Social Housing and Regeneration: Earl’s Court and West Kensington

Tuesday 20th February 2018 Westminster Hall

13:30

[Andy Slaughter (Hammersmith) (Lab)]

I beg to move,

That this House has considered social housing and regeneration in Earl’s Court and West Kensington.

It is a pleasure to serve under your chairmanship, Mr Owen. Last Thursday, Property Week carried the story that Capital & Counties Properties plc, the promoter of the Earl’s Court development, is about to sell the Empress State building to the Mayor’s Office for Policing and Crime for around £240 million. Capco confirmed the leak. Indeed, using the “cui bono?” test, Capco was responsible for the leak, which gave a glimmer of good news to its shareholders, who have only had bad news in recent years, ahead of its full-year figures for 2017 being published later this week.

At over 30 storeys, Empress State was the tallest commercial building in London when it was built in the early 1960s. When it was vacated and sold by the Ministry of Defence, the Metropolitan police rented it from its new commercial owners. When Capco acquired the freehold in 2014, it gave notice to the Met and got consent from a complicit Conservative administration—with only weeks to spare before they lost control of Hammersmith and Fulham Council—to approve Empress State’s redevelopment as 440 mainly luxury flats.

Why give up now on luxury residential development, which was previously seen as not just another licence to print money, but a way of integrating the key Empress State site into Capco’s master plan for Earl’s Court and West Kensington? The answer is that throwing in the towel on Empress State is the clearest sign yet that not just the master plan, but Capco itself is in serious trouble and is seeking to cut and run to save its own skin.

This is a story about arrogance and greed; about politicians who thought they could treat people as commodities, units of production and pieces on an electoral chessboard; about developers who could not believe their luck and then fell prey to changing political and market forces; about a vibrant part of London full of industry, commerce and entertainment that was ordered to be razed and replaced with monotonous high-rise blocks as safe deposit flats for the investment market; and about a proud community of 2,000 people who have stood firm for 10 years against the threat of their homes and community being demolished and dispersed.

Ten years ago, Capco conceived a master plan for 77 acres of land straddling the borders of Hammersmith and Fulham and Kensington and Chelsea. It was dubbed Earl’s Court, although the majority of the land lay in the marginal North End ward of Hammersmith and Fulham. It was billed as the biggest urban development outside China, with an estimated built-out value of £12 billion.

The plan was audacious, because although designated as an opportunity area, this was no derelict, brownfield land. One third of the site comprised the Earl’s Court exhibition centre, including its iconic 1930s entrance, which is now sadly demolished despite the UK having only a third of France’s exhibition space and a quarter of Germany’s. One third comprised the maintenance, manufacture and stabling of a significant part of London Underground in the Lillie Bridge depot, which was a major employer of skilled labour. One third comprised two estates of predominantly council housing: Gibbs Green and West Kensington. Around 2,000 of my constituents live there in 760 good quality, spacious, affordable 1950s, 1970s and 1990s low or medium-rise homes.

In place of all that, Capco promised 7,500 high-rise flats, of which only 11% would be additional affordable homes that stretched that definition to its limits by, for the most part, offering nugatory discounts on extortionate market prices. Interestingly, now Capco is aching for a deal—any deal—to get out of the scheme, it does not say, as most developers do, “Look at our viability assessment. It is all that we could afford.” It says, “We did what Conservative politicians asked, and they wanted precious little affordable housing and not one new social rented home.”

At the start of the process in 2008, Capco told me with similar candour that it did not want to include the estates in the master plan. Developing the exhibition centre and depot meant negotiating with a single partner, Transport for London. Bringing in the estates meant not only a political minefield, but buying up the land interests of the hundreds of freeholders and leaseholders who had bought the desirable homes, flats and maisonettes on Gibbs Green and West Ken.

Why did Capco succumb? Because the ideologically driven council in Hammersmith and Fulham decided to attract the attention of its political masters in the Department for Communities and Local Government by showing that whole areas of social housing could be wiped and reconceived as luxury developments—they called it “sweating the asset”. For Capco, demolishing the estates was the price of the Tories’ co-operation with the scheme.

Capco drove a hard bargain. The inequality of arms between developers and local authorities is not unique to Hammersmith. The deal done with TfL on the exhibition sites was hugely preferential to Capco, despite TfL owning the freehold—perhaps the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) was also not trying too hard—but that looks like a master stroke compared with the deal that the Hammersmith Tories did for the estate land.

