§ Mr. Simon Hughes (Southwark and Bermondsey)
I beg to move,That this House notes the shameful state of housing in Britain and the horrifying total of well over 150,000 families a year now accepted as homeless by local councils; further notes that over 75,000 homes were repossessed last year and that over 190,000 people are now more than six months in arrears with mortgage repayments; deplores the fact that in real terms the proportion of national expenditure spent on housing has more than halved since 1979; recognises that in the Autumn Statement, although Her Majesty's Government has announced a few measures which will assist some of those in need, its proposals are altogether inadequate and have yet again failed to include the release of the accrued £.5.5 billion of local authority capital receipts, higher credit approvals for councils with few or no receipts including those in Scotland, and a nationwide programme of home insulation; believes that the only reliable way out of the recession is a large scale public investment programme of which a central element should be higher capital spending for home renovation and new build; and calls on the Government to introduce such a programme which would rescue the construction industry, boost the general economy and provide real jobs, whilst at the same time ending for many the nightmare of a life in cardboard city, in bed and breakfast accommodation or in a home that is under imminent threat of repossession.It gives me no pleasure to have to introduce a debate on behalf of my right hon. and hon. Friends on housing, homelessness and the mortgage crisis in Britain. I move the motion because, since the general election, the House has not had the opportunity to debate properly the state of housing in Britain. I move it because the housing crisis is a crisis the length and breadth of the country. I move it because, after 13 years of Tory Government, all their promises have been seen to be shallow and hollow and millions have suffered as a result.
In 1983, the former right hon. Member for Finchley, now Baroness Thatcher, said and had printed in the Conservative party manifesto for that year:Our goal is to make Britain the best housed nation in Europe.Nine years later, I wonder how far she believes that we have moved towards that goal.
The majority of people who come to Members' surgeries—and you, Madam Speaker, will be as aware of this as any other Member of this House—come with housing problems. It is clear to them that housing is the most fundamental issue that a Government must address. It is a kind of fundamental human right.
Housing is a moral issue as well as a practical issue. The Catholic bishops conference stated in 1985:First of all, housing is a moral issue. Decent physical accommodation is a basic need and not a luxury; a right, not a concession.Another quote sums up quite well how important housing is in the spectrum of policies that concern us all:Housing is the greatest of all social needs. It is the first priority among social services. Even the best schools, clinics, 24 hospitals, playing fields and libraries are something of a mockery to those thousands of families who have no decent home of their own.That was a quotation from the then Prime Minister, Harold Macmillan, to the Tory party conference in Blackpool the year after I was born. Everyone of right judgment would agree with Harold Macmillan, and it is a tragedy that the 13 years of Tory rule have not dealt with that agenda in a way that the people of Britain need and would have wished.
We could look at any of the last four Conservative manifestos, but perhaps we should concentrate on the last but one Tory manifesto in the middle of the period in the 1980s which encouraged and pushed people into buying even though one had always understood that it was Tory policy to encourage people to choose—in this case, to choose whether to rent or to buy. The 1987 Tory manifesto stated:Housing is the biggest single investment that most people make, whether in money or in time, skill and effort. In the last eight years, as a result of our policies, we have seen a dramatic increase in home ownership. In the next five years we will complement that with policies designed to improve the supply and condition of the rented housing stock.Four years after the goal of making this country the best-housed nation in Europe, other targets were set—other targets which also have abysmally not been met.
On 4 February 1992, the Minister for Housing and Planning, whom my colleagues and I respect and welcome to his job, when speaking in the "Roof" debate, which we both did, just before the general election, said:The goal has to be a decent home for everyone in the tenure that he or she wants and at the price that he or she can afford.There is a consistency about the rhetoric. There is also, tragically, a consistency about the practice.
§ Mr. Derek Conway (Shrewsbury and Atcham)
I am grateful to the hon. Gentleman for giving way so early in his speech. The House will accept the sincerity of his comments and of the motion. While he is dealing with consistency and manifesto content, will he tell the House whether his party still stands by the pledge that was given in its manifesto in the recent election to scrap mortgage interest relief? Does he agree that if that pledge were implemented, and if it is still held strongly by his party, it would add to the misery of many millions of home owners today?
§ Mr. Hughes
Interventions are often predictable, and interventions that are culled from Tory central office briefings are more predicatable. I not only predicted but welcome the opportunity to deal with a distortion of the truth. I shall deal with that now because the hon. Member for Shrewsbury and Atcham (Mr. Conway) and his colleagues might otherwise continue to press me, thinking that I am not dealing with that matter straight away.
My colleagues and I have had a very clear view, and it is supported by all informed opinion, no matter whether it is professional from the housing sector, from the Confederation of British Industry, from housing charities or from the most famous source of all, the inquiry chaired by the Duke of Edinburgh, and that is that a system of tax relief that advantages those who purchase over those who rent is unfair and should be replaced as soon as possible in the fairest possible way.
What my colleagues and I proposed at the election was very simple. It was not the abolition of mortgage interest 25 tax relief; it was for the future and for those who have not yet bought the replacement of that form of tax relief by a different form of tax relief, which we called housing cost relief and which would be available to those who bought and to those who rented alike. We have never proposed abolition. We have proposed doing what all informed opinion argues should be done, which is to move to a fair system of assisting everybody to acquire a home of the sort that they want when they want.
§ Mr. Hughes
I will not give way again, because I hope that the answer was not only comprehensive but that it will allow the hon. Gentleman to understand our policy and not distort it.
Conservative policies of the past 13 years have resulted for many in homelessness or old, cold and damp housing, and, worse in recent years, the increasing risk to those who have bought that their homes will be repossessed over their heads. That blight affects all parts of the country and people of all ages and backgrounds. Whether I talk to my hon. Friends the Members for Caithness and Sutherland (Mr. Maclennan) and for Orkney and Shetland (Mr. Wallace), who are from one of the most remote parts of the north of Scotland in rural Britain, my hon. and learned Friend from rural mid-Wales, the hon. and learned Member for Montgomery (Mr. Carlile), my hon. Friends from the south-west, whether in citiies such as Bath or Truro or in rural communities such as north Conwall and north Devon, my hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton), or my colleagues on the council in the London borough of Southwark, the problem is essentially the same. There are queues of people who cannot be housed and queues of people who, although housed, do not think that they will be able to stay in their housing either because it is unfit or because they fear that they will not be able to keep up the payments for the home which they have been persuaded to buy.
Young people and others on the streets of cities such as London are the most visible victims, but there are many other invisible victims of the housing crisis. Today, my colleagues and I want to show that there are in this House people who understand the severity of the crisis and who believe it possible, given the political will and within the term of one Parliament, to ensure that the goals expressed over the years are achieved and that everyone in Britain has a home at a price he or she can afford.
I shall deal briefly with the record. How many houses are there; are we meeting the need? The statistics are clear. The most recent figures on house building starts and completions were issued by the Department of the Environment in November this year. They show that starts in Great Britain in the past 10 years have decreased from 194,000 to 160,000—lower than ever before. Completions have fallen from 175,800 to about 167,000—lower than ever before.
The National Council of Building Material Producers, in its October bulletin on the state of the building industry, says:There are ominous signs that the industry is now moving into a deeper recessionary phase and that the situation is very much worse than had been anticipated in our February survey. The autumn state of trade survey reflects the appalling state of the construction industry.The number of jobs in all parts of the industry has fallen too. Since July 1989 the Federation of Master Builders has 26 lost 260,000 construction workers. A quarter of the skilled work force is out of work, and apprenticeships are down by 50 per cent.
We are not building the necessary houses, and on current projections there is no prospect of our doing so.
What has happened meanwhile to the number of people wanting property? The most objective statistics are those for households accepted as homeless. Record numbers of such households exist. In England, in the second quarter of 1992, there were 34,840. In London, in the second quarter of 1992, 9,400 households were accepted as homeless and there were more than 10,000 in other English metropolitan areas. In the same period 62,780 households were in temporary accommodation—6,500 more than a year ago; 11,000 households were in bed-and-breakfast accommodation.
Last year more than 150,000 households in the United Kingdom were accepted as homeless, and about 1,250,000 were on waiting lists. Probably another 750,000 households need somewhere, but are staying with family or friends on settees or on floors. The census carried out a year ago counted just under 3,000 people sleeping rough, and at the same time a quarter of the housing stock is deemed unsuitable for human habitation, as defined by an Act of Parliament introduced by this Government.
England, Scotland and Wales exhibit similar characteristics. Increases between 1979 and 1989–91 are recorded in all three countries. In 1979, in England, about 55,000 were accepted as homeless; in 1987, the relevant figure was 109,000; and in 1991, 150,000. In Wales, the figure rose from between 4,000 and 5,000 to more than 6,000, and, in Scotland, from 7,500 to more than 10,000. These are not just statistics: they are people and families among the most vulnerable groups in society, and we all too regularly hear tragic stories of people in just such categories as these.
Of course, during the eighties, many people took the Government's advice and bought. They decided to avail themselves of mortgage interest tax relief and became owner-occupiers. What has happened to them? So far, 1992 has been—and is likely to continue to be—the worst year for house price reductions since records began. The transaction volume—the number of properties bought and sold—is the lowest since 1974, when far fewer people owned their homes.
Mortgage rates and mortgage repayments are low—no doubt the Minister will tell us that they are the lowest for 20 years—but, with the fears surrounding the prospect of purchase today, many people now will not buy.
The worst fear is that of unemployment. According to every projection, official unemployment is soon likely to rise to well over 3 million and people are not likely to buy if they do not think that they will have the money to pay for their house. They fear that the house price will fall below the value of the mortgage. One in five of the people who bought during the past five years now owns a property which is worth less than they paid for it. That is hardly a good investment, although one that has been explicitly encouraged by Tory policies.
As of June, according to the most recent report of UBS Phillips and Drew, there were 1.5 million households in the debt trap, which is one seventh of all households with a mortgage. The Bank of England estimates that 1 million people are in that position and have an average debt of more than £6,000 on their property.
§ Mr. Jonathan Evans (Brecon and Radnor)
The hon. Gentleman referred to the UBS Phillips and Drew survey. He is aware, of course, that earlier in the year a UBS Phillips and Drew forecast was that there might be a 14 per cent. increase in house prices next year. One of the fears was that that might start too much of a sustained rush back into owner occupation. The picture that the hon. Gentleman paints, which reflects the concerns of many home owners, must be seen within the context of the survey he quoted, which also said that that situation might quickly turn round.
§ Mr. Hughes
Yes, as my hon. Friend says, we have heard that before: we have heard all too many promises about green shoots and things turning round.
I have read the whole of the most recent survey, which makes it abundantly clear, in black and white, that the prospect is that things will get worse and not better in 1993. That was before the autumn statement, which I shall deal with later. The survey states that, at best, things might improve for some people in 1994. I hope the hon. Gentleman does not dispute what the survey says.
The survey also states that confidence in the housing market is at an all-time low. I do not think that there is any dispute about the fact that all those people who were encouraged to buy are now in as bad a position as many who stayed in the rented sector.
To put the most unpleasant icing on this unpleasant cake, one of the saddest things that I have read was in a law report in The Times in August. The headline read, "Children of mortgage defaulters have no right to be rehoused." If one fails to keep up mortgage payments, one can be declared to be intentionally homeless and cannot therefore be housed by the local authority, which would otherwise have a duty to house people who were on the streets.
Our last major indictment is on debt. The right hon. Lady who was, until recently, the Prime Minister of this country for far too many years said that she was in favour of family life and against debt. What has happened to debt which is the product of house purchase, which is normally the most expensive purchase that anyone makes? In the early 1980s, personal debt was about 55 per cent. of the annual disposable income of adults in Great Britain; it is now 114 per cent. of disposable income. At the same time as the number of people waiting to be housed has risen, so the number of people in debt with their properties and likely to remain so has risen. Many of them bought under the right-to-buy scheme initiated in the 1980s. They are in as bad a state as the rest, with unexpected capital, service, and sinking fund charges to pay. Having bought council stock from a council whose tenants they had been for years, they now find that they cannot keep up the mortgage payments either.
All those things are happening while around us tens of thousands, or even hundreds of thousands, of empty properties lie waiting to he used.
Tory policy in relation to tenants and owner-occupiers could be summarised so far as a double whammy. It is now in danger of becoming a triple whammy because a potentially final knockout blow is about to be struck. Next April, people in housing will have to pay a council tax, and the bills of many people who pay a poll tax may go up by 28 50 per cent. The council tax about to be brought in by the Government will make the properties to which many people have hung on through the bad times impossible to hang on to any longer.
It is not surprising that the Government's policies have not lived up to expectations because their expenditure on housing as a percentage of our national wealth has dropped phenomenally. When the Government came to power, we spent about £11.5 thousand million on housing; we now spend less than £6 thousand million. The Minister cannot argue that such a large proportion of people have bought their own homes that the percentage is bound to go down. He knows that the number of people who have bought their own homes has not doubled in the past 10 years and that, while the budget on housing has been slashed, expenditure on health, law and order and social security as a proportion of our national wealth has gone up substantially. The Government cannot expect people to be adequately housed when they cut the nation's housing budget from 2.7 per cent. to 1 per cent. of gross domestic product—a cut of 62 per cent., which is larger than the cut in the budget of any other of the Government's public expenditure programmes.
Not only politicians but many of our constituents were hoping that, at the Government's first opportunity since the election, they would have realised the urgency of the problem. Even Conservatives were hoping that, and many local Conservative associations submitted motions on housing to the Tory party conference, among other things, urging the Government to remove controls on local authorities' receipts. Motions from north Cornwall, Taunton and Honiton, among others from the south and from the north, said that the £6 billion or a little less from the sale of council properties should be used. The Confederation of British Industry, Shelter and all the opposition parties argued for it.
However, the autumn statement failed adequately to respond. On housing, it started by stating the obvious. The Minister said that housing and the construction industry had faced particular difficulties in the past two years, and then made some announcements. Although there is extra money, two obvious comments can be made about the £700 million plus which the Government committed last week. First, it is simply a drop in the ocean; and, secondly, it is a con because much of the money that has now been given has been taken away from programmes for the following two years.
A simple, objective analysis was made in the weekend press. The Guardian on Saturday said:The Chancellor's Autumn Statement brought some cheer to home buyers but fell far short of the radical moves which many had hoped for.The CBI said:Capital receipts are also unevenly distributed and it is too early to assess the effects of the relaxation of the rules … on individual authorities.The Association of Metropolitan Authorities said:On capital receipts we arc told we cannot spend the money we raised when the property boom was in progress but we can spend anything we can raise now the boom is past and gone. Such freedom is not going to lead to much rejoicing in the coalfields and the conurbations.Last week the Government responded to the call for the release of capital receipts—but which capital receipts? Only those from 13 November 1992 until 1 January 1994, predicted receipts the Government say are worth about £1.75 billion. Putting aside the fact that most Government predictions over the past few years have been miles from 29 the truth, there is not much point in saying that anyone who buys now from a local authority—and they might be mad to do so—will see their purchase money spent by that authority to increase the lowest ever amount of local authority building. As the AMA press release made clear, the capital receipts that were accumulated when people were buying because the market was good are still frozen in the bank. In England and Wales they are called receipts, while in Scotland they are called credits, but the result of the announcement is just the same.
