HC Deb 06 February 2002 vol 379 cc273-95WH

11 am

Mrs. Marion Roe (in the Chair)

I call Mr. Jeremy Corbyn.

Jeremy Corbyn (Islington, North)

Thank you, Madam Deputy Speaker. This is—

Mrs. Marion Roe (in the Chair)

Order. I remind hon. Members that I should be addressed as Mrs. Roe, because I am a member of the Chairmen's Panel.

Jeremy Corbyn

I have had trouble on that score before. Good morning, Mrs. Roe, and thank you.

This is not the first, and certainly not the last, Westminster Hall debate on London housing, and I hope that there will be further debates on the Floor of the House. It is clear from the number of hon. Members present that there is serious concern about housing shortages and housing problems in London. The housing crisis affects almost everyone: those on waiting lists, those in bed-and-breakfast accommodation, those who are homeless or, unfortunately, still roofless, and those who are desperate to pay high private rents or buy a flat in London.

The situation demands large-scale public intervention, which has helped people out of poverty and misery in London in the past. There were large-scale council house developments after the first and second world wars and right up until the advent of the Tory Government in 1979. Many people owe the fact that they live in reasonable accommodation to the enormous efforts that successive Labour Governments and many Labour local authorities put into expanding their social rented stock, and such an approach remains the only long-term solution to London's housing problems, which the market alone cannot solve.

I am sure that the Under-Secretary of State for Transport, Local Government and the Regions, my hon. Friend the Member for Northampton, North (Ms Keeble), will refer to this when she replies, but it is important to recognise that London's housing problems are markedly different from those in other parts of the country. Its problems are driven as much as anything by the property boom, which has a pernicious effect on all housing sectors and particularly on public services and on the ability of public service workers to live in London.

Lists and figures abound, and they tell a terrifying story. In 1998, 19,000 homeless households were in accommodation in London, but the number has now gone up to 48,000. The figure has increased from 2,000 to 4,600 in the borough of Haringey, and from 500 to 1,400 in my borough of Islington. I hope that my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) will catch your eye, Mrs. Roe, because he wants to say more about that. Throughout London, the figures tell a similarly terrifying story.

Some 7,000 families have been placed in bed-and-breakfast accommodation throughout London. That is an entirely miserable way to exist, and such accommodation is supremely inefficient and a gross waste of public money. We are giving millions of pounds to bed-and-breakfast landlords and making millionaires of people who often provide abominable accommodation. Anyone who cares to visit bed-and-breakfast hotels in Finsbury Park in my constituency and in many other parts of London will see the sheer misery in which people must live. Such accommodation is not cheap and is paid for by the public sector, because housing benefit pays the rent of a large proportion of the people involved.

If I may, I shall quote briefly from the Shelter briefing for this debate, which states: The Government has made tackling homelessness a policy priority. The Homelessness Bill, the National Homeless Strategy and the new unit dedicated to reducing the use of B and B are testament to this. Shelter is very favourable to many of the Government's policies, but the briefing goes on to say: But these polices must be backed up by resources if the Government is to deliver on its pledge to halve child poverty by 2010 and end it in a generation. The Spending Review 2002 presents a key opportunity to put in place a sustained programme of investment backed up by challenging targets to improve the lives and life chances of homeless children. Shelter has given us part of the important story. It is true that the costs of poor quality housing are borne by the public sector, in that we pay for extortionate private sector rents through housing benefit or through homelessness and bed-and-breakfast landlords. However, the children also pay. They pay in ill health, poor school achievement, endless moves from one set of homeless person's accommodation to another and family break-up. The damage to our communities resulting from the inadequacy of housing in London is astonishing. We must tackle that issue.

However, we must also look at the problems of communities that are being priced out of their geographical area. The borough that my right hon. Friend and I have the honour to represent is now one of the areas of the country with the fastest rising property prices. That means that even Members of Parliament moving there could not, unless they had substantial equity, afford the mortgage on a two-bedroomed flat. Price rises of that magnitude, which are similar to those that have happened in neighbouring boroughs, mean that unless families on average or below-average incomes obtain social housing through a council or a housing association, the possibilities of remaining in the community where they grew up are pretty well zero. Inner-city areas of London are simply exporting people on average or below-average incomes. That problem needs to be dealt with.

Mr. Andrew Love (Edmonton)

According to figures released this morning by the Halifax, the average loan taken out by a first-time buyer in London at present is £127,000. Does not that make for the sort of affordability crisis that my hon. Friend describes?

Jeremy Corbyn

Absolutely. As that is a Londonwide average figure, many people in inner urban areas will have to pay substantially more. The costs of living in London are very high.

We need to look for solutions. The Labour Government who were elected in 1997 inherited a legacy. The outgoing Labour Government in 1979 were funding an enormous council and housing association building programme. Those of us who served on London boroughs will remember that between 500 and 1,000 new dwellings a year was a routine achievement. That figure dwindled so that at the end of the period of Tory Government very few were being built. We looked to the election of a new Government to encourage the expansion of the social sector. Unfortunately, that expansion has not happened to any great degree, and indeed, with the number of sales—particularly of existing council property—happening at present, the new build is barely keeping pace with current stock.

The Government have done much to try to improve existing stock, and I acknowledge the amount of money released through capital receipts that has been injected into areas by way of regeneration money. My constituency has benefited from that, as have the constituencies of many colleagues. We welcome that money; we welcome the new roofs and windows and the improvements to estates, including security and community and play facilities. Those are very welcome. However, they do not solve the problem. The solution is expanding the stock.

I am concerned that the Government seem to emphasise regeneration to some extent and estate transfers to a great extent. I hope that the Minister will deal with that question. I share the concern that many people feel about tenants being virtually forced into estate transfers because they believe that there is no alternative. It is interesting that despite a pressurised campaign to vote for a transfer, the tenants of the Aylesbury estate in Southwark voted to remain within the council. I hope that the Minister will tell us that in future there will be a genuinely level playing field on estate transfer votes, so that money will be invested whether or not the estate is transferred.

Mr. Edward Davey (Kingston and Surbiton)

My hon. Friend the Member for Southwark, North and Bermondsey (Simon Hughes) cannot be present, and he apologises for that. However, he told me about that vote. He would agree with the hon. Gentleman that the choice facing tenants means that, in effect, they are being bribed to move to the stock transfer option. However, tenants voted against that by three to one—so they would back the point that the hon. Gentleman made.

