Homelessness and the Private Rented Sector (Hansard, 6 July 1989)

The Minister of State, Department of the Environment (The Earl of Caithness)
My Lords, the measures contained in Part I of the Housing Act 1988 deregulating new private sector lettings have been in force for less than six months, and it is therefore too soon to draw any firm conclusions as to their impact. We shall carry out a detailed evaluation as soon as practicable.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that Answer, which is the type of Answer that could have been reasonably expected. Is he aware of the figures that I quoted in Tuesday's debate in the housing section of the Local Government and Housing Bill which show that rents paid in London from public funds range from a minimum of £160 a week to £300 a week? Is that not an appallingly bad use of public funds, when for £5,500 the debt charges on a new council house could be paid? Is it not the economics of the mad-house to carry on in that manner?

The Earl of Caithness
My Lords, no. We want more diversity in our housing market. To date, there has been a great deal of restriction. There has been either owner occupation or council house tenancy. Many of those who have been on the waiting list have said that they want diversity, more choice and more opportunity. That is what the Act gave them.

§ Lord Graham of Edmonton
My Lords, I can confirm that the figures given by my noble friend Lord Dean of Beswick are correct. Rents for property in London are in the region of £100 to £150 a week. Bearing in mind that the Question is about how the Government's action last year will help the homeless, can the Minister tell us how the homeless are expected to find rents of £150 a week? Will he tell us a little more about how he intends to monitor the effects of last year's legislation? It is one thing to say that they intend to free the market; it is another to produce figures which convince the homeless that they are being well looked after by the legislation.

The Earl of Caithness
My Lords, we shall not know what the true situation is until a detailed survey is done. We are considering how that can be done. We may well be able to use the OPCS 1991 survey, which is associated with the Labour Force Survey. That is something that we need to keep under review. With respect, the noble Lord's question goes wider, because homelessness is part of housing. In providing an opportunity for someone to rent which was not there before the 1988 Act, one is relieving pressure elsewhere in the system.

§ Lord Carter
My Lords, is the Minister aware that this is not just a problem in the inner cities? Wiltshire, where I live, is a rural area with a population of 67,000. The district council's bill for bed and breakfast accommodation five years ago was £2,000 and the bill this year is £82,000. That is because 50 per cent. of the homeless are in rural areas. What plans do the Government have to solve the housing problem in rural areas, because if they do not solve it, it will wreck the social structure of the countryside?

The Earl of Caithness
My Lords, I am grateful to the noble Lord for raising that important point. As he will be aware, we are the first Government to have designed a package for rural housing. It involves changes in the Finance Act, which my right honourable friend the Chancellor of the Exchequer has brought forward; and it has meant changes to the planning system so that for the first time land can be set aside for low cost housing for local people. Extra funds have been made available to the housing associations to enable them to take advantage of the new climate.

§ Lord Dean of Beswick
My Lords, is the Minister aware that on Tuesday I quoted the fact that two-thirds of the improverished families living in bed and breakfast accommodation live in the London area. Without trying to make political capital out of it, would it not make more sense for the Government to release some of the funds to local authorities or to give permission for them to use more of the capital assets which the Government intend to diminish under the Bill at present going through Parliament? That would allow local authorities to have a substantial increase in the house building programme in conjunction with housing associations. These are only two areas of housing which could possibly cope with homelessness on the scale that we have. The private sector has neither the will nor the ability to do such a job under the Government's legislation.

The Earl of Caithness
My Lords, I am very interested in that question from the noble Lord. He said clearly that it would be the local authorities in conjunction with the housing associations. That is a major step forward, it is what we are seeking to pursue. There is a role for the local authorities which have about 4.5 million properties of their own. Many need repair; indeed, many are now receiving repair. There is due provision for the housing associations and there is the private rented sector housing. Under the Local Government Act 1988, the local authorities 1276 can help the private rented sector by giving help of between 50 and 75 per cent. No one body can solve the very difficult problem. It must be a combination of local authorities, housing associations and the private sector.

§ Lord Stallard
My Lords, I accept that no one body can solve the problem. But will the Minister accept that all the bodies trying to solve the problem, including the Housing Corporation, have had their finances and subsidies slashed by the Government?
The Housing Corporation, for instance, had a £35 million cut between 1987 and 1989. We all know about the huge cuts in the local authority subsidised expenditure. Is it not true that government policies, of which the 1988 Act is just the latest example, have worsened an already serious housing situation? The Government can take no joy from the fact that the situation is getting worse every day and every night in London.

The Earl of Caithness
My Lords, I am glad to be able to tell the House and to reassure the noble Lord that he is wrong on this matter. Capital expenditure on housing this year, 1989–90, will be £4.2 billion. That is 12 per cent. higher than previously planned.

§ Lord Stallard
My Lords, I must correct the Minister. My figures, or the figures from his documentation, show that the Housing Corporation was allocated £686 million in 1987. For 1988–89 it has £655 million; that is a reduction of £31 million, no matter how one adds it up.

The Earl of Caithness
My Lords, the noble Lord has taken a specific item and I am unable to check his figures from this position at the moment. Perhaps I may re-emphasise that the total capital expenditure for local authorities and housing associations is 12 per cent. higher than previously planned this year. As the noble Lord will be aware, there has been a substantial increase in funds to the Housing Corporation. By 1991–92 we expect its funds to be 60 per cent. higher than now.

§ Lord Jenkins of Hillhead
My Lords, as a matter of statistical interest, what is the validity of "previously planned"? Can the Minister tell us how the figures compare with what previously happened?

The Earl of Caithness
My Lords, the statistics that I gave show that funds have not been cut. They have been increased.