§ Mr. Bernard Jenkin (Colchester, North)
I can see how the release of capital receipts would benefit my constituency in which there have been many council house sales and where we have had to tackle an acute but not large problem of homelessness. However, I am slightly at a loss to see how it would help the hon. Gentleman's constituents, because his local authority is already £0.9 billion in debt.
§ Mr. Hughes
The hon. Gentleman touches on the important problem of how to render equal treatment to local authorities, given that the right to buy is exercised much more in areas where there are more houses than high-rise flats. He cites a good example because my authority has about 60,000 properties, the largest number of any London authority. They are mainly flats, and many of them are high-rise flats which do not sell as well as traditional council housing.
The subject is complicated and I shall not do the hon. Gentleman the injustice of pretending that it is simple. There are various ways to account for public expenditure capital receipts and to attribute the money to the accounting budget in terms of either the Government planning total or the public expenditure borrowing requirement. It is, however, possible to arrange the collection of receipts and the distribution of local authority rights to borrow to give a fair distribution that responds to the needs of local authorities.
My hon. Friends and I, whether we represent urban or rural constituencies, argue for a formula that will fairly distribute for housing renovation or repair the money that is currently locked in local authority coffers or banks. Of course, some of that money may already have been spent. It is quite possible to do that without exceeding the Government's public expenditure total of £45 billion. The Minister and I and others have had long debates about that. I shall give the hon. Member for Colchester, North (Mr. Jenkin) an example. We could retrospectively legislate to allow receipts prior to this financial year to be counted outside the public expenditure total. It would have no effect on the Government total for the current year or on their projections for the year ahead. The issue is complicated, but there is a solution and the Government should find it.
The Government have given £750 million to housing associations to buy empty and repossessed properties and it is reckoned that about 20,000 such properties will be bought. However, the con is that, although the Government previously promised the Housing Corporation £1.92 billion for 1993–94, that sum has now been reduced by £133 million. For the following year, they previously promised the Housing Corporation £1.77 billion, but that has now been reduced by £190 million as well. There is money to bring back 20,000 properties into use, but it has been found at the expense of meeting the 30 housing needs of Britain in 1993 and the years to come. If that is not a con, what is? It is also sad that the rough sleepers initiative, which was supposed to meet the needs of those at the acute end of the housing crisis, has also been cut as a result of the autumn statement.
My party has argued a consistent case for many years. It is that the only way for Britain to be adequately housed is for us to invest in it, led from the public purse by those in charge of the Exchequer and Ministers in spending Departments. We repeat that call today. Let me put it simply, because the arguments have been well made.
There should be a large increase in public expenditure, specifically to fund house building and house repairs. It is good value for money, and it not a foolish way to conduct public accounts. We should cut the uniform business rate as that will allow some businesses to put money into housing as well. We should have a stable interest rate policy so that people feel encouraged to buy, in the knowledge that they will not be penalised in the years ahead. We should invest in training and in keeping people in work so that the construction industry can recover.
Perhaps most acutely now, there should be a new element of public finance, a subsidy that would allow people in difficulty to keep their homes or perhaps convert from mortgages to rents. It is entirely possible—and we have put out figures to show this—to start turning the corner of Britain's housing crisis. Our indictment of the Government is that, over the past 13 years—and they cannot blame anybody else because they have been told over and over again—they have, worse than not listening and failing to act, condemned millions of people in a rich and civilised country to conditions that are not only unsatisfactory but often inhumane.
Of all elements of policy, it is this policy and record of which the Government should be most ashamed. I am sad that they have so far given no adequate answers. I hope that now they are at least embarrassed enough to do something about the crisis before many other people suffer as all too many have already done.
§ The Minister for Housing and Planning (Sir George Young)
I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:notes the Government's continuing commitment to housing policies designed to ensure that a decent home is within reach of every family, and in particular to promoting the growth of owner-occupation, widening choice for tenants, and improving value-for-money and targeting of public expenditure; and especially welcomes the measures announced by the Chancellor of the Exchequer in his Autumn Statement which—consistently with the need to maintain tight control of public spending in the interests of the economy and the taxpayer—will contribute to stabilising the housing market, will increase the supply of social housing thereby helping homeless families, and will promote investment in renovation of run-down council estates.The Government welcome this opportunity to debate housing. As the hon. Member for Southwark and Bermondsey (Mr. Hughes) said, it is an important subject to millions of our citizens. The Government are happy to explain and defend their record on housing.
Last Thursday, while most of us were listening to the Chancellor's autumn statement, someone was drafting the motion before the House, a serious motion but one drafted with a strange mixture of Sun headlines and Guardianprose. As I hope to show, all the people mentioned in the 31 motion have reason to welcome the measures in the autumn statement. Indeed, I see that, in a release last Thursday, Shelter said:Shelter strongly welcomes Government initiatives to provide more homes.That shows that, while Shelter regularly urges us to do better, it recognises progress when it sees it.
By contrast, the rather grudging recognition in the motion—although Her Majesty's Government has announced a few measures which will assist some of those in need"—does less than justice to the scale of the Government's response last week to the case for housing.
Let me set out those whom the hon. Gentleman has identified in the motion. They include those sleeping rough, those in "bed and breakfast accommodation", thoseaccepted as homeless by local councils",those in difficulty with their mortgages, those in housing in need of improvement and the construction industry. Every hon. Member shares his concern for those groups and much was already being done to help, but we plan to do better.
Let me start with the most visible aspect of homelessness—rough sleeping. In a civilised society, no one should have to sleep rough. Over the past three years, under the rough sleepers initiative, we have made available £96 million to provide 900 hostel places, 2,200 places in permanent housing for those in hostels to move on to, and 700 places in flats and houses leased from private landlords.
Voluntary organisations estimated that, before the initiative began, more than 1,000 people were sleeping rough in central London. Their most recent count on 5 November showed that just over 400 people were sleeping rough, of whom fewer than 60 were under the age of 25. Many of those remaining will be helped by the initiative under way at Lincoln's Inn Fields to provide accommodation for them and, one hopes, to restore that open space to an attractive park that can be enjoyed by Londoners.
The rough sleeping initiative was to have ended on 31 March next year, but the autumn statement announced further resources to provide continuing help to rough sleepers. A further £86 million will now be made available to enable the excellent voluntary organisations, which are managing the programme, to build on their achievements and to drive the momentum forward to make it unnecessary for anyone to sleep rough. To project that funding as a cut does less than justice to the hon. Member for Southwark and Bermondsey, because the hostels and permanent accommodation are, of course, still there. They will remain available in the forthcoming period. What is happening is that we are providing an extra £86 million over and above the resources originally planned. Moreover, I will shortly be announcing details of this year's cold weather shelters, which will open in a fortnight and which will provide accommodation for people who would otherwise have to sleep rough in central London this winter.
Even before the autumn statement the numbers of those in bed-and-breakfast accommodation had been falling. No one is in favour of it as a temporary form of accommodation. I see it as a measure of last resort. Many local authorities, to their credit, manage not to use it at all. 32 In the past year the number of homeless families in such accommodation has gone down from 13,000 to 11,080. As a percentage the number is down from 24 per cent. to 18 per cent. In London the decrease has been more marked —from 8,110 to 5,870.
Those in bed-and-breakfast accommodation have more reason to welcome the autumn statement than any other group because of the way in which the 20,000 extra homes to be bought between now and the end of March compares with the figure of 11,080 who are currently in that accommodation. Those in bed and breakfast and other temporary accommodation will be rehoused more quickly as a result of the £630 million to be spent in England in the next four months. With the private finance that we plan to lever in, I expect the result to be a £1 billion package for recovery in the housing market.
§ Mr. Nick Raynsford (Greenwich)
Will the Minister confirm that, at current rates of repossession, the number of home owners who are likely to lose their homes between now and the end of March will probably be well in excess of that 20,000? Will he tell us how there is any hope of significantly reducing the numbers in temporary accommodation when there is a huge additional demand to be met from home owners facing repossession?
§ Sir George Young
The hon. Gentleman knows that the number of court actions entered for repossession has fallen sharply by about 32 per cent. in the past year. The Council of Mortgage Lenders reckons that about 55,000 repossessions have been avoided as a result of the measures it introduced in December.
§ Mr. Simon Hughes
The Minister quoted Shelter's reaction to the autumn statement and gave a litany of figures. What does he say to Shelter's comments in today's press release on rough sleepers, entitled "Government cuts in help for people sleeping rough. A matter of life and death"? It stated:The Government has announced a cut of £5 million in help provided for the growing number of people sleeping rough on the streets of Britain … The 13 per cent. reduction … from £38 million to £33 million was revealed by the Department of the Environment on Friday morning, less than 24 hours after the Government's Autumn Statement".
§ Sir George Young
The hon. Gentleman is aware that the rough sleeping initiative was originally devised as a three-year programme and no provision was made in the public expenditure survey for any money after 31 March. We have found fresh resources to keep that initiative going and against that background it is misleading to allege that there has been any reduction in expenditure. Planned provision of help to rough sleepers has been increased.
On the question of the extra 20,000 homes to be made available, I am concerned—other hon. Members may share my concern—at the lack of mobility within the social sector of housing. New accommodation tends to go directly to those in temporary accommodation. It would be possible for an existing council tenant to move into the new accommodation and then to move a homeless family into the accommodation thereby released. A council tenant who chose to move would lose his right to buy, but he might be prepared for that if it meant that he could live in a more attractive property than his present home. I want the new stock that is acquired to be used to promote 33 mobility. There should be more transfers for existing tenants where the scope for mobility within a council's stock is limited.
Of course, councils and housing associations must consider the issue in the light of local circumstances and they must take account of people's preferences. They should not assume that people are not prepared to move voluntarily outside the council sector if that would get them better houses.
I have been in touch with the National Federation of Housing Associations, the Housing Corporation and the Council of Mortgage Lenders. My right hon. Friend the Chancellor of the Exchequer and my right hon. and learned Friend the Secretary of State for the Environment met mortgage lenders and the chairman of the Housing Corporation again this morning, when they underlined the importance that we attach to taking as many properties as possible off the market through the initiative. I am pleased to say that those lenders present confirmed that they would play a full and constructive part in the initiative. They are confident of responding to the challenge that the Government have set them and of providing the target number of homes.
§ Mr. Jonathan Evans
My hon. Friend referred to his meeting with the Council of Mortgage Lenders. Did he also discuss our right hon. Friend the Chancellor's announcement last week of a reduction in interest rates and the apparent difficulty of some mortgage lenders in passing on that benefit to home owners, sometimes deferring it for many months?
§ Sir George Young
I was not at that meeting, which was attended by my right hon. Friend the Chancellor and my right hon. and learned Friend the Secretary of State. From the press statement issued after that meeting, I understand that my right hon. Friend the Chancellor reminded lenders of the importance of passing on interest rate reductions as quickly as possible. I understand that shortly after the meeting the Halifax announced a welcome reduction in its mortgage rate.
§ Mr. George Howarth (Knowsley, North)
I am anxious to pin down the Minister on one point. He is suggesting that the scheme that the Chancellor announced in the autumn statement to create an additional 20,000 properties to rent should be used in some way to facilitate mobility in housing. My understanding is that housing associations are required by statute to operate an allocation procedure and that most allocations are zoned to a particular location. Without specific Government intervention to ring-fence the properties for a national mobility scheme, I cannot envisage how the Minister's suggestion can work in practice.
§ Sir George Young
The hon. Gentleman is making rather heavy weather of this matter. The housing associations will buy 20,000 properties. In the normal course of events, they would give the nominations to local authorities, which would then nominate families currently in bed and breakfast or temporary accommodation. My suggestion is that the housing associations should continue to give the nominations to local authorities, but that instead of them nominating people in bed and breakfast and temporary accommodation, they should offer transfers to existing tenants. Those people could move into the new homes, if that is what they want, and the homeless 34 families could move into the local authority stock thus vacated. That would improve mobility in the social housing sector. It is certainly difficult in London to get a transfer unless one has strong grounds. My suggestion would encourage transfers within local authority stock and also within housing association stock—
§ Ms. Jackson
My local authority has an inadequate number of two and three-bedroom houses, so the problem of families transferring would not be alleviated by the 20,000 properties to which the Minister referred. Indeed, inadequate properties for the size of family groups are endemic.
§ Sir George Young
The hon. Lady is making heavy weather of this matter. The whole point about the package announced last week is that the housing associations and local authorities should consult and the stock acquired by the housing associations should be of the sort that local authorities want—the right configuration and size to meet the needs of their areas. It is important that there is close liaison between housing associations and local authorities to avoid the mishmash to which the hon. Lady refers.
Against the background of an extra £597 million for the Housing Corporation this year, I hope that the hon. Member for Leeds, West (Mr. Battle) will have the decency —for I believe him to be a decent man—to admit that the rumour to which he referred in Committee last Tuesday, that the Conservative party might abandon its manifesto commitment to provide 153,000 homes through the Housing Corporation over the next three years, was ill founded. The figure will rise by 12,000 to 165,000.
§ Mr. John Battle (Leeds, West)
The Minister refers to this year's commitment, but he will recall the Conservatives' clear manifesto pledge of money over three years ago. Is the third year absolutely guaranteed?
§ Sir George Young
There is a lot of battle smoke around. However the hon. Gentleman looks at the figures, he will find that there is more money for the three years covered by the manifesto—an increase of £597 million this year, with a decrease in the following two years of £155 million and £191 million. That represents an increase, and extra homes are being provided in the early part of the period in question. If the hon. Gentleman wants to intervene again to admit that our manifesto is being more than honoured, I shall be happy to give way to him.
Conditions for tenants on many council estates are unacceptable. The autumn statement made it clear that our popular programme of housing action trusts can continue. Our expenditure provision for next year will allow the momentum of the HAT programme to be fully maintained. That will allow the establishment of three further housing action trusts to follow those in Hull, Waltham Forest, and the successful ballot in Liverpool. I am sure that will be warmly welcomed in areas where housing action trusts have already begun work or are under consideration. The feasibility work on Castle Vale in Birmingham and the Bow estate in Tower Hamlets is largely complete and I expect to make decisions on ballots shortly.
35 There will be more resources for the estate action programme. The amount available in 1993–94 will be £356 million, which is £16 million more than this year. On current practice, that expenditure will allow us to fund 135 of the 270 schemes that authorities are anxious should go forward. However, the capital partnership approach announced last Friday will enable us to spread resources even further. The more that authorities contribute from their capital receipts, the higher the number of schemes that we will be able to include in our programme.
§ Dame Elaine Kellett-Bowman (Lancaster)
Will my hon. Friend the Minister favourably consider the scheme submitted by Morecambe, which has a substantial housing need?
§ Sir George Young
I am delighted that that popular clement in the Government's housing policy has won such favour in a constituency adjoining that of my hon. Friend. I will be happy to send my hon. Friend details of the HAT programme and the procedure that must be observed if a trust is to be established in her part of the country.
§ Mr. Nirj Joseph Deva (Brentford and Isleworth)
I welcome the prospect of greater mobility and extra funding that my hon. Friend's new scheme will introduce, but Isleworth council is encountering considerable problems because of the way that the points system is used to allocate council housing needs. The new system has disadvantaged many thousands of people. Will my hon. Friend consider re-jigging it to allow for a more equitable share of council properties?
