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Housing and Regeneration Bill
Mr. Michael Meacher (Oldham, West and Royton) (Lab): I welcome the Bill as being the first serious attempt for perhaps three decades to seek to address the issues of severe housing shortage and unaffordability. The Conservative spokesman, the hon. Member for Welwyn Hatfield (Grant Shapps), tried—rather synthetically, I thought—to counter the Bill, and in doing so made one of the thinnest speeches I have heard for a long time from the Opposition Front Bench. The Bill is a major step forward, and he would be wise to recognise that, although I would be the first to agree with other Members that some aspects of it need further consideration, and I want to concentrate on some of them.
The first is the scale of new house building in relation to need—the Conservative spokesman refused on more than half a dozen occasions to comment on that. The number is still distinctly short of what is required. For more than a quarter of a century, public housing in this country has been starved of investment. It has plummeted from 6.1 per cent. of Government spend per year in 1981—the trend started under
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Mrs. Thatcher’s Government—to just 1.6 per cent. in 2005. That is a staggering drop. If we put it in current price terms—which is the way to make sense of it—the Government today are spending about £22 billion less a year on public housing than their predecessors were at the end of the 1970s.
We should add to that the fact that half the public stock has been removed by sales and transfers of various kinds. The council waiting list was 1.6 million two years ago, and it is probably higher today, and it is now virtually impossible to get a council tenancy at all in current conditions. The situation in my town, Oldham, is similar to that in many other Members’ areas; in Oldham, the waiting list is now 11,000 and the total number of council properties remaining after all the sales is only 12,000 or 13,000. Even if someone is lucky enough to get a council tenancy, the rent-setting formula has now been changed from pooled-historical rent to one that is partly related to owner-occupied housing in the area. Therefore, just as house prices have risen dramatically, rents have also risen sharply, sometimes so much that they are out of financial reach.
As Members have also said, no one today has got a conceivable hope of buying their way out into the private sector as almost everywhere in the country the ratio of mortgage loans to income is now 5:1 or 6:1, and in some places even 8:1 or 10:1. Nor is it clear—I find this very worrying—that a small increase in housing will necessarily stabilise, let alone bring down, housing prices in view of the fact that the flow of house-purchase lending, which is now at the staggering level of £1 trillion a year, is rising so much faster. If extra house building increases the stock by, let us say, 1 or 2 per cent. a year, which might well be an effect of this Bill, while at the same time the credit available to buy it is rising at 5 per cent. or even more a year, house prices can hardly be expected to fall.
I admire the aspirations of the Bill but I do not think it is ambitious enough. I think that what is needed is a return nearer to historical levels of housing investment and a major construction drive targeted at good-quality council housing made available at construction-cost-related rents and entirely unrelated to the ballooning prices in the private sector. Although the Government’s proposals for increased house building are very welcome, I fear that they fall well short of matching the demand. The Government are proposing 200,000 new homes a year to 2016, and 240,000 new homes a year by 2020, but the housing economist with the best reputation in this area, Alan Holman, has estimated the required new housing formation every year at about 220,000 and that the extent of unmet housing need that has accumulated over the years—due to overcrowding, for example, and bad-quality, damp housing—is probably another half a million homes. If that latter category were to be cleared in a 10-year housing programme—which, I think, is modest—that would require 270,000 houses a year, which is considerably more than the Government’s aim.
Mark Pritchard: I do not wish to embarrass the right hon. Gentleman as a former Environment Minister, but is it not the case that much of the increased housing numbers he seeks could be found by local authorities doing far more to deal with their voids—with their empty properties—and by their releasing them back
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into the rented sector? The fact is that some of the worst offenders in terms of not releasing such voids are Labour authorities. [Interruption.] Yes, they are.
Mr. Meacher: I entirely disagree with that. Of course voids are a problem, but the hon. Gentleman’s suggestion that one should release more of those properties to the private sector is not the answer at all. The reason that they are voids is that there has been low investment and a low level of repairs. Let us not forget that, under the Conservative Government, repairs and improvements plummeted. The cost of the repairs that had been accumulated by 1997 was estimated in a report of that year to be about £20 billion. That is the fundamental problem and that is what the Government are taking their first steps to try to deal with.
