous year. In London, a city of 7 million people, just 56 new social rented homes were begun in the same period, which represents 8,469 fewer social rented home starts between April and September last year than in the preceding six months. That is not the record of a Government who are committed to building the homes this country needs; it is the record of a Government who are failing.
In the past few weeks, I asked a major housing association in London to provide me with figures on the number of social rented homes it has built over the past three years and what it plans to build over the next three. Its response was illuminating. Although it has averaged an annual output of more than 1,000 social rented homes—homes that have been built new—in recent years, that figure will halve in the next three years. Those projections are borne out by the amount of social housing that has been granted planning permission since the Government came to power. Last week, Inside Housing reported that the amount of social housing that was granted planning permission in 2011 was virtually half that which had been granted permission the year before. If planning permissions are not granted, the homes will not be built—it is simple.
I also question the affordability of any homes that housing associations or councils do build in the next few years, and my hon. Friend Austin Mitchell also picked up on this issue. The Government have their strangely named affordable rent model, which allows social landlords to charge up to 80% of market rents, thereby bringing in more money to cover the costs they laid out in construction. The problem is that, in some parts of the country, the rents, which are just 20% lower than market rents, will be anything but affordable. If people in receipt of housing benefit move into those properties, will we not just be adding to the housing benefit bill again? I could be wrong, but I thought that was precisely what the Government were trying to avoid.
The supply of social housing is a function of not only what is built, but what happens to existing homes in the sector. Debates about allocation policies are all well and good, but if there is simply not enough social housing out there to meet the population’s needs, we will just be working out how to cut up the cake, knowing there will never be enough to go round.
On the overall amount of housing available at rents that people can afford, the Government’s enhanced right-to-buy proposals are particularly worrying. Like my hon. Friend, I agree with the principle of a right to buy, but when there is such a shortage of council housing, it seems crazy to deplete the overall stock of socially rented homes. The Government will argue that, for every home sold, another will be built, but I do not see how the finances stack up. Research by Hometrack in December 2011 showed that, where a £50,000 discount is applied, the average receipt from a sale would be £65,000, which would be lower than the cost of delivering a new property. That leaves aside the issue of whether the replacement works on a like-for-like basis. Will a two-bedroom flat sold under the right to buy in London be replaced by the same sort of property in a similar location?
On that point, two-bedroom flats sold off in London should be replaced by larger properties to deal with the shortage of such properties in London. In the same way, there is a shortage of smaller properties in other parts of the country.
I do not necessarily disagree with the hon. Gentleman, but building a larger property will probably cost more. There are real questions about how we get to a situation where we have the right sorts of properties in the right places. I just cannot see how an enhanced right-to-buy scheme will help to get people into homes at a price they can afford.
I have painted quite a bleak picture, but there are things the Government could and should be doing. They should level the playing field between councils and housing associations in respect of how they borrow money to invest in social housing. If we remove the cap on the borrowing that local authorities can invest, more money might go into new social rented housing. The Government should also be clear in the national planning policy framework that social rented housing is a priority, instead of leaving it to the whim of local authorities, as the current draft does. They should be clear and robust in their planning policy document.
Since the Government came to power, we have heard plenty from the Housing Minister, including lots of different initiatives and gimmicks. I have listened carefully to those announcements, waiting to hear something that will give hope to my constituents—the people I spoke about at the start of my contribution. To be honest, however, I have heard nothing in what the Government have said that will give them hope. We need a dramatic increase in the number of social rented homes being built, but nothing the Government are doing will bring that about.
I am pleased to speak under your chairmanship for the first time, Ms Clark. I, too, congratulate Austin Mitchell on securing the debate.
The contribution of Heidi Alexander was somewhat unfair on the Government. I would just point her in the direction of the comments made by my right hon. Friend Simon Hughes, who noted the massive under-investment in social housing during the years of the previous Labour Government, when the economy was doing well. Throughout the previous Parliament, I, along with colleagues not only in the Liberal Democrat party but across the House, argued for substantially more investment in social housing. Indeed, my hon. Friend Sir Bob Russell was arguing for that from 1997.
