Housing

HL Deb 17 October 2000 vol 617 cc954-71

7.30 p.m.

Baroness Maddock rose to ask Her Majesty's Government what steps they propose to take to implement the proposals in the Housing Green Paper.

The noble Baroness said: My Lords, I am pleased to have this opportunity to question the Government on the housing proposals set out in the Green Paper. We have now had some time to consider our responses and we are also in the run-up to the Queen's Speech, which will detail the legislation in the next Session.

I recognise that the Minister will not be giving anything away, but it is widely thought by many in the housing world that a housing Bill will be introduced in the next Session. I do hope that the Government take the opportunity to respond to what has been said by those with expertise and an interest in housing matters since the Green Paper was published.

I begin on a positive note. We on these Benches welcome the attempt made in the Green Paper to look at housing in a wide context as well as to give a fairly comprehensive description of the many problems that exist. We welcome the recognition of the woeful condition of large sectors of our housing stock. We welcome, also, the attempt to speed up home sales; the commitment made to reform leasehold; the wider definition of homelessness, long overdue and likely to strengthen the safety net for homeless people; and the introduction of a licensing scheme for houses in multiple occupation. The last two points were manifesto commitments made by the Labour Party at the general election. I served with the present housing Minister on a committee which considered the last housing Bill in another place. When he was in opposition he supported such proposals. For those reasons, I hope that the Minister will be able to give a commitment that, should a housing Bill be introduced, these matters will be included.

The emphasis placed on sustainability in the Green Paper is welcome; first, through planning for mixed communities as a path to sustainable communities. However, I am concerned about whether the Government recognise the full extent of the problems that surround the delivery of regeneration schemes.

Secondly, the paper recognises the importance of energy efficiency improvement and its role in tackling fuel poverty. However, the strengthening of building regulations in terms of energy and water conservation would, I believe, ensure faster progress. The lowering of VAT on energy-saving materials to below 5 per cent and a target of half a million homes to be insulated every year would give more teeth to the good intentions set out in the paper.

This leads me to concerns that the Green Paper sets few targets, in particular the level of resources needed to provide new affordable homes and to tackle the level of disrepair. My noble friends Lord Oakeshott of Seagrove Bay and Lord Greaves will address those issues in more detail.

The Government have recognised what needs to be done to provide affordable housing in rural areas, a topic on which my noble friend Lady Miller of Chilthorne Domer will have more to say later in the debate.

While welcoming the recognition in the Green Paper of the important strategic role played by local authorities in housing provision, we on these Benches have some concerns. First, despite the increased powers conferred on local authorities in the recent Local Government Act, the Green Paper is much more prescriptive as regards what authorities may or may not do in the field of housing.

Secondly, many proposals seem to comprise a wish list that fails to recognise the reality of the financial and legal difficulties faced by local authorities as they try to deliver wide ranging housing strategies for their areas. The paper appears to have been written from the perspective of large urban authorities.

The Government recognise the need for local authority planning and housing departments to work closely together, but they seem reluctant to give them the tools to make a difference. Small local authorities in particular do not have the means, especially the financial means, to fight developers in the courts; furthermore the law is not on their side.

I shall touch on the proposals in the Green Paper on local authority stock transfer. Why are the Government not prepared to provide a level playing field in which housing associations and councils can borrow on equal terms? Tenants could then choose. As my honourable friend in another place, Don Foster, the Member for Bath, said, "At present, tenants can choose anything they like as long as they say 'yes' to transfer".

I hope that the Government can respond to some of the concerns expressed since the publication of the paper. The Government state that they want to see a healthy private rented sector. The response of the Royal Institution of Chartered Surveyors was that, firm proposals are few and far between". and geared more towards small investors than institutional funds". I hope that the Minister can assure us that the Government have developed some new thinking.

As regards the licensing of houses in multiple occupation, organisations such as Shelter which daily come face to face with the reality of some of the most vulnerable in our society—those living in our worst privately rented dwellings—continue to remind the Government of the urgency of the need to raise standards. However, private landlords and letting organisations have expressed the view that such licensing would reduce lettings. I hope that the Minister will have an opportunity to emphasise that regulation is not about making life for landlords more difficult; it concerns saving lives. Many people die in fires. The risk of that happening is far greater in the private rented sector. Furthermore, year by year more people die of carbon monoxide poisoning. I hope that the Minister will be able to emphasise that licensing means ensuring that houses in multiple occupation meet health and safety standards.

I hope that the Government can also give an assurance that, when they introduce the new system, they will keep the fees for obtaining licences as low as possible and ensure that local authorities have in place the resources to administer any new system efficiently. Furthermore, they must ensure that financial assistance is made available to responsible landlords who wish to improve their properties through renovation grants and tax allowances. Only then will responsible landlords see the benefits of licensing.

