HC Deb 13 March 1986 vol 93 cc1111-31 5.30 pm
Mr. Chris Smith (Islington, South and Finsbury)

I wish to begin my discussion of Government policy towards local housing programmes by highlighting the desperate need for good homes to rent for the people of my constituency and for many in other parts of the country. The impact of Government policy on the availability of good-quality homes to rent has been disastrous, as I hope to illustrate during the course of my speech. It is perhaps unnecessary to rehearse the bare statistics so often brought before the House, but some bear repeating because they draw attention to the scale of the problem that we face, in the country at large and in my constituency in particular.

We have the lowest number of home building starts since the 1920s. The housing investment programme allocations of most local authorities have been cut to a third of what they were in 1979. Bed-and-breakfast accommodation in squalid and inadequate hotels and boarding houses is being used for homeless families, particularly in London, but elsewhere as well. Many of our older council estates are in an appalling state of repair. Equally appalling is the rate of replacement of accommodation. At the current rate of replacement, it will take 625 years to replace the whole of Britain's housing stock.

This affects local statistics as well. In my constituency we have a waiting list in Islington of 7,000 families, and a transfer list, that is, those wishing to transfer to larger and better accommodation, of 9,000. The chances of these families getting the moves that many desperately need and want are very small indeed, and have been dramatically reduced over the past six or seven years because of the restrictions on the building, renovation and repair programmes that local authorities can carry out.

The human need behind those bare statistics, however, is greater and more tragic than any statistics can possibly indicate. This need is felt by families who have been forced to live in damp, overcrowded, mould-infested accommodation, up many flights of stairs, with lifts which do not work, even where they exist—the sort of conditions which, in a modern society, we ought not to impose on families, on children, on ordinary people whose only crime is that they cannot afford to buy property at the grossly inflated prices which would be necessary if they turned to the private market in my constituency.

We must also bear in mind the possibility of the employment that would be generated by a much more vigorous programme of building and repair work. A major programme of building and renovating houses would not only provide homes for people who need them, but would provide jobs for people who need them. For every one job directly created in the construction industry by investment in housebuilding and renovation, a further job is created in the ancillary trades supplying the builders. Virtually all those jobs would be created here in Britain rather than overseas. It makes economic sense from the Government's point of view. It makes employment sense, as well as making social sense in providing good homes for people who need them.

It is not just the need that exists, however, or just the jobs that could be created by good quality housing programmes. Nor is it just the way in which many Conservative Members, as we heard in the debate on the Housing and Planning Bill, seek at every opportunity to do down the provision of council housing. They speak of vast, impersonal estates such as were put up in the fifties, sixties and early seventies. They speak in denigrating terms of the mistakes of the past. To a large extent, they are quite right to do so, because many mistakes were made, encouraged and fostered by Governments of all political complexions.

That does not mean that we should ignore the extremely good work carried out in the past 10 years by local authorities, particularly in the latter part of the seventies, when the mistakes of the past had been taken to heart and the lessons learnt. Good quality homes with gardens, which were liked and respected by the people who came to live in them, were built, and, in many cases, were created out of the older housing stock by the councils concerned.

I draw the attention of the Minister to the homes in Blair Close, Islington, for example. They have been built in only the past four years by the present Labour council on land which was on the point of being sold for private development by the Social Democratic council in 1982. The SDP had hijacked Islington for a fortunately brief period of six months. The land was due to be sold the day after the election for a new council in May 1982. Because the SDP was swept ingloriously from office on that occasion, the incoming council was able to revoke the sale of the land and went ahead with speed to build a very fine development of small houses around a close, which is much appreciated by the tenants now living there.

That is the kind of good quality accommodation which can be provided by local authorities now. Those who simply assume that all local authority housing development is like the junk estates of the past are unhappily and ungenerously doing down the quality which can be achieved by local authorities in modern days.

I turn now to the malign influence which present Government policy has on local authority housing programmes through the operation of the project control system. Many prospective tenants are disadvantaged because of the conditions and restraints of the project control system, operated by the Department of the Environment under the aegis of this Government—indeed dreamt up by this Government. The operation of the system seriously affects the quality of accommodation which can be provided.

The project control system is a mechanism whereby a calculation of the cost of the homes to be provided, either by new build or by rehabilitation, is set against the original site value in the case of land, or property value in the case of a house. A ratio is calculated and figures are submitted to the Department of the Environment. In some cases the Department of the Environment declines to intervene, but in many cases it does intervene. If it does, it can reject the application, and if it rejects the application the building or renovation project cannot go ahead.

To make matters worse, the guidelines against which the system operates have never been published. No manual is available to local authorities to explain how the Department will set about its task of calculating the value for money of particular schemes. Some schemes which cost more than others are passed, whereas the cheaper ones are not. Some which have a better ratio than others are declined, while the worse ratio schemes go ahead. There appears to be little rhyme or reason to the decisions which are made by the Department in this matter, and no explanation has to be given, or is indeed ever given, to the local authority for the turning down of particular projects.

In such a matter, where we are talking about people's homes and something that will be of enormous benefit to people who desperately need it, for the Department and Ministers to operate the sort of secret system that we have in the present project control operation is outrageous. The Department should, at the very least, publish guidelines to set down the rules by which it will operate so that local authorities can at least do some advance planning and know how to advise their prospective tenants when they are consulting them about design, building or renovation. When they are going out to their electorate and talking about the sort of housing programmes that they can have, they should at least know what will and will not be possible. The roulette game which is imposed on local authorities at the moment by the way the system operates acts to the detriment of local authorities and their prospective tenants.

However, there are a number of even worse effects of the project control system. I want to go into those in some detail. The first is that the system seems to operate against those areas where land and property values are higher than others. In a constituency such as mine, where the southern part touches the City of London, where land and property prices are extremely high, whereas in the northern part they are much less high, the operation of the project control system means that schemes which are proposed in the southern part of my constituency tend to fare much worse than schemes which are proposed in the northern part.