Jeremy Corbyn

We are all sorry that the hon. Member for Southwark, North and Bermondsey cannot be here today, but I agree with what the hon. Gentleman said.

I ask the Minister, where do we go from here? The Government have done a lot in terms of estate improvements, improving the quality of life for people on estates. They have also done much to promote key worker housing through some funding of teachers' schemes. However, it seems ironic that, while the Government invest to enable teachers to buy homes so that they may stay in the community—and none of us has any problem with that scheme—the police and other Government agencies are selling Government property. There seems a complete lack of co-ordination in that respect. We should retain in the public sector specialist homes that were built for the police, nursing staff, fire officers and so on. It seems that something has gone badly wrong in that regard.

Key worker housing is not a solution in itself, however. There is a desperate problem with getting nurses, police officers, firefighters and others to work in London, but there are other key workers who are not included. If no one sweeps the streets, they become filthy, so the street cleaner is a key worker. Hospital porters and catering workers are key workers, as are workers in many other grades.

I hope that the Minister recognises that, in the longer term, the only way in which to ensure good quality public services and a good standard of life in London as a whole is to expand the affordable rented sector. The Minister should recognise that, over the past three or four years, many in London have spent much effort and time examining the housing situation. That effort includes the Mayor's strategy document for London and statements on the subject by the Greater London Authority, London boroughs, Shelter and employers who have difficulty in recruiting skilled workers. Not least, it includes those views expressed by inner-city and outer-London MPs, who share those concerns.

I hope that, when the Minister replies, she can tell us a number of things. First, she may tell us that, when the restrictions are removed on local authority borrowing and authorities are allowed to borrow against capital assets, there will be no restrictions on councils' borrowing against those assets to build council stock if that is what they decide, democratically, to do. I hope that she will tell us that the Government are prepared to invest in new build or purchasing existing properties for conversion, so that we may expand the social rented sector. They should recognise that although different housing problems exist in other parts of the country, we must retain and expand the rented sector in London, so that we may look forward to a cohesive city instead of one that is increasingly divided by housing shortages and associated problems.

I know that these are difficult times, but it is too easy for the Government to say that they will leave the market to deal with such issues. The market has had a pretty free rein in the past few years in London, and it has shown that it can make a great deal of money from shortages but can do nothing for the poorest and most vulnerable, or for the cohesion of our city. I hope that the Government will recognise those issues and be prepared to invest massively in expanding the social rented stock, which, in turn, will lead to the better communities that we want.

This is not the first debate on this subject, and I am sure that it will not be the last. Week in and week out, some of us have to face people in our surgeries and speak to families with three or four children who share two-roomed flats. We see all the tension and anger that goes with that situation, but we have to tell them, "Sorry; you are not really a priority and you have no chance of being rehoused." It is hard, it is brutal and, above all, it is totally unnecessary for us to have to say that. Public intervention is necessary to save us from that situation.

Several hon. Members

rose—

Mrs. Marion Roe (in the Chair)

Order. I remind the many hon. Members who wish to speak that the winding-up speeches begin at noon.

11.14 am
Mr. John Randall (Uxbridge)

I congratulate the hon. Member for Islington, North (Jeremy Corbyn) on securing this important debate, which concerns inner and outer-London boroughs. Some might think that those of us in the outer London boroughs have an easier time. That is true in some respects; I am aware of the problems in inner London. However, to imagine that, outside the inner core, we are all in leafy boroughs is far from correct. I am pleased to see that my neighbour, the hon. Member for Hayes and Harlington (John McDonnell), is present. I am sure that he will add to my comments on our borough.

Our problems are much the same and we do have deprived areas. However, the principal problem, which the hon. Member for Islington, North has elucidated, is that of rising house prices. Property prices have risen by over 100 per cent. since 1996 and most of our residents and their children are being priced out of their communities. I echo the point that the hon. Gentleman made about the importance of keeping communities together; this pricing out is having a very bad effect on our areas.

There is no affordable housing for purchase—that is a frightening prospect for anyone considering being a first-time buyer in central, inner or outer London. The average price of a flat in the London borough of Hillingdon is £104,000, and a semi-detached house is £170,000—anyone would regard that as an impossible first step. We are lumbering people with incredible debt, even at this time of low interest rates. If those change, we shall have extreme problems.

The issue of key workers is as relevant in outer London as it is in inner London. Key workers include everyone who works there—someone has to work in the shops and provide other services. Like the hon. Gentleman, I welcome teachers and other public service sector workers. However, it is not just the public sector that is affected. I regret the sale of police houses and other dwellings. It started some time ago and I am sorry to say that it is continuing. That is an accountant's measure—the short-term gain looks good on paper. However, the long-term loss is huge and we are now suffering greatly from it.

In outer London we have another problem—we do not have enough houses. However, the dichotomy is that we do not want too many to be built, because the places where they might be put are our open spaces. Week after week, people come to my surgery with stories of chronic overcrowding and they all have the same problem—they are not deemed to be priority cases; they have no chance of being rehoused. However, I also see people who do not want a development to be built because parks and open spaces are valuable. I recognise that; those are the green lungs of our communities. If we are not careful but build on those, we shall ruin the quality of life that the residents of suburbs value. Many of the people who live in Uxbridge moved out from central London just after the war because they did not like the pollution and thought that they were moving to a better quality of life. However, unfortunately, the quality of life that they left behind is extending further out.

When I speak to other Members of Parliament, I often find that the problem in the north of England is the reverse. Those of us who live in London wonder what can be done about the places around the country where the houses and vast estates cannot be filled. Government after Government have considered how to change the situation and it seems to be impossible to socially engineer. People come to London as a honeypot.

Mr. Love

Two suggestions for dealing with the problem that the hon. Gentleman is hinting at are as follows. First, 50 per cent. of all new build housing on any size of site should be affordable housing and, secondly, we should increase the density of housing on any site. Does the hon. Gentleman support either of those suggestions?

Mr. Randall

I am not a housing expert, but I do believe that those suggestions should be considered. There is a real problem and something must be done to deal with it.

