Housing: HIP Allocations (Hansard, 7 December 1989)

§ Lord Reay
My Lords, my right honourable friend the Secretary of State for the Environment will announce the Housing Investment Programme allocations to individual local authorities in England for 1990–91 later this month. Copies of the letters to individual authorities and the schedule of allocations will be placed in the Library of the House.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that Answer. The information that I have received from people involved in the negotiations shows that, despite the pleas that have been made in your Lordships' House from all quarters for increased spending on housing because of the social problems, public sector housing in this country will once again suffer a cut in real terms this year of £303 million in the settlement that the Minister has stated will be announced shortly. In real terms that is an 18 per cent. cut. Does the Minister consider that local authorities can continue their functions of caring for people and getting homeless people off the streets with cuts of such magnitude?

§ Lord Reay
My Lords, the Autumn Statement of my right honourable friend the Chancellor of the Exchequer about next year's public expenditure plans provides for a total of £4.4 billion to be spent on housing capital by both local authorities and the Housing Corporation in 1990–91. That is 7 per cent. higher in cash terms than in the 1989–90 provision of £4.2 billion. Within the total provision for housing capital expenditure for the year 1990–91, of the £4.4 billion, £1.2 billion will go to the Housing Corporation. We expect £3.2 billion to be spent by local authorities. The provision for investment by the housing associations through the Housing Corporation will rise from £815 million in 1989–90 to £1,221 million in 1990–91. It should enable more than 30,000 new homes to be built.

§ Lord Dean of Beswick
My Lords, I am sorry quickly to rise again. The Minister indicates that my figures are correct. My figure was £3.3 billion; he 996 has stated a figure of £3.2 billion. Is it not a fact that that indicates a real cut? Will the Government reconsider what they are doing before they do more appalling damage to the housing situation?

§ Lord Reay
My Lords, I do not accept the words of the noble Lord. The Government are not cutting their housing programme. They are maintaining a substantial housing programme. They believe in the value of the private sector and the housing associations supported by the Housing Corporation. That is a part of the policy that is being expanded at the present time.

§ Lord Mellish
My Lords, news agencies report that the Secretary of State for the Environment has announced today that special money is to be found for those who are at present homeless. Will the Minister say something about that? It is certainly very interesting.

§ Lord Reay
My Lords, yes. The Government share the belief that to tackle homelessness is a matter of the very greatest importance. That is why, following the publication of the homelessness review, we announced that we would provide an extra £250 million over the next two years to help local authorities and housing associations. In the homelessness pressure areas identified by the review—London and the South-East—that should provide 15,000 extra lettings through the repair of empty property and other means to help get the homeless out of the unsatisfactory situation of bed and breakfast accommodation.

§ Lord Stallard
My Lords, does the Minister accept that his statement on government policy on homelessness is to be welcomed? Recognition that the problem is mainly in the South-East and in London is welcome news to most of us. But if we accept his figures of 30,000 new homes and 15,000 new lettings, making together 45,000 new houses by 1992, the figure is nowhere near the 100,000 per year needed to meet the existing shortage. We also need £3 billion urgently for the repair and refurbishment not only of empty properties but properties that are rapidly deteriorating. Can he inject more urgency into the future statements of the Secretary of State with regard to the statistics?

§ Lord Reay
My Lords, the homelessness initiative is a very recent one indeed. We certainly hope that it will go some way to alleviating a problem which concerns us all.
On renovation, the public expenditure provision made in the Chancellor's Autumn Statement last month will enable local authorities to spend over £1.8 billion on renovation of their stock in 1990–91. This is a very large sum indeed.

§ Lord Monkswell
My Lords, are the Government aware that the very high level of mortgage interest rates is causing a reduction in private housing investment? Would it not be sensible for there to be a corresponding increase in public sector housing investment to ensure that the overall level of housing investment is maintained in this country?

§ Lord Reay
My Lords, we believe that housing associations should take the lead in the provision of new subsidised rented housing. We do not see the local authorities' primary role as being that of adding to the stock of subsidised housing. We see it rather as assisting the private sector and the housing associations and of maintaining their own stock in good condition.

§ Lord Monkswell
My Lords, I must rise again. The Minister has not answered the question. Given the reduction in private housing investment, is it not more sensible that there should be an increase in public sector housing investment? I did not say that it should be council housing or housing association investment. I referred to the broad total of public sector housing investment.

§ Lord Reay
My Lords, no. According to the latest figures that I have, the proportion of the United Kingdom's housing stock within the public rented sector—namely, 25 per cent. —is the highest of all the countries for which I have figures. It compares with 14 per cent. in France, an estimated 3 per cent. in the Federal Republic of Germany and 2 per cent. in Spain.

§ Lord Hankey
My Lords, do the Government recognise that if they restrict the construction of houses the price tends to increase and this has a bad effect on inflation?

§ Lord Reay
My Lords, interest rates have had to be high but we hope that they will be reduced as soon as possible.

§ Lord Dean of Beswick
My Lords, is the Minister aware that the recently formed Housing Forum —it is not a political organisation but consists of members of the RIBA and representatives of local authorities, the public accountants' organisations and the Institute of Housing—states clearly that by the turn of the century there will be need for a further 2 million houses? How does the Minister expect local authorities and the public and private sectors to achieve such a target when even the private sector building programme has fallen by 30 per cent. during the past three months? Is it not time that the Government listened to people outside the political spectrum and started allowing local authorities once again to build the houses which are so urgently needed?

§ Lord Reay
My Lords, as I have stated a sufficient number of times, we do not believe that the primary task of providing subsidised rented accommodation should be for local authorities. We accept that there are shortages but not a general housing shortage as existed in the 1950s, for example. There are shortages—even acute shortages—in certain areas; for instance, in the South-East and inner London. For that reason we have made available increased funds to the Housing Corporation and recently for the homeless.