Housing and Homelessness

HL Deb 08 June 1994 vol 555 cc1229-92

3.8 p.m.

Baroness Hamwee rose to call attention to the case for measures to increase the provision of affordable housing; and to homelessness; and to move for Papers.

The noble Baroness said: My Lords, this week is National Housing Week and it is a mark of the concern of these Benches that we did not know that—or at least I did not know that—when we put down this topic for debate. Since then the matter has become highly topical. Some 10 days ago the Prime Minister made remarks about begging which some saw as ill judged and others analysed as arising from an immediate party political imperative. But what is generally agreed is that the remarks distracted from the real issue—the need for every member of society to have a home; and by "home" I mean more than a roof.

We tend in this place and indeed outside it to deal with what is urgent and not necessarily with what is important. I suggest to the House that the issue of housing is both urgent and important. Indeed, it is fundamental. Without decent housing you cannot educate your children to their full potential; indeed, you may not even be able to settle them to consistent schooling. You cannot earn your living: "No home, no job; no job, no home" is very true. If you have a home, but you cannot move to where the work is, you may be in danger of having neither. You cannot look after your own or your family's health.

Housing is not a woolly, do-gooding issue; it is as much at the heart of the functioning of society as is the economy. Housing is itself a hard economic subject both because of the effect on the labour market and because of the role that house-building and renovation play. If you do not know where you may be living next week or next month, the disruption and the trauma must be indescribable. I say "must be", but housing problems are not problems which do not affect people like us. The horrors of negative equity are very familiar indeed.

Your Lordships must all have listened to the anxieties expressed by middle-aged and middle-income people who themselves are settled, but who ask: where will my children live? You may have been involved in situations such as that of a family in tied accommodation—perhaps working in a shop and living over it—who lose their jobs and therefore their home, just as the youngest child with a difficult history has settled in at the local school. There is also the example of the family who have been living with relatives when relationships strain and finally break.

Shelter's Nightline (that is an emergency line, outside normal office hours) answered 24,000 calls last year and knows that another 7,000 calls were lost. It is telling that many of its referrals come from the Samaritans. Very local to my own home—it is a microcosm—a hostel for single homeless people in Richmond has told me that it is generally unable to accommodate about six people a night who seek its help.

People want their own homes—of course they do —and they also want to own them. Perhaps that is because society tells them that they should. I believe that we have made property something of a god and that it is more than time that we got rid of the stigma which attaches to renting rather than owning. Since many of our troubles come from individuals who regard housing as an investment, let us as a society invest effectively.

What is the current situation? The number of households with serious mortgage arrears, as well as those with negative equity, have contributed to wider economic problems as well as personal tragedies. Quite apart from immediate need, there is a sense of vulnerability which was almost unknown 10 or 20 years ago. Faced with the volatility of the boom-bust market, the output of private housebuilders fell. At the end of last year the BES incentive arrangements ended and there is now no help available to stimulate the private rented sector.

Local authorities have almost ceased to build new homes. After a year's respite from having to use receipts to repay debt, they have resumed their contribution to easing central Government's funding problems. The output of housing association rented homes is destined to fall away following cuts in the last budget. Despite falling property values, rents for social housing have increased markedly, causing problems for those with low incomes. A colleague in my own local authority, commenting on the plight of housing association tenants whose rents have increased, but who have small savings —we are all familiar with the desperation to hang on to savings and not to squander them—describes them as the "new genteel poor".

The figures may vary, but it is agreed that there is a need for affordable housing; that is a need and not merely a demand. In 1990 the London Research Centre estimated that about 560,000 households were in housing need, of which about 380,000 were unable to afford owner occupation and could not meet their own needs without outside assistance. A recent report on the situation in London gave the following statistics: at the last census 1,275 people were sleeping on the streets of London. I am aware of initiatives in that regard but the figure was telling then and it is still telling. It is estimated that over 50,000 single people are living in temporary accommodation including hostels, hotels, short-life accommodation or squatting. There are almost 38,000 homeless families in temporary accommodation waiting for the council to find them permanent homes. There are 36,500 households "accepted", in the technical sense of the term, as homeless by London councils. More than 230,000 households are on London borough housing waiting lists.

The report goes on to say:

'These statistics are alarming enough, but they do not show how the situation has deteriorated over the last few years — in 1978 London councils accepted 14,430 households as homeless, 40‥ of today's total. The contrast with numbers in temporary accommodation is even greater. In 1979 there were 2,750 households in such accommodation awaiting rehousing … The figure is now over thirteen times greater".

The Government's policies and attitudes have been criticised recently by two parliamentary committees. In June last year, in its second report entitled The Housing Corporation, the Commons Environment Select Committee stated: We recommend that assessments of housing need—whether expressed as a range or as a precise figure—should be published by the DoE, using widely accepted methodology, on a regular basis".

In April this year the Commons Public Accounts Committee, in its twentieth report dealing with the Housing Corporation said: It remains our view that accurate assessment of housing need is essential in distributing resources to housing associations. The Department should therefore continue to see that needs assessments are regularly compiled and updated to provide the necessary data to help ensure that available resources are targeted effectively".

One of the difficulties is that of definition. The Government define "affordable housing" as both subsidised and low-cost market housing. That is too imprecise and too wide-ranging, certainly for forward planning or development control dealing with particular planning applications. Low-cost market housing is generally not affordable. It is not just a matter of numbers. Your Lordships will have seen a report this week of the National Housing Forum which has drawn attention to the extent of poor housing conditions. One in 13 homes in the United Kingdom is unfit for habitation; one in six is in need of urgent repairs costing more than £6,000. Three out of 10 homes in Scotland and one in five in England are suffering from problems of dampness, condensation and mould.

There are particular special needs too. Yesterday your Lordships' attention was drawn to the funding crisis facing refuges for women who are victims of domestic violence, especially the refuge in Chiswick. Domestic violence is a human rights issue and not confined to housing. Women's refuges, unable now to provide the sanctuary needed, know that if the Government's review of homelessness goes forward, altering the woman's status from homeless to not homeless on the ground that she has been fortunate enough to find a bedspace, removing her entitlement to permanent, settled accommodation, disaster lies ahead for her and for the women who cannot find a safe haven because the system has become clogged up.

Recently Crisis has reported on the high proportion of single homeless people who have served in the forces. A country which honours its servicemen would do well to remember its obligations when the spotlight of this week's commemorations is turned off. MENCAP draws to our attention its concern about housing shortages for people with learning disabilities. A recent NFHA/Institute of Housing study showed that more than 5,000 new rented homes a year will be needed over the next five years for people with learning disabilities whose accommodation is no longer available in NHS hospitals or local authority, private and voluntary facilities. Their families now caring for them fear for their future when they, the parents, can no longer do so. They need to know that their children will be cared for without waiting for a crisis.

Community care policies require special needs housing to be effective. But the Government have reduced special needs bedspaces from 3,000 to 2,500 a year and have capped the revenue support available to housing associations via the Housing Corporation over the next three years. The drive to reduce costs and to increase value for money must not mean that those who require more expensive support are discriminated against. Can our planning system deal with the crisis? I believe that it has a contribution, but only a small one. I have recently been a member of a Joseph Rowntree Foundation inquiry into planning for housing. Its report is to be launched in 10 days. I am delighted that the noble Lord, Lord Shuttleworth—as the Minister said before, on this occasion I can call him "my noble friend"—is speaking in this debate.

The report highlights the fact that planning mechanisms can play only a small part. It raises the problems and, indeed, the ineffectiveness of asking developers to carry the burden by contributing affordable housing from new development. Site-specific quotas, encouraged by government guidance, making planning consents conditional on a proportion of affordable homes being built on significant sites, create uncertainty and introduce an unpredictable charge on the development. The cost is spread in an unforeseeable way between landowners, developers and house purchasers.

What about the creation of a "social housing" use-class? I know that some would say that that is already possible without a change in the law, but I believe that it would face a number of difficulties. Landowners may leave sites undeveloped, hoping for a future change of policy. Local authorities might have difficulty in finding sound land use planning reasons for selecting sites that were suitable for social, but not other, housing. There is also the danger of "ghettoisation". I believe that an integrated mix of tenures is not only desirable but essential to avoid stigmatism. Anyway, there is a backlog of unconstrained sites which need to be developed first.

What the report has made very clear is that although there is no formal national policy or target for the number of homes that should be built over a given period, central Government controls the process of deciding numbers in development plans. The inquiry reports that the whole approach would be placed on a more secure foundation if a more tangible national strategy for housing existed to underpin it. The procedures for deciding housing land use figures need to be more open. Local views need to be given an earlier and clearer prominence in the formulation of housing supply policy at strategic level. There is widespread confusion over the meaning of DoE housing requirement figures. Are they capacities—in other words, maxima—or targets? The recent South East guidance, which has figures ending in 67, has not helped, but at least someone resisted publishing what must have been an annual calculation ending in 66 recurring.

Let me return to issues directly of the economy and regeneration. I am sure that other noble Lords will make longer and more detailed points. Investment in housing means jobs—both in building and in the supply of materials, most of which are provided by UK industry. Investment is a good thing. Capital spending is part of the nation's wealth and will generate an increase in private sector returns. That applies not only to new building. Indeed, quite the contrary. It makes economic sense to protect an asset and not to let it crumble. It makes environmental sense to conserve and not to succumb to the temptation to move on to greenfield sites and squander prospects for a sustainable future.

Let us look again at the restrictions on renovation grants. In many areas, the demand for mandatory grants far outstrips resources. Few grants are going to improve housing in the private rented sector where conditions are proportionately worse.

Let us look again at new incentives for investment in the private rented sector. There is no pride in the fact that private renting in the UK stands at a mere 7 per cent. —making us the only country in Europe to have that proportion in single figures. That has to be set against a proportion of 22 per cent. in Denmark, 30 per cent. in Luxembourg and 32 per cent. in the US. Let us accept that there is nothing wrong in moving to owner-occupation later than we now direct people to do— perhaps in one's 30s when one is in a settled relationship, a settled job and has some savings.

Let us address the poverty trap in which high rents place families. The DoE itself tells us that more than 80 per cent. of homeless applicants are eligible for housing benefit. But if someone in the household gets a job, the problem of affordability becomes ironically more, not less, acute. Housing benefit is withdrawn at the rate of 65p for each pound of increased income. We know that in 1992–93, 29 per cent. of private tenants whose rents were referred to the rent officer had them reduced for housing benefit purposes.

Let us address more effectively the use of homes now currently empty. To give but one example, Crisis—I have mentioned its report on ex-servicemen—recom-mends that the Ministry of Defence make use of its empty homes, which numbered 10,000 at the end of last year, and that the MoD Housing Trust offer surplus stock to other housing associations in return for the right to nominate single people to housing rented by that association elsewhere. That imagination needs to be encouraged and given an atmosphere in which such proposals can be implemented.

Let us acknowledge and, I hope, alter the cuts in support for housing associations. Lowering the grant rate for 1995–96 to 55 per cent. is called by the NFHA a false economy. The confidence of lenders of private finance could be threatened. Shared ownership will wither as its costs come close to those of full home ownership. I have commented that high rents can be a disincentive to work. With a 55 per cent. grant rate, 85 per cent. of all new housing association tenants would be eligible for benefit by 1996.

Let me be the first of today's speakers to call again for the release of local authority capital receipts for investment in housing where there is the greatest shortage.

Let us acknowledge that affordable housing contributes to economic health rather than drains it. It helps labour mobility. It helps employment generation. It reduces the dependency of the economy on house price inflation. MIRAS has been cut back. I congratulate the Government on taking that particular bit between their teeth, but the money has not been used for housing purposes.

I recall some eight or nine years ago a businessman commenting that he did not understand why someone living in Brixton who was not employed did not get on the train to Esher to find work. That simplistic view is rarely expressed today. Industry and business know the need for housing for employees. The City knows that housing is needed for key workers. And all employers know that with poor housing, with worries about the future for oneself and one's family, no employee can give his or her best.

This has been a deliberately broad-brush approach. I am conscious that I have skated thinly over a number of issues and not even touched on many others. I know that others of your Lordships will bring to the debate an expertise and experience that I cannot and that there will be reference to the work and the ideas of those agencies outside this place which know the real problems and which are bursting with energy and commitment.

No one has a monopoly of good ideas. I hope that the Minister will understand that this debate is instigated in a spirit of co-operation and of attempting to identify problems and solutions and that in his reply he will show that the Government are receptive to them because, if for no other reason, good quality homes cost less than homelessness.

I beg to move my Motion for Papers.

3.28 p.m.

Lord Shuttleworth

My Lords, housing is an issue of concern to us all and it has been much in the news this week. I congratulate the noble Baroness, Lady Hamwee, on introducing such an important and timely subject for debate. As is customary in your Lordships' House I must declare an interest; in fact, two interests.

First, I am chairman of a large building society, and secondly, I am chairman of the Rural Development Commission. As many noble Lords know, that is the government agency concerned with the economic and social development of rural England. In that connection, I must also make an apology. I have a long-standing development commission engagement in the West Country this evening, and I much regret that it is highly unlikely that I shall be able to stay until the end of today's debate. I hope that all those taking part will forgive me.

The noble Baroness, Lady Hamwee, gave a comprehensive survey of the housing scene. I shall concentrate on a narrower front. I want particularly to emphasise that problems associated with affordability and homelessness are not the exclusive preserve of urban areas. They occur much more in rural areas than a casual observer would guess. The Rural Development Commission is not a housing authority, but it is our responsibility to understand what is happening in the countryside. The availability of suitable housing, or the lack of it, is critical to the wellbeing of rural communities. Without an adequate supply of low-cost housing people on modest or low incomes, especially young people and those recently married, are forced to leave our villages, thus starving communities of the life blood needed to maintain the local economy and local services.

For several years, the availability and cost of housing has been generally recognised as one of the most important issues facing rural areas. Concerns about the issue are mentioned to me in every rural area I visit. People have it at the forefront of their minds. Certainly, yesterday, when I was in Staffordshire Moorlands, that was the point, as it is everywhere I go. It is an issue which is as likely to affect the more affluent parts of the countryside just as much as the remoter, more economically vulnerable areas. Over the past 10 to 20 years more and more people have chosen to move to rural areas, to work in or commute from them, or to retire there. Increased demand has not been matched by an increased supply; so, understandably, prices have risen. Even in the current housing market, prices remain high in most rural areas. At estate agents' offices in my part of the country—the south end of the Lake District —one finds prices which would not be uncommon in London or the Home Counties. However, incomes generally are lower in the countryside. Inevitably, as a result, many people who want to live and work in the countryside and whose services are badly needed there cannot compete when it comes to buying a house.

No national statistics of the extent of housing need in rural England exist, although I know that the Department of the Environment has commissioned some research which will provide information. I hope that that will be available speedily. To try to fill the gap, the development commission carried out a study in 1990 which concluded that, at a conservative estimate, there would be a net requirement of at least 80,000 additional homes in rural England over the following five years —that is, some 16,000 homes a year. The greatest need is in the smaller villages, particularly those with a population of fewer than 1,000. Let me make it clear, before I am accused of promoting massive new development in the countryside, that, taken over the country as a whole, I am actually talking about very small scale additions, sensitively designed and carefully integrated into their surroundings.

I turn to homelessness, long thought to be an urban or inner city problem but now, unfortunately, not unknown in rural areas. Latest figures produced for the development commission and published last year show that in 1992–93 there were over 16,000 homeless households in rural areas—that is, some 12 per cent. of the national total. Nearly 5,000 families were in temporary accommodation—that is, one-fifth of the total outside London. Young people and childless couples face especial difficulty in finding their own home.

The need for affordable housing in rural areas remains high: the rural population continues to grow, as does the number of households. When we consider ways of improving the provision, we must recognise a number of problems associated specifically with rural areas. Rural housing schemes tend to be more expensive to build; because of their small scale, because of remoteness and because of the need to achieve high standards of design. They need to be handled sensitively, which involves close working with the community. That all takes extra time. It is not easy nowadays to raise finance from the private sector. Indeed, there must be a risk that current pressure on housing associations to increase their output, to be more competitive and to raise more private finance will make small rural housing schemes even harder to develop. All that is against a background of often restrictive planning policies, and all too often a short sighted and negative public attitude to any change in the countryside. Faced with those difficulties the government have introduced a number initiatives to increase the supply of low cost housing in rural England, and I welcome the steps they have taken.

The Housing Corporation is the main provider of rural social housing. Its special rural programme, introduced in 1989–90, has now produced over 7,600 homes. I congratulate it on exceeding its target last year by some 350 homes. Together with the rural houses secured through the housing market package and the special local authority supplementary credit approvals programmes in 1991–92 and 1992–93, nearly 11,000 affordable homes for rent or shared ownership have been built in the four years since the introduction of the rural programme.

Planning policy has been changed to help address the problem of securing land and to ensure that housing for local needs remains available for that purpose in future years. The "exceptions" planning policy, introduced by the late Lord Ridley, when Secretary of State for the Environment, is now embodied in planning policy and has been adopted widely by local authorities. That has encouraged landowners to make land available cheaply for housing and many of them have done so most generously. All of that is welcome, but I am afraid progress is still slow. The fact is that the problem will not easily disappear.

Until means are found to reduce the inherent difficulties in providing affordable housing in rural areas, the countryside will continue to suffer an outflow of its less well-off inhabitants. Measures that could help include continued recognition by government that housing is a key issue in rural areas and that measures to increase competition and output by housing providers must not disadvantage small rural schemes whose additional costs, such as higher design standards and the purchasing of local materials need to be taken into account; an increased rural housing programme, delivered through the Housing Corporation and others; local authorities addressing specifically the needs of rural areas in their housing strategies and helping to facilitate supply through the planning system and in their planning policies and development control decisions; and lenders—here, as one connected with a building society, I recognise the need to talk to myself —recognising that small rural schemes and small housing associations do not represent too great a risk.

