Housing and Regeneration Bill

Mr. Michael Meacher (Oldham, West and Royton) (Lab): I have a great deal of sympathy with what the right hon. Member for North-West Hampshire (Sir George Young) said about new clause 9, but I want to speak specifically to new clause 8, which is not entirely unrelated and which goes to the heart of the Government’s policy on council housing.
There are three drivers behind new clause 8. First, the demand for social and affordable housing in the country at present far exceeds what could be accommodated by the Government’s present plans for the sector. Secondly, it is unrealistic to rely on the private sector to provide decent, secure homes that people on lower incomes need at prices that they can afford; nor, unfortunately, is there evidence—quite the contrary—that housing associations are rising to the challenge to fill the gap. Thirdly, the funding for local
authorities to maintain and repair their existing stock, let alone to build the new homes that are so desperately needed, is grossly inadequate.
On the first point, the Government say that they propose to increase the number of houses built per year from 200,000 to 240,000, to reach a total, which we have heard so many times, of 3 million by 2020. But the current baseline, of course, is not 200,000; it is actually about 170,000. That figure is likely to fall, sadly, for a number of years ahead, because of the sub-prime market disaster gradually deepening and the credit crunch. The number of specifically social and affordable houses needed is estimated by Shelter to be over 50 per cent. higher than under the Government’s current spending plans and more than 100 per cent. by Alan Holmans, who is a very respected housing economist, if the backlog of housing need is to be met within a reasonable period, which I am sure that all Members on both sides of the House would wish.
On the second point, there is no way that the private sector in the current economic climate will be remotely able to fill the gap; nor, indeed, is it very wise for it to try to do so anyway. According to a parliamentary answer that I received in November, more than 200,000 households have already taken out mortgages with a house price to income ratio in excess of six to one, including 38,000 with a ratio in excess of 10 to one. That is clearly unsustainable. We are already in great danger of generating our own sub-prime market disaster, too—not just in the US—and we certainly do not want to make things any worse.
The passion for private ownership, which I find very difficult to understand but with which the Government seem to be obsessed just as much as the previous Tory Government were, is absolutely fine for people who can afford it—probably all hon. Members own their own house—but it is not shared by the majority of people on low incomes at the bottom end of the scale. Probably a fifth of the population, or something of that order, have such low incomes and such uncertain employment prospects that they will never be able, under present circumstances, to afford to buy and maintain a home. For them, what is clearly needed is good quality, secure public housing at rents that they can genuinely afford. That is the issue at the heart of the Bill. Indeed, that is the message that, given current housing demand, people are crying out for the Government to hear.
In 2006, 1.6 million households were on council waiting lists. I have not seen later figures, but I suspect that today the number is nearer 2 million. Indeed, 12,000 are currently on the council waiting lists in my Oldham constituency, yet the total council housing stock in Oldham is today only about 12,500, down from 27,000 some 20 years ago. In addition, across the country almost 100,000 households are homeless and in temporary accommodation, according to a technical view of homelessness.
Let me turn to a key issue by relating a remarkable fact. There can be no clearer indication that the demand for council housing is both very strong and growing despite the pressure-cooker conditions that now prevail in terms of public rented housing, than that 2.5 million existing council tenants have opted to remain with their council even though the Government have denied them the fundamental basic right of the fourth option. Regretfully, I must say that I think that denial is morally and politically indefensible.
Simon Hughes: Does the right hon. Gentleman accept that some councils have supported their tenants in remaining council tenants not at arm’s length or in any other such way, but as ordinary, straightforward, traditional council tenants? In my borough, all four parties on the council support that view. Some councils still resist Government attempts at bribing and blandishment to force them to have an arrangement that the tenants and all their elected representatives do not want.
Mr. Meacher: I fully accept that, and it is the background to the point I am about to make. Given the huge and swelling extent of unmet housing need, it is crucial that the funding of public rented housing—in particular the levels of management and maintenance allowance and the major repair allowance—is wholly adequate. It clearly is not at present. A new Government report out this month, “Self-financing of council housing services: summary of findings of a modelling exercise”, astonishingly states that current allowances undercut
“basic investment needs by 43 per cent. over 30 years”.
Coming from an official Government report, that is a staggering statement: the funding provided for council housing is little more than half of what is needed—that is official.
The report was published by the Department for Communities and Local Government, and it also states that
“anticipated levels of future subsidy...are not sufficient to maintain a sustainable level of housing services within the HRA”—
housing revenue account—
“subsidy system.”
That is also a remarkable statement. This shortfall in allowances is what is driving councils to privatise their homes in defiance of the wishes of their tenants—and against the wishes of most of the councillors as well. It also means that many local authorities cannot meet the Government’s decent housing standard, and that many who can at present will be unable to sustain the standard in the longer term.
Other amendments in the group, notably new clause 1, protest at the bullying and blackmailing of tenants into stock transfer by some councils—and by quite a lot of landlords—but that will continue to happen unless the basic management allowances are substantially raised along the lines set out in new clause 8. That is my basic case.
Perversely, the net funding trail is going in the opposite direction. Council rents are rising faster in order to close the gap on private rents in the locality. Ideologically, that turns the whole purpose of council housing on its head. Council rents are even rising higher than expenditure, so that tenants are paying what amounts to a tax to the Treasury, which works out at some £180 million this year—a parliamentary answer of 18 December last year even suggested that the figure could rise to £900 million a year by 2022. That is on top of the £1.5 billion taken each year from council housing revenue accounts, ostensibly to pay back historical debt. That, again, is odd because tenants do not own the stock and it is difficult to see why they should be burdened with having to service the debt.
New clause 8 is about justice for tenants. It would require the Secretary of State to calculate the housing revenue account subsidy needed to ensure that local authorities can properly “manage, maintain and repair” their homes and
“acquire, rehabilitate and build new housing”
so as to be able to meet
“the need for affordable housing within their respective areas.”
That moderate, reasonable and measured request is long overdue and it is now incumbent on the Government to commit to that position. If they do not, I intend to support new clause 8 in tonight’s Divisions.