One thing the previous Labour Government had to deal with when they came into office was the £19 billion backlog in repairs and maintenance investment in public housing, but they brought 1.5 million homes up to the decent homes standard. Does the hon. Gentleman not accept that that represented an incredible amount of investment in social housing, albeit it did not contribute to the number of new homes?
I thank the hon. Lady for that intervention. I will not stand here and defend the ills of the Conservative Government pre-1997. However, the previous Labour Government could have done more at a time when the economy was doing well. As my right hon. Friend the Member for Bermondsey and Old Southwark said, the coalition Government have come to office at a time when there is not a lot of cash available.
Although I welcome the additional social housing that will be built over the next three to four years, I emphasise to my hon. Friend the Minister that we need to do more. I point him in the direction of the Department for Transport, where there has been significant capital investment in railway schemes at a time of significant budget cuts. Some capital investment in social housing schemes would be yet another way of helping to boost the construction industry and to deal with the massive shortage of social housing.
Governments cannot, however, be expected to do everything. Local authorities must play their part, and I want to make a few brief comments about that. My hon. Friend the Minister is aware of my concern about the changes to housing benefit regulations, and the prospect of tenants who under-occupy homes in my constituency losing housing benefit unless they choose to move to smaller properties. That policy has been widely criticised by housing associations and local authorities, including my own in Manchester, because of a lack of available smaller properties for tenants to move into. The hon. Member for Lewisham East mentioned a massive shortage of larger homes in London, but the problem in other parts of the country—certainly in Manchester, but also in other areas of the north of England—is a shortage of smaller properties for people to move into.
Manchester city council criticised that change in housing benefit regulations, but when it was given the opportunity to help to provide some additional, smaller social housing accommodation, it chose not to do so. Many local authorities—although London is an exception—have available land, which has been earmarked for housing development, and my constituency is no exception to that. In Chorlton, the former Oakwood high school site on Darley avenue has been earmarked for housing. However, Manchester city council says that there is already plenty of social housing in the area, so there is no need for more. It says so despite having argued that there are not enough available properties to allow under-occupying tenants to move to smaller accommodation. That seems to be a bit of a contradiction.
The council also argues that some homes will, by definition, be affordable, because some property will be available to buy on a shared ownership scheme. That is certainly true—and welcome—for people who are able to get on the housing ladder, but the harsh reality is that many people cannot get a mortgage in any circumstances; therefore, by definition, those homes are unaffordable for those people.
I return, therefore, to the point I made at the beginning, about local authorities taking on some of the responsibility. It cannot just be left to the Government to throw billions of pounds at housing development. Local authorities need to make land available—where they have it, because I recognise that some do not—for social housing.
It is a pleasure to speak under your chairmanship, Ms Clark. I congratulate my hon. Friend Austin Mitchell on securing the debate. Both he and my hon. Friend Heidi Alexander have said a lot of what I intended to say, so I shall be brief. I intend to speak purely on local issues, and how my constituency and borough are affected.
Six wards of my constituency are in the London borough of Waltham Forest and two are in Redbridge. The borough of Waltham Forest has a housing waiting list of about 13,000. The Redbridge waiting list is probably not much short of that. My hon. Friend the Member for Great Grimsby mentioned that about two fifths of people in the country cannot afford to buy a home. I do not have the figures to hand, but my suspicion is that, certainly in the four wards of Leyton, and almost certainly in Leytonstone ward as well, that figure will be much higher.
We are getting back to the sort of levels of overcrowding that probably were last seen during the Victorian era. Like my hon. Friends the Members for Great Grimsby and for Lewisham East (Heidi Alexander)—and other hon. Members in the debate—I sit in advice surgeries week in, week out, taking up housing cases, and I know there is little I can do about the vast majority of them because, as my hon. Friends pointed out, it is simply a matter of the relationship between supply and demand. That relationship is out of balance because of the failure, over a very long period—since 1979—to build council houses, and the partial failure to build social housing.