§ Sir George Young
I hope that my announcement that the Government felt that there should be more mobility within the local authority stock will encourage councils —including Hounslow—to review their transfer policies, and also to review the way in which priorities are allocated among competing demands from local authority tenants. I hope that all councils will try to find ways of promoting more transfers.
The relaxation of the rules governing local authority capital receipts over the coming year will provide authorities with an extra £1 billion for housing. I expect them to devote the money mainly to renovating rundown council estates, and to implementing the housing investment programme strategy set out in their recent bids. The figure is derived from evidence on local authority returns. Tenants awaiting improvements do not mind whether the work is paid for by borrowing or by a capital receipt; they want the work done, regardless of how it is funded—and more work will now be done.
"Capital receipts" is a phrase that has been much on the lips of Opposition Members. It is worth reminding them that there would be few capital receipts for us to debate if we had taken their advice on the right to buy. We did not think it right to allow authorities simply to spend the capital receipts that they had already built up. The current need is to stimulate the construction industry, and that justifies a temporary relaxation of the requirement to set aside part of the new receipts for that purpose. The relaxation gives authorities some £1.75 billion of extra spending power. Our proposals give them an incentive to promote new asset disposals, and to get in fresh receipts rather than recycling past ones.
36 I expect interest in the right to buy to increase as the economy recovers; I also expect interest in the rent-to-mortgage scheme to increase when the Bill reaches the statute book. Predictably, Opposition Members have already criticised the scheme: the hon. Member for Dagenham (Mr. Gould), for instance, described it as facile and short term. I see nothing facile or short term in treating people as adults and giving them choice—a word used by the hon. Member for Southwark and Bermondsey. Authorities will gain a capital receipt, and they will be able to spend all of it, provided that it comes in before 31 March next year. I predict that Opposition Members will abandon their objection to the rent-to-mortgage scheme when they realise how popular it is, just as they abandoned their objection to the right to buy.
The motion makes the fair point that some local authorities have less prospect than others of generating receipts. We can handle that, up to a point, through the services of a lady called Rita—receipts taken into account. When we allocate credit approvals to local authorities—this, I think, is the process towards which the hon. Member for Southwark and Bermondsey was cautiously nudging his way—we take into account the relative availability of receipts. That enables us to give higher basic credit approvals to the authorities with the fewest receipts —a point raised by my hon. Friend the Member for Colchester, North (Mr. Jenkin).
Authorities with limited receipts will also be able to compete for the capital partnership scheme that was launched on Friday by my right hon. and learned Friend the Secretary of State for the Environment. The scheme provides up to £600 million of public money for projects that will stimulate growth.
The motion also mentions owner-occupiers. The package included help for those facing difficulty with their mortgages: a further and welcome reduction of one percentage point in interest rates. Over the past two years, interest rates have fallen by eight percentage points; that translates into a saving of more than £130 a month on a typical £33,000 mortgage since the level reached its peak in October 1990. For those who are concerned about the value of their properties, we are taking some 16,000 empty homes off the market in a short space of time. That will increase the number of transactions in the property market, and will reduce the overhang that has deterred many prospective buyers. The measure can only help to return confidence to the market—although none of us wants a return to the excesses of four years ago.
Measures taken a year ago have probably reduced the number of repossessions by about 50,000, but the best mortgage rescue scheme is provided by lower interest rates and a recovering economy, which was the purpose of the measures in the autumn statement. The number of court orders for repossessions has also fallen: in the third quarter of the year, the number of actions entered was 32 per cent. lower than it had been a year earlier.
§ Sir George Young
No. I promised that I would not give way again; indeed, I believe that I made that promise three times. The longer my speech lasts, the less will be the hon. Gentleman's chance of making his own formidable contribution.
One consequence of the fall in house prices has been the number of people with negative equity—perhaps 1 million, 37 according to one estimate by the Bank of England. That phenomenon does not call for the domesday scenario painted by some commentators. Most negative equity borrowers are not having trouble meeting their payments, nor do they want to move, but if they do want to move the property that they move to is likely to have fallen in value, along with their own home. My hon. Friend the Economic Secretary announced on 20 October two measures, which were widely welcomed, to help to promote mobility in those circumstances.
The building and construction industry is also mentioned in the motion. It was assisted last Thursday. Builders have the opportunity to improve their cash flow by selling unsold homes. There will be opportunities for smaller builders to carry out necessary repairs to repossessed homes that need attention. These measures have been welcomed by the construction industry. Neville Sims of Tarmac, for example, praised the Chancellor's proposals as imaginative and as a good way to get money into the construction industry in the regions. The new public-private funding rules announced on Thursday will give a further boost to investment in the inner city areas covered by city challenge.
There is even something in the package for estate agents. The £50 million to enable local authority and housing association tenants to buy homes in the market will increase transactions, as well as freeing up more homes for those on the waiting list.
Because of the rough sleeping initiative, there are now fewer people sleeping on the streets. There are fewer families in unsatisfactory bed-and-breakfast accommodation. The last figures for homeless acceptances showed a reduction, not an increase. The provision of good quality accommodation by housing associations has doubled in the past three years and the ambitious target that we set ourselves in our manifesto is now to be exceeded.
The programme for modernising and improving local authority estates can proceed at a faster pace, thanks to the change in the capital receipts rule. With interest rates for some first-time buyers at 6 per cent., home ownership is more affordable than it has been for more than 15 years; 20,000 homes, instead of lying empty, are to be put to the use for which they were built and that will help to restore confidence in the housing market.
I recognise that we have much work to do. Any London Member of Parliament knows that there are still shortages of social housing and that too many council tenants live in unacceptable conditions, but we are on the right track. It would be too optimistic to expect the hon. Member for Southwark and Bermondsey to withdraw his motion, but I ask the House to support the Government amendment with enthusiasm.
§ Mr. John Battle (Leeds, West)
We, too, welcome the debate. There is nothing in the motion with which we disagree. It is particularly welcome at this time, coming so soon after the autumn statement. The autumn statement day ought to be remembered as the day when unemployment passed, in real terms, the 4 million mark. According to the original calculation of the figures, before the Government's 30 changes to massage them down, on 12 November this year unemployment passed 4 million. I 38 mention that at the beginning of my speech because rising unemployment is the primary cause of homelessness and the housing market crisis.
The scale of the housing crisis is daunting and worsens day by day. However, the Government try to put on a brave front and say that they are coping with it. Since the late 1970s, homelessness has more than doubled. In England alone, 147,000 households were accepted as homeless by local authorities in 1991. Many more were turned away as ineligible. More than 1.5 million are on local authority waiting lists. They comprise what could be described as the hidden homeless, often living in overcrowded and inappropriate circumstances. It is estimated that in 1991 an additional 80,000 single people were homeless but ineligible for help. In the past 18 months, more than 100,000 families have had their homes repossessed.
Not surprisingly perhaps, fewer than 100 families have had their homes saved by the Government's "intended" mortgage rescue scheme, which was announced this time last year. The Government promised us at the Dispatch Box that 40,000 households would be rescued. That never happened. More than 200,000 households are now more than six months in arrears with their mortgages; more than 1 million cannot afford to move because their homes are worth less than they paid for them.
Recently, the Bank of England estimated that further small falls in property values would add an additional 500,000 households to that total. In September this year, after the general election, the Department of the Environment disclosed that a record number of 62,780 homeless families were living in sometimes terrible quality temporary accommodation. As we now know, since 1979 the proportion of national expenditure, in real terms, spent on housing has more than halved. There has been a significant cut in expenditure. I say "significant" because the cut amounts to £5.3 billion—ironically, exactly the figure of accumulated capital receipts that local authorities have in the bank. To this day, the Government are preventing them from spending that money on housing.
What is the Government's response to the housing crisis? I submit that it is feeble. When we look at the small print of what we were offered in the autumn statement, we see that we have been short-changed. Barely six months ago, on 23 March, during those heady days of the electioneering period, the Secretary of State for the Environment asserted:House sales under the Conservatives are picking up.'All this, we were told, would change on 10 April if there were a Labour Government. We were also told that the recovery—I am tempted, Madam Deputy Speaker, to insert the word "sic"—in the housing market would be devastated, just as it was getting under way. The Secretary of State for the Environment was echoed by the Prime Minister on 31 March, when he said:We're going to make life easier for people buying their home. Our policies will mean a stronger housing market.[Interruption.] The hon. Member for Brecon and Radnor (Mr. Evans) may mutter, "Hear, hear", but what every other hon. Member and everybody else in the country knows is that exactly the opposite is true. People were truly conned on 9 April. Families now face the worst housing crisis in our society since the war. It is tempting to add that all the Government's special offers have been heard before and have been found to be second-hand and shoddy goods.
39 The latest evidence from the Joseph Rowntree Foundation report, which was published last week, shows that further small falls in house prices threaten to double negative equity. It points out that four out of every 10 Londoners who bought their homes in the past five years now have properties worth less than their mortgages. Basildon now has a negative equity rate of 60 per cent. —an average shortfall of £6,500 for every household. That is where the rent-to-mortgage pilot scheme was undertaken. In those circumstances, I cannot imagine that it is going down well in Basildon.
What of the scale of the Government's response? The Government amendment is remarkable in its complacency. It says that the Government are keen to promote the growth of owner-occupation. Many commentators on housing and economic policy now submit that, at 69 per cent., owner-occupation in our society is unsustainable because there are not sufficient homes for people who need to rent. The Government do not seem yet to appreciate that fact. The amendment refers to widening choice for tenants. It does not refer to the fact that under the Housing and Urban Development Bill which is being considered in Standing Committee the Government are taking away tenants' rights in order to push through compulsory competitive tendering.
The amendment refers also to the targeting of public expenditure. It is tempting to add that that may be the only truthful statement in the amendment. It is true that resources are being targeted, because existing resources are being wrapped up and disguised as new money when in fact they prove to be old money.
The moves on interest rates are welcome. They will give hard-pressed home owners some relief, if the interest rate reduction is passed on, but that relief will apply only so long as people have a job and continue to be able to pay their mortgages. The question that many people are asking is whether this will be enough to revive the housing market. Many people think that they live simply one pay cheque away from redundancy and worry that their home may be the next to be repossessed.
The autumn statement was trumpeted in the press as offering extra money, but the Secretary of State was careful to use that weasel word and say that money had been "earmarked" rather than to suggest that new money was available. We discover from the fine print that that was a sleight of hand—a clever piece of news management to create the impression of new money. The Government are simply juggling the figures in a remarkable creative-accounting exercise.
What does the figure of £1.75 billion mean? It is tempting to ask the Minister, in the light of his statement, how firm that promise is. We are glad that the Government are at last coming around to our common-sense arguments on the need to use capital receipts, but it is not clear whether that promise of funds will be realised.
The autumn statement is based on illusion—the £1.75 billion in estimated capital receipts is not there. The Government have acknowledged that only £1.1 billion of that money will be available for housing, and only capital receipts that may be available in the next 12 months will be available as extra expenditure.
40 What will happen to the £5.5 billion of receipts that is sitting in local authorities' banks? Why cannot those funds be released?
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry)
If the hon. Gentleman is to take that point, perhaps he will redefine his position. I quote from an interview with Inside Housing as recently as mid-September in which the journalist commented:redefinition of the PSBR, which could theoretically release capital receipts for housing, is clearly not something Mr. Battle is prepared to argue for today.The hon. Gentleman said:Those are the arguments that the Treasury team are going to have to sort out. not me as the Housing spokesman. At the moment, redefinition is not on Labour's agenda. It is not one of my priorities.Has the hon. Gentleman and his team managed to redefine the PSBR for the benefit of the country?
§ Mr. Battle
What I said still stands. We have pressed for the phased relief of capital receipts to enable them to be distributed according to need. The Government have not responded. They have simply told authorities that they may spend money which may or may not come in. Amazingly, in the face of current evidence, the Government assume that right-to-buy sales will pick up from their present low, but if they do not do so, the extra £1.75 billion will not materialise. Is not that the truth and should not Ministers be spelling that out? In practice, as the figures work through, people will find that they have been shortchanged again. The key question is whether the money will be available, and that depends on homes being sold to tenants on low incomes, under the right to buy, during a housing market slump and at a time of record repossessions. Most people in work feel that they cannot afford to take the chance of moving to purchase in case they lose their jobs.
A London Weekend Television programme on Friday night revealed that 70,000 people who bought their council flats cannot sell them because mortgage lenders are again doing what used to be described as red-lining. In his conversations with mortgage lenders this morning, what did the Minister say about that and what do the Government propose to do to unlock that situation? In turn, that will be a check on further house sales.
The small print of the autumn statement shows that Government capital allocations for local authority housing will be cut and that credit approvals will be substantially lower. We cannot now say what the figures are, because they will be revealed only in the forthcoming months, but that is the logic of the arithmetic in the autumn statement.
I suspect that the capital partnership is another example of iniative dazzle—an initiative for the media that lasts 24 hours, but in the afterglow realises little. In practice, it is top-slicing—taking money out of budgets and organising them from the centre again. It is a form of revamping of the estate action scheme. It is also clear that it will depend on bids and competition, with local authorities competing against each other according to how they use capital receipts in forthcoming years.
§ Mr. Battle
The Minister says "Hear, hear", but that action reduces local authorities' ability to respond to local need and the total amount that is available for them.
§ Sir George Young
When I dealt with the capital partnership, I specifically explained that if, for good reasons, a local authority has no access to capital receipts, it will not be penalised in its hid for estate action.
§ Mr. Battle
It is encouraging to receive that reassurance, but we shall watch to see how it works in practice because we were told the same about the city challenge, and we saw how that worked in practice. Many authorities have been disappointed.
The promised new £600 million depends on sales that may never materialise. The whole project will buy only 16,000 homes, whereas more than 200,000 are empty, and that overhang is dominating the housing market. There is no new money, because £400 million will come from the Housing Corporation's allocation and £200 million from local authority credit approvals.
In practice, it could be argued that housing associations were worst hit in the autumn statement. Housing association grant rates are being cut from an average of 72 per cent. to 67 per cent. In an article in The Roof, Mr. David Edmonds, the former Housing Corporation's chief executive, pointedly showed how private finance would be more difficult to obtain because investors would be worried about whether housing benefit would continue to meet the tab for higher rents. The corporation's 150,000 homes promised over the next three years could be jeopardised because the Government have not got their act together and are forcing up rents. David Edmonds said:There is very solid reason to argue that the point has been reached beyond which grant rates should not be diminished. How does an association explain to a banking credit appraisal expert that higher amounts of loan are needed, payments on which are serviced primarily by people on HB who pay rents which are increasingly viewed as unaffordable?
§ Mr. Jonathan Evans
Does the hon. Gentleman accept that there must always be a correlation between private finance and the grant rate made available by the Housing Corporation to take account of reductions in interest rates? There has been a substantial reduction in interest rates. Whenever an interest rate reduction is made—at least this is what happened when I was deputy chairman of Housing for Wales—;an alteration is made to the grant rate.
§ Mr. Battle
The hon. Gentleman is missing the point that the critical figure of 67 per cent. for attracting private finance is on the margin below which the private sector will not lend money to construct houses in the first place. The promised partnership between public and private money will collapse because the Government are reducing their contribution to housing associations.
