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§ Mr. Andrew Love (Edmonton)I begin by apologising because, although it is Wednesday morning in Westminster Hall, I am still in Tuesday night. I hope that hon. Members will bear with me if I make mistakes.
The debate is about housing in London. London is the capital, but it is also a world city, bearing comparison with Tokyo and New York. As a result, it attracts people from all over the United Kingdom and the world. It is a city of diversity. Many communities live within London's boundaries. They have different cultural backgrounds and many languages are spoken. It is also a city of contrasts. Great affluence sits beside deep-seated deprivation. For example, the City of London is probably the most affluent area in the European Community, but it sits cheek by jowl with Tower Hamlets, which is one of the most deprived areas. Nowhere are those contrasts more stark than in housing. London is a city of mansions and slums. It is two different cities, and there is inevitably a great disparity betwen the housing choices that are available to the citizens of those two cities.
The pressure on housing in London is acute. That has an impact on all aspects of London life, from the needs of the London economy to the life chances of its ordinary citizens. In the public's mind, the pressures that are associated with housing are those that are highlighted in newspaper headlines on soaring house prices or market rents. Often, however, the pressures involve that other city within the city and reflect the problems of homelessness, which is vividly displayed by the common sight of people sleeping in central London streets. For many Londoners, the idea of housing choice is an illusion.
The more affluent people in London look to the owner-occupied sector to solve their housing difficulties, but during the past year, prices have spiralled by 23 per cent. In January this year, the average price for a London house was £159,000, and a first-time buyer had to pay £120,000. The comparison of those costs with the average salary of key professionals, especially in the capital's public sector, displays a stark difference. A teacher who works in outer London is lucky to earn £20,000 and would probably earn less than that, perhaps about £18,000. Such a person is priced out of the market. He or she would probably be able to take out a maximum mortgage of just over £50,000, which would not go far in the context of prices in London today. Indeed, two teachers who are a married couple might just about be able to buy a home, but they would still be far short of the average amount needed by first-time buyers in London.
In a yet-to-be published report on house prices sent to me by the London chamber of commerce, the rapid increase in house prices was characterised as reminiscent of the boom in the late 1980s. That is not the only organisation to make that comparison. Indeed, last week, at a lunch for mortgate companies, Howard Davies outlined some research carried out by the financial service authorities into the nine biggest mortgage lenders, which have more than 50 per cent. of the mortgage market. The report highlighted the increasing generosity in lending by those mortgage 47WH companies, which are using salary multipliers of three and a half to three and three quarters. In addition to that generous lending, there is an estimated £83 billion of non-mortgage debt in the marketplace, we have high interest rates and, unlike in previous housing booms, inflation is unlikely to erode the value of mortgages because it is so low. That combination of factors led Howard Davies to urge lenders to act more prudently.
There is no mystery about why Howard Davies suggested that. Last year—eight years after the previous recession—30,000 properties were repossessed. I hope that my hon. Friend the Minister will recognise that the spiralling increase in house prices must be moderated. I would go further and say that, in consultation with those who set mortgage interest rates, the Government should consider introducing measures that will create sustainable home ownership. The previous Government failed miserably on that project and I hope that this Government will make a better fist of it.
There are more modest increases in the private rented sector—just 9 per cent. last year. A typical twobedroomed property, if someone is lucky enough to find one, costs £278 a week. A similar property in Manchester costs £65. That shows the disparity that has emerged in the private rented sector between the capital and the rest of the country, which can be traced back to a decision by the previous Government during the late 1980s to deregulate rents. The Minister at the time said, "Let housing benefit take the strain." Well, it did take the strain, and they did not wait long before deciding to introduce restrictions on the amount of housing benefit that they would allow to take the strain. Those restrictions took the form of local reference rents and single room rents. However, because of the concern and scepticism about the impact of the introduction of those restrictions, they agreed to review the operation of local reference rents and single room rents after two years. The Conservatives were no longer in government two years later, but the review was carried out by the present Government, and it demonstrated what most people at the time already thought: that, if a cap is put on housing benefit, that will undoubtedly restrain it. I am afraid that there is little evidence that the much-vaunted prospect that it would restrain rent increases has happened. There is a lot of evidence, however, that it has had no effect in London. The Conservatives' proposition has not come to pass.
The important feature is the impact on tenants. Research conducted by the Department of the Environment, Transport and the Regions and the Department of Social Security said:
Few tenants were successful in negotiating lower rent levels with landlords … landlords said that they would rarely reduce the rent when a tenant was facing a shortfall as they saw paying the rent as the tenant's responsibility.The evidence from reports and research suggests that the shopping incentive represented by local reference rents and single room rents does not work. As the departmental report says, landlords will not reduce rents, an especially important factor in areas such as London where there is a gross shortage of rented accommodation, and where all power is in the landlord's hands. Severe hardship is placed on tenants because shortfalls must be made up, normally through 48WH their ordinary benefits. The report also shows that, in almost four in 10 cases, the shortfall was about £20 or more. Inevitably, tenants had to take a large sum from benefit or fall into arrears. Like other hon. Members, I have constituents who have fallen into arrears and have eventually been evicted from their properties.What is the net outcome of the two years' experience of the shopping incentives introduced by the previous Government? The Residential Landlords Association commissioned a report based on the Government's housing benefit statistics. It claims that more that 300,000 low-income tenants in England have been driven out of the private rented sector by the housing benefit restrictions since 1996.
The problem in the social rental sector is not affordability, as it is in the other two sectors, but access. Access is difficult because there is an acute shortage of suitable and affordable accommodation. That is a major issue for all London Members of Parliament. The problems in inner London, about which my hon. Friend the Member for Islington, North (Mr. Corbyn) spoke some weeks ago, were reflected in parts of outer London. One in four of the constituents who come to my surgery are involved in housing difficulty; the cases are mixed, but the vast majority relate to the lack of affordable rented accommodation. Neither the local authority nor I can do anything tangible to assist them. The situation must be remedied. The reason why it is so stark is relatively straightforward—250,000 housing units in London have been lost through right to buy since 1980 and have not been made up. There has been some building, a substantial proportion of which has been in the housing association sector, but it goes nowhere towards making up that loss.