The Rural Development Commission will continue to take action to facilitate an increased supply of affordable rural housing. For a number of years we have granted support to the Rural Housing Trust in its excellent assistance for rural housing associations. The commission also supports financially the setting up of option land banks to increase the availability of land for housing as well as the establishment of posts for housing enablers who improve supply by bringing together the various agencies, landowners and local communities. We also finance demonstration projects tackling particular rural housing problems; for example, homelessness among young people. We shall continue to look for ways in which we can contribute, not only by researching and highlighting issues but, above all, in practical ways which produce an increased supply of affordable homes for country people.

Unless the situation improves, the vitality of rural areas and communities will be in jeopardy. For the healthy rural economy and balanced communities so important to the countryside's well-being, no less needed than jobs and services is an adequate supply of housing, affordable to a mix of people.

3.39 p.m.

Baroness Dean of Thornton-le-Fylde

My Lords, I thank the noble Baroness, Lady Hamwee, for initiating the debate today and for giving us the opportunity to discuss the subject during this week of housing, and, of course, this Year of the Family. Decent homes are extremely important to families. I extend to your Lordships my sincere regret that I shall be unable to stay for the whole of the debate. It is the first time since I joined your Lordships' House that I have been in this rather embarrassing position of being unable to stay to the end of the debate and of having to apologise. I hope that your Lordships will understand, in particular those taking part in the debate.

Housing is at the centre of families, whatever guise they come in, and during the years the importance of housing has been recognised. Last night BBC television showed more programmes commemorating D-Day, which it did so well, and it showed how the news of that time would have appeared on television had it occurred this week. The programme mentioned the Portal house —the pre-fab. It was announced that they were being built because we had lost so many houses during the war and the families needed them. It was received very well as a temporary measure. Some 50 years later many of those pre-fabs are still being lived in. That illustrates the kind of problems that we have in housing.

At a Conservative Party Conference in the late 1950s, a very well-known and loved politician—Harold Macmillan—announced the Government's target to build 300,000 houses during the following year. His civil servants went into a spin because they had no idea how they were going to achieve that incredible target. He sent for Ernest Marples and they did achieve it. In 1979, during a period of Labour government, some 150,000 new homes were built in Britain. Last year only 55,000 homes were built. We are not replenishing our housing stock in the number or in the manner that is necessary.

Last March, Sir George Young said: I want to bring within the reach of every family the decent home that they deserve". I believe that he meant what he said but, regrettably, government policies are not delivering that aspiration. Indeed, the reverse is true because the situation is getting worse.

The National Federation of Housing Associations states that the Government's policy is failing to deliver affordable housing because they are placing too much emphasis on substantially increased rent levels. There is no demonstrable vision for social rented housing. The right-to-buy scheme was a success for those families able to take the opportunity. But I wonder how many believe today that it is the success that they then believed it to be. So many families are caught in the trap of negative equity. They cannot sell their properties, the debts on mortgage payments are rising and building societies are not moving in to repossess. But will not that situation change when the market improves? Is it not a ticking time bomb waiting to go off, because where will those families find affordable homes when the situation changes?

The old idea of public housing was cyclical. As children grew up and left home families did not need such a big house and the parents moved into smaller accommodation such as a flat or, if they were lucky, a bungalow. That is not happening today because when they have a property they are staying put. That cycle has come to a stop.

The erosion of stock availability is one of the reasons for the public backlash against single parent families, in particular, single mothers. They are in accommodation and cannot move on. The fact is that they are not getting priority—the wrong message was put across. There is no evidence of queue jumping but there is evidence to show that when people get a home they need to hold on to it, even if alternative accommodation may be more suitable.

A recent survey confirmed that there is no queue jumping. It also confirmed that approximately 1.9 million people in Britain are technically homeless. I say "technically" because the figure includes not only people sleeping rough, squatters and people in hostels, but families in short-term accommodation with a housing contract of less than six months. They do not know where their home will be. Yes, they have a roof over their heads but they cannot call that their home because it is short-term accommodation.

The noble Baroness, Lady Hamwee, referred to capital receipts from housing and said that she did not think that would be the last time it would be mentioned in the debate today. She was so right. It would not take many earth-moving changes in government policy considerably to ease the present situation. The release of those receipts would help house building. Councils are no longer building houses and your Lordships should not believe that the private sector will step in. It cannot do so because the housing associations are not receiving the funding to provide accommodation. Why does the Treasury insist on holding fast to its policy that the PSBR must include everything, not only housing benefit? Instead of separating it out—as, sensibly, most countries in Europe do—it treats investment in housing in the same way. If that policy could be changed it would help the situation.

Affordable housing means affordable rents. It also means avoiding the poverty trap. Unfortunately, many people who need housing are caught in that situation. In 1992–93 the RPI increased by 1.8 per cent. That was a laudably low level. Regrettably, because of the change in Government policy as regards the funding available for housing associations, housing association rents increased by just under 21 per cent. That was an enormous figure and has an enormous effect on the budget of any family. This year council house tenants will face an average increase of 6.5 percent. Again, that is a high figure taking into account the present rate of inflation and RPI.

The poverty trap still catches people who need help. A few days ago I saw figures provided by Shelter. They show that, as regards a certain poverty trap, if one takes into account families receiving family credit, housing and tax benefits, for every £1 increase in gross earnings they benefited by three pence. They are caught in the poverty trap and there is no way of getting out of it. That restricts them considerably in being able to do something about their housing situation.

This week's report from the National Housing Forum is timely and is supported by the Rowntree Foundation. It makes clear the social price that we all pay, not only those who suffer the worse problems of being without a permanent home. The noble Baroness, Lady Hamwee, mentioned that one in 13 houses are unfit for habitation. According to the report, one in six houses need more than £1,000 to be spent on major repairs. It states: The crux of the crisis is the shortage of resources for local authorities to carry out the duties which the Government have imposed on them". Rightly, the Government have imposed duties on local authorities but, wrongly, they have not provided the resources to meet those responsibilities.

Between 1987 and 1992 the housing investment programme fell from £1.5 billion to less than £0.5 billion. The impact is that whereas in 1984 approximately 214,000 grants were given to improve homes, in 1992 the figure had fallen to 35,000. Therefore, we have a dual problem: not only are we failing to build the houses that we need, we are failing to look after the houses that we have. That kind of decline affects the health of people. It affects their family life. That in itself imposes additional costs on the state in terms of health care and family support. That money would have been much better spent on providing decent housing accommodation.

Many years ago Lloyd George said that he was going to build "homes fit for heroes". That went sadly wrong. The problem is that all these years later we still aspire to provide something much lower down the scale; namely, decent housing for the people who need it. It is not just a question of spending money and a debit on the country's balance sheet because the result will be a reduction in costs in areas where there is no need for such expenditure.

I am pleased to support the Motion and I congratulate the noble Baroness, Lady Hamwee, on bringing forward this debate today.

3.5l p.m.

The Lord Bishop of St. Edmundsbury and Ipswich

My Lords, the difficulty of experiencing homelessness in anything other than our imagination for Members of this House is considerable. Perhaps we need to assess what having a home means to us in terms of a door behind which we can go and behind which we can live our own lives; in terms of security; and in terms of the enmeshment in the network of medical care, social services and belonging to a community, and so on, which we take for granted. We may then see how we should feel if we were not able to experience that. We believe that a home is more than bricks and mortar, more than a roof over one's head. Decent housing certainly means a place that is dry, warm and in reasonable repair. It also means security, privacy, sufficient space; a place where people can grow, make choices, become more whole people". That is a quotation from the report Faith in the City which is now several years old but in many areas, it is still sadly relevant.

There is not a single member of your Lordships' House who would not agree that it is the birthright of all people, and in particular, children, to live within that sort of environment. Credit needs to be given to the strenuous efforts that have been made down the years to ensure or to seek to ensure that adequate housing and homes are available for all people in this country. The housing associations, local authorities and government have worked for many years to that end. In recent years, credit needs to be given to the Government for the rough sleepers' initiative in London, the housing market package and their efforts to bring the private sector more onto the centre stage.

Certainly there are more than enough privately owned houses to meet housing needs, if that were the way of so doing. However, I believe that that will only ever make a fairly small contribution. Of course, there have been housing association grants. Housing benefit has increased over the past eight years by something like four times and housing association grants have been made towards the building costs of new houses, although there is well-founded anxiety about the standing of such contributions in the future.

Quite clearly a reasonable balanced objective and national debate is needed. The Churches National Housing Coalition calls for such a major debate, looking ahead at the needs over the next 20 years. We must now obviously begin to plan for that.

Yet there are so many illusions which persist about the standing of the homeless in this country. Those illusions need to be dissipated if any debate is not to be vitiated and polarised. I say "illusions" and not "myths" because a "myth" is a technical word, both theologically and anthropologically. A myth is a story which may not in itself be true but which nevertheless has deep truth within it. I am talking about illusions and not myths.

There are many illusions and I seek merely to draw attention to but a handful of them because they will at least remind us that many others exist, too. One of the illusions is that the problem of housing can be solved by the Government alone. Clearly, that is not true. There must be a partnership between all those involved. Perhaps I may say that it might be helpful if the Government were more in touch with themselves, particularly through the DSS and the DoE which need to be in closer contact with each other. Housing associations, the Churches and the homeless must all be in partnership.

The second illusion is a perennial one which exists not, I am sure, in your Lordships' House but it certainly exists outside it; that is, that the homeless merely need to pull themselves together and sort themselves out. That ignores the reality, as we all well know. Many homeless today are extremely competent people. A view expressed by John Bird, who is editor of the Big Issue, is that the: encouragement to stand on your own two feet may have liberated some people. But it also pushed many into aspirations beyond their means. Risk-taking burgeoned and with it failures and debts. Quite a number of the homeless today are the people who took risks in the heady days of the 80s. As traditional industries closed down, armies of people began to move around in pursuit of opportunity. The socially mobile, though, could become the socially immobile when the hype did not live up to the reality". It also ignores the fact that homelessness itself is extremely debilitating. People in that situation can very easily lose their nerve and any ability which they may have to contribute towards their own rescue. Of course, it ignores the need therefore for that and other reasons, for education, socialisation and help for those who need to find nerve and skills which they no longer have; for example, the Girls' Friendly Society is at work in Great Yarmouth to help young single mothers.

There is thé illusion that London's problems are the same as over the nation as a whole. I speak as a Bishop with a large rural responsibility and I am extremely grateful to the noble Lord, Lord Shuttleworth, for his very competent outline of the housing needs of rural areas. I think that I need say no more about that.

The noble Baroness, Lady Hamwee, referred at the beginning to the illusion that all the single homeless are beggars, and aggressive beggars too. All I can say about that is that when I come to Westminster, which is fairly frequently, to visit either your Lordships' House or Church House, across the road, I make it my practice to walk from the terminus which delivers me to London, which is Liverpool Street, to Westminster. It is an hour's walk. It is a very healthy walk. There is good fresh air and much of the walk is along the river. I come through the City; I cross Blackfriars Bridge; I walk along the South Bank through Waterloo; and cross the river again at Westminster Bridge. It is certainly true that I meet beggars. Therefore, although it is a healthy walk, I cannot say that it is a cheap walk. I seldom reach the end of it without having parted at least with my Tube fare, and there are times when I part with what would amount to the taxi fare. However, I must say that the begging that I meet is gentle and courteous in the extreme. One may say that it is the dog collar which does it, but I doubt it. Indeed, I can certainly say that the colour coding of the purple shirt passes them by completely, I am glad to say.

There is the illusion that the young homeless have a home to return to would they but do so. However, that ignores the fact, as the noble Baroness, Lady Hamwee, pointed out, that there is a large proportion of former servicemen among them —indeed, I believe that the figure is 25 per cent.—and also that 40 per cent. of the young homeless have come straight out of care and therefore certainly have no home to return to. There is also the illusion that there are those who queue jump and avoid the waiting lists for housing, especially girls who allow themselves to become pregnant. The noble Baroness, Lady Dean, drew attention to that fact and said, as the note I have with me says, that there is no evidence for that whatsoever. Indeed, 74 per cent. of those designated as homeless were, in any event, on the waiting list.

There is another illusion that I felt your Lordships were falling into last night during a debate which concentrated for a while on gypsies and New Age travellers; namely, that all travellers are either gypsies who were brought up to that way of life and are happy in that nomadic life or, on the other hand, New Age travellers who are happy with it, although they have embraced it more recently. In fact, a recent study by the Children's Society in Avon of those resident on 20 sites revealed small, quiet communities consisting of young single mothers, leavers from care, discharged prisoners and former servicemen. They were all anxious about their children, about their health and about their well-being and wanted to keep clear of trouble. Moreover, they were only living in that way because they had no other choice.

There is a further illusion—and, perhaps, the most serious—that if it is someone else's fault that those people are homeless, it is up to them to get themselves out of their difficulty. If we allowed ourselves as a country to fall into that particular trap and adopt that attitude, I do not believe that we could call ourselves Christian any longer. I am grateful for the debate and grateful to the noble Baroness for raising the issue. I hope to hear—and, indeed, I look for—an integrated response and some reassurance in that respect.

4.2 p.m.

Lord Rodgers of Quarry Bank

My Lords, the noble Lord, Lord Shuttleworth, referred to housing as one of the most important issues facing rural areas. I believe that was a salutary reminder for those of us who associate the housing problem mainly with our towns and cities. However, the noble Lord's remarks only confirmed that the matters which we are discussing today are indeed matters of grave concern to all of us in your Lordships' House and to the whole nation.

I greatly regret that the subject is no longer at the top of the political agenda as once it was. I know that Ministers may argue that one of the reasons for that is the right-to-buy policy and the fact that many more people own their homes than was once the case. They might also choose to argue that it is partly the result of switching from housing provided mainly by local authorities to that provided by housing associations. I have to say that I support the right to buy, subject only to a very important proviso already referred to by my noble friend Lady Hamwee and the noble Baroness, Lady Dean, regarding what happens to the earnings as a result of selling and the need to recycle the sums which become available.

I also support the movement into the use of housing associations, though I think there has been too great a tendency to denigrate some of the excellent work carried out by some outstanding local authorities in the housing field. While I welcome the extent to which the transfer is taking place, I believe that there is a proper balance between the work done by housing associations and what can be done by local authorities.

The right reverend Prelate reminded us in a most appropriate way about the need for a partnership to solve the housing problem; indeed, he was very emollient and charitable in that respect. However, I hope that your Lordships will not be too gentle with the Government—or with any government —because, whatever government may be in power, they have a major responsibility in that area and can do things which no one else can do either to exacerbate the problem or to solve it. The fact that we have National Housing Week is a reflection on our national failure. We ought not to need one single week in the year where all those concerned with housing questions feel that they need to get together and remind us of something that we should have in our minds all of the time.

As other Members of this House have done, I strongly recommend the document published by the National Housing Forum entitled, Papering Over the Cracks. It gives a very good account of the current housing conditions and, as my noble friend Lady Hamwee said, draws attention to the important consequences for the nation's health which flow from bad housing. Both that and other documents published this week are an indictment of our national failure.

Among the papers that I researched in advance of today's debate was a leaflet advertising a conference on Friday, 24th June. Perhaps its title, Breaking the Mould, was too familiar and even painful for some of us. However, let us forget the title and concentrate instead on its subtitle, "Significant Solutions to Homeless Require Significant Increases in Construction Investment". That is most important because it links together, as the conference intends to do, the construction industry and those who seek to work for the single homeless. Moreover, it makes the important point that it would be very difficult for those who do not understand our peculiar political ways to find an answer to the question: why is it that our construction industry is hugely under-employed when we have so many people with no homes? It would seem to be quite a simple task to use that under-capacity now and, over the coming years, provide the homes that the nation needs. Yet, for one reason or another, it has proved impossible for us to do so.

Ministers say that we have been coming out of recession since the autumn of 1992. Perhaps, narrowly defined, that may be the case. But certainly for the construction industry progress has been very slow and recovery exceedingly fragile. I was looking through the preliminary estimates of the first quarter of this year, which were published by the Central Statistical Office on 25th May. They show that the construction industry's output is still lagging at 86.8 per cent. of output in 1990. The figure is slightly up on the first quarter of last year, but it is still down on the first quarter of 1992. By quite a wide margin, it is the worst performance of any industrial sector. Again, that is confirmation that we have the capacity, if we could only devise the means, to tackle the problem of the homeless and of those others who are in need of new accommodation. It is within the capacity of this and other governments to do so.

I also read the Department of Environment's regular bulletin, the Construction Monitor. I looked in particular at the second issue for May which, referring to the construction industry, says: 'Total employment (seasonally adjusted) fell again in January 1994 compared with October 1993 although the rate of decline has slowed considerably … Total employment has now fallen by 450,000 since October 1989". That is a clever way of putting it—"Total employment has now fallen". What those words really mean is that 450,000 men and women—but mainly men—are no longer working in the construction industry. That is yet another confirmation of the capacity that is there for us to use should we choose to do so.

The noble Baroness, Lady Dean, referred to the progress with housing in the Attlee government after 1945 where, after a slow start in difficult circumstances, that government did a competent job in providing homes for the men who fought on D-Day and in Normandy. She also referred, quite fairly, to Mr. Harold Macmillan when, after 1951, against the expectations of many of us at that time—and in the face of a good deal of criticism—he achieved his target of 300,000 houses a year. In both cases the government of the day—first a Labour Government and then a Conservative Government—were prepared to recognise the urgency of a problem and then to go to great lengths to achieve some success in dealing with it. I do not say that the record or the achievement of either of those governments was totally without blemish in this respect and I recognise that circumstances are different today, but housing was seriously on their agenda. It is not seriously on the agenda of Mr. John Major's Government in 1994.

I referred to the work of housing associations and I have made clear my acceptance that, for the most part, they are doing a good job; but let me return to a point which I think is central to the fact that we have a National Housing Week. The fact that so many people have homes today has increasingly made poor relations of those who cannot afford to buy. In addition, as a result of the right-to-buy policy, many of the best houses are no longer available for rent. I am sure the noble Lord, Lord Shuttleworth, will confirm that this is as true in rural areas as in our towns and cities.