§ Mr. Jenkin
I suggest that the matter is in the nature of public-private negotiations. The private sector will negotiate, of course, for the best terms that it can get and it is right that the Government should play their part and negotiate the best terms for the public sector to get better value for money. Those matters are resolved in the fullness of time. If one goes into negotiation on the basis that one will lose that negotiation, all I can say, on behalf of the homeless, is thank goodness the hon. Gentleman is not in charge.
§ Mr. Battle
The hon. Gentleman is missing the point that, for months, all the housing associations and the 42 private housing finance world have spelt out to the Government that 67 per cent. is the bottom line. Below that point, schemes will not go ahead.
I hope that the hon. Member for Colchester, North (Mr. Jenkin) will join me in pressing the Minister to make available the report on affordability which was prepared by the Housing Corporation and which now rests in his Department. I am pretty sure that it reveals that housing associations are being forced to push up rents, which makes schemes unsustainable. The net result is that housing associations can only take tenants who can guarantee that they are on full housing benefit. If they cannot, they will not get a place.
I urge the Minister to make the report available so that it can be discussed and the figures can be worked through in those terms. By changing grant relationships and by not taking account of housing benefit changes, the Government are pricing people out of even housing association housing, yet the Government insist that housing associations—and only housing associations—should provide affordable housing.
Special capital grant approvals are to be cut from 75 per cent. to 60 per cent. That means that for improvement grants to be paid at all to hard-up owner-occupiers, local authorities will have to meet 40 per cent. instead of 25 per cent. of the cost. We had hoped that there would be some reference in the autumn statement to the problems that local authorities face in terms of mandatory grants. The whole of their housing investment programmes could be consumed by the demand for improvement grants, yet the Government seem simply to be turning a blind eye. I urge the Minister to look again at mandatory grants and at their impact on local authorities' ability to serve housing needs in the round.
Let us look in slightly closer detail at the £750 million package to take 20,000 properties off the market through acquisitions by housing associations. We believe that that is inadequate when almost 250,000 properties either have been repossessed or were unsold in the first place. On BBC News on 12 November, John Wrigglesworth of UBS Phillips and Drew referred to the sum asa snowflake on an iceberg".Although the scheme is limited, the Government could sharpen it and substantially improve it.
Can the Minister assure us that the available money will go only to mortgage lenders who are running or who are about to set up mortgage rescue schemes? Why is the money not tied in so that there can be real and workable mortgage rescue schemes? That would make the money go further, as properties would not just be taken off the market. We would be reassured that repossessions would slow down, which would in turn prevent more repossessed houses coming on to the market. Why not link the scheme so that it does not simply reward lenders who repossess but goes some way towards keeping people in their own home?
Surely the same grant rates should apply to those schemes as they do to any other schemes funded by the Housing Corporation. Lower grant rates will simply lead to unaffordable rents and to dwindling housing association involvement in the scheme. In practice, the scheme is too inflexible. Some lenders may want to lease properties rather than to sell them outright. Why cannot the Government relax leasing restrictions on local authorities and on housing associations, and allow 20-year leases? There should be a combination of buy-back and leasing.
43 It is not clear whether the properties that are in disrepair or have been vandalised are to be included in the scheme. It is now evident that many properties that have been repossessed are in a terrible state. It is estimated that 100,000 repossessed properties standing for sale are in a poor condition and increasingly are being vandalised. Although lenders should bring properties up to standard, why do the Government not allow previously rundown properties to be included in the scheme as long as the lender agrees to do the necessary improvement work to bring them up to scratch, so that people can move into them?
Why cannot local authorities be given a guarantee of first refusal so that they can use the properties for homeless families? There would then be a direct link between cutting temporary accommodation bills and bringing the properties back into use.
What do we find for local authority tenants in the small print of the autumn statement? We find that council rents are to be forced up by 9 per cent. in the coming year—more than twice the rate of inflation. It will mean an average of £2.50 on everyone's rent. The Government then tell us that there is no problem of people being priced out of their homes. The measures in the autumn statement will have that effect and will force people into debt and insecurity. How can people exercise their rights if they find that they are increasingly in debt and unable to meet the primary demand to pay the rent? The Government fail to help not only those with mortgages, but those with rents.
There was no housing windfall in the autumn statement. Many homeless families, tragically, will still face a cold and bitter winter. There is no real evidence that the Government take the housing crisis seriously. Perhaps in the coming months they will listen to the lobby of the tenants and of the churches which is coming to the House. In the meantime, the autumn statement is part of the Government's clear strategy of simply putting off what they cannot bear to face today because it is politically embarrassing. We are not being presented with a new policy. It is simply a time-buying exercise to get the Government into the calmer waters of less hostile headlines.
As homelessness and unemployment inexorably rise, the Government's pitiful failure to recognise and to take seriously the scale of the housing crisis will become plainer for all to see. We intend to keep the spotlight on the Government's lack of housing policy. We continue to monitor initiatives that constantly prove ineffectual. We shall continue to press for emergency measures to tackle street homelessness not only in London but elsewhere. I remind the Minister that rough sleeping is no longer confined to London.
We shall press for real measures to revive the housing market and we shall continue to demand that people have the right to rent. We shall harass the Government in detail until our society is a lot closer to ensuring that everyone's right to a decent, appropriate and affordable home is realised. The Minister's great claims today for his Government's minuscule measures will not even stand the test of this Parliament.
§ 5.7 pm
§ Mr. Jonathan Evans (Brecon and Radnor)
I am pleased to have the opportunity to follow the hon. Member for Leeds, West (Mr. Battle). I noticed that the words "welcome" and "glad" passed his lips. However, the tone was rather different. It was a speech by a rather lugubrious hon. Member. In terms of visual aspect, he was the nearest thing to Clement Freud.
I can understand why the hon. Gentleman was so gloomy. He appears to be an aficionado of "Black Dog" in the Mail on Sunday—his required Sunday reading, at least according to his speech in the Committee considering the Housing and Urban Development Bill. Last Tuesday, he gave us a warning about what was likely to happen the following Thursday when the Chancellor made his autumn statement. He quoted "Black Dog", saying:'There is worrying news about Sir George Young the affable Housing Minister, whose budget has reportedly vanished in this autumn's draconian spending round."'— [Official Report, Standing Committee B; 10 November 1992; c. 3.]The hon. Gentleman then quoted more from that article. I can understand why the hon. Gentleman was so gloomy. He has found that the budget of my hon. Friend the Minister has not evaporated. Instead, it has been considerably expanded and I welcome that. I particularly welcome the extra funding that has been made available in Wales. Some £38 million of extra funding will be used by local authorities and Housing for Wales and to assist the work of housing associations.
I am pleased that my right hon. Friend the Secretary of State for Wales has already said that he will discuss that allocation with the chairman of Housing for Wales and that wide-ranging discussions will take place about how that money can be spent because we must ensure that the money is spent wisely. In that regard, I want to raise some concerns with my hon. Friend the Minister.
It is important that the money should not be used as a catalyst for mortgage lenders to take further action in cases where they are staying their hands in respect of repossessions. The hon. Member for Leeds, West referred to the deterioration of properties which have come on to the market. If the money was to be spent solely on purchase and rehabilitation of those properties, it is important that we consider the taxation rules.
When I was involved with Housing for Wales, I was concerned about the fact that there was a shift towards new build away from the rehabilitation of property. That shift occurred because 17.5 per cent. VAT is added to the cost of the rehabilitation of property. It would be deeply damaging if much of the new funding was leaked away in that fashion. I urge my hon. Friend the Minister to consider that point in the discussions with the Housing Corporation and the local authorities when they assess how the funding can be used.
I am also anxious that the rural housing problem should be recognised in Wales and elsewhere. So often when we discuss homelessness the problem is referred to in the context of cardboard city and images of people in desperate circumstances sleeping in the shop doorways of many of our major cities. Many of the problems are being addressed by initiatives referred to by my hon. Friend the Minister. However, as a result of those stark images, we sometimes lose contact with the fact that there is also a 45 rural housing crisis. The problem of people who earn the lowest wages and live in rural areas is pushed into the background.
I am pleased to say that in Wales at least that problem has been recognised. Twenty-eight per cent. of the funding to housing associations in Wales is given to associations that work in rural areas and perhaps that lesson could be followed in England. Some of the Welsh initiatives will avoid situations that have occurred in towns because it has been recognised that the funding should be invested on the basis of local needs.
Although councils may have ideas about local housing needs, sometimes the people who live in the villages have the best means of identifying the local housing needs. That is why several initiatives have been started in Wales which draw together local needs surveys. They have identified problems in relation to housing which the local housing authorities may not have recognised in some parts of the Principality.
Once the problems have been identified, there is investment, but not in those vast council estates—the monoliths of municipal socialism of the past as I like to describe them. Instead, perhaps between two and eight houses are built in a village and they become part of the village. They do not become ghettoes. Those houses are not just part of the community; they are attractive to local people and young people can stay, live and work in the communities in which they have been raised.
Initiatives have also been taken on a national level, and also in Wales, to bring into use the empty accommodation above shops. That is a worthwhile initiative for which funding has been made available and it is quite apart from general support made available for the vital renting and shared ownership programme.
My hon. Friend the Minister outlined the steps being taken to attempt to deal with rough sleeping in our cities. I particularly welcome my hon. Friend's attempt to reduce the figures in terms of the use of bed-and-breakfast accommodation for so many families. Before I came to the House, and subsequently in articles that I have written on the issue, I have stated that it is unacceptable for a Government who have been in office for 13 years still to have so many people, even on today's figures, living in bed-and-breakfast accommodation. That is not something with which I want to be associated and I know that my hon. Friend the Minister does not wish to be associated with it either.
More than that, the provision of bed-and-breakfast accommodation does not make economic sense. All the surveys show that it can cost between twice and three times as much to accommodate people in those absolutely unacceptable conditions than if we were to house them properly in the first place. I welcome the steps that have been taken to reduce the proportion, as my hon. Friend the Minister said, from 24 per cent. to 18 per cent. During the many years that I will be a Member of this place, I hope that we will ensure that the figure is reduced substantially—and the earlier the better.
I hope that the hon. Member for Southwark and Bermondsey (Mr. Hughes) will not take offence when I say that he adopted a sanctimonious approach. At one point, he seemed to say that the Government should simply be building more houses. That may be a disservice to him, but I do not believe that simply more housebuilding is what is needed. On the contrary, it seems that we have sufficient properties.
46 It is well known that there are about 750,000 empty properties in private and public hands. We can all argue about the accuracy of the figures and we often hear all sorts of figures bandied around the House. However, we might agree that about 150,000 families are currently accepted as being homeless by local authorities. In such circumstances, we should urgently seek a marriage between the two sets of figures.
According to the figures that I have seen, 9.7 per cent. of public housing in Liverpool appears to be empty. It is unacceptable that there are local authorities—including authorities which at least two hon. Members in the Chamber now represent—in which the amount of council house rents outstanding is colossal. The highest amount outstanding is in the constituency of the hon. Member for Southwark and Bermondsey. According to my figures, there are some £35 million of uncollected council house rents in the hon. Gentleman's authority.
I know that it is said that the cause of such outstanding rents is that people are in desperate financial circumstances and they cannot afford to pay the rents. I notice that the hon. Member for Knowsley, North (Mr. Howarth) is in the Chamber. He will be aware that his local authority, within which many people face strained financial circumstances, has performed much better in terms of collecting council house rents than Southwark and Bermondsey or Greenwich.
§ Mr. Raynsford
Does the hon. Gentleman recognise that there is a serious problem in respect of people being able to afford rent or mortgages in the rented and privately-owned sectors? Does he accept that mortgage arrears have increased dramatically, as have rent arrears? When the Government propose to increase rents in council properties by on average 9 per cent., when they expect public sector workers to accept a maximum 1.5 per cent. pay increase, does the hon. Gentleman accept that that is a recipe for further increases in arrears?
§ Mr. Evans
I made a misjudgment. I thought that the hon. Gentleman was about to explain why Greenwich had an outstanding figure of 25 per cent. in council house rents—about £13 million. I was hoping that the hon. Gentleman would be able to tell us how many houses in his constituency might be built for that sum.
§ Mr. Charles Hendry (High Peak)
Has my hon. Friend noted the correlation between councils that are dilatory at collecting rents and those that have bad records in respect of occupied housing and the number of vacancies in boroughs such as Southwark? Southwark is the fourth worst borough in London in terms of vacancies. One of the few councils with a worse record for vacancies is the Liberal Democrat-controlled borough of Tower Hamlets.
§ Mr. Evans
I also have made that correlation. I represent the largest constituency in Wales—I think that it is also the largest constituency in England and Wales—and we have managed, through all local authorities in Wales, many of which are controlled by friends of the Labour party, to keep down the number of public housing voids. The figures that I was able to gain from the Welsh Office in a parliamentary answer only last week show that there is a direct balance between housing association voids and council house voids of 1.2 per cent. in Wales. When we compare that with the situation in which there have been 47 up to 10 per cent. voids in some local authority areas in England, we see that far more needs to be done than just throwing money at the problem.
§ Mr. Simon Hughes
I agree. The hon. Gentleman will imagine that, for obvious reasons, I am critical of my local authority, but one thing that he may not know, which is relevant and has been raised with Ministers, is that there is an unfair method of calculating the amount needed per unit of property, which is called the management and maintenance allowance, across different authorities. For no current, valid reason there is a differential allowance—government to local authority money—which means that boroughs such as Southwark get far less than otherwise identical boroughs with the same housing needs.
§ Ms. Glenda Jackson
The hon. Gentleman has spent some time being highly critical of local authorities. I should like to give him an example of what is happening in the private rented sector in London. In one case, a young woman found a room for herself in a house where the rent was £45 a week. She would have had to claim housing benefit to pay it. Her landlord suggested that, as she was claiming housing benefit, they should bump up the rent to £60 and split the difference. She refused to do that and is therefore homeless.
Another case involves a young couple, one of whom was a student. Her boyfriend became ill. When their landlord discovered that they would be reliant on housing benefit, they were asked to leave. That is yet another example within the private sector. Local authorities are saints in comparison.
§ Madam Deputy Speaker (Dame Janet Fookes)
Before the hon. Member for Brecon and Radnor (Mr. Evans) continues, let me say that interventions are becoming progressively longer. That is not confined to one side; I make the observation to all.
§ Mr. Evans
I am obliged for your guidance, Madam Deputy Speaker. I am trying to be as generous as possible to Opposition Members.
I certainly do not defend the activities of landlords who behave in the way that the hon. Member for Hampstead and Highgate (Ms. Jackson) has outlined. She appears to have in her hand a document which presents some detail of that case, but it seems to me as a lawyer that the first case that she outlined is one in which the involvement of the police should be considered at an early point. It clearly was an invitation to participate in a criminal offence.
§ Mr. Evans
I am sure that the hon. Lady has not been putting points to me without evidence. I rather hoped that she put her case with evidence to support her assertion. I shall now make progress.
It has become clear that it is the Government's responsibility to ensure that we improve the supply and condition of our rented housing stock. Quite apart from the other choices and availability that there may be of different tenures, that has to be a cardinal point. The Government, sometimes in the face of substantial opposition, have given positive support to housing associations, and they deserve congratulations for that. In the course of that work they have had to attempt to deal with a manifest distortion in the rented housing sector. I refer in particular to the way in which the private rented sector, sometimes because of the abuse that is piled on many landlords who have attempted to operate within the private sector, has declined substantially. That has been regarded with some sadness by hon. Members.