Factors other than right to buy are involved—the matter is more complex than that. Net new lettings in the social sector in the past two years have fallen by 17 per cent., causing a crisis in the London housing market. The consequence has been greater housing stress, especially for those on low incomes who have limited choices. That is reflected in many different ways, one of which is an increase in the numbers on housing waiting lists across London. Almost every authority other than those that choose not to put people on housing waiting lists shows that increase. As I can vouch from my own local authority, many people live in dire circumstances and cannot be helped because there is no accommodation.
Another consequence is a massive increase in the use of temporary accommodation—30 per cent. over the past two years—and, the worst of all worlds, the reintroduction of bed-and-breakfast accommodation, which has doubled to 6,000 and is rising. It is the most appalling accommodation to send young families into. Those statistics measure the hidden homeless, not the high-profile person sleeping on the streets. People living in bed-and-breakfast or temporary accommodation, sharing the misery and squalor of a hotel bedroom, face real problems.
The Association of London Government has called it the worst housing crisis ever, rather like Classic FM, which calls every record produced the best ever. That is perhaps hyperbole, but it gives the flavour of the crisis in the social sector in London. Last year, 40,000 people were accepted as homeless, and the number is rising. 49WH Because all the permanent and temporary accommodation has been taken up, the system has silted up, with disastrous impact on the single homeless.
Most people think that the single homeless are young and mobile people from other parts of the country who can be flexible and move on. That is not always the case. On its telephone hotline, Shelterline, Shelter deals with many single homeless people, many of whom are middle-aged, whose patterns of employment and/or social living have been disrupted by changes in the London market. Such people are now excluded from help. Although Shelterline rings around for hostel or temporary accommodation early in the morning, it cannot meet their needs: they are put back on the street.
What needs to be done? I begin by welcoming the Government's initiative to help rough sleepers, "Coming in from the Cold", which has started a process that we believe will reduce by two thirds the number sleeping on the streets by 2002. I welcome the additional hostel places that that programme is making available and, in particular, the permanent units of accommodation that will provide a long-term solution for those who are on the streets. However, they are just the tip of the iceberg. If we are to address the wider homelessness problem, we must increase the supply of affordable accommodation.
That may sound surprising, but that recommendation has appeared in almost every report produced about London's housing crisis. The London Housing Federation's report "Closing Doors" says:
there is an urgent need for the Government, together with the new mayor and Greater London Authority, to act to tackle the shortage of decent affordable housing for those living and working in the capital.London Pride Partnership, a private/public sector partnership, called for a programme of new build to provide affordable accommodation. The idea behind that was toprovide a major economic boost to London—reducing dependency on benefits and bringing work to many. The programme meets an opportunity as well as a need.As my hon. Friend the Member for Islington, North said in his last debate on this subject, the Association of London Government has introduced an action plan to deal with the immediate homelessness crisis in the capital, which will provide 5,000 additional units of accommodation over the next three years.The Government also face a major challenge to address what is happening in London. Enormous misery exists among the homeless who live in squalor in bed-and-breakfast accommodation, many of them with young families. This is also an economic issue, because of the need to house key workers and professionals to make the London economy more efficient. The only way to do that is to increase the availability of affordable accommodation. The opportunity is the spending review 2000, which Ministers are discussing. If they listen to this debate, I believe that money will be made available to the public or private sector, or a combination of the two, to ensure an increase in the availability of affordable accommodation during the next five years.
§ Mr. Jeremy Corbyn (Islington, North)I thank my hon. Friend the Member for Edmonton (Mr. Love) for securing this debate. It follows a debate that I secured on 19 January on the problems of housing in inner London. I welcome the Minister again today. I suspect that he will return to this Chamber increasingly in the future, because the deep concern of London Members of Parliament about housing in the capital will not go away. Consistent pressure will be put on the Government to intervene much more in housing in London.
As the Minister and hon. Members will be aware, housing problems in London are markedly different to housing problems in other parts of the country. Buying a house in London in the private sector is far more expensive than anywhere else in the country apart from the richest parts of the south-east. Private sector rents are astronomical compared with any other part of the country, and council rents tend to be slightly higher. The increase in the provision of social housing is much smaller in London than elsewhere.
We are asking the Government to recognise that London has a serious and peculiar problem. As my hon. Friend the Member for Edmonton pointed out, London is not a city of two halves, but a city of three quarters and a quarter. Three quarters of the population are not finding life easy, while a quarter find life extremely comfortable. The kind of inner-London constituency that I represent is portrayed as wealthy and a home to all things upwardly mobile. Although such people undoubtedly live within it, the majority of people with whom I deal in my constituency—I am sure that my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) also has this experience—are living on below average or average incomes, and are finding life very hard.
The National Housing Federation report, "Closing Doors", which I am sure that the Minister has seen, is an excellent document that sets out the problems of council housing, private ownership, owner occupation and private rented housing. It then sets out the average private sector rents in London. In my borough, the average is £196 a week for a one-bedroomed flat, while, to rent a house in my constituency, one could easily pay £500 a week. Given average house prices, it is impossible for anyone living on an average income in central London—or almost anywhere in the capital—to even think about buying, unless they have an inheritance or other means of investing a large dollop of capital in a house initially. On average incomes of between, say, £15,000 and £17,000 a year, two people together—a joint income of £34,000 a year—would be lucky to get a mortgage of £90,000 or £100,000, which would not even touch base on a two-bedroomed flat in most parts of London. That is the stark reality.
The effect of the property boom on London as a whole is profound in many ways. All public agencies believe that they can cash in on the property boom by selling any piece of land that comes anywhere near their grasp, because there is a huge demand for land for private sector building. The social housing of the future is being sold as the empty land of today.