More particularly, within the total, the number of additional affordable houses for renting, which is the epicentre of what we have to attend to, needs to be considerably higher. The Government propose an extra 15,000 houses a year, which is very good. It is 50 per cent. above the current output. But is it enough? I think the centre for housing and planning research at Cambridge has done the most recent and thorough work on this matter. It has updated the Barker analysis and has used the latest population forecast. It has estimated that an additional 60,000 social rented homes are needed by 2011—above the planned outputs in the Bill—to meet urgent newly arising need and to do what the Government rightly intend to do: halve the total in temporary accommodation, which is currently about 100,000. What we are seeing is a good first step, but we need to address the issue.
Tim Farron (Westmorland and Lonsdale) (LD): Will the right hon. Gentleman acknowledge that, even though the figures that he refers to may be insufficiently ambitious, they will not be met in parts of the country such as mine, which include national parks, where the restrictions are such that often housing need is not taken fully into account?
Mr. Meacher: We will have to see whether those targets are met. With regard to national parks, there is a serious environmental issue to consider. That is not to say that there should not be house building in national parks. However, as was referred to a few moments ago, as a former Environment Minister, I would want those needs to be reconciled with the need to preserve the landscape and amenity value of the parks. I do not believe that those things contradict each other, as the hon. Gentleman said.
Where are the extra houses to come from? I feel strongly that local authorities should be able to borrow on the open market exactly as RSLs can, against the security of their own housing stock. However, the only movement in the Bill on this matter is that a few councils will be able to access housing grant—that is welcome—but through an ALMO, or what is called a special venture vehicle, which seems an odd euphemism for a wholly owned private company. Even where those things exist, it is proposed that there should be a pre-qualification process before the councils are allowed to bid. It is likely that only a small number of councils will actually get to access grant. It is helpful and right that the Government are saying that local authorities should be able to keep the income and capital returns from new housing supply where the capital subsidy is provided by them. However, frankly that is of little use if councils cannot access the capital subsidy in the first place. We need to look again at that.
In addition to the adequate supply and funding of new housing on the scale required—particularly social homes for rent—there are a number of new policy developments in the Bill that cause some concern. As many others have said, the Bill establishes a new quango—the Homes and Communities Agency—to take over key functions such as the compulsory purchase of land and the granting of planning permission. However, if those functions are not to be left with democratically elected councils, which is what I would expect, at the very least the Bill should state that those decisions must be taken in co-operation with local councils.
The Bill creates an unaccountable regulator, Oftenant, and transfers key responsibilities from elected Ministers and Departments, including responsibility for such sensitive issues as the criteria for allocating accommodation, the nature of housing demand to be met, the extent to which housing demand is to be supplied, the terms of tenancies, the level of rent, the procedures for addressing tenant complaints, and even antisocial behaviour. Those are extremely sensitive matters of policy. I recognise that the powers will apply in the first instance to RSLs, but it is clearly the intention that they should be extended to council housing. In effect, after stock transfer, RSLs, ALMOs and the right to buy have shifted vast quantities of council housing away from local government, the latest proposal could go a long way to removing the rest from local democratic control and ministerial supervision.
This is a very far-reaching—I would even say breathtaking—proposal and it needs to be examined extremely carefully. It could well undermine ministerial responsibility for one of the most fundamental needs of citizens, which many hon. Members have spoken about eloquently. I am talking about the provision of good quality, high standard accommodation for all, and particularly for the poorest 20 per cent. in society, whose income and employment are so precarious that they are inevitably dependent on public subsidy.
Ominously, that proposal is further buttressed by two other proposals in the Bill. One is that profit-making companies will be allowed for the first time to register as social landlords under a lighter burden of regulation. That must inevitably chip away at social responsibilities. The other is that, for the first time—as I think that my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) said—means-testing is included in the definition of social housing. That inevitably abandons one of the fundamental founding principles of council housing in this country. Council housing was based on local authorities providing high quality housing for all sections of society, not just housing of last resort for those who cannot afford something better.
According to Professor John Hills, only 30 years ago, 20 per cent. of the richest 10 per cent. lived in social housing. Now, if the Bill goes through, council estates will further concentrate deprivation and council housing will be further stigmatised. The Government, as the champion of choice, ought to promote council housing as a tenure of choice for those who wish it. A great deal in the Bill is to be welcomed, but those issues need to be examined much more fully.
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