There is another problem, which I am sure is also faced by other hon. Members' constituents. Because of the lack of housing, a blame culture arises among those people who find that they cannot be rehoused, and they blame asylum seekers. My constituency is near Heathrow, so it includes a certain number of asylum seekers. It is a fallacy that people cannot be rehoused because of asylum seekers, but the shortage of housing creates a problem and increases social tension. Unless we can deal with that problem, the situation will get worse. It is difficult to explain to people that what they perceive to be true is not the case when there are so many urban myths around. It is difficult to tell people that they cannot be rehoused when they know of someone who has just moved in. That causes big problems in our communities.

We have individual problems in the area, such as a large university—Brunel university—and students to be accommodated. I am sure that most hon. Members share my concern about student debt. We will have another problem when the building of Heathrow terminal 5 goes ahead. Vast numbers of construction workers and other businesses associated with the construction of terminal 5 will require temporary housing. There might be an opportunity for those people who are involved in that work to house their workers and then allow the local authority to use the accommodation afterwards in some sort of planning gain, but that is for the London borough of Hillingdon to work out.

As time is short and many hon. Members wish to speak, I shall not go into detail on the situation in Hillingdon and the number of families in temporary accommodation. The London borough of Hillingdon has put in a bid to the void transfer scheme, and we are waiting to hear the result. That will not provide the whole answer to the problem. Almost certainly, the correct solution lies in the creation of more permanent housing that is affordable to households on low incomes. The hon. Member for Edmonton (Mr. Love) made some suggestions that we should all consider. Many families on limited incomes in Hillingdon are unable to afford market housing, whether it is owner-occupied or rented. That is the fundamental cause of housing need in my constituency.

11.24 am
Mr. Chris Smith (Islington, South and Finsbury)

I congratulate my hon. Friend the Member for Islington, North (Jeremy Corbyn) on choosing this subject for debate. It is of enormous salience to our constituents, as it has been during my 18 years in Parliament. It remains the biggest issue for my constituents by a long way. It would not be inappropriate to say that we have a genuine housing crisis throughout London, particularly in inner London. That crisis has not suddenly occurred; it has been happening for a long time. It results fundamentally from a lack of investment. I will return to that point in a moment, but let me first echo much of what the hon. Member for Uxbridge (Mr. Randall) said in his extremely interesting and honourable speech. His warning that we must all avoid looking for scapegoats when considering the difficulties faced by our constituents was well said and well taken.

The problems of investment for the creation of new accommodation at affordable rents for our constituents and the regeneration of existing council accommodation have existed for many years. Throughout the period of Conservative Government, there was a decline in investment. I am pleased that, in the past four years, more money has been available to boroughs such as Islington to renovate and create housing, but it is nowhere near enough. I welcome that extra investment. This year, Islington has double the amount of investment money for its housing work than it did four years ago. That is an enormous improvement, and it is welcome. In the coming financial year, it will amount to a little more than £40 million.

I spoke to the director of housing last week, as we visited one of the estates in my constituency that are in need of improvement. He said that, given the condition of Islington's existing housing stock, before we even think about creating necessary new housing, improvement measures costing about £440 million will be needed. It does not take a genius to work out that if we have only £40 million a year, it will be a long time before that existing housing stock is put in decent order.

The problem is becoming worse. Many estates built in the London borough of Islington, and in the old borough of Finsbury, were built in the immediate post-war years. Those estates have now reached the point at which major structural difficulties occur. That is bound to happen after 40 or 50 years. The concrete is starting to crumble. The structure needs major attention and that problem will become worse during the next few years.

My first and most important plea to the Government is for them to understand the need for sustained and increased investment in the housing capital stock in boroughs such as Islington. It is needed to put existing housing in a decent condition and to ensure that people no longer have to live in bed-and-breakfast accommodation, in overcrowded accommodation and, in some cases, in no accommodation at all.

The Government have rightly identified the provision of public service as their major priority for this Parliament. In areas such as inner London, it is not just health, education and transport that need attention, but housing. I hope that we will begin to hear much more from the Government about that, and that they will identify it as one of the key public service priorities—because it certainly is a key priority for my constituents.

Mr. Geoffrey Clifton-Brown (Cotswold)

Is the right hon. Gentleman aware of the article in London Housing that estimates that, if the capital funding proposals of the Department for Transport, Local Government and the Regions were to go ahead, London would lose out, in comparison with the rest of the country, to the tune of £128 million of resources? London and the shire counties also lost out in the revenue support grant settlement of the past three years. Therefore, it is clear that London and the shire counties are losing out with regard to the Government's local support grant settlements.

Mr. Chris Smith

I have not seen the article to which the hon. Gentleman has referred, and I am unsure whether I share his analysis of the provisions for London and the rest of the country. The floor and ceiling proposals in relation to revenue support grant—which the Government have rightly put in place—must also be taken into account, as must the many other ways in which they are assisting, such as the single regeneration budget schemes and the neighbourhood renewal fund. London rightly benefits from all those forms of assistance, as do other areas of the country. However, my key point is that the Government must specifically address funding for housing work in the London boroughs.

My constituents' problems are currently compounded by the appalling service that they receive with regard to the administration of housing benefit, which was outsourced four or five years ago to a firm called IT Net. Forms are lost, not just once but twice or three times. Delays of months occur in the sorting out of even the simplest cases. Letters are occasionally sent out, on the same day and to the same person, that give a different housing benefit assessment. Tenants are sometimes issued with eviction notices—and they might face court action, or receive a visit from the bailiffs—because their housing benefit has not been properly assessed.

Unbelievably, the Liberal Democrat council—that party currently controls Islington, alas—did not send IT Net packing, as it should have done. Instead, it extended the company's contract and gave it more money. That was absolutely the wrong decision. However, a month and a half ago the new contract was signed.

I ask the Minister to draw to the attention of her colleagues at the Department for Work and Pensions the problems that the people of Islington are facing because of the failures of IT Net, and to ensure that the Department's housing benefit team takes the matter seriously and does whatever it can to help the tenants of Islington to receive a better service.

Mr. Edward Davey

Can the right hon. Gentleman confirm that the original contract for IT Net was signed by a Labour council? Before the 1998 local elections, the Labour administration agreed to a poor supplier and signed a weak contract. It would have been extremely costly to end that contract, and it would have led to short-term chaos—which has happened in other London boroughs.

Mr. Chris Smith

The hon. Gentleman is right on one point: the contract was signed by the previous Labour council. I said at the time that that was the wrong decision. The Minister and I have told the council so many times since. Now, it accepts that it was wrong. It was far worse to compound the error by continuing and extending the contract.