The London property boom is pricing poorer people out of central London. The problems experienced by teachers, nurses, lower-paid hospital medical staff, 51WH postal workers and others are becoming increasingly well-known. Unless there is greater intervention in the housing market and social housing in London, a truly disastrous situation will arise in respect of people who do essential jobs in inner London. To judge by local schools in my community, excellent young teachers who are determined to turn our schools around and contribute to the community are entering the profession. However, life is not easy for a young teacher who lives in a bedsit or shares a flat with three or four other people. No one wants to live that kind of life for long. After a couple of years, such teachers move to an area where housing is cheaper and the job is perhaps a bit easier, and the community and the children lose talented teachers. The same can be said of nurses, doctors and almost any other community skill that this country and our society desperately needs.
The Government must bear in mind the example of the previous Government, who were profoundly opposed to virtually every action taken by local government, and in favour of selling off all public assets cheaply. In effect, they were selling £10 notes for a fiver. For a while, that was politically successful, but London is now paying the price in terms of housing problems.
The Government should accept that London's problems differ from those in the rest of the country, and look at the public provision of housing. On taking office, they said that they would release capital receipts for housing improvements. That policy, which was commendable, necessary and welcome, and which I wholeheartedly endorse, has helped to deal with some of the backlog of repairs to major estates in London. In May 1997, Islington—despite what The Daily Telegraph repeatedly says, Islington does not differ markedly from the rest of London—had a repair backlog totalling £500 million. That is just one borough. Were that sum multiplied to take into account the whole of inner London, the resulting figure would be massive. Capital receipts will not meet that repair bill; new money must also be spent.
Capital receipts from the sale of housing will not meet the cost of replacing houses that were sold off and thereby lost to the public sector. That is partly because a discount is offered on council property—it has been reduced to £30,000—and partly because many valuations of council property are peculiarly low. Many find those valuations difficult to comprehend, given private market prices and the valuations put on council properties that were subsequently resold to people who did not need social housing. I know that this is a politically difficult issue for the Government to grasp. We are talking about a social demand, rather than a prsonal desire to make as much money as possible and obtain the cheapest possible housing. However, the reality is that we must look at the housing needs of the community as a whole.
The Government are right to spend money on estate improvements. In a previous debate, I mentioned the anticipated success of the single regeneration budget schemes in King's Cross, Finsbury Park and other areas in my borough. I fully commend tenant participation and tenant self-management. A couple of weeks ago, we had a successful conference on tenant participation in the borough of Islington; 350 representatives of tenants 52WH associations and residents groups turned up, and it proved to be a useful day's discussion. I welcome such developments. However, I do not welcome the pressure that is being put on local authorities to transfer their housing estates and stock to housing associations. That is presented as a free choice. Tenants can vote yes to the council or yes to a housing association. However, it is not a free choice because, given the borrowing restictions that are placed on local authorities, it is unlikely that they will be able to make any money available for the huge regeneration that is required on estates. That money is available only through housing associations.
I am worried that we are creating a massive community of housing associations, in which tenant participation, representation and democracy is sometimes good, but often truly appalling. The brick wall of administration that one comes up against in housing associations is far worse than local authority democracy. Although many people criticise what local government does, ultimately one can choose to elect or not elect one's councillor, but that is not so for one's housing association. It is important to protect democratic choice. Will the Minister deal with the need for a genuinely level playing field in estate transfers?
I turn to the administration of housing and housing needs. My hon. Friend the Member for Edmonton rightly mentioned housing benefit and the way in which the 1996 change in the regulations has lost many people their homes in the private rented sector. We should seriously consider the cost of housing benefit within our society. The Conservative Government had a passion for rent deregulation—ending any form of rent control and saying that the market rent must be paid through housing benefit. As a result, the public are creating millionaires every week through the bed-and-breakfast system and the private rented sector, because housing benefit has to pay the rent, whatever it is. I do not want to punish tenants or reduce their choice, but is it the best use of public resources to subsidise private landlords when we should be putting money into bricks and mortar for the future of the public? We should seriously consider how housing benefit can best be delivered.
I also ask the Government to examine the cost to local authorities of administering housing benefit. The benefit was created in the early 1980s, and local authorities were required to administer it—although there is no record of any authority wishing to do so; it was forced on them. The quality of administration varies enormously. During the debate in this Chamber on 19 January, I raised the problem of housing benefit administration in my borough. A company called IT Net runs the contract there and in the neighbouring borough of Hackney. The administration is appalling, as are the tension, stress and distress that that causes people. Many people have been threatened with eviction by the local authority and housing associations because their housing benefit has not been paid. An unknown number of private sector tenants have been threatened with the loss of their tenancies, which sometimes happens because people's benefit has been poorly administered. I am told that 24,000 unopened housing benefit application forms are held by my borough alone, and that Hackney holds a very large number. That figure represents 24,000 people who have, I presume legitimately, applied for housing benefit, and are not receiving it simply because the quality of adminstration in the privatised service is poor.
53WH I do not expect the Minister to be an expert on the administration of housing benefit. That is not his function; he would not have time to do anything else if it were. However, I ask him to examine seriously the quality of service delivered by the privatised companies that have become involved in housing benefit in London, and the untold misery that they are causing.
Elderly people come to my advice bureau week after week in desperation and in tears. They are unaware that their rent is in arrears until the council tells them that that is the case because their housing benefit has not been paid. They try to trace their form, which has gone missing, and they are deemed not to have applied because there is no receipt date. They are then told that their rent is at least six months in arrears. They are in a desperate state as a result. I cannot stress too strongly how awful that is, at a human level, for those people. I want the Government to insist that local authorities administer housing benefit properly, and that those companies that cannot deliver the service should lose their contract immediately. That contract should then be given to a body that can deliver, preferably through the public sector.