Yesterday I met a group of GPs from my constituency, mainly based in the Leyton area. We were talking about methods of preventing the sorts of illnesses that are common in my constituency—engaging in programmes of prevention rather than cure. Those GPs are perfectly honourable people, with perfectly good intentions, but the fact is that an awful lot of the problems that they deal with have to do not just with health but living conditions. When entire families live in single rooms—and I have met many who live in those circumstances, which as I said takes us back to almost Victorian levels of overcrowding—it will not be possible to deal with the illnesses, including psychological illnesses, that stem from those conditions.
When siblings must share not just rooms but beds; when there are many people in one room; or when people are in overcrowded social housing, or are tenants of cowboy landlords, in badly maintained and overcrowded properties, those people will not enjoy the best of health, or perform to the best of their ability at school. They will also encounter problems with work—and there are problems at work in any case. All those circumstances together bring things to a critical pitch, and I suspect that if we continue down the path we are on, with overcrowding, and bad living and working conditions, there will be an explosion in many of the illnesses that we associate with those conditions, and serious public health problems.
[Martin Caton in the Chair]
The number of home starts is now the lowest since 1923, whatever hon. Members on the Government side say. That is a pretty appalling record. I am the first to admit that the Labour Government should have built more council and housing association homes, but in reality an awful lot of money was ploughed into the decent homes standard. Many homes in the social sector—whether belonging to councils or housing associations and trusts—had fallen to such a low level of maintenance that there had to be investment. That is leaving aside the fact that investment was necessary in education and the fabric of schools, and in hospitals and GP surgeries. There was investment in housing, to bring the existing housing stock up to the decent homes standard.
However, in the last two years of the Labour Government some progress was made. When my right hon. Friend John Healey was Housing Minister, there were council housing starts in many boroughs, including London boroughs, for the first time, in some cases, in 25 or more years. If my right hon. Friend had had more time he would have emerged not just as a good Minister but a great one, and he would certainly have had an enormous impact on the lives of my constituents and many others.
A figure from the history of housing that I always remember is that in 1951, Winston Churchill, who was leader of the Conservative party, stood on a platform of building more council houses than the then Labour Government—the Attlee Government. We were building 200,000—it might have been more, but I think it was about that. It seems extraordinary now that a Conservative leader would say their Government would build more than 200,000 council homes a year.
The house building programme in the council sector peaked under Harold Wilson’s Government, at about 1 million homes a year, in the mid to late ’60s. If we could have even a fraction of that situation today it would make an enormous difference to my constituents, who struggle, day in and day out, with appalling housing conditions. At the moment we are in a vicious circle of cuts, resulting in more people being unemployed in the construction sector, less investment, and more people unemployed and claiming benefits. Since the election alone—in just under two years—65,000 people from the construction sector have joined the dole queue. If we were to invest in housing we could get into a virtuous circle. At the time of the election—this is not a party political broadcast—the deficit was falling, and so was unemployment. We were in a virtuous circle of investing in the public sector. We were building homes, among other things—council homes. We were starting to see a rise in the number of people employed in construction. Getting back to that position would have a great effect on the indigenous industries, the numbers of people employed in the construction sector and those whom I represent who live in appalling housing conditions.
I am grateful to Austin Mitchell for introducing this important debate. I want to make a few points. Having a constituency not very far from that of Heidi Alexander, we share many of the same analyses. As another London MP, John Cryer has exactly the same sort of housing need pressure on him as I have had for every year since I have been a Member of this House. The pressure on me has not altered; it has been the same under Labour and Tory Governments and even under this Government. It is still 40% or more of the people who come to see me who ask for help with their housing. They may want new housing because they are living in overcrowded conditions, a first home at a cost they can afford, repairs to be done or whatever. The issue, therefore, remains hugely important.
A few months ago, the Halifax and Lloyds bank sent me—and probably many other Members—some key facts about my constituency. I think I knew them, but I will relay them to you, Mr Caton, for the purpose of the debate. The average house price in my constituency at the time this pamphlet was issued in December 2010 was £310,621. The average national house price was £164,310, which was nearly half the cost of a house in a seat such as mine, where most people come from a working-class background and where many have lived all of their lives, and generations before. The average earnings in a constituency such as mine were £52,755, while the average earnings across the UK were £32,178. Of course London earnings are higher, but they are not so high that they make up for the additional housing costs.