In 2013, Hammersmith and Fulham Council made a deal to receive £90 million for the estates, plus space in the new development to replace the homes lost. Uniquely in the experience of most planners and developers, however, that sum was not index-linked—as if property prices never rise in central London.

Moreover, the council needed to deliver vacant possession of the land. That meant buying out 171 leasehold and freehold homes, which is normally the developer’s task. The maximum needed to acquire the homes was budgeted as £60 million, although valuation experts assessed the true figure as between £150 million and £174 million. The council has already purchased 26 homes at an average price of £552,000, excluding compensation, which is well in excess of the estimated £350,000.

The true value of the land is not recorded, but reading across from the valuation of the exhibition centre site, which is, suggests that a more accurate figure is around £1 billion. By accepting no more than 10% of the land’s value and by underestimating the costs of acquiring vacant possession, the council could now be left with a zero receipt and a maximum of 672 replacement homes for residents of the estates, having sold 88 homes to cover its shortfall. That will also not guarantee a home for all residents in the new scheme.

For reasons of time, I must return another day to what I regard as one of local government’s great financial scandals: how not just prime land, but whole communities were sold for a song to serve an extreme political agenda of gerrymandering and social engineering. Most of the guilty men of the previous Conservative administration—and they were all men—have taken their poisonous philosophy elsewhere, but Capco still squats on Earl’s Court and West Ken like a toad.

Capco is represented by its chairman, Ian Hawksworth, who is now most famous for being on the guest list for the President’s Club dinner, and Gary Yardley, its managing director, who is quick to pick up lavish bonuses for the granting of planning consents with negligible community benefit and huge community loss. Its development partners are even less savoury. They include Hong Kong-based mega-developers Kwok Family Interests. One of the family, Thomas Kwok, is currently serving a five-year sentence for bribery.

Although I have referred, and will continue to refer, to Capco as the developer, in fact the estates were purchased through an obscure entity called EC Properties LP. The sole partner capital contributed to EC Properties LP is £2 paid in cash by Jersey-registered EC Properties LP Ltd. These and further labyrinthine arrangements appear designed to put Capco in control while shielding it from liability and allowing it to take advantage of offshore tax arrangements.

Before being tempted by the prospect of rich pickings in Earl’s Court, Capco’s business was commercial and retail estate management, specifically through its ownership of Covent Garden. It has no experience as a major land developer, and it shows. It does not have control of the master plan site; it has no option on Lillie Bridge depot, which is owned by TfL; the estate residents, through their lawyers, dispute that the conditional land sale agreement for the estates is enforceable; and now the deliverability of its scheme has been further undermined by the sale of the Empress State building.

Capco’s scheme, the value of which fell by 20% in 2016, includes £1.8 billion of enabling infrastructure costs. At £148 per square foot, that is more than three times the cost of larger development schemes in London. Other residential developers have commented on Capco’s extreme construction costs, which are thought to be 30% to 45% above the market rate.

Capco’s assumptions for residential value, which are significantly higher than the local market and schemes elsewhere in London, have not been realised. Sales are slower than expected: flats have been selling at a rate of less than one a week. At one point it was selling one flat a fortnight, at which rate it would take more than 150 years to sell the entire scheme, yet the business plan relies on a high sales rate of 480 private homes a year. Unsurprisingly, Capco has tried in recent months to sell some or all of the site to overseas investors in America, South Africa, Japan, China and Saudi Arabia, but it has had no takers. Frankly, any developer, however much of a gambler, would be beyond reckless to take any of the Earl’s Court site off Capco’s hands.

With no money in the scheme and none from outside, Capco’s only other option is to return to planning and come up with a new master plan with increased heights and density. Sadly for Capco, that option also looks like a dead end. With Eric Pickles at the Department for Communities and Local Government, the right hon. Member for Uxbridge and South Ruislip as Mayor in City Hall, and Stephen Greenhalgh in Hammersmith Town Hall, anything was possible, but the political weather has changed. Now Sadiq Khan is Mayor and has very different ideas about what constitutes affordable and sustainable development. He has also made a strong commitment to tenants’ ballots and said that he wants

“to make sure people living on social housing estates…are at the heart of any decisions”

involving demolition. Stephen Cowan, the Labour leader of Hammersmith and Fulham Council, has described the Earl’s Court scheme as “unviable” and “undeliverable” and called on Capco to return the estates to the council. He has the full support of the North End ward Labour candidates, Councillor Larry Culhane, Councillor Daryl Brown and Zarar Qayyum. It appears that he also has the support of the deputy leader of Kensington and Chelsea, Councillor Kim Taylor-Smith, who spoke about the scheme at a meeting of the full council on 24 January.