The solution to housing problems in London has to be greater investment by the community as a whole in affordable rented housing for people who need it, otherwise social divisions and tensions in London will grow. The property boom is fine if one is already on the ladder. If one is nowhere near the first rung, one loses out entirely, and is faced with a lifetime of high rents. Private sector rents represent a higher proportion of salaries in London than in any other part of the country or, probably, of Europe. The Government must build on their achievements in estate improvements and in the rough sleepers initiative and, above all, put public money into building affordable rented housing.
§ Mr. Keith Darvill (Upminster)I congratulate my hon. Friend the Member for Edmonton (Mr. Love) on securing this debate, and on his presentation of the case. I agree with his arguments, and with those made by my hon. Friend the Member for Islington, North (Mr. Corbyn).
I approach the matter from an outer London point of view. Outer London is often considered an affluent area, without housing problems. However, as my hon. Friend the Member for Edmonton said, that is not the case. Areas of deprivation and housing need, and unemployment blackspots, often exist alongside affluent areas.
My constituency of Upminster is part of the London borough of Havering, and is effectively divided into two parts. One consists mainly of owner-occupied housing; the other contains part of the Harold Hill estate—a large, suburban estate built to accommodate the severe housing needs of inner Londoners after the second world war. Those people moved out to Harold Hill in the late 1940s and early 1950s. In many ways it was a fine estate, planned by the London county council and later administered by the Greater London council and, most recently, the London borough of Havering.
However, the first of the area's problems that I shall outline is its geographical position, which is relevant to the debate, especially in the context of outer London. It 54WH is completely surrounded by green belt. On one side, it is next to the M25, and there is also green belt between the London borough of Barking and Dagenham and the London borough of Havering, so there is little room for expansion into what would be greenfield sites. The green belt is preciously guarded and will continue to be so. Most of the land within the designated housing areas is taken up. Small pockets remain for development here and there, but there is little scope for increasing the supply. The housing is mainly low density, and there is limited opportunity for creating high-density housing within a planning context. That helps to create the scarcity.
In relation to the social factors, I echo the points made by my hon. Friends about the right to buy. There has been very high take-up of the right to buy in the area, because the available accommodation consists mainly of houses. That has led to a great reduction in the local authority's ability to meet the need for affordable housing. One must also consider the effect of the presence of an ageing population. People who moved out to the area just after the second world war are now in a later stage of their life. Many of them have lived in their houses since the early 1950s and will continue to do so. However, given that the actual number of people occupying each house is smaller, the housing stock houses fewer people.
Compared with other constituencies, mine belongs to the premier league in respect of the age of the population, which is very high. Matrimonial and family breakdowns mean that fewer people live in each house. Many young people remain unmarried for longer, which again leads to an increased demand for housing. As for the owner-occupied sector, the price of houses is very high. It costs about £250,000 for an average size semidetached house. Although statistics show the borough to be below the London average, the overall average disguises the real position.
The local authority housing stock is significantly smaller as a result of the right-to-buy scheme. Housing association stock is scarce because few associations in London have been able to move to the outer boroughs to expand their housing provision. Housing in the rented sector is scarce, too. Most owner-occupied housing is not available for rent. All that has led to a significant housing problem. The number of households on the housing register is 1,511 and the number on the transfer waiting list is 1,243. In the local authority sector, the average waiting time for a transfer to a three to four-bedroomed house is 38 months and for a twobedroomed house, it is 32 months, so we can understand how such a problem impinges on those who require housing in the area.
What does the present position mean? Many families now live in cramped conditions It is common for a family living in a two or three-bedroomed house to find that alternative accommodation is not available in the local authority sector, the housing association sector or the private sector. Often, when people get married and/or have children, they cannot find accommodation and have to live with their parents in crowded conditions. About 60 per cent. of my advice surgery cases are about housing. My constituents tell me horror stories about the conditions in which they are forced to live. Such living conditions result in health problems, dissatisfaction, disenchantment, social exclusion, family 55WH breakdown and, in some cases, crime. They lead to significant social costs, such as costs to the health service, social services, police services and the legal aid budget. Such knock-on effects lead to investment in failure rather than success.
We must bear in mind the effect on public services. During the past fortnight, two head teachers have written to me complaining about their inability to attract teachers to the area because appropriate housing is not available, as a result of which they cannot provide the school curriculum that they want to provide. The Metropolitan police service has a similar problem. Frequently, after a few months new recruits move out to other parts of the country where housing is less expensive. How can the problem be resolved? I support my hon. Friend the Member for Islington, North, who said that there was a need for urgent intervention. Local authorities and other agencies should work with the private sector to identify brownfield sites. We need a programme to drive that along.
In the public sector, we must ensure that there is a programme working with housing associations to reduce the number of people waiting for accommodation. If the local community can see a reduction in the numbers on the waiting list, it will be confident that the problem is being tackled. At the moment, the opposite is happening, and lists and numbers are increasing. We must deal urgently with those serious problems.
There is a programme in east London for the regeneration of docklands and the Thames gateway. That will attract jobs to the area, but the lack of affordable private sector housing will have a detrimental effect on the regeneration programme. Employers will not be attracted to the area if the opportunities to create employment are reduced because the work force cannot find housing. Education is fundamental, as is the crime reduction programme. We all endorse such programmes and wish them success, but if we do not deal with the housing problem, they will be put in jeopardy.
§ Ms Oona King (Bethnal Green and Bow)I, too, would like to thank my hon. Friend the Member for Edmonton (Mr. Love) for securing the debate. Housing is one of the most important and least discussed issues in the House, which remains a scandal when we consider the situation that faces many Londoners, including many of my constituents.
I would like to echo everything that has been said about the need to tackle homelessness in London. I know that the Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Sunderland, South (Mr. Mullin), needs little reminding about many of the issues that we have raised. Good work is being done. The rough sleepers initiative is a fantastic start, and I am confident that, with extra resources and Louise Casey in charge, the targets for reducing homelessness will be met.