My first point is that for people in high-cost areas—it applies not just to London but to inner-city Leeds, Manchester and so on—the additional money that they earn does not make up for the additional cost of their housing. That is a challenge that can only be met by supported housing. By definition, if people do not have the wages to be able to buy into the private sector as owner-occupiers, social housing must be provided.
Secondly, we are required, therefore, to build as much as possible. All the evidence suggests that if we are to get people into work and keep them in work, we need construction projects, whether it is big infrastructure projects or housing. It is how we can get most people into work, doing skilled and productive jobs, and thus benefiting the local economy. It is a win-win situation: we house people and provide work for them.
Thirdly, I have a pre-Budget plea. The Chancellor could help this situation with some tax changes. If we taxed unused, undeveloped brownfield land as if it had been developed, we would incentivise the owners to use the land. They would realise that there was no point in sitting on undeveloped land because they would be paying the same tax as they would on developed land. Let me repeat publicly the plea that I have made to my colleagues in private. Site value rating—it can be called by another name—which the Liberal Democrats have espoused for many years, is really important. We must incentivise people to put their land on the market so that there is the space on which to construct our buildings. There are many unused sites in my constituency that still could and should be used for housing. We must have a tax system that incentivises proper development of property.
If there is new council housing, and there should be, we must change the rules over right to buy. The discount regime has been varied. It was much higher and was rightly brought down by the Labour Government, and it has been changed again under this Government. The incentive on councils to build new council housing is never going to be great if, immediately it is built, it is bought out of the council housing sector. There is an argument that different rules should apply to new-build council property and existing council property. I have never supported the discounts when they were high. There should always have been a regime in which the whole of the money went back to the council so that the stock could be replaced. For many years, though, the money went to the Government, leaving the council with only some of it.
I am in favour of mixed communities, but mixed use of blocks of properties, either flats or tower blocks, often does not work at all. There is the tenant who, in many cases, is there for life; the right-to-buy person, who will be there for life or a long time; and then the people who rent, either from people who have bought the flat or from people who have bought and sold on. They tend to be there for two minutes—I exaggerate slightly—and have no stake in the community. They are not naturally very good neighbours. They may not be inherently antisocial, but they may be students, visitors or here on holiday. Such a mix does not make for community cohesion, and we may need to have different rules in the future. I appeal to Ministers to think about how we manage multi-occupancy places—places that are not detached, semi-detached or terraced. The system does not work well at the moment. As any local authority will say, managing an estate with that mix of people is really difficult.
The right hon. Gentleman is talking about the right to buy. Obviously, his Government have consulted on the enhanced right to buy. For the sake of clarity, I want to know whether he supports the proposed £50,000 limit on the discount that can be applied.
My instinct is to keep the limit where it is. There is such a need for social rented housing that we do not need to encourage people at the moment.
I have two final ideas. The hon. Member for Great Grimsby and I had an exchange earlier. It is important that we get out the message that it will be up to local authorities to decide whether all or some of their properties will be secure tenancies in the future. I worked very hard to ensure that that was the outcome. My colleagues will remember that in the summer of 2010, the Prime Minister floated the idea that it might be the policy of the Government to end secure tenancies in every local authority.
I was very clear about that from the beginning. I went to see the Minister for Housing and Local Government immediately and he helpfully allowed me to look at the housing policy paper. I was clear that we needed to have a policy that only allowed that if the local authority decided that that should be the policy. We must not frighten people, particularly older people, into thinking that they will lose their security of tenure where they are—that does not apply—or that it will follow that in future council tenancies in Southwark, Lewisham, Grimsby or anywhere else there will not be security of tenure. Councils can decide to keep every property, or 90% of properties or every estate bar one as secure tenancies if they wish. I support that as a principle of localism.
I will fight to ensure that my local authority, whoever runs it—it has been run by us and by Labour over the years—retains the security of tenure for those who move into council properties unless there is an all-party consensus in a particular block that it should not be retained, for other management reasons.