I shall give one recent example of two housing schemes, both designed to provide 18 homes and both with more or less the same density of accommodation. I refer to the project at Everilda and Copenhagen streets, which was approved under the project control system by the Government, and the project at Farringdon road, which in the last few days has been rejected by the Department of the Environment under the project control system. At Everilda and Copenhagen streets there are 18 homes, with an average number of persons per dwelling of 4.2. At Farringdon road there are 18 homes with an average number of persons per dwelling of 4.3. The cost of construction of the 18 homes at Everilda and Copenhagen streets was £44,500 each. The average cost of construction at Farringdon road was £45,000 each. The ratio of cost to value at Everilda and Copenhagen streets was 101. At Farringdon road it was 92—a better ratio under the project control system.

Yet the Department of the Environment, with those two almost identical schemes, with almost identical construction costs and almost identical density, has rejected the scheme which has the better cost to value ratio and accepted the one which had the worst. We have no knowledge why the Department took that decision, because it does not have to tell us. But the only possible reason, and the only difference between the two schemes, is the original market value of the land. At Farringdon road, because it is towards the City in a prime site location, the cost of the land is some £10,000 per home higher than it is at Everilda and Copenhagen streets, despite the fact that the land is already in the local authority's ownership and has been for a number of years. The Department appears to have rejected the scheme because of that higher value of the land.

If the Department and Ministers are serious about creating good quality homes within the inner city, particularly in the heart of the inner city, they must not operate such apparently arbitrary rules about land values. The project control system operates in a malign way against the interests of those who wish to see accommodation, particularly family accommodation, built in areas in the inner city where land values and prices will inevitably be higher than elsewhere. That seems to be the only reason why the Government could, in that particular instance, have decided to turn down that scheme which means that people will be denied a number of flats and houses, of which four are designed for wheelchair use for the disabled, and of which 10 are designed to mobility standards so that those who are frail or find difficulty in walking can have access to them, and where good quality family accommodation can be provided in an area which is in high demand for tenants in my constituency who wish to move into that sort of quality of accommodation, because of the apparently arbitrary rules that the Department of the Environment is seeking to operate. That is a tragedy for the people who are faced with that decision. That is one way in which the project control system operates in a malign way.

There is another tragedy, and that is that the system tends to force local authorities to build or renovate, with smaller homes being created rather than larger ones. Because there are no ground rules, we can only go by experience, but the overwhelming experience of people from Islington submitting applications for renovation or new building projects to the Department of the Environment is that an application for a family dwelling will be rejected, while an application for a home for one or two people is much more likely to be accepted.

If the Minister intends to protest that that does not happen, I draw his attention to the way in which his Department operated in relation to the Sans Walk housing development, again in my constituency, again in the Clerkenwell area, like the Farringdon road development, and again a development which will be extremely useful for the people of my area. That scheme had to go through three submissions before the Department finally accepted it. At each submission it required a reduction in the number of family homes which were to be provided in the development. It was only when we got down to a development which included far fewer family homes than the number which we had started with, and which people in the Clerkenwell area really want and need because there is a desperate need there for three, four and five-bedroom houses, that the Department said that we could go ahead with it. That is the way in which the project control system operates. It operates to the detriment of those who need housing accommodation.

It has also had a malign impact on what is called the estate action programme. This is a programme of work on estates which were built between the two world wars in Islington, where the council moves tenants out of blocks on a rotation basis and does major renovations, including the installation of lifts and central heating, knocking down walls to make rooms bigger, putting in entry phones, complete redecoration, refitting and so on. The way in which new homes are created out of old shells is quite often miraculous.

The purpose of that is not just to be able to use good quality solid and stable basic accommodation to create modern homes, not only to bring new life to old estates which are decaying and unpleasant to live in, but to keep a community together. On an estate of that kind, where one is working on a rotation basis over a number of years, one can preserve much of the tenant community on the estate, and people can stay on the estate but move into much better quality accommodation than the flat which they previously occupied.

It is extremely popular with the tenants who live on those estates. It was highly praised by the former Minister for Housing and Construction when he came to visit Islington and visited one estate where such work had begun. He saw the shoddy, awful and desperate state of the previous blocks, and he saw the extremely good quality of the work which was being done for the renovation programme.

The project control system is now operating to the detriment of that programme. Two years ago it was relatively easy for a local authority to gain acceptances on the various stages of the programme on various estates, but now, on stage after stage, even though the costs are deliberately being drastically reduced to try to assist in getting through the project control system, rejections are coming through from the Department of the Environment.

I should like the Minister to explain to the tenants of Sickert Court estate or Canonbury Court estate why his Department feels that they are no longer entitled to the good quality accommodation which can be provided out of the homes in which they are presently living, even though great effort has been made to keep costs down to the minimum necessary to produce good quality work. One should never cut costs in order to cut the basic quality of work. I am afraid that the way in which the Government are operating at present means that tenants on those estates, looking at other estates which now have very good work completed under the estate action programme, will be sadly disappointed that they are not able to achieve the same standards of work on their own estates because the Government will not let them.

I should like the Minister to tell the tenants why the Government will not let them have the standard of work that is needed on those estates, and why there has been such a stream of rejections of project control applications by the local authority for work which is highly valued by the tenants concerned. I suspect that what we are seeing—and it runs through the whole operation of the project control system and the philosophy behind the Government's housing activities—is the "cut costs at any price" philosophy.

That is the approach which the Government wish to see adopted by local authorities. In fact, by depressing the costs of work in that way, supposedly in the name of value for money, but in fact in the name of cuts in cost at any price, the effect will be to drive us straight back into the junk work which the Government's Back-Bench Members so decry and deplore, quite rightly, in the work which was carried out in the 1950s and 1960s in many parts of the country.

I am happy to say that the Labour party is going in precisely the opposite direction. I am happy to say that the party's housing policy document, adopted overwhelmingly at our party conference last year, specifically said that there should be far fewer controls by central Government and bureaucrats in Marsham street over the way in which local authorities carry out their housing programmes. The need is for local councils to be accountable to their local electorate and to be accountable to the tenants who will live in the homes that are created. That is where the consultation will take place and where the controls will operate. The controls will operate by the imposition of arbitrary rules by the Department of the Environment, which will not publish those rules, wilt not tell local authorities how or why they are operating. The Department operates them in a way which discourages the creation of family homes in the heart of the inner city and damages major and valued programmes such as the estate action programme.