The problem that affects my constituents and other Londoners most acutely is invisible homelessness. In Tower Hamlets, there are almost 17,000 households on 56WH council waiting lists, 12,000 of which are in my constituency. In the past three years, I have met almost 1,000 families that live in overcrowded, substandard housing, and hundreds that live in homes that are damp and in much need of repair. There are so many stories of personal tragedy that I cannot compress them into a few minutes. When I come out of my surgery, I sometimes feel as though I need counselling, and that I am suffering from post-traumatic stress syndrome. I cannot believe that there is so much human misery in 21st-century Britain, and I wonder whether British people—not to mention colleagues in parts of the country that do not face the crisis—realise what is happening.
Two weeks ago, a woman visited my surgery to explain that her entire family—her, her husband and her three daughters—lived in one room of a bedsit flat. Some people in my constituency live with six people to a room. There is a family of 13 in two bedrooms. A 19year-old woman came to see me who had lived in the same bedroom as her father for her entire life. That should be unacceptable and unnatural to Parliament, the Government and the country. It is a Dickensian life style. Moreover, poor housing obviously worsens health problems, creates family tensions, prevents children from doing well at school and reduces their chance of finding and retaining fulfilling employment. Not since the aftermath of the second world war have a Government poured the necessary resources into low-cost affordable housing. Instead, social housing has been provided on the cheap, and the social costs have been reaped later.
In my constituency, the new deal for communities has recognised many of the entangled problems of housing. I pay tribute to the Government for having introduced that programme, because it is truly radical. It empowers the community to say what it wants and gives it some control over housing, which traditionally only middle-class people have had. Working-class people have, on the whole, not had such control or empowerment. In addition, it tackles the problem holistically, which has not been done before. The programme is truly wonderful, but it is truly not enough. It affects only a small number of my constituents, and we have not been able to roll it out or to use the principles that it embodies in other areas.
As my hon. Friend the Member for Islington, North (Mr. Corbyn) said, the cost of housing in London has spiralled out of control. I am worried, having witnessed it in my own constituency, that soon London will contain only the very rich and the very poor, and no one in between. That is especially clear from the experience of my constituency, as the City is pushing eastwards almost hourly. Local people and key workers are being pushed out. A nurse on £20,000 a year—a good wage, one would think—has absolutely no chance of buying a flat in my constituency. The same goes for other professions such as teachers and policemen, which goes a long way towards explaining the difficulties in attracting, and, more importantly, retaining staff in vital public services in London.
I am pleased that the Government have promised £35 million to build new homes and refurbish and repair existing properties in Tower Hamlets over the next year. It would be churlish not to acknowledge that that is three times the funding that the previous 57WH Administration provided, and means that the Government have invested an additional £40 million in housing in the borough in just three years.
That money will help to ensure that urgent repairs and improvements to council properties are completed, and that some families living in overcrowded conditions are rehoused. It is more money than we have received from any Government in recent memory, but it is not enough. We need year-on-year increases in the housing investment programme for local authorities in London. That programme should ensure that teenage boys and girls do not have to share bedrooms with each other or with their parents, that people with disabilities are not stuck on the top floor of a block without a lift, and that people born and bred in the east end do not have to leave. We fail to give people hope if we do not tackle overcrowding and squalid conditions, which is the moral argument, and we fail economically if we cannot provide people in inner London with a home fit to raise a family, which is the economic argument.
Social housing must be not only decent but affordable. Council rents in Tower Hamlets have in the past compared favourably with those in other-London boroughs and housing associations. The decision to keep rents low was right at the time and helped keep many residents out of the poverty trap. Unfortunately, however, residents are paying the price for that now. I hope that my hon. Friend the Minister recognises that a rent rise of 25 per cent. in just two years is not sustainable. I also hope that he will act on my public plea and ask his colleagues in the Treasury to grant Tower Hamlets an exemption from the rent rebate subsidy limitation regulations. If that is not granted, all the Government's excellent initiatives in Tower Hamlets will be negated by the huge rent rise.
I also hope that my hon. Friend the Minister will take account of the concerns about the Court of Appeal's decision to block the Government's plans to protect sitting tenants who are paying registered fair rents from high rent increases. The Department of the Environment, Transport and the Regions was refused leave to appeal to the House of Lords, but the Government plan to petition the Lords to reopen the case. I am sure that my hon. Friend knows that every London Labour MP backs the Secretary of State in that petition. If it were rejected, my hon. Friend would have the support of every hon. Member to introduce primary legislation that would reverse the effect of the judgment and restore the limits on registered fair rent increases set in the Rent Acts (Maximum Fair Rents) Order 1999.
In conclusion, I should like to put the importance of housing in perspective. The case that I mentioned earlier, of the woman who came to my surgery, never leaves my mind. Her four-month-old baby had died and the doctor's notes said that it was due to the housing. It is a matter of life and death, and there is no greater social exclusion than death. Given the Government's commitment to tackling social exclusion and addressing child poverty within the next 20 years, I hope that they recognise that that can be done only if the housing crisis is tackled. Tower Hamlets is not in a position to make good the historical underfunding and poor-quality housing in the east end. To my deep regret, it is not hyperbole to say that children are dying because of housing conditions. Will my hon. Friend undertake to inject the necessary urgency into the debate and give housing what it requires—money?
§ Mr. Tom Brake (Carshalton and Wallington)I congratulate the hon. Member for Edmonton (Mr. Love) on securing this key debate. I should like to consider several questions: whether there is a housing shortage—that is an easy one to answer—what the impact of the shortage is; where and how the housing should be built and who should be allowed to build it; what other measures will help the shortage; and finally, if time allows, what role the mayor and the Greater London Assembly will have in regard to housing.
On my first question, there is no doubt that there is a shortage of housing. Many hon. Members have cited evidence of a shortage: surgery cases, the actions that local authorities have to take—my own has had to call a halt to transfers—and soaring house prices. According to an estate agent in Kew, there are some nice starter homes in Kew costing £400,000. I am not sure who can afford starter homes at that price, but it is certainly not nurses or policemen—perhaps it is people in internet start-up companies. There are also the predictions. It is said that another 3.8 million homes will need to be built by 2021. There is clearly a shortage.