I turn briefly to the question of rents. I seek reassurance from the Minister that the Government have listened carefully to the concerns expressed about the implications of retail price index-only rent increases for social landlords. The Royal Institution of Chartered Surveyors, as well as many social landlords, believe that the Government have not fully considered the effects of this. At present, the building cost index is running at a higher level than RPI, as are average wage increases. To make their finances and business plans add up, registered social landlords need to be able to retain their staff, ensure that they have good building maintenance schedules and convince financiers to continue to lend them money. I hope that the Minister will be able to reassure us that these matters will be given careful consideration.

Finally, although we have so little time in which to cover such a large issue, I should like to urge the Government to remove the single room rent restriction on housing benefit. This has been strongly recommended by many organisations, including a committee in another place. When examining housing benefit, will the Government please not fight shy of reforming it? Such reform is long overdue and the system desperately needs simplification.

Perhaps I may also urge the Government to remove the huge difference in VAT between new build and that on renovation. Again, many organisations have called for this. Will the Government also consider changing the full council tax charge levied on empty properties and do more to ensure that local authorities deliver empty property strategies?

I have mentioned the areas in which the Government have expressed many good intentions. I hope that the Minister can assure us that they are serious about delivering them.

7.40 p.m.

Baroness Dean of Thornton-le-Fylde

My Lords, not for the first time, I thank the noble Baroness, Lady Maddock, for introducing a debate on housing.

I should declare an interest as chair of the Housing Corporation. We welcome the Green Paper. The last time we had a short debate about this subject housing did not appear to be at the top of the political agenda. But this year, with a wide-ranging housing Bill coupled with the outcome of the comprehensive spending review which will increase the Housing Corporation's budget by £2.5 billion over three years, we are back at the top of the political agenda. Given the living conditions of many people up and down the country, that is where we should be.

It is good to talk about the Green Paper because there is much good in it. Choice for tenants is extremely important—not only choice about where they live and what they live in but about their role, influence and empowerment in their sector. The Green Paper provides for stock transfers where tenants want them. We are pleased that the Green Paper provides that stock is not automatically transferred from one monopoly to another but that tenants have a real choice, whether they are housed in tenant-managed organisations, co-operatives or other kinds of structures. If the projections in the Green Paper are correct, within the next five years something like 10 per cent of the total housing stock of the country will be regulated by the Housing Corporation We also welcome the requirement for improved performance of service to tenants. That puts pressure on us as a corporation to make sure that we are up to the job of ensuring the delivery of improved standards of performance. It also places emphasis on the quality of the fabric of housing.

The noble Baroness, Lady Maddock, referred to rents. Certainly the Green Paper provides various options for change. I think everyone in the sector welcomes the opportunity to look at a more coherent, fairer policy. However, we recognise that it will be a real challenge, not only to deliver it but to deliver it in a way which is workable and sustainable over the coming years and which ensures that the registered social landlord sector is viable and able to provide a good service to its tenants.

After looking carefully at the outcome of the possible changes, we welcome the requirement for targets not only to be met but to be published and monitored regularly. We welcome the impositions it will put on us as a housing corporation. For the first time ever we published our evidence and our response to the Government on the Green Paper. One wonders why that has not happened in the past. I can assure the House that it will certainly happen on every occasion in future.

The Question asks what steps the Government propose to take to implement the proposals. There is much in the Green Paper that does not require statutory regulation or parliamentary time. I hope that the department and the Minister will be able to give an assurance that such proposals will not be held back; that we can move forward on them. Where necessary, parliamentary time should be found to bring forward the necessary changes as soon as is sensibly possible.

I welcome the debate. We are indebted to the noble Baroness for introducing it.

7.44 p.m.

The Earl of Listowel

My Lords, I join with Barnado's, Centrepoint and Shelter in welcoming much of what the Green Paper offers for homeless single young people and for homeless families. While there are lacunae, many of the proposals, if enacted, would make a great difference to the lives of the most vulnerable in our society. Consequently, I join with the noble Baroness, Lady Maddock, in urging the Government to put something on the statute book soon, in the next Queen's Speech if possible.

The Government's SEU report on homelessness states that between a quarter and a third of rough sleepers have been looked after by local authorities as children; that around a half of rough sleepers have been in prison or a remand centre at some time. Research in prisons shows that 40 per cent of prisoners are homeless on release; and between one quarter and one fifth of rough sleepers have been in the services at some stage. I therefore warmly welcome the Government's proposal to extend priority housing need to those who have an institutional background.

As treasurer of the all-party parliamentary groups for maternity and children, I am particularly concerned about the conditions of families living in temporary accommodation. The mothers of such families tell me how depressed they are. When one listens to their stories and notes their anxieties as they speak, one sees that they are indeed deeply troubled by their situation. Shelter informs me that the numbers in bed and breakfast have increased by 100 per cent in the past two years. There are more than 6,000 households in bed and breakfast accommodation in London alone.