The Parliamentary Under-Secretary of State for the Environment (Sir George Young)

Will the hon. Gentleman tell the House the percentage of cases in Islington in which my Department has intervened?

Mr. Smith

The Department has intervened in recent months in a considerably higher percentage of cases than in previous months. I do not know the overall percentage. The Minister may enlighten us as the debate progresses, but that is not the point. If the Minister seeks to make great play of it, he is ignoring the fact that the local authority deliberately tries to read the mind of the Department of the Environment before making submissions, thereby deliberately downplaying its expectations, and he is ignoring the impact of the refusals.

I should like the Minister to tell me whether rejections have taken place in the estate action programme, because they have, and I have a list of them. I should like the Minister to tell me whether rejections took place on the Sans Walk development, because they did, and whether a rejection has occurred on the Farringdon road development, because it has. Whatever overall percentage the Minister may try to use to sweeten his actions, and whatever he decides to do in that respect, it will not mitigate the fact that there are now many tenants in the estate action programme who were looking forward to much better quality work than they are now to get because of the way in which the project control system operates.

Earlier on I mentioned Blair close, which is a new and small development carried out by the borough of Islington. It is named after Eric Blair, who wrote under the name of George Orwell and was a resident for many years in my constituency. He had a profound belief in the equal dignity and value of all ordinary people. On behalf of my constituents—and I wish that the Government would listen and not hide behind false statistics, as I expect the Minister will—I am saying that they have as much right to the best quality of accommodation to rent, and to want to see created out of the estates they are living in at the moment, as the Prime Minister has to have a fine house built for herself in Dulwich. My constituents want that to happen for them. That is their aspiration. It is a valid and valued aspiration and one which the Government are thwarting.

5.29 pm
Mr. David Winnick (Walsall, North)

I should like to congratulate my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) on having initiated this useful and necessary debate. I appreciate his remarks about the effects of the housing programme on his own constituency. The background to this and other recent debates on housing is the 63 per cent. reduction in real terms in public expenditure on housing between 1979–80 and 1985–86. In addition, there have been reductions in central Government subsidies for local authority housing. There have been cuts of about £1 billion since the Government came to office.

Those figures explain why there has been such a dramatic decline in the number of new council houses built. The provisional figure for the number of public sector starts last year is just over 33,000 for the whole of the United Kingdom. That is almost unbelievable. What would people have said if, a few years ago, before the Conservative party came to office, we had warned that a Tory Government's policies would result in the number of council dwelling starts in any given year being so low? It would have been understandable even if some of our supporters had even privately accused Labour candidates and Members of Parliament of exaggeration.

Figures that I have obtained from the Library show that this year there will be just 28,000 new council house starts in Great Britain. As we have said—it is worth repeating—in peace time there has never been such a sharp reduction in council house building since local authorities started to build. Is the Under-Secretary of State, who has just been muttering, proud of that record? Will he merely read out his brief when the time comes, taking the line that this is not his responsibility but a matter for Cabinet? The hon. Gentleman should be thoroughly ashamed of himself for being responsible, as one of the Ministers in the Department of the Environment, for a policy which has meant that the number of starts in the public sector last year was 33,000 and this year will be 5,000 lower than that figure.

It is untrue to say that there is no demand for council dwellings. That has been part of the fiction that Conservative Ministers have peddled since coming to office in 1979. From the very start, they said that the position had changed dramatically and that much less council accommodation was required. I do not accept that for one moment. I believe that the demand and need—certainly in the inner cities—is as great and as acute as in previous years.

The explanation is simple: for those who cannot possibly afford to buy, the only hope of obtaining adequate accommodation is through either a local authority or a genuine housing association. In some areas, including Greater London, property prices are so high that many people, including those on average incomes, find it very difficult indeed, if they have no savings, even to start to buy. I say again, because it is easy for Ministers to distort our position, that we are not against owner-occupation—indeed, the opposite. We are for owner-occupation. We recognise, however, as the Government are so reluctant to do, that many families and single people are just not able to buy.

Some people who do not wish to buy are forced to do so because they have no alternative. In a number of cases which have been brought to the attention of local authorities, the breadwinner has become unemployed or has had a reduction in his income and therefore has not been able to pay the mortgage. In addition, there has been a sharp decline in the number of housing association dwellings.

In my borough of Walsall no contracts for new council dwellings have been entered into since 1979. Inevitably, a large number of people are on the waiting list. Many families who live in high-rise flats have come to my surgeries or written to me about their problems. If they have one child, their chances of being rehoused are remote. Even families with two children have a small chance of being offered alternative accommodation in a house. I am sure that my borough is not unique in this. If no new council dwellings are built and if, at the same time, the Government ensure by their policies that a large part of the rented accommodation is sold, it is hardly surprising that such problems exist.

I believe that housing will be a major issue in the next election. The constant talk by Ministers about the tenants' right to buy will not hide the fact that there is increasing hardship and misery. My colleagues and I are continually waiting for an answer to the question about private tenants which we always ask in these debates. My question still is: if it is right for council tenants to have the right in law to buy, why do private tenants not have that right? Many private tenants would certainly like that right. My colleagues and I understand why a Tory Government will not do anything to offend the large property companies, but private tenants, who often are not as political as we are, do not understand why they are not given that right.

It is an indictment of the Government that so many families are living in acute hardship and misery, and will continue to do so, because of these policies. They have meant that local authorities cannot carry out their housing responsibilities. There is the scandal of bed and breakfast accommodation. How much does that add up to financially and in terms of misery for the families involved? Where is the logic and justice in a Government washing their hands of their responsibilities in one of the most important aspects of social policy—adequate housing?

Sometimes, we get the impression that, in effect, the Government say that the private rented sector will be able to fulfil the needs which at present are not met by the public sector. During the last debate on this topic, the Minister for Housing, Urban Affairs and Construction told us that there would be no "major" change in the Rent Acts during this Parliament. As I said at the time, I am not sure what he meant by "major". We shall strenuously oppose all attempts to deregulate the private rented sector.