What is the impact of the shortage? We are witnessing a boom and bust in house prices. The hon. Member for Edmonton referred to a 23 per cent. increase in house prices. Overcrowding and homelessness are problems both on the streets and in some accommodation, where people are sometimes forced to stay for longer than they would like because they cannot afford to buy a local house. There is also the clear impact on public services and on public-sector workers to which other hon. Members have referred. The best example that I can think of is a school that tried to purchase a nearby house that became vacant. Unfortunately, it was unsuccessful, but it had wanted to provide cheap, rented accommodation for young teachers who could not afford to live in the area. Does the Minister accept that the Government need to consider London weighting and decide on action to make living in London more affordable for key workers?
There is broad agreement that housing should be built on brownfield sites, which is exactly what is happening in London. Clearer guidance on cleaning up contaminated land will be needed, and it becomes more important as the easier brownfield sites are used up, leaving heavily contaminated sites that require clear rules to be brought into use. A subsidy such as the greenfield development levy could be used to cross-subsidise the cost of decontaminating such sites to bring them into use. I understand that the Deputy Prime Minister may be considering that proposal, and I hope that the Minister will comment on it.
The problem can also be addressed by bringing into use unoccupied properties located above shops, but that will require much greater co-operation between a raft of organisations. A couple of weeks ago, I visited a site in my constituency where clearly the housing trust, a number of retailers—including a large retailer, Lidland others, such as the freeholder, should get together to improve security and to make what were fairly pleasant flats much safer for residents having problems with people breaking in at the back of the property.
The next question is: how should new housing be built? If there is a positive side to the requirement for 59WH large numbers of homes to be built in London—Shelter cites a figure of 600,000—it is the opportunity to do something about sustainability. Properties can be built using tighter building regulations, improved insulation standards and greater energy efficiency, and can be placed closer to transport links as part of the sustainable integrated transport policy. Why are developers still allowed to build retail premises close to high street locations with good transport links—the areas where young people want to live—with no flats above them? Why is that empty space left, when it could better used?
Who should be allowed to build the homes? All the organisations currently building them should be allowed to continue, whether as registered social landlords or private developers, but local authorities should also be allowed to build. I cannot understand why the Government have inherited the previous Administration's reluctance to let local authorities build. As the hon. Member for Islington, North (Mr. Corbyn) said, at least people are able to get rid of local authorities when they do not like what they are doing on housing—an option that is not open with some of the other providers. Why cannot local authorities borrow to invest in housing stock?
What measures could help this dire situation? First, we could consider introducing tougher penalties for private developers on small sites who adopt a build-andrun philosophy. Such developers quickly build a development and go, as Nova homes has done in my constituency. They run away and leave the new occupiers with properties that are on unfinished roads, without streetlights or adequate landscaping. Government support is needed to ensure that developments are of an acceptable standard. In addition, there should be more part-rent, part-buy schemes for people who are entering the market for the first time or who are in difficulties and want to reduce their mortgage payments by switching to a part-rent scheme until their financial situation improves.
The mayor and the GLA have a positive role to play in housing. That needs to be highlighted because the mayoral debate has focused on personalities rather than policies, which is a scandal. It puts Londoners off what should be an exciting initiative. Instead, the wheeling and dealing, the fixing and fudging, have devalued the mayor's currency. There is an opportunity for the mayor and the GLA to get the different parties together and to use the spatial development strategy and the mayor's facilitating role. They could identify the housing need in London, which local authorities may be a little scared of doing. But when a local authority has played its part and delivered on its housing figure, the mayor should not impose an excessive quota so that the local authority has to make up the shortfall if other local authorities have not played their part.
There is clearly a shortage of housing in London. Everyone knows that. It has a massive impact on the ability of local authorities to house the homeless and asylum seekers, and to tackle overcrowding. There is broad agreement on where housing should be built. We have an opportunity to do something about the sustainable nature of homes. There is, of course, controversy over who should build them, but simple measures can assist us in dealing with that problem and 60WH help to tackle the housing shortage. However, the Minister must answer the outstanding question of whether the Government have the political will to solve the housing crisis which, according to the Association of London Government, is the worst ever. If the Minister does not make that commitment clear, I hope that it will be given in the housing Green Paper. I look forward to the Government providing the financial means to prevent the housing crisis from turning into a housing catastrophe.
§ 12.7 pm
§ Mr. Tim Loughton (East Worthing and Shoreham)I too congratulate the hon. Member for Edmonton (Mr. Love) on securing the debate and the excellent way in which he made his case. Given his experience with the all-party group on homelessness and housing need, he is well informed about the subject. As the hon. Member for Bethnal Green and Bow (Ms King) said, the subject is important. It does not get aired enough in the House of Commons. The hon. Lady in particular knows some of the desperate problems that many of her constituents face in inner London.
London is not simply a microcosm of the housing problems that people face throughout the country. As the hon. Member for Islington, North (Mr. Corbyn) said, it also has specific problems, not least because of its high property prices and the high living costs that go with them. It is a tale of two cities—of three quarters and a quarter, as he non-metrically put it. Bearing in mind the Government's key pledge that everyone will have the chance to live in a decent home, it is interesting to note that the contributions that have been made, especially by Labour Members, highlighted the problems but contained little praise for the Government's achievements, with the exception of the rough sleepers initiative and the limited new deal projects in Bethnal Green and Bow. As the hon. Member for Bethnal Green and Bow said, it is truly not enough.
When on earth will the long-awaited Green Paper on housing be published? There is a housing crisis in London. About 184,000 households are on waiting lists and the number of households in temporary accommodation has doubled. As the hon. Member for Edmonton said, the number of people living in bed-and-breakfast accommodation has doubled in the past two years to about 6,500.