I am bothered about the Housing Corporation. Reference was made to the report last year on the Housing Corporation by the House of Commons Select Committee on the Environment. I also direct noble Lords to the response of the Government, published in October 1993, Cm. 2363. That really was a dusty answer to the House of Commons Select Committee. The truth is that the Housing Corporation is the Government's poodle and enables the Government to have things both ways. It is no longer possible to hold the Government accountable for many of our housing shortcomings, as was once the case. At the same time it is the Government, and only the Government, who determine the membership of the Housing Corporation and instruct it in its policy. If there is any doubt in the minds of noble Lords about that, let them read the Government's response to the Select Committee of another place.

Many housing associations are quite nervous of criticising the Housing Corporation because they think they may become the victims of it. I have to say that in recent years the membership of the board of the Housing Corporation has not exactly inspired confidence that it is concerned with building homes for people and not simply with the sums that accountants enjoy spending their time doing. We need to look at the role of the Housing Corporation and satisfy ourselves that it is really serving the nation and not simply acting in the interests of the government of the day.

We are all concerned with numbers and I support everyone who talks of the need to increase the planned provision of affordable social housing to about 100,000 new homes a year, which is roughly twice the present figure. But we should be concerned not only with numbers but also with quality. I remember the introduction of Parker Morris standards. How long ago that now seems. Shortly after this Government came into office—I think it was in 1980—they did away with Parker Morris standards. That was an extraordinary step backwards. This was not a field in which I was at that time closely involved but I found it quite astounding that when standards had been set which were going to raise the sights of this nation in providing social housing, they were then taken away and the Government settled for something a great deal less.

The DoE acknowledges the importance of quality in social housing. For a number of years the department has been working with the Royal Institute of British Architects, among others, in making annual awards for good design. As a result there is some good new social housing. But I have to say that overall, when it comes to procurement, the emphasis is not on standards and quality but on cutting corners. Of course it is right that housing associations should be expected to pursue value for money, but value for money does not necessarily mean the cheapest. Value for money does not mean only choosing what is not expensive at the time without taking full account of the life cycle of the house which is being built. Least of all does it mean the off-the-peg purchase of the unsold stock of private house builders. I fully understand that private house builders want to get rid of houses which they have built on spec and have not been able to sell. However, those houses are often quite unsuitable for social housing and are the wrong sort of homes in the wrong places to meet the needs of tenants, especially the young, the elderly and those with disabilities.

We often talk about the energy problem and the need to save energy. We should be building new social housing and rehabilitating existing homes to much higher energy saving standards. We should be upgrading our housing stock in a way that will enable it to last. We should congratulate the many local authorities and their professional staff, especially architects, who after long and careful consultation with residents have remarkably transformed ugly and unpopular housing estates making them far better places in which to live. I am not only talking about high-rise flats but also about peripheral estates. In this way they have helped to minimise the consequences of some of the gross errors of the 1960s the responsibility for which all of us, to some extent, share.

But if the emphasis is only on numbers, we shall store up for future generations exactly the sort of problems we are seeking to solve today as a result of the errors made in the 1960s. Surely we should learn that lesson and raise our standards in building as well as meeting the needs of the homeless and those others who require accommodation. It is a sad commentary on this Government, and in a way on all of us, that there is a need for a special week to remind us of a major social problem. The housing problem of this country should be on our conscience every day.

4.17 p.m.

Lord Skidelsky

My Lords, we are all grateful to the noble Baroness, Lady Hamwee, for introducing this important debate. She gave a very able and compendious review of the problems in the housing field. It is not intended as any criticism of her to say that her speech was longer on the problems than on solutions. I fear that I am destined to be the hard man in debates on this kind of issue, partly because no economists from the Opposition Benches choose to speak on these matters, although I see that the noble Lord, Lord Desai, is in the House.

I think we all agree that a deficiency of affordable housing leads to homelessness. But differences are likely to arise on how best to deal with that situation. I believe—I think this is a view which is shared by many noble Lords on this side of the House and by the Government—that we must do all we can to encourage market forces to increase the supply of affordable houses, whereas I think the Opposition parties believe in increasing it by administrative methods. Public expenditure certainly looms very large but I also refer to the methods of rent control and political allocation of housing to high priority groups and measures of that kind. In our view these measures simply dry up the supply of affordable housing and produce the queues of homeless to which the parties opposite rightly object.

However, I want to address one part of my remarks to my noble friend the Minister as well. We are used to discussing housing too exclusively in the context of social policy, whereas the way in which housing is provided can either encourage or discourage the way in which the economy as a whole works. Housing policy can make an economy more or less prone to inflation and more or less volatile; it can influence the level of unemployment and the rate of job creation. All of those matters eventually rebound on the number of homeless. Decades of policy have left us with too narrow a choice of tenure for the needs of a flexible economy. Most people have essentially two choices: either to buy their own home or to rent a council house. Until the last two or three years the private rented sector was in danger of total extinction.

I have always supported the right to buy: a property-owning democracy is a fine ideal. However, there are other forms of property ownership than housing. It is stated that most people in this country prefer that form of property ownership, but that is because for many years the tax system has privileged house ownership above all other ownership. For most of the 1970s and 1980s tax relief made rates of return on housing for mortgage borrowers much higher than on other forms of equity.

Given that house prices are determined in the short run by demand, that situation led to a succession of classic speculative booms with highly geared swapping of existing titles to ownership, thus driving house prices spectacularly upwards. It has been calculated that during the Lawson boom of 1986–87 the average first-time home buyer could expect an annual rate of return of 96.4 per cent. By 1990 the rate of return would be minus 70.4 per cent. In other words, tax and interest rate policy, in order to encourage home ownership, not only made the housing market extraordinarily volatile but made the whole economy much more volatile than it would otherwise have been. It encouraged booms to get out of hand and it made slumps deeper and more prolonged, as those who borrowed on a rise now find themselves being saddled, as a number of speakers have pointed out, with negative equity.

The economic effects do not end there. Encouraging young people to get into debt in order to get onto the housing ladder as quickly as possible not only fuels wage inflation but makes them less likely to invest in training, which is the key to higher incomes in the long run.

There are many more aspects of the matter, but I welcome the Government's policy of phasing out income tax relief on mortgages and reducing that source of distortion in the housing market.

Housing policy also influences the ability of the economy to generate jobs. This year is the 50th anniversary of the employment White Paper of 1944 which committed the Government to maintain a high and stable level of employment after the war. One of the conditions for high employment stated in that White Paper was mobility of labour, including the availability of low rent houses. The noble Baroness, Lady Hamwee, correctly stated that if one cannot move to where a job is, one may not get a job.

Economists of all political persuasions—it is really a matter of common sense—agree that our system of housing tenure is a great impediment to labour mobility. John Mullbauer of Nuffield College, Oxford, wrote: The lack of a free rented sector and the restrictions on the mobility of council tenants have long been seen as handicaps on the efficiency of labour markets. Patrick Minford and Michael Peel, have calculated that the immobility of lower-skilled labour induced by the Rent Acts and council house subsidies added 500,000 to the unemployment figures.

The current problem is not simply a lack of affordable housing; it is that almost 30 per cent. of households are trapped in untradeable tenancies. That situation produces a geographic mismatch between job availability and labour availability. In turn, unemploy-ment has a direct impact on the social factors which produce statutorily defined homelessness. For example, the increase in single parent and particularly single mother households is connected with the growing inability of young males to fulfil their traditional role as breadwinners. That situation has meant in turn that the proportion of local authority lettings that go to households that are accepted as statutorily homeless has increased from 18 per cent, in 1983–84 to 45 per cent. 1992–93. In turn the rate of turnover of municipal housing stock is reduced. Instead of social housing being, as it was surely intended to be, a source of cheap housing for low wage earners, it is filling up with people who are increasingly unlikely to be employed at all.

At the same time there has been a steady shrinkage of the private rented sector to under 10 per cent. of all households in England and Wales today, which is by far the lowest in the European Union. That shrinkage has occurred at a time when we have moved into an era when young people can expect to change their jobs and in many cases their locations up to a dozen times early in their lives, and go on adapting and retraining throughout their lives. We have created a system of tenure which traps people in certain areas, in certain types of housing, and which gives them incredibly little choice of job.

The Government have been tackling these very difficult problems in the right way. They have been committed to raising rents in the social housing sector towards market clearing levels. I support that move. The reason for it is very obvious; it is to eliminate the element of subsidy to those who do not need it and to allow a more discriminating subsidy to go directly to people who need it, in the form of housing benefit. The reduction of the subsidy element will allow more houses to be built for the same amount of taxpayers' money, whether by local authorities, private housing associa-tions or private developers.

It is all very well to say: this is terrible, the taxpayer must pay more and more in order to get the required supply response. We do not live in that kind of world. The taxpayer is not going to subsidise the rents of those who do not need it, as is made clear by the electoral fate of those parties which advocate tax increases for those purposes.

Jack Straw, the Labour Party spokesman in the other place, in his favourite position of being five years behind the times, stated on 18th January 1994 that Labour wants to see subsidy transferred from rent to bricks. That statement reflects the same old policy.

The noble Baroness, Lady Dean, mentioned investment; investment is good and therefore the Treasury should not worry about increasing the public sector borrowing requirement in order to create more social housing. However, investment is not good in and of itself; it depends very much on whether the investment pays. The Soviet Union had the highest rates of investment over the whole of its history of any country in the world. Much of that investment was wasted. Therefore, we should consider the subsidy element and the quality of investment, not just the amount.

I should like the Government to go much further in their thinking on municipal housing. Why not abandon the administrative methods of allocating social housing altogether? Keep back a proportion of the total for high priority groups, but let the remainder be allocated in exactly the same way as private rented accommodation is at the moment, through estate agents and advertisements.

We need to decide what it is that public housing can do that the market cannot do. It can provide an essential social safety net and a greater security of tenure than would make sense for many private landlords who might wish to use their housing for other purposes. Having decided on the role of public authorities, let the market make the allocation. It seems to me that that is the rational division of labour between the two institutions.

The Government have also been trying to stimulate the supply of private rented accommodation through such policies as shorthold tenancies, the rent-a-room scheme and so on. The main reasons for the decline of this sector have been the tax bias in favour of home ownership and the rent controls. The latest figures seem to indicate that the. decline in the private rented sector may at last have been halted, though I do not believe that that policy has done much yet to encourage private developers to come into the market for low rents. This is something which also depends on other factors like land prices, as was pointed out in an earlier speech.

However, there is no doubt in my mind that the main obstacle to private letting is the overhang of the rent Acts. At present 764,000 homes—one in 20—stand empty in England. Research indicates that the most important factor in keeping them empty is the fear which owners have about regaining possession if they were to let them. Of course, this fear is irrational at the moment, but not if the parties opposite return to power. Landlords fear that an incoming Labour government would re-impose the rent Acts on shorthold tenancies, or on existing regulated tenancies if these were to be deregulated. This confirms what we have always known —that regulated rents and security of tenure dry up the supply of affordable rented accommodation in the private sector.

This is a debate about homelessness, initiated by the Benches opposite. It is hard to avoid the conclusion that, by refusing to give a pledge not to re-introduce rent controls, the Labour Party has contributed directly to the problem of homelessness. Will the noble Baroness winding up for the Labour Party give that pledge today —that it will not re-introduce rent controls—and allow this disastrous episode in housing policy to be wound up for good?

Baroness Seear

My Lords, the noble Lord must not confuse the two Opposition Benches. This debate was initiated by the Liberal Democrats.

Lord Skidelsky

My Lords, I accept what the noble Baroness says. The ramifications of housing policy run deep. Decades of well-meant intervention have contributed to drying up the supply of affordable housing and have damaged the working of the economy, both contributing to homelessness. The Government have started to tackle the problem. The Labour Party —and I distinguish between the Opposition parties, as I should have done earlier—remains trapped in the old thinking. The idea that anyone should be allowed to make a profit out of providing housing for others is still something that the Labour Party dislikes. Basically, it just wants more public housing. Until this stranglehold of thinking is broken, we shall not be able to have a decent cross-party debate with the Labour Party on what to do about this important problem.

4.33 p.m.

Baroness Fisher of Rednal

My Lords, I join this debate at a critical time. I disagree fundamentally with much of what the previous speaker has said. I thought that governments and public bodies existed to invest in people; but it appears that the noble Lord thinks that as long as we invest and the money goes into shareholders' pockets, that is what we want in this country. It is not the way that I want this country to go forward in the next generation.

From the noble Lord's final remarks, I come to the conclusion that the Government have formed the opinion that in elections there are no votes for them on council housing estates. Therefore, they will exercise their views by not providing more accommodation so that they will not lose any more votes. That is a cynical approach to a serious problem.

The noble Baroness, Lady Hamwee, introduced the debate in the comprehensive way that we are used to. My noble friend Lady Dean, sitting behind me, reminded me that I was chairman of the Birmingham local authority in the days of "Cathy Come Home". I know all about homelessness, and appeared on television constantly in that connection during that period. We have LLoyd-George "homes fit for heroes" in Birmingham, and when I became chairman of the authority I was privileged to see the fine houses that had been built. They were nowhere near the city centre; they were all in what we used to call the rural part of Birmingham, which is now built up. My first task when I joined the council (representing an inner city ward) was to attend a public function when the then Mr. Harold Macmillan opened not homes, but the first high-storey block of flats in the city. So the Tories built flats as well as houses. Everyone has come to the conclusion that only the Labour Party build flats; but the Conservatives also did so.

On behalf of local authorities, I wish to say that they are the largest group of people providing reasonable housing at reasonable rents. The housing associations do an extremely good job, as the noble Lord, Lord Rodgers, said. But unfortunately they have to charge much higher rents than the local authorities. The Government pay out housing benefit but—and let us be quite sure about this—over 50 per cent. of the people who live in council houses normally have to receive housing benefit. When they join housing associations, the rents are higher and obviously the housing benefit is increased. When we talk about the kind of people who live in council properties, if we revert to a policy of wages below what we call the national average, we shall have to deal with the problem of how people can afford to pay their rent. You cannot have it both ways: if you want to bring down wages, you must bring down the cost of housing or subsidise people's rents. Those who earn less than the average wage will never be in the market to purchase. If they earned less than the national average, everyone else would live in mansions. That is the comparison.

Local authorities have had a difficult task, particularly over the past five years, in keeping up with the number of applications—never mind the homeless —on their housing registers. In Birmingham alone, between 25,000 and 30,000 people with their families are waiting for properties, as well as the homeless. Let us not forget all the young people who leave care at 16 with nowhere to go, nowhere to live; they are lonely, they are kicked out of their homes, in many cases because they cannot get jobs and pay anything into the family.

Perhaps a wife is left by her husband and, often a new man comes in and he does not want the children there any more—particularly not the sons. I speak with a great deal of knowledge of the young homeless with whom I am identified in the City of Birmingham.

All those people demand accommodation. If local authorities do not provide it with the taxpayers' money as part and parcel of it, who will provide that accommodation? We must ask that question. We cannot have them all sleeping rough, they are making the place untidy now and we will not be able to walk along the pavement if we do not do something about it. We must be realistic. Who will provide the accommodation if the local authorities and the housing associations do not? The private landlord left the market a long time ago. Why? Because it was not profitable. Even the Tory Government accepted that. So who will do it now? Nice houses are being built all over the country, but they are all for sale. One has to ask the fundamental question: who will provide for those people? They are not statistics or percentages, they are people and families.

Lord Skidelsky

My Lords, I wonder whether the noble Baroness could answer this question: why is it that so many European countries manage to maintain a much much higher private rented sector than we do and a much lower proportion of social housing? We have the lowest proportion of rented housing and the lowest proportion of social housing in the European Union.

Baroness Fisher of Rednal

My Lords, the noble Lord asks a question which he himself ought to be able to answer. I would have said that with his economic background, and so on, he should know the answer better than I do. It could be said that it is because house purchase is not so important in those countries. Trade unions get involved in providing housing in Europe. All kinds of co-operatives are providing housing; but in this country this Government do not believe in trade unions or Labour local authorities. They only believe in themselves. That is the crux of the problem. Everything then is boiled down to percentages, to figures and to comparisons. What we never realise is that they are the children in schools or the young people who are unemployed or people who are homeless. They are never people like us. They are the unfortunate ones who are not sitting and gracing themselves on these Benches. I think the Tory Party has to start thinking and develop a conscience.

Coming from Birmingham, as I do, we had there the Chamberlains and the Cadburys. We had all those families. They were entrepreneurs, and they set up businesses and famous factories, many of which are still there. But they also believed in the people that they employed. That is what made Birmingham successful, because its employers knew that if they paid their workers reasonable wages, and if housing was provided for them—that was under the Chamberlain government in Birmingham—they knew that they would get the best from their workers. This Government do not feel that same way. They do not have the spirit that there used to be in the Conservative Party.

If we are looking at affordable housing and at the whole structure of it, we have to look at family life. A decent home, as my noble friend Lady Dean said, helps to create a happy and healthy family. It is not "back to basics" which the Prime Minister talks about. A home is basic. A home can only be made in good housing conditions and not in short-life tenancies under a private landlord system. You cannot provide homes for your children in that kind of accommodation, where you are there for one month and then move on somewhere else for three months and so on, until somebody decides to pick you up somewhere along the line. That normally has to be the local authority.

If we are looking at the difference between rents and at the research which has been conducted by the Government, we can see that when we are paying out housing benefits we are looking at a very serious problem because we are giving the money to the private landlord sector. My figures, which are quite up to date, show that 948,000 cases of housing benefit were being paid into the private sector 18 months ago. That made a staggering amount of over £13 million in a year being given for housing subsidies for the private landlord. Of course we could have spent that money on investment; and so the assets belonging to the local authority or to the Government in the form of public housing were there; but that money has just gone. It has been given away: it is lost. We cannot keep on saying to ourselves that the solution lies in the private landlord area.