We do not want a repeat of the Rachmanite scandals. We warn that, if the Conservative party is re-elected to office and if it is determined, as it appears to be, to carry out the same policies carried out by the Tory Government in the Rent Act 1957, the result will be the same as in 1957. Ministers say that only new rented dwellings will be subject to deregulation. It is obvious that, as happened with the Rent Act 1957, some landlords will apply pressure to ensure that their tenants are thrown out so that their places can become new dwellings which are not subject to decontrol. That is how Rachmanism arose. Many of us warned at the time of what was likely to occur.

The way that the Government have acted on housing should cause the maximum concern and, as I have already said, we are determined that that should become a dominant issue in the next election campaign. The Government have done their best to undermine the existing stock of local authority housing. If the Government believe in selling off much of the rented housing stock, then replacements should have taken place. However, the opposite has happened.

The Government are more concerned with selling off as much as possible of the existing rented accommodation and at the same time to ensure by the housing policy that the majority of local authorities are not in a position to build. As a consequence, most local authorities have not been able properly to carry out their housing responsibilities for new building and modernisation. Many estates in my borough have not yet been modernised, because the local authority found that its HIP allocation has been inadequate.

For these reasons, I hope that the debate will continue elsewhere, in the Fulham by-election and in the country at large. The Opposition believe that it is wrong that people should be deprived of the ability to be properly housed. If they cannot buy accommodation—as I have said, I support owner-occupation—and so many people are not in that position, then those families have an absolute right to be properly housed. The only way they are likely to be properly, adequately and securely housed is through local authorities offering them accommodation. The Government have done everything possible to undermine the right and ability of local authorities to build and modernise. That is the Opposition's accusation against the Government and the Ministers who are carrying out their policy.

6.14 pm
Mr. Simon Hughes (Southwark and Bermondsey)

I welcome the opportunity provided by the hon. Member for Islington, South and Finsbury (Mr. Smith) to debate the Government's policy towards local housing programmes. Now is the appropriate time of year to hold such a debate, as all hon. Members will know that around this time local authorities are deciding their priorities for what they have been granted as expenditure permission under the housing investment programmes. The authorities are now deciding their budgets for the coming year.

Like other hon. Members perhaps, I have in recent days attended at least one of the district housing committees in my borough, where local representatives of the tenants associations in the estates owned by the borough council in Southwark have been expressing their views about the priorities for expenditure. The tenants hope that these priorities will be endorsed by the housing committee and implemented over the next 12 months.

The background to this debate is common knowledge. We are at the end of a 10-year period in which Government financial contributions towards housing—which is traditionally also contributed to by local authorities—have been reduced year by year. We are now at the bottom point of that period of reduced Government investment in housing. Coincident with that is the reduction in the number of new housing starts and completions, and the reduction in the amount of work that is being done on renovation.

That is the background to the debate and we have often rehearsed in the House the difference in attitude between the Government and the Opposition in the way the Government have responded to what, by any analysis, is the housing need in England. The Government know that all the committees and reports issued last year concluded that we needed a massive amount of new housing. We also need a massive amount of money—£20 billion was the Department of the Environment's own figure—to renovate the housing stock in the public sector.

We continue to hope and look for signs that wisdom will prevail. We are looking for signs of a response to that mass of critical evidence which states that the Government are not doing their job properly in seeking to fulfil their election promise. That promise is now famous and no doubt with hindsight the Government may regret making it, but the Government promised that their objective was to make this nation the best housed nation in Europe. The Government have so far fallen appallingly short of that objective. Presumably the Government will want to forget all about that promise, as it will be decades if not centuries—if the Government's present policy continues—before they can reverse the trend and put us at the top of the league table in terms of adequate provision and meeting housing needs.

The title of the debate on the Order Paper names the three key issues on which I shall concentrate in my short contribution. That is unusual, as debate titles do not normally set out all the aspects of the matter under discussion. The hon. Member for Islington, South and Finsbury wanted the House to address the subject of Government policy on local housing programmes. That requires us to confirm each of the three elements in the title of the debate.

First, there is a need to have programmes for housing. We do not want a hit-or-miss, stop-start housing policy. We need, if we are to recover from the appallingly low position in housing provision, a planned policy whereby the housing provided actually meets the housing need. At present there is no set of programmes, under any Government-recognised methodology, which considers what is to be produced across the range of tenures and sectors. There is no way at present whereby the Government require a local authority to prove that the housing need—not demand—in the authority area requires so many single-bed, two-bed, three-bed or four-bed homes over the next few years. There is no way at present whereby the local authorities state their projection of population for new households and so require the Government to respond to their need. There is no way in which the Government can require an authority to supply details of local authority housing build, housing association or Housing Corporation build, as private development and so have the authority to provide a plan which the Government can recognise and ensure that the authority achieves.

The time has come for us to plan to meet housing needs at all levels. Some two years ago, the Government said that they would no longer have a national housing plan for England. We must plan if we are to realise the extent of the need and so meet that need. We must plan in each local authority area. Unless there is planning and a financial response to the sheer volume of need, we will not be able to fulfil that need and the increasing needs which will be caused by people presenting themselves for housing in future years.

If we do not meet this year's need, for example, for the people presenting themselves as homeless and the needs of those who may become homeless in the future, which may see an escalation in the number of new homeless cases received in boroughs such as Brent, Camden and Westminster, we will perpetually—certainly until the end of this decade—condemn people to bed and breakfast accommodation, to sleeping on the streets and to wandering around looking for what may be seedy, unsatisfactory, unsafe and multiple occupancy dwellings.

The first priority is planning. The second need is obviously for houses—renovated, fit and warm houses. Often of course flats and maisonettes are acceptable and people may prefer them. I am sure that the Minister will have seen that the survey recently produced by the GLC about housing standards in Greater London—no doubt one of its last pieces of research before its demise—confirms that with the removal of the traditional Parker Morris standards there has been a reduction in the standard of housing.

There has also been a reduction in the size of rooms, particularly in London, and no doubt elsewhere. Although there are arguments which may suggest that old-fashioned housing with high ceilings and large rooms was difficult to heat and unsatisfactory, I often now have complaints—as I am sure the Minister has in his borough of Ealing and elsewhere—that many people believe that there is not enough space. We must examine the standards of the housing we need and alter the requirements of the building regulations and of local authorities.

