HL Deb 03 March 1993 vol 543 cc660-3

2.52 p.m.

Lord Skidelsky asked Her Majesty's Government:

What steps they are taking to expand the market for low-cost private rented accommodation in view of the shrinkage of the local authority housing stock.

The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde)

My Lords, we are committed to increasing the supply of homes for rent. Deregulation of the private rented sector in 1989 has freed rents from excessive regulations and led to a welcome increase in private lettings, and there are a number of incentives in place to encourage investment in homes for rent. We have been meeting with institutional investors and others with a view to identifying what barriers there are to expansion of the sector, and what can be done to overcome them.

Lord Skidelsky

My Lords, I thank my noble friend for that reply. However, he must be aware that since 1979 the proportion of private rented households to total households has declined from 10 per cent. to 7 per cent. and the resulting immobility of labour is one of the main causes of avoidable long-term unemployment. Does he really believe that present policy offers a realistic prospect of reversing that decline in a matter that is so essential to the creation of a more flexible economy?

Lord Strathclyde

My Lords, my noble friend is, of course, quite right in saying that there has been a reduction in the private rented accommodation sector. That concerns the Government. In my original Answer I said that we have been meeting with institutional investors and others to see how we can rectify the imbalance.

Lord Molloy

My Lords, bearing in mind that local authorities have done so much to house thousands of people over many years, would it not now be possible for the Government to contact those local authorities or their association representatives, particularly those authorities with long waiting lists, to explore ways in which the Government may be able to help local authorities to build more accommodation? That would also help the building industry.

Lord Strathclyde

My Lords, the Question deals quite specifically with the private rented sector. We believe that the main provision of social housing lies with the Housing Corporation. That is the role of the Housing Corporation, not of local authorities.

The Earl of Halsbury

My Lords, is it not anomalous that we have millions of unemployed, the construction industry at a standstill and an inadequate housing stock? Do the Government object to a national recovery loan to get the industry spiralling uphill again?

Lord Strathclyde

My Lords, the noble Earl will have seen that in the Autumn Statement we released enormous amounts of money from local authorities through their capital receipts to boost the housing sector and thus to help the construction industry. We also made special grants.

Lord Clark of Kempston

My Lords, does my noble friend think the Housing and Urban Development Bill will increase private rented accommodation?

Lord Strathclyde

No, my Lords.

Lord Dean of Beswick

My Lords, the Minister will be aware that the Question tabled by the noble Lord, Lord Skidelsky, refers to the shrinkage of local authority housing. The Minister must be aware of reports in the press which state that the Minister in another place, Sir George Young, is introducing a scheme that will further encourage people to buy another million council houses by increasing the credits or discounts that they can obtain. Is the Minister aware that the one and a half million local authority houses that have already been sold have not been replaced and that the present rate of building by the voluntary sector will not replace those houses this century or indeed well into the next? We now have the worst of all possible worlds bearing in mind the number of repossessions that are occurring. There are now more people without a roof over their heads than ever before.

Lord Strathclyde

My Lords, our objective is to ensure that a decent house is within reach of all families. Measures have been taken to increase the supply where it is needed and the increase in funding for housing associations, together with increased efficiency, means that we shall be able to provide around 170,000 homes in the current three-year period.

Lord Monson

My Lords, does the noble Lord agree that the more Ministers talk about giving people the right to own or control the property in which they live, as they have been doing recently, the less inclined will potential landlords be to let vacant residential property for fear that in a few years' time a Bill will be introduced to allow tenants compulsorily to acquire their houses or flats against their landlords' wishes, and very probably at less than the market value?

Lord Strathclyde

My Lords, this Government have no desire compulsorily to require landlords to sell their houses which are let.

Baroness Hamwee

My Lords, does the Minister agree that the Housing Corporation's programme for next year comprises some 50,000 new units? One should set that against a demand for 102,000 new units, according to the corporation's consultant study, or 76,000 using the figures of the Audit Commission. What does the Minister have to say about the shortfall?

Lord Strathclyde

My Lords, we have discussed on many occasions the reasons for the increased number of households that have arisen in recent years. Indeed my noble and learned friend the Lord Chancellor is undertaking a special study to consider the relationships within families which lead to the increased number of households. Our job is to ensure that houses are available that meet the needs of society as a whole. We believe our policies are achieving that. I accept that we need to do more as regards increasing the amount of accommodation available in the private rented sector.

Baroness Hollis of Heigham

My Lords, I wish to press, the point about low-cost private rented housing. Is it not the case that private rents are now so high that rent officers now refuse full housing benefit in one-third of all cases because the rents are unreasonable? Therefore families who are unable to afford the high rents become homeless. Surely the answer, as so many noble Lords have already said today, is socially rented housing.

Lord Strathclyde

My Lords, there are a number of ways of solving that problem. Housing benefit is available and it can meet 100 per cent. of a person's reasonable rent and accommodation-related service charges if income is at or below income support level. We have a firm commitment to the private rented sector and we would like to see it increase.

Lord Stoddart of Swindon

My Lords, is the Minister aware that his reply to the noble Lord, Lord Monson, will not cut much ice? Does he not agree that firms or individuals who rent out their houses are at great risk from this Government, bearing in mind the latter's record? Does he not agree that this Government have forced local authorities and housing associations to sell off their properties to anyone who wants them at discount prices? Under the Housing and Urban Development Bill people who own leases are being forced to sell their leases to other people. What is there to stop Citizen Major coming forward, just before another general election when he wants to defend some marginal seats, and promising tenants of private landlords that they also may buy their houses, whether or not the landlords wish to sell them?

Lord Strathclyde

My Lords, the noble Lord has entirely missed the point of the Housing and Urban Development Bill and its relationship with the private rented sector. There is absolutely no doubt that a Conservative Government seek to increase the level of the private rented sector. They certainly do not seek to reduce it, and never to nationalise it in the way that the noble Lord suggests.

Lord Stoddart of Swindon

My Lords, ask the Duke of Westminster whether you can trust a Tory Government.

Noble Lords