It must be recognised that if there are three quarters of a million empty properties, although many are in the public sector, a large proportion of them are in the private sector. One would wish those properties to be brought into better use. One factor that must be borne in mind when we consider the Opposition's figures is that the Government have given substantial support through the housing benefits system.
I note the point that was made by the hon. Member for Southwark and Bermondsey, but, according to figures that I obtained from the Library this morning, in the past year £5.9 billion in support was given. [Interruption.] The hon. Member for Greenwich (Mr. Raynsford) is not terribly happy about that because, in seminars and conferences around the country, he has been saying that that is manifestly dreadful and stupid. Taken together with the other amounts of support in terms of the Government's house building programme, there is substantial assistance—up to 18 per cent. of the public sector borrowing requirement, according to the figures that I saw today.
The hon. Member for Southwark and Bermondsey referred to such evidence and said that mortgage tax relief is a bad thing. The hon. Member for Greenwich shares that view. The proportion of support available under mortgage tax relief has substantially eroded over the years, and that must be recognised. The hon. Member for Southwark and Bermondsey is shaking his head, but that is absolutely true. Inflation and tax decreases have substantially eroded that benefit, as a result of which it is fairly likely in the current year that the amount of support available through housing benefit will overtake the support that is given under mortgage tax relief. At the moment, 69 per cent. of households in Wales are receiving support through the housing benefit structure initially directly from the Government and then from local authorities.
Hon. Members recognise that there is a housing crisis in this country—I hope that I made that clear at the beginning of my speech. If there were no crisis there would not be a need for all the steps that the Government have taken to address the problem. My hon. Friend the Minister is regarded throughout the country as a person who genuinely recognises the scale of the problem. Many of the initiatives over the past few years are directly as a result of the pressure and influence that he has been able 49 to bring to bear. I am absolutely sure that, with my hon. Friend in charge of our housing programme, we have a policy that all our colleagues can support.
§ Ms. Glenda Jackson (Hampstead and Highgate)
Although I welcome the opportunity to participate in this debate, I do not welcome the fact that for the fourth time in this Parliament we are debating the issue of homelessness. I look forward to the day when homelessness will have no place in this Chamber or in the cities and towns of this country.
My hon. Friend the Member for Greenwich (Mr. Raynsford) has referred to homelessness as a scar on the face of society. While agreeing wholeheartedly with his sentiment, I disagree with his analogy, because over time scars heal, but during this Government's tenure of office the number of households accepted as homeless has tripled, to stand at 150,000. That represents 400,000 adults and children. According to the Shelter briefing, which I am sure all hon. Members received in time for the autumn statement, almost 63,000 of those families will spend this Christmas in unsuitable temporary housing, such as bed and breakfast hotels and local authority hostels.
There are enough learned documents around to prove the dangers for children in bed and breakfasts—quite apart from the economic costs. In London, the cost of keeping a family in bed and breakfasts is estimated at £14,500 a year. The damage done to children is almost inestimable. Children in bed and breakfasts tend to catch illnesses far more easily and to have greater difficulty in learning and in creating real social relationships. The borough in which my constituency lies has 1,900 families with no homes of their own; that figure does not include the number forced to use voluntary hostels or squats or cardboard boxes for shelter.
There is no doubt that the plight of the homeless is a matter of concern to hon. Members on both sides of the House, but a former leader of the Conservative party once said that it is not enough for people merely to say that they care; their actions must support their words. The Government's actions so far have failed to alleviate, let alone eradicate, the evil of homelessness.
Last week, the Chancellor of the Exchequer unveiled a number of proposals in his autumn statement designed to boost the housing sector—proposals to which the Minister referred today. One proposal was to purchase 20,000 empty homes. Another was that councils would be allowed to spend the capital receipts that they earn between now and December 1993. That was done, the Chancellor said, to make a real contribution to housing families in need.
What was the background against which the announcement was made? Twenty thousand homes are to be purchased, but last year 75,000 homes were repossessed. Capital receipts will be released from now until December 1993, but more than £8 billion in capital receipts have already been accumulated. So the Government can buy 20,000 homes, yet they allow the seizure of 75,000.
This is a time of deep recession, when people are much concerned that they may have no jobs, when—to quote Shelter—the rate of mortgage repossessions in England alone is running at 200 a day and when loans more than 12 months in arrears had risen by June 1992 by almost 25 per cent. to more than 110,000. So the Government, on the 50 most optimistic estimate, are giving £1.75 billion in capital receipts but are blocking the £8 billion that councils have already raised from the right to buy.
On top of all this, the Government tell councils, which have the prime responsibility for housing those in need, that they will give them less money next year to discharge their duties than they did this year—that has always been the trend while the Conservative party has been in power. Spending on housing in real terms fell from £11.6 billion in 1978–79 to £5.5 billion in 1991–92—a reduction of £6.1 billion.
The Government claim that they care about the homeless, but in the next breath they say that it is not for central Government to generate the growth in the housing sector which the homeless so desperately need and in their third breath they announce that they will bring in spending measures that will prevent local government from generating growth.
Homelessness under this Government has become an epidemic, and it is eating away at the fabric of society. How much potential is wasted in the doorways of the shops lining the Strand? How many doctors, teachers and business men could have grown—could still grow—out of the people who have no home of their own and hence no opportunity? What can be said of a Government who deny them that opportunity?
The Conservative manifesto states:The opportunity to own a home and pass it on is one of the most important rights an individual has in a free society.But what of those denied the right to live in a home, never mind own one? A right to clean, decent, affordable housing should be guaranteed, and if all else fails it is incumbent on the Government to safeguard that right. If solving the problem of homelessness means Government intervention before lunch, breakfast and dinner, so be it. Homelessness will not be solved by the reintroduction of restrictions on capital receipts, due to come into effect in December 1993. Nor will it be solved by the restrictions on council spending due to come into effect in April 1993. Nor will it be solved by unemployment, by recession or by the slump to which no end is in sight—
§ Ms. Jackson
I shall shortly have finished my speech.
The glossy brochure in my hand is not, it may surprise my hon. Friends to hear, a charter produced by the Government. It is called, "The London Day Centres Directory: Services for Homeless People". As Conservative Members can see, it has many pages and many more sub-divisions. Instead of tackling the basic problem of homelessness and our inadequate housing stock, we are being directed to manage homelessness—to find it acceptable and to tolerate it. Many people have asked me why homelessness and the problem of housing are not higher up the political agenda—
§ Ms. Jackson
I say that these issues are high up the political agenda—we will all see how high as Christmas approaches. For a few weeks before Christmas, local and national newspapers will publish schemes under which the homeless will be taken off the streets and put in damp, drafty vaults under bridges. There they will be fed turkey 51 dinners on paper plates and there they will toast each other in champagne from polystyrene cups. Come Boxing day they will become invisible again.
I urge the Government to set in train before Christmas real measures that will make this glossy brochure utterly irrelevant by this time next year.
§ Mr. Gary Streeter (Plymouth, Sutton)
This will be the fifth time I have spoken since becoming a Member inApril. By some strange coincidence, you, Madam Deputy Speaker, have been in the Chair on each occasion. I do not presume to detect any connection beyond the fact that we represent neighbouring seats.
I was interested to hear the excellent remarks by my hon. Friend the Member for Brecon and Radnor (Mr. Evans), who said that he foresaw many happy years in the House for himself. Given that he has a majority of 130, one can only conclude that that was an example of great confidence—admirable confidence.
I congratulate the Government on the excellent measures in the autumn statement to help boost the housing market and meet housing need. We all want everyone to have a decent home at an affordable price, and it is encouraging that the Government have introduced more measures to meet that end.
I refer first to the £750 million to be provided for housing associations to buy up an estimated 20,000 repossessed properties in the next 12 months, to convert them to homes for rent. That will be an important measure to free the housing market, which has been bogged down during the past two years. The Government have taken an incisive and imaginative measure to get the market moving again at the lower end, by removing 20,000 empty and repossessed properties from the market. I support that excellent measure, as it will help to stimulate the housing market.
I welcome the reduction of the interest rate to 7 per cent.—as low as I can remember during my working life —which is an excellent boost for the property market. I hope that my hon. Friend the Minister is listening—
§ Mr. Streeter
I am sure that my hon. Friend is—I did not wish to infer otherwise. I thought that he might have nodded off and that perhaps the headphones were his personal stereo. I hope that he will speak severely to building societies that fail to pass on the benefits of lower interest rates for several months. Recently, the Halifax announced that it would pass on the benefit in January. I must declare an interest, as it is lending me a small amount of money. Why cannot the Halifax pass on the benefit of that rate reduction in December?
Building societies and banks have a lot to answer for in failing to pass on interest rate reductions early enough, and we shall hear more about banks in the Adjournment 52 debate tonight. I hope that the Government will get tough with those building societies and banks that fail quickly to pass on the reductions.
Excellent deals are available in the market place for first-time buyers and people who want to move house, who will be able to borrow money at advantageous rates. I scanned the Sunday newspapers and found that one could get a loan on a fixed rate of interest for seven years—long enough to tide us over the next upturn in the property cycle which is bound to come—at 8.25 per cent. Anyone who wants to plan ahead with certainty can take the sort of packages on offer at 8.25 per cent. There has never been a better time to buy a property, and I hope that that message is getting across to home owners and first-time buyers.
Even estate agents have begun to report an upturn in activity during the past few days, which is greatly to be welcomed. We hear much about the difficulties that home owners have suffered during the past two years—about negative equity and repossessions. Those are real problems, but it is not right for us to concentrate on a short-term problem and to allow it to negate a long-term benefit.
There is no doubt that home ownership remains the aspiration of the vast majority of families, and so it should be. In the long term, home ownership is a great asset to any person or family. It is undoubtedly the single biggest asset that most people have, and is to be encouraged. I welcome Government measures to encourage it and the forthcoming rent-into-mortgage scheme which will extend the choice of home ownership to another layer of the population.
I also welcome the capital receipts initiative, announced by my right hon. Friend the Chancellor in his excellent statement on Thursday. I am not the only one to welcome it. On Friday 13 November, a report was published in the Plymouth Western Evening Herald—an excellent local newspaper—which stated:Plymouth could be in for a £2 million windfall from council house sales, courtesy of Chancellor Norman Lamont it emerged today. City Housing Chairman Pat Kelly gave a cautious welcome to Mr. Lamont's announcement yesterday that councils can now spend all the money they make from selling land and houses. Mr. Kelly said, 'I have done some sums which indicate we could generate between £1.5 million and £2 million from the sale of about 100 council houses that we have in the pipeline'.That is a cautious welcome from a left-wing Labour-controlled authority, which is no friend of our party or of the homeless. By May 1991, when I ceased —by the will of the people—to be the housing chairman in Plymouth, I had already set up many deals between the council and housing associations, which the local authority instantly froze for ideological reasons. It preferred to keep people waiting on the streets and in bed-and-breakfast accommodation, rather than to deal with evil housing associations, which it saw as the wicked private sector. That was an absolute disgrace. That same council has welcomed the statement by my right hon. Friend the Chancellor on capital receipts, estimating that it will release up to £2 million during the next 14 months, which will enable the council to build up to 100 council houses. That is a measure of the support that my right hon. Friend's excellent initiative has in this country. A cautious welcome from the left-wing Plymouth city council is the highest accolade.
I welcome the hon. Member for Leeds, West (Mr. Battle) to the Opposition Front Bench, although he is no 53 longer in the Chamber, and I listened to his speech with interest. I am pleased that he intends to press for measures to improve housing, and I offer to accompany him on his trips around Labour-controlled local authorities—I am sure that that was what he had in mind—to urge them to get their act together, to collect rents, carry out repairs, utilise voids and deal with housing associations rather than turning their backs on them.
§ Mr. George Howarth
Does the hon. Gentleman care to name one Labour authority that turns its back on housing associations?
§ Mr. Streeter
I have already named Plymouth city council, which turned its back on housing associations for 18 months, hoping to keep all the land in its ownership so that it could build council houses, knowing that it would never have the money to do so.
§ Mr. Streeter
No, I must move on. I have already given way to the hon. Gentleman.
I welcome the fact that the hon. Member for Leeds, West at long last understands the need to press for measures to improve the housing stock—doubtless by putting pressure on Labour-controlled authorities.
In addition to the Chancellor's excellent statement about capital receipts on Thursday, I welcome the fact that he has been able to maintain the Housing Corporation's budget for the next three years and even to add to it. That is greatly to be welcomed. Housing associations in Plymouth are planning to build more than 250 houses in the next 12 months and the 100 houses that the city council may be able to add to that will be an excellent step towards meeting the needs of the homeless. I welcome the fact that the budget has been not cut but augmented. No doubt that owes much to the Government's commitment to the homeless.
The Government should encourage councils to consider not merely selling houses or land to release capital receipts to spend on housing. Plymouth Pavilions is a leisure and conference complex, which was built by the local authority at a cost of £25 million and which is running at a loss of £1.5 million per annum. Local authorities should not run such centres. If that complex were sold to the private sector, it would make a profit, and release money which could be spent on noteworthy assets and meritworthy schemes in Plymouth. I suggest that local authorities should consider such sales. The Government can only create a framework and it is for local authorities to deal with their housing stock, and to suggest initiatives to take full advantage of the excellent leadership given by the Government.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) spoke about releasing the £5.5 billion currently held by local authorities; he referred to those funds as "historic capital receipts". But the motion does not say how local authorities would deal with the shortfall in their general funds which spending that money would create. The interest currently accruing on those capital receipts comes from the general fund of local authorities throughout the country. If that money were spent, the interest would not enter the general fund and the shortfall would have to be covered by community charge payers. The hon. Gentleman did not mention that. If he is committed to that course of action, I invite him to make 54 it perfectly clear in the leaflets that will no doubt flood the land in the run-up to the county council elections next May that it is Liberal Democrat policy to spend those capital receipts and to double community charges throughout the country, massively increasing the council tax. That will allow voters at the county council elections to decide whether they wish to follow such a policy.
§ Mr. Simon Hughes
The answer to the hon. Gentleman's accusation is that we have a simple view, which I hope that he, as a former local government councillor, supports. Each local council should have the freedom to spend all its capital receipts or not. That decision should not be imposed by central Government.
§ Mr. Streeter
I am grateful for the hon. Gentleman's intervention. I take it as a confirmation that the Liberal Democrats will be courageous enough to spell out in its election material the implications not only of 1 p in the pound for education but of doubling the community charge to pay for capital receipts.
§ Mr. David Lidington (Aylesbury)
Does my hon. Friend agree that the Liberal Democrats also want to abolish capping, which would increase last year's community charge or next year's council tax, placing a further burden on home owners?
§ Mr. Streeter
My hon. Friend is absolutely right. It is of great concern that those Liberal Democrat policies slip through the net because no one takes the party seriously enough to read its manifestos and see what its policies are. Most people would be alarmed at the prospect of those dreadful policies.