It is becoming more and more clear that the quality of the relationship between mother and child in the first year of infancy shapes the rest of that child's existence. A depressed, anxious mother is inhibited in her love for her child. The infant will also inevitably share in her anxiety; he internalises this anxiety. As an adult he will be more prone to worry. Those challenges we all face will be greater for him simply because he is innately more fearful of them. Young people who have grown up homeless may well face more knocks than most of us receive, yet their poor start makes them less able to bounce back and to persevere.

A mother told me that the shared lavatory in her accommodation is unhygienic. She complained to her landlord and he told her that there was nothing he could do if the other tenants chose to leave their shared facilities in that condition. This mother tells me that she will not leave her child alone in her room, so she has to take him with her to this unhygienic bathroom. When I hear this, I am concerned for the physical health of child and mother. I am also concerned for the distress of that mother—who is helpless to improve her environment and to do what any of us would take for granted in terms of improving our facilities—and how her concern will impinge upon her child.

As I know that her experience is a common one which is shared by many of the thousands of families living in multiple occupation, I warmly welcome the Government's manifesto commitment—repeated in the Green Paper—to licence HMOs. Mothers in HMOs have many other pressures on them. They may live a distance from a kitchen; they may have to walk up stairs, perhaps carrying both a child and hot food. They may well live in overcrowded conditions. They have enough on their plates without having to worry about fire safety and the sanitary condition of their accommodation.

The Audit Commission suggested that only 56 per cent of local authorities in England and Wales administered benefits efficiently, leaving claimants with worrying rent arrears and the risk of eviction. This is another common complaint of mothers.

With the Sure Start plan to support families with young children and with the Government's targets for reducing child poverty, surely it makes sense to improve the conditions of the most vulnerable families. I look forward to the Minister's response and to any hint he can give that licensing of HMOs is fast approaching.

7.49 p.m.

Lord Oakeshott of Seagrove Bay

My Lords, I follow the wide-ranging speech of my noble friend Lady Maddock by concentrating on one main point. Value added tax, as it is now imposed, is pushing far too many of our scarce building resources into new development, with all the costs to society—of which we had another example with the flooding in southeast England last week—instead of helping the renovation, extension and conversion of buildings in existing settlements.

New house building incurs no VAT, but refurbishment and conversion of existing residential properties attracts the full VAT rate of 17.5 per cent. It makes a nonsense of the Government's claims to be encouraging sustainability in housing when the big developers pay nothing on their new estates. By contrast, two teachers struggling to buy their own home, for example, have to pay 17.5 per cent on the extension if they build another bedroom when they have children, as does a private landlord in a depressed inner-city area converting a run-down house into modern flats for nurses or young people. It is madness to be eating up more and more of our countryside with new development while much of the older housing stock in our cities is not merely being allowed to rot, but is being encouraged to rot by the VAT system. How "un-green" can you get?

So it is no surprise that the Minister's noble friend Lord Rogers of Riverside, in his Urban Task Force report last year, made the harmonisation of VAT rates on new building and conversions one of his key recommendations. It is no surprise that a Select Committee in another place, referring to housing PPG3 last July went so far as to call the present VAT arrangements "perverse financial incentives". The committee said that they, worked against Government policy and should be re-examined as a matter of urgency. It is no surprise that the Royal Institution of Chartered Surveyors has said in response to the Green Paper that it strongly recommends revisions to value added tax. It believes that the relative treatment of new build and refurbishment, is irrational and does not assist in the wider sustainability agenda". Finally, it was no surprise to find only last week the new chairman of English Heritage, Sir Neil Cossons, summing up the VAT system on home improvements in one simple word: he called it "lunacy". He said: This is the single issue that has come through unanimously from those people whom we have consulted on the built environment. If you have a government that actually believes in recycling our urban areas into active areas for the population—recycling historic buildings—that simple change would provide a symbolic and financial incentive". These are compelling and widely held arguments from distinguished experts right across the spectrum. They are reinforced by the basic presumption of economics against a tax differential which distorts consumer choice and allocation of resources. But I am afraid that, in the Minister's reply to the debate in this House on 4th April, it was apparently all a matter for the Chancellor of the Exchequer.

Of course, the final decision on varying VAT rates is a matter for the Chancellor. But please will the Minister, this time at least, share with us his department's views of the implication for housing policy in the present regime and what he would see as the pros and cons of what is being proposed.

A change could easily be revenue neutral, if the VAT rate on new building, refurbishment and extensions were equalised at, say, 5 per cent. We on these Benches should prefer the distortion to be removed by the abolition of VAT on housing refurbishment and conversion work altogether. And there is, incidentally, ample scope for recouping lost revenue in other ways in housing; for example, by ending the present unfair concession to second home owners like myself who have to pay only 50 per cent of the normal rate of council tax.