Finally, I support the Housing Minister and my hon. Friend the Minister in this debate in saying that if there are people who end up with high incomes, it is wrong that as council tenants they do not pay for that property the market rent it would fetch on the open market. This is a difficult area. The Housing Minister has said that there should be a threshold of £100,000, which I support; that is an easy starting place. I cannot justify saying to my constituents who are knocking on my surgery door that there is not a place for them because someone with a family income of £50,000, £60,000, £70,000, £80,000, £90,000 or £100,000 is sitting in a council property paying a council house rent. We have to deal with that issue, because that is an inequity that was never intended to exist. These homes were intended to be for people on low incomes who could not afford to go elsewhere. At the moment, we have people in them who are on much higher incomes. I do not suggest that those people should be evicted—that would be inappropriate, because we want mixed communities—but they should pay the full whack.
In conclusion, I say to my hon. Friend the Minister that I am grateful for many of the initiatives that have been introduced, particularly the new homes bonus, which allows all authorities—including mine—to spend money on housing. I understand the difficulties that the Department for Communities and Local Government has had in trying to win the battle to get the money that it needs. I am pleased that the new affordable renting system does not mean that the properties concerned will all be at 80% of market rents; in London, I think the average is 64% of market rents, which is better than 80% of market rents. We must try to ensure that we have the maximum number of properties at lower rather than higher rents.
I will continue to urge my hon. Friend the Minister—as I know he would wish me to do—to argue within his Department and within Government as a whole that we should have more local authority housing wherever possible, or that we should give councils the freedom to build it, because we have a huge unmet need for such housing in many parts of our country. We need more local housing that is not all immediately swallowed up by being bought up and disappearing from the social housing sector. I hope that message is heard loud and clear within Government, and I hope that my colleagues within Government are arguing very strongly for it, so that at the end of five years the coalition can have a better record on housing than that of the Governments that have gone before; I know that that is my hon. Friend’s aspiration.
It is a pleasure to serve under your chairmanship, Mr Caton, for what I think is the second time.
I shall begin by congratulating my hon. Friend Austin Mitchell on securing what is an absolutely vital debate. It has been a very good debate, and I am particularly encouraged by the contributions from all parties. We have heard contributions from Martin Vickers, my hon. Friend Heidi Alexander, Mr Leech, my hon. Friend John Cryer and Simon Hughes.
It is important that we set this debate in some sort of historical context; my hon. Friend the Member for Great Grimsby touched on that context in his contribution. There was a break in the post-war consensus, which existed from 1945 through to the election of Margaret Thatcher in 1979. After that election, we saw an ideologically driven Government that really set its face against public housing and many other elements of the welfare state. Council housing was run down and stigmatised, and ultimately we saw council houses being sold off in their millions, and now the Government are at it again.
The new right to buy is not fit for purpose because, first, there is a real problem in the adequate supply of affordable housing for people. Secondly, the commitment that for every house sold another one will be built is not really worth the paper that it is written on for many areas, and the reason is that the houses will not necessarily be built in the area where the houses are sold off.
To return to the historical context, after 1979, rents were driven up and houses were sold off. Then there was a large-scale voluntary transfer, with significant reliance on the private sector to make up for the houses that were sold off. Sir George Young, who was then Housing Minister, said when challenged in the House of Commons on
“Housing benefit will underpin market rents—we have made that absolutely clear.”
He went on to say:
“If people cannot afford to pay…housing benefit will take the strain.”—[Hansard, 30 January 1991; Vol. 184, c. 935.]
The Housing Minister of 1991 ought to talk to his contemporaries today to say that the direction of travel in which they are taking Government policy is absolutely at odds with that commitment, which was given by a Conservative Minister 20 years ago.