On Monday, I wrote to the chief executive of EC Properties, whose parent company is Capco, to seek a meeting to consider the site’s future. I told him that on 14 June the facts on the ground in Kensington had changed. I wrote:

“I want to make it very clear that I do not believe the continuation of this development under the current terms is right. And, as a minimum, if this is to continue I want to see more social and more truly affordable housing included in this scheme.”

I am pleased to see my hon. Friend the Member for Kensington (Emma Dent Coad) present, because part of the site is in her constituency. As she knows, my reference to 14 June was to the Grenfell Tower fire.

So what happens now? It is too late for the exhibition centres that were demolished in an act of vandalism, but it is not too late to build an acceptable replacement on the site. It is far from too late for the Lillie Bridge depot, which is still owned by TfL, to undergo sympathetic redevelopment to preserve necessary infrastructure for the tube and new affordable homes. If hon. Members will forgive me, however, I will turn my focus to the estates, or rather to the people who live there.

I first got to know West Ken and Gibbs Green in 1985 as the newly selected council candidate for Gibbs Green ward. The first campaign that I had to fight was to stop the then Tory council putting a relief road through the West Ken estate. It has been a pleasure to represent the area as a councillor and MP for 28 of the past 32 years. Although on aggregate it is a low-income community, it includes people from every walk of life, ethnicity, nationality and profession.

Residents reacted with horror to the prospect of demolition of their homes. At first, there was no guarantee of rehousing in the area—only the statutory requirement to rehouse secure tenants in suitable alternative accommodation. Even when residents were told that homes would be available on the site, there were strings attached. Homeowners, private tenants and households who moved into the estates after the land sale agreement was signed in 2013 have no guarantee of finding a replacement home in the area on eviction. Secure council tenants who move into the first phase of replacement homes could see their service charges triple to between £2,500 and £3,500 a year on top of rent. Having been initially promised like-for-like replacement homes, residents who currently have spacious flats and houses built in the 1960s and 1970s, some of which have gardens and off-street parking, have now been told simply that replacement homes will meet the legal minimum size standard. Even if the developer had the finances and political support to begin evicting residents tomorrow, redevelopment of the estates would still take at least 20 years to complete.

Residents have done everything they can to make it very clear what they do not want: demolition. In December 2009, a year after learning of the possible demolition of their homes, residents from 83% of households on the West Kensington and Gibbs Green estates signed a petition to oppose it. In March 2012, 80% of residents who responded to the council’s consultation on the scheme said no to demolition.

Residents have also been very clear about what they want instead: community ownership. In March 2011, they formed West Ken Gibbs Green Community Homes, a community-controlled not-for-profit organisation with membership from more than two thirds of households on the estates. It was set up with the intention of exercising council tenants’ right to transfer.

[Ms Karen Buck (Westminster North) (Lab)]

I congratulate my hon. Friend on his powerful speech. Does he agree that residents could do a lot worse than learn from the community ownership experience in a neighbouring estate? Walterton and Elgin Community Homes was set up in the face of a threat from Westminster City Council in the late 1980s. It has proved to be one of the most successful and popular models for social housing in the country. Does he agree that that experience shows exactly the approach we should take when estates are threatened?

[Andy Slaughter]

It is a pleasure to see my hon. Friend in the Chamber. I am not surprised to hear her champion one of the most successful community-held developments in the country. I will say a little more about that development before I conclude my speech.

The right to transfer allows council tenants to choose a different landlord for their area. The objective of West Ken Gibbs Green Community Homes is to become the community-controlled landlord for its members’ homes. For four years, it lobbied the Government to implement the necessary legislation to enable it to use the right to transfer under the Housing Act 1985, as amended by the Housing and Regeneration Act 2008. The necessary regulations came into force in December 2013, and in March 2015 members voted 100:1 to serve a right-to-transfer proposal notice. That is a comfort to those whose priority is simply to remain in their homes. Some residents have lived on the estates with friends and neighbours for 30, 40 or even 50 years and dread the disruption of redevelopment and forced transfer.