I make a brief final comment. I fear that there is considerable uncertainty about our tenants' likely fate on rent because of the Government's rent restructuring proposals. I understand why the Government wish to establish a more rational system of setting rents for council tenants throughout the country, but I urge them not simply to attach council and housing association rents to market rates. Market rents in inner London are astronomical and getting worse. If market rents are used as the lodestone for setting social housing rents, I fear that our constituents are in for substantial rent rises. I hope that that will not happen. A problem is that the Government have not given us precise information about how their proposals will affect what our constituents must pay.

I hope that the Government take account of the worries that my colleagues and I have about the proposals, which I know that many of our constituents share. We need more and better housing at affordable rents in our constituencies. That is a major issue of importance. The Government have done much to improve on what they inherited in 1997, but there is further to go.

11.36 am
Glenda Jackson (Hampstead and Highgate)

I endorse everything that hon. Members have said, especially my hon. Friend the Member for Islington, North (Jeremy Corbyn), my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) and the hon. Member for Uxbridge (Mr. Randall). I will not repeat the details that were furnished about the severe housing crisis under which London is groaning—that is no exaggeration. Undoubtedly, the Government have invested more money in affordable social housing than was invested under past Governments. However, I regret to tell the Minister that the money is not sufficient for London.

My right hon. Friend the Member for Islington, South and Finsbury pointed out the problem of a lack of investment over decades. We need more investment in London to create more affordable housing. The Government should adopt the policy that has been promulgated by the Mayor—I must declare an interest because I serve on the Mayor's advisory cabinet with the portfolio of homelessness—that all new projects should consist of 50 per cent. affordable housing.

The hon. Member for Uxbridge was right that we must protect London's green spaces. That causes higher density, and would require higher standards of build quality so that we do not encounter the problems of neighbour disputes caused by noise and harassment, which all London Members have heard about from people in their advice surgeries. Therefore, costs will inevitably rise, which is why the Government must examine how there can be more investment for London housing.

As my right hon. Friend the Member for Islington, South and Finsbury said, there is little point in the Government's prioritising long-term investment for education, health, transport and tackling crime if housing is not addressed. I am sure that every London Member knows of a surgery case of a child who is treated for asthma in hospital and returns home to a flat in which mould is growing out of the child's bedroom wall, producing spores. In addition, there is a problem if an elderly person who eventually has a hip replacement must return to a building in which the lift is out of order and there are 68 steps up to her flat. It is impossible for children to benefit from the Government's vast investment in education if their home is so overcrowded that there is nowhere for them to do their homework. I shall not list specific examples in the two other subject areas that I mentioned—transport and the prevention of crime—but we all know that inadequate, unacceptable housing can feed the root causes of problems.

The Government must seriously and speedily address the need for increased investment in affordable housing in London. I acknowledge that investment is a medium and long-term solution to the problems that we all face in our advice surgeries. I would argue that the Government can take action in the short term to begin to improve matters now.

The overriding issue of housing benefit has already been mentioned. I represent half the borough of Camden, which has received two charter marks for the excellence of its housing benefit system. However, because of the inadequacies of the system in other London boroughs, landlords in my constituency are now refusing to accept tenants if they would be paid via housing benefit. That seems entirely improper, but there is nothing that the Government can do. However, they could certainly take the payment of housing benefit to landlords out of the hands of the tenants. The local authority should be able to pay directly to the landlord. That should also be the case with other types of housing, such as temporary housing. We have already mentioned the scandal of bed and breakfasts, and I am delighted that the Government have introduced the bed-and-breakfast unit. There is much that the Government can do in the short term.

On the subject of keeping communities together, I should like to mention local reference rent. I dealt only this week with the case of a constituent who was made redundant. She had lived in a flat for many years. The LRR officer visited and disagreed with the rent that her landlord was charging her. The result is that my constituent has to find an additional £100 a month from her unemployment benefit, as I still persist in calling it. There are huge discrepancies in rents charged in my constituency. As there is so much pressure on housing in London, inadequate properties can command very high rents. In the short term, the Government could consider and change the existing structures.

Mr. Love

Does my hon. Friend recognise that the difficulties with housing benefit that she outlines, particularly in London, are leading to additional pressure on the affordable rented sector, which is no longer available to some people? The private rented sector is therefore a factor in increasing the numbers of the homeless.

Glenda Jackson

I thought that I had already made that point, but I am grateful to my hon. Friend for making it clearer. That is absolutely the case. We are experiencing the break-up of communities. More people have to leave the places where they, their parents and grandparents have lived for years, because they cannot afford the rent.

Far too many organisations in London have partial responsibility for tackling such issues. The Government's overarching strategy is to be welcomed, and the Bills that the Government have introduced will help to tackle homelessness and attempt to prevent it. However, there are also the Association of London Government, the 33 boroughs, the Government office for London and taskforces hither and yon.

We are in a real crisis, and the Government should consider the issues and accept the argument that I am urging on them. There should be a single strategic group, which I think should be the Greater London Assembly and the Mayor, to devise strategies and implement speedy and co-ordinated measures to begin to tackle an issue that, if not dealt with in the short, medium and long term, will lead to vast bills further down the line for London. We have heard from the hon. Member for Uxbridge about the potential for severe social disruption; I have heard similar stories. Only the other week, someone said to me, "If you are black, you can get a house. If you come into the country, you are guaranteed a house immediately." We all know that that is not the case, but if such urban myths are not challenged, London will never be a world capital city. The housing issue will be a constant pressure on everyone.

I strongly urge the Government to deal immediately with the issue of increased resources and, in the short term, to amend the existing structures that I mentioned with regard to housing benefit and local rent referral. We must devise one statutory body—I made it clear where responsibility for that should lie. That body should be responsible, if not for actually delivering new houses, for devising the strategy and the overview to tackle the problems for London as a whole.

11.45 am
Mr. Neil Gerrard (Walthamstow)

I shall try to be brief because other hon. Members wish to speak. I agree with an enormous amount of what has been said. The first political job that I did that carried any responsibility was that of chairing the housing committee in the London borough of Waltham Forest in 1973. I may have thought that things were difficult in housing then, but they did not compare with today's problems—we have waiting lists so long that the computers might as well be turned off. The number of homeless exceeds the number of lettings available to local authorities and social landlords. The single homeless are, for the most part, not even covered by homelessness legislation. The Homelessness Bill will make some changes and provide that local authorities should give advice, but I despair to think what that could be in the current circumstances.