When the Conservatives chose to go down that course on housing, it was a spectacular failure; indeed, it was predicted that it would be a spectacular failure. Since 1991, the housing benefit bill has nearly quadrupled, from £6 billion to well over £22 billion. Then today’s Government—the coalition Government—have the temerity to blame the very victims of a policy failure for which a previous Conservative Administration were responsible back in the early 1980s and 1990s, when council houses were sold off and the private rented sector was supposed to pick up the slack. As the Housing Minister of the day said in 1991, housing benefit would “take the strain.”
Now we are seeing the consequences of that, and we do not really have anything to show for it other than a number of enriched private landlords. We have not got any houses particularly to show for this huge investment in housing.
What happened was that rather than investing in bricks and mortar, as used to be the case, the situation was turned on its head, and personal subsidy became the flavour of the day. That has resulted in the huge problems that we see now. As my hon. Friends have pointed out, we now have the lowest number of housing starts since the 1920s; there has been a catastrophic collapse in new housing starts.
Before the general election, on
In my view, the cuts in housing benefit are a national scandal. They will do nothing to tackle high rents; all they will do is impoverish people who have no alternative but to live in rented accommodation. The bedroom tax is utterly shameful, and increasing the age rule for the shared accommodation rate to 35 is utterly despicable and an attack on young people, and on people who are not so young.
My hon. Friend the Member for Great Grimsby discussed a potential return to Rachmanism, but that has already happened. I addressed a public meeting in Brent at the end of last year, and a number of private tenants who attended told me that they had been in their homes for a long time but were being evicted to allow the landlord to rent out their properties at an inflated price to people attending the Olympics.
The Government’s approach in relation to so-called affordable rents, which are set at 80% of market rents, is nonsense. By definition, that approach makes “affordable” housing unaffordable and it will add to the housing benefit bill. People living in social housing will be caught by the housing benefit cap, which is absolute madness. Investment in council housing is absolutely key, and I hope that the Government will think again about their approach, because such investment would give a huge boost, not only to people who are in desperate need of affordable public housing but to the economy. It would create jobs in the construction sector, as my hon. Friends have already pointed out. Indeed, it would create jobs not only in construction itself but in all the ancillary trades and industries that go with construction when there is a buoyant housing market. It should also be said that 80% of the materials used on a construction site are procured within the UK.
The construction sector is on its knees. We need a new approach. The new homes bonus is not fit for purpose, it will not work and it will provide very few houses. We need investment and we have heard some excellent ideas today about linking quantitative easing to that investment, as well as ideas about the use of bonds, pension funds and so on. All those ideas should be considered by the Government. In conclusion, housing subsidy is a good thing; it is just a question of how we deploy it. We absolutely need housing subsidy in our country.
The problem is that the Government—this applies to both parties, because it was not changed when Labour came to power in 1997, so this is not a party political point —did not shift the subsidy back towards bricks and mortar. The Government really need to think again. If they are genuinely committed, and there appears to be cross-party support today for council housing, they need to think about their approach to council housing and their enhanced right to buy, which will decimate council housing in the north of the country, but not make too big an impact in the south. They need to look at the supply side, at new ways of investing and, in my view, change course. That is absolutely essential if they are to provide the housing that the people of our country desperately need.
I am pleased to have the opportunity to respond to a very important topic in a timely debate. It is a privilege to serve under your chairmanship, Mr Caton. I am delighted to have the opportunity to respond to Austin Mitchell, who is a long-standing and passionate campaigner for council housing. In fact, I think he has got more passionate every year that I have heard him, which is from 1997 onwards. I think his passion increased as his despair with his Government’s performance grew. Of course, he is not simply an advocate of social housing. I hope that he will not take this amiss, but he is a fundamentalist who is in favour of council housing.
Several temptations have been offered to me in this debate—for instance, to trespass on the work of my right hon. Friends in the Department for Work and Pensions in relating to housing benefit. I will not go there. I have been tempted to trespass on the toes of the Chancellor of the Exchequer in relation to the Government’s approach to stabilising the finances of this country and writing a new Budget. I will not go there. In the limited time that I have, I will focus on the key points relating to council and social housing. I want to make it clear that we accept the analysis that it would be a good thing to have more investment in housing. That is why we are investing more in housing. We think that it is a good idea to have more social and affordable homes. That is why we are investing in social and affordable homes.