Estates are home to people who are the lifeblood of our towns and cities. Many residents are people on minimum wage or zero-hours contracts, who feel the rising costs of living the most. Demolishing and marginalising social housing will not work; more importantly, it dehumanises an entire category of people. Certain councils and developers generalise about social housing tenants. They assume they know better than the tenants what is good for them, and they tell them to be grateful when their homes are under threat. That is what the Conservatives did before agreeing the sale to Capco, describing estates as “not decent neighbourhoods”, “barracks for the poor” and “ghettoes of multiple deprivation”. Is it any wonder that communities such as West Kensington and Gibbs Green are bidding to take control and ownership for themselves?

So residents came up with the people’s plan, which shows the professionals how new development ought to be done. At the outset, Community Homes brought more than 100 residents into workshops and site visits with architects. Residents and architects together identified space for up to 327 new homes and devised plans for improvements to their homes, streets and community spaces. The plans were costed and valued, and residents were able to show that they could help to pay for improvements and subsidise the building of new homes at social rent levels through sales. Residents from 65% of households provided written feedback on these proposals, and 90% of respondents said that the plans were “excellent” or “good”, and “better” or “far better” than the Capco scheme. Here is some of their feedback:

“Everybody is trying to save our homes from these rich people. What do you want to destroy people’s lives for? For money?”

“I like that there is a plan to build new homes but I can keep my home. I don’t understand why they are going to demolish decent homes.”

“The most important thing is that we get to stay. I love it here. We know each other and look out for each other.”

I have two final things to say. First, I thank everybody in the community at West Kensington and Gibbs Green, and their supporters and advisers, for the struggle of the last 10 years. It has been gruelling, and 2,000 people have had their lives on hold, unable to move on with everything from modernising their home to planning their family’s future. However, it has created a fantastic community spirit and inspired people to create their own vision for the future.

Even before the political climate began to thaw, I knew that we would win, because I have known people such as Sally Taylor and Diana Belshaw, the chairs of the West Ken and Gibbs Green residents’ associations, and Keith Drew, the chair of West Ken Gibbs Green Community Homes Limited, for 20 years and more. They are strong Fulham people who are standing up for their communities, and they are not daunted by the dirty tricks of the developer and its political cipher.

I am delighted that so many residents have been able to attend this debate. I apologise if I cannot name them all, but they stand for the hundreds and thousands of people on the estates who have fought for their homes and their livelihoods over many, many years. That battle is not over, but there is at least some light at the end of the tunnel.

As I say, there are too many people for me to name, but I cannot leave out Jonathan Rosenberg, the community organiser for these 10 years, who brought not only his absolute focus and determination to an often exhausting David and Goliath battle, but 30 years of experience of community housing. As my hon. Friend the Member for Westminster North (Ms Buck) knows, Jonathan is the chair of Walterton and Elgin Community Homes, which is in her constituency. He is a slayer of Shirley Porter and a champion of tenants’ rights. Jonathan has been ably assisted by a number of professional advisers—accountants, architects and planners—and by community activists across both boroughs, and indeed by residents who have turned up, often when everything looked hopeless and bleak, time and again to assert the identity of their community.

I must also mention Dave Hill, the former Guardian journalist who now runs—I will give it a blatant plug—the “On London” website, which he is crowdfunding for. Dave has written dozens and dozens of articles to expose what has gone on in West Ken and Gibbs Green over the last 10 years. I do not always agree with everything that he says—he is a good, independent journalist—but he has chronicled what I am afraid to say lazier and more partisan journalists would have otherwise missed. It is good that we have it all on the record.

In conclusion, I have only a couple of simple requests to put to the Minister. I know that, new as he is to his post, he will have listened attentively. From my time holding the justice brief, I know that he is serious and has intellectual weight, and I hope that he will give me good news today. First, will he please determine the Community Homes application for the right to transfer, which his Department has been waiting to determine for more than two years? When he does so, can he please heed the residents’ call for him to uphold their legal right to take back control—a phrase I am sure he is keen to hear in this Chamber—of their community, so that they can deliver the homes that we need?

Secondly and more broadly, I ask the Minister to get the Government, including his Department, to work with the residents, the boroughs and the Greater London Authority—they are all now of one mind, a very different mind from the one of 10 years ago—to provide decent, genuinely affordable homes across the Earl’s Court site for families? That perhaps includes families from Grenfell, and thousands of others who are in overcrowded, unfit and unaffordable accommodation in two of London’s most expensive boroughs.

