Housing Associations (Hansard, 20 October 1993)

§ 8. Mr. Raynsford
To ask the Secretary of State for the Environment if he will make a statement about the level of housing association grant in 1994–95.

§ Sir George Young
I announced on 4 August that the published grant rates for the rented programme in 1994–95 would average 62 per cent. and that they would be a ceiling against which housing associations would be invited to bid.

§ Mr. Raynsford
As the Minister well knows, all informed opinion in the housing world—including the Housing Corporation itself and the Select Committee on the Environment—advised him not to make further cuts in housing association grant. That advice was given in the light of overwhelming evidence of the devastating impact of rent increases on tenants, which has forced them into benefit dependency and the poverty trap. When will the Minister recognise his responsibility to tenants, rather than acting—as he increasingly appears to be doing—as George the gopher, delivering cuts for the Treasury?

§ Sir George Young
That was an unusually unintelligent question from the hon. Gentleman. He knows perfectly well that the reductions in grant rate have nothing whatever to do with the totality of resources available. Those reductions enable more homes to be built for a given public pound. By progressively increasing the amount of private funds going into housing associations, we have enabled 30,000 more homes to be built than could have been built otherwise. If the hon. Gentleman wants to put the grant rate back to where it was, he must accept that fewer homes would then be available to meet the needs of those who require good-quality accommodation.

§ Mr. Tracey
Is not my right hon. Friend bothered by the impression that housing associations are too regularly 268 using their grant to outbid private sector developers? Will he amplify what he said in Blackpool about controlling the position and taking housing associations back to their roots in the way that he has just described, so that they can renovate out-of-date property and bring housing up to a proper standard, rather than building new housing?

§ Sir George Young
In the past few minutes, I have certainly noticed some antipathy towards housing associations—particularly those in London—among my hon. Friends. I readily accept my hon. Friend's invitation to describe in more detail the proposals that I outlined a few weeks ago, to ensure that the resources of the housing association movement are devoted to what housing associations originally set out to do: improving conditions, particularly in inner-city areas, doing more conversions and improving houses for sale, rather than building new houses. That could equally well be done by house builders building for sale.

§ Mr. Straw
Will the Minister come clean for once and confess whether he is any more comfortable with the disingenuous poppycock with which he answered my hon. Friend the Member for Greenwich (Mr. Raynsford) a moment ago than he was with the undignified role that he was put up to play at the Conservative party conference? There, as my hon. Friend the Member for Knowsley, North (Mr. Howarth) said, he had to resort to scapegoating the children of single parents to pass on the blame for the housing crisis over which he presides. Will he admit that a reduction in the grant rate to housing associations necessarily requires an increase in private funding for housing associations, which in turn will force up rents—which have already rocketed—and that that, in turn, will force up housing benefit contributions from the Treasury? Will he admit that the overall consequence of those policies is to deny choice to any potential tenant who is in work and earning above housing benefit levels and to create ghettos out of what were once decent housing association estates?

§ Sir George Young
We all understand that there are shadow Cabinet elections today, which means that Opposition Members have to put more spice into their questions. The hon. Gentleman knows that there is a trade-off between rent levels and the volume of output. I have decided that the priority is to increase the output of affordable homes for rent. That is why the grant rate has decreased and imputed rents have increased. Housing' benefit is there to take the strain for those who cannot pay housing association rents. One must remember, however, that the average new rent on a housing association property is £42 a week. In my view that is affordable, given that housing benefit is there to take the strain for those on low incomes.