The key point is that rates should be equalised, or harmonised. Can we please have a housing argument and a housing assessment, given the wide concern in so many areas? I hope that, from a housing perspective, the Minister will have some sympathy with the arguments that I have put forward. VAT reform is needed now to boost sustainable housing and to protect our environment.

7.54 p.m.

Lord Graham of Edmonton

My Lords, first, perhaps I may congratulate the noble Baroness, Lady Maddock, on reassembling the repertory company of Members in this House who take keen interest in housing. I also offer hearty congratulations to the Government and to the Ministers who represent them in this House on this subject on being bold and imaginative in producing this housing policy.

The key aim of the housing Green Paper is that there should be a decent home for all. While that is a primary objective, it is vital that the provision of those homes is sustainable in the long term. Since the 1970s we have seen repeated attempts to regenerate public sector housing, and most have failed. They have failed because no regeneration approach has yet been based on giving power, resources and responsibility to the communities themselves. The Prime Minister, in his foreword to the Social Exclusion Unit's publication, Bringing Britain Together: a national strategy for neighbourhood renewal, clearly recognised that, saying that, too much has been imposed from above, when experience shows that success depends on communities themselves having the power and taking the responsibility to make things better". We agree that the way forward is to find ways to transfer power and responsibility to communities.

There may be a variety of methods of transferring power, but research and experience have shown that the housing co-operative model is a very effective way of devolving power, and yet there has been very limited government support for housing co-operatives since the mid-1980s. Consequently, only a tiny fraction of social housing in England and Wales is co-operatively controlled. In Scotland, however, with significant support for tenant control, over half of the housing association sector is tenant controlled, and half of that is co-operative.

This strategy should take on board the key lessons learnt from the housing co-operative sector. Housing co-cops have been one of the most successful and under-valued forms of transferring power. They have been sustainable community organisations, promoting social inclusion and capacity building for as long as 25 years in some cases. Their message of self-help and people taking pride in and responsibility for their homes and environment is precisely what is needed to transform society. All the available research indicates the effectiveness of housing co-ops in comparison with other forms of housing provision. The most notable piece of research in this area has been the DoE-commissioned report, Tenants In Control: an evaluation of tenant-led housing management solutions, carried out by Price Waterhouse. It concluded that, Most … co-ops outperformed their Local Authority and Housing Association counterparts and provided more efficient housing management services with usually better value for money … Tenant Management Organisations delivered wider non-quantifiable social and community benefits … The most effective organisations were those whose members had greatest control over their housing management, finances and environment". The clear message of the report is that tenant-controlled organisations are better value for money at the same time as providing social and community benefits, and that the organisations that had the most control—ownership housing co-ops—were the most successful. That should have a major effect on housing policy.

I conclude by asking this of my noble friend the Minister—who is a good friend in terms of the needs demonstrated. There is in circulation for consultation a draft commonhold and leasehold reform Bill. It provides for groups of tenants to have the option of forming a limited company. However, I am advised that there is no provision in the Bill for tenants to opt, under the stock transfer route, for a co-operative structure rather than a company structure to become a commonhold association. Why not?

I welcome the Government's intention to provide a wide choice to tenants. That was not provided in earlier stock transfer guidelines. Will my noble friend the Minister understand that, if the co-operative option is not provided for, there will be deep disappointment within the co-operative movement?

Finally, I congratulate my noble friend Lady Dean and the Housing Corporation, which has taken a great interest in this matter. There has been a change of culture within the Housing Corporation and it is now sympathetic to the options. Its report for September 2000 lists the membership of the national advisory group on resident controlled housing. Among those on the list, I see the names of Ron Batholomew, Nic Bliss, David Dickman, Catherine Meredith and David Rodgers—all good co-operators who are helping the Minister and the Housing Corporation to do their job. I wish the Government well in their plans to improve housing for the people of this country.

8 p.m.

Lord Greaves

My Lords, I, too, congratulate my noble friend on initiating this important debate. I should like to speak about the housing in two small towns that I know very well in north-east Lancashire—Nelson and Colne in the borough of Pendle. I do not do so as any special pleading for them; it is simply that I believe them to be typical of much of the north of England.

We are talking about large areas of terraced housing built before 1914, most of which is over 100 years old. It is all very cheap housing and is to be found in Band A for council tax purposes. Indeed, most of it was, and still is, owner occupied. Thirty years ago most of this housing had no inside bathroom or any other such facilities; for example, no lavatories. Many had no hot water and just one open fire. It was pretty grim, but people lived in what were called "little palaces". There is a speciality of north-east Lancashire called the "tippler" toilet, about which I shall not go into great detail. However, I can tell noble Lords that it was colloquially known as the "longdrop bog". If any noble Lord wants to know what it was all about, I shall be happy to tell him after the debate.