I think that the Government fail to recognise what causes homelessness. The Government have published a Green Paper on homelessness. I feel sure that the Minister will tell us about the thousands of people who have commented on it. They have all come to the same conclusion. They say that we cannot solve the problem without providing more homes. I think that all of us have received papers from various Church organisations and all kinds of other organisations, including Shelter, saying that until the Government provide more housing, we shall not solve the homeless situation.

I was very interested in what the noble Lord, Lord Rodgers, said when he talked about the building industry. Everybody knows that those in the building industry are looking for work. They are going all over the world seeking work. We could help the building industry in this country, as the noble Lord said. If you stimulate the building industry you will get young people off the unemployed register, and also you gain when they start work because they start paying taxes. Therefore the Government cannot lose if they help by providing more housing. Those who are unemployed would become wage earners and also taxpayers. So I say: let us look very seriously at what needs to be done. That is to disregard entirely the premise which came from the department regarding homelessness. We do not need a compilation of those who are "deserving". I ask: who is undeserving?

Local authorities were asked to reply to the question: when homeless people come to you, are they deserving? If I were homeless and somebody sitting behind a desk asked me whether I was a deserving case, I would most likely throw a book at him and say, "What do you think I am here for?" It is a ridiculous thing to say. They have to compile figures for these people according to whether or not they are deserving. The Government think that they can then decide who are the undeserving.

I should like to refer to those stupid words, "those who are roofless". I sometimes wonder what would happen if you were sleeping out and you had an umbrella over you. You would not be roofless. What a stupid definition! But that was in the Green Paper. So therefore we have to say to the Government, "Do not start juggling with the homeless figures by putting people into categories as to whether they are deserving or roofless". We know very well what that means: it means that it is the same trick as that which the Government played with the unemployment statistics. If you are going to define homelessness by means of those little boxes, it is a cheap political gambit, in my estimation. It is just something with which to massage the homeless figures.

A change of culture is needed which recognises and respects renting as being of equal status to owning. Whether people rent from the private sector, from housing associations or local authorities is irrelevant. What matters is that the people who rent must be able to live in their homes combined with security and good standards of housing provision.

I should like to close by saying that we had a long debate in this House over many days concerned with Sunday trading and we have all seen the propaganda that was put forward then by the powerful allies of retailing: the Sainsburys, the Tescos, the Halfords, the Do-it-Alls and the Boots, etc. They all came down on us, telling us what to do about Sunday trading. I would hope that perhaps the poorly housed and the homeless might prove their case better if Wimpeys, Bovis, Tarmac, Taylor Woodrow and all the other building companies lobbied the Government on behalf of the homeless and in that way made sure that they get their employees back to work and that we get more houses.

Finally, I ask your Lordships to remember that 1994 is the International Year of the Family and attention is focused on policies to promote family life. Secure housing is a vital base for building stable family life and for bringing up families. The Government should withdraw the proposals in their Green Paper and set themselves a realistic programme to increase substanti-ally the supply of affordable rented housing, and to increase that year by year.

I apologise to your Lordships for having gone on for rather longer than I intended; and I have to leave early. I am involved with St. Basil's young homeless, and we work closely together raising money with Business in the Community in the City of Birmingham. Tonight they are holding a very special event and they have asked me to attend and receive a very substantial cheque from them towards taking care of the young homeless. I am sure your Lordships would prefer that I went to receive that on their behalf rather than sitting here.

4.51 p.m.

Lord Ezra

My Lords, the previous two speakers have demonstrated how many sided is the issue of housing. The noble Lord, Lord Skidelsky, reminded us of the economic aspects and of the part that housing policy played in the boom of the late eighties and of the succeeding slump of the early nineties. Speaking from the heart, with her great experience of local government in Birmingham, the noble Baroness, Lady Fisher, raised the human aspect of housing. There has been reference to other aspects. Housing remains a vital issue and a vital asset.

I wish to address my remarks to the way in which we are at present managing that asset. I have been involved for many years as president of the National Home Improvement Council, a body which exists to propagate home improvements, as the title suggests. The starting point is the condition of housing in Britain. That is revealed at five-yearly intervals in the Housing Conditions Survey, the last one of which related to England and Wales. It was conducted in 1991 and the findings were published in 1993.

Other noble Lords have referred to figures demonstrating that, unfortunately, there are at present 1.5 million homes which, under the Government's own definition, are unfit for human habitation, a further one million which require serious renovation and repair, and many others which require less repair. All that boils down to is that some six million people are living in accommodation which is either unsuitable or partially unsuitable for human habitation. It represents a high proportion—13 per cent.—of the housing in this country. The report published by the National Housing Forum, to which my noble friend Lady Hamwee, referred in her eloquent introduction to this debate, has again brought our attention to the facts.

The question is: what is being done about this? Should we continue in a situation where such a large proportion of housing, which is a vital ingredient in human life, is in such a state? Is action being taken which is likely to improve the condition of housing? Before turning to what I consider should be done, I have to say that I cannot see that sufficient is being done to correct this unfortunate situation. The sale of council houses has been referred to. There is no doubt that, from the point of view of amassing vast resources for the Treasury, such sales have been a great success. The sum of £28 billion has been secured for public purposes out of the sale of council houses. That is 43 per cent. of the total yield from privatisation—more than the combined value of selling off the electricity, gas and telecom-munications industries. What is disturbing is that such a small proportion of that massive infusion of funding into the Government—other noble Lords have mentioned this fact—has been recirculated for the purpose of dealing with the clear need in housing. In fact, the amount of public provision for housing investment remains something like 22 per cent. lower in real terms than in 1979–80, and, according to government estimates, in 1995–96 the figure will fall still further.

Under Part VIII of the Local Government and Housing Act 1989, local authorities must provide grants to improve housing which is defined as unfit. The definition of "unfitness" is described in that Act. In order to enable that to happen, the DoE has to fund 60 per cent. of those grants. However, as noble Lords have stated, the funding for renovation grants has fallen, at constant prices, from £1,300 million in 1984–85 to £435 million in 1991–92, and a further reduction is planned to £250 million in 1995–96. Therefore, in respect of house replacement and house renovation, the funding has substantially declined at a time when a very real problem is revealed by the housing surveys. On that basis, it seems quite impossible to see how the problem can be dealt with in a measurable time if present policies are continued.

We should note that 70 per cent. of unfit dwellings are privately owned, largely by people who bought their council houses and, quite apart from the negative equity element, now find themselves unable to maintain them. Those are the very people who are being hit by the massive reduction in renovation grants.

The definition of dwellings fit for human habitation includes, as my noble friend Lord Rodgers pointed out, the provision of adequate heating, a subject with which I have been somewhat involved. Poor standards of insulation are one of the worst elements of the housing situation in Britain. We compare badly with other countries. It is only necessary to consider one statistic. There is no need to go into many statistics to define the effect that such poor insulation has on the health of the nation. Our mortality rates in winter compared with summer are higher than in any other West European country. That can be put down to only one factor; the poor state of housing, the lack of insulation, and the draughts and the damp to which people are subjected. It means that we have a higher proportion of deaths in winter than in summer. In a country such as Denmark which, for many years, has had a strong policy of good insulation in its homes, the level of mortality in summer and winter is identical.

Therefore it is not only a matter of statistics. It is not only an economic issue. One might almost say that the issue is a matter of life and death. It has to be considered extremely seriously from that point of view.

I happen to be concerned with another organisation called Neighbourhood Energy Action. With consider-able assistance from Government—the assistance has recently been increased, for which I am grateful—we have the task of insulating the homes of mainly elderly people on low incomes. We are increasing the rate of insulation from something like 250,000 homes a year, with the assistance of the additional grants, to about half a million a year. However, that does not go far enough. Many more poorly insulated homes in this country need to be tackled.

One way of tackling those homes would be through the Energy Saving Trust. The Government set it up with the intention of helping in that regard. Our concern is that the source of funding for the trust, which was due to come from the proceeds of the electricity and gas industries, is being restricted as a result of action taken by the regulators, in particular the gas regulator. I asked a question of the noble Earl about this a few days ago. I should like to ask him whether the Government have had time to reflect on the matter and to consider how the money should be replaced. One source of replenishment would be to use part of the proceeds from the imposition of VAT on fuel. It seems perfectly reasonable that some part of that sum, which the Government tell us is intended to induce people to use fuel more efficiently, should be re-circulated in order for that precisely to happen. The trust is a useful vehicle for that purpose.

In looking at the management of the vital asset of housing, far too high a proportion is unfit for habitation, a very large proportion requires much more investment to remedy major defects, and funding from government sources is diminishing. Therefore, it is difficult to see how the problem can ever be resolved if those trends go on at the same time. We have been reminded by my noble friend Lord Rodgers of the efforts made under previous governments, both Conservative and Labour, to make housing a top priority. It seems to me that there is no reason why the Government cannot say that they must stop the existing trend which, if it continues, will become so serious as to become unmanageable in years ahead.

Is it not possible for the Government to introduce a performance target addressed to the question of unfit dwellings, which now stand at 1.5 million, with the aim of reducing the figure over, say, the next five years to 1 million dwellings, and to continue that reduction of unfit dwellings at a progressive rate beyond that? I put forward that specific suggestion as a contribution to this important debate.

5.2 p.m.

Viscount Brookeborough

My Lords, I too am very grateful to the noble Baroness, Lady Hamwee, for bringing forward this subject: for debate. She was—and I believe still may be—a legal adviser to the Simon Community. My interest in this subject is that I am one of the trustees of the Housing for the Homeless Fund which is run by the Simon Community in Northern Ireland. I should point out that Simon communities in different parts of the United Kingdom and world are not specifically connected with one another.

My noble friend the Minister may well say that Northern Ireland is a separate entity with its own department, Minister and housing executive, which is a different system from the one here. I respond by saying that as part of the United Kingdom our experience and problems are totally relevant to a debate in your Lordships' House on a national problem such as this. This is especially so as we do not have a place for debate in Northern Ireland. Our authorities need as much support and drive from central government as the authorities in England, Scotland and Wales.

In 1993 10,000 households in the Province registered as homeless with the housing executive. We all know that the number of people who register are by no means the whole picture. Our problems in housing and homelessness are similar in proportion to those in Great Britain. There are a couple of small differences which largely balance out. We have a very low rate of homelessness (2 per cent. of the total) for reasons of mortgage default and rent arrears, compared with double figures in England. However, that is balanced by a high figure (10.3 per cent.) for the regional problem of intimidation and civil strife. Other than those two instances, most of the reasons for homelessness are very similar to those over here.

For various reasons, homelessness has a very high profile at the moment. The perception of the problem by many people is that the homeless are middle-aged males who are ragged, dirty, down-and-outs, winos, or people who beg on the streets. These are a very tiny proportion of the people involved. The reality is very different. As many women as men and as many younger people as older people become homeless. The vast majority are not the untidy beggar types and are therefore not easily identified, even when one passes them in the street. The vast majority are proud people who do not wish to let others see their distress or misery. As the success of the magazine the Big Issue shows, these people are keen to work and train given the chance.

Another misconception is that homelessness is only a big city problem. In Northern Ireland research shows similar percentages of homelessness in provincial towns. The big city experience is more public and perhaps a better example, but we must not forget that this is a United Kingdom-wide problem. Although the backgrounds and needs of people who are homeless are very diverse, there are two main characteristics that are shared by people who are homeless in the United Kingdom: a very low level of income, often due to unemployment, and a breakdown of family relation-ships so that they can no longer live with other members of their families. The breakdown in the extended family is a major reason for the increase in homelessness in Northern Ireland.

The kind of help that they need also varies greatly between different groups of homeless people. At least two-thirds are capable of living independently, perhaps with some initial support and advice, if they can simply get access to affordable, appropriately small units, flats or houses, to rent in an area where they know the people. However, that leaves one-third of the homeless in need of rehabilitation training, which is where charities such as the Simon Community come in. The key to tackling the problem of homelessness is clearly to enable social housing providers substantially to increase the number of flats and small houses available for rent. Unfortunately, this has been in decline in recent years.

Although increased public investment in small unit housing to rent is the key to reducing homelessness, there are other low-cost initiatives that can also have an important impact in the short term. For example, the new build programme of housing authorities and other social housing agencies might be readjusted so that a much larger number of new homes of one and two-bedroom size could be built. In addition, perhaps the public housing selection scheme could be reviewed so that homelessness was recognised as the most severe form of housing need and allocated points accordingly. A move could also be made to introduce a rent deposit scheme to provide private sector landlords with a guarantee in place of an actual deposit to make available tenancies to homeless households. There are many homeless people who can afford to pay an on-going rent but cannot afford a deposit in order to start them off. Undoubtedly that kind of scheme would assist. There might also be the establishment of an empty property register to make selective vesting of empty properties a much easier and quicker process.

Charities in Northern Ireland working with the homeless share the concerns of a very large number of organisations in Britain about the Government's Green Paper published in January 1994 entitled Access to Local Authority and Housing Association Tenancies. I hope that the Government will respond positively to the 9,000 objections that they have received and quietly drop the proposals to reduce the already minimal rights of homeless people to accommodation and look to more positive solutions. It is interesting to note that the figure of 9,000 objections is far higher than the number of objections at the same stage of the poll tax.

I also hope that the Government will support the efforts of voluntary agencies such as Centrepoint in London, and the Simon Community in Northern Ireland, which try to respond to the immediate needs of individuals who face the tragedy of homelessness and help them to get back on their feet again, and provide the necessary funds further to develop the important services that they provide.

5.10 p.m.

Lord Northbourne

My Lords, debates on homelessness in this House tend to have a reassuring familiarity. The Opposition parties and the bishops draw our attention to the very real problems and supporters of the Government, not unnaturally, take a rather different view.

From the Cross-Benches it seemed to me appropriate to try to trespass on to some rather different ground. I always remember attending a conference by the late Professor Fritz Schumacher. He described how his life as a professional economist, eventually rising to be the chief economist at the Coal Board, had been taken up with asking the same questions and giving much the same answers. When he came to retire he decided, as he put it, to turn the disc over and see what was on the other side. Perhaps that is a valuable experience and one that we should emulate. In his case it led to that wonderful book Small is Beautiful and to the concept of "appropriate technology", which has done so much for third world development.

I do not claim to be able to introduce any insights of that order of magnitude. But I should like to ask three questions which I hope may throw some light on causes or possible solutions. I hope that perhaps the Government or the Opposition, or both, may have thought about these questions and may have some answers to them.

My first question is this. How do we avoid what I call the Dick Whittington syndrome; that is to say, the tendency of people to congregate in cities, or in certain parts of certain cities? Noble Lords will know that in the third world the drift to the cities is a major problem. In 1981 Calcutta had a population of 9.2 million. Today the population is 13.3 million, and is rising. In the UK the problem is not so serious. The statistics for Tower Hamlets in 1989 showed a population of 164,000. The projection for the year 2011 is 193,000. At that level it will represent 100 persons per square hectare, based on gross hectares. It will probably mean 200 persons per residential hectare.

I do not know whether that is an acceptable density. I do not know whether the Government know whether it is acceptable, or whether we as a nation have an acceptable maximum density. It would be interesting and useful to know. Whether we do or not, we probably should have. The question that I want to ask is: when a density is reached which is unacceptable, how do we control the population in a particular borough or inner-city area? We have no system for licensing where people may live. Nor, I suspect, do we want one. I suspect that the only way in which one can control the density is by limiting the amount of available accommodation. In that case the danger will recur of people sleeping on the streets because they want to be in Tower Hamlets and because we believe that it is wrong to exceed an acceptable density of accommodation in Tower Hamlets. Is there an answer to that question?

My next question is: how do we control the expectation explosion? Demand for housing is increasing. Two reasons why it is increasing are the fragmentation of families and the enormous growth in the demand for second homes. I should like to deal with the matter of families first. The noble Viscount, Lord Brookeborough, referred to this problem. It would not be impossible to envisage a theoretical family in which there were four grandparents all living in separate houses; two parents who had separated and were living in houses; and up to two or three teenage children, all of whom had left home—making a total of nine units of accommodation for one biological family. I simply ask the question: is there some limit beyond which society must say, "No, that is enough. We cannot simply go on indefinitely providing for the desire of members of a biological family all to live separately". There are very strong grounds for the Government to undertake some cost benefit studies to see whether it would be better to invest money in support for families, in keeping families together where it is appropriate to do so rather than in building more boxes in which people will be lonely.

Turning for a moment to second homes, we probably all agree that in most cases second homes are a luxury and they contribute to the problem, because they withdraw affordable housing from the marketplace. Should there not be some system whereby second home owners, through local taxes or otherwise, make some contribution towards the cost of providing affordable houses to replace the second homes which they have caused to be withdrawn from the market?

Thirdly, I ask whether support is going to the right people. Accepting that resources are always finite, and including tax relief, benefits, subsidies, housing association grants and all forms of support that go from the taxpayer, have we got our priorities right?

For me, the first and second priorities (in either order) would be to help those who make a real effort to provide for themselves and those who through no fault of their own simply cannot provide for themselves. Into the latter category, in my book, fall children. They are among the most important considerations. The quality of the early life experience of a child affects the whole life of that child, and therefore probably affects society as well. Bed-and-breakfast accommodation as an environment for young children to grow up in is totally unacceptable. So is overcrowding at a level where in teenage children it may lead to incest.

It has been argued that to give housing priority to young children may encourage irresponsible parent-hood. I accept that there is probably an element of gravitas in that argument. But I insist that it must be possible to find a way of ensuring that children get the start that they need in life without encouraging irresponsible parenthood and what the Government have called a dependency culture. We must find a solution to this problem. It is a problem upon which new thinking is needed.

I shall just summarise the three questions that I want to ask. How do we control the drift to certain parts of our inner cities? How do we reduce excessive fragmentation of families? And how do we help children without encouraging irresponsible parenthood?

5.18 p.m.