Although we should through advanced building construction and material science have better quality housing—much of our housing is of better quality—some poor quality new-build housing still exists in all sectors. That is often worse in the private sector than in the public sector. There is not a great deal of timber-framed housing or modern housing development in a constituency such as mine, except in the docklands area in Bermondsey, but when surveys are done there are often complaints that the new housing is not of a high standard, so would-be occupiers are put off. They will not buy those properties because they are advised that for structural reasons they should not make a major investment in them.

The third point was made specifically in relation to Islington—I do not know the figures or percentages, but perhaps the Minister will inform us of them—but it should not be the responsibility of Government to decide local authority priorities. Housing programmes supported by funding from taxpayers need to be local housing programmes. This is one of our great criticisms of Government economic policy as it affects housing policy.

In 1979, the Conservative party went to the country on a policy of the right to buy. The Government steered legislation through Parliament, and local authorities, whatever their views, political colour, will or circumstances, were forced to sell. They gained the assets from the sales which often left them in net deficit, and now they are told that they cannot spend the proceeds from those sales. They have been told that this year they may spend only 20 per cent. of capital receipts.

That restriction, for national expenditure reasons, which forbids local authorities to spend their own money, which has been acquired only by policies imposed by the Government, shows that the relationship between central and local government is wrong. Local authorities are at the centre of a complete pincer movement. On the one hand, they are forced to reduce their stock but are not given extra money to replace it, and on the other they are not allowed to spend the money coming to them from forced sales.

I hope that the Government will co-operate fully with the plans that the GLC has laid for the forward funding of housing programmes which it cannot pay for or manage after abolition at the end of this month. Southwark has the largest volume of public sector housing of any London borough. It has 65,000 properties, and some 65 per cent. of the population live in public sector housing. It also has the largest proportion of ex-GLC housing stock—27,000 homes. A substantial amount of work needs to be done.

When we debated the undertakings by the Minister's predecessor, we did not receive any commitments that money would be found for that work when the GLC properties were handed to the boroughs. Indeed, there was a breach of a clear undertaking given at the time. We now need a clear undertaking that the Government will cooperate with, support—not merely be neutral about—and oppose any attempt to prevent, the forward funding with GLC money of the work that needs to be done on the housing estates that were in the hands of the GLC. If the boroughs cannot have the moneys which the GLC at present has, much of the vital work on the estates in greatest need of expenditure, whether on roofing and window repairs or on the installation of central heating, will not be done. People who live on what are generally regarded as some of the least desirable estates in London will then have no prospect of decent housing in the foreseeable future.

My next point is a regional point, which is inevitable given that all hon. Members who are likely to participate in the debate are London Members, except for the hon. Member for Walsall, North (Mr. Winnick). In London we have a particular responsibility to the public sector because a substantial proportion of our properties are local authority properties. Only one region in England has more local authority properties. In London, 29.8 per cent. of homes are owned by local authorities, we have the highest proportion of housing association properties—nearly 5 per cent.—and the highest proportion of private rented accommodation—we are the highest of the three regions where it is more than 10 per cent. Therefore, owner-occupation is a relatively small form of tenure in London compared with other regions. For that reason we have a particular responsibility to consider London policy separately from regional policy.

I should be grateful if the Minister, when he considers Government figures, planning and HIP allocations, will recognise that in London we are starting from a base of more public sector housing. I hope that he will recognise that, whatever happens in the future, we need commensurately more Government investment and approvals for expenditure on housing in our capital city than elsewhere.

As the Minister knows, one problem with the right to buy, and one of the problems which we in the alliance see increasingly with buildings in the public sector, is that if the right to buy is to continue, public sector new build, unless it is specialised housing, such as sheltered housing or housing for the elderly, is the housing most likely to be bought because it is the most desirable housing. Therefore, there will inevitably be a higher take-up of the right to buy of new-build housing stock, so the relative amount of decent new property in the public sector will be reduced. If it is believed that it is inappropriate to replace lost stock in the public sector, the voluntary sector must take up the deficit. I am thinking of the social housing sector, the Housing Corporation, housing associations and the like.

The Housing Corporation administers this part of the moneys funded by Government. I know from discussion with its officers that, although this year it is seeking to deal with the needs in London by moving funds which would otherwise be spent in counties such as Kent, Surrey and Sussex to housing association build in London, it is finding it impossible to fund the projects for which it has bids from housing associations and which it would like to fund. If in the coming year the Minister does not fund and support public sector housing through Government expenditure, we need some commitment to increase the possibility of people having housing association and Housing Corporation funding.

Will the hon. Gentleman reconsider the grant given to the Housing Corporation, and encourage the view that, if there is a crisis in housing in the capital city, he will seek to make additional funds available to the Housing Corporation? He knows that I am particularly interested in arguing that the docklands could benefit greatly from additional special Housing Corporation funding. Is he willing to accept that the docklands should be considered for special Housing Corporation allocation, such as has been given to other areas in the past?

The other day we came to the end of a hard road, down which many of my constituents have travelled to achieve an acceptable result regarding the Cherry Garden site on the riverside in Bermondsey. The London Docklands Development Corporation was about to develop largely private sector housing there, which was wholly unacceptable because the cost of the housing was to be massively beyond the means of most local people. A flat on the river with a wonderful view would have cost hundreds of thousands of pounds in a community with a desperate need for housing. The local authority, the LDDC, the Government, the GLC and I have long been engaged with local people in seeking a satisfactory solution, and we have now more or less done so.

Most of the site will be taken up with a deferred funding project, which means that local authority housing will occupy most of it. That is a good achievement. Incidentally, the best laid plans of the LDDC were further thwarted when it was discovered that there was an ancient monument on another part of the site—a medieval royal mansion on the riverside. Therefore, its idea of putting up a futher luxury block of flats for sale has been thwarted because our heritage must, of course, come first.