We had a programme to eliminate the tippler toilets and install WCs. Along with many other transformations in the 1970s and 1980s, those areas were turned into places that people would not have recognised: modern amenities were put in and the housing was transformed. Indeed, in many cases the environment was transformed, although perhaps not as much as we might have wanted. Slum landlords were often bought out and the houses turned into social housing. In general, there was a very successful application of what are now known as "public/private partnerships"—a phrase that we did not use at the time. However, it involved a substantial input of public money.

In the past 15 years the situation has again been in decline; it has become worse. There are four basic reasons for this: first, the effects on such property of deregulation of rents. In effect, there has been asset stripping of whole streets and a great expansion of the private rented sector. For example, in 1990 the local authority gave £1 million in housing benefit rent allowances—just the rent allowance part of housing benefit—but this year it will be £12 million. I believe that that indicates the extent of the expansion.

The second factor is the virtual abolition of grants. This has made it impossible for people who are not well off to put money into their own homes. The abolition of housing action areas and the much tighter and inflexible rules on renewal areas are matters that the Green Paper tackles as regards the size of them. They are designed for big cities, not for much more intricate, small towns.

Thirdly, there are the cuts in finance. Again, I shall illustrate the effects by citing my own authority in Pendle where I live. It is typical. At the peak, the private sector housing renovation spending of the authority was over £3 million. Last year it was £2.3 million, so, allowing for inflation, that is perhaps a cut of two-thirds. This year, because of the present Government's wish to transfer funding to council housing, the authority expects the figure to be £1.5 million, despite the fact that it was encouraged by the Government Office in the North-West to declare a new housing action area. That is simply not acceptable.

Finally, I welcome many of the policies in the Green Paper, especially the increased flexibility on grants and renewal areas, but they will not work unless the funding is available. The result is that the physical fabric of whole areas—that is, street after street—is slowly rotting. There is nothing that the local authorities or anyone else can do about it because the funding is not there. The social fabric is slowly disintegrating, with the great increase in private rented accommodation and tenants who come and go very quickly. The economic foundation of these areas is collapsing. Houses which 10 or 15 years ago sold for £45,000 are selling for £35,000; those sold for £25,000 are selling for £15,000; and those that sold for £10,000 or £12,000 are now being abandoned.

The main problem is money. The Minister may know that his ministerial colleague Nick Raynsford was in Nelson and Colne this very afternoon. I hope that he will return and give the same message that I am offering to your Lordships this evening.

8.5 p.m.

Lord Smith of Leigh

My Lords, in declaring my interest as leader of a local authority, I also welcome the Green Paper from the local authority perspective. I welcome two aspects in particular. The first, as the noble Baroness, Lady Maddock, said, is its holistic approach. It actually recognises that there is not just housing in one area—it is not public or private, nor is it tenant or owner occupied. It involves the wider social agenda. As the noble Lord. Lord Greaves, would say, the key issue is not only the condition of houses; it is also the social environment in which people live. Community safety is the one factor that many people regard as very important. It is the number one priority for tenants in my area of Wigan. You could draw up a map of social exclusion for Wigan that would almost fit like a glove with areas of public housing. We need to tackle those issues together.

I certainly welcome the increased role for local authorities. I do not find it quite as inhibiting as perhaps some noble Lords opposite. We must recognise the great variation in housing need. While listening to the noble Lord, Lord Greaves, I recognised some of those symptoms from northern areas, especially parts of east Manchester and other areas where there are examples of what is really over-supply of poor quality housing. That creates the basic problem. Indeed, you have only to contrast that with the issues that arise in the capital, where obviously there is a shortage of housing and consequently high prices and high rents.

I must disagree with the noble Lord, Lord Greaves, about housing renewal areas. If the noble Lord would like examples of how they can be successful, I invite him to come to Wigan. We can show him examples where, while concentrating on an area, we have been able to put in some social fabric as well as delivering housing improvement. Indeed, that can result in a real change in housing conditions.

I turn now to the role of council houses. I was pleased to see that the Deputy Prime Minister stated in another place that he believes that there is a continuing role for such housing. These houses are often held up as being a very unpopular choice for many people. But that is certainly not the case. I can give your Lordships an example. Only last Thursday at a tenants' meeting I met someone who had been a Wigan tenant for 62 years. When she started she paid 7 shillings and 10 pence, which I believe is 39p in today's money. In many areas people look to the council as the main provider of social housing. We are happy to do that in collaboration with housing associations and with housing co-operatives. But the council is still regarded as being the organisation to which people apply if they need social housing.