The Association of London Government estimates that the number of temporary accommodation households will have risen to at least 51,000 by 2002. That will be a record. Temporary accommodation causes enormous disruption to families and to the communities in which they live and from which they are being pushed; it disrupts schooling, especially of children with special needs, and employment. That has a knock-on effect on the rest of the country, because many of those families are pushed out to resorts on the south coast, such as Worthing in my constituency.
Another subject that has not yet been raised is the fact that about 19,000 destitute asylum seekers, including families with children, are housed by London social services departments in temporary accommodation. That puts enormous pressure on temporary accommodation. Shelter estimates that about 40,000 households are officially recognised as homeless by the 61WH London authorities; that figure probably represents more than 100,000 people. Another factor is that about 56 per cent. of those people are estimated to be from ethnic minorities. It is thought that that problem is felt disproportionately by those from ethnic minorities, not least those living in the constituency of Bethnal Green and Bow.
I have not mentioned the problem of rough sleepers. Despite the initiatives undertaken by the previous Government, particularly the rough sleepers initiative started in the early 1990s my right hon. Friend the Member for North-West Hampshire (Sir G. Young), more than 400 people still sleep rough on the streets of London every night. I would like to see more being done to help with the medical problems that many of those people suffer. I also want greater preventive measures to be taken to stop the break-up of families, which leads to young people, particularly those younger than 16, leaving home and living rough. The problem will not be solved by the appointment of a £90,000-a-year street czar whose opening gambit was to say that we need to destroy the culture of kindness—whatever that may mean.
Hon. Members have spoken of problems in the private market. We are experiencing a housing boom, and there is every chance that it will lead to a housing bust. The Chancellor would be prudent not to allow that; he often speaks about prudence and wanting to get away from the boom-and-bust mentality with which he so easily labels the previous Government.
There are many two-bedroomed flats; for example, I saw some in Hampstead advertised at the weekend starting at £400,000. There is a chronic shortage of affordable housing. None of us would deny that. The north-south divide causes enormous problems, with the great prices of London property being set against the much lower prices of the north-east and north-west of England. According to the Council of Mortgage Lenders, the number of repossessions is starting to creep up again.
There is a shortage of affordable private rented accommodation; that part of the market represents only 10 per cent. of all housing. We need to encourage the expansion of private rented accommodation, not merely put extra regulatory burdens on that sector. One problem is that lenders do not treat private rented landlords as favourably as they treat social housing landlords and other publicly backed agencies when it comes to raising capital. That is a barrier to more money being made available to that sector.
Other hon. Members have touched on the fact that we need not only more homes but homes that are inhabitable and that do not suffer from fuel poverty, as many do. I am sure that many hon. Members will support the reasoning behind the Warm Homes and Energy Conservation Bill, which we shall soon consider.
So far, the Government response has been a lot of promises, reports and hot air. A study of the DETR annual report clearly shows a significant reduction in the total public expenditure on housing. The capital spend through the Housing Corporation has dropped from more than £1 billion in 1996–97 to a projected £686 million in 2001–02, and the revenue spend has been considerably reduced. The Government have reduced the social housing building programme for the coming 62WH year by more than 25 per cent., which equates to 8,000 homes that will not be built. When does the Minister expect Government spending on housing to return to that of 1993–94, under the previous Government?
The subject of council house rents has been raised in the press recently. We are promised words soon from the Deputy Prime Minister on the possible equalisation of council and private sector rents. In somewhere such as Westminster, council rents—currently about £50 or £60 per week—would rise to £200 a week. That sounds like a crude approach that would result only in ghettoisation, with poorer people forced into cheaper rundown areas outside central London and some of the boroughs that have already been mentioned. I hope that it is not the crude attempt that it was portrayed as in the newspapers. If it is, the Government will succeed only in creating even greater housing apartheid.
Much work is going on. Let us not forget that the housing associations were a success story of the previous Government, bringing far more private and voluntary sector money into housing and freeing up local authority resources to concentrate on other priorities. Let us not forget the great success story of large-scale voluntary transfers; they were initially opposed, but more than 100 local authorities have now taken them up. The Alliance of Councils for Successful Stock Transfer was formed at the LGA conference last July to promote greater use of such transfers. Let us not forget the previous Government's imaginative rent a room proposals, and the estates challenge money.
We want to see a more imaginative and more radical approach, to bring precious resources into housing. We want to see a ladder approach to the provision of housing, with the homeless on the lower rungs given maximum mobility, and with private home owners on top. The Government and local authorities should work together to provide the encouragement and incentives to people to move up from rung to rung. Too many people are caught in a trap of declining public housing, often on hostile estates, lacking the resources to move out or up. Tenants are less likely to move out of social housing if other options become more expensive. The problem is being exacerbated. One wonders if that is why the Labour candidate for mayor of London currently occupies a council property in inner London.
We must see clear rewards and incentives for good public tenants who look after their homes and who do their bit for the community. There is precious little incentivisation at the moment. We must see greater encouragement for councils to improve turnaround times for unoccupied housing, with schemes to allow worse dwellings to be renovated by willing tenants with grant help, who could then qualify for a share in the house. We need much more imagination regarding flexible tenure, allowing young people especially to get their foot on the rung through accumulating greater shared ownership in houses. Schemes such as "do it yourself shared ownership" worked well. The Government must do more, and much can be achieved through imaginative community-based solutions, but they need to be sustainable and long term. Above all, we need a holistic approach, especially on homelessness.
I shall end with a handful of questions for the Minister, to which, given the shortage of time, he might like to reply in writing. When shall we see the housing Green Paper? What plans does he have to produce a 63WH register of brownfield sites, especially in London when—or if—we see spending on new housing match the rhetoric and achieve the 1993–94 levels, so that we might not go for the soft option of new build on greenfield sites? When will the Government give details of the replacement for the estates renewal challenge fund, which is due to end next year? Will it involve real new, rather than recycled old, money? What practical proposals does the Minister have to promote affordable housing, and what definition of affordability would he use in the social rented sector? What is he doing to stop young homelessness at source, and to promote the maintenance of family home environments?