I ask the Government for a commitment that schemes which allow deferred payment and forward funding, if necessary by borrowing from the private sector, can be encouraged rather than discouraged. Therefore, even if there is no immediate prospect in the forthcoming financial year of the development of such a site as the Cherry Garden site for public sector or deferred public sector housing, if none the less the need is there and the financial arrangements are available, I hope that the Government will not block any possible overtures by local authorities for extra funds to enable the housing to be built that the local people need. Such co-operation from the Government would prevent such a site as Cherry Garden being bought speculatively for private gain at the expense of local needs. I would be grateful for an assurance that that type of scheme will receive the endorsement of the Government. We need more such schemes for the local people of Bermondsey, as elsewhere.

I hope we will soon see change from a Government who have resisted Londoners' demands for housing long enough. The Government may think that a move in this direction will at least save them a few votes in the elections that are coming up.

6.31 pm
Mr. Harry Cohen (Leyton)

I congratulate my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) on raising this important matter, and I congratulate him also on his excellent speech, in which he set out the problems caused to so many families by the Government's savage cuts in local housing programmes.

On the day that the House adjourned for Christmas, I raised the problem of the housing crisis in my constituency of Leyton and Leytonstone. I drew attention to the growing problem of homelessness and the increasing inability of the local authority to cope properly with that problem. Such inability had an effect on the people on the waiting lists who were desperately trying to get a move. More and more were told that they had no chance of getting the move that they wanted. The new building programme had been effectively curtailed. Repairs were harder to obtain and estates which desperately needed environmental improvements were denied them and were pushed further back in the queue awaiting such improvements.

Subsequent to that debate I asked a parliamentary question about housing investment in Waltham Forest. I asked what the investment in real terms was in 1979, and what it was at present. The answer was that in 1979 housing investment was worth £17 million, but that it was worth £4.5 million in real terms in 1985. That was the result of the Government's savage cutback in the housing programme. The Minister who replied to my question said that I had not given enough emphasis to the private sector. However, the private sector cannot possibly fill the gap caused in Waltham Forest, or anywhere else in the country, by the Government's savage cuts.

I have referred to the housing problems in the private sector. Home improvement grants for owner-occupiers in my borough have been blocked since August 1984. The opportunity for low-income owner-occupiers to repair and improve their homes has been effectively extinguished by that blocking policy. Private tenants are afforded little protection. I contributed to the debate on this matter recently, and I feel that there should be an effective charter of rights for private tenants. The Labour party takes into account private as well as public sector housing.

I referred briefly at Christmas to the Sinnott road development site in my borough. It is a site of scarce housing land which will be needed to rehouse families displaced by the Mll link road proposals as they affect my constituency. The Waltham Forest council—it is jointly controlled by the Liberals and the Tories—is in the process of selling off that site. It is a scandal.

I received a letter from the leader of the Labour group on the council, Councillor Bill Pearmine, about that site. Bill Pearmine draws attention to the recommendations of the council's housing committee on 28 January which were accepted by the full council—Liberal and Tory-controlled—on 20 February. The housing committee recommended: Members are asked to endorse the current proposals. This would include a formal submission to the DOE in order to dispose of the land at nil cost or at cost below market value. Councillor Pearmine asked:

How anyone can talk of disposing at 'nil value' land on which 148 homes can be built is beyond me; as the developer will retain nearly 100 properties. This is putting in the hands of a private developer an asset that when built will be worth over £3.5 million assuming a unit price of £35,000 and that may indeed be on the low side … You will notice that if the DOE requires repayment of the outstanding loan debt on the land, then the nomination rights would only apply to 16 properties. That is all that the council would get out of the sale. However, the total cost would be £1,806,000. That is the amount of the give away by the council to private developers for scarce housing land in my borough. Privatisation is represented by that type of handout. The Conservatives and Liberals are forcing a massive handout to private developers, regardless of the need for public sector houses.

It is a deplorable situation. The hon. Member for Southwark and Bermondsey (Mr. Hughes) should get on his feet and deplore that handout. Unless he does so, in any future elections the Liberals' part in that deplorable give away of housing land must be made clear.

Mr. Simon Hughes

I do not know the facts in the hon. Member's borough, but I shall look into them and I shall certainly raise the matter with him again. I understand his concern, and it is a matter with which I shall deal.

Mr. Cohen

I am pleased that the hon. Member has made that point. I hope that he will visit the Liberal councillors at Waltham Forest and get them to reverse this deplorable situation.

6.37 pm
Mr. John Fraser (Norwood)

With the advent of the second world war, the construction industry went through a dramatic change, for quite understandable reasons. The building of homes came to a sudden and dramatic halt. I can remember as a child that it was clear that the industry was not building houses, but was concerned with defence and was often engaged in building barriers and obstructions.

For wholly incomprehensible reasons, a cycle of dramatic change has been followed by the Minister for Housing, Urban Affairs and Construction. Under the Conservative Government the large public housing building programme has been replaced by barriers and obstructions. They have blocked the desires of local authorities. I wish to deal with two such obstructions, which were touched upon by my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith).

The first obstruction is in terms of the housing investment programme. We tend to use jargon far too often in the House. I suspect that many people outside do not understand what the housing investment programme is, so let us remind ourselves. It is not money that is provided by central Government to local authorities. It is the amount of money which a local authority is allowed to raise from its own resources or by borrowing from banks or building societies. It is not money which is supplied by the Government. The housing investment programme has turned out to be the restricted levels which are imposed by central Government upon local government when it seeks to discharge its housing responsibilities. Over the past seven years we have had a history not of assistance to local authorities, but one of obstruction.

The figures given by my hon. Friend the Member for Walsall, North (Mr. Winnick) are fairly clear. Between 1979–80 and the current financial year, the amount of capital expenditure that local authorities have been allowed to engage upon has dropped by 63 per cent. That is, in broad terms, the money that was allowed to provide 10 new houses in 1979–80. Now enough money is allowed to provide only four new houses.

To put it another way, there has been a loss of 100,000 public sector homes for every year that the Government have been in office; or, to put it yet another way, every week that goes by under this Tory Government, 2,000 fewer homes are built than would have been built if a Labour Government had been in office. The plight of individual boroughs shows that it should be called, not the HIP, but the dip. I have some figures from my hon. Friend the Member for Islington, South and Finsbury. At constant 1985–86 prices, in 1979–80 Islington was allowed to spend £90 million on all sorts of housing projects, ranging from new build to help for owner-occupiers with repair and improvement grants. As a result of the HIP allocation in 1985–86, it will be allowed to spend £29 million, which is slightly under one third of what it was allowed to spend six years ago. That is a Labour borough, so let us take a borough under Conservative and Liberal control—Brent. In 1979–80 it was permitted to spend £52 million on housing expenditure and in 1985–86 it has been allowed to spend rather less than half that figure, £23 million.