I was very pleased to see the part of the Green Paper that brings in the arm's length companies—an alternative to the stock transfer. I know that the Government are working hard to ensure that this becomes a reality. Of course, there is money behind that initiative in the Comprehensive Spending Review. I only hope that the hurdles that will be raised will not prove too difficult for the authorities.

Choice in housing is a desirable objective but it will always be restricted by income, as is the case with almost everything. When I was ennobled someone asked me whether I would buy a property in London. I replied, "I think not; income does not permit". We need to ensure that we involve tenants. That is the way that we shall give them choice to do the things that my noble friend Lord Graham mentioned. That can be done not only in housing co-operatives but also in local authority housing. We must make tenants feel that they have a proper role to play in managing decisions about their lives.

I was pleased to hear the Government announce last week the neighbourhood renewal programme, which is designed to tackle these wider issues and to enable local authorities to put money into problem areas on housing estates. I hope that the Government will ensure that there is a holistic approach to housing from other departments, not just the DETR. In problem areas schools are probably the only form of community facility available. We must be sensitive in examining the future of schools to ensure that we are not denuding such areas of that facility.

We must also bear in mind the other considerations mentioned by the noble Baroness, Lady Maddock, in terms of insulation, security, housing schemes and so on. Where such schemes exist, we must ensure that we involve local people and create job opportunities in the area. Good housing policy can improve physical environments. It can also improve the community. However, there is an even greater challenge; namely, that of improving the image. Once an area has acquired a bad image, it has to be turned round. We must find ways to ensure that we can make people understand that everyone recognises change—but people should not be labelled because they come from a particular area.

8.9 p.m.

Baroness Miller of Chilthorne Domer

My Lords, I warmly congratulate my noble friend Lady Maddock on securing this debate. I am most grateful to her for doing so because I should like to highlight a group that seems to be invisible and completely unrecognised by this Green Paper. My noble friend said that the paper was written from the perspective of large, urban authorities. I believe that to be true for this group. The group about which I am talking comprises rural young people who are not recognised as homeless.

The difference between urban and rural homelessness is that the rural homeless are not really seen. They are not under arches and in doorways. They are not in hostels because there are so few hostels. Young rural homeless usually end up on their friends' floors. That might be acceptable for a couple of weeks or four or five weeks, but I know that that extends into months and years. Because they are on someone's floor they are not seen as in need.

I do not believe that this Green Paper in which there are a number of things to welcome quite fulfils its subtitle which says "A decent home for all". It does go on to talk about housing. A home is somewhere that is one's own, even if only one room. Sharing someone's floor space does not, I believe, qualify as a home.

Statistics show that homeless people in rural areas are local people. This has been proved time and again to be thecase. I quote a couple of examples of the YWCA in Truro who looked at the cases of 40 women whom they re-housed in two years, and only one of them was not a local person. In Leicestershire the Lutterworth Homelessness Project found that 88 per cent of the persons they housed were from that local district. The fact is that people in rural areas want to stay in their area and when they become homeless it is very important that they still have the support system of friends, the roots they have in that area and, if they have a job that they are able to continue with it.

This group is badly in need of the sort of integrated programme the Government are talking about for vulnerable people and homeless people. The Government could act in a number of areas that would be very helpful. They could act particularly on the issue of the single room rent. Most houses in rural areas, even those called affordable, are not affordable now for anyone below the age of 25 years unless they are on an exceptional salary scale. They could make sure that 16 and 17 year olds are seen as priority homeless. In many other ways—and I think the Government recognise this—they are adults. They need to be regarded as such in respect of their homes.

There is still a lack of real or enough incentives for people to take in lodgers although the tax break has helped that. There needs to be a support mechanism for those peoplewilling to take in lodgers. Some areas have bond schemes to help young people over that huge hiccup of finding a deposit and the first month's rent, very often completely impossible to find. I think that bond schemes ought to apply to all areas.

Young people often need more than bricks and mortar. They do need support. Rural Foyer Schemes have done a good job but there is a strong case for a number of units with just occasional support, not with the intensity of training that a Foyer requires but the occasional support that someone of 17 or 18 badly needs.

There are the inadequacies of the RSL rent restrictions on which we hope the Government will take some action.

The noble Lord, Lord Smith, recognised the need for money. As was mentioned at the beginning, at the moment local authorities have to find a number of ways through the maze. They have either to undertake stock transfers or bidding. Should it not be reasonable for local authorities to borrow the money for improving council housing stock?

8.16 p.m.

Lord Dixon-Smith

Like other noble Lords, I am also very pleased that the noble Lady, Baroness Maddock, was successful in having this debate this evening. The question of housing has been around for a very long time. I have no doubt that we will continue to have housing debates into the future whatever happens. The noble Lord, Lord Graham of Edmonton, mentioned 30 years, and I remember when national building targets were a matter of intense interest in the late 1950s and the early 1960s. This is a constant problem.