Lord Moyne

My Lords, we should all be grateful to the noble Baroness, Lady Hamwee, for introducing this very important topic—particularly after last night's discussion on squatting. Clearly, the questions of homelessness and squatting must be related. I declare an interest here. For 36 years I have been a trustee of the Guinness Trust. Just by way of a small advertisement, last year the Guinness Trust provided 1,070 homes for people, all of which were for rent with the exception of 44 which were hostel places and 63 under share ownership schemes.

Looked at superficially, there should be only a very small housing problem in this country, because we have a static population. There are four reasons why there is, nevertheless, a housing problem. First, people move —very often because they have to move. If a pit closes, people have to go somewhere else for a job and the houses where they lived are of no practical use any more, being in the wrong place. Secondly, households are getting smaller. For example, marriages are breaking up more often. We cannot be too moralistic. It is happening. There are more one-parent families and therefore more home units are needed. Thirdly, old people are living longer; and fourthly, owing partly to government policy I am afraid, there are fewer hospitals, asylums and other places from which people emerge who need accommodation and who often cannot obtain it.

The Guinness Trust reckons that 100,000 new homes a year—affordable homes—are needed. As one noble Lord said, we are getting only 55,000. I have seen estimates which are lower than that. We need more affordable housing. Whatever side of the Chamber we sit on, we must agree on that.

As regards housing associations, the Government have used them in recent years in a very intelligent way. Some credit must be given to the Government for that. In effect, through the Housing Corporation, subsidy has been channelled to the housing associations. The reason why I believe that that is sensible, imaginative and has worked well is because associations are, by and large, more efficient, less bureaucratic and possibly even more dedicated than public authorities—not that I would denigrate them. I shall come to that subject later.

However, there are worrying aspects which have to be examined and addressed. The associations are no longer financed 100 per cent. for most of the dwellings that they put up but very often are financed at around 50 per cent. That sounds sensible. It means that the grant money is eked out by borrowing. But the borrowing has to take place in the market and that means that rents have to be higher. In turn, housing benefit has to be higher for the very poor, which increases the poverty trap connected with housing benefit. Valuable and important though it is, housing benefit has got right out of hand. The fact that 80 per cent. of applicants for social housing (according to the figures given by the noble Baroness, Lady Hamwee) are on housing benefit shows that it represents far too great a proportion of the subsidy which goes to social housing.

What is wrong with housing benefit is that the better housed get the most help, the worst housed get less help and the homeless get absolutely no help. I shall not be exactly popular with the Guinness Trust for attacking housing benefit. For housing associations it is a very convenient system. The rent is paid automatically and there is no trouble with arrears or anything like that. But it means that increasingly subsidy, which it is absolutely right should go to social housing, is directed toward the wrong goals. To him that hath shall be given. I am afraid that the present housing benefit system exemplifies that.

I must also mention a very worrying rumour that the Government want to give housing association tenants the right to buy. I plead with the Government not to do it, for two very important reasons. First, morally, a sale by a housing association of its property for less than market value would mean alienation of charitable funds from the charity, which must be wrong in principle. Secondly, and perhaps of more practical meaning, the existence of the right to buy would ruin the status of those properties as collateral against which money could be raised in the market. It could therefore prevent borrowing in the market and completely ruin the present government policy (which I have criticised but which nevertheless at least enables houses to be built) under which we have to borrow in the market. I urge the Government not to give housing association tenants the right to buy.

Let us look at solutions to the problems. Within the Guinness Trust we are trying to think flexibly, as are other housing associations. I mentioned the fact that 63 of the homes that we produced last year are part-owned by the tenant; that is to say, they are under a shared ownership scheme. That could perhaps be extended and made more flexible so that somebody who was prospering could buy his whole house at an agreed figure. There is nothing wrong with the right to buy so long as it is at market value. Someone who loses his job may be able to sell back his part to the trust. There would be administrative difficulties but I am sure that they could be resolved. It must be said that the Government are in danger of thinking that if the housing associations cannot do it all, they can do more than they do. The attempt to make them do so will increase distortions and unfairness.

The government agencies—for example, the National Health Service—should be encouraged to consider the housing implications of some of their policy changes, such as closing hospitals. Housing benefit should be wholly recast. It should never reach 100 per cent. When 100 per cent. benefit is necessary, it should be met through other types of benefit. There should be a ceiling on housing benefit. People who are being paid a very great deal to repay expensive mortgages should perhaps no longer have that benefit and even be encouraged to move, unkind though that may seem.

There has been a tendency, which is understandable in a way, to cold shoulder local authorities. That must stop. They have a big role to play. In particular, there must be urgent programmes to get families out of bed and breakfast accommodation, which is bad in every way. It is a bad environment for the families, deeply uneconomic and extremely expensive.

My conclusion has to be that a big and urgent rethink is needed in this area. That is why we should be grateful to the noble Baroness for her timely reminder.

With regard to squatters, mentioned yesterday, I quite agree with government policy to check abuses on and by squatters. It is absolutely right to restrict them, on condition that homelessness is not allowed to continue to increase. If one sits on a pressure cooker, the result is an explosion.

5.28 p.m.

Lord Beaumont of Whitley

My Lords, I too am grateful to my noble friend Lady Hamwee for introducing this debate today, not least because it has given rise so far to a number of very interesting speeches. It goes without saying that my noble friends contributed some of the best speeches.

But before I begin on my main point, I should like to draw attention in particular to the speeches made by the noble Lords, Lord Skidelsky and Lord Northbourne. It seems to me that they opened up the subject to a much wider area and pinpointed the fact that our society and possibly the society of the whole world are in a period of immense flux and change. We will have to think in the long term, and even in the medium term, in terms in which we have so far not had to think, because we have been able to tackle issues five or 10 years at a time. It will not be like that any longer. In particular, the issue raised by the noble Lord, Lord Northbourne, about the size of conurbations and the number of people encouraged or even allowed to live in a particular area, is one in which I should be delighted to engage at another time.

I want to concentrate on housing in the countryside —rural housing—which was a topic raised by the noble Lord, Lord Shuttleworth, and the right reverend Prelate. I do so because, among other reasons, my party recently published a report called, Reclaiming the Countryside. That includes a major section on this subject. The chairman, councillor Jack Ainslie, my noble friends Lord Mackie and Lord Geraint among others, and myself sat on the working party. What I say now will largely relate to the policies in that report. It may help the noble Lord, Lord Skidelsky, when he comes to read Hansard—he is not in his place—to differentiate between the two parties on this side of the House. We do not have much in common except that we are both opposed to a large number of the policies of the Government Front Bench, in which the noble Lord, Lord Skidelsky, often joins us.

The provision of housing in rural areas is a serious problem. Estimates of need run as high as 500,000 and the general evidence is that the need is rising. The Rural Development Commission reported in 1992 that 16,800 households had been declared statutorily homeless in the more rural housing districts, with another 5,000 in bed and breakfast accommodation. And we have all heard how appalling it is for families to live in bed and breakfast accommodation.

The key problem is an acute shortage of affordable accommodation which would enable people to remain in their communities. That sentence raises whole problems in relation to the extent to which we encourage people to remain in their communities. But it seems to me that society—by that I include as a major part of society its elected government—must hold a balance between the need for people to be mobile from the point of view of jobs and the need for communities to be stable and to build up traditions. We can then develop a society which in itself has a stable ethos with which it can live and which, for instance, cuts down crime and enables rural areas to be less crime-ridden than town areas. Where rural areas are not less crime-ridden—I know that there are figures which say that in some cases they are not less crime-ridden—it is usually because the crime is imported from the town. The rural areas become the prey of the towns.

There is therefore a problem of how society organises its mobility; not too stagnant but not too destructive of societies and communities. Nevertheless, one must try in the countryside to resolve that problem, particularly if, like me and my party, one believes that over the coming years we will need to build up rural communities rather than see them continue to decline.. To do that we must provide more affordable housing in the countryside.

We believe that local authorities are best placed to act as strategic identifiers of need and, where appropriate, providers of housing. That is one of the major philosophical concerns of these Benches. We should like to see those decisions pushed as far down the administrative range as possible. It is local people who, on the whole, know what they want and are best qualified to administer it. Local authorities should be freed from the present need to retain capital receipts and subject their housing management role to competitive tendering. We see no real advantage in either. The vast majority of rural councils perform a good and cost-effective job, as is borne out in successive reports. by the Audit Commission. Resources could thus be freed for housing needs studies and for the direct provision and renovation of housing. The advisory role of the Rural Development Commission is valuable and could usefully grow into active participation.

Local authorities should be encouraged to adopt a variety of schemes, either on their own or in partnership with housing associations and co-operatives, to improve the provision of affordable housing. Where land has no clear amenity, conservation or agricultural value and where it will not fundamentally conflict with the aims of the district local plan, there should be the possibility of it being zoned for social housing with the benefits of such planning again being used to help finance it. It would have to be balanced with the need to ensure that there was a real social mix in any such form of new housing in the countryside, just as it should be in the town. Those of us who have had parishes and have seen some of the worst effects of the right-to-buy legislation, have seen its ability to turn what were mixed society parishes and areas into one-class ones. Sometimes they are attractive one-class areas, but the legislation destroyed a necessary part of the English social scene. Further action can be taken to supply rented accommodation by developing planning policies which stipulate that a fixed percentage of land allocated for housing in local plans should be reserved for the rented sector. It is particularly important to relate that kind of condition to developable land areas rather than to numbers of properties. If one relates it to numbers of properties it will result in cramped, second-rate properties for rent.

Second homes were mentioned and what I said earlier about policies being decided at local level indicates that we feel it is important that powers should be given to local authorities In some areas the concentration of second homes is such that they threaten the viability of the established community and steps to reduce their spread are justified. In other parts—though they are few—they may be an asset. By a simple adaptation of the development control criteria to separate second homes from main residences, as defined for council tax purposes, we would enable communities to make a choice on a balance between the two. When we come into government—and until then we will support any other party who wants to—we will increase council tax rates on second homes or enable local authorities to increase those rates. When the system of local government finance is finally reformed, second homes should be subject to site value rating with similar effects. The revenue raised could then be re-injected into local affordable housing.

There are a growing number of single young homeless people who fall outside the current criteria for assistance. Your Lordships will know that I have worked for some time with Church Action on Poverty. The right reverend Prelate mentioned the Churches National Housing Coalition, which has done serious work in this area. The problems, of which my noble friend Lord Russell knows more than I and will probably be discussing in his winding-up speech, are connected with 17 and 18 year-olds who perhaps should be encouraged to be with their families, but many of them do not have families in any understandable sense of the term. It has been mentioned more than once that many people of that age are coming out of care. A large number of them have mothers or fathers who are single; or, if they have remarried, the person whom they have remarried does not want a 17 or 18 year-old adolescent hanging about. Who does want a 17 or 18 year-old adolescent hanging about?

Baroness Hollis of Heigham

My Lords, particularly if it is not yours.

Lord Beaumont of Whitley

Exactly, as the noble Baroness says. My Lords, this is a major problem. We would encourage partnership initiatives in the countryside between housing authorities and the voluntary sector so that council housing could be made available for at least short-stay accommodation, managed and wardened by local voluntary groups. That would probably be a considerable step forward.

It has so far been a good debate and I am sure that it will continue to be a good debate. What is absolutely certain is that within the area defined by the housing situation and economics as we see them today there is room for considerable improvement. The points raised by the noble Lords, Lord Skidelsky and Lord Northbourne, about the wider horizon must also be tackled. There is a great deal to be done. The Government are clearly aware that quite a lot needs to be done but they have failed to a very large extent in doing it. I think the most telling remark on that subject in the course of this debate was the statement that it is undeniable that this Government will be seen not to have taken housing policy as a major plank which they treat really seriously.

5.42 p.m.

Viscount Brentford

My Lords, regrettably, I do not think I shall follow the noble Lord, Lord Beaumont, down his philosophical line. I also have to part company with him on the fact that I thoroughly enjoy having 17 and 18 year-old adolescents hanging around. I usually manage to find plenty of activities to keep them going when they are hanging around.

Earl Russell

They are yours.

Viscount Brentford

And others as well. I wish to thank the noble Baroness, Lady Hamwee, for introducing this debate and to emphasise my agreement with her that this topic is both important and urgent. It fits into both of those categories.

So far as I can see, the Government's policy is absolutely faultless, and I fully agree with it. Perhaps I may quote from my honourable friend Sir George Young: One of my highest priorities is to secure decent housing for those relatively few families with children and others in vulnerable groups who, through no fault of their own, do not have a proper home now. Helping those in greatest housing need remains at the forefront of our efforts". A decent family home, my Lords. I fully concur with that as I am sure all noble Lords do. Conservative policy is to ensure that a decent home is within the reach of every family. Our policy should increase the supply of affordable homes available for rent and ensure that existing housing is used more effectively. Those are the questions we need to be considering. When my noble friend the Minister replies perhaps he will amplify how fully he considers his department is fulfilling this task.

The provision of affordable homes is a partnership between government, local authorities, charities and others concerned, such as the Housing Corporation and the housing associations. This is an interlocking matter and we need to see it as such. At the root of it is the Government's action and guidelines. I shall give a couple of examples. I read this week that the City of London Corporation is giving £500,000 for a young people's centre in the heart of the City and another £500,000 for two housing association move-on accommodation schemes. That is where a local authority is putting money where it speaks. I was also reading a brochure of the Prince's Trust, which is aiming to persuade the corporate sector to increase its backing for voluntary groups working with the young homeless. Here again is the partnership between charity and the corporate sector. We all need to be putting our efforts into this.

There is a need for both temporary shelters and permanent move-on housing accommodation. I am concerned that the present safety net will have some large holes made in it by prospective government changes as a result of the recent consultation paper. It is crucially important that we keep a stronger safety net for those in need than we have in place at present. Time and again it is the vulnerable members of society who are suffering. I accept the fact that the Government do not have endless cash to throw around, which is why we are in a partnership situation. But I believe that the Government can do more to encourage the safety net. Everywhere I go I see need. Charities and churches are doing a lot to meet this need. Only last night I was discussing what one local church in Vauxhall is doing. I am encouraged by the way it is stepping up its provision for the homeless. A partnership is needed and the Government need to give it their warm encouragement and practical help.

I wish to ask about the future of the rough sleepers' initiative. I understand that it will cease in 1996. The Government have put £96 million of public money into it in the first three years and will put in £86 million in the next three years up to 1996. But I am concerned that the emergency bed spaces, including the cold weather shelters, that the RSI has produced should continue after 1996. We must not reduce the number of temporary shelters. What are the Government's plans when the RSI ceases in 1996? I have not seen the answer to that question.

Similarly, RSI has done an enormous amount in producing new permanent move-on accommodation. If we do not have an increasing amount of move-on accommodation we get a bottleneck. Temporary accommodation becomes full and the bottleneck stops the throughput that is needed all the time. Cannot we increase this permanent move-on accommodation at a rental that the poor and vulnerable can afford? We need more of it, not less. There will not cease to be a need for more move-on accommodation in 1996.

I turn to another question. I agree that we do not necessarily need to keep building new houses all the time, thereby causing other environmental damage. However, I am concerned as to whether we are using at least the sites where there are now buildings. I have read that there are about 868,000 empty properties. Can my noble friend say how many of those properties are owned by local authorities; how many are privately owned; how many are repairable and how many need to be demolished and new buildings erected on their sites? A very large number of properties are empty. It is very expensive for the nation to allow properties to remain empty. What proposals have we for tackling this dual problem of transferring empty accommodation into usable accommodation?

I also understand that the Government have been looking at the use of empty properties belonging to government departments and that a task force has recently reported on that possibility. What action is being taken to use this empty government property and will any of it be available in one way or the other for meeting housing needs? I am not clear as to the position, and it may be totally unsuitable, but perhaps some of it can be used for the temporary accommodation which is needed.

The Government have recently introduced one good scheme for giving tax exemption for the first £3,250 of rent received when a houseowner makes a lodging within his own home available to somebody else. Can my noble friend say how much take-up there has been of that new Government initiative? How many people are now being housed in a room in someone else's house who would not have been prior to this initiative? I look forward to hearing the answers to my questions from my noble friend.

5.52 p.m.

Lord Pitt of Hampstead

My Lords, I too would like to thank the noble Baroness, Lady Hamwee, for giving us this opportunity to discuss the issue of affordable housing and homelessness. As has been said before, this is National Housing Week so it is particularly appropriate that we are having the debate today. The report issued by the National Housing Forum to launch the week makes depressing reading. It confirms that not only do we have a problem concerning the supply and affordability of housing, but also that much of our housing stock is in a very bad state of repair. The report confirms the consequences of the growth of poverty throughout the 1980s.

The divisions in our society have become more extreme. That is nowhere more apparent than when we look at the housing conditions of those living in poverty. Poor conditions are widespread and, as has been, mentioned and according to the report, one in 13 homes in the United Kingdom is officially unfit for human habitation. One in six homes needs a significant amount of urgent repair work. That is the state of the housing stock. It is estimated that at least £7 billion is needed to deal with unfit homes. That is the situation shown in the report.

The issue of poor housing and health is one which has concerned me for a number of years. I am only too aware that poor housing affects people's health. I was a general medical practitioner for 50 years and I am a past chairman of Shelter. My experience in both those positions leads me to believe that we seriously—and I use that word advisedly—underestimate the social and economic costs of poor housing. I ask noble Lords to note that one of the major achievements in this country through the post-war housebuilding programmes was to break the link between poverty and bad housing. It is tragic to see that link being re-established and the health and welfare of so many of our citizens being put at risk by a short-sighted policy of cutting investment in housing.

The impact of poor housing on health is well documented. In recent years there have been a number of studies showing the link between dampness and respiratory disease. But there are many other links. Families in bed and breakfast accommodation have a range of health problems and the long-term impact on child development is considerable. Many homeless people use the casualty and emergency departments of our hospitals and are less likely to seek medical help early enough to prevent the onset of serious illness. That is part of the problem. The direct and indirect costs to our National Health Service must be enormous. There is an estimate that damp and cold homes alone cost the National Health Service £800 million a year.