I want to put very clearly on the record the statistics for social rented homes—local authority and housing associations combined. They show that in the 18 years between 1979 and 1997—dates chosen not entirely arbitrarily—the number of social rented homes fell by 1,122,000. Between 1997 and 2010—13 years—the number of social rented homes fell by 420,000. The average loss per year under the Conservatives’ 18 years was 62,000 a year, and the average loss per year during Labour’s 13 years was 32,385—a net loss of local authority and housing association homes.
As a result of our investment programme, in the five years from 2010 to 2015, for the first time since 1979 there will be a net increase in social and local authority homes. Although I am ready to concede that it would be good if we could do more, it is important to recognise that this Government are outperforming their predecessors by a margin. The problem is large. We currently have 1,840,000 families on local authority waiting lists in England. As several hon. Members have noted, the Localism Act 2011 gives back to local authorities the flexibility to manage their housing stock without reference to national diktats.
One thing to emerge from this debate is that there are many different housing markets and many different social housing markets. As an example, my hon. Friend Mr Leech contrasted the situation in his constituency with the problems facing Heidi Alexander. It is surely right that local housing authorities should have the right and the duty to determine for themselves what their social housing strategy should be, and the Localism Act gives them that additional flexibility.
The hon. Member for Lewisham East made a point about the national planning policy framework perhaps dictating to councils what land they should allocate for social housing. That is surely a matter for them to carry out a proper study of the circumstances in their area and to make appropriate provision.
No, I have only two or three minutes left. I want to make a point regarding the reduced investment in housing alleged by Chris Williamson. It is true that the amount of money that we are investing is lower, but of course the amount of subsidy needed is lower as well. Under the formula that we inherited, every social home built required a subsidy of £85,000 to be built. Under the affordable rents model, it requires a subsidy, on average, of £37,000. We produced a scheme that would invest £4.5 billion in social and affordable homes, and we told the House that we were confident it would deliver 150,000 new homes over the period to 2015.
We were mocked and scorned by the Opposition, who said that the model would not work; it could not possibly deliver. I have not yet received an apology now that we know that not 150,000, but 170,000 homes will be provided with the £4.5 billion injection. Contracts are being signed up all over the country by the Homes and Communities Agency. Indicative rent levels are in a range to fit local circumstances. The average affordable rents range from 65% in London to 79.5% in the north-west. In London, only 5% of the affordable rent homes are being offered at the 80% level. Those are in areas of comparatively low rental values in London.
I want to make a point about decent homes. If I can put it this way, Labour hoped that it had got a “get out of jail free” card for reducing the social housing stock. Of course, the Labour Government improved much of it. We are also improving 170,000 existing social homes to bring the remainder up to the decent homes standard. We are continuing that investment as rapidly as we can in all circumstances.
I will address points made by the hon. Gentlemen from the northern part of Lincolnshire: my hon. Friends the Members for Brigg and Goole (Andrew Percy) and for Cleethorpes (Martin Vickers) and, of course, the hon. Member for Great Grimsby. The new homes bonus does not simply apply to new homes, but to the reoccupation of empty homes. Indeed, the conversion of shops to homes would generate the new homes bonus via the empty homes route. I hope that those hon. Gentlemen will talk to their local authorities to see how best they can make sure that that is dealt with appropriately.
In my final moments, I will talk about right to buy. It seems to be generally agreed—certainly by the hon. Member for Great Grimsby and a number of others—that the problem with right to buy in the past was that there was no replacement policy. When the Prime Minister announced last September that the Government were reintroducing the right to buy policy, he made it explicitly clear that that was on a one-for-one replacement basis. [Interruption.] The hon. Member for Derby North disbelieves it. He disbelieved the 150,000, and we produced 170,000. No aspect of this Government’s policy has been taken at face value on Labour’s side of the road, and yet, every time, we have not simply delivered, we have exceeded. I ask the hon. Gentleman, just for once, to accept that the intentions of this Government are clear: to increase the social housing stock and to make sure that we maintain and deliver on the promises that we have made to the House.