I want to look at this subject from a slightly different point of view and to pick a theme that a number of noble Lords have already mentioned. When I look at the housing situation in the country I almost see two separate countries. It would be wrong to categorise them as the North, the West, the South and the East. That description makes the simple contrast but it is wrong because within both those areas there are areas of prosperity and success and areas of depression. To characterise the two countries, there is an area where there is a crude surplus of housing, plenty of industrial land available, costs are low, demand is low and there is a high proportion of what would now beregarded as sub-standard housing. On the other hand, one has a large section of the country where there is a chronic shortage of housing, high costs, shortage of industrial brown field sites, high demand and there is still sub-standard housing in many instances.

I want to pick up particularly the point made by the noble Lord, Lord Oakeshott of Seagrove Bay, about VAT. It is a relatively recent problem because VAT has not been around for that many years, and at the higher rates that it is today which has made this differential so dramatic in its effect for the last decade. The fact of the matter is that if one has a 17.5 per cent disincentive in renovation building works, it is quite difficult for any financial person, developer or anyone else to climb over that barrier. That barrier has to be climbed.

Although I cannot expect the Minister in his response to tell us what the noble and learned Lord the Lord Chancellor might be thinking in this area, I would plead with him to agree to argue the case for this change. If rumours in the press are anything to go by the noble and learned Lord the Lord Chancellor is looking more at adjusting stamp duty rates for urban development, that is all very nice and fine but an adjustment in a rate of tax which, at its highest level, is only 5 per cent cannot make up for a disincentive that is already set at 17.5 per cent.This is a very potent point. If the result of this debate were to be that a very strong plea went in for that particular change to be made then I think that a great deal of the other worthy aspirations contained in this Paper would be much more easily achievable. That is the only serious point I wish to make.

There are so many other points that could be made. I look forward to the next debate we have on housing, the one after that and the one after that because I am sure that we will have them.

8.19 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)

My Lords, I am not sure of that unending sequence of housing debates to which the noble Lord, Lord Dixon-Smith, looks forward. I do not think I quite share his enthusiasm. Nevertheless, I welcome this debate tonight. It gives me the first chance to debate these issues since announcing the Housing Green Paper on 4th April. The publication of that report does put housing back pretty close to the top of the agenda.

That Green Paper represented the most comprehensive review of housing for over 20 years. The Green Paper invited views on the proposals. Over 1,000 organisations and individuals responded. I know that many of the questions raised in this debate were also covered in those responses. We are currently developing the proposals in the light of the responses to that consultation. It is the intention of my colleagues to announce our detailed considerations later this year at which point, no doubt, the noble Baroness will request a further debate on these matters. In the meantime I can tell the House that most respondents welcomed the Green Paper which is gratifying. I understand that out of 1,099 respondents only seven disagreed fundamentally. There were one or two specific concerns and modifications that respondents would wish to see. We are considering those proposals.

Many respondents said that the proposals would work only if the Government provided the resources necessary to implement them. I believe that our spending plans for the next three years, announced in July, provide resources for our Green Paper proposals. They will provide an additional £1.8 billion over the next three years on top of the doubling in capital investment in housing which we have announced since 1997. In particular the spending plans will put us on track to meet the Green Paper commitment to bring all social housing up to a decent standard over the next decade and will nearly double the Housing Corporation's approved development programme to provide affordable housing. They provide another £250 million over the next three years for a new starter home initiative to help key workers to buy their own homes in areas where they might otherwise be priced out. The Government are therefore providing substantial resources to all parts and all tenures within the housing market.

It is perhaps appropriate, however, if I address that section of our society who regrettably have no form of tenure; namely, those homeless families and individuals whose plight was graphically described by the noble Earl, Lord Listowel. Our proposals in the Green Paper will fulfil our election manifesto promise to increase protection for unintentionally homeless people in priority need. Our announcements to be made later this year will take that forward. Ideas have been worked up in that area in consultation with local government, Shelter, the National Housing Federation and the Chartered Institute of Housing. The aim is to ensure that the homelessness safety net provides temporary housing support for those in priority need. We want to ensure that homeless people are given more help to ensure that they are provided with housing solutions which are sustainable. I agree entirely with the noble Earl that more should be done in that field and it is certainly our intention so to do.

The noble Baroness, Lady Maddock, mentioned choice and stock transfer. She suggested that many tenants had no choice but to opt for stock transfer. I do not think that that is correct. At several different levels our proposals provide more choice for tenants, as my noble friend Lady Dean said. Stock transfer is a choice available to local authorities and to their tenants. We back it only where those tenants vote for it. As my noble friend Lord Smith of Leigh indicated, there are local authorities and tenants who prefer local authority housing. Local authorities can, and will, continue to own and manage their own housing under the new financial framework which includes more efficient business planning and a new major repairs allowance. These options provide real alternatives to stock transfer. We want local authorities to consider which option best meets a tenant's need and to consult with tenants on the choices available to them.