At a time when we are implementing a policy of care in the community we should be particularly concerned about the implications of this policy on housing. The numbers of people aged 75 and over, such as myself, will rise to 8 per cent. of the population by the year 2001. If we expect those and other vulnerable groups to live in their homes, then their homes must be fit to live in. The new policy of renovation grants introduced by the Government is failing badly because of lack of resources. Many local authorities cannot meet the demands for mandatory grants, far less introduce new area clearance schemes or renovation programmes. Housing associations, which were very important in inner city rehabilitation, are now able to do only a small part of the necessary work. The new financial regime makes it highly risky to undertake that work. The National Housing Forum report argues that a completely new strategy is needed if the situation is to be reversed. I hope that the Minister will read the report carefully and respond to its recommendations.

Finally, there is always the argument that we can do only what we can afford. However, apart from the false economy, that simply results in shifting costs on to other government departments. Investment in housing makes good economic sense. The work that Shelter has done, using the Rowntree economic model, shows that for every £1 invested by the Government in housing, the cost to the Treasury is 40p. Putting building workers back to work and improving the profit margins of builders means increases in tax revenues and reductions in benefit costs. A recent estimate suggests that between 30 and 35 jobs are created for each £1 million of investment.

The House has discussed the subject of housing many times in recent years and we shall no doubt do so again and again—I hope we do—until we consider that the Government are giving a higher priority to housing than they have to date. Recent estimates of the need for rented housing suggest the need for an annual supply of about 100,000 additional homes over the next 10 years. We need 100,000 additional homes a year for 10 years. But current plans envisage that housing associations will provide only between 35,000 and 45,000 homes a year for the next three years. The AMA believes that local authorities and housing associations should provide an additional 50,000 homes a year to make up the shortfall in the supply of social rented housing. I hope that the Government will at least make that possible.

6.3 p.m.

The Earl of Dundonald

My Lords, I wish to restrict my remarks to a small component part of the Motion on the Order Paper in, I regret, a very pedestrian way and to refer to rural housing in Scotland, which I do not believe has been mentioned so far.

I should like to draw your Lordships' attention to the excellent work that has been carried out recently by Scottish Homes. Over two years ago, it initiated a series of rural demonstration areas, promoting a wide range of grants for housing for rent and owner-occupation in those areas. The geographic locations were as wide as they were varied and included the Angus Glens, Arran, East Lothian, North-East Fife, Central Buchan, North-West Sutherland, the Western Isles, West Stirling, and Wigtown.

Scottish Homes recently commissioned a report from Aberdeen University to advise it on the evaluation of those rural areas. That report has thrown up some interesting information. Only 25 per cent. of people on local authority and housing association waiting lists in those areas wish to be owner-occupiers. Over 50 per cent. wish to rent. Fewer than 50 per cent. know what Scottish Homes does and practically nobody had heard of the rural demonstration areas despite living in those areas.

The report made a number of recommendations, a few of which I should like to share with your Lordships. Scottish Homes should continue to focus its attention on local authorities and housing associations as its principal means of providing affordable homes in rural areas. Scottish Homes should seek to make more people aware of what it does in rural areas. Scottish Homes should expand its current development partnership network and the rural demonstration areas should be consolidated and expanded. The report also highlighted the fact that without affordable housing, the rural economy will decline.

I should like to focus briefly on RDAs in the Angus Glens, which was the only one of the pilot studies in Scotland that was initiated with private landowners. It was brokered through the offices of the Scottish Landowners' Federation. The initiative aimed to bring back redundant agricultural housing stock into use for local people on long leases. The report made the general reference that attempting to release land and buildings from private landowners would be a largely fruitless task, yet the experience of the Angus Glen project tells a rather different story. Landowners were happy to release buildings for local people to rent on receipt of grants from Scottish Homes to put them back in good order. Those grants generally ranged from 40 per cent. to 70 per cent. of the capital cost of refurbishment. The minimum period of lease was seven years, but in most cases 15 to 25 years was achieved, thereby guaranteeing affordable rented accommodation for a reasonable length of time in those areas. Landowners were delighted to improve and diversify their incomes and were happy to inject the much-needed shortfall in finance to complete the capital works in those projects.

I hope therefore that Scottish Homes, and perhaps its counterpart south of the Border, can learn the lessons of that trial. The great advantage of widening the net of providers of affordable housing and of involving rural landowners is that more often than not the redundant buildings that landowners can convert or bring back to use as dwelling houses are without a number of problems. There are few or no planning restrictions on such buildings. Site servicing tends to be in place, so saving substantial development costs. Land costs are minimal as they are already written down in the farm accounts. Additionally, landowners are usually willing to put up the shortfall finance if they can get a decent return on their money.

It seems to me that there could be a genuine marriage of convenience. Landowners need a higher and more diverse income at a time of falling agricultural incomes, and the Government and the nation desperately need more affordable housing in those rural areas. We should —I hope that we shall—try to send a message to Scottish Homes to encourage it to widen its initiatives using agencies such as the Scottish Landowners' Federation, the Farming, Forestry, Wildlife Agriculture Group (FFWAG), the SAC and any other agencies, such as Scottish Natural Heritage, with their roots firmly in rural Scotland. That would, I hope, result in a much wider source of affordable housing stock being available in the Scottish countryside.

I conclude by thanking the noble Baroness, Lady Hamwee, for initiating this timely and important debate.

6.8 p.m.

Lord Lester of Herne Hill

My Lords, the serious social ills resulting from homelessness have been vividly described by my noble friend Lady Hamwee and by the noble Baroness, Lady Dean of Thornton-le-Fylde, the noble Lord, Lord Pitt of Hampstead, and several other noble Lords.

The serious social evils of homelessness have created difficult problems not only for the very poor and for housing authorities, but also for the courts in administering justice between the individual and public authorities.

Even if the Appellate Committee of this House made it clear some years ago in the Pulhofer case that judicial review cannot normally provide an effective remedy for that most vulnerable section of society, except in the grossest cases, more and more homeless people have been seeking redress from the Divisional Court by way of judicial review.

I am grateful to the Lord Chancellor's Department for giving me the relevant figures. They are quite startling. In 1987, for example, 9.3 per cent. of the applications for judicial review came from the homeless; two years later, in 1989, the figure was 15 per cent.; last year, 1993, there were 447 homelessness cases out of a total of 2,886, of which 2,414 were non-criminal cases; in other words, over one in six applications for civil judicial review were brought by homeless persons. That is a significant and increasing proportion of the cases coming before the Divisional Court, where, as many noble Lords will know, there are insufficient judges, an appalling overload, a huge backlog and much delay in dealing even with urgent cases.

That problem has led the noble and learned Lord the Lord Chancellor to appoint members of the Bar, including myself, to sit as deputy High Court judges dealing with homelessness judicial reviews to relieve the great pressure on the courts caused by such cases. To my great surprise I have found, sitting as a judge, that many more mistakes are made by housing authorities in discharging their functions under Part III of the 1986 Act than I thought likely. Indeed, in as many as 25 per cent. to 33 per cent. of the cases that have come before me, I have felt obliged to quash the decision of the housing authority and to allow the applications for judicial review, even though, as I have explained, the Law Lords have made it clear that one should allow judicial review in exceptional cases only.

The mistakes are largely procedural, because judicial review is not permitted to look at the merits of the case. But the cases are serious. Why is it then that there are so many applications for judicial review in homelessness cases? The answer is the absence of any appeals system enabling any judicial authority or tribunal to look at the merits of the decisions that are being taken, or to investigate procedural defects. There is a pressing need to create a homelessness appeal tribunal, similar, for example, to the much commended Australian Administrative Appeal Tribunal, or, in another context, this country's Immigration Appeal Tribunal, so that there is some independent machinery which can enable housing authorities, as well as the homeless, to obtain speedy, effective and, normally, final decisions. It is not in the interests of housing authorities nor, ultimately, of homeless persons for there to be long delays and then, as I say, applications for judicial review decided eventually without the merits of the case being examined at an appeal level.

One of the third party effects that the present situation is creating is great delay in the administration of justice in judicial review cases, because of the clogging of the system in the way that I have described, with precious judicial manpower and womanpower being spent on matters which should be investigated by the kind of administrative appeal tribunal to deal with homeless cases that I have suggested. I therefore hope that the problem, which I know is considered to be serious by Crown Office list judges, can be considered by Ministers so as to create speedier and more effective remedies for the sake of the homeless and housing authorities, and so as to avoid any further unnecessary delays in the greatly overburdened Divisional Court. I should be grateful if the Minister would give at least some indication—I hope that he will not be too bleak and chilling—in his reply that that proposal might be given a fair wind.

6.15 p.m.

Lord Milverton

My Lords, it gives me pleasure to support the Motion tabled by the noble Baroness, Lady Hamwee. It has been a fascinating debate. I agree with the right reverend Prelate and others that it is as much a matter to be overcome in rural areas as it is in towns or cities. Both my incumbencies were in rural areas. I can vouch that there is a need in those areas as much as anywhere else. My first incumbency was in the green belt about 35 miles from London. The other was in the country. The need in the country has to be met. Some young people brought up in the village would have liked to buy a house there when they got married, or even if they did not get married. They were unable to do so because they were priced out of the market by second-time or third-time buyers, who had the money. The property that those young people would have liked to buy cost too much—because it was in a pleasant area.

Every person should be able to feel the security, certainty, permanency and peace of a home; not just a roof, concrete walls and the bare necessities. Some of the material I have received shows the conditions in which some people have to live. They are called the bare necessities. I would not call them the bare necessities. We would not even allow animals to live in those conditions. As the noble Baroness said in a debate the other day—I cannot remember which debate it was—we treat animals with far more consideration than human beings.

As I have said in my pulpit, when I see some of the people on the Underground or at Paddington station I find myself asking what has gone wrong. Where have we gone wrong? What has happened so that people with gifts and the ability to contribute to others and to the community have come to this? We do not expect the Christian faith to be able, hey presto, to bring everything to a glorious alleluia. Perhaps one would not have expected things to go so far. We know that some gypsies, New Age travellers and what have you like to move about. However, the majority of people would like a home in which to live in security, permanence, peace and sureness. In a sense, the clergy know what that feels like. Once we are no longer in charge of parishes under a Bishop —my house is one of the last freehold properties—suddenly we must find somewhere to live when we vacate the vicarage or rectory. We know what it is like to go through the same process. Where am I and my wife—and my children if still living with us —to live?

The word I shall leave your Lordships with is "partnership". I believe Her Majesty's Government have tried, and are trying, their best to work out the problem. There are successes. Surely, however, the only way necessities and affordability can come to people who do not have a huge amount of money at hand is to work in partnership. I mean what I say, and I have experience. I have good experience of all kinds of life. I know how people feel. During my national service I stayed in the ranks. In a sense, that was good. I had a broader view and outlook in understanding people than I would have had if I had become an officer.

Perhaps we need to find fuller and deeper forms of partnership involving local and central government, housing associations, voluntary bodies and everyone concerned and interested to meet the need. It should not be a political project to be bounced from one party to another; it should be a real work of partnership and mutual understanding, seeking, finding and working out a basic foundation from which people can work. They should not simply be told, "Here is a building with bare necessities". They should be told, "Here is a building with decent bare necessities for you to start on, to work on, to build on and to carry on". They should have decent help so that they can take part in life economically, socially, politically and in every other way. They should be able to give their talents, gifts and abilities.

If people do not have that security, sureness, permanence and peace, how can they give what otherwise they are capable of giving their spouse and their children? How can the children, if they are not brought up under such circumstances, give what they possibly could give? It is amazing how many people and children give what they give while living in conditions and circumstances in which, if we were to experience them, we should not be able to give so much. Let us hope that in a real, true partnership of seeking together, these hurdles may be overcome. Many more people who wish to have a home could then be helped. We are not saying that we are going to spoon-feed them all the time; we are saying that we wish to give them help and a start on which to build. Unless they have the start, how can they do that? Partnership. Let Her Majesty's Government lead in partnership, listening and giving, to bring the unity for these things to happen.

6.25 p.m.

Earl Russell

My Lords, Sherlock Holmes, with his usual serendipity, once discovered a south London boy who had witnessed a number of events about which he was extremely anxious to know. Having heard what the boy had to say, he said, "Is there anything you would like?". "I would like a shilling", said the boy. "Is there nothing you'd like better?", said Holmes. "I'd like two shillings better", said the boy, after some thought.

That boy understood the basic principle of the market. But also he illustrated why the market is not an appropriate vehicle for providing low-cost housing. I agree with the noble Lord, Lord Skidelsky, that it is the appropriate vehicle for providing a very large part of the supply of housing. I found the noble Lord's remarks extremely interesting and I shall return to them. But in asking the market to provide low-cost housing, one is asking the market to behave against the nature of a market because one is asking it to prefer less money to more. One cannot answer that by the classic free market theory of saying that if the price of apples is set too high it will come down until they clear.

There are a great many reasons why that does not happen. One of them is the immense difference between the rents at the top of the market and those at the bottom. If you have three rooms to let and you let one of them at £150 a week you receive the same income as if you had let all three of them at £50 a week each and a great deal less work. That may look like a good bargain.

Keeping up housing can also be too capital intensive. My noble friend Lord Ezra had some important comments to make about repairs. If you borrow very large sums of money to deal with, say, dry rot in your house you need perhaps a rather more rapid return on your capital than you would get by providing low-cost housing.

The market theory also does not work because, as my noble friend Lady Seear has reminded us many times, the market in which we live is global. If the price of London housing seems to be falling it does not go on falling until it comes within the reach of people on low wages. My American colleagues immediately see a chance to buy a place where they can conduct their research without having to take on unstable renting.

The noble Lord, Lord Milverton, illustrated how rural communities are not an enclosed mystical market. People come in from outside and it is that which prevents the price from falling to a point where people on lower incomes come within range of it. There are also a large number of people who are shut out of the market. It does not matter that you have a level playing field if you are not allowed on the pitch.

I spoke previously on the problem of deposits. I have argued for the social fund to provide help with them. I hope that Sir George Young's letter to me on 21st March is not his last word on the subject because, if it is, it certainly is not mine.

Following the Prime Minister's recent remarks, the Independent started talking to beggars around "card-board city". It found two of them who were begging for money for a deposit to buy a place to live from which they could begin to look for work. If the Minister wishes to condemn that practice, I should be grateful if he could tell me how else they should go about that.

My noble friend Lord Beaumont of Whitley has reminded me to return yet again—and not, I fear, for the last time—to the 16 and 17 year-olds. The National Association of Probation Officers found that two-thirds of 17 year-olds in its sample simply had no reliable source of income whatever. That does not get you into the market.

Also, in a free market, landlords have a choice of tenant; and that must be right. But it means that they are not necessarily keen on taking highly disturbed people. That is something of which the policy of care in the community should have taken account. Before the Government go too far with discharging mentally disturbed patients for whom there is no available housing, they should remember how the McNaghten rules came into existence. If they think that the invisible hand of the market will solve the problems of low-cost housing, they should remember the judgment of Judge Jeffreys on the defence policy of King James II: letting the Virgin Mary do it all. It did not do James II much good.

The noble Lord, Lord Skidelsky, enlarged the arguments of our debate. He said a great deal with which I agree and I should say to him that nobody on these Benches is arguing in favour of introducing rent control. We agree with him that the shrinking of the private rented sector is extremely unfortunate and is exacerbating our problems. We should like to see that reversed. We recognise that landlords are in business. They are not normally in charity. They need to make a living. The word "landlord" is not an oath.

That means that rents must allow landlords to make a profit. But in agreeing with that, I would say that that is not the end of the discussion because it is also necessary that the tenants should be able to afford to pay the rents. It seems to me that we have now, and have had for the past 20 or 30 years, a gap between the highest level of rent that the tenant can afford to pay and the lowest level at which a landlord can afford to make a profit. We should sit down round a table to discuss ways, including the financing of repairs, in which we might be able to close that gap. In that regard, there is a lot of scope for useful discussion, and I am extremely grateful to the noble Lord, Lord Skidelsky, for saying what he did.

I turn now to the main item on which I wish to speak; namely, the homelessness review. On the whole, this debate has been conducted with a very large area of agreement; and I am glad of that. But I cannot extend that to the homelessness review. I have cast far and wide for where the ideological roots of that review might be. I finally fastened on the first chapter of Evelyn Waugh's Decline and Fall. Your Lordships may remember that Pennyfeather was set upon in the college quad by a collection of hearties and debagged. He was then cripplingly fined and sent down for being about in the college improperly dressed. That seems to me to be the intellectual level on which the Government's homeless-ness review has so far been conducted.

We have heard a good deal about Shelter's criticisms of the review but in my view Shelter has been quite excessively moderate because it has discussed the matter in terms of rational argument as though a rational case were being made. I have not found one. Therefore, by taking it at that rational level, it is dignifying what is put before us.

It is extremely tempting to discuss such a policy on the moral level. I intend to resist that temptation because, by doing that, I should concede that there could be a rational, even if cynical, purpose which it could intelligibly have intended to serve. Looking at the review, I cannot concede that, and that is the ground on which I feel I must join issue.

The first point on which the review insists is that accommodation provided for the homeless shall be only temporary, thereby reversing the legislation introduced by the late Lord Ross of Newport; and these Benches are proud of my late noble friend's achievements in that sphere. When you are in temporary accommodation, it is extremely difficult to find another job. The right reverend Prelate referred—and I was glad that he did so —to the debilitating effect of homelessness. But it is not just the debilitating effect because if, as now often happens, the temporary accommodation is a long way from your borough of origin, you do not know where to look for work because you do not know where you will be when you leave that accommodation. Even if you think that you know where to look for work, a prospective employer may well hesitate if he does not know whether or not you will be able to get to work Therefore, by putting people into that pattern of temporary accommodation the Government, clean against their own financial interests, are making it much more difficult for those people to find work.