The Government are committed to ensuring that local authorities give value for money in their management of public sector housing. That is vital if we are to resolve housing issues. We should remember that 4.2 million household units owned by local authorities are still let in the public sector. The best way to improve the condition of housing stock and the plight of the homeless is to persuade local authorities to become increasingly efficient. I welcome the measures which the Government have pursued for many years to drive local authority housing departments towards greater efficiency.
The compulsory competitive tendering measures shortly to be introduced are welcome, but they do not go far enough. One of the biggest problems of housing departments in managing housing stock is the fact that they are bogged down by local authority culture. Legal, treasury and general administrative services supplied to housing departments throughout the country are a major impediment to efficiency.
Will my hon. Friend the Minister consider the point that I made in my maiden speech—it now seems a long time ago—about independently managed local authority companies buying in services from wherever they wish, at the best price that they can find, whenever they want them? They would buy in repair, legal, financial and every other service, rather than being suffocated as they are now by local authority culture, which most housing departments must suffer. CCT is an excellent measure that will introduce efficiency into housing departments. But it will not help housing management to escape the icy grip of local authority culture, and I hope that the Government will look again at that point.
55 It has been said that the Government's proposals will result in a 9 per cent. increase in council rents. The average council rent in Plymouth is just less than £25 a week. From the way in which Opposition Members react when the matter is discussed in the House, one would think that we were talking about £125 a week. I believe that £25 still provides excellent value for money and that 9 per cent. on £25 is not a draconian increase. Moreover, housing benefit exists to support those who cannot afford to pay it.
§ Mr. Streeter
I am just winding down, so I shall not give way.
It is wrong to suggest that the Government are introducing measures that will penalise council tenants. However, I urge them to look again at the most effective way of encouraging local authorities to run housing associations.
I reject the motion put forward by the Liberal Democrats and support the Government's valiant attempts to make affordable housing appropriate and within the reach of everyone in the nation.
§ Mr. George Howarth (Knowsley, North)
I wish to take up a point made by the hon. Member for Plymouth, Sutton (Mr. Streeter). He should not try—in the House or elsewhere—to characterise Labour-controlled local authorities or any other local authorities as being generally obstructive towards housing associations. I am familiar with how Labour-controlled local authorities and housing associations operate, and it simply is not true to say that Labour-controlled authorities have a general policy of obstructing housing associations. I am not familiar with his example of Plymouth council, but as a general principle it is not the case. I expect that the hon. Member for Brecon and Radnor (Mr. Evans), who has some experience in these matters, will confirm that that is the case in Wales.
§ Mr. Jonathan Evans
The hon. Gentleman will concede, however, that even I know of instances where some authorities take such a hostile line.
§ Mr. Howarth
The hon. Member for Plymouth, Sutton was trying to establish the fact that Labour-controlled authorities have such a general policy, and that simply is not true. That is the only rebuttal that I care to make of his speech.
May I say a few words about the consequences of the autumn statement for housing policy? We need, first, to consider the Government's diagnosis of the problems in the housing market and, secondly, to look specifically at how their proposed remedies follow the diagnosis. The generally accepted diagnosis, which even Ministers may accept, is that there is a double problem of overhang in the housing market. On the one hand, a debt overhang is causing considerable hardship to families but is also acting as a brake on the housing market. On the other hand, there is an overhang caused by the number of properties on the market that cannot be sold because of general market conditions. Those two problems feed off each other: the glut of properties on the market causes problems for people who wish to sell and their debt therefore mounts 56 up. Part of that equation is the effect of falling prices—the negative equity that has already been mentioned. That is the broad diagnosis of the problem.
I shall not go into the problems of homelessness, which have been more than adequately dealt with by my hon. Friend the Member for Hampstead and Highgate (Ms. Jackson) and others. I wish to concentrate on the narrow area that is of immense importance to the development and execution of housing policy in the next year or so.
Two remedies are proposed. First, £750 million is allegedly being made available to the Housing Corporation to enable housing associations to acquire, it is said, 20,000 additional properties. Secondly, the Government will grant permission to use capital receipts between now and the end of next year. According to the Housing Corporation press release issued on Thursday, £600 million is being made directly available to that programme and another £150 million will be directed from capital receipts.
In response to my hon. Friend the Member for Leeds, West (Mr. Battle) and to the hon. Member for Southwark and Bermondsey (Mr. Hughes), the Minister said that additional money would be available over the period covered by the press release. I have not had the opportunity to make a precise calculation, but the amount available during the 12 months of the scheme will be more than £200 million. However, it will be available in principle only.
On Friday, I spent a good deal of time telephoning a wide range of contacts in the housing association movement. Some of them are directly employed by associations, some are consultants, and some have general expertise in housing finance. I do not claim that it was a scientific survey, but it led me to the view that for two reasons the scheme will not work. First, considerable delays will necessarily be imposed on housing associations because of the negotiations and surveys that must take place before any property is acquired. Unless the associations can buy huge portfolios of properties by way of auction or some such scheme, much time and resources will need to be spent carrying out the necessary searches and surveys and in conducting negotiations. I spoke to a surveyor who carried out some preliminary work of that nature. He told me that the repair bill to make a property fit for habitation and available for rent is likely to be between £5,000 and £10,000.
A substantial amount of public money is used to fund the housing association grants system and those associations have to go through all the proper procedures to acquire property. That will take time. Secondly, they have to identify the extent of the necessary repairs, and if they are very expensive the transaction may have to be abandoned. Given a tolerance level of plus or minus 20 per cent., I predict that the 20,000 target will not be achieved. I could go further and say that it is unlikely that the Government will achieve 2,000 units within the time available. That will result in a huge difference between the actual cost and the money that the Government have identified for the programme. Much but not all of that money has already been taken from the Housing Corporation's agreed development programmes for the next two years. If I am right and there is a substantial underspend in the programme, will the money be put back into the corporation's agreed development programme over the next two years? I shall give way to the Minister if he wishes to give that assurance.
§ Mr. Baldry
I have every confidence that the Housing Corporation and the housing associations will be able to meet the target that we have set for them.
§ Mr. Howarth
In that case, I conclude that if the scheme fails to meet the target of 20,000 properties, the corporation's agreed programme for the next two years will have had money taken away from it and not spent. The overall impact on the construction industry will therefore be negative rather than positive.
§ Mr. Jonathan Evans
Even if the hon. Gentleman's worst fears were realised in a short time, he will know from his knowledge of housing associations that they are currently working on cash-limited allocations for years ahead. If it is a matter of spending money, it should not be difficult to advance programmes that have already been planned or to make off-the-shelf purchases.
§ Mr. Howarth
That may well be the case, but it was not my point. In his intervention the Minister did not make it clear that the resources will be returned to the Housing Corporation's programme over the next two years. The hon. Member for Brecon and Radnor (Mr. Evans) may dissent from the specifics of my prediction hut, given his knowledge of the Housing Corporation; he would probably accept its generality. If my prediction is correct, the impact on construction will be negative.
The second part of the programme announced in the autumn statement was that local authorities will be allowed to spend capital receipts that they accrue during the 12 or 13-month time slot. The matter is notoriously unpredictable. In his speech, the Minister used submissions by local authorities for credit approval bids to assess the amount of money that would be available. I think that I am right in assuming that. I do not know how one assesses the accuracy of those bids because they are always best guesses. However, I know from experience in my constituency and elsewhere that the market is in such an appalling state that many potential buyers of land and council properties—of which about 40 per cent. have probably been sold—are wary about entering it. I suspect that even local authorities did not anticipate the depths to which the market would sink. The Government's assessment will turn out to be extremely optimistic.
§ Mr. Peter L. Pike (Burnley)
Many people are not willing to exercise their right to buy council properties or properties in the private sector because they fear redundancy and unemployment, a cloud that is hanging over hundreds of thousands or millions of people.
§ Mr. Howarth
My hon. Friend makes a most important point in justifying my argument. Confidence in the market by builders, developers and potential purchasers simply does not exist. I would be delighted if the autumn statement and subsequent pronouncements from the Department of the Environment and the Housing Corporation boosted confidence. However, the proposed programmes do not contain sufficient substance to inject such confidence into the market.
Another point arises out of the autumn statement. In this, I support what was said by my hon. Friend the Member for Leeds, West from the Front Bench. By reducing the housing associations' grant percentage to 67 per cent., the Government are hoping—this is an arguable point—to raise additional private finance and thereby to 58 expand the amount of programme money that will be available. In other words, they hope to make the available public money go further.
My fear is that, rather than achieving that, it will have one of two effects. First, it could make it more and more difficult, in each given scheme that a housing association considers, to arrive at a combination of private finance and grant that will result in affordable rents. I know that, even at higher levels of grant, housing associations are having difficulty making that equation work.
If submissions from housing associations, through the National Federation of Housing Associations and others, prove to the Minister that this will create problems, I hope that he will listen to those representations and find a compromise solution to enable the programme that we all want to see in place go ahead. I hope that he does not get tied down to the figure as the last word when it may turn out to cause a problem.
The other possible consequence that I fear is that housing associations will be obliged, if they try to stick rigidly to that percentage, to drive down standards so as to make the equation work. We know from the example of local authority housing in the 1960s and 1970s the consequence of allowing standards to slip. It creates expensive long-term problems that are the source of great misery to many people.
I had hoped to say more, but I shall cut my remarks short as several hon. Members still wish to speak. I hope that the expectations that the Government have created through the Chancellor's announcement can be met, but I strongly fear that they cannot. After all the hype and the fuss over the past week have died down, if it proves, as I fear that it will, that the problems built into that announcement overwhelm the projects that have been set in train, I hope that, as quickly as possible, the Government will think again. I hope that the Minister will listen to the submissions that are bound to come from housing associations and others and will be willing to modify the details so that the Government's objectives —rather than the hype—can be met.
§ Mr. Iain Duncan-Smith (Chingford)
For a variety of reasons, I have no hesitation in supporting the Government amendment. Some of the major points missed by Opposition Members include the important one that, since the Conservative party came into power in 1979, we have changed the nature of the housing market and the link with councils. The base line has changed so radically that many Opposition Members have been left behind. The changes are not only in the position of councils but in the expectations of individuals. The simple fact that well in excess of 60 per cent. of the population own their own homes is a significant factor. It means that people are determined to take decisions about their own lives into their own hands and to get away from the problems resulting from the bad running of estates by local authorities.
The Government have recently made some significant commitments. I congratulate them on their stated hope to exceed the commitment to build 53,000 houses. Over the period that we have been in power, of the 6 million householders who have bought their own homes, about 1.4 million have done so under the right-to-buy scheme, of which all of us are justifiably proud.
59 I shall not speak for too long as many others wish to speak, but I wish to dwell on the subject of the housing action trust scheme, introduced by the Government. For a while, it was faltering as councils opposed it. In my area, the tenants in Waltham Forest gave it their full support. The Conservative party should thank them, because more than 70 per cent. of them voted in favour of taking their housing estates out of the control of local authorities and instead to put them in the hands of a housing action trust. It is important to bear that in mind because that is the key to the issue. We have here people whose lives have been blighted by some of the worst-run estates in central London and who chose, in significant numbers, to get away from that.
§ Mr. Raynsford
Will the hon. Gentleman recognise—the Minister will, as he was aware of this—that the tenants in Waltham Forest voted for the housing action trust only when they had been given a clear and categoric guarantee that they could return to local authority control after the properties had been renovated?
§ Mr. Duncan-Smith
When I go around the estates, I am told that the tenants have no wish to see the properties return to local authority control. The record of the local authority in running the estates, particularly Chingford Hall estate, which is in my constituency, was appalling. One has only to walk around the estate to see that it has been left in rack and ruin and that it is falling to pieces, to such an extent that the housing action trust will take down most of the estate and rebuild houses that will be perfect for people who wish to live there in comfort.
§ Mr. Duncan-Smith
They do not wish that.
When I have visited the housing action trust for Chingford Hall estate, I have found that people are buoyed up with enthusiasm about the scheme—I know that my hon. Friend the Minister can attest to that as he recently visited the area. Furthermore, those who run it, both from the Hoe street headquarters and from Chingford Hall estate itself, show what can happen when people are in charge who want to do something for those who live on an estate and want to help them to solve some of the worse problems. That is a great bonus, and shows how a Conservative policy is working well.
In support of Conservative policies over the past 12 years or so, particularly now, it must also be said that Government expenditure on housing is a significant £8.5 billion. That includes £2.3 billion for the Housing Corporation, £1.5 billion for local authorities and £3.7 billion for housing revenue account subsidy. That shows clearly the Government's commitment to housing.
Others have talked at great length about homelessness, but the Government's record on that, particularly their recent record, is one on which they can stand up and be counted. Single Homelessness in London, in its recent annual report, stated:Extra resources which the rough sleepers' initiative and the homeless mentally ill initiative are providing a welcome recognition by central Government of the scale of the problem in central London.That is significant.
60 I know that my hon. Friend the Minister has spoken already about those two initiatives, but I shall highlight some points about them. Some £96 million will be provided for the rough sleepers initiative and that should give 2,900 spaces in permanent or leased accommodation and 900 in hostels and emergency accommodation. Some £20 million will be made available over the three years for the mentally ill initiative, to develop a new housing advisory service.
I support the amendment and the Government's housing policy. Building on what has been achieved over the past 12 years, it will take us more and more down to the level of individuals looking after themselves while those who cannot are supported and directed through group initiatives and housing associations rather than through councils.
§ Mr. Paul Tyler (Cornwall, North)
I shall make a brief contribution because I suspect that others wish to speak before the winding-up speeches.
There has been an unusual degree of three-party agreement today. My colleagues and I did not expect to find ourselves in agreement with the hon. Member for Plymouth, Sutton (Mr. Streeter), who offered words of wisdom to lenders. They must watch their reputations carefully in the coming weeks to see that they pass on the interest rate cuts that they have now been permitted.
I was also extremely surprised to find that I agreed with the hon. Member for Brecon and Radnor (Mr. Evans) who made an eloquent plea on behalf of rural areas. When I worked for Shelter in the south-west, my primary work was centred on Plymouth—the city represented by you, Madam Deputy Speaker, and the hon. Member for Sutton. If I still had that job, however, it would now take me as much to the rural areas and the market towns as to the large cities. There are rough speakers—I mean sleepers —in almost every market town; there may be rough speakers, too, at some hours of the night, it depends on when one disturbs them. When I spent time on a sleep-out, I was staggered to find how many full-time professional rough sleepers there were compared with a once-or-twice amateur like me.
The rural areas face a serious homeless problem. The excellent work conducted by Glen Bramley and his team at Bristol university in 1990 and 1991 has shown that up to one third of new households in the rural areas require rented accommodation. Those people will not be accommodated through the right-to-buy provisions or as a result of liberating the now frozen owner-occupied market. More than half of those newly formed households simply cannot afford the full value of anything on the market, even now with so many depressed house prices.
The work undertaken by Action for Communities in Rural England—ACRE—estimates that about 377,000 homes will be required either immediately or in the next five years in rural areas. Recently, I visited rural areas in north Yorkshire, Cumbria, Scotland and in my home area of Cornwall. It is clear to me that we must have a continual programme to provide rented accommodation of all sorts for those communities.
In recent years, the Minister has not shown himself to be dogmatic about the split between the rented and owner-occupied sector. He is a man of great stature, because he listens to both sides of the House on this subject 61 [HON. MEMBERS: "Hear, hear".] I agree with the Minister's colleagues. In the months ahead, we look to him to be flexible and to ensure that if the new programmes are not successful he will be prepared to argue with his colleagues at the Department and in the Cabinet for a bigger slice of the cake for those who seek rented accommodation.