I echo the comments made about the need for investment. It is crystal clear that, unless we significantly improve investment, we shall not begin to tackle the problems. I have never understood why local authorities are not allowed to borrow against their assets, or why, in cases involving housing associations, the right-to-acquire receipts are ring-fenced for new provision, but councils' right-to-buy receipts are not. The removal of that inconsistency could make a difference straight away.

It is clear in boroughs such as Waltham Forest that, whatever is done in terms of new build—I agree with making available 50 per cent. affordable housing in new developments—it will be no quick fix and will not provide the whole solution. As long as London housing is organised on a borough basis, individual boroughs will have difficulty in managing.

I recall a time in my borough when the council bought properties—there were programmes in which 200 to 300 properties a year were bought. It seemed a simple and straightforward way to increase the supply of rented social housing.

Mr. Love

There are significant numbers of empty properties in London—perhaps we could start with those.

Mr. Gerrard

Absolutely; that would be a good place to start. We should also remove some of the barriers encountered when local authorities try to lease in the private rented sector—such as the housing benefit threshold—which make it more difficult for them to run leasing schemes.

I want to comment on some of the points that my hon. Friend the Member for Hampstead and Highgate (Glenda Jackson) made about the private rented sector. Although I do not pretend that the whole sector is wonderful or that some people are not living in horrible conditions within it, I despair when people come to my surgery who are being evicted from decent private rented sector homes, usually because of housing benefit problems. We had an experience in Waltham Forest of the privatisation of housing benefit. Fortunately, the council decided to terminate that contract. In doing so, it did not face making payments to the contractor but received money from the contractor because of the contract's failure. Surely part of the strategy must be to deal with such problems in order to prevent people from becoming homeless in the first place.

We should reconsider the system of local reference rents. Gaps between the housing benefit that people receive and the rent that they are required to pay can eventually make them homeless. It is argued that if we did not have local reference rents and keep the lid on, market rents would spiral out of control, but they are doing so anyway. That argument would work only if there was a genuine market in which people had some choice and could tell their landlord, "I'm not paying that money. I'm going elsewhere." The London housing market does not offer the sort of choice that allows people to operate in that way.

Linda Perham

(Ilford, North): My hon. Friend mentioned homelessness prevention. Is he aware that the neighbouring borough, Redbridge, has a homelessness prevention team that is doing very good work and, indeed, saving money? There is also a scheme that gives boroughs choice in housing allocation.

Mr. Gerrard

I am certainly aware of the choice-in-allocation scheme, and it will be interesting to find out how it operates. I was not aware of the specific work being done in Redbridge on homelessness prevention, but I should like more local authorities to put more effort into that. It is difficult for them when people have such problems in the private rented sector.

We could also make some other small changes to housing benefit—changes to disregards, tapers and thresholds—which would make a significant difference to some people. We should stop tinkering with the system. Local authorities receive a new circular every week on another change to be made to the system. It is no wonder that the administration starts to falter.

The long-term solutions must involve investment. There is no answer in the medium to long term but greater investment. However, we should also consider shorter-term measures such as letting local authorities buy and considering what we can do to improve the housing benefit system so that at least we prevent some people from becoming homeless and putting extra pressure on the social sector.

Mrs. Marion Roe (in the Chair)

Order. I remind hon. Members that winding-up speeches begin at 12 noon.

11.53 am
Ms Oona King (Bethnal Green and Bow)

Given the lack of time, I shall try to reduce my speech to a few points. The first, and the most salient, is that we must fund the welcome changes that the Government have introduced. Following legislation, for the first time 18 to 21-year-old care leavers will be given priority, as will all 16 and 17-year-olds. In Tower Hamlets, that will mean a minimum of an extra 300 young people turning up at homeless services. We welcome the fact that they will be given priority, as they must be in any civilised society, but we must have the money to back that up, and it is not there at the moment.

Secondly, we must reduce temporary accommodation, especially among families with children, as has been said. Shelter estimates that an investment of only £250 million, which is surely crumbs from the table, would bring about 10,000 empty private properties back into use as temporary accommodation, with much cheaper rents. Will the Minister respond, if not now, perhaps in writing, to that proposal?

Thirdly, we must tackle and prevent homelessness among those who do not qualify for priority need. That can be done only by increasing the amount of affordable housing.

Fourthly, although all hon. Members have many problems with stock transfer in our constituencies, it is fair to say that, according to the DTLR's deprivation index, I have the worst. Recently, the Under-Secretary of State for Transport, Local Government and the Regions, my hon. Friend the Member for Northampton, North (Ms Keeble), who is in the Chamber today, and Lord Falconer, the Minister for Housing and Planning, visited my constituency. He saw a family of 16 people who lived in two bedrooms and described that as the worst housing that he had ever seen. It is shocking that such housing problems exist. We cannot sit back and allow another generation of children to grow up in slums. [HON. MEMBERS: "Hear, hear."] I am glad that I have my colleagues' support on that issue, as I shall lose it on my next point. Having seen two cases of successful stock transfer, which has turned slums into very good quality housing, we must consider that route and deal with the problems that arose with the first wave of stock transfers 10 years ago.

Fifthly, the right to buy is another controversial matter. At the very least, it must be suspended in areas of regeneration where it is sucking up Government money that was made available to improve housing.

Sixthly, I am horrified by the prospect of rent restructuring. I seek the Minister's reassurance that it will not be dire for housing associations. Some housing associations in London, for example, have said that they do not want to increase their rents but will be forced to do so.

Finally, I commend the Minister on her decision to review the housing health and safety rating standards. I hope that she will deal with the overcrowding regulations, which have not changed since the 1930s. I welcome her comments on all the issues that I have raised. We are millions of pounds better off under the Labour Government, but it is still not enough for our housing problems. Please could they give us some more?

11.57 am
Joan Ruddock (Lewisham, Deptford)

All that I can do in the few minutes that are left is to impress on the Minister why there is a crisis in my borough of Lewisham. It has 250,000 people with high deprivation rates. Its constant population growth is now reckoned to be about 7 per cent. over the next 10 years. In the past six years, the number of lettings that have become available from council stock has decreased by nearly 50 per cent., to 2,000 per annum. That is because people cannot get out. They would have purchased homes, but during the same period the average cost of a flat has increased from £64,000 to £155,000. That is an impossible price for the average person to pay.