Many improvements can be made in the area of social housing without any changes in legislation. I assure my noble friend Lady Dean that those areas are already being pursued and will continue to be pursued. Others will require some legislative approach, including the area of rent reform in both the social and private sectors. In the social sector the Green Paper proposes a number of reforms to bring greater coherence and fairness to rents charged by councils and registered social landlords and to ensure that they remain affordable in the long term. As the, noble Baroness said, the current pattern of rents is not sensible and can in many cases be incoherent and unfair to tenants. Most respondents who commented on the rent proposals supported the aim of the reforms. The announcement to be made later this year will set out our plans for taking forward rent reforms in the social housing sector.

As the noble Lord, Lord Greaves, indicated, there are also rent problems in the private sector, some of which stem from deregulation and some of which stem from more recent problems of inequities. We need to face up to those problems. We also need to provide new initiatives in the private rented sector. I do not entirely agree with the noble Lord's criticism of renewal areas which he appears to reject. I tend to agree with my noble friend Lord Smith that in certain circumstances those renewal areas can work well. It is not correct to suggest that we are reducing activity on private housing renovation. The Green Paper proposals will give local authorities new options to stimulate action with increased resources for local authority investment and will give them greater discretion on how they use their capital. In those areas where private sector renovation is a high priority, we expect to see that reflected in local authorities' strategies.

A number of other points were raised. The noble Lords, Lord Oakeshott and Lord Dixon-Smith, referred to the effects of VAT on housing and in particular VAT levied on housing renovation work and the need to bring it closer in line with the zero rate applied to new housing construction and thus reduce what is undoubtedly a significant perceived disincentive to refurbishment. Several respondents to the Green Paper made precisely those points and referred to what they considered the distortion in the housing market and housing priorities which resulted from that. However, at the end of the day, these are matters for the Chancellor. There are other provisions in the Housing Green Paper and in the new planning guidance on housing (PPG3) which will provide an effective range of measures to improve the quality of housing and ensure improvements for existing buildings. No doubt the taxation issue can be returned to at a later stage.

The noble Baroness, Lady Maddock, referred to housing benefit. Clearly that has a major effect on the housing market. There are serious problems with housing benefit. We are engaged in a process of looking at housing benefit reform which would further our wider aims for the welfare state of providing security in old age and support for those who cannot work. We want to consider what is the best way to reform housing benefit. We want to build on the initiatives set out in the Green Paper in that respect. In that context we also want to consider ways to broaden the single room rent as proposed in the Green Paper—a number of noble Lords referred to that—to ensure that we provide adequate support for young people to live in reasonable accommodation and provide them with a secure base from which to find a secure job. I say to the noble Baroness, Lady Miller of Chilthorne Domer, that that applies to rural as well as urban areas.

The noble Baroness, Lady Miller, referred more generally to the important issue of rural housing. We shall shortly produce a rural White Paper which will set out in detail the Government's strategy to deliver more affordable housing in rural areas and to tackle, among other things, the problem of the young homeless and the hidden homeless in rural areas who sleep on their mates' floors, as the noble Baroness said. I have no doubt that there is a problem in that respect. Therefore our proposals on vulnerable homeless people will be covered in our announcements later this year.

The noble Baroness and, I believe, the noble Earl, Lord Listowel, raised the issue of houses in multiple occupation. As we indicated, we are firmly committed to introduce measures which will require legislation as part of our strategy to promote a healthier private rented sector. I have seen some of the newspaper reports to which the noble Baroness referred. Clearly they give a damaging message. We are anxious to avoid the property market getting the wrong perception of the proposals. At the same time we need to tackle the well-documented problems which have bedevilled this sector for too long. I echo what the noble Baroness said: that our proposals for licensing, including the licensing conditions, are intended to improve the standard of housing. They are not intended as a restriction on effective and decent landlords. We are intent on introducing the system of licensing for HMOs.

My noble friend Lord Graham referred to cooperative housing and the substantial support for the housing co-operative movement in this Government. He raised the issue of the commonhold and leasehold Bill which is in early draft form and may be brought forward at later stages by the Government. The question of transferring to a co-operative under the Bill is a complex issue. I know that my colleague, Nick Raynsford, is in receipt of a letter from my noble friend. Rather than trying to squeeze in the response on that, perhaps he can await my colleague's letter.

My allocated time is up. I hope that I have managed to answer most of the questions. I hope, therefore, that the House is convinced of the determination of this Government to act on the Green Paper, and will watch this space for an announcement later this year.