The study undertaken by the Department of the Environment of communities with populations of fewer than 3,000 has revealed that they will need far more new homes than are currently proposed. In the housing association rental programmes for 1991–92 and for 1992–93, the DOE figure show that 2,436 additional housing units will be provided under the supplementary credit approval scheme. That number will be insufficient to meet the needs of those areas. In Cambridgeshire, for example, only 106 new units will become available; in Cheshire, Cumbria and Cornwall the numbers available will be 38, 51 and 78 respectively. Those numbers are a drop in the ocean. When one considers all the forms of social mix and occupation that make up the rural areas, I cannot believe that the vast majority will be able to make the dramatic shift from the rented to owner-occupied sector—their needs cannot be met.
Good work has been done by the House-Builders Federation, the Association of District Councils and others to try to find ways in which matters can be improved, but the social and housing mixture is extremely difficult to achieve for legal, funding and planning reasons.
In the Chancellor's statement last week some limited help was offered to the hard-pressed building industry. My hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) has already drawn attention to the problems of that industry. It is labour intensive and if more money had been made available to it immediately, that could have had a major impact not only on the housing problem but on the jobless totals in many areas.
The disappointment felt at the inability to invest the historic receipts from council house sales is particularly great in rural areas, because many authorities there have few suitable properties still for sale. In the present depressed state of the rural economy, even fewer authorities expect their tenants to be able to exercise their right to buy. I note what the Minister said about Rita, but she will have to work extremely hard in the coming months if an effective equalisation of opportunities is to be offered to people in rural areas.
As the Minister will know, there has been cross-party support in the south-west—I am surprised that the hon. Member for Sutton did not refer to this—for the campaign by The Western Morning Newsto obtain a phased release of council house receipts. That approach would be a much more sane and effective way in which to achieve the investment in housing that is required in the rural south-west.
The rural areas have one national champion when it comes to job opportunities, help for small businesses and housing—the Rural Development Commission. That excellent body has recently produced an excellent report entitled "Homelessness in Rural Areas". It undertook special studies of Derbyshire, Hertfordshire, Shropshire, Northumberland, Lincolnshire and north Cornwall.
In the particular section relating to my area of the country, that exhaustive report showed that 90 per cent. of applicants for housing had incomes of less than £10,000 a year, 63 per cent. had incomes of less than £6,000 and 36 per cent. relied solely on pensions or benefits. The waiting 62 list in the area has grown at the rate of 80 individuals or families a month. In recent months, repossessions have had a marked effect on the problem.
One would think that the Rural Development Commission, given its excellent pioneering work—which I acknowledge happens to be of particular interest to my constituency—would be given additional funds to help it to meet its housing responsibilities. But what did we find in the autumn statement? Its modest budget of some £40 million is to be cut by £2 million. That organisation is the only one that can effectively try to overcome the homeless problem in some of the lowest income areas, but its budget is to be cut. It is a sad day when such effective organisations, with such small means, find that they are at the mercy of the Chancellor's axe.
When the Prime Minister, who represents a rural constituency, took over from someone whose suburbanity was a terrible example to us all, some of us hoped that the country areas would get a fair crack of the whip. We have had a sad few days since the autumn statement because, once again, the rural areas will be deprived of expert help, limited though it was, which it received and which was designed to try to ensure that they got a fair slice of the housing action.
§ Mr. Bernard Jenkin (Colchester, North)
It is clear from the speeches of the hon. Members for Cornwall, North (Mr. Tyler) and for Knowsley, North (Mr. Howarth) that this subject is becoming less and less of a purely party political issue. The hon. Member for Knowsley, North was keen to emphasise that Labour authorities have now come round to the idea of housing associations, and the hon. Member for Cornwall, North even paid warm tribute to my hon. Friend the Minister. I take it as progress that other parties are coming round to our way of thinking.
Colchester borough council is a hung council that takes a non-party political approach to its small but acute homelessness problem. It is one of the key issues in my constituency and the reason for that is simple: the vast majority of people live in excellent housing, which makes it all the more unacceptable that an albeit tiny minority should be excluded from that element of prosperity. All parties on the council are determined to resolve the problem and are committed to using housing associations to achieve that end. There is a remarkable lack of party dogma.
My hon. Friend the Member for Colchester, South and Maldon (Mr. Whittingdale) and I have been invited to attend a meeting with the council on Friday to discuss how to make further progress. I ask my hon. Friend the Minister, in the spirit of political co-operation between all the parties, to approve an application for additional credit under the Government's estate action programme.
I shall be brief so that the replies can commence. I had intended to comment in detail on housing need in Colchester and what is already being achieved by housing associations. In summary, a total of £15 million is being spent, with £8 million coming from the Housing Corporation. Considerable progress is being made. The estate action programme on the Greenstead estate involves 3,200 properties and a £2 million programme of mainly flats and maisonettes. The problems are familiar and it is 63 worth emphasising that not all acute housing problems are in our inner cities; there are just as many in the surrounding towns and the rural areas.
The environment has deteriorated and, for no apparent reason, vandalism and crime are on the increase. The people on the Greenstead estate have an undeserved reputation. They want to improve their area. I know that many of those people are as decent and law-abiding as any anywhere in the constituency and they deserve better. The council has developed plans in close co-operation with the estate's residents and there is evidence of a strong desire for greater self-determination and for the area to recover its standing. I urge my hon. Friend the Minister to consider the application favourably.
There are also certain actions that we can urge the council to take. It could sell its assets and make use of the proposals in the autumn statement. It could sell the bus company and Colchester Contract Services to raise the necessary capital. All those issues and many others will be discussed at the meeting on Friday.
I commend the Government amendment to the House.
§ Mr. Nigel Jones (Cheltenham)
It is a great pleasure for me to have the opportunity to reply to the debate. It has been a good debate. However, I am disappointed that only a few hon. Members have attended it. I hope that it is not a signal to the wider audience that the House does not take seriously the subject of homelessness and the housing crisis. It is a matter that we should take very seriously. My hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) said that a home is a right, not a concession.
Many people in my constituency and elsewhere fear buying houses while there is a lack of confidence in the housing market. They have three main fears. The first is that prices will continue to fall—and over the past two months there have been large falls. Secondly, there is the continuing fear of unemployment—and a report published today shows that 46 per cent. of people fear that they could lose their jobs. Thirdly, there is a fear of negative equity —and my hon. Friend said that one in seven households currently live in a property worth less than the mortgage.
One Conservative Member accused the Liberal Democrats of wanting to abolish mortgage interest tax relief. My hon. Friend dealt with that suggestion so firmly that Conservative Members did not mention it again. I want to lay the matter firmly to rest. Our manifesto at the general election said that we wouldintroduce housing cost relief weighted towards those most in need and available to house buyers and renters. This will replace mortgage tax relief for future home buyers …People holding mortgages will be protected: they will have the choice of moving to housing cost relief or continuing to receive mortgage interest tax relief.I hope that that clarifies the matter for Conservative Members, who clearly have not read our manifesto. I must admit that I have not read the Conservative party manifesto, but I prefer non-fiction.
I was grateful for some of the Minister's comments. I am enjoying working alongside him and other familiar faces on the Committee considering the Housing and Urban Development Bill. I am sure that we will be on that Committee for a number of months to come, so it is important that we maintain good relations.
64 I welcomed the Minister's comment that no one should have to sleep rough, but I question the cut in funds for the rough sleeping initiative which, as my hon. Friend the Member for Southwark and Bermondsey pointed out, was announced on Thursday. I am concerned about the provision in the autumn statement of £750 million to buy 20,000 vacant houses. I take seriously the comments of the hon. Member for Knowsley, North (Mr. Howarth) about delays and the Government's possible lack of ability to meet that target. The key intervention was that by the hon. Member for Greenwich (Mr. Raynsford), who pointed out that, during the time it takes to buy those 20,000 homes, it is likely that there will be more than 20,000 further repossessions. The scheme is a drop in the ocean.
The hon. Member for Leeds, West (Mr. Battle) said that, on the 1979 basis for calculating unemployment, the true unemployment figure is now in excess of 4 million. It is right to link the unemployment rate with the number of houses on the market and the number of people in financial difficulty. The hon. Gentleman also mentioned the curious logic in the Housing and Urban Development Bill—which we shall seek to amend—where the Government propose to take away the rights of tenants through compulsory competitive tendering.
When the Minister replies, will he deal with the point about accumulated receipts of £5.5 billion? It is the crux of the matter. It is well known that the best and most sure way out of a recession is through the construction industry. A phased relief of £5.5 billion in councils' bank accounts throughout the country would get the building industry back to work, with all that that means.
§ Mr. Jones
I will not give way as I am short of time and I have a great deal of ground to cover.
If that £5.5 billion were released in a phased way, it would enable houses currently requiring repairs to be brought back into use. It would allow housing associations and councils to make an impact on their waiting lists. It would also put back in work many of those in the construction industry who have lost their jobs.
A family who recently visited my constituency surgery believed that the way to instant riches was to buy their council house, so in 1987 they voted Conservative and bought their property the following year. The husband was a skilled bricklayer, but in 1989 he lost his job and the family home was repossessed.
That family found themselves again on the local council's books, and the home that they occupied as council tenants for 11 years was left empty. Every Sunday, the family used to visit their old house and look through the front windows of the property that was once their home. If they had not believed Conservative party propaganda, they would still be contented council tenants.
That family was placed in bed-and-breakfast accommodation, which had a serious effect on their health, for 56 weeks—at a cost to the council of £18,000. That is the economics of the situation.
§ Mr. Jones
No, because I have much more ground to cover.
The most remarkable contribution in today's debate was that of the hon. Member for Brecon and Radnor (Mr. 65 Evans). Many of his comments might lead one to think that he had a place on this side of the House. I agree with him that local authorities must be efficient in collecting rent and in turning round property. I pay tribute to Cheltenham local authority, which has cut the time between lets from seven weeks to four weeks and is reducing it still further. As a consequence, the number of families in bed-and-breakfast accommodation has also fallen and continues to do so. I point out that the council is controlled by Liberal Democrats, and that is Liberal Democrat policy in action.
The hon. Member for Hampstead and Highgate (Ms. Jackson) said that she would like to see £1.75 billion of receipts released. She is right to argue that, though I believe—because I was absent from the Chamber—that the hon. Lady confused some of her figures.
The hon. Member for Brecon and Radnor summed up the situation when he asserted that there is a housing crisis and that after 13 years in power it is unacceptable that under the Government there are so many individuals and families in bed-and-breakfast accommodation. I am sure that everyone on this side of the House agrees with that.
My hon. Friend the Member for Southwark and Bermondsey said that the purpose of housing policy is to provide a decent home for everyone, on a tenure of their choice, and at a price that they can afford. By any measure, the Government have failed to do that. The autumn statement does not address the issue. As the hon. Member for Leeds, West said, the autumn statement is a snowflake on an iceberg. I urge right hon. and hon. Members to reject the Government amendment and to support our motion.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry)
As Liberal Democrats appear to have spent most of the weekend trying to change the topic of today's debate, I have little doubt that they now regret choosing the subject of housing. Even as my right hon. Friend the Leader of the House was announcing last Thursday the business of the House for this week, a headline in the Evening Standard was proclaiming "Billions to boost housing". A front page article reported:Chancellor Norman Lamont pumped billions into the housing industry today to spearhead his drive for the economic recovery of Britain.Even Labour Members were compelled to acknowledge that, as a result of the autumn statement, there will be more money for housing than was set out in our general election manifesto.
Government spending plans provide for all the commitments in our manifesto to be met, including more housing action trusts and continuing help for rough sleepers—and I may explain to the hon. Member for Cheltenham (Mr. Jones) that £86 million for the rough-sleeper programme that was not there before is not a cut. There will be further large-scale voluntary transfers of council housing and increased output of social housing.
Capital spending on housing funded through the Housing Corporation increased this year by £600 million to produce an immediate boost to the housing market, and nearly £6 billion will be spent over the next three years. We estimate that that will enable substantially more than the 153,000 homes forecast in our manifesto to be provided over that three-year period—and the Government, rightly, will be looking to lever in more private finance in support of the £7.5 billion of public capital spending to be made 66 this year and over the public expenditure survey period. That is expected to produce a total of £10.5 billion of spending on new social housing across four years for people in need.
Anyone reading the speech by the hon. Member for Southwark and Bermondsey (Mr. Hughes) would be disappointed. It contained no new ideas or suggestions, but was just a clutch of recycled speeches and other people's press releases. The hon. Member for Cheltenham regretted the paucity of attendance for this debate, and I agree. Three out of the motion's six sponsors have failed to make an appearance, such is their considerable interest in housing matters. It would be interesting to know where the right hon. Member for Yeovil (Mr. Ashdown), the hon. and learned Member for Montgomery (Mr. Carlile), and the hon. Member for Berwick-upon-Tweed (Mr. Beith) might be. Perhaps they hoped that they would be successful in changing the topic of today's debate.
The absence of new ideas and lack of interest from the Opposition Benches is not surprising. It is often the case that, when Opposition parties have local responsibilities for housing, their record is truly appalling. Five per cent. of Hackney's housing stock—2,000 homes—stands empty and a further 1,200 homes are illegally occupied. The council has no clue who lives in those properties. That council has 3,200 empty or illegally-occupied properties, but its homeless total is just under 2,000. That council could house them all and still have some change.
The Liberals are no better. Tower Hamlets has a 4.5 per cent. void rate, or 1,895 houses. That is rather more than the total of 1,669 persons that council had in temporary accommodation at the last count.
The 1990 auditor's report described Islington council as "incompetent". He mentioned eight flats leased from private owners to alleviate homelessness that the council had left empty for one and a half years. A report by a Queen's Counsel ommented that the council hadthe cash office staffed by the innumerate, the filing done by the disorganised, and the reception in the care of the surly and charmless.Basil Fawlty on the rates.
Islington council also paid a firm to maintain communal television aerials in a block of council flats that has been demolished 10 years previously, and £25,000 on constructing a 40-yard cycle track the wrong way down a one-way street. Islington council also had £10 million of usable capital housing receipts but spent it elsewhere.
As was made clear by the hon. Member for Leeds, West (Mr. Battle)—whom we welcome to the Dispatch Box for the first time—Labour is still confused about its approach to capital receipts. As Inside Housing reported in a recent issue:In the run-up to the election, Clive Soley ran into trouble with the leadership when he was quoted as saying that a redefinition of the public sector borrowing requirement, taking council capital receipts out of the calculation, was on the party's agenda. Mr. Battle is obviously keen to avoid similar problems. Redefinition of the PSBR, which could theoretically release capital receipts for housing, is clearly not something Mr. Battle is prepared to argue for today. 'Those are the arguments that the Treasury team are going to have to sort out, not me as the Housing spokesman. At the moment, redefinition is not on Labour's agenda. It is not one of my priorities.' And when asked for clarification today, he said that that approach still stands.67 We welcome the opportunity given by today's debate to make clear our commitment to the promotion of greater owner-occupation, the widening of choice for tenants and an increase in the number of homes available for rent.