There are 15,000 people on the waiting list and they are in serious need. My borough is one of only four in London that do not use bed-and-breakfast accommodation. It is to be commended for that. However, as a consequence, no one else can acquire council house stock because 1,400 homeless households are in temporary accommodation. During the same period, only 260 new homes have been produced in the whole borough. That is not even enough to house my case load of homeless people. My borough could have taken the close on 4,000 units that were produced throughout London last year by social landlords, and still not met our needs. That is the extent of the crisis. It is a catastrophe for individual families. As so many hon. Members have said, families are breaking up under the strain. Children's health and education are being sacrificed. The position is unacceptable.

I agree with all that has been said and must impress on the Minister the need for more public intervention and more investment. The right to buy should be suspended in cases of great shortage, such as that in my borough, and allocating 50 per cent. of development to social housing is the least that we can do.

The Government have given my borough considerable good news. However, today we need to complain because people are suffering and there are remedies that the Minister must put into effect.

12 noon

Mr. Edward Davey (Kingston and Surbiton)

I congratulate the hon. Member for Islington, North (Jeremy Corbyn) on securing the debate. He initiated a debate on housing in London last July and I agree with him that we should keep bringing the issue to the House until we get a solution. We have to keep arguing and must convince Ministers that the matter is urgent. Those of us who represent inner-city and outer-London constituencies hear about it in our surgeries every week. I am sure that others feel as I do after their surgeries: frustrated, angry and impatient—and lots of other things for which I would be called to order if I said them—about our inability to deal with some of the problems that are brought to us, not least overcrowding. A lot of my constituents have many points on the housing list, representing their need, but that need is unmet.

The misery out there is beyond words and it is getting worse. That is happening for a series of reasons that are well known and have been mentioned. Consider the history of housing policy in London. After the second world war there was plenty of land on which to build and large amounts of money did make an impact on the housing crisis in those years. Now we have population growth not seen for decades but land is scarce, so prices are high. The problem is possibly at its most acute in London's history. Despite some of the proposals and policies that have been mentioned, the Government have yet to meet the challenge. It is a major challenge and they should recognise that.

The hon. Member for Bethnal Green and Bow (Ms King) gave a moving example from her constituency. My example is from a report produced by Fordham Research for Kingston council on the housing needs in the borough. That estimates, after detailed research, that every year for the next five years there will be a shortfall of 1,365 dwellings for affordable rent in Kingston. That is an indication of the need in one area. If we multiply that across London, we shall get an idea of the problem.

The Government have introduced a few welcome measures. At least the starter home initiative recognises the problem despite not meeting it by any means. However, the Metropolitan police and the national health service are selling off homes, so we are taking one step forward and two back. It is questionable whether the way in which the starter home initiative is set up deals with the problem for key public workers. I ask the Government to consider whether shared equity is a better way—it might produce more money per buck.

Rent restructuring has been mentioned. That is incredibly worrying on affordability grounds and because of what it says about the Government's underlying attitude to public subsidy for housing in London. It seems to suggest that there will not be much Subsidy—that will have to come from the tenants. Is that really the way forward? Does it solve the problems that we see in our advice sessions? It is also creating uncertainty for the future of the registered social landlord sector in that it is unclear what will happen because the Government have made such a mess of it so far. With that uncertainty, landlords will not conclude the deals that the hon. Member for Bethnal Green and Bow talked about. We shall not see the advances that have been made in other parts of the country. The Government must act quickly. They must get it right and they must understand the problems of affordability as they affect London.

There are other solutions that the Government should seriously consider. The GLA has been good at promoting use of the planning system to tackle some of the problems. That is a medium-term solution, as hon. Members have said. We need to consider the 50 per cent. affordable housing proposal for new developments, and we should apply it to sites of smaller numbers. The floor needs to come down.

Mr. Mark Field (Cities of London and Westminster)

I apologise for my late arrival, but I had a constituency engagement that was arranged some time in advance. It is obviously useful for me to play an active part in the debate.

I want to tackle the Mayor of London's 50 per cent. blanket housing proposal for key workers. Perhaps the hon. Gentleman will comment on my concern, which is that it may have unintended consequences, especially if there is a downturn in the property market as a whole during the next two or three years. A limit as high as 50 per cent. across the board may discourage developers from building at all.

Mr. Davey

I suppose that I am grateful for the intervention, but I am afraid that the hon. Gentleman misrepresents the GLA's proposal, which is about more than key workers. Moreover, if the Mayor went down the road of a much lower limit, as some developers have suggested, we could not tackle the problem. We may have to adjust and tweak as we go along. I am sure that the GLA is aware—I hope that Ministers are—that if the problem makes the market dry up, we may have to consider other measures. Land values and property prices in London show that the idea that developers could not still make a handsome profit does not hold water.

There must be more than a planning solution, as the Government must do their bit. The affordable housing planning permission is well and good, but a public subsidy is still needed to build the houses through the social sector. The Government do not seem to be putting that money forward. Perhaps we shall see in the comprehensive spending review in July that they have changed their mind, but the GLA briefing for the debate suggests that the total public subsidy requirement for London needs to be £600 million a year to deliver the social housing if we have the 50 per cent. affordable planning guidance. If one compares that with the public subsidy of £240 million provided at present, one sees the size of the increase needed—it needs to be almost trebled, year on year.

That is a challenge to the Government. I hope that the Minister will say that she and her colleagues will hear the voice of hon. Members in today's debate and argue strongly with Her Majesty's Treasury for such increases. They would be an effective use of public subsidy, as they would use the benefits of the planning system effectively to reduce the land price, and would lever in financial capital with a relatively small public subsidy. Although the increase may seem large, it is good value for money for the taxpayer and is worth defending on Treasury terms. If the sum required was considered in historical terms, it would still not be as great as the amount that was spent in the 1950s and 1960s in real prices. What the GLA argues for in terms of resource requirement for London's social housing is relatively reasonable.

I want to talk about one other solution for the problem, which may be more controversial. People who want to leave London to live elsewhere—the necessary houses are available in other parts of the country—should be able to do so if they wish. A recent experiment in my borough facilitated that by bringing landlords to Kingston, providing details of job opportunities and vacancies from jobcentres and providing packages in which local authorities have supplied money for relocation. People are starting to take up such offers. Recently, people have relocated to Lincoln, Easington in County Durham and elsewhere. Such people are still economically active and are moving for jobs as well. That may be part—I emphasise that word—of the solution.