Only yesterday, some figures were published by the Greater London council on the cost of bed-and-breakfast accommodation. I am sorry that these figures are not directly comparable to the HIP figures. In 1981, Brent council had a net expenditure on bed-and-breakfast accommodation of £600,000. In 1984–85 it had a net expenditure on homeless families in bed-and-breakfast accommodation of £1.5 million. In two years, from June 1983 to June 1985, the bed-and-breakfast population accommodation by Brent council has doubled.

One sees reflected in London borough after London borough a steep and dramatic drop in the amount of housing investment permitted to the local authorities, and equally a steep and dramatic increase in the number of homeless families and the amount of money that has to be spent by the local authorities in looking after those who have no roof above them.

I do not apologise for using the figures for Lambeth. In 1979–80 it was allowed to spend £94 million on its housing programme. That figure has dropped by almost two thirds to £34 million in the current year, and, rather like Brent, expenditure on bed-and-breakfast accommodation has gone up, while investment has gone down. In 1981 it spent £229,000 on looking after such families, and for 1984–85, despite many efforts to use local housing for homeless families, the expenditure has escalated to £997,000. Over six years housing investment has been cut by two thirds, and in three years expenditure on bed-and-breakfast accommodation has increased by 300 per cent. Wherever one looks, the figures are much the same.

To give some idea of the scale of dereliction of public housing and the lack of urgency and care about what should be spent on those in greatest need, we can take another comparison. In the current year, the revenue subsidy through the mortgage interest relief scheme to those buying their own homes is running—I do not know the exact figure to the end of the financial year—at about £4.7 billion. That means that the revenue subsidy to owner-occupiers is running at double the amount of capital expenditure that local authorities are permitted to pay.

Side by side with homelessness, unfit homes, waiting lists, deprivation and despair are the continuous cuts in the amounts available to local authorities to spend. One cannot escape the conclusion that the severity of control is applied with the greatest stringency to those areas of greatest housing need.

The second obstruction that is being persisted in by the Minister for Housing, Urban Affairs and Construction is what is called project approval. For some local authorities the words "project approval" have a hollow ring.

Sir George Young

Project control.

Mr. Fraser

Project control. That amounts to the substitution of the judgment of officials at Marsham street for that of the local authority. I have examples similar in part to those given by my hon. Friend the Member for Leyton (Mr. Cohen). When my local authority read the Department's circular 28/82, it saw that it was about "good value for money". I have no objection to that, but the circular went on to say that the project control was about the local authorities

being directly accountable to their electorate for decisions about housing provision … to give local authorities greater freedom to decide cost and quality of the dwellings they provide". My local authority took that seriously. It wanted to provide large family houses and spacious flats in the heart of Brixton. We all recognise the need for spacious accommodation, to give people a sense of history and place, to enhance a conservation area, to respect the views of local people and to maintain mature trees. The accommodation had a large number of bed spaces, private gardens and parking, and was to be built at the relatively low cost of £13,245 per bed space. However, when the project was submitted to the Department of the Environment, it was turned down because the cost was above market value by 198 per cent.

In this case, the project was turned down because the value of the dwellings that would be created by the rehabilitation scheme were far above the low-market values in the centre of Brixton. In an area that has been dragged down by its boot straps, which has a number of social problems, a problem of crime—which affects property values—and where unemployment has been escalating, and values and purchasing power falling—affecting land prices—projects for good dwellings will be at prices well above the local value for property. Therefore, projects are turned down.

In Islington the problem is different, because land prices are high, but the projects are still turned down. This brings us to the complaint that local authority offices do not know where they are. They do not understand what the system is. If it is the system that operates in Brixton, it seems extraordinary. In the project that I mentioned, the cost per dwelling was £62,000. That might seem a lot of money, but it is not compared to the dwelling that the Prime Minister is intending to buy in Dulwich. It is not much money compared to the price of many three or four-bedroom homes in the south London area. When I look in the Wates property guide or the South London Press, I see that at Gun wharf a two or three-bedroom maisonette costs £329,000. With such property prices in the affluent part of my constituency and south London, £62,000 for a completely modernised, self-contained, centrally-heated flat with a garden at the front and the back and car parking space is incredibly good value for money, but it is not good enough for those who are poor and deprived.

Local government officials do not know where they stand. They believe that the project control operates against the maintenance of quality. The one thing about which I feel most strongly, and I am sure that my hon. Friends the Members for Islington, South and Finsbury and for Leyton feel the same, is that we must invest local authority housing with more dignity and status. Perhaps we can even have a few extravagances—extravagances which can be enjoyed, not just by the occupants, but by all the community, and which raise the standards and the quality of an area. We want to see that, but project approval operates against it.

Secondly, project approval appears to be wholly inconsistent. The levels of expenditure permitted in one area of a borough are disregarded in another area only a mile away. The system is uncertain. The yardstick at least had some kind of generally accepted measure of cost.

The application of project control is operated where the local authority officers and councillors are kept in ignorance and frustration. I am told that no reasons are given for decisions, and this applies in Lambeth, in Islington and elsewhere. I am told that no approach is possible to technical counterparts of local government officers in Marsham street. There is no dialogue possible between those in local authorities and those in central Government.

We have had the chance to air two obstructions which the Government have erected against the provision of local authority housing programmes. I do not know when we will have repentance. The Parliamentary Under-Secretary of State for the Environment, I am sure, regrets the trends that have taken place, perhaps imposed upon the Government mostly by the Treasury. I hope that in the course of the coming local and parliamentary elections, repentance will be forced upon the Government.