The hon. Member for Carshalton and Wallington (Mr. Brake) touched on the role of the new mayor and the GLA in tackling housing problems. What priorities have been set for them, and what will be the role of the mayor's spatial development strategy in promoting the development of affordable housing? Finally, why have lenders to the social housing sector been told that no decisions are being taken on London housing until after the mayoral elections, and that the Government office for London is simply minding the shop at the moment, and not making any operational decisions, while we all suffer the crisis that we have heard so much about today?
§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Chris Mullin)I thank my hon. Friend the Member for Edmonton (Mr. Love) for initiating this important debate on a subject that I know is dear to the heart of every London Member. I appreciate that many of my hon. Friends have been up all night. It obviously takes more than an all-night sitting to deter my hon. Friends from representing their constituents as forcefully as they have done today.
The debate is the second that we have had in the past month or so on this important issue. As has been pointed out, the subject will not go away. I fully expect to be back here discussing the same issues in years to come. The problems are large and there are no overnight solutions.
I lived in inner London for many years until 1985, when I moved north and, of course, I am here three or four days a week. I therefore have first-hand experience of the problems described by hon. Members. In particular, there has been mention of the stark contrasts—as if between two different planets—affecting people who live cheek by jowl in different parts, or even different streets, of London. Where I come from, in the north, we have a different problem—a surplus of property. However, before any hon. Members cast envious eyes, I remind them that that brings its own social problems, which I do not wish on them when they have enough of their own.
It takes some restraint to reply in a dignified manner to the hon. Member for East Worthing and Shoreham (Mr. Loughton). I do not recognise the figures that he read out—or rather, I think I do, but he gave a clever interpretation. He asked when we would return to the spending levels of 1993–94, but wisely missed out the 64WH years in between. Under the previous Government, there was a year-on-year decrease in housing investment in London. Indeed, 1993–94 was a good year, by the standards of what followed. Much of the decline and many of the stark contrasts about which we have heard today—although not all, of course, since they would be a problem in the capital whoever was in government—came about on the hon. Gentleman's watch, or at least while his party was in control. There were year-on-year cuts in public housing throughout the country, but particularly in London, in that time. I am pleased to report that spending in the next financial year will be substantially up on even 1993–94, let alone 1997–98. It was then less than half what it will be in the next financial year. I do not think that we shall take any lessons from the previous Government.
My hon. Friend the Member for Edmonton talked about moderating rent levels. I think it unlikely that we shall intervene in private sector rents, if that is what he was suggesting. We are laying down clear guide rules on rents where transfers occur—about which there is, I realise, concern—to make sure that excessive rent increases do not result.
My hon. Friend the Member for Islington, North (Mr. Corbyn) mentioned the difficulties with housing benefit administration, which apply not only to private companies but to some local authorities. That is a serious problem. We are promoting best value, and inspections of the delivery of services will be carried out in the hope that local government services can be improved across the board, but especially in relation to the administration of housing benefit. My hon. Friend asked about a level playing field for estate transfers. I acknowledge the importance of that and understand that it will be discussed by Housing Ministers.
I am grateful to my hon. Friends for acknowledging the efforts that have already been made. The hon. Member for East Worthing and Shoreham would do well to study them. The hon. Gentleman asked about the Green Paper—that is coming shortly, as we say in government. He also mentioned the problem of asylum seekers. London's problems, severe though they are, have been exacerbated by the large numbers of asylum seekers. One of the things that the Government have done to reduce the problem is to initiate a programme of dispersal around the country. Indeed, in Sunderland, where previously there were none, we are now accommodating asylum seekers in some of our surplus properties because we recognise that it is a national problem and should not be confined to the areas where those people happen to come ashore.
My hon. Friend the Member for Bethnal Green and Bow (Ms King) asked about the rent subsidy limitation for Tower Hamlets. If she will forgive me, I shall write to her on that matter. I was asked many questions and I am unable to answer them all in the short time available to me. However, I want to make one general point. There is a huge imbalance in this country, as there is in other countries, between the capital city and other areas. Inevitably, there is a population drift in the direction of the capital city, and a policy of predicting and providing will not work in relation to housing any more than it works with roads. We can pour in extra resources, and we will do that. I acknowledge the bald point that has been made by many hon. Members, especially about creating affordable housing in London. However, we 65WH should not imagine that simply pouring in resources, without asking sufficient questions about how those resources are spent, would solve the problem. Having lived in inner London for a long time, I know that many of the resources that were made available to deal with the problem were badly misspent, but that has considerably improved in recent years.
§ Mr. MullinForgive me, but I have only three minutes left.
The Government must implement a regional policy to moderate the reasons why people tend to drift towards London. Of course, one of the main reasons is for work, so we must create jobs and sustainable life in all parts of the country because that is one of the ways in which we can reduce the enormous pressure on London.
I want to say a few words about the increase in housing investment that we have made in the three years since we came to power. We have reversed the decline in housing investment presided over by the previous Administration and initiated a massive investment programme to improve both the quantity and quality of social housing in London. Allocations for housing investment by local authorities and registered social landlords in London between 1997–98 and 2001–02 will total about £3.8 billion, of which about £1.3 billion will come from additional resources made available by the Government. London boroughs have received £400 million of those additional resources so far. That represents almost 30 per cent. of the national total of extra resources and reflects the high level of deprivation to which my hon. Friends have referred. I believe that Edmonton received a 36 per cent. increase this year.
We have increased the resources made available to London through the housing investment programme. The 2000–01 settlement comprises a £613 million package, which represents a 54 per cent. increase on the resources provided in the previous financial year. The package also brings together several previously separate capital programmes into a single housing "pot", giving London boroughs greater flexibility in deciding their spending priorities. I am confident that authorities will take full advantage of that new freedom to strike the right local balance between investing in repair and renovation of their own housing stock, and encouraging the provision of new units of affordable accommodation.
§ Mr. Deputy Speaker (Mr. John McWilliam)Order. Time is up.