The Government have to recognise the extent of the problem. They have to back the GLA's actions and tell the Treasury to come up with the goods.

12.9 pm

Mr. Geoffrey Clifton-Brown (Cotswold)

I am grateful that you have allowed me to catch your eye in this debate, Mr. Deputy Speaker, and I congratulate the hon. Member for Islington, North (Jeremy Corbyn) on securing it. It is a matter of consensus that the problem of homelessness, and particularly the problem of people living in temporary accommodation and bed and breakfasts, is getting decidedly worse. The subject is important and needs to be addressed by the House.

I would like to start, if I may, by administering a minor rebuke to the hon. Gentleman. The idea that everything in public housing was wonderful up to 1979, but suddenly got worse between then and 1997 and then suddenly got better again between 1997 and today, is farcical. I think that we would all agree that the problem is one of under-investment during a long period, under Governments of both parties. We must try to find ways of putting that right and improve the lot of people living in London.

London is by far the most expensive place to live in Britain. Even people on average incomes cannot afford to buy or even rent decent accommodation. As my hon. Friend the Member for Uxbridge (Mr. Randall) pointed out in his excellent speech. house prices rose by 23 per cent. between September 1999 and September 2000, to an average, in London, of £194,000. Such a figure would require a single person to earn over £50,000 a year to get a mortgage. As the hon. Member for Islington, North said, even Members of Parliament would be in difficulty.

As my hon. Friend the Member for Uxbridge said, the population of London continues to grow, which will further exacerbate the problem. The total population of the capital is approaching 7.2 million. That is an increase of 28,000 every year since 1983. Those figures are taken from the Office for National Statistics' "Focus on London 2000". The population is increasing partly through net inward migration from the rest of Britain—a north-south drift—and partly through net inward migration from the rest of the world. We need to take those figures carefully into account.

I hope that the Government are examining the latest census. I doubt that the Government's figures are accurate, because of the number of uncompleted forms. They need to be accurate so that a proper revenue support grant can be made to the London boroughs. I want to return to that aspect of the allocation of resources to London, which I mentioned in an intervention.

There is a staggering estimate that, by 2016, one-person households as a proportion of the total will rise from 37 per cent. to 40 per cent. Married couples are expected to decline as a proportion of households from 44 per cent. to 30 per cent. That will require a substantial number of empty houses. It is not only the increase in one-person households that will determine that, but the fact that we are all living longer and that more people want to live in London. The problem is acute and getting worse, and to solve it more investment will be required.

Many hon. Members have mentioned the issue of homelessness and people living in bed-and-breakfast accommodation. I have only a short time available to me, but the rate of increase in the number of people living in such accommodation is a scandal. We know, from a written answer supplied by the Under-Secretary of State for Transport, Local Government and the Regions, the hon. Member for Northampton, North (Ms Keeble), that the number of families living in bed-and-breakfast in the United Kingdom rose between June 1997 and June 2001 from 4,500 to a staggering 11,340, of which 6,270 families are currently housed in bed-and-breakfast in London. I would say to the Minister and every Member of the House that that figure is far too high. It is a scandal and a waste of precious resources.

The hon. Member for Bethnal Green and Bow (Ms King) quoted the Shelter brief prepared for the debate. She quoted the figure of £250 million, which is the sum required to provide 10,000 units of privately leased accommodation. It is estimated that £60 million is spent on bed-and-breakfast accommodation in London alone. That money, therefore, would provide 2,500 units of accommodation. The figure is not huge, but it is there. Money is being misapplied. Furthermore, the standard of accommodation in bed-and-breakfast is often very poor, so we must get away from the idea that we are providing a service for those people when, in fact, we are doing them a great disservice. The Government should regulate to set standards for bed-and-breakfast accommodation, so that the huge amount of money that we pay is at least spent on something of reasonable value.

Mr. Love

The hon. Gentleman talked about the so-called scandals. In the past year, 11,000 properties in London were sold under the right-to-buy legislation and only 3,000 new properties were built. Nationally, it costs about £50,000 to build a property, but the right-to-buy receipts are for an average sum of about £28,000. Last year, over £1 billion was spent on the right to buy. Does the hon. Gentleman want anything to be done about that?

Mr. Clifton-Brown

The hon. Gentleman is part of the governing party. If he could persuade his Minister to abolish the right to buy, he would have a point. Until he can persuade the Minister to do so, he will have to live with it. There is no point in his intervening on me because I am not in the Government—they sit on the hon. Gentleman's side of the House.

The most serious problem that I shall cite in this debate relates to the estimate by Crisis, among others, of the number of hidden homeless. The problem is really tragic. Crisis estimates that as many as a staggering 400,000 people in the country as a whole may be hidden homeless. In London, it is estimated that some 112,000 women and children—and, perhaps, a further 75,000 men—are hidden homeless. There may be 200,000 people in London who are hidden homeless. Those figures are far higher than the Government have ever admitted in their official figures. The Government need to address all those categories, including people sleeping rough on the streets, living in bed-and-breakfasts, and sleeping on a sofa or the floor in friends' houses. No one knows exactly how many there are.

Will the Minister state clearly that she will initiate some research, so that we have at least some idea and are given an authoritative figure of the number of people who are homeless in London? An easy way to do so would be to include a question in the census form. I know that there will not be another census for another 10 years, but these things take a long time to plan, and we might plan for the future. Meanwhile, some academic research should be conducted to allow us to discover how many hidden homeless there are in London, and in which boroughs, so that we can begin to allocate resources to each borough on a sensible basis.

A number of people have said that one problem that leads to homelessness is the non-payment of housing benefit to people, who are subsequently evicted from their homes. We have raised that point in Westminster Hall before, and the hon. Member for Islington, North intervened in another debate on that matter. It is no wonder that there are problems with housing benefit when the system is changed almost weekly; there have been between 70 and 90 new directives in the past three years. No one can administer the housing benefit system correctly if it is changed with that rapidity. I have sympathy with the hon. Gentleman for the fact that his council has contracted out the management of housing benefit but, equally, I have some sympathy for the company administering it, because the Government continually make changes to the system.