That policy reminds me of the time when I got lost in the Arab quarter of Perpignan. I drove into a square. There were five roads coming into that square and all of them were one way coming in. That is what the Government's temporary accommodation will be like.

The second basic principle in the review is that the waiting lists shall be the sole route to housing. I have already raised the effect of that on the women's refuge movement, which I believe would be absolutely disastrous. On 12th April, I asked the noble Earl whether he would institute consultations between the Department of the Environment and the refuge section in the Home Office. I should be glad to know whether those consultations have taken place and, if possible, what the result has been.

My next point of anxiety, from paragraph 8 of the consultation paper, is the effect on family breakdown. We all regret family breakdown but, in the real world, we must all admit that it happens. The consultation paper suggests that if people are asked to leave by another member of the family they should not be counted as homeless. I do not know whether anyone here has read Konrad Lorenz on aggression. If so, they may remember what happened when Lorenz locked two turtle doves together in a cage overnight. The dove is a peaceable bird because it avoids fighting by flight. Without the option of flight, when Lorenz came back the next morning, one of the doves was dead. If in that way we prevent people who leave a family from qualifying as homeless, some of them will go the way of Lorenz's doves.

I am absolutely astonished by paragraph 8.3 of the consultation paper which directs a local authority, in cases where people have left home, to investigate whether they could have continued to live there without undue strain. I should like to know—and this is a serious question—whether those who undertake that investiga-tion will be paid danger money. I should also like to know by what possible criteria they could conduct such an operation. In the end, hatred is as irrational as life. Most of us would be quite hard put to answer questions about why we loved those whom we do. We could give 101 rational reasons, but we know perfectly well that that is not the answer. It is the same thing with hatred. I simply do not see by what criteria those inquisitors would be able to operate. I believe that it would be an immense bureaucratic apparatus which would, ultimate-ly, be entirely useless.

It is also the policy of the consultation paper that where people have accommodation, however tempor-ary, they cannot be classified as homeless. I have twice taken into my flat, as it then was, schizophrenics in a fairly poor state of mental health. I am glad that I did so. But, if in taking them on, I had conferred on them something like the status of the controlled tenants of the 1950s, I would have been subjecting myself to more temptation to become a Rachman than I feel sure I could resist. That policy will break up families by restraining the people from offering hospitality to those whom they would otherwise assist.

The noble Lord, Lord Pitt of Hampstead, quoted the maxim that we only do what we can afford. There is good sense in that. However, there is equal sense in the proposition that we only refrain from doing what we can afford to refrain from doing. The key point about the paper from the Government's point of view is that those who are plunged into that black triangle of a square in Perpignan will become unemployable. Creating a larger and larger class of people who are unemployable is keen against the interest of the Government in general and the Department of Social Security in particular. Can the noble Earl say whether the Department of Social Security has been given an opportunity to consider the effect of the consultation paper on its budget? I do not always agree with what the Department of Social Security does, but I am developing an increasing sympathy with it because of the way that other government departments sweep their unwanted expen-diture on to its table. I believe that the department is quite entitled to resent that fact.

The whole of the issue rests on the doctrine of perverse incentive to become homeless. I find that in itself to be perverse. I have known people who have slept rough; indeed, I have seen it happening along the Strand. In January, and with a strong wind blowing, the Strand can be a very cold place. Moreover, one is liable to assault and robbery. If one is treated to two or three days in the cells, one might possibly find it to be a relief. Can the Minister say—and the question is not frivolous —whether is any incentive, however perverse, which would lead someone to do that voluntarily? I should be a little surprised if his answer is yes.

The whole of the doctrine of the perverse incentive rests on a type of economic determinism, ruling out the whole of the emotional life where it is not economic, which is paralleled, so far as I know, only in the works of Karl Marx. It is characteristic of ideologies, as it is of crusty old married couples, that they go on quarrelling for so long that they become like one another. That is what has happened to free market ideology and Marxism. I hope that they can be consigned together to the ideological scrap heap.

6.44 p.m.

Baroness Hollis of Heigham

My Lords, like other speakers tonight, first I should like very genuinely to thank the noble Baroness, Lady Hamwee, for introducing the debate. Back in April, we debated homelessness late at night. I am delighted, especially in the context of National Housing Week, that we have the opportunity today, in better time and with a fuller House, to debate the issue more fully.

Back in 1989, the Department of the Environment said: In many local authorities, those who are homeless are simply people on the waiting list with nowhere to wait". That statement is as true today as it was five years ago. The Audit Commission has emphasised that the homeless are not a different sort of people from the rest of us; indeed, some 60 percent. of them are on a waiting list, just waiting. However, they have experienced a crisis which means that they can wait no longer. They may have been struggling with mortgage repayments or payment of rent until unemployment produced arrears and eviction. As other speakers have suggested, those affected may be a couple who have shared a small overcrowded house with relatives until the arrival of a baby made the situation intolerable for everyone.

Homelessness is always the result of a crisis, often for reasons that have not changed over the past decade; for example, it may be the break up of a relationship, eviction —legal or illegal—or it may be mortgage repossession. However, it can also happen for reasons that have changed over the past decade as has already been mentioned in the debate. One such reason is care in the community which has brought people from long-stay hospitals into the community and, too often, left them on the streets. Another reason is domestic violence, often—and sadly—associated with male unemployment, which has doubled as a source of homelessness. Moreover, there is also eviction from the private rented sector. In my local authority, only a few homeless people were housed from that sector on those grounds a few years ago, but now it accounts for over one quarter of our homeless—the very sector to which the Government are seeking to return people and from which they were made homeless in the first place.

The reason for some people's homelessness is the very fact that they cannot wait any longer. But the reason why they remain homeless is, I suspect, that, unlike, everyone in the House tonight, they cannot buy themselves out of their homelessness; they cannot rehouse themselves. As the noble Earl, Lord Russell, said, being poor and homeless almost always means being jobless and poor. It means precisely that such people have no cushion of savings for emergencies. Whether they are homeless because they have been evicted for rent or mortgage arrears, because of the break up of a relationship, because of lone parenthood, because of violence in the home where the wife has fled, or because they have come out of a long-stay hospital, it is clear—is it not?—that such homeless people and families cannot buy their way out of homelessness. Of course, the private sector can only properly respond to demand which it does not have, rather than to need which most genuinely exists.

The Government consulted on their 1991 homeless code of guidance, and 85 per cent. of local authorities thought that it was satisfactory or very satisfactory. However, 15 per cent. of local authorities thought that it was unsatisfactory. Why was that? It was not because it was too generous; it was because it was not generous and not socially inclusive enough: it overlooked the homelessness of the single. As the right reverend Prelate reminded us, we know from the incidence of older single men sleeping rough, and from the fact that young single people are begging, just how right the anxieties of local authorities were when they responded to that code of guidance.

From all the reports that we have received over the past week and fortnight, we know that older single men have often fallen through the community care net and that, often, with their background of drink, mental health or solvent abuse problems—indeed, they may be former army servicemen or ex-prisoners—they are now living on the streets. We also know about young people who are homeless. Let us not say that they should return to their families, for it is known that 40 per cent. of them had to leave their families precisely because they were abused; and they are now exposed to our abuse on the streets. They are homeless because they fall outside the code of guidance, and they are without income because at 16 or 17 years of age they are ineligible for standard benefit. They are living on the streets as they did in Mayhew's time, except that he knew that society had put people there. We have not yet fully woken up to our responsibilities to that extent.

We may say, "go to the hostels"—and I certainly support some of the rough sleeper initiatives—but nonetheless two-thirds of hostels regularly turn people away every night, and some of them are now closing beds. These are people without homes, families, jobs, income and who very often have minimal self-esteem. Then we criticise them for begging.

Tonight there will probably be some 5,000 people sleeping rough on the streets of England, Wales and Scotland. This week probably 1,000 families will lose their homes through repossession; 5,000 families will probably be in bed-and-breakfast accommodation; 10,000 families will probably be in hostels—nearly 40,000 families will be in temporary accommodation. Why is that? I suggest to your Lordships that it is because the Government have constructed a crisis of rationing, overlaid by a crisis of price; and the result is. a crisis of housing.

As regards the crisis of rationing, we know—some of us have been reminded of it again tonight—that it has, been triggered by the loss of socially rented housing. As; the noble Lord, Lord Ezra, reminded us, housing investment has fallen by nearly a quarter since 1979–80 First, the Government required local authorities to sell off the best of their stock to the lucky few who were in situ at the time. That was fine except that local authorities were not allowed to replace that stock. Secondly, the Government cut back credit approvals for additional new housing. Therefore local authorities which used to build over 100,000 houses a year now build 2,000. My authority alone used to build 1,000 houses a year through the late 1970s and 1980s. We all know—the Audit Commission, the Housing Corporation, the Select Committee on the Environment, local authorities and, as the noble Lord, Lord Moyne, and my noble friend Lord Pitt have said earlier, everyone knows except apparently government—that this country needs 100,000 units of socially rented housing a year just to keep pace with the need that we know we have as opposed to the need that still remains hidden and invisible.

In the city where I live, the authority has money from capital receipts; but that money stands idle. We have the land; but weeds are growing on it and it stands idle. We have building workers who are hungry for work; but they stand idle. We have families on the waiting list who are homeless and on our streets, and they stand idle. Yet the Government refuse to allow us to meet that need. Therefore thistles grow on the fields where children should live and grow themselves. Why, for heaven's sake? Spending money we are told from a recycled asset —selling and then building, for example—adds to the public sector borrowing requirement. But if it was okay to release capital assets last year, why not this? Why was it not a rule last year but apparently was a rule the year before and is now a rule again? Treasury accountancy is clearly what government say it is— whatever they say it is—and families go homeless.

It is precisely because we have this shortfall and have to house the neediest first that those on the waiting list wait longer and therefore we have rationing. The homeless are being blamed by government in all effrontery—those who are in deepest housing need—for taking houses away from those in lesser housing need who are able to wait. To the crisis of rationing has been added a second crisis—the crisis of price. Again we charge government with manufacturing that crisis. It may be the only thing they are manufacturing at the moment, but they are certainly manufacturing that. They have forced up council rents. As a matter of policy, they are required to rise by 5 per cent. above inflation every year. That means since 1990 they have gone up a third in real terms. That way the DoE can cut subsidy and cut its grant to local authorities. But what do government expect will happen if rents are artificially forced up unless wage inflation follows? If wage inflation does not follow, it means families have to have housing benefit and the social security bill will go up.

Investment in public housing in 1978-79 was £12.5 billion. It is now less than half that. Around the same period rent rebates were three-quarters of a billion pounds. They are now five times that. Do not government understand the connection between those two things? Does not the noble Lord, Lord Skidelsky, understand the connection between those two things? Every time the DoE cuts its subsidies on investment in housing, it exports its costs to the DSS, which has to subsidise consumption. For every £1 the DoE saves, the DSS has to spend 75p in benefit to finance that consumption. One would not mind perhaps the laundering of the money, but it is the damage that it does to the people concerned that matters. In the process, the Government lock people into the very dependency on housing benefit that the Government, when it suits them, profess to deplore. As a result, we have an unemployment trap in which, as noble Lords have said, for every pound someone might earn he loses 65p in housing benefit as well as council tax benefit on income support. It is not worth lone parents going to work. A lone parent on £70 a week has to double that to £140 before she is better off in work. A family with two children who pay a rent of £50 are just £10 a week better off if they earn £220 a week rather than £80.

As for the poverty trap of those in work, as other noble Lords have said tonight, add family credit and they are paying a marginal tax rate of 97p in the pound. How do the Government expect them to behave other than rationally in not seeking extra earnings or extra work? Over half a million of our people are paying tax rates of more than 70p in the pound. They just happen not to be the rich but the very poor. The Government say this is about targeting. When two-thirds of all tenants cannot afford to pay their rent that is not targeting, it is a subsidy on consumption because we are choosing not to subsidise investment. If more resources were applied to investment in housing it would encourage people into work and it would simultaneously release work for others in the building trades. Why not release those capital receipts and filter them back into the system and require the companies that acquired the contracts to take on young, unskilled male apprentices who stand idle on our street corners and bring them back into work, into useful skills and into adulthood?

Housing associations too are experiencing a rent crisis as their housing investment grant is cut, as my noble friend Lady Dean has mentioned. Do not government appreciate that within broadly the same budget government have the choice of investment in public housing, keeping rents down and housing benefit down and people in work, or, alternatively, pushing rents up, forcing families on to benefit, on to a dependency culture and into a poverty or unemployment trap? Do not government accept they have that choice; and why are they always making the bad choice and the wrong choice? If government—

Lord Skidelsky

My Lords, I wish to ask the noble Baroness a question. We are not against investment—no one is against investment —but why does she think the Government have to do all the investment in housing? There are many sources of investment and investment funds.

Baroness Hollis of Heigham

My Lords, I entirely agree with the noble Lord, Lord Skidelsky. I would hope he can now persuade his right honourable friends to allow local authorities as well as housing associations to seek finance to amplify the basic credit approval which at the moment limits their ability to build. That would be a splendid proposal and I would warmly welcome it. I hope the noble Lord will perhaps tell us how he is going to invite the Minister to respond.

I was trying to suggest that the Government had a choice and that they made a bad choice. The reason the Government are locked into this is that if they sharpen housing benefit and reduce the taper fewer people can afford to start work. If they elongate and smooth the taper, fewer people in work can afford to increase their hours and pay. I wish I could persuade the noble Lord, Lord Skidelsky, to accept this argument. The only way to switch resources from consumption into investment, which I am sure we all want, is to allow rents to stabilise and therefore to allow people to float themselves off benefit without penalty. Under the system that the Government have put in place, that is now impossible. What we need, in other words, is affordable housing.

As regards the problem of price in the private sector, we will see that what has happened there is that government have deregulated without adding to the supply. There are fewer than half the private sector lettings that there were in 1979. The only new rented houses are those where people are waiting to sell, waiting for the market to improve. It is a landlord's market and therefore people cannot turn to the social rented sector.

Sir George Young in 1991 insisted that housing benefit must underpin market rents. I ask whether benefits and the benefit bill should rise to support whatever rents private landlords would like to charge. If they do, housing benefit will rise inexorably. If they do not, the poor will be unable to pay; they will be evicted and homeless, with no adequate supply of social rented housing to turn to in lieu. Which alternative do the Government want?

Already, over 45 per cent, of private tenants are on benefit, and in nearly 40 per cent. of the cases that are determined by a rent officer the rent has been reduced by an average of £29 below what the landlord is charging. What do those people do then? They have the choice of struggling to pay the rent from income support and going into debt or not paying, being evicted and becoming homeless.

In other words, it is not a question of whether or not there is rent control; we already have indirect control through the housing benefit system and therefore the worst of all worlds.

Housing benefit soars not primarily because more people are claiming but because the amount that each individual is claiming is rising because council rents are being forced up by Government and the private sector has been deregulated. As a result, we now face a housing benefit bill which is soaring out of control and creating a dependency culture, a wages trap, an unemployment trap and the poverty trap that we deplore.

As the Select Committee on the Environment stated, we are creating welfare ghettos where only those who an: on benefit can afford to rent, and because of that rent they cannot afford to work. The Government's pitiful —no, my Lords, that is the wrong word—pitiless response to that situation is, under the Green Paper, to threaten their right to a home and, if Mr. Portillo is to be believed, if they get one, to reduce their right to benefit.

We have a housing crisis, a shortage of houses to rent in the public sector; rapidly and deliberately rising rents in the public and private sector. There is a consequential rise in housing benefit in the public sector. With the Green Paper on the one hand and rent officer capping of housing benefit on the other, there is a growing problem of homelessness.

Not many authorities with responsibility for housing are Tory—about 75 out of approximately 400 in England and Wales—but one would expect them staunchly to support the Green Paper on homelessness.

I should like to quote from one such authority, which may stand for most of them: 'The Government's proposals appear to turn current policy and practice completely on its head … It is the opinion of this council that the proposals are generally ill conceived and, if adopted, they would cause unnecessary trauma to many families and individuals in genuine housing crisis". Quite so.

The same Tory local authority in relation to suggestions that homeless families should move into the private sector stated: Problems will occur with families finding shorthold tenancies which last for only six months, following which they may be homeless for a second time and a third time … No account appears to have been taken of the effects upon family life of this constant disruption, particularly upon the children involved. Overall the Green Paper proposes a radical change … Those effects are viewed at present as being very detrimental to many of the claimants, particularly families with children, where the constant disruption of moving to alternative accommodation could seriously damage family relations". Quite so. That Tory authority is Suffolk Coastal, the constituency of the Secretary of State for the Environment.

There have been 10,000 responses to the Green Paper, and they have been overwhelmingly hostile, including that of Suffolk Coastal, as similarly have been the speeches today.

I should like to ask the Minister a direct question. Will he please confirm that he still expects to proceed to legislation, or will he now admit that the Green Paper must be withdrawn? My second question is this. In the light of Mr. Portillo's threats to housing benefit, will the Minister also confirm that the Department of the Environment still stands by the statement made by Sir George Young in 1991 that rents will be fully underpinned by housing benefit?

Homelessness is not an act of God, it is not a lack of moral fibre; it happens to those who simply cannot buy their way out of a housing crisis. That housing crisis has largely been manufactured since 1979 by the interaction of the Government's policies on making social housing scarce and its rents unaffordable. What do they expect the poor and homeless to do? Does the Minister expect them to have the good manners to make themselves invisible, to tidy themselves out of sight and not trouble us?

I hope, on the contrary, that the homeless will harry our consciences and harass us as politicians until they force us to address their—our—crisis of housing.

7.5 p.m.

The Earl of Arran

My Lords, our thanks go to the: noble Baroness, Lady Hamwee, for bringing forward this very sensitive, important and serious topic during National Housing Week. She may or may not be aware that next week is the Institute of Housing's annual conference.

I like to think that the debate has been reasonably friendly. These are very complicated issues that need rational and constructive discussions at all times.