6.50 pm
The Parliamentary Under-Secretary of State for the Environment (Sir George Young)

I join in the congratulations to the hon. Member for Islington, South and Finsbury (Mr. Smith) on giving the House the opportunity to debate housing, a crucially important subject. In no way do I deny the existence of the problems that he set out in opening. Too many buildings in local authority control are in poor condition and too many people are living in bad conditions in both sectors with too many people in bed and breakfast accommodation. That is common ground between us.

The problems have not risen overnight. As a London Member of Parliament representing an inner city seat, I share the hon. Member's concern that too many people are living in unacceptable housing conditions.

I find it infinitely depressing that in his speech and in the speech of his hon. Friend the Member for Walsall, North (Mr. Winnick) nowhere is the suggestion made that the private sector has some part to play in tackling the problem that has been outlined. Nowhere in either speech was there any recognition that local authorities can have a constructive partnership with the private sector, the building societies and the financial institutions to make faster progress in putting right the wrongs outlined by the hon. Member for Islington, South and Finsbury. The Opposition's only answer is more public expenditure. Whichever Government are in control, if they continue only to look to the public sector for a solution to all these problems, they will simply have to wait far longer than if they develop the sort of partnership that this Government have been promoting.

The narrow vision shared by those two hon. Members is not shared by Labour councillors. A growing number of Labour-controlled local authorities are recognising that there are resources waiting to be unlocked in the private sector. We announced only two weeks ago the first scheme under the £50 million housing investment programme that my Department held back, when we announced the go-ahead at Calderdale for a scheme whereby resources were made available to turn round the Abbey Park estate, a very difficult estate. This involved extra resources for the local authority from my Department but, crucially, resources from the private sector to take over some of the empty houses for refurbishment and sale at acceptable prices, initially to people on the waiting list or to other local authority tenants.

The other thing that I find so depressing about all the Opposition speeches is that they do not recognise that there is far more to tackling housing than just local authorities. The vast majority of people want to own their own homes. Hon. Gentlemen spoke about the HIP allocations which have fallen, although they have not fallen as fast as they did under the last Labour Government. They said nothing about starts in the private sector, which are up from 99,000 in 1980 to 161,000 in 1985. Opposition Members keep putting the telescope to their blind eye and concentrating on one part of the housing market without recognising that Government policies have brought home ownership within the reach of more people. Many people who traditionally looked to the local authority alone for a solution to their housing problem now look to alternative schemes, to shared ownership and to other schemes whereby the local authority makes available land that it owns for building under licence to a local builder who builds at prices controlled by the local authority for onward sale to those in need.

I had hoped that the Labour party had now accepted that my party's policy under the right to buy was not a policy to be resisted as ferociously as they tried to five years ago, and that we were developing some common ground in this sort of approach to housing problems. I was somewhat depressed that, apart from a passing reference from the hon. Member for Leyton (Mr. Cohen), there was no recognition from Opposition Members of the broader housing issues and the other opportunities to tackle housing apart from the only thing they seemed to know—more public expenditure.

It is worth putting on record that more people are now being housed under the Housing (Homeless Persons) Act 1977 than in 1979, and that a substantial improvement has taken place in the nation's housing stock by way of restoring missing amenities. There has been a substantial improvement in the disbursement of improvement grants since 1979, with the figure up from some £90 million in that year to over £400 million this year.

I say to the hon. Member, for Walsall, North, who called for more public expenditure on building houses for rent, that there is general agreement that the priority for local authorities rests with modernising, improving and making the best use of existing stock before embarking upon a new programme of building for rent. We have published a survey that we had the courage to commission showing that there is £20 billion of outstanding work on local authority stock. We have to tackle that first. We have to bring back into use the 28,000 homes that have been empty for far too long before embarking on an expensive programme of new build for rent.

I mention now local authority project control, which was the theme of the speech of the hon. Member for Islington, South and Finsbury. Only 80 local authorities are covered by project control. The vast majority of local authorities do not come within project control because they are out of subsidy. Secondly, the Department rarely intervenes. Taking renovation, we intervene in only 7 per cent. of applications; for new build, the figure is 12 per cent. For Islington, the figure is higher, at 25 per cent. That is because Islington put forward a number of very expensive schemes.

It is not the case that, after we have rejected it, a project simply lapses. In most cases—and I take a personal interest—projects can be renegotiated and different schemes put forward which my Department approves. I hope that that will be possible in the scheme mentioned by the hon. Gentleman at Farringdon road. In that scheme, the floor areas are very generous. There is a high land cost element of nearly £20,000 per dwelling. We believe that the site could be developed a little more to achieve its full potential. I am aware that the council wishes to include a number of wheelchair users in the scheme and to build properties of mobility standard. It is right that the local authority should concentrate on those needs. If it would like to resubmit a scheme—as I have said, I take a personal interest—I will see, as has happened in most cases in Islington, whether some compromise is acceptable. The present resource cost of that scheme works out at £82,000 per dwelling. I have to ask whether that is the best use that Islington can find for scarce HIP resources, and whether there is not a better way of spending the money that we have made available to it.

I deal next with some points raised by the hon. Member for Southwark and Bermondsey (Mr. Hughes). The way we allocate resources reflects the fact that in some parts of the country there are more local authority dwellings than in others. Building new houses for rent which are then subject to the right to buy is made more difficult by the application of the cost floor rules. The local authority cannot sell at a loss. If one considers the sort of cost that I mentioned, it is clear that if the right to buy is exercised there is no discount and one has to buy at the historic cost. That would put the new properties beyond the reach of most people.

We have taken an interest in the relationship between the LDDC and Southwark. I was pleased that on one or two sites a good working relationship has been reached. I know of the case that the hon. Member makes for more local authority starts. That having been said, Tower Hamlets and Southwark, have about the highest percentage of local authority tenure in the country. The top priority is to get a better balance by building more houses for sale rather than more houses to rent if one is to try to build up a slightly more balanced community.

This has been a worthwhile debate. I shall write to those hon. Members who raised specific points, in particular the hon. Member for Leyton who asked about the Sinnott road scheme, which I remember from the last debate, although, unfortunately, I do not remember the answer. As I say, I shall write to the hon. Member and see how best we can help him. I urge the Opposition to consider whether there might be a role for the private sector to play in tackling the problems to which they have quite rightly drawn the attention of the House.