§ Mr. Stephen
Does my hon. Friend agree that there would be no capital receipts from council house sales if Labour and the Liberal Democrats had had their way, because there would have been no council house sales?
§ Mr. Baldry
My hon. Friend has made a good point: there would be little choice and opportunity in housing if the Opposition had had their way.
Our housing policies are good news for tenants, because they provide an opportunity and choice—
§ Mr. Pike
I assure the Minister that our position on the public sector borrowing requirement and on capital receipts is quite clear. In view of the Government's expenditure plans—announced last week by the Chancellor of the Exchequer—may I ask why it is all right for them to take into account over the next few years the use of capital receipts gained from the sale of public assets? What will the Government do when they have no more public assets to sell?
§ Mr. Baldry
The hon. Gentleman has made a brave attempt to rescue his hon. Friend the Member for Leeds, West. His hon. Friend failed earlier today, and the hon. Gentleman has failed now.
As I have said, our housing policies are good news for tenants. They provide more opportunity and more choice. Let me add that the proposed increase contained in next year's rent guidelines is less, in cash terms, than last year's increase. We are revolutionising the management of council housing and flats; we are giving tenants new rights, such as the right to improve and an improved right to repair; we are continuing to invest millions of pounds in estate action—and in housing action trusts, which concentrate resources on the worst council estates. I assure my hon. Friend the Member for Colchester, North (Mr. Jenkin) that I will give careful attention to his request for further implementation of the estate action programme in his area. I am sure that his local authority, like every other, will want to take full advantage of the opportunities provided by the capital partnership scheme.
My hon. Friend the Member for Chingford (Mr. Duncan-Smith) has direct experience of tenants' aspirations in his constituency and nearby. He reinforced the welcome given by those tenants for Government initiatives such as the establishment of housing action trusts—initiatives that Labour voted against, campaigned against and would have denied tenants. Only our policies are good news for tenants; only our policies provide choice.
§ Mr. George Howarth
Earlier, I asked the Minister a question which he failed to answer. Let me ask it again. If the money that has been targeted at the Housing Corporation with a view to the acquisition of 20,000 properties fails to materialise, will the Minister ensure that the underspend is carried forward into the following two years—from which much of it has been taken?
§ Mr. Baldry
The hon. Gentleman's speech would have done Cassandra proud. I shall deal with it in a moment.
68 Our policies are good news for home owners. Following a further fall in interest rates, the cost of home loans is now at a 20-year low. Barratt Homes has announced a 30-year mortgage rate low of 6.5 per cent.; the majority of Abbey National mortgage customers will be paying their lowest-ever rate by Christmas; housing-market experts now expect loans to dip below 6 per cent., especially for first-time buyers. Little wonder that the chief executive of the Halifax building society stated, immediately after the autumn statement, that the 7 per cent. bank base rate wasvery good news for the housing market—it is what we have been calling forAs my hon. Friend the Member for Plymouth, Sutton (Mr. Streeter) rightly pointed out, building societies should pass on the benefit of interest-rate cuts to home owners in lower mortgage rates as soon as possible. I am glad to say that, when my right hon. Friend the Chancellor of the Exchequer and my right hon. and learned Friend the Secretary of State for the Environment met mortgage lenders this morning, all the mortgage lenders confirmed that they would play a full and constructive part in the initiative for the purchase of empty properties.
The housing market will also be helped by the Chancellor's £750 million package to enable housing associations to buy some 20,000 empty homes, including new homes and repossessed properties. That, in turn, will provide houses for families in great need. The £750 million will benefit the housing market by helping those in housing need, making it easier for some people to move and giving relief to mortgage lenders. The prospect of 20,000 families in housing need being housed sooner rather than later must be good news.
As the chairman of the Housing Corporation, Sir Christopher Benson, has observed, thishas given the Housing Corporation the opportunity they are seeking—to help the revival of the housing market and to help people in housing need.Let me tell the hon. Member for Knowsley, North (Mr. Howarth) that building societies are queueing up to start positive negotiations with housing associations, to enable them to meet our target of 20,000 as soon as possible.
§ Mr. Simon Hughes
The Minister misrepresented the truth about which of my colleagues were present earlier. Quite apart from that, however, does he accept that he has not delivered the sort of response that people outside expect? First, it may be a token of the Government's commitment that none of the amendment's signatories has been present for any of the debate—including the Secretary of State for the Environment, who is responsible for housing. Secondly, although we accept, along with others outside the House, that welcome measures were announced on Thursday, those measures are nothing in comparison with the scale of the current housing problem; and that is what the Minister has so far failed to recognise.
§ Mr. Baldry
The hon. Gentleman has expressed regret about Conservative attendance. He should look first to his own Benches: he will note that a significant number of the motion's sponsors are not present on what is, after all, a Liberal Democrat Supply day, having spent most of the weekend trying to persuade the House authorities to change the topic of the debate to anything other than housing.
My hon. Friend the Member for Brecon and Radnor (Mr. Evans) reminded us that the autumn statement provided not just more money for England, but more 69 money for Scotland and Wales. Wales is being provided with £38 million to purchase repossessed properties. Yes, we will rise to the challenge presented by rural housing: the capital partnership scheme will give us an opportunity to work together with more rural local authorities, presenting rural housing initiatives and responding to local housing needs.
Let me tell the hon. Member for Cornwall, North (Mr. Tyler) that rural areas have a champion: the Government. Our manifesto commitment to spend nearly £6 billion through the Housing Corporation to provide 153,000 homes over the next few years will be more than that. We now expect the Housing Corporation to provide some 165,000 further homes to rent. Local authorities will be able to use 100 per cent. of capital receipts, obtained between now and 1 December 1993. We anticipate that that will release at least £1 billion for spending on housing.
We have launched the capital partnership scheme to reinforce local authorities' incentives to spend their money on areas such as housing, which will be of lasting benefit to their communities. The scheme will be worth up to £600 million next year. An increase in Housing Corporation spending to well over £2 billion this year, together with further leverage of private finance, is expected to provide some £10.5 billion of public and private spending on new social housing.
We are investing in housing, and we are enabling others to do so. The money invested will allow us to tackle rundown council housing; it will provide new opportunities to help families on local authority waiting, lists, and will enable more to be done for the homeless; and it will help and encourage the construction industry.
We are a Government committed to tackling the problem of homelessness: a Government determined to continue to take action to ensure that no one in our society needs to sleep rough, and determined that every family should have a decent home in which to live. The initiatives that we are implementing, the policies that we have announced and the money that we have made available are good news for families in need of housing, good news for tenants of rundown social housing, good news for the house-building industry and good news for the housing market. I urge my right hon. and hon. Friends to support the amendment.
§ Question put, That the original words stand part of the Question:—
§ The House divided: Ayes 55, Noes 187.71
|Division No. 86]||[6.59 pm|
|Ainsworth, Robert (Cov'try NE)||Hogg, Norman (Cumbernauld)|
|Ashdown, Rt Hon Paddy||Hood, Jimmy|
|Ashton, Joe||Hughes, Kevin (Doncaster N)|
|Barnes, Harry||Hughes, Simon (Southwark)|
|Bayley, Hugh||Jackson, Helen (Shef'ld, H)|
|Campbell, Menzies (Fife NE)||Johnston, Sir Russell|
|Corbyn, Jeremy||Jones, Barry (Alyn and D'side)|
|Cryer, Bob||Jones, leuan Wyn (Ynys Môn)|
|Cummings, John||Jones, Nigel (Cheltenham)|
|Cunningham, Jim (Covy SE)||Kennedy, Charles (Ross.C&S)|
|Dafis, Cynog||Kilfoyle, Peter|
|Davis, Terry (B'ham, H'dge H'l)||Llwyd, Eltyn|
|Denham, John||Lynne, Ms Liz|
|Ewing, Mrs Margaret||Macdonald, Calum|
|Foster, Don (Bath)||McFall, John|
|Godman, Dr Norman A.||Madden, Max|
|Hall, Mike||Marshall, Jim (Leicester, S)|
|Harvey, Nick||Michie, Mrs Ray (Argyll Bute)|
|Hoey, Kate||Morris, Estelle (B'ham Yardley)|
|O'Brien, Michael (N W'kshire)||Wallace, James|
|Olner, William||Wardell Gareth (Gower)|
|Purchase, Ken||Wareing, Robert N|
|Raynsford, Nick||Wicks, Malcolm|
|Rooker, Jeff||Wigley, Dafydd|
|Short, Clare||Winnick, David|
|Spearing, Nigel||Tellers for the Ayes:|
|Steel, Rt Hon Sir David||Mr. Archy Kirkwood and Mr. Alex Carlile.|
|Taylor, Matthew (Truro)|
|Alexander, Richard||Forth, Eric|
|Amess, David||Fox, Sir Marcus (Shipley)|
|Ancram, Michael||Freeman, Roger|
|Arbuthnot, James||French, Douglas|
|Arnold, Jacques (Gravesham)||Gale, Roger|
|Arnold, Sir Thomas (Hazel Grv)||Gallie, Phil|
|Ashby, David||Gill, Christopher|
|Atkinson, David (Bour'mouth E)||Gillan, Cheryl|
|Atkinson, Peter (Hexham)||Goodson-Wickes, Dr Charles|
|Baker, Rt Hon K. (Mole Valley)||Gorman, Mrs Teresa|
|Baker, Nicholas (Dorset North)||Gorst, John|
|Baldry, Tony||Greenway, Harry (Ealing N)|
|Banks, Matthew (Southport)||Greenway, John (Ryedale)|
|Bates, Michael||Griffiths, Peter (Portsmouth, N)|
|Bendall, Vivian||Grylls, Sir Michael|
|Beresford, Sir Paul||Hague, William|
|Blackburn, Dr John G.||Hamilton, Rt Hon Archie (Epsom)|
|Bonsor, Sir Nicholas||Hannam, Sir John|
|Booth, Hartley||Hargreaves, Andrew|
|Boswell, Tim||Harris, David|
|Bottomley, Peter (Eltham)||Haselhurst, Alan|
|Bottomley, Rt Hon Virginia||Hawkins, Nick|
|Bowis, John||Hawksley, Warren|
|Brandreth, Gyles||Heald, Oliver|
|Brazier, Julian||Heathcoat-Amory, David|
|Bright, Graham||Hendry, Charles|
|Brooke, Rt Hon Peter||Hicks, Robert|
|Brown, M. (Brigg & Cl'thorpes)||Hill, James (Southampton Test)|
|Browning, Mrs. Angela||Hogg, Rt Hon Douglas (G'tham)|
|Bruce, Ian (S Dorset)||Horam, John|
|Burns, Simon||Howell, Ralph (North Norfolk)|
|Burt, Alistair||Hunt, Sir John (Ravensbourne)|
|Carlisle, Kenneth (Lincoln)||Hunter, Andrew|
|Carrington, Matthew||Jenkin, Bernard|
|Chaplin, Mrs Judith||Jessel, Toby|
|Chapman, Sydney||Jones, Robert B. (W Hertfdshr)|
|Clappison, James||Kellett-Bowman, Dame Elaine|
|Clark, Dr Michael (Rochford)||Kirkhope, Timothy|
|Clarke, Rt Hon Kenneth (Ruclif)||Knapman, Roger|
|Clifton-Brown, Geoffrey||Knight, Mrs Angela (Erewash)|
|Colvin, Michael||Knight, Greg (Derby N)|
|Congdon, David||Knight, Dame Jill (Bir'm E'st'n)|
|Conway, Derek||Kynoch, George (Kincardine)|
|Coombs, Anthony (Wyre For'st)||Lawrence, Sir Ivan|
|Coombs, Simon (Swindon)||Legg, Barry|
|Cope, Rt Hon Sir John||Lester, Jim (Broxtowe)|
|Cormack, Patrick||Lidington, David|
|Cran, James||Lightbown, David|
|Currie, Mrs Edwina (S D'by'ire)||Lilley, Rt Hon Peter|
|Davies, Quentin (Stamford)||Lord, Michael|
|Davis, David (Boothferry)||Luff, Peter|
|Day, Stephen||MacGregor, Rt Hon John|
|Deva, Nirj Joseph||McLoughlin, Patrick|
|Devlin, Tim||Madel, David|
|Douglas-Hamilton, Lord James||Maitland, Lady Olga|
|Dover, Den||Mans, Keith|
|Duncan, Alan||Marshall, Sir Michael (Arundel)|
|Duncan-Smith, Iain||Martin, David (Portsmouth S)|
|Dykes, Hugh||Merchant, Piers|
|Elletson, Harold||Milligan, Stephen|
|Evans, Jonathan (Brecon)||Mitchell, Andrew (Gedling)|
|Evans, Nigel (Ribble Valley)||Moate, Roger|
|Fabricant, Michael||Montgomery, Sir Fergus|
|Fairbairn, Sir Nicholas||Nelson, Anthony|
|Fenner, Dame Peggy||Neubert, Sir Michael|
|Fishburn, Dudley||Nicholson, David (Taunton)|
|Forsyth, Michael (Stirling)||Norris, Steve|
|Onslow, Rt Hon Cranley||Thomason, Roy|
|Patnick, Irvine||Thompson, Sir Donald (C'er V)|
|Pawsey, James||Thompson, Patrick (Norwich N)|
|Peacock, Mrs Elizabeth||Thornton, Sir Malcolm|
|Pickles, Eric||Townsend, Cyril D. (Bexl'yh'th)|
|Porter, David (Waveney)||Trend, Michael|
|Powell, William (Corby)||Trotter, Neville|
|Richards, Rod||Twinn, Dr Ian|
|Riddick, Graham||Vaughan, Sir Gerard|
|Rifkind, Rt Hon. Malcolm||Walden, George|
|Robertson, Raymond (Ab'd'n S)||Waller, Gary|
|Robinson, Mark (Somerton)||Ward, John|
|Rowe, Andrew (Mid Kent)||Wardle, Charles (Bexhill)|
|Ryder, Rt Hon Richard||Waterson, Nigel|
|Shaw, David (Dover)||Watts, John|
|Shepherd, Richard (Aldridge)||Wells, Bowen|
|Sims, Roger||Wheeler, Sir John|
|Skeet, Sir Trevor||Whittingdale, John|
|Smith, Tim (Beaconsfield)||Widdecombe, Ann|
|Speed, Sir Keith||Wilkinson, John|
|Spencer, Sir Derek||Willetts, David|
|Spink, Dr Robert||Wood, Timothy|
|Sproat, Iain||Yeo, Tim|
|Stephen, Michael||Young, Sir George (Acton)|
|Stewart, Allan||Tellers for the Noes:|
|Streeter, Gary||Mr. Robert G. Hughes and Mr. Andrew Mackay.|
§ Question accordingly negatived.
§ Question, That the proposed words be there added,put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
§ MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
That this House notes the Government's continuing commitment to housing policies designed to ensure that a decent home is within reach of every family, and in particular to promoting the growth of owner-occupation, widening choice for tenants, and improving value-for-money and targeting of public expenditure; and especially welcomes the measures announced by the Chancellor of the Exchequer in his Autumn Statement which—consistently with the need to maintain tight control of public spending in the interests of the economy and the taxpayer—will contribute to stabilizing the housing market, will increase the supply of social housing thereby helping homeless families, and will promote investment in renovation of run-down council estates.