Rented Housing: Resources (Hansard, 26 November 1991)

§ Baroness Blatch
My Lords, the Government's spending plans were announced in another place on 6th November. While there are local shortages of rented housing in parts of the country, we have taken steps to increase supply. The Housing Corporation's capital programme will rise to over £2 billion a year by 1993–94. Together with housing associations' ability to attract private investment, that will increase output from 22,000 dwellings to around 40,000 by 1993–94. Deregulation of the private rented sector has also led to a welcome increase in private letting.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that reply. Is she aware of the report in the Institute of Housing's journal of 8th November in which Mr. Jack Perry, the head of professional practice, referring to the Chancellor's Autumn Statement, said: We are looking for a substantial real increase in spending, but it looks as if spending will not even keep up with this year's level". Bearing in mind that repossessions are still increasing, that local authority waiting lists are increasing, that homelessness is increasing, and that the number of people sleeping rough is increasing, are not the people calling for 100,000 new tenancies a year right, and will not the Government's programme meet less than half of that demand?

§ Baroness Blatch
My Lords, the noble Lord is wrong about there being no increase in available resources. I have said a number of times at the Dispatch Box that Housing Corporation money is set to rise from £1.2 billion to over £2 billion by 1993. I have also said a number of times that there has been a switch away from local authority direct provision of housing to the Housing Corporation. There are a number of initiatives on a number of different fronts: the private sector partnership initiatives to produce low-cost housing where development permission is being applied for; inner city initiatives, some of which I have been involved with, using city grant; flats over shops, funded to bring such flats back into use; circular 7/91 which encourages local authorities to require low-cost housing in major new developments —we believe that the scope there is potentially substantial—the exceptions policy for rural areas, and, as I have already said, deregulation of the private rented sector.

§ Lord Dean of Beswick
My Lords, I have to come back immediately, because that was a lengthy answer. Is the Minister saying that when the Institute of Housing, which is not a political body and which has expertise in this matter, says that there will be a cut in real terms, it has got it wrong? I do not believe that it has. Does the Minister understand that organisations such as Shelter are saying that the 48,000 new homes to be built by the housing charities in the next two years will be far too few and only half what is wanted? When will the Minister understand that we want houses and not facts and figures?

§ Baroness Blatch
My Lords, I do not criticise the seriousness of the reports of the Institute of Housing. I am critical of the over-simplistic interpretation of what is being said about the provision of housing. What I said was that there is an increase in resources. The noble Lord said that there is not. I also said that the housing shortage is being tackled on many fronts. The Institute of Housing considers that more houses are being built. One has to take into account the private, the voluntary, the Housing Corporation and the local authority sectors when considering house building in the round.

§ Baroness Young
My Lords, will my noble friend say how many houses are now being occupied as a result of deregulation of the private rented sector? My understanding was that there were some 500,000 empty properties. Do we have any idea how many have come back into use? In particular, are flats over shops being brought back into use?

§ Baroness Blatch
My Lords, in answer to my noble friend, I certainly cannot be specific about numbers. However, I can say that we realise that there is a difficulty here; namely the resistance of many private owners to allow their homes to be rented. So we have encouraged the housing authorities to offer themselves as managing agents to private owners to bring some of the empty properties back into use. We believe that that will be a very successful policy.
I also mentioned that a fund is being made available to bring flats over shops back into play. That 1271 produces two benefits. One is that there will be more units for people to live in; secondly, it brings much needed residents back into many city and town centres.

§ Lord Moyne
My Lords, does my noble friend agree that the policy of the Housing Corporation of reducing grant rates in all new developments next year must lead to an increase in rents? If there were more generous funding, could not the Housing Corporation then afford to revert to the previous more generous rates, enabling more houses to be built at lower rents?

§ Baroness Blatch
My Lords, the housing associations, which are in the business of satisfying social need for housing, have to balance a number of interests. Those include income from rents, providing new un is for people to live in and making sure that what they do is cost effective. I believe that the extra resources that will be made available to the housing associations will benefit in a number of ways but they must not throw rents out of kilter with the need to provide homes for people. We have a very buoyant policy of subsidising people individually as opposed to subsidising property.

§ Baroness Fisher of Rednal
My Lords, is the noble Baroness aware that since 1979 £23 billion has been raised through the sale of council housing? Would it not be possible for the Minister to say now to unemployed building workers, painters, and decorators, "Get off the unemployment list, we shall now start to build houses and give you a job"?

§ Baroness Blatch
My Lords, there are two points. We are unashamedly on the side of the right-to-buy policy. I do not know whether what the noble Baroness said is any kind of criticism of the right to buy. Secondly, there is a buoyancy in building houses. Clearly, it is not as great as one would wish and the noble Baroness would like more. However, that involves more public spending. We are committed to spending what we believe people can afford. I understand that that is to be the policy of the party of noble Lords opposite. Certainly, John Smith tells us that. I wonder whether there has been a move away from spending what the country can afford.

§ Lord Stoddart of Swindon
My Lords, following that excellent question from my noble friend Lady Fisher, will the Minister confirm that new household formation continues apace and will do so for the next four or live years? Under present circumstances, with house building at such a low level, will there not by the mid-1990s be a God-awful housing shortage? Is not now the time to do something about it, perhaps by the means suggested by my noble friend?

§ Baroness Blatch
My Lords, I profoundly disagree. This is not an easy issue; it is extremely complex. Many initiatives are addressing the problem of housing needs right across the spectrum. I have every confidence that the gloom which the noble Lord predicted will not come about if we remain in power but could well come about if the noble Lord gets into power.

§ Lord Stoddart of Swindon
My Lords, if the noble Baroness will forgive me saying so, I asked her about the problems which will be raised as a result of new household formation which is going on now and will continue until the mid-1990s. She did not answer that question. Will she confirm that it is going on?

§ Baroness Blatch
My Lords, I do not agree with the scenario set out by the noble Lord. I believe that all the ways in which we are addressing housing and new household formation, which the noble Lord suggested were the basis of the problem, will not give rise to the difficulty that he predicts.

§ Lord Dean of Beswick
My Lords, the Minister referred to my party's policy if we win the election. I have to tell her that the main plank of that policy in terms of houses to rent will be immediately to free local authorities once again to start building houses for people to rent. Why do not the Government stop behaving so stupidly and let local authorities resume that role?

§ Baroness Blatch
My Lords, that is a very interesting statement. The only way the noble Lord can do that is by substantially increasing local authority and government spending. I understand that the honourable gentleman in another place has set his face against that. It is the only way in which extra house building by local authorities can be achieved.

§ Baroness Fisher of Rednal
My Lords, it will decrease the unemployment pay.