I should like to make it quite clear that the broad aim of our housing policies is that a decent home should be within reach of every family. We have taken steps to increase the supply of housing where it is most needed, by securing better value for money in the public rented sector and by promoting the private rented sector.

Most people prefer to own their own homes and there can be no doubting the success in expanding owner-occupation: the figure has risen from 56 per cent. in 1979 to 67 per cent. today, an increase of over 3 million households.

The noble Baroness, Lady Hamwee, staled that there should be no stigma attached to renting. She is quite right and I am happy to tell her that my right honourable friend the Secretary of State made precisely the same point in a speech last year to the Institute of Housing. He explained that renting should not be treated as a "residual" sector for those who cannot afford to buy homes.

Not every household will want, or be able to afford owner-occupation, so we are committed to increasing the supply of homes for rent. In particular, we are keen to expand the role played by the private rented sector. With around three-quarters of a million vacant private sector properties in England, there is scope for bringing more of them into use, through private renting, to meet housing demand.

The noble Baroness, Lady Hamwee, is correct in stating that there should be a larger private rented sector, but she underestimates its present size. It has grown to just under 10 per cent. We have introduced a number of initiatives to encourage just that. For example, the Housing Associations as Managing Agents scheme—or HAMA for short, gives landlords the chance to make use of the professional expertise of housing associations to run their property, thereby removing much of the administrative burden. To build on the success of mat initiative, a new scheme called "HAMA Plus" has been introduced, providing an additional £5 million in 1994–95 to the housing associations involved to help bring the empty properties up to scratch before they are let out.

Housing associations have also been central to the Flats Over Shops initiative which not only brings unused housing back into use, but has brought life back to abandoned areas of our high streets.

There are now clear indications that the Government's deregulation of private renting in 1988 and other initiatives have helped to stem the decline in the sector. We are moving away from the legacy of rent control and unlimited security of tenure which, although theoretically attractive to tenants, resulted in landlords steadily selling up and leaving the market. The latest figures suggest that it has increased in size in recent years: the number of households renting from private sector landlords increased from just over 1.6 million in 1988 to just under 2 million at the end of 1993.

I believe that it is wrong for the noble Baroness, Lady Fisher, to suggest that private rented housing is somehow inherently unsuitable for families in need. In many cases it may be better than public sector alternatives, providing a high standard of accommoda-tion. The initial six months minimum of an assured shorthold tenancy will often in practice be extended. If we constantly suggest, as did the noble Baroness, that private renting is somehow inadequate, we shall never encourage new landlords to come forward. At the same time, our investment in the social sector remains substantial. The budget for the housing association sector is some £1.5 billion in 1994–95. The Housing Corporation estimates that, during the period 1992–93 to 1994–95, housing associations will have provided homes for 178,000 households—25,000 more than the target we set in 1992.

The noble Lord, Lord Rodgers, suggested that the Government had no housing agenda, but that is not the case. Indeed, on present plans, the Housing Corporation estimates that housing associations will provide some 167,000 new lettings between 1993–94 and 1995–96, exceeding its estimate made in January 1993 of 154,000 lettings over the period.

Public money is made available to housing associations, now the main providers of new social housing, through the Housing Corporation. Housing associations bid for resources through an annual competition in which bids are assessed on the value for money they offer. Priority is given to housing association bids that are part of a strategy to meet the priority housing needs identified by local authorities, together with the corporation and housing associations, in local housing strategies. The aim is to achieve best value for money from the resources available.

We have asked them to place greater emphasis over the next three years on making the most productive use of existing housing stock through greater use of rehabilitation; by making use of an increased short-life housing programme; and through cost effective initiatives such as the Tenants Incentive Scheme or Do It Yourself Shared Ownership which both encourage home ownership and vacate property for others in housing need. A considerable proportion of the Housing Corporation's capital programme will still be devoted to homes for rent—some 80 per cent. of the corporation's approved development programme in 1994–95.

Private finance for housing association development plays a vital role in ensuring that public investment provides as many decent new homes for families as possible. In the six years to the end of March 1994, housing associations have successfully attracted £2.6 billion from the private sector, enabling them to provide an additional 55,000 homes for families who would otherwise have remained homeless or living in inadequate accommodation.

We have been able to reduce the rate of housing association grant from 67 per cent. to 62 per cent. without any significant impact on the affordability of the rents implied by those grant rates, partly because of the cost reductions achieved this year through lower interest rates and competitive prices. Indeed, the Housing Corporation provisionally estimates that around 2,600 more people now homeless or living in unacceptable accommodation will be housed this year.

Those homes matter because they help directly in the fight against housing need. The fourth quarter of 1993 was the seventh successive quarter to show a reduction in the number of households accepted by local authorities as statutorily homeless over the previous 12 months. The figures also show that there has been a fall of 14 per cent. in the number of households placed in temporary accommodation over the past year, and a drop of 34 per cent. in the number of households temporarily housed by local authorities in bed-and-breakfast accommodation. We want to see that situation improve further, and will continue to aim for the maximum output of new lettings from the resources available to us.

My noble friend Lord Moyne suggested that we should get families out of bed-and-breakfast accom-modation. I believe that the noble Lord, Lord Beaumont, also made the same point about rural areas. We wholly agree with my noble friend. Bed-and-breakfast accommodation is only suitable for short-term accommodation and we encourage local authorities to use it as little as possible.

The proposals on reforming the homelessness legislation which we set out in the consultation paper, Access to local authority and housing association tenancies, had a simple purpose. We wanted to make the allocation of council and housing association homes fairer. Such housing is a valuable commodity and it is right that the Government should seek to ensure that it is allocated fairly. Despite what some have suggested, local authorities will continue to have a duty under the proposals to provide accommodation for families and other vulnerable people who, through no fault of their own, find themselves without anywhere suitable to live.

I have already made it clear to this House in the debate on the proposals on 12th April that there is no question of vulnerable people, who include families with children, not having a home. This re-inforced an earlier commitment made by the Minister for Housing, Inner Cities and Construction in another place on 26th January.

Nor is there any question of families having to sleep on the streets, or children being separated from their parents and taken into care. Concern on this point, such as the noble Baroness, Lady Hollis, mentioned, stems from a misunderstanding of what would happen to a family before a local authority has formally accepted it as homeless. The consultation paper is clear that authorities would be expected to provide assistance with accommodation for families who are otherwise roofless during this period, and the Government are committed to ensuring that that should happen.

We remain committed to ensuring a proper safety net for families and other vulnerable people in need of accommodation, to tide them through a crisis and provide them with a stable home for a reasonable period. The proposals are about fairer access to a given stock of social housing, and, for the longer term, anyone in real housing need should receive priority in the allocation of permanent accommodation.

Most of the people we are talking about when we refer to housing need are people who have a roof over their head, but whose housing is, in one way or another, unsatisfactory. But as many of your Lordships have pointed out this evening, the needs of those who have no home at all are of vital concern. The Government's rough sleepers initiative has made a significant impact on the problem of rough sleeping in central London. That was commended by the right reverend Prelate the Bishop of St. Edmundsbury and Ipswich. One hundred and eighty million pounds has been made available over the six years from 1990–91 to 1995–96. That money will provide at least 3,300 places in permanent accommoda-tion by March 1996, as well as outreach work and resettlement support by voluntary organisations.

The initiative has been most successful in reducing the numbers sleeping rough in central London. Several thousand people with a history of sleeping rough have already been found accommodation; and the latest voluntary sector count, in November 1993, found 287 people sleeping rough, down by more than two-thirds from similar estimates of over 1,000 before the initiative began. Of those 287, just three were aged under 18. The majority now left on the streets are the hard core of the longer-term rough sleepers, many of whom have been sleeping rough for considerable periods.

Several noble Lords raised the issue of homeless young people. This is a many-sided problem. The schemes are particularly geared to provide advice and assistance to young people and many do so very effectively. We are also watching with care and interest other developments such as the Foyer initiative which combines housing accommodation with employment and training opportunities.

Tackling rough sleeping is not a simple task; it demands close co-ordination between central and local government, housing associations and voluntary bodies, to ensure that rough sleepers have an opportunity to start a new life with secure housing. The Government are funding voluntary organisations to provide resettlement workers to ensure that so far as possible hostel residents are found alternative accommodation as hostels close. The overriding need now, as when the initiative began, is to provide move-on accommodation to free up already existing hostel bed spaces. Similarly outside London we are working with the voluntary sector and helping with £7 million this year in grants.

My noble friend Lord Shuttleworth is not in his place but I think that your Lordships will agree that he spoke with great eloquence about homelessness and the housing need in rural areas. I am grateful to him for acknowledging the success of the Housing Corporation's rural housing programme.

I am also glad that my noble friend referred to the need for local authorities specifically to address the needs of rural areas in their housing strategies and for the planning system. When housing associations bid for resources from the Housing Corporation the corporation will give priority to bids which are part of the strategy to address the priority for housing needs identified in local housing strategies. Local authorities' housing strategies are therefore of the first importance. For their part, the Government continue to recognise the importance of the rural programme. Despite the reduction in the Housing Corporation's budget which followed last year, we have asked the Housing Corporation to achieve at least 1,850 allocations in 1994–95. The corporation tells us that it is on course to achieve that target.

At this point I am sure your Lordships will be well aware that I have by no means answered all the many questions that have been raised. However, it is my intention to answer as many points raised during the; debate as I can. First, the noble Baroness, Lady Hamwee, speaking of victims of domestic violence, suggested that women's refuges would become clogged up if the proposals to reform homelessness legislation proceed. That was a point with which the noble Earl., Lord Russell, agreed; I saw him nod his head at that point. However, my right honourable friend the Minister for Housing and Construction and I have made it clear that we are well aware of this issue—and indeed I made this point in your Lordships' House during Question Time yesterday. Also we are clear that our detailed considerations should not allow this to happen, and I would ask the noble Baroness to wait until we announce our detailed proposals on this matter.

The noble Baroness also suggested that greater use should be made of empty MoD properties—a point made by other noble Lords. We entirely agree that we should look at ways of making the best use of properties standing empty; and that point was raised by my noble friend Lord Brentford. We axe at present considering the report of a working party that has been studying how to make better use of empty governmental property.

The noble Baroness, Lady Dean, who is not in her place at the moment, mentioned the 1.9 million homeless. I have to take issue with the noble Baroness. The figure she quoted includes households in a range of tenures, some of which are perfectly matched to their particular needs: for example, young people setting up on their own for the first time. There are also migrant workers, and many families find that assured shorthold tenure provides a very satisfactory solution to their current needs.

The right reverend Prelate the Bishop of St. Edmundsbury and Ipswich spoke about illusions. I listened to his speech with great interest One illusion he mentioned was that the Government can do everything on their own. We cannot do that. Housing is a hugely complex area, as the noble Baroness, Lady Hamwee, among others, pointed out. We have to work in partnership: a partnership between government, local authorities, housing associations, the voluntary sector, tenants and those in housing need.

The noble Lord, Lord Rodgers, talked about poor standards in housing association homes. It is, of course, in the housing associations' own interests to use good materials in order to keep future maintenance costs down. The Housing Corporation lays down the minimum requirements for associations in order to be eligible for housing association grant, and it sets clear guidelines for both design and construction quality, to ensure that all housing provided by housing associations is of a good standard.

The noble Baroness, Lady Fisher, who is also not in her place, and indeed other speakers, mentioned the consultation document and the number of responses that had been received. There have been some 10,000 responses in all, but a large proportion of them were sent as a result of misleading and alarmist campaigns, mounted by pressure groups on behalf of the homeless. Those responses were little more than—certainly I will give way.

Earl Russell

My Lords, the noble Earl has called the campaign misleading. Would he care to repeat that opinion when he is not covered by parliamentary privilege?

The Earl of Arran

My Lords, I am sorry, I did not quite catch what the noble Earl said.

Earl Russell

My Lords, I asked whether the noble Earl would care to repeat his opinion that the campaign was misleading, and do so outside this Chamber when he is not covered by parliamentary privilege.

The Earl of Arran

My Lords, I said before that it was regarded that a proportion of the responses were sent in as a result of misleading and alarmist campaigns and I think they were regarded as that. May I continue?

Earl Russell

My Lords, but would the noble Earl repeat that opinion outside this Chamber?

The Earl of Arran

My Lords, these responses were little more than really a lot of ill-conceived complaints. The consultation paper contained a range of proposals on a number of related issues. The more effective responses addressed these individually. The response has been very complex and it really cannot be classified in a simple "yes" or "no" fashion. However, we hope to be able to state the way forward before the Recess.

Baroness Hollis of Heigham

My Lords, I am grateful to the noble Earl for giving way. When he says he hopes to go forward before the Recess, could he perhaps use this opportunity to give an answer because it relates to a question I put to him: does that mean that we shall be expecting the Green Paper to lead to legislation?

The Earl of Arran

My Lords, I have to tell the noble Baroness that we shall be considering the responses very carefully before we decide the best way forward. There are many aspects to be considered. There have been many responses and it would be totally improper if they did not receive very careful consideration before we decide on what to do. My noble friend Lord Skidelsky pointed out, rightly, that a speculative housing market, with people buying homes solely because of their investment potential, cannot but be unhealthy. What is important is that we should enable people to choose the sort of housing that they want.

I hope that my noble friend Lord Brookeborough will forgive me if I resist the temptation to comment in detail on housing in Northern Ireland. As he will know, my Ministerial colleagues there have announced that they will be looking closely at housing policies. The noble Lord, Lord Ezra, asked the Government to consider introducing a performance target for reducing unfitness. However, this oversimplifies what is actually happening within the housing stock. The number of unfit properties is not a constant target against which progress can be made. Properties are falling into unfitness while others are being improved all the time.

My noble friend Lord Brentford raised a number of questions. I think I have already answered one of them concerning empty housing stock. He also asked about the number of people housed as a result of the tax concession for home owners renting out rooms to lodgers. By its very nature, with a tax concession which means that people no longer have to declare income, it is difficult to study the impact immediately but we will of course continue to monitor progress of the private rented sector as a whole. I will write to my noble friend on the other point that he raised.

My noble friend Lord Brentford also asked what will happen when the rough sleepers initiative runs out after 1995–96. I can say that responsibility for this group of people will rightly return to the local authorities. However, by the end of the RSI over 3,000 permanent homes will have been provided and they will continue to be available long after the RSI has ended. If local authorities believe that they need future resources, that should be included in their housing strategies.

The noble Lord, Lord Lester, asked the interesting and important question about why there are so many judicial review cases on homelessness. We are well aware of the issue. Our consultation paper invites views on whether judicial review should remain the only route of challenge to a local authority decision. We are considering the subject in consultation with the Lord Chancellor's Department. The noble Lord's proposal for a separate tribunal is one way forward; we shall certainly bear it in mind.

The noble Earl, Lord Russell, asked whether I had discussed women's refuges concerning the proposal regarding homeless legislation. We are in contact with the Home Office on the issue both at official level and via the ministerial group on domestic violence to which I believe I referred yesterday. However, that issue must await the outcome on the homelessness review generally.

The noble Earl asked also whether we had considered the cost to the DSS. I remind the House that these are government proposals. Of course we are in continuing dialogue with our DSS counterparts on a range of issues the whole time.

The noble Baroness, Lady Hollis, commented that reductions in bricks and mortar subsidies to suppliers of homes tend to lead to higher housing benefit expenditure. It has indeed been our policy to move away from a bricks and mortar subsidy to subsidies like housing benefit which are targeted on the individual.

There are, I think your Lordships will agree, no easy answers when it comes to tackling housing need. I can assure the House that the Government will continue to look carefully and closely at their policies and programmes to ensure that maximum benefit is being obtained for those in need from every penny of public money spent. It is vital that we target resources effectively to provide decent housing for those who cannot afford it for themselves.

Perhaps the key element in meeting housing need is getting the conditions right for sustained economic growth. The more people can meet their own housing costs, the fewer people will need help from the state and the better will be our targeting of resources. Talking about public spending as if it had no Budgetary consequences and as if it had a purely benign impact on the national economy regardless of the impact on taxation is never going to solve our housing needs.

7.31 p.m.

Baroness Hamwee

My Lords, I am grateful to all noble Lords who have taken part in a wide-ranging debate. I saw that my noble friend Lord Russell had written "Judge Jeffreys" in his notes and wondered whether he would bring that reference into the debate. We have ranged from that reference to comments from the right reverend Prelate on various government departments which apparently have failed to com-municate with one another despite what the Minister said. I draw no specific connection between the judge and government departments.

I enjoyed the contribution of the noble Lord, Lord Skidelsky. I was glad that he widened the debate. I agreed with rather more of what he said than he might have expected. I am sorry that we do not have the opportunity to continue that part of the debate tonight. However, it will be helpful on another occasion if we are able to discuss the more difficult economic areas which deserve considerable scrutiny.

I should like to respond to much of what the Minister said. However, I appreciate that now is not the time to do so. I am sorry that he referred to reactions to the homelessness review as misleading and alarmist. If they were alarmist—I do not accept that they were—I am tempted to respond that that is because those who were affected were alarmed.

The publicity about begging was swiftly followed —although little connection was made about it in the press—by announcements of closures of the hostels which had been accommodating those people who came within the ambit of the rough sleepers initiative. I should like to make that point in addition to what has been said.

Finally, the only area that we have not covered tonight is that of young people just over the 16 and 17 year-old age group to which my noble friend Lord Russell and others referred. I took part in a televised discussion last week-end when the question of training of, and accommodation for, young people was raised. Afterwards I was quite rightly tackled by a lady who said that she had worked for many years as a foster parent. She was concerned—it is a concern I understand —that under the provisions of the Children Act those who are children until 18 are cast adrift when they are just over 18. I should like to bring that point into the context of the debate.

I understand that if I do not beg leave to withdraw the Motion there will be delivered to me every piece of paper that the Government can find on the subject, My filing cabinet will not accommodate 10,000 protests. I therefore beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.