Finally, I shall mention the allocation of resources, which is a subject that I raised in an intervention. I quoted from a London Housing article from October 2001, which showed that the DTLR proposals would mean that, over three years, London would lose out in resources for capital investment in housing by £128 million, which includes £91 million for local housing authority strategies and £37 million for housing associations. Given the picture that has emerged of the number of homeless people increasing and the number of social housing units that are being built declining in the current period of Labour Government, it seems wrong that the resources allocated for London are being reduced. Indeed, we know that in the past three years, the resources allocated for London have been reduced by £91 million. It is worth noting that the Government use the index of deprivation to replace the old index of local deprivation. In a sense, that is to compound an error twice because that is the mechanism used to distribute regeneration grants and it does not take account of other factors, such as rising populations, in each borough.

It has been a worthwhile debate. Many hon. Members have emphasised that there is a problem of under-investment, but we know that, under the Labour Government, homelessness has risen substantially, the number of people living in bed-and-breakfast accommodation has risen substantially, the number of social housing units has fallen substantially and Labour councils have more empty council houses than Conservative councils. Those councils should turn houses around more quickly. Conservative councils can manage their housing stock better than Labour and Liberal councils—

Hon. Members

Shame!

Mr. Deputy Speaker (Mr. Nicholas Winterton)

Order.

Mr. Clifton-Brown

Thank you, Mr. Deputy Speaker.

We know that the Government will have a real job to do to reverse the tragic human misery caused by the problem of homelessness in London, which is getting worse.

12.21 pm
The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Ms Sally Keeble)

I congratulate my hon. Friend the Member for Islington, North (Jeremy Corbyn) on securing the debate. It is not the first time that he has raised the issue and I am sure that it will not be the last. I also congratulate all hon. Members who have taken part in the debate. I shall not reply to each point in detail because many general points have been made, but the debate has raised our level of thinking and awareness of housing problems in London.

I want to start by making a few general points. I agree with much of the analysis of problems in London. The Government of course recognise the real pressures that exist in the capital. I also want to make two specific points. First, I want to remind hon. Members of the history of under-investment in housing over many years, especially during the 18 years when the Conservative party was in power. All of us whose political memories predate 1997 and who have had anything to do with housing in London—

Mr. Clifton-Brown

It is pathetic.

Ms Keeble

It is not pathetic. All of us who have longer political memories and practical experience in housing know exactly what price communities in London paid as a result of that under-investment.

Secondly, in addition to under-investment, there has been a failure to tackle some of the issues surrounding housing standards. Some of those issues have been mentioned: how we calculate the fitness of properties and overcrowding, how we define who is homeless, how we determine rents and how we plan to provide decent support, through housing benefit, for people who cannot afford to pay their rent. That adds up to a big agenda, which the Government must tackle by dealing with investment issues and with the standards and legislation that underpin housing provision.

It will be impossible to deal with all those issues in the time that I have available, but I hope to make progress on some of them.

John McDonnell (Hayes and Harlington)

I want to pick up the point raised by the hon. Member for Uxbridge (Mr. Randall). We have 2,000 families in temporary accommodation—almost on the scale that existed after the second world war. At that time, Clem Attlee came along and launched almost a Marshall plan to allow local councils to borrow to build. Will the Minister address that central question? Why cannot councils borrow to build?

Ms Keeble

I shall deal with a range of issues raised in the debate, but I shall refer specifically to investment and the procurement of investment for affordable housing. As hon. Members acknowledged in their speeches, since coming to office we have reversed the decline in investment in housing and have aimed for significant increases, including in London, not just through council accommodation but also through registered social landlords. Where the money goes is an important issue, and one of its major uses is bringing the existing housing stock up to a reasonable standard.

I can see no justification for authorities—including the Government, who are responsible for the provision of housing through local authorities and housing associations—to tolerate unfit public sector housing stock. We have made it a priority to bring the housing stock in question up to standard and have applied a substantial amount of money to that task. We have set a target of bringing all public sector housing to a fit standard by 2010, and a third of it by 2004. That will be a challenge. The argument about finding alternative sources of investment, in particular through stock transfer and other options, is partly to do with increasing the speed of funding streams to bring housing to a decent standard.

As to the shape taken by our proposals, hon. Members will be aware that we have a range of options, including not just stock transfer, but arm's length management companies. Now there is the discussion with respect to the Prudential code, which will shape the possibility of councils' raising funds in the private sector to use in upgrading their housing stock.

I am well aware of the vote on the Aylesbury estate. Thought will be needed to ensure that council tenants are still provided with the housing improvements that they want, and to which they are entitled. However, in many ballots throughout the country tenants have voted for stock transfer and it has been successful in many instances. It is now a realistic option, which has produced good results.

The points that were made about rent restructuring must be tackled if we are dealing with a diversity of providers of public sector housing. I point out to my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) that safeguards are built into the system with respect to both the year-on-year increases and the total cap. I pay tribute to the London Members of Parliament whose vociferous lobbying was partly responsible for the incorporation of those safeguards.

My hon. Friends the Members for Islington, North and for Bethnal Green and Bow (Ms King) both raised the issue of overcrowding. We are investigating that. It is an important factor because it has repercussions for so many other Government agendas, especially ensuring that children have a decent education. The overcrowding regulations are probably among the most difficult standards with respect to improvements because, as my hon. Friend the Member for Bethnal Green and Bow mentioned, they were introduced in 1935. The arguments that Labour Members of Parliament made about improvements then are the same as those made today, and it will be a major task to make progress. However, it makes no sense that in this day and age people should still be expected to sleep in the kitchen.

Hon. Members made an important argument about the need to increase the supply of affordable housing in London. That is of course right. There is not enough time to go through all the arguments, but hon. Members will know of the starter home initiative. Important factors in that, besides the need to deal with the high property prices, are recognition of the need for high quality public services in the capital of the country, to ensure that it maintains its position as a world-class city, and the importance of good public sector workers to deal with key services. The initiative is not a universal panacea, but it is designed to tackle a specific problem. We are also taking other measures.

As to the question of future action, the debate comes at an opportune time. Later this week a conference will be held to launch the consultation process for the 2002 London housing statement, which will set out the key housing policies and priorities for the capital. It is important that all partners take part in the consultation, so that the statement may have a real impact. From what I have heard this morning, the debate will be trenchant and lively; I hope that it will tackle the real issues of homelessness and housing in the capital.