This situation should not be seen as a tragedy but as an opportunity. If there is going to be redevelopment, it should be sympathetic and sustainable, and in the interests of the people who need it most. They are the people who need social and affordable housing in Hammersmith and Fulham, and in Kensington and Chelsea.

13:49

[Emma Dent Coad (Kensington) (Lab)]

Like many Kensingtonians, I have a long history with Earl’s Court exhibition centre. As a child, I visited the Bertram Mills circus, when they had performing animals; it was the “olden days”. I also attended the Royal Tournament, countless Ideal Home exhibitions, and—of course—some of those amazing concerts. However, the site is not just part of my story. It was, and could be again, a thriving and well-used commercial centre, comprising a third of our country’s exhibition space, and providing jobs and customers all year round for our local hotels, restaurants, shops and pubs—remember pubs?

According to the Greater London Authority, Earl’s Court exhibition centre generated £1 billion of business a year. Now, however, it has been flattened and all that business has gone elsewhere. I remember those crazy days eight years ago when Hammersmith and Fulham Council was under a different administration, and the then director of housing and homelessness was exposed for vile racist views, including, in the context of the estates, expressing a wish to “bulldoze the ghettos”.

Enter Capco, the social cleanser’s friend. Its plans, promoted as being “sensitive” to local context and character, put on the Kensington side a forest of lumpen, bland, blocky chunks of real estate with brick cladding, where no one would ever live; shopping streets where no one would ever shop; and a “river park” without a river or, indeed, anything like a park, and where, despite the optimistic visuals, small blonde children would not play with red balloons.

Facing Warwick Road, in place of our beautiful and now demolished art deco facade, would be a bizarre pair of supposedly landmark buildings that I am sorry to say are reminiscent of Italian fascist architecture. Put simply, world-renowned architect Terry Farrell, whose work I have known for many years, had apparently transported a piece of one of his Chinese cities into our beloved borough. It was a cut and paste job, and was very disappointing.

In May 2015, I had the pleasure of speaking at a seminar at South Bank University, called—enticingly—“Politics with Planning”, which is my favourite combination. I was up against the chief executive of Capco, Gary Yardley. I expressed my misgivings about the proposals for Earl’s Court. How he sneered, because he was reimagining a chunk of our heritage. Who was I to question him? After all, the 14% social housing on offer, or 10% based on floor space, was all that the poor thing could offer, because he had consultants. And this is what Section 106 Consultants says to its developer clients,

“if a Section 106 viability report cannot entirely extinguish your liability to provide Section 106 affordable housing”,

then all is not lost. It says that much may yet be achieved, either

“through delivering…affordable housing of a type…that is more valuable to you”—

that is, to the developer—

“or identifying and prioritising those types of contribution that are most important to the Local Planning Department.”

Let us hope that the days of cosy relationships between developers and planning departments are well and truly over.

How the world has changed. Three years on, Capco is on the ropes, its share value plummeting due to the local luxury housing over-provision, and the heat has been taken out of the market, by, among other factors, fears over Brexit. Capco’s recent half-hearted attempt to intensify the provision of units at Earl’s Court—to provide more small housing units that it thought it could sell, rather than the huge and unwanted super-prime units of its dreams—seems to have hit a brick-clad wall.

Politically, culturally and in terms of local need, the scene has changed dramatically. The international appetite for buying flats to park money—sometimes dodgy money—has waned, and it seems that even Capco has accepted that. It had hoped its desire to intensify Earl’s Court could be agreed within the current planning permission, but that is not happening.

Let us not compound the litany of errors and developer greed with yet another round of international online poker, using our neighbourhoods as chips, to sell the site abroad. Local house prices are plummeting—or what the estate agents call “softening”—and there is no longer any taste for these super-luxury developments that have turned parts of London into ghost towns. The current plan is undeliverable; we need to start again. We need to curtail the developers’ rampage through our neighbourhoods and look to a future at Earl’s Court that does not offer empty units for international investors but instead satisfies local needs and provides homes for existing residents.

After the atrocity of the fire at Grenfell Tower, we have seen a dramatic change of heart at Kensington and Chelsea Council, which we need to consolidate and compound with a completely new approach to the development at Earl’s Court. We need to listen to our constituents, who are the experts on what is needed, now, at Earl’s Court. The Save Earl’s Court campaigners are relentless, intelligent and forward-thinking and have good and achievable ideas.

The UK is desperate for exhibition space and London lags dangerously behind in its offer to those who need large exhibition centres. Earl’s Court is struggling, with local shops and restaurants closing and hotels clinging on by their fingernails, ironically propped up by the council using them as temporary accommodation. The heart has been ripped out of Earl’s Court and we need to put it back.

The deputy leader of Kensington and Chelsea Council has stated that communities must take the lead in future developments. Let us trust them, and listen to the knowledgeable and conscientious Save Earl’s Court campaigners, all our local residents and Councillor Wade. They have been working on proposals for an environmentally sustainable and very green exhibition centre with social rented housing on site, offering a green lung in an area of terrible air quality and with jobs on the doorstep. Demolishing estates of social housing is not the answer to deprivation; working with communities is the way forward. We must set the current undeliverable plans aside and start again.

The world has changed since the repellent comments were made by the former Hammersmith and Fulham director of homelessness; we are better than that now. The world has also changed since 14 June 2017, when the result of poor maintenance, lack of care and absence of social conscience was exposed to the world with the Grenfell Tower fire. Let us show that change now by finding ways to realise our constituents’ ambitions. Let us leave the 2,000 residents of my hon. Friend the Member for Hammersmith (Andy Slaughter) in peace to enjoy and manage the homes built with conscience and care over the past 50 years. On my side, at Earl’s Court, let us support a struggling area that has been decimated by developer greed, by working closely with the London Mayor and the Government to repeal the current planning permission where possible and work with the people of Earl’s Court to provide socially rented and truly affordable housing for those who need it, cleaner air, and a fantastic modern exhibition centre that will provide jobs and return vital business. Let us get them out of those hotels.

[Albert Owen (in the Chair)]

If there are no other Back-Bench speeches, I call the Front-Bench spokespeople. Tony Lloyd, usually you would have five minutes. I am sure that you will use your discretion and allow the Minister enough time to respond to the matters.

09:00

[Tony Lloyd (Rochdale) (Lab)]

Thank you, Mr Owen. I congratulate my hon. Friend the Member for Hammersmith (Andy Slaughter). He made a powerful speech that was clearly embedded in the needs of the people he represents, some of whom have come here today to hear the debate and others of whom will want to know the outcome. I say kindly to the Minister that there is a real expectation that today we begin to move the long-running saga of Capco’s plan forward in a way that is acceptable to the local residents.

If I may, I will set the debate in a wider context, going back to before the Grenfell fire. It has been recognised that the policy of owner occupation being the only viable form of tenancy, which was driven during the bulk of the Conservative-Lib Dem coalition and in the early days of the present Government, had to change, in the face of the reality of what modern Britain is all about. It is worth putting on record some of the national statistics that are part of the process faced by people in this part of London. Since 2010, there has been a 50% increase in the number of people who are unintentionally homeless and are deemed to be a priority, people who desperately need rehousing and regarding whom our local authorities have a duty to respond. The local authorities find that extremely difficult of course, because of the lack of available properties.

Those who present themselves to local authorities as unintentionally homeless are only part of the picture. Many families and individuals are in inadequate, overcrowded housing, perhaps living with parents or other relatives. We know that the need for affordable social homes is massively greater than that illustrated by the unintentionally homeless figures. It is a scandal that some 120,000 children nationwide are in temporary accommodation—and the number is growing. In London in particular, in recent years there has been a tripling in the number of people described as rough sleepers, people who have been abandoned by our society in many ways.

That is all part of the background. So why is this? It is because policies dictated to take out social housing—affordable housing for people who need it—have been massively detrimental. That is what the ideologues my hon. Friend the Member for Hammersmith talked about earlier wanted to achieve. Since 2010, we have seen a 174,000 reduction in the number of council properties nationwide. According to the Chartered Institute of Housing, 150,000 social housing units have been lost, and it is predicted that a further 80,000 will go between now and 2020. At the same time, in 2010 there were 40,000 social housing starts and in the most recent year the figure was down to 1,000. Frankly, this is a crisis that has been made at political policy level, because of incompetence and the unacceptability of developers taking control of our planning process.

Something has gone drastically wrong, and the situation in Earl’s Court and West Kensington fits into that national pattern. My hon. Friend the Member for Hammersmith made the point forcefully that there is something fundamentally wrong when developers can sweat assets that are people’s homes, land on which perfectly adequate estates and communities make their lives. That is not sweating assets; it is prostituting national resources in the interests of developer profit and it cannot be acceptable. Nor can it be acceptable that simply because the market is turning and Capco no longer sees the development as viable we now have the possibility of a change of policy. The policy should never have been allowed in the first place, putting, as it does, people’s lives and homes at risk.

Everything I know of the situation my hon. Friend the Member for Hammersmith has talked about says that this is a collection of viable estates of popular homes. I understand there are very few voids, empty properties—I think my hon. Friend the Member for Hammersmith confirms that—and that they are properties that are not so old and not really in enormous need of repair. With that background, the idea of destroying those homes simply to allow the sweating of assets—in fact, to allow people to make enormous amounts of money—does not fit in with the social values we ought to espouse. Even the Government have now begun to espouse those values, as they talk in a slightly more nuanced language about the need to develop more affordable social housing.

My hon. Friend the Member for Hammersmith made some important points about the situation that would be unacceptable anywhere. “Like for like” should be the minimum requirement of any transfer for individuals. It is not like for like when we know that people who have substantial properties will be offered properties with minimum space standards—whatever that means. In fact, it increasingly means much reduced standards and therefore a lower quality of life. My hon. Friend talked about people possibly seeing a tripling of service charges to £3,500 a year, and that is not a small amount of money. It would have a significant impact on people’s incomes, and it simply is not sustainable. Given that background, there is something fundamentally wrong with the model. Residents are rightly looking not only to the local authority—it now has a different political complexion and a different view of the situation—but to central Government to see what they can do to alter the situation.

My hon. Friend asked for specific things from the Minister. The Minister should look at the capacity of the right to transfer. If that issue has been on his predecessor’s desk for two years, it needs to be brought to a conclusion. I hope today he can begin to move that process on. My hon. Friend also talked about the need for the provision of affordable housing. There is something fundamentally wrong in the design of a new area that is supposed to have some 7,500 properties when the number of affordable homes would be less than the number being taken out. In the world in which we now live, the proportion of affordable homes should be significantly in excess of replacement. It should make some real impact on the dire need for social homes—affordable social homes at that—in London in particular. I hope the Minister will comment on what that means for future developments such as this and what the Government can do to begin to bring pressure to bear on Capco.

In conclusion, my hon. Friend has brought a shocking story to the House. The support that my hon. Friends the Members for Kensington (Emma Dent Coad) and for Westminster North (Ms Buck) have brought is important. I congratulate the residents of the area. Their 10-year fight is not yet over, but had they not been prepared to stand up to Capco and the developers, the issue most certainly would have been finished long ago with them in massively inferior conditions to what they now have. I hope that where we are today promises something better for the future.

We look to the Minister for a credible response. The saga is complicated because a lot of the control rests with the developer, but the developer is now on the ropes. I hope he accepts that it should not depend on changing market conditions for us to have a more rational housing policy that says that the rights of existing viable communities should not be wiped out simply to sweat those assets to make more money. The Government’s changing attitude says that that is the wrong situation for us to be in, and I hope the Minister will confirm that.

[Albert Owen (in the Chair)]

I know that in responding to the debate the Minister will allow a couple of minutes for Mr Slaughter to wind up.

14:13

[The Minister for Housing (Dominic Raab)]

It is a privilege to serve under your chairmanship, Mr Owen. As is the custom, I congratulate the hon. Member for Hammersmith (Andy Slaughter) on securing this debate. We have sparred many times on justice matters, and I look forward to an equally rigorous friendship on housing issues. He takes a close interest in those issues and I know how tenaciously he makes his case for his constituents and on matters of principle. I pay tribute to the residents who have come to listen to him and to hear the different views on this important matter.

I take note of all the hon. Gentleman’s points regarding the merits or otherwise of the development of the Earl’s Court and West Kensington area. He will know that the Secretary of State for Housing, Communities and Local Government has been asked to make a decision on two specific matters submitted for his determination. The determination requests are currently being considered in the Department. The hon. Gentleman made some specific requests that I want to address clearly. As a lawyer and an assiduous local MP, he will know that that process precludes me, for legal and propriety reasons, from commenting specifically on the regeneration proposals for the Earl’s Court and Kensington area. As he knows, to do so would prejudice the very decision making he is calling for. Notwithstanding those limits, in his usual deft way he has highlighted his concerns over the Earl’s Court project while also raising—the shadow Minister did this, too—wider issues relating to social housing and the place for regeneration within that. I will say as much as I conceivably can.

Members will know that social housing is a priority for this Government. Last year we announced a review