HC Deb 07 July 1994 vol 246 cc475-512
Madam Speaker

I have selected the amendment in the name of the Prime Minister.

4.43 pm
Mr. Cynog Dafis (Ceredigion and Pembroke, North)

I beg to move, That this House records its concern at the continuing high level of unmet need for social housing in Wales; recognises that adequate provision of rented homes at affordable rents is a fundamental necessity; is opposed to any intention to reduce the proportion of the Tai Cymru budget dedicated to providing rented properties or to reduce the level of Housing Association Grant; calls for the restoration of a financial regime which would make the purchase and renovation of existing properties by both local councils and housing associations economically feasible; and demands the establishment of a Parliament for Wales with legislative and revenue-raising powers that would enable the people of Wales to implement housing policies appropriate to their specific needs and priorities. It had been my intention to speak in last Wednesday's debate on housing initiated by the Labour party, but on the morning of the debate I found that it was to be specifically about England, so I could not speak about Wales in that context. When Plaid Cymru was offered a supply day this Thursday, I decided to take the opportunity to have a debate on housing in Wales. It is a vital issue at present, as I shall try to show. I want to show that at least one party in Wales is concerned about this topic.

I shall show the extent of the continuing problem with regard to housing in Wales, and I shall show that Government policy is, by and large, in disarray. There is a danger of foisting on Wales approaches already pursued in England which would be entirely inappropriate and damaging here. I am not for one moment saying that they are appropriate in England either.

It is true that Tai Cymru hopes that housing associations will provide more than 4,000 units of social housing in 1994. That sounds substantial, but it means that we would return to the level of provision that we had in 1980 after a long period of under-provision. Nevertheless, it is important to congratulate the housing association movement of Wales on its ability to respond to the challenge of providing social housing and delivering that substantial number. I was associated with that movement for more than 10 years.

The figure of 4,000 needs to be set in the context of a number of issues that I shall raise. First, there has been an enormous increase in homelessness in Wales over the past decade. It is a serious problem. The number has increased by 84 per cent., with 10,270 households accepted as homeless in 1992—the highest number ever. The Shelter report, which is quoted in the Western Mail today, shows that the position is not getting better; it is getting worse.

Mr. Rod Richards (Clwyd, North-West)

The hon. Gentleman quoted the number of homeless households in Wales as being in the order of 10,000. The figure that I have for 1992 is 7,345. My source is Welsh housing statistics. Can the hon. Gentleman tell the House his source?

Mr. Dafis

My source is Shelter, which has access to similar sources to the hon. Gentleman. Even if his figure is right, it is a serious problem.

Over the past decade, there has been an increase of 121 per cent. in the number of homeless families housed in temporary accommodation. There is a particular problem with regard to young people. It is estimated that between 7,500 and 10,000 young people experience homelessness in some form every year. That is an astonishing figure.

Mr. Alex Carlile (Montgomery)

Does the hon. Gentleman agree that the problem among young people includes a very large number of young people who simply are not in a position to buy accommodation? Whatever the Secretary of State's proposals to make it possible for more people to buy accommodation—welcome though they may be—there will still be a large residue of homeless young people who need houses to rent which are not being built.

Mr. Dafis

That is a crucial point, and it will be the main thrust of my remarks. However welcome proposals to facilitate owner-occupation may be, that approach cannot satisfy the needs especially of young people.

Another unsatisfactory aspect is the special circumstances in Wales with regard to the condition of housing. In Wales, 36.8 per cent. of the housing stock was built before 1919, compared with 26.6 per cent. in the United Kingdom as a whole. That is a significantly higher level. In certain industrial areas—for example, the Cynon Valley, about which I made some inquiries over the past week—more than 50 per cent. of the housing stock predates 1919. Much of that housing stock is inhabited by pensioners. As a result of the industrial legacy of that part of Wales, a high proportion of them suffer from varying degrees of disability. That means that we have disabled, elderly people living in antiquated houses which are seriously in need of repair.

Mr. Jonathan Evans (Brecon and Radnor)

We know that the population of the Cynon Valley area has fallen recently and there has been additional housing provision. With that background, how would the hon. Gentleman explain the increase in homelessness to which he referred?

Mr. Dafis

The hon. Gentleman did not hear me. I did not refer to the Cynon Valley specifically in relation to homelessness. I was talking about the condition of the housing stock. A high proportion of the residents of that housing stock are elderly people who suffer a disability. They live in old property that badly needs renovation. Of those old properties, 9 per cent. apparently still lack or have to share a bath, shower or WC. They are still inadequately insulated. I am told that it is pretty well impossible for anyone who is not on benefit to obtain an insulation grant. The grant is entirely for people on housing benefit and some of those elderly people have a small pit pension which makes them ineligible for benefit.

To people living in old property badly in need of renovation, the effect of the imposition of 17.5 per cent. VAT on domestic fuel is particularly damaging. It is not too much to say that that represents a serious threat to the health and certainly to the welfare of many elderly people in such housing conditions. It is worth pointing out that there is a downside to owner-occupation among low-income families. The vast majority of the houses in question are owner-occupied: 42 per cent. of all owner-occupied houses in Wales are in significant need of repair.

The Government will say that they are tackling the problem through the renovation grant system. Let us examine that system, which is in serious disarray. A tremendous amount of good work has been done and large sums of money have been poured into the renovation of existing sub-standard property. It is worth saying at this juncture that sometimes demolition and rebuild might be a more cost-effective option and we need to explore that.

Substantial sums of money have been spent on renovation of existing old property, but the whole thing has been badly handled. Hon. Members will remember the open cheque book system that applied for the first year or two of the system. While the open cheque book applied, there was no problem. The money was available and the work could go ahead apace. However, there was an enormous expansion in demand without the funds to meet it. The open cheque book system came to an end. Councils found that they must either break the body of law on mandatory grants or break the body of law on control of local government expenditure. I can quote an example from the ombudsman's report. Councils were legally obliged to make mandatory grants for renovation, but simply did not have the funds to do so. That has led to a great deal of frustration and delay, of which we are all aware from our constituency mail.

In the south Wales valleys, the waiting period for a renovation grant is eight years in Cynon, 10 years in Merthyr and nine years in Rhondda. The Welsh Office has responded by attempting to make the funds more quickly available by reducing the maximum grant level to 24 per cent. However, that will mean that many of the least well-off in the poorest properties which need the greatest sums for renovation will be unable to undertake the improvements. That is not satisfactory targeting, of which the Government are very much in favour.

Renovation is a good idea for environmental reasons because we wish to avoid developing green-field sites. It is a good idea for social reasons because there is often social cohesion in areas of existing property and because it avoids the costs of providing new infrastructure. So renovation of existing property is a good idea, although on the surface it is the more expensive option.

It is regrettable—everyone in the housing association movement in Wales agrees with this—that nowadays housing associations are simply unable to purchase and renovate. The Secretary of State for the Environment recently said that he wished to see housing associations return to purchasing existing property and, in that way, restoring the quality of life in well-established areas.

Mr. Jonathan Evans

Does the hon. Gentleman recognise that the key issue is a fiscal one? VAT is chargeable on renovation and makes the cost that much higher. Presumably the judgment ultimately involves sweeping away VAT.

Mr. Dafis

Indeed. The hon. Gentleman might have read my next sentence. The decision to impose VAT on renovation and to differentiate between it and new build is a Government decision. It needs to be reconsidered. It is not in the gift of Tai Cymru or even of the Welsh Office. It is in the gift of the Government.

VAT is not the only factor. Tai Cymru's acceptable cost guidelines do not recognise that other extra costs besides VAT are associated with the option of renovation. There are extra maintenance costs. In my experience, major repairs which involve considerable cost frequently have to be done to renovate a property.

We need to look afresh at creating a financial regime which will enable housing associations to undertake renovation work and, because renovation may not always be the best option, to consider how to purchase and demolish and new build on existing sites. I know of several instances of housing that has been expensively refurbished and could have been more cost-effectively replaced by new building on the existing site. We need to consider ways in which that could be made feasible where a property has reached the end of its useful life. All properties reach that stage at some time. Housing associations and councils are better equipped to undertake such tasks than many owner-occupiers. They are certainly far better equipped to do so than private developers and landlords.

The question of rents is a vexed one. Since the introduction in 1989 of the new mixed funding regime, housing association grant—HAG, as it is called—as a percentage of the total cost of providing new units has been pushed down. It currently stands at 62 per cent. The result is that rents have been pushed inexorably upwards. The Government argue that housing subsidies should be targeted through housing benefit rather than to bricks and mortar. That is the Government's rationale. It sounds plausible enough on the surface, but it, too, has a serious downside, which is increasingly recognised throughout the housing movement and the world of housing expertise.

Housing associations are already worried that only those who are in receipt of housing benefit can afford to take their property. That is becoming the case. It means in turn that people just above the benefit level, but still low paid, hard-up and unable to enter the open market for purchasing a house find it difficult to obtain housing. It also means that the poverty trap leads to a disincentive to unemployed benefit recipients in such properties to take employment. The poverty trap is a well-known phenomenon and it applies particularly where rents are high. It means in turn that housing association estates tend to have a high percentage of benefit-dependent unemployed people. That brings social problems.

It also has to be said that housing associations often do not have the resources or experience to provide the special management skills such as counselling or, in some cases, enforcement. They do not have the capacity or resources to tackle such problems. That is what tends to happen where the cost per unit dominates policy. There is a strong feeling in the housing association movement that cost per unit has constantly driven development.

The rent situation is already harsh with HAG at its present level—42 per cent. of housing association tenants pay 25 per cent. or more of their income in rent. That is approaching serious unaffordability. It is a harsh regime for those who have to pay rent and it is socially problematic for the reasons that I mentioned.

If the Government proceed with their proposal to reduce HAG from its present 62 per cent. to 55 per cent. by 1997, rent levels will become intolerable. The situation could even become inflammable. People will be annoyed and worried to the point of desperation, if rent levels rise in that way. City analysts UBS have calculated that rents would rise by 34 per cent. in those circumstances, and that 83 per cent. of tenants would be paying unaffordable rents, which depends on how one defines unaffordable. The Government refused to present an affordability index at the time of the Housing Act 1988, even though the housing association movement pressed them to do so.

On the whole, the housing association movement believes that affordable rents are between 20 and 25 per cent.—certainly less than 25 per cent. The Government seem to be thinking of an affordability index of about 35 per cent. It is a very serious matter.

If HAG is reduced to 55 per cent, there will not merely be a problem with rents. Most housing associations in Wales would find it impossible to raise the remaining 45 per cent. from banks and building societies and we must attend to that problem.

The mixed funding system could unravel and disintegrate, which brings me to the subject of low-cost home ownership. Tai Cymru has drawn up a new proposal for assisted ownership, whereby aspiring owner-occupiers who cannot buy on the open market have to raise only 70 per cent. of the cost of a house and HAG provides the remaining 30 per cent. That is an interesting proposal and I have no objection, in principle, to providing some public subsidy, which is what it is, to enable some categories of people to become owner-occupiers. I have no philosophical problems with that, as it is a useful approach, especially when local people on relatively low pay have to compete in the same housing market as wealthier incomers. We were familiar with that phenomenon in my constituency in south-west Wales and throughout western Wales in the late 1980s, when local people were priced out of the market because of demographic phenomena—migration and so forth. That sort of subsidy for acquiring one's own property is useful in that context.

The latest Tai Cymru proposals are ingenious. It is not the first time that it has come up with such ingenious ideas and I am prepared to praise it for that. The system is preferable to shared ownership, which has had some limited success but also some grave failures. It is good to see Wales ploughing its own furrow in devising policies in these times.

I am very dubious, however, about the rationale for assisted ownership presented in Tai Cymru's discussion paper—the creation of social stability. The idea is that social stability can somehow be enhanced by integrating at least 25 per cent. of owner-occupiers into any estate with more than 20 homes. The rules state that, initially, assisted ownership will be provided for in those circumstances. Any estate of more than 20 houses will have to have 25 per cent. of people on an assisted ownership scheme.

Significantly, that shows that Tai Cymru recognises the social problems created by the high-rent policy forced on it by the Government. There is a clear recognition of those significant social problems in Tai Cymru's policy document. We must tackle that aspect—the high-rent, low-HAG policy—as well as the problem of low pay and unemployment, rather than attempting to solve the latter problem by an assisted ownership input in a social housing estate. That attempt at social engineering is unlikely to succeed, as we shall see in a few years' time. We will be able to check to find out whether it has worked in that way.

A further reduction in HAG would be very damaging—indeed, it would be disastrous. It would be equally inappropriate for the Secretary of State to insist on an ever-greater proportion of Tai Cymru's budget being set aside for low-cost home ownership. In Wales, we want no emulation of the situation in England, where the Housing Corporation is being forced—kicking and screaming, I understand—to increase the percentage of its budget for low-cost home ownership from 33 to 45 per cent. between 1995 and 1997. That is the way that England is going, but we must not go that way in Wales.

All the evidence confirms that what one housing director told me in a letter this week is true throughout Wales. I shall quote his opinion, as I am sure that it is typical. He said: There remains a significant problem of unmet social housing need which demands the provision of low-cost rented housing rather than housing for sale which may well be outside the scope of local applicants due to the uncertain local economy and low wage base". I am afraid that an uncertain local economy and a low wage base are not untypical of the Welsh situation. There is a consensus among people involved with housing policy in Wales—in the housing association movement, local authorities and charities, such as Shelter.

The Welsh Office knows of the 1990 survey conducted for the Council of Welsh Districts and the House Builders Federation, which found that less than half of new households formed in Wales could afford to buy the cheaper, older, second-hand homes available in their area. The position has probably improved since then because the market is less vibrant, but it is not significantly different. A large proportion of new households will not be in a position to enter into owner-occupation, even with the assisted ownership scheme.

Mr. Richards

The hon. Gentleman quoted a director of housing. May I quote another—the director of housing for Ynys Môn—who said: I consider that the existing housing stock on the island, together with the current initiatives being undertaken in partnership with private landlords and developers, will provide the decent homes which every Ynys Môn resident has a right to expect.

Mr. Dafis

I would be very surprised if my hon. Friend the Member for Ynys Môn (Mr. Jones) did not confirm that young people wishing to set up home for the first time will find it difficult to get housing in Ynys Môn. If he will not confirm that, it must be the exception, as that is the general picture throughout rural Wales.

If one matched the housing stock—the aggregate number of houses—with local demand, one might be able to say that there was sufficient balance, but that is not the end of the story as there are population movements. Other people move in, and young people find themselves marginalised and unable to acquire property to live in.

We know that the Government's not-so-hidden agenda—it is hardly hidden at all, in fact—is the advancement of the private sector, even in the provision of social housing. There is talk, which the Under-Secretary of State did not deny in a recent reply to me, of paying HAG-type grants to private developers and landlords, which is an entirely different approach. The private sector has expressed scepticism about the idea, knowing that it will be in competition with the housing association movement for the same financial resources. Surely it is far better for that sort of provision to be made through the public sector, housing associations and local authorities.

The Minister of State for Housing, Inner Cities and Construction at the Department of the Environment, extolled the virtues of HAMA, whereby housing associations become managing agents for private landlords. There is nothing particularly wrong with that in itself, but we must recognise how volatile, insecure and unstable such provision would be.

Private houses are lying unoccupied at the moment because the owners have been unable to sell them in today's depressed market. As soon as the market becomes more positive, the properties will be put up for sale, so trying to tackle the needs of social housing through that sort of procedure would be profoundly unsatisfactory.

Some Conservatives see housing associations as playing only a transitional role in the move towards an entirely privately owned housing stock. I am sure that many Conservative Members have that view. In Wales, the number of homes for rent in the private sector has fallen by 10,000 since 1981, so anyone who imagines that we will find salvation in that direction—either in terms of the number of homes or the quality of management—is deluding himself.

Mr. Walter Sweeney (Vale of Glamorgan)

Does the hon. Gentleman accept that the decline in private rented sector has been brought to a halt since the Housing Act 1988 and will be ultimately reversed?

Mr. Dafis

There is no evidence of that in Wales, and the statistics certainly do not confirm it. The hon. Gentleman might be looking at the figures between 1988 and 1992, but during the past 10 years there has been a decline.

It would be wrong to look in that direction for the provision of social housing, certainly in terms of the quality of management. The Department of the Environment recognises that in its suggestion that housing associations should be providing management services to the private sector. That is a recognition that private landlords cannot, and do not wish to, provide the quality of management that is currently provided by housing associations and local authorities.

Mr. Sweeney

Is not the reason for the reluctance of the private sector to increase the stock of private rented accommodation the fact that there is a fear that, at some stage in the future, the Opposition might reintroduce rent controls and other measures which would mean that investment in the private rented sector would prove to be misplaced? Is not all-party co-operation and an assurance to the private sector that it is to be welcomed and encouraged, rather than constantly denigrated, the solution to the problem?

Mr. Dafis

I was not denigrating the private sector, and I was not saying that the private sector might not make a contribution. I am saying that it would be foolish to look in that direction for a major contribution to solving the problem of social housing in Wales, and the statistics clearly indicate that.

There are people in the Conservative party who are prepared to delude themselves concerning the role of the private sector. In one of the debates on the Deregulation and Contracting Out Bill, the Parliamentary Under-Secretary of State for Corporate Affairs called for a wide-ranging new housing Bill in which the brave new world of the private sector would be advanced even further. It was a very interesting dialogue between the Minister and the hon. Member for Bolton, North-East (Mr. Thurnham), in which local authorities were denigrated as landlords and the scenario of the large-scale provision of social housing by the private sector was proposed.

What was on the cards there was local authorities having no housing for rent at all. Clearly, there are different emphases within the Conservative party and one of the purposes of the debate tonight is to find out where the Secretary of State for Wales stands in the Conservative party in the matter. Will he represent clearly identifiable Welsh views and interests, or is it his priority to promote a right-wing agenda within his own party? Recent reports indicate the latter. It is said that the right hon. Gentleman wishes to introduce the right to buy for housing association properties which have been provided with mixed funding. That would have far-reaching and problematical implications.

Hitherto, the existence of a degree of administrative devolution has afforded some protection for Wales against the worst excesses of right-wing ideology in housing and other policies. However, it is insufficient protection, and we must ask ourselves: what will protect us from a new housing Bill? What will enable us to devise an approach to housing that is truly appropriate for Wales and in keeping with our values and priorities? We say that only a Welsh parliament with legislative and revenue-raising powers can enable us to do that. We hope that all the Opposition parties will support us tonight in this matter.

5.14 pm
The Secretary of State for Wales (Mr. John Redwood)

I beg to move to leave out from 'House' to the end of the Question to add instead thereof 'congratulates the Government on its comprehensive housing policies to meet the needs and aspirations of the people of Wales; welcomes in particular the high and increasing level of home ownership in Wales; supports measures to promote wider home ownership; notes the high level of investment by Tai Cymru since 1989 which has exceeded £1 billion and produced nearly 22,000 homes; welcomes the attraction of substantial private funding to the housing association programme enabling greater diversity and choice; and rejects the call for the establishment of a Parliament for Wales which would create an unnecessary tier of Government and would waste resources.' We had a ramble through the by-ways of housing policy from the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis), ending with a short eulogy to the idea of an all-taxing, all-regulating and all-legislating Welsh assembly. It is interesting that the Opposition still have not clarified all the details about the kind of assembly that they would like, but at least the hon. Gentleman's party is clear and straightforward: tax more, legislate more, put in more red tape and tie people up in more bureaucratic knots—that is the kind of assembly they would like for Wales.

I look forward to seeing the verdict of the electorate on that in due course in a general election, and I know that the electorate will say a big no to an all-taxing, all-legislating assembly of that kind.

The long march of Everyman to freedom began with rights to justice symbolised by Magna Carta. It gathered momentum in the 19th and 20th century enfranchisement of all adults in the political life of the country. As the 20th century draws to a close, it is strengthened by a majority coming to own property and by many coming to benefit from college education. Everyman has gained his rights, his votes, his dignity and his enlightenment. Owning a home of your own is an almost universal aspiration and the experience of most.

In the 1920s and 1930s, the suburban semi spread all over Britain, and the suburbs of Cardiff and Swansea grew. Sneered at by the liberal intelligentsia, it was real social housing. Behind those front doors, people enjoyed more comfort than had been available to their parents. By those hearths, loves and lives were cultivated in a fruitful family way. The superior mind of socialist Bloomsbury found that hard to take—as some Opposition Members seem to—along with their whisky and soda. That housing was what people wanted then, and that is what many people in Wales want again today.

Design should not be solely a matter for the expert. We all have a view, and the profusion of styles is a consequence. Architecture moulds and reflects the spirit, and architectural style in Britain, I am pleased to say, is now much more varied than it was in the 1960s. There are many good examples in Wales.

The drab conformity of buildings in the countries of the old Warsaw pact reflected their totalitarian and uniform world view. Concrete architecture was also part of the levelling spirit of post-war Britain—mean-minded and unhelpful. British architecture today is part of the energy and variety of contemporary life and a vital part of our housing policy.

Mr. Dafydd Wigley (Caernarfon)

The Secretary of State will be aware that in many of the more historic towns of Wales—I am thinking of Caernarfon in particular, but there are others around Wales—it may be more costly to provide housing and other buildings to the acceptable architectural standard that the right hon. Gentleman describes. Will he confirm that the Welsh Office will always be prepared to look sympathetically at the differential in cost between the market value attainable by a development in such towns and the higher cost necessary to meet those historic architectural requirements?

Mr. Redwood

In sensitive areas and conservation areas, it is particularly important that architecture should be sensitive to what is in the surroundings. I visited Caernarfon recently—as the right hon. Gentleman knows—to see the good work that is going on there on the projects that we and the local authority are backing to restore some of the beauty and excellence of the buildings in the heart of the town.

On the more general point, design matters. If it requires money—and it is legal to grant permission—I should like to see that work done. Sometimes it does not require more money—just a different and better design.

People should also be careful to look at the total cost—not just the one-off capital cost of a building, but the maintenance costs and the cost of using a building over many years. How depressing it is to visit schools where extensions were put up in the 1960s, for example, with flat roofs. They were cheap at the time, but my goodness, they have cost us dear ever since in trying to remedy the problems that they created. I want no part of that today in our housing policies; I want good design and practical, sturdy buildings, which also add something to the architectural life of our towns and villages.

People are now walking tall in modern Wales and modern Britain. People know that owning their home gives them more options. When we buy a house, we appreciate that the money we spend can make us richer. If people rent a house all their life, the money they spend can make the landlord richer. At a time like the present, when interest rates are low, when land is cheap, when inflation is low and growth is back in the economy, it is ideal to make a further leap forward in that great policy.

The idea that social housing should be housing for rent is one of the oddest in British social policy. Subsidised housing for rent not only reduces the scope for people to move house and to develop their lives as they see fit: low-cost home ownership is better value for the tenant and the taxpayer and it does not have the drawbacks of some rented accommodation.

Those who are truly concerned, as I am, to provide real social housing should think twice about those pensioners who pay high bills when they have their lowest income and are most frail. Many of those who have bought a house have much better prospects in their old age. They may be able to live on in their house for the rest of their life rent free. Alternatively, they may sell the house and use the money to provide more suitable sheltered accommodation in old age, in a setting of their choice, with the care of their choice.

If a couple had set out, just before the war, and purchased a house in Wales, after 20 or 25 years of paying a mortgage they would own their house. They would have no more mortgage to pay, let alone rent, and they would have an extremely valuable asset. If that same couple had set out and rented property—I am advised that rents were about 30p a week—and if they were still fortunate to be alive and renting a subsidised property, they would be paying 100 times that rental each week and they would have nothing to show for all the money that they had spent over all those years. For that reason and many others, the best social housing of all is low-cost home ownership.

The success of our housing policy in the 1980s was to attract many more people into ownership. The biggest advances by far came through rising incomes and more employment opportunities, which enabled many people to buy new homes of their own for the first time in the many attractive estates and villages that grew up around Wales. A very successful council house sales programme converted many tenants into owners. In the 1990s, we need to make sure that housing associations, too, make their contribution.

Mr. Jon Owen Jones (Cardiff, Central)

Would the Secretary of State care to comment on what has been perceived as a particularly difficult British economic problem? He has rightly pointed out that, in the past, investing in one's home was considered the best use of a person's money. In other European countries, however, investing in some company that makes something is considered a better use of one's money. The problem is that, over the years, it has been a better option in Britain to invest in bricks and mortar than in industry. Does the right hon. Gentleman agree that that tendency might be a part of our problems today?

Mr. Redwood

People can do both, should do both and, now, largely do do both. Their investment in industry is mainly channelled through their pension savings, usually made on their behalf by their employers' schemes. There is room for both types of investment. Given the current levels of investment in industry, the stock market and in housing, I do not believe that we need to engineer an artificial shift of the type that the hon. Gentleman has described. There is room for both types of investment, and investment in housing has a lot to recommend it.

Too few housing association tenants have the opportunity to buy their homes. My policy for the housing associations in Wales is to encourage a higher proportion of low-cost home ownership schemes and to encourage right to buy for new tenancies.

Local authorities can also play an essential role in facilitating home ownership and, at the same time, freeing up their stock for those waiting for council homes. Today, I am announcing a package of £4 million for local authorities from the homelessness reserve. Of that sum, £1 million will support enterprising schemes, including proposals from Newport borough council working with Lovell Partnerships to provide 36 homes and from Alyn and Deeside and Ogwr for 23 do-it-yourself shared ownerships. Some £2.4 million of the £4 million package is available to local authorities for transferable discount schemes, which will enable them to give significant grants to people who move out of council houses to purchase their homes. This means a new tenant for the local authority home and a new home owner at the same time. For those who wish to do so, I am allocating £600,000 to providing accommodation to elderly people moving out of larger council housing into accommodation more suited to their current needs.

Local authorities are in a position to cheapen the initial capital cost of the home by making land available on favourable terms or free. In Wales, I want to see more of those on lower incomes having more immediate access to a home of their own. I also intend to expand shared ownership schemes and other schemes where a subsidised capital value can offer someone a cheap way into a home of their own. The taxpayer is well protected by having a claim on the property should the person decide to sell and realise the gain in the short term.

Mr. Gareth Wardell (Gower)

As part of the policy to encourage home ownership, will the right hon. Gentleman consider the decision in the case of Murphy v Brentwood district council, which went to the House of Lords on appeal in 1991? As a result of that decision, there is no legal obligation on a local authority should a person who owns his own home find that it is defective. That person cannot sue the local authority for any fault in the inspection of the property during its construction. That represents a major retrograde step for home owners and has caused great concern to people who are purchasing a property.

Mr. Redwood

There are other ways of protecting the interests of those whom the hon. Gentleman is seeking to protect. I assume that they would take proper advice when they were thinking of purchasing their home. There are ways around the problem that the hon. Gentleman is trying to place in the way of that important policy.

Mr. Gareth Wardell

Let me spell out the implications of the decision. If a person buys a property from another person and the second owner finds that the builder has gone bankrupt, the insurance company will not cover that property if internal defects appear because of the absence of footings. As a consequence of the case, there is no recourse to sue the local authority. Will the right hon. Gentleman consider that decision and bring in legislation to overrule it? That decision has reversed all previous law. Now, it does not matter what the building regulator says to the local authority, because the building inspector can do absolutely nothing. People will have no come-back on the local authority if a defect is found.

We want to avoid what happened with BISF housing and Cornish Units, which had so many problems that the Government were forced to introduce legislation on defective housing to remedy them.

Mr. Redwood

The hon. Gentleman has partly offered his own answer, because, when problems emerged, the Government took action to remedy them. I will, of course, read the case to which he referred, but the particular chain of events that he described is a rather extraordinary one and not likely to become common, as he fears.

Now is an extremely good time to make a major advance in low-cost ownership. Land prices fell during the recession and building costs have been controlled by fiercely competitive markets. I have asked the agencies in Wales to bring forward more land for sale. I cannot accept a position where they are hoarding more than 4,000 acres of land, some of it usable for housing.

As a response to the invitation, the Land Authority for Wales will be making available 500 acres per year for all purposes over the next three years. Cardiff Bay development corporation has 150 acres under offer or available; the Welsh Development Agency is bringing forward 330 acres over the next three years and the Development Board for Rural Wales is currently reviewing its land stocks with a view to releasing at least 27 acres. Over the next three years, a total of some 2,000 acres of land will be offered for sale from the public sector. I trust that some of that land will be used for housing.

I also wish to ensure that the training and enterprise councils provide the tradesmen whom the builders will need over the next few years as house building increases again from the low levels of the early 1990s.

I am asking all councils to ensure that sufficient land is granted planning permission for development. I do not want massive increases in development in the most beautiful and prosperous areas of Wales.

Mr. Alex Carlile

I welcome what the Secretary of State has said on increasing home ownership and look forward to more people in Wales owning their own homes. However, does he recognise that one group not being catered for is that of young people who are not yet in a position to buy their own homes and who would not obtain the finance? Can we look forward to an announcement of increased facilities to enable them to find properties to rent?

Mr. Redwood

I shall cover that point later in my remarks.

I wish to see realistic attitudes towards redevelopment in areas that most need jobs, especially building jobs, and where land can be recycled and reclaimed. I have asked the WDA to make a major increase in its land reclamation programme and I have given it extra cash to do that. The WDA's single most important task at home over the next few years is to reclaim sufficient land so that the building industry is well supplied, while the best areas of Wales, in environmental terms, are protected from developers' bulldozers.

I shall use my influence over the new development plans of the unitary local authorities to ensure that, in total, Wales has enough development land available for her needs in the foreseeable future. I do not expect a balance in each individual area, as I wish to ensure that the most beautiful and prosperous parts of Wales are protected, while giving maximum encouragement to those areas in need of regeneration and of many more jobs.

Housing policy must recognise the pressures of social change but also the fact that it will influence social change itself. If we make subsidised housing too readily available to young people, it will induce them to leave home earlier than they would otherwise. Much housing policy in recent years has rightly been designed to take care of young people who are no longer prepared to live at home and other vulnerable groups.

Mr. Jon Owen Jones

On the Secretary of State's point about developing land while protecting the most beautiful and prosperous land, will he concede that, in some cases, land in a prosperous area with low unemployment is next door to a highly populated area with high unemployment, where there is no land to develop? In those circumstances, should not he try to encourage development on that land?

Mr. Redwood

I do not think that there are as many such problems in south Wales as the hon. Gentleman is suggesting. Occasionally, I shall have to take tough decisions under the planning rules and laws. But I have made it clear in previous debates that, wherever possible, I hope that local people and their local representatives can guide that work. Today's statement offers a way to square the circle between those areas that are less keen on new jobs and development, and those that are keen. The balance in Wales is not too bad, so we come to a sensible answer overall.

On social change and young people, some of that source of increased demand for housing needs to be met, while some of it needs careful handling through a range of other policies. I do not believe that a 16 to 18-year-old should have a right to a subsidised house just because he or she no longer wants to live at home. Only in extreme circumstances should the state intervene to break up a family—for example where violence or grave damage is being done. Most 16 and 17-year-olds are keen to leave home; it is a part of the natural process of growing up. But it does not mean that we should subsidise them to do so.

The bulk of housing support is now routed through housing benefit directly tied to the incomes and outgoings of the individuals concerned. Blanket or general subsidies to bricks and mortar can be a wasteful way to proceed and there is always a danger that the benefits leak to those who do not need such help. There is no need to subsidise a three or four-earner family in a council house bringing in several hundred pounds a week from reasonable jobs; there is every need to provide housing benefits to the low-wage or no-wage family next door to meet the rent bill, which is why we have been shifting the balance of our support.

Our care in the community policy has also added to the demand for suitable housing for the elderly, handicapped and mentally disabled. We need to ensure that sufficient sheltered and very sheltered accommodation is constructed and provided. We should not carry the policy so far that those who need the full support of residential care homes are discouraged from receiving it and are put into the community, where they may be less happy or secure. We need a balance, and I hope that all those involved in making those difficult judgments will understand the need to reach a sensible conclusion in each case, where either is an option.

Mr. Alex Carlile

I apologise for intervening again, but I very much welcome what the Secretary of State has just said. In my constituency, two hospitals house some seriously physically and mentally handicapped people. Will he add to his remarks the belief that some of those people will need not just care but continuing nursing care of the quality they have now?

Mr. Redwood

They need care that is appropriate for their circumstances. I do not want to get involved in specific cases, for obvious reasons. A judgment must always be made on whether people need medical care, which is under one set of arrangements, or more general care, which is under another. I want them to receive the care that they need. May I make it clear to all those involved in those judgments that, for my part, there is no wish to ensure that they are all placed in the community? Obviously, I am keen on the policy where it makes sense for them to be put into the community and where they and their relatives, as well as the professionals who make those judgments, think that that is the best solution.

In the "Agenda for Action" in November 1991, we set a target of adding 10,000 subsidised homes over three years. I am delighted that Housing for Wales has provided more than 9,000 homes since then and is on target to provide a further 4,000 in the current financial year. As well as rented accommodation—it is primarily rented accommodation—those will include low-cost housing for sale. To that end, I have asked Housing for Wales to deliver at least 420 homes for low-cost ownership during 1994–95, and I intend to take further action to increase those figures in the future.

Some elderly people find their larger family home too big for their needs. They might like a smaller property, but, if they rent rather than own, it can be difficult to find one. I am supporting the construction of more bungalows for the elderly, which will give them some choice and, where they choose to move, it will free a family home.

Good progress is being made on Wales's first urban village at Victoria, Ebbw Vale. Offices and workshops are being developed alongside homes. All that is in a setting that makes use of garden festival features including lakes, wetlands and woodland. It is a vivid illustration of what can be done to regenerate land ravaged by dereliction. Plans are also progressing well for the urban village in Penarth Haven in Cardiff bay.

I like the idea of urban villages that add something to the rich Welsh architectural tradition. Housing with a heart and communities that are more than the sum total of the houses built are the signs that an urban village has supplanted just another housing estate. Builders and developers take more care with layouts, design and landscaping when they have to persuade individuals to buy, rather than when they are working for the public client. One of the best experiences of my ministerial life before coming to Wales was to award the money to Manchester to demolish part of the Hulme estate—a concrete monstrosity which had aged badly during its short life. It was a standing reproach even to modern brutalism in architecture, and a mocking commentary on the beauty of Bath, which was said to "inspire" it.

Wales was mercifully spared the worst of such construction, but the warning remains: it is better to involve many rather than fewer in designing and buying houses, as it is more likely that they will reflect the spirit of those who will use them.

Mr. Rhodri Morgan (Cardiff, West)

This sounds like the Prince of Wales.

Mr. Redwood

I give full credit to the Prince of Wales, as the hon. Member for Cardiff, West (Mr. Morgan), from a sedentary position, has invited me to do, for his many good and brave words on architecture, which I think have made a strong impact on our architectural debate.

The slab style of architecture reflected only too well a view of society, which said, "We shall give you"—in their words—"a 'subsidised dwelling unit', if you accept our control of your area. Don't ask for tenants' rights, tenants' information or better services—you should be grateful to us for defining the limits of your horizons. When you give your address, you may not get the job or credit as easily as you would if you came from somewhere else, so your dependence is so much more reliable."

I want an end to such areas. It requires different housing; different patterns of ownership; higher expectations. Labour may say that it wants pathways out of poverty, yet it often blocks the roads that offer the most promise to most people.

The other day, I was interested to read that Cynon Valley has decided that its housing problem has improved dramatically in the past three years. In 1991–92, Housing for Wales was spending about £3.3 million in the borough, and the construction of about 115 houses was started. Cynon Valley borough council has now revised its figures downwards, and decided that it needs to build only a maximum of 45 new houses this year. I understand that it has found that there is much more scope for the better use of its existing stock, and that demand is not getting out of control.

That is an interesting idea from Cynon Valley. I look forward to that informing the speeches of some Opposition Members, instead of their usual diatribe that the demand is spiralling out of control, and that the only answer to the problem is to build ever more houses of a specific type.

We should make clear the distinction between rooflessness and homelessness. Fortunately, rooflessness afflicts very few people in Wales. In Cardiff alone, where it would be more serious, the Government are paying £800,000 to provide accommodation and support for young, single, vulnerable people. I want no one to be roofless in Wales. I intend to ensure that accommodation is available for those people who need and want it.

Homelessness is a condition which local authorities have a legal obligation to tackle. Many people who present themselves as homeless are by no means roofless, but they live in accommodation that is not ideal and they would like a change. One of the main aims of our continuing large programme of house building of all types is to meet their aspirations.

The proposals on which the Government consulted earlier this year are designed to bring about fairer arrangements for those people seeking a better home, and those people who are waiting patiently for social housing.

The hon. Member for Ceredigion and Pembroke, North made several comments about the condition of the housing stock and about ways in which housing policy could develop. Yes, I, like him, wish more houses to be improved, and I believe that our policy of making available a substantial number of grants to people on low incomes who live in homes of their own that need repairing, is tackling the job manfully. Between January and March this year, 4,194 grant schemes were completed, totalling about £43.7 million. That is another 4,000-plus homes that are in a much better condition. We intend to press on, with substantial sums of money, so that the job can be well done.

I think that the hon. Member for Ceredigion and Pembroke, North was mistaking the issue when he commented that we were cutting the HAG grant rate too much, and expecting too much from the private sector contribution. I should have thought that he might welcome that. I hope that the Labour party will welcome it, now that its members are converts to the idea of private capital working alongside public money so that we can have more building work and better conditions for everyone.

It is important that we attract an increasing amount of private money into that type of activity, so that we can build more houses for the amount of public money that we have on offer, because we think that tax bills matter as well as the achievement on the ground, and that is the way of managing both.

The hon. Member for Ceredigion and Pembroke, North expressed a fear about rents, but he did not take into account building and financing costs, which are vital to the equation before one can predict anything from the HAG rates as to how rents might be affected. I was glad that he praised some methods of shared ownership and assisted ownership, but then he seemed to turn against ownership altogether, which I thought was most disappointing, given the aspirations of many of his constituents.

Wales approaches the end of the 20th century in good heart. Her people are better educated, better housed and more prosperous than at any time in her history. Wales is no longer a nation of tenants in tied cottages. Wales is now a nation of home owners—of those who have seized the opportunity of the Conservative moment, and have a stake in Wales's present and future prosperity. Home ownership—one of the foundation stones of a stable democracy—is now firmly rooted in Welsh soil.

Conservative policies will continue to ensure that advance. If only Opposition Members would join in, they would discover that it is popular as well as right.

5.44 pm
Mr. Paul Murphy (Torfaen)

That was a fascinating contribution from the Secretary of State. He and I hold degrees in history from the same university, but I suspect that our interpretation of the historic facts of the past few hundred years might differ, at least as regards Wales.

I confess that it is the first time that I have heard the Magna Carta quoted in the Chamber during a debate on housing in Wales. The 13th century barons who devised that great charter in those far off days probably had no idea how most of their tenants lived. I guess that they lived in hovels. I wonder whether, if it were left to the Secretary of State, he might think that the same will happen in Wales, because what he said today bears no relationship whatsoever, either to the recent history of housing in Wales, or to the condition of the houses of the Welsh people.

The Secretary of State speaks at great length about the significance and importance of owner-occupation, and he is right. He said that the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) did not support owner-occupation, which is the opposite of what the hon. Gentleman said. The hon. Member for Ceredigion and Pembroke, North said that owner-occupation is not the only answer, which is what the Labour party says.

Some people believe that the Labour party supports only rented housing, and that the Conservative party supports only owner-occupation. That is only half right, in the sense that the Labour party certainly believes in a proper choice for people in Wales, as in the rest of the country. Our opinion is that there should be a variety of tenure throughout Wales—that people should have the right to own their houses, but they should also have the right to rent their houses from local authorities, private landlords or housing associations.

The Secretary of State touched on that side of the equation only very lightly, because he told the House and, I suspect, the nation—I mean the British nation rather than the Welsh—that his views on housing are effectively laissez-faire, fairly right-wing, ideological Conservative views about owner-occupation. He failed to mention—perhaps he does not realise, but I am sure that he does—that the percentage of people in Wales who own their houses is extremely large. In our south Wales valleys, a massive proportion of people own their houses. It is no new phenomenon to them.

It seems to me that the Secretary of State failed to understand that, although there were problems in the past with regard to the building of council house estates, because enormous estates were built which were too big and caused all types of social problems, the housing problems in Wales would have been phenomenal if those local authorities had not built those houses in past decades.

Mr. Sweeney

Although it is true that, historically, the percentage of owner-occupancy in Wales has tended to be high, is not it fair to say that it has increased from 59 to 72 per cent. since the Conservatives took over power from Labour?

Mr. Murphy

Inevitably the right-to-buy legislation has meant that thousands of council and development corporation houses have been bought by tenants. Of course the percentage of owner-occupation has increased. There is nothing new about that development or that phenomenon. In those intervening years, however, the number of people who are waiting for homes on council house waiting lists has also increased. There are now 75,000 people in Wales whose names are on local authority waiting lists, and there are nearly 19,000 names on the waiting lists of housing associations. So although, yes, owner-occupation has increased, at the same time the number of people who desperately need accommodation has also increased.

Why on earth cannot the Government understand the need for all types of accommodation, as all European Governments do? Perhaps that is the reason why the Secretary of State does not like it very much. He knows that, in Europe, there is a genuine and good mix of rented accommodation, private and public, and owner-occupation. That richness of diversity of tenure provides the answer to the housing problems in Wales, as it does to housing problems in Britain as a whole. To that extent, the Secretary of State did not answer the questions that the hon. Member for Ceredigion and Pembroke, North rightly and properly asked in his good speech.

Mr. Jonathan Evans

The hon. Gentleman misses the point. The figure for housing stock in Wales today is more than 100,000 higher than it was 14 years ago. The homelessness problem has been caused by marital breakdown and because young people now elect to leave home earlier, as my right hon. Friend the Secretary of State said. We have the highest divorce rate in the whole of Europe, which is probably why many of the people are on the waiting lists.

Mr. Murphy

It may be that the divorce rate is high, but this is not a debate on moral values or divorce. It is a debate on the housing needs in Wales. I do not know whether constituents come to the hon. Gentleman's advice surgery every week to talk about accommodation problems, but I am convinced that all hon. Members—whether they represent a Welsh, English or Scottish constituency—will have had the same experience. The problem of housing is high on the list of those who visit our advice surgeries, not simply because they are divorced or because they are single parents, although those are important factors. What do we do with divorced people? Should we not house them? What about the children involved? Are they to be denied housing because their parents are divorced?

We are mistaken if we believe that the housing problems have disappeared simply because the right-to-buy policy has given people the opportunity to buy their own homes from local authorities. The Government are spending much less on housing in Wales than they have for a long time. Between 1989 and 1994, spending on housing fell from £197 million to £79 million. Council house rents have gone up. While the Government have been in power they have been obsessed with local authorities and their role in the provision of housing, whether in Wales or the rest of Britain. They will push up rents as high as they can to ensure that houses are sold to tenants. As a result, council house provision in Wales comes to a halt. Although almost 250,000 houses are still owned by local authorities in Wales, they still need maintaining. The Government have fallen down on providing sufficient money to local authorities to do the job.

The Government state that housing associations are the social providers of housing. I agree with the hon. Member for Ceredigion and Pembroke, North when he says that we are now in deep trouble because of the changes that the Government are making to the subsidies paid to Tai Cymru and housing associations. The reduction of the grant from 62 to 55 per cent. next year means that rents will rise on average by about 34 per cent.—they have already risen by 61 per cent. since 1989.

It will become evident that the only people able to afford the rents will be those whose rents are paid by some form of housing benefit. The last thing that we want to do is to turn the estates built by housing associations into ghettos.

Mr. Morgan

Welfare ghettos.

Mr. Murphy

As my hon. Friend says, they will be nothing more than welfare ghettos.

If ever there were a prescription for social divisiveness in Wales, that is it. What we need is what Governments of both colours developed in my town of Cwmbran—the only new town in Wales for 30 years. They developed a mix of owner-occupation and houses with reasonable rents. That mix will disappear and all that will be left in Wales will be rented provision that provides nothing more than welfare ghettos, which will be bad news for Wales.

Mr. Jon Owen Jones

I thank my hon. Friend for giving way because I am interested in exploring that issue. Does he also recognise that it is not only the new build housing association areas that are becoming welfare ghettos, but older, inner city areas? House prices are relatively cheap in such districts, so housing associations have bought up about one fifth or perhaps 30 per cent. of the housing stock—I know that that is true in certain parts of Cardiff. Those districts are becoming ghettos as a result of the policies that my hon. Friend is explaining.

Mr. Murphy

My hon. Friend is right—I know that he has personal experience of those districts as he has represented them, both as a Member of Parliament and as a councillor. It is important for us to realise that the problems that we have identified exist not only in the valleys and rural areas, but in Welsh cities. I fear that the divisive policies that the Secretary of State has announced this afternoon could make the position even worse.

Society in Wales is becoming polarised, which is the last thing that we want. We need much more harmonisation, which can occur only if there is a proper mix. But because the Government are obsessed with not allowing local authorities to play a housing role, either as a provider or an enabler, we find ourselves in a serious situation. The Nationwide building society has threatened to pull out of the housing association sector as a direct result of the Government reducing the grant from 62 to 55 per cent.

A subject that must exercise the mind of anyone involved in housing in Wales or any public representative in Wales is the Government's consultation exercise on homelessness. I welcome the Secretary of State's announcements on any action that will reduce homelessness. If the right hon. Gentleman listened to the radio this morning, he will know that 500 church housing groups have condemned the Government's latest proposals on homelessness. The Government are setting the desperate against the very desperate. We must not create a situation where those on housing waiting lists are set against those who are homeless—they are often the same people.

Statistics show that, in 1992, only 11 per cent. of households that were accepted as homeless were rehoused in ordinary council houses. That shows that the policy does not work. I suspect that the Government's hidden agenda—perhaps not in Wales, but elsewhere in Britain—is to see the homeless figures fall. They wanted unemployment figures to fall, so they changed the system and massaged the figures. They say that homelessness does not exist, so the figures fall, but the problem remains. I urge the Secretary of State to think hard. All sorts of people in Wales, including those in women's refuges, could lose out as a direct consequence of the Government's proposals on homelessness.

The Secretary of State talks about the housing stock in Wales. As the hon. Member for Ceredigion and Pembroke, North rightly said, 37 per cent. of houses were built before 1919. Some 42 per cent. of all Welsh owner-occupied houses in Wales are in need of repair. Although the finance has been increased in the past few years, it is not new money. Instead of being used for council stock, the money is being spent on private stock. Whoever heard of a system where a mandatory grant for housing renovations cannot be used because the local authority has been cash limited by the Welsh Office? As a result, I suspect that villages and towns, particularly in the valleys, will be severely affected by the dotty combination of Government policies that do not seem to mix.

The maximum renovation grant has been reduced from £50,000 to £24,000. Obviously, the houses most in need of repair are those least likely to be repaired, and the quality of housing will be affected. Our rural districts are also hit.

Mr. Redwood

How much additional new money is the hon. Member and his party prepared to pledge to housing in Wales?

Mr. Murphy

Two years before a general election I am not in a position to give the figures and I would be foolish to do so. If the Secretary of State would tell me by how much the Government were to increase or reduce taxation next year, I would be prepared to answer his question. He knows that when the Labour Government come to power after the next general election, we will look at the books and work out our priorities. Our priorities will be different from those of the present Government. We intend to use the capital receipts held by local authorities to build houses and to improve the council stock. We would not do something as daft as to award a mandatory grant, but not allow a local authority to use the money.

Everybody in Wales agrees that the problem with owner-occupation is not so much that it is bad as that people in Wales often cannot afford to become owner-occupiers. I welcome anything that the Government do to provide low-cost housing in Wales for owner-occupation. That is vital, but we must not forget that in many of the cities and valleys of Wales—although not so much in the rural areas—there are secondhand homes which are quite old but which can be bought for £30,000 or even less. In 1990, the Council of Welsh Districts reported that 54 per cent. of new households in Wales could not afford home ownership. The same is roughly true today. Private house building is down; only 6,000 were built last year, as opposed to 9,000 five years ago.

What I am saying holds good for every part of Wales. Dyfed has the lowest average male manual earnings of any British county. Powys has the lowest average male earnings in the country. In Mid-Glamorgan, 22 per cent. of men and 40 per cent. of women are economically inactive. In Gwynedd, male disposable earnings are 14 per cent. below the British average. Wales is at the bottom of the earnings list in Great Britain. If people do not earn enough, they cannot afford mortgages. That is why only 6,000 new houses a year are being built now.

Mr. Jonathan Evans

Is the hon. Gentleman aware that, according to figures published by Lloyd's earlier this year, the average amount spent on housing in Wales is 16 per cent. of a person's income, whereas in England it is 19 per cent?

Mr. Murphy

I do not give much credence to figures from Lloyd's, but, whether they are right or wrong, they do not invalidate the figures that I have just given. We are the lowest earners, and that in turn means that people in Wales, especially young families setting off up the housing ladder, cannot afford to buy houses.

Mr. Sweeney

Surely that is only one half of the equation? If housing costs are lower in Wales, then lower wages in Wales should not make the slightest difference. In fact, if the gap between English and Welsh housing costs is wider than the gap between earnings, Welsh people will be better able to buy their own homes.

Mr. Murphy

But even people in the parts of Wales with traditionally low-cost housing cannot afford to buy. The survey done by the CWD four years ago showed that the average price of a house was about £31,000, and it has not changed much since. Even so, houses are not being bought. No one should delude himself that people in Wales are in a position to buy houses straight away. They are not.

We know that young couples do not enjoy the same opportunities today as they did 10 or 15 years ago—whether to buy a house, or to rent a house from an association, a local authority or the private sector. That is why 5,000 people in my constituency linger on the waiting list, and the situation is not improving.

The answer is not to say that we need more private-sector owner-occupied houses. That is certainly part of the answer, but it is only part of it. Because the Government do not want to allow councils to be involved in house building, and because they are cutting back the work of the housing associations, matters will only get worse. I think that we need another report on Tai Cymru. We have heard about all the reports on other quangos, and I should like to know what Tai Cymru is up to half the time. If the Government keep on cutting grants, it will not have much left to do. I hope, therefore, that the Secretary of State will have a look at Tai Cymru's work in the months to come.

We must allow councils to start using their capital receipts to buy houses. We also need a change in planning laws in our rural areas so that people can stay in the villages and towns in which they were brought up. The Government must abandon their homelessness review and provide proper accommodation for those in desperate need of it. More members of local authorities must be represented on the board of Tai Cymru—none of them are at present. The Government must abandon their obsession with local authorities.

Only this week, the Queen gave her Royal Assent to the Local Government (Wales) Bill, and within six or seven months, the new shadow authorities will come into being. Those 22 new authorities in Wales will be housing authorities and the opportunity exists to allow them to provide proper housing for the people of Wales. The Government should give them the resources and the opportunity to do just that.

6.4 pm

Mr. Jonathan Evans (Brecon and Radnor)

The hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) said that he was concerned about the fact that there was insufficient housing provision in Wales. As I listened to the list of prescriptions that he gave the House, however, it seemed to me that everything that he proposed would lead to less housing being available.

The hon. Gentleman complained first about the rehabilitation of property. I acknowledge his point about the financial difficulties that have resulted from fiscal changes to do with VAT and charges. He also rightly outlined another problem: when someone goes to rehabilitate a property, he does not know what difficulties he may find, so the costs, necessarily, become higher. The hon. Gentleman suggested that grants should therefore be higher. Without more resources, however, that would mean fewer houses. That is the difficulty that has faced Tai Cymru in all its decisions. It has not opposed rehabilitation; it is just that, if we choose the more expensive route, we end up with fewer houses. That is surely not what we want, given a recognition that we must provide more social housing, and it goes against the direction in which our policy should be aimed.

The hon. Member for Ceredigion and Pembroke, North also spoke about rents. The same trade-off applies to rents. If we drive them downwards, perhaps by increasing housing association grant rates, as the hon. Gentleman proposed, again, without increased resources, there are bound to be fewer houses. That points up the emptiness of the remarks by the hon. Member for Torfaen (Mr. Murphy), who was not prepared to tell us anything about resources, but who was prepared to describe the direction in which we should move in respect of rents, HAG rates and so on. Without additional resources, I repeat, in the end, that fewer houses will be provided.

Mr. Dafis

The balance between HAG and private money is crucial. In theory, we can increase the number of houses if we can continue to increase the proportion of private funding—but there must be a cut-off point. That is the vital balance to be struck between the number of houses provided and the rents charged. Is the hon. Gentleman in favour of further reducing HAG in Wales?

Mr. Evans

The hon. Gentleman is right to say that we cannot drive down HAG rates inexorably without ultimately finding that private finance is not available. The hon. Gentleman will know that I addressed the Federation of Welsh Housing Associations conference precisely on that point. We know from private financiers that once the proportion falls below 50 per cent., private finance may dry up. We have not yet reached that point. Still, the hon. Gentleman is right to draw attention to the issue for the future. A move in the opposite direction, to increase HAG rates, will inexorably lead to the provision of fewer houses.

Earlier in the debate, I intervened to say that the Welsh housing stock currently stands at record levels. That fact is not generally acknowledged when we debate housing issues. Since 1979, for instance, more than 100,000 extra homes have been provided. I return to the point about Cynon Valley: I recognise that homelessness there has increased, but it has done so at the same time as the population has declined, even though we have provided more homes.

Social factors are the reason why we need so many more homes—there are many more households. This is not a moral judgment or an attack upon those who, for one reason or another, have been engaged in a marital breakdown, but we cannot say in a politically correct way that we shall not speak about, or draw attention to the fact that, despite the massive addition to the number of houses in Wales, we still have a prevailing homelessness problem. We have to examine the reasons for that and, at the same time, recognise that there is a duty on the Government to do what they can to alleviate that problem.

I make no apology for saying that during the past 20 years, the divorce rate has doubled and we now have the highest divorce rate in Europe. Those are important factors in understanding some of the difficulties that are placed within the remit of Government in addressing housing problems. What is the response? Since Tai Cymru was formed, 22,000 extra homes have been provided. Housing for Wales has so far spent £903 million, provided by the Welsh Office in a variety of ways. Listening to the debate, one would think that the whole thrust of the Housing for Wales programme is towards home ownership of one sort or another, through shared ownership or whatever.

Housing for Wales aims to deliver about 10 per cent. on the assisted ownership basis, according to the latest proposals, and the fall from that initial target of 10 per cent. has been due largely to the recession in house prices. All the evidence shows that in recent years people have not generally been going into private home ownership so much because, for the first time, we have seen the phenomenon of declining house prices.

As we now have historically low interest rates and house prices are starting to rise again, it is essential that Tai Cymru should take advantage of that by returning to the 10 per cent. figure and helping those people by adopting the remarks and words of the hon. Member for Torfaen and offering people the choice. If up to 10 per cent. of the people funded by Tai Cymru wish to take advantage of the scheme, they should be able to do so. The great advantage is that if we are able to spend the money in that way, we shall end up housing more people, and that has to be in everyone's interest.

Mr. Dafis

Would the hon. Gentleman approve of an increase over and above the 10 per cent. currently allocated to the owner-occupied sector? Would he like that percentage to increase beyond 10 per cent?

Mr. Evans

I believe very much in choice. If I have a criticism of the original "Agenda for Action" paper—I have to be careful as when it was published I was deputy chairman of Tai Cymru—it is that the Government set a target for owner-occupation. I do not believe that the Government should be setting a target for the level of owner-occupation that they would like in Wales. I believe in choice, and Tai Cymru is right to devote 10 per cent. of its resources to providing the opportunities for people to exercise that choice. If a significant number of people wish to exercise it, we can consider expanding the scheme thereafter, but that is the advantageous way to move.

Let me also outline to the House a view that I have expressed on several occasions in relation to general housing provision. Tai Cymru currently provides about 4,200 houses. The Welsh Affairs Committee received evidence from the chief executive of Tai Cymru to the effect that we need to provide up to 5,000 houses per annum and I support that target.

We have to bite the bullet and challenge those people presenting significantly higher figures. I am aware that Shelter Cymru and the Welsh Federation of Housing Associations are talking in terms of an expansion upwards to 10,000 units per annum. I doubt whether that could be delivered, but one has to recognise what the cost of that provision would be. Looking at the implications for private finance—some of which have been raised by the hon. Member for Ceredigion and Pembroke, North—that would ultimately mean the Welsh Office spending about five times as much on social housing in Wales as it does today. Those who support Shelter Cymru's aims should recognise the substantial financial costs.

Even if we had unlimited resources, it is important to recognise some of the other problems faced by those who are looking for proper and adequate housing within their own communities. I speak particularly about rural communities in my constituency. In recent weeks, I have spoken to some of my constituents in Llangattock and Bulch. The Llangattock community is quite small and the national parks planning guidance, policy and programme for that area allow for the building of 15 houses in Llangattock in the next 10 years. I understand that the policy has been approved, or at least examined, by the Welsh Office. There are 98 people on the waiting list in Llangattock, yet under the planning process only 15 new houses will be built in the next 10 years.

That problem exists not just in my constituency; there is a similar problem in Bulch and in the constituency of the hon. Member for Yns Môn (Mr. Jones). Recently, the hon. Gentleman and I were helpfully sent housing strategies and operational plans from Mr. John Arthur Jones, the noted director of housing in Yns Môn, which make it quite clear that planning permissions within Yns Môn are insufficient to address the number of people actually on the housing waiting list in the area.

There are real planning permission problems in some of our rural areas and I believe that the Welsh Affairs Committee, while expressing concern about some aspects of planning permissions that had been granted, invited the view that there should be some developments in some areas based upon the Welsh settlement pattern. That is important in some parts of rural Wales and is not always recognised by planning authorities.

It is important for the Government to examine the allocation of housing. Although I recognise that additional houses should be provided, allocation is also a matter of great concern. This afternoon, my right hon. Friend announced some changes to the development board, following a number of critical reports, one of which related to a housing allocation matter that activated the entire Welsh media. I spoke today to the local government ombudsman's office and I was informed that in the past five years, he has confirmed 16 cases of critical reports on local authorities in relation to housing allocation matters, 14 of which were serious enough to warrant a finding of maladministration. That illustrates that the allocation of housing is not a matter to be thrown aside; it requires some important consideration.

Mr. Murphy

I do not want to pre-empt the hon. Gentleman, but I assume that he is going to give some consideration in his comments about allocation, as he knows that the vast bulk of local authorities in Wales allocate by a proper points system. What does he mean by further consideration?

Mr. Evans

My area has moved to a points allocation system which, as my right hon. Friend the Secretary of State has said, favours people who present themselves as being immediately homeless—those who are effectively roofless. If a person takes steps to find himself some temporary accommodation while seeking permanent accommodation from the local authority, sadly, as things stand today, he or she will be on waiting lists for months, if not years, and ultimately probably not housed at all. Those who make no effort to find themselves temporary accommodation have an advantage over those in housing need who make some temporary arrangement, who, as a result of having taken that temporary arrangement, are disadvantaged in housing allocation thereafter. The whole issue should be examined by the Government and changes brought forward.

If the Government encourage local authorities to provide temporary accommodation, perhaps in the private sector, for people who are immediately roofless, they could take action with regard to other aspects, one of the most important of which concerns houses in multiple occupation. I have received a letter from Radnorshire district council which draws attention to the Prime Minister's commitment, given in the House on 6 May 1994, to have a Government review of the licensing of such houses. Some documents that have been sent to me show that the likelihood of injury to tenants in such accommodation is six times higher than is the case with other tenants. That leads me to the view that action is necessary.

I welcome the fact that there has been a 34 per cent. reduction in the use of bed and breakfast accommodation, but I should ultimately like to see its use eliminated. I am strongly of the view that it has no part to play in Britain's housing provision. I am also concerned about overall levels of housing benefit. However, in deference to the House and the fact that others wish to speak, I shall leave that point.

Much has been said about Tai Cymru's proposals about assisted ownership. As I said earlier, that amounts to barely 10 per cent. of the overall resources that will be made available by Tai Cymru, which will still be geared towards the provision of rented housing for those in housing need. Housing for Wales should be congratulated on the significant contribution that it has made in that sector over the past five years. It would be wrong if the tenor of the debate were to lead to the view within housing circles in Wales that the thrust of Tai Cymru's provision in future will be directed only towards owner-occupation. Nothing could be further from the truth.

6.21 pm
Mr. Alex Carlile (Montgomery)

By making his excellent choice of subject for today's debate, the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) drew from the Secretary of State an interesting and provocative statement about the future of housing in Wales. I share with the Secretary of State the hope that owner-occupation can be increased substantially, particularly if that makes it accessible to a wider range of people in the social stratum of Wales. It is extremely important that quality housing should be available to as wide a range of people as possible. The evidence suggests that those who own their own houses sometimes look after them rather better than do those who live in homes in public ownership, so more owner-occupation could lead to a higher quality of property in Wales.

One issue on which the Secretary of State's statement was a little disappointing was housing for rent for young people. The right hon. Gentleman was right to say that 16 and 17-year-olds cannot and should not expect to be provided with their own properties to rent. Family life has its difficulties. All of us who have been the parents of teenagers know that the period between 14 and 18 can be one in which there are tense moments, but they are part of building towards an adult life.

However, the Secretary of State may have overlooked the extent of the need for housing for rent for young people older than 17—the 18 to 25 age group. I share the concern expressed by the hon. Member for Brecon and Radnor (Mr. Evans) about the increasing divorce rate throughout the United Kingdom, but that is a fact with which we must live.

It is also a fact that, in well-regulated families, parents experience intelligent but difficult, or intelligent but wise, young people who, when they reach the age of 18, 19 or 20 build up their own relationships and rightly want to lead their own independent lives, and perhaps are entitled to expect society to give them a footing on the housing ladder. In rural mid-Wales—for example, in Newtown or Welshpool in my constituency—it costs as much to rent a room or a small flat as it does in London, but the wages are significantly lower. There is not the supply of houses to rent that is needed. I do not suggest that that is logical. Many people in the construction industry do not realise that there is, potentially, significant income to be made from building flats to rent. The Government should encourage developers to realise that the opportunities are available and that they are rather foolish not to take them up, but they are not doing so.

Therefore, I invite the Government to consider whether there might not be ways to give private developers, rather than the money, the confidence to realise that building houses for rent for young people is a realistic way first, to provide properties in which young people can live and, secondly, to make a reasonable amount of money from sound business investment. Particularly among the smaller developers—in rural Wales it is inevitable that developers will be small—there is a lack of confidence in that.

That is not a matter of ideology. It is destructive to talk about left and right-wing ideology when one is discussing the building of houses in which young people can live. It is inevitable that there will be a mix between public housing, in one form or another, and private housing, but we must try to ensure that we achieve the quantum of housing that meets at least the majority of need.

I think that all hon. Members are worried when young people, sometimes with a baby or expecting a baby, come to them, and they find that one partner is living with one set of parents and the other with the other set of parents. That is a common experience. We must do something more to try to provide such people with the properties that they need in the period before they have the earnings and the capital base to borrow money from banks or building societies.

In this short contribution—I know that others wish to speak—I want to make three other points. The first relates to renovation grants. The hon. Member for Ceredigion and Pembroke, North was right to refer to the appalling waiting lists for renovation grants. In my constituency—I have written to Ministers about one or two of the cases—young people live in caravans for years because of the queue for renovation grants. Some of those renovation grants are for old properties that are well worth saving; some are of historic value. Every year that passes makes it more expensive to rebuild such properties and bring them up to a reasonably modern standard.

I hope that the Secretary of State will reconsider the renovation grants regime in order to ensure that it operates in such a way as to achieve a reasonable throughput. It is difficult to explain to constituents, other than by blaming the Government, why they have to wait three, four or five years for such grants. I suppose that those of us in Opposition parties can blame the Government with impunity, but it does not increase one's job satisfaction. I would rather be able to praise the Government on this issue and say that the grants are being made more readily available. It is not fair to blame local authorities. Montgomeryshire district council has been doing its best in this sector.

My next point concerns incomplete private developments. Again, that may be peculiar to areas where private developments are inevitably small, because of rurality, and where the developers are therefore small. My constituency is peppered with private developments which have started with a splendid plan, full of landscaping, trees, good roads, sound drains and everything else that one could wish. Architects are good at preparing such drawings, but they are prepared for builders who, unfortunately, are part of what Customs and Excise call the phoenix syndrome—small developers who go bust and rise from the ashes in a different form on the following day leaving unfinished estates, broken roads, inadequate retention sums, no trees and large bills for the owner-occupiers who are the very people whom we want to encourage to buy properties. That often happens to estates where the properties are relatively cheap and are built to a budget.

Local authorities do their best to imposes conditions on developers, but, if one looks around not just my constituency but others and sees the estates that have been in a dreadful state for years, they do not seem to be working well. It would be good if the Government could examine that issue and find a way to ensure that new dereliction on estates does not arise.

I agree with every word that the Secretary of State said about physically and mentally handicapped people and care in the community. There are people who cannot realistically lead an independent life in the community. I will not draw Ministers again on whether there should be nursing or non-nursing care. I am happy to settle for the Secretary of State's unequivocal statement that there will be appropriate care, based, of course, on appropriate advice.

There are in Wales patients in hospitals for the mentally handicapped for whom appropriate care is nursing care. I am not satisfied, and neither are their carers or relatives, that those patients will be cared for properly if they are placed in the community in two-person or three-person accommodation with changing staff. I ask the Secretary of State to consider ensuring that where they are needed, communities are provided for groups of a dozen or 15 residents—some of whom may be in or near a persistent vegetative state—in which a high level of care is available, so that the public may be reassured that the weakest members of our society are given the strongest protection. Of all the issues discussed today, that is the most important.

We must care for those who cannot care for themselves. Otherwise, as we know, serious abuse follows. It is not enough to wear sackcloth and ashes after sexual abuse has been committed against weak members of society. I hope that I may look forward to the Secretary of State putting his wise words into wise action.

6.31 pm
Mr. Walter Sweeney (Vale of Glamorgan)

I am sure that quality, availability and affordability of housing are close to the top of the agenda for all hon. Members, even though we may differ over the appropriate means of achieving those ends. Every week in constituency surgeries I hear about housing problems. They are not a representative cross-section, but, anecdotally, they are relevant. Complainants fall into two categories—young people, often single mothers, desperately trying to find somewhere to live, and older people desperately seeking a transfer from one council house to another.

Young people in the first category are symptomatic of a breakdown in family values. In an ideal world, they would be living at home as members of stable families, and saving up money before even thinking of having a baby. Unfortunately, young people leave home and form relationships, not necessarily in that order, and the girl in question becomes pregnant and needs somewhere to live.

The second category is the result of council housing estates tending, in general, to be unpopular places to live. Well-intentioned national and local government policies in years past have resulted in growing problems in society—a vicious circle of deprivation. New generations often grow up with no firmly rooted family values, family support or stability in their lives. As a consequence, crime becomes endemic in such areas. Many constituents who come to my surgeries begging for a council transfer do so because their homes or cars have been vandalised.

Last week, I saw a constituent who has five children. Three of them are handicapped—one of them severely so. The social services department allocated that lady a car to enable her to transport the extremely handicapped child. It was set fire to, and shortly after the social services provided a replacement vehicle. Just before her visit, that car also was vandalised by stones being smashed on its roof.

Social housing is necessary for some people, but is not desirable. I long for the day when there will be a shift in the balance. My constituency has 75 per cent. owner-occupancy, nearly 20 per cent. council or housing association occupancy, and just 5 per cent. private rented accommodation. I want the private rented sector to be expanded because that is how to achieve more flexibility in the housing market.

The Government's right-to-buy policies have been extremely successful. The hon. Member for Torfaen (Mr. Murphy) did not do the Government justice when he said that there has always been a high percentage of owner-occupancy in Wales and that it would inevitably continue to rise. In fact, it increased from 59 per cent. in March 1979 to 72 per cent. at the end of 1992. That did not happen by accident. The Government applied a variety of useful measures to encourage owner-occupancy. The right to buy, which was strenuously resisted for years by Labour and the Liberal Democrats, enabled more than 90,000 public sector tenants to purchase their homes.

In 1993, the Government launched a rent-to-mortgage scheme, which extended the opportunity to own to another 70,000 tenants in Wales who cannot immediately afford the full purchase price. Owners of long leases of flats have been given the right to enfranchise their properties. The long decline in the private rented sector has been arrested, thanks to the Housing Act 1988. The hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) was sceptical about whether the private rented sector is growing, but between 1990 and 1992 the number of privately rented dwellings increased by 15,000.

Housing associations have become the main providers of new, affordable housing. Since 1985, public expenditure on housing associations has been supplemented by £177 million of private sector finance. That means that more homes can be built at a time of public expenditure restraint.

I want to sound a note of caution, because the social problems that developed from the expansion of council housing estates may recur in respect of housing association estates. I see that happening already in my constituency. One of my constituents complained recently that, shortly after she purchased a house on a new estate, the developer had difficulty selling the remaining properties because of market conditions. Consequently, a job lot of the properties was sold to a housing association. That lady feels that the misbehaviour of some of the tenants who have moved into those properties has led to a reduction in the value of her house.

Mr. Murphy

What a shame.

Mr. Sweeney

The hon. Gentleman may say that—from a sedentary position—but surely we should be concerned about people who find themselves in the negative-equity trap because of bad behaviour on the estates on which they live. We need to ensure that, in future, huge housing association blocks do not create the same problems.

Dr. Kim Howells (Pontypridd)

The hon. Gentleman's assessment of the position seems fairly insulting to some of us who grew up in excellent houses on council estates, which are fine places in which to grow up. When the Conservative Government took office in 1979, local authorities were suddenly deprived of the ability to maintain such houses. It is a question of maintenance, whether the properties concerned are in the public or the private sector.

My local authority has been forced to send letters warning people that they will have to wait 20 years for maintenance grants. Perhaps the hon. Gentleman would like to tell us where the sense or justice is in that. How much better it would be for such groups of houses if enough money were available to renovate and maintain them.

Mr. Sweeney

It is a bit rich for a Labour Member to talk about the maintenance of council houses. For a short time, I lived on the Hulme housing estate, which was mentioned by my right hon. Friend the Secretary of State. That estate was run by Labour-controlled Manchester city council; the standard of maintenance seemed to be nil, and half the properties in the block that I inhabited were empty.

Since the present Government have been in office, the number of houses in Wales has increased from 1.1 million to 2.2 million in absolute terms. The problem is matching housing stock to housing needs. I believe that that can best be done through the private sector and market forces. I must declare an interest: I am a landlord, albeit not in Wales. I believe, however, that in order to increase occupancy of houses the Government must try harder to encourage landlords to enter the private rented sector.

The Government have rightly allowed those with lodgers to receive the first part of their rental income tax free. Further steps need to be taken to encourage multiple occupation, which is currently inhibited by draconian regulations. I am not convinced that living in bedsits serves the best interests of, for instance, students and young mothers; I think that such accommodation is basically lonely and anti-social, and brings about misery and the breakdown of family ties. More people should live en famine, with perhaps half a dozen people sharing a house. Students have had wide experience of that way of life, and if such properties are well run and in good condition they can provide landlords with a good return and justify investment.

The Opposition parties could contribute in an important way. They are fond of looking forward to the day—constantly receding—when they may take office. The private rented sector would greatly appreciate a commitment to support and encourage increased provision of private rented accommodation. That would produce a better balance in the housing market and help to guard against shortages.

6.44 pm
Mr. Ieuan Wyn Jones (Ynys Môn)

This has been a good debate and most of the speeches have been constructive. I intend to be generous: hon. Members on both sides of the House have made some excellent points. Although there has been a difference of emphasis, most of what we have heard has been positive. I confess that I found some of the comments of the hon. Member for Vale of Glamorgan (Mr. Sweeney) rather bizarre; at times, I could not follow his train of thought. I was surprised that he should attack housing associations, which have demonstrated excellent management skills over the years. The hon. Gentleman would like much of the balance to be transferred to the private sector, but many private developers do not possess such skills.

The hon. and learned Member for Montgomery (Mr. Carlile) pointed out that many private estates in Wales are left after the developers have gone bust. Roads are unmade, weeds spring up and amenity areas become overgrown. The record of some private developers leaves a lot to be desired. No one suggests that a single organisation has all the answers to the problem of housing provision; a balance must be struck between the requirements of those who are fortunate enough to be able to afford their own homes and those who cannot do so, whatever the circumstances. I accept that, as the hon. Member for Brecon and Radnor (Mr. Evans) said, social circumstances sometimes put people on waiting lists, but—

Mr. Richards

Will the hon. Gentleman give way?

Mr. Jones

I will not give way to the hon. Gentleman, because he has not been present for the debate.

I understand the point made by the hon. Member for Brecon and Radnor, but it does not remove our responsibility to try to find some answers. I think that the main answer lies in a proper balance between local authorities, housing associations and private developers, which should work together to meet the needs of the people of Wales. If it has done nothing else, the debate has shown how important it is for such co-operation to continue. Tomorrow's Hansard will show that, in that regard, it has been excellent.

I said that I intended to be generous in my praise for those who have spoken, but I must point out that the Secretary of State was rather uncharitable about my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Dafis), who made an excellent and well-researched speech.

Mr. Richards

On a point of order, Madam Deputy Speaker. The hon. Member for Ynys Môn (Mr. Jones) alleged that I had not been present during the debate. That is not true; I had to leave the Chamber for half an hour to hear a serious complaint from one of the hon. Gentleman's constituents, Mr. Gordon Pritchard, about Ynys Môn borough council.

Madam Deputy Speaker (Dame Janet Fookes)

Hon. Members cannot use debating time to explain why they were or were not in the Chamber. A brief explanation might be all right, but further explanations are not necessary.

Mr. Jones

I think it important for me to respond to points made by hon. Members who have been present throughout the debate and who have made constructive contributions. I congratulate my hon. Friend the Member for Ceredigion and Pembroke, North on the presentation of his speech, its detail and research and the way in which he advanced his arguments.

Dr. Howells

And his good looks!

Mr. Jones

Yes, and his good looks—the most important factor of all.

The Secretary of State seemed to want to give us a lesson in home ownership. The Minister of State, Welsh Office will know that there is a long tradition of home ownership in Wales. The word perchentyaeth is rooted in Welsh culture, history and tradition. The Secretary of State should discuss that with the Minister so that he will understand that we are not averse to home ownership, which we have always valued and which we want to extend.

The Secretary of State referred to Magna Carta. We are fortunate in Wales: we have much information on our history. We know about not only Magna Carta but the laws of Hywel Dda. When the Secretary of State discusses those laws over a cup of tea with the Minister, he will learn that throughout their history Welsh people have attached great importance to home ownership. I am sure that he will recognise that. Perhaps in his reply the Under-Secretary of State for Wales will acknowledge that on behalf of the people of Wales.

The Secretary of State made some interesting points about the role of housing associations and the need for them to encourage low-cost home ownership. We should like him to say a bit more about that on another occasion. His use of the word "encourage" is interesting. If he means that he would like housing associations to move in that direction, that is acceptable; but if he is saying that the funding for Tai Cymru will have to move in that direction, that is another matter. We are entitled to know whether it is the former or the latter. I hope that the Under-Secretary will answer that question.

We have heard some interesting arguments about housing association grant. My hon. Friend the Member for Ceredigion and Pembroke, North said that he did not want it to be reduced to less than 62 per cent. I recall that the hon. Member for Brecon and Radnor said that he did not want it to be reduced substantially. We did not hear whether the Secretary of State would support such a reduction, so the Under-Secretary must say what the Government have in mind. What proportion of HAG will be paid?

All statistics and surveys show that the three key issues that most affect people's lives are their families, their health and their homes, which are reflected in the problems that hon. Members hear about in their surgeries every week. Housing is the single most important issue to our constituents. That is why we chose the subject for our Opposition day debate.

Housing is important because it meets not only the physical need for shelter from rain and for comfort but the emotional need of well-being and of satisfaction with one's position in life. Will the Government ensure that more people in Wales have such benefits? We acknowledge that people will own their own homes, and it is acceptable that their proportion has increased, but, as a result of Government policies, some people have no opportunity to own a house of any description and their lives are being blighted. We want the Government to have the priorities that the people of Wales consistently vote for but are never delivered.

The problem is that since 1979 a welter of legislation has been passed. Housing Act after housing Act has sought to deal with the problems. We accept that some of those Acts have worked, but, as always, they have failed some groups of people.

I must confess that I was interested in the Secretary of State's remarks about a Welsh assembly or parliament raising taxes. This Government have raised more taxes than any other in the history of the United Kingdom, so to accuse us of wanting to raise more taxes in a Welsh parliament was pretty rich.

The right hon. Gentleman also talked about increases in legislation. I was elected to the House in 1987. The number of Acts, including housing Acts, has rocketed since 1979.

Mr. Wigley

My hon. Friend said that some categories of people inevitably faced difficulties. Does he accept that areas also experience difficulties? In Dwyfor, in my constituency, second homes account for 20 per cent. of the housing stock, and pressure is placed on the rented sector because rents are dictated by the holiday market. That is an important industry, but private rents are too high for people who want to rent. Likewise, people cannot afford to buy because the cost of buying a house is determined by factors outside the local economy. In Dwyfor, Meirionnydd and other areas where tourism is important, there is a need for rented social housing because external factors mean that the market cannot provide.

Mr. Jones

I agree with my hon. Friend, who has long experience of those matters. He has been in the House a number of years and has seen the problems that have occurred in my and other hon. Members' constituencies.

My hon. Friend has reminded me of an important point. The hon. Member for Vale of Glamorgan said that if the value of houses in Wales is lower than in other parts of the United Kingdom, and the amount of grant local authorities were giving was lower, somehow or other equality resulted.

The hon. Gentleman should remember that the property boom of the 1980s alienated many young Welsh people, who could not get into the property market. Between 1985 and 1988, house prices in Ynys Môn doubled. Incomes, however, did not double during that period. Having set their heart on a house, young people who had spent years saving up a deposit were faced with despair because they could not afford the mortgage. A couple who had tried to save a small deposit and obtain a 95 per cent. mortgage on a property worth £40,000 in 1985 found that, in 1988, its value had risen to £85,000. Their incomes or salaries were not sufficient for them to afford the house.

Pressures have therefore been placed on the planning system and on the provision of housing for social need. I reject the hon. Gentleman's argument that there should not be any room for social housing in Wales. It is crucial that we move on the issue today.

Mr. Sweeney

Will the hon. Gentleman give way?

Mr. Jones

I appreciate that I have named the hon. Gentleman, but I must finish making my points because we want to wind up the debate quickly.

We have a different housing philosophy in Wales. We want a proper balance. The motion states that the only way in which we can properly meet the housing needs of the Welsh people is to have a parliament of our own in Cardiff.

6.59 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones)

We have had an interesting debate. We realise now that both the Welsh nationalists and the Labour party would take action that would result in a reduction in the amount of social housing being built in Wales, that the Labour party is determined to spend more in this area, but is desperately afraid to say how much, and that both would impose the extra taxation that a Welsh assembly would cost the people of Wales.

Opposition Members talked about the need for specific Welsh policies. I honestly do not know where they have been for the past few years. Have they not taken note of the many initiatives which we have taken forward in Wales precisely to meet the specific housing needs of the people of Wales? Have they not read "Agenda for Action for Housing in Wales", which was published by my predecessor in November 1991? In that document—the first of its kind anywhere in the United Kingdom—we set out our policies, which we have been following over a number of years and which have brought forward real achievements, of which we can all be proud.

The agenda set out three main objectives: to encourage home ownership for the vast majority of the people in Wales so that about 80 per cent. of households can achieve owner occupation by the turn of the century; to create greater diversity of choice and supply for those who cannot afford or do not want to be home owners; and to improve both the quality of the housing stock and the lives of the people who live in those homes.

There has been much reference to the high level of unmet need. However, there are no national criteria for housing need or an agreed level of housing need, precisely because it is not possible to define housing need as an absolute. Estimates of need for social housing in Wales vary widely and, as my right hon. Friend the Secretary of State said earlier, almost always tend to be overstated.

I was interested in the exchanges between the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) and my hon. Friend the Member for Clwyd, North-West (Mr. Richards) with regard to homelessness figures. The hon. Gentleman accepted that his figures were probably wrong. The difference between my hon. Friend and the hon. Gentleman meant that the hon. Gentleman could easily be 50 per cent. out. However, that did not seem to matter to him; they were just figures that he could throw up in the air.

I shall set the record straight for the hon. Gentleman. The latest figure for the number of homelessness cases at March 1994 is 2,628. That can be compared with 2,867 in March 1993. As I know that Opposition Members cannot work it out, it is a reduction of 8.3 per cent. The reduction in the number of homelessness cases should be widely welcomed.

Our role in meeting housing need is to set the broad policy framework and encourage local authorities to employ the wide range of options available to address housing need and to make the best use of the resources available to them. Local authorities have a statutory duty to assess housing need in their areas. They are the appropriate organisations to prepare local housing assessments which will provide the context for housing associations and other agencies to plan their strategies and programmes, as well as help to inform the distribution of resources. These assessments provide the basis for authorities' strategic and operational plans, taking account of likely available resources as well as priorities between competing needs and the best use of resources in meeting objectives that are essential for the effective delivery of housing services.

I suppose that I should thank the hon. Member for Ceredigion and Pembroke, North for the congratulations that he inadvertently gave the Government on their housing record. He specifically congratulated the housing associations in Wales on what they have achieved. However, it is the Government who have massively supported and enabled the housing associations to go forward and achieve all that they have done. In 1989, the Government established Housing for Wales to build on the enthusiasm of housing associations in Wales and to work in partnership with local authorities.

Since Tai Cymru was established, total investment in Welsh housing associations, including that for the current financial year, is in excess of £1 billion, producing almost 22,000 necessary new homes in Wales. In the current financial year, the total resources for Housing for Wales will be about £200 million, which should enable more than 4,000 new homes to be completed.

I remind hon. Members that the introduction of mixed funding has enabled 50 per cent. more homes to be built than under the old system. Housing for Wales is now the main provider of new social rented housing in Wales. It works closely with local authorities, which recognise the benefits that the new mixed funding regime can bring. I am pleased to say that local authorities have transferred almost £70 million to Welsh housing associations in the past five years to provide additional social housing.

The hon. Member for Ynys Môn (Mr. Jones) asked me about next year's housing association grant rate. I completely reject the wild prediction made by the hon. Member for Torfaen (Mr. Murphy). He should know, as I am sure all Opposition Members know, that the question of the housing association grant rate will be considered, as it is always considered, during the normal round of the public expenditure survey.

We will carefully consider all the questions that need to be addressed: whether we should be subsidising bricks and mortar or helping families; and whether we should be providing cheap rents for all, or providing more homes, exactly as my hon. Friend the Member for Brecon and Radnor (Mr. Evans) spelt out. All of us would recognise that it is unreasonable to subsidise people who can afford to pay, because that means that people who are deserving will be deprived of necessary housing.

I am pleased to report that strategic housing agreements between Housing for Wales and nine local authorities have been signed since the initiative was introduced in 1991–92. I see that as helping to cement the partnerships and take further forward the excellent relationship that exists between Housing for Wales and local authorities.

We also recognise that an active private rented sector offering a variety of accommodation and tenures is necessary for those who cannot or do not wish to buy their own homes. I found it somewhat ironic that the hon. Member for Torfaen sought to remind us that he was a history graduate. His history seems to have stopped at some time in the past. He certainly does not have much recollection of current affairs. He tried to claim that he was in favour of a variety of housing tenures, including the right for people to rent from the private sector. What his history should have told him is that his party voted against the Housing Act 1988, which did so much to expand the opportunities for the private rented sector.

The number of private rented dwellings in Wales increased from 80,000 in 1990 to 95,000 in 1992. For Opposition Members who cannot do arithmetic, that is an increase of 19 per cent. That is a substantial and worthwhile contribution to expanding the sum of housing available for the people of Wales. We are not content with that. We are going forward with the rent-a-room scheme which was introduced in 1992. Householders no longer have to pay income tax on rent from a lodger if the gross annual rent is less than £3,250. That is a further worthwhile contribution to expanding the sum of housing available in Wales.

Naturally and rightly, my hon. Friend the Member for Brecon and Radnor referred to the needs of housing in rural Wales. To assist authorities to meet particular rural housing pressures, we created the rural housing reserve in 1991–92. Investment over the past three years has totalled nearly £16 million, leading to the production of some 700 homes. In the current financial year, £4 million is available which, together with investment through Housing for Wales, is expected to produce 1,150 homes. Rural authorities also benefit from other central reserves, including renewal, rented private sector and homelessness reserves. I need not remind my hon. Friend that Housing for Wales devotes at least one quarter of its resources to rural housing. Between 1989–90 and 1993–94, investment totalled nearly £240 million, producing nearly 4,700 new homes.

Our final "Agenda for Action" objective is to improve the quality of the housing stock and, of course, of the lives of the people who live in those homes. Much reference has been made to renovation in the debate. I thank the hon. and learned Member for Montgomery (Mr. Carlile) for what he said about the provisions to which my right hon. Friend the Secretary of State referred for the mentally handicapped under community care. This is not the time to expand on that, but we have published our new guidance for the Welsh mental handicap strategy. I think that the hon. and learned Gentleman will find in it exactly the provision that he is looking for and which we are all looking for. It is important that we continue to try to ensure that the right care and choice are available to mentally handicapped individuals and their carers.

Since the current home renovation grant was introduced in 1990, almost £850 million has been made available for home renovation in Wales. That includes for this year £149 million for mandatory renovation grants alone. That is £3.5 million more than last year. It should enable Welsh local authorities to complete some 9,600 grants.

I was interested to note the suggestion of the hon. Member for Ceredigion and Pembroke, North that we should bring clearance and demolition back on to the agenda. While I accept that that is not entirely irrelevant, I feel that we have moved on from the days of widespread clearance, and rightly so, exactly in the way, as my right hon. Friend the Secretary of State said, that we have put behind us the grey architecture and slab concrete of the socialist past.

In addition to the renovation grants, £26.3 million has been made available to local authorities in each of the past two years for disabled facilities and discretionary grants. The current funding arrangements for disabled facilities grants enable local authorities to consider all housing options, including transfers to more suitable accommodation, in responding to the needs of disabled people.

Dr. Howells

Will the Minister give way?

Mr. Jones

I fear I do not have time. I was just about to refer to the hon. Member for Torfaen, who complained that we were not spending enough. Just as his party would not say at the last election, the hon. Gentleman would not say how much he would spend. He brought out that canard about capital receipts, which he then pledged himself to make available. I wonder whether the hon. Member for Dunfermline, East (Mr. Brown) will be upset when he sees that in the record. I well know the claims that Welsh Labour councils have made that that would mean spending of at least £177 million. It might help the hon. Member for Torfaen, if he rushes off to see his hon. Friend, to say that the local councils will have only £23.7 million to spend from their capital receipts.

I remind the House that grants are also available to landlords to repair and improve or convert houses or buildings into flats and accommodation. We can boast a good record on area-based renewal schemes in Wales: 13 renewal schemes have been declared, and there are more in the pipeline. Resources of more than £17 million will be available in the current year for area-based schemes.

One matter was conspicuous by its absence from the speeches of Opposition Members. My right hon. Friend the Secretary of State rightly concentrated on the fact that the vast majority of people in Wales aspire to home ownership. That is demonstrated by the high take-up of the right-to-buy initiative. More than 100,000 council tenants have exercised the right to buy since 1979. Surveys keep telling us that 80 per cent. or more of the people of Wales want to own their own homes. Opposition Members hardly referred to that at all. Where was the welcome for the progress that has been made in increasing home ownership from 59 per cent. in 1979 to 71 per cent. now? We recognise and we will continue to respond to the aspirations of the people of Wales for a higher level of home ownership, and we will deliver.

One other idea was conspicuous by its absence in the debate. The hon. Member for Ceredigion and Pembroke, North was remarkably brief in referring to an assembly for Wales, although I know that the hon. Member for Ynys Môn went on at slightly more length about it. That ancient, discredited policy from the 1970s has been trotted out as the great idea of all the Opposition policies. Yet we know by the token references that Opposition Members have made to it this evening that they are doing nothing more than going through the motions.

Wales is now better housed. Major sums are being provided for new social ownership and maintenance of existing housing. There are more opportunities for ownership, which is the exact and clear aspiration of the people of Wales. My right hon. Friend the Secretary of State announced today an exciting expansion of the transferable discount scheme in Wales. We are making great progress. At the same time, we continue to ensure that there will be choice—real choice, unlike what the Opposition offer. I am confident that we shall go forward. We shall continue to go forward. The last thing that we in Wales need is that ultimate quango—a Welsh assembly. It has been roundly rejected by the people of Wales before and it will be rejected again if it is ever put to the test.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 26, Noes 153.

Division No. 290] [7.16 pm
Ainsworth, Robert (Cov'try NE) McMaster, Gordon
Anderson, Donald (Swansea E) Meale, Alan
Campbell-Savours, D. N. Morgan, Rhodri
Carlile, Alexander (Montgomry) Murphy, Paul
Clwyd, Mrs Ann Pendry, Torn
Cox, Tom Prescott, John
Cunliffe, Lawrence Salmond, Alex
Dafis, Cynog Short, Clare
Dixon, Don Skinner, Dennis
Dowd, Jim Wigley, Dafydd
Henderson, Doug Wilson, Brian
Howells, Dr. Kim (Pontypridd)
Jones, Ieuan Wyn (Ynys Môn) Tellers for the Ayes:
Jones, Jon Owen (Cardiff C) Mrs. Margaret Ewing and
Jones, Lynne (B'ham S O) Mr. Elfyn Llwyd.
Ainsworth, Peter (East Surrey) Bottomley, Peter (Eltham)
Alexander, Richard Bowden, Sir Andrew
Alison, Rt Hon Michael (Selby) Bowis, John
Amess, David Brandreth, Gyles
Arbuthnot, James Brazier, Julian
Arnold, Jacques (Gravesham) Bright, Graham
Ashby, David Brooke, Rt Hon Peter
Aspinwall, Jack Brown, M. (Brigg & Cl'thorpes)
Atkinson, David (Bour'mouth E) Browning, Mrs. Angela
Atkinson, Peter (Hexham) Bruce, Ian (S Dorset)
Baker, Rt Hon K. (Mole Valley) Burns, Simon
Baker, Nicholas (Dorset North) Burt, Alistair
Banks, Robert (Harrogate) Butterfill, John
Bates, Michael Carlisle, John (Luton North)
Bendall, Vivian Carlisle, Sir Kenneth (Lincoln)
Beresford, Sir Paul Carrington, Matthew
Biffen, Rt Hon John Carttiss, Michael
Blackburn, Dr John G. Clappison, James
Bonsor, Sir Nicholas Clark, Dr Michael (Rochford)
Booth, Hartley Clarke, Rt Hon Kenneth (Ruclif)
Clifton-Brown, Geoffrey Maitland, Lady Olga
Conway, Derek Malone, Gerald
Coombs, Simon (Swindon) Martin, David (Portsmouth S)
Cran, James Merchant, Piers
Davies, Quentin (Stamford) Mills, Iain
Deva, Nirj Joseph Mitchell, Andrew (Gedling)
Devlin, Tim Mitchell, Sir David (Hants NW)
Duncan, Alan Moate, Sir Roger
Duncan-Smith, Iain Neubert, Sir Michael
Dykes, Hugh Nicholls, Patrick
Elletson, Harold Ottaway, Richard
Evans, Jonathan (Brecon) Patnick, Irvine
Evans, Nigel (Ribble Valley) Pattie, Rt Hon Sir Geoffrey
Fabricant, Michael Peacock, Mrs Elizabeth
Fenner, Dame Peggy Pickles, Eric
Fishburn, Dudley Rathbone, Tim
Forman, Nigel Richards, Rod
Fox, Dr Liam (Woodspring) Riddick, Graham
Freeman, Rt Hon Roger Roberts, Rt Hon Sir Wyn
French, Douglas Robertson, Raymond (Ab'd'n S)
Gallie, Phil Robinson, Mark (Somerton)
Gardiner, Sir George Ryder, Rt Hon Richard
Garel-Jones, Rt Hon Tristan Shaw, David (Dover)
Garnier, Edward Shephard, Rt Hon Gillian
Gillan, Cheryl Shepherd, Colin (Hereford)
Goodson-Wickes, Dr Charles Sims, Roger
Gorman, Mrs Teresa Speed, Sir Keith
Gorst, Sir John Spencer, Sir Derek
Grant, Sir A. (Cambs SW) Spink, Dr Robert
Greenway, Harry (Ealing N) Sproat, Iain
Greenway, John (Ryedale) Stephen, Michael
Griffiths, Peter (Portsmouth, N) Stern, Michael
Grylls, Sir Michael Stewart, Allan
Hague, William Streeter, Gary
Hamilton, Rt Hon Sir Archie Sweeney, Walter
Hampson, Dr Keith Sykes, John
Harris, David Taylor, Ian (Esher)
Hawksley, Warren Taylor, John M. (Solihull)
Heald, Oliver Thomason, Roy
Hendry, Charles Thompson, Sir Donald (C'er V)
Heseltine, Rt Hon Michael Thompson, Patrick (Norwich N)
Hicks, Robert Tredinnick, David
Hill, James (Southampton Test) Twinn, Dr Ian
Howell, Sir Ralph (N Norfolk) Vaughan, Sir Gerard
Hughes Robert G. (Harrow W) Viggers, Peter
Hunt, Sir John (Ravensbourne) Walden, George
Jenkin, Bernard Wardle, Charles (Bexhill)
Jessel, Toby Waterson, Nigel
Kellett-Bowman, Dame Elaine Watts, John
Kilfedder, Sir James Wells, Bowen
Kirkhope, Timothy Whittingdale, John
Knapman, Roger Willetts, David
Knight, Greg (Derby N) Wilshire, David
Kynoch, George (Kincardine) Wood, Timothy
Lait, Mrs Jacqui
Lawrence, Sir Ivan Tellers for the Noes:
Legg, Barry Mr. David Lightbown and
Lidington, David Mr. Sydney Chapman.
MacKay, Andrew

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.

MADAM DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House congratulates the Government on its comprehensive housing policies to meet the needs and aspirations of the people of Wales; welcomes in particular the high and increasing level of home ownership in Wales; supports measures to promote wider home ownership; notes the high level of investment by Tai Cymru since 1989 which has exceeded £1 billion and produced nearly 22,000 homes; welcomes the attraction of substantial private funding to the housing association programme enabling greater diversity and choice; and rejects the call for the establishment of a Parliament for Wales which would create an unnecessary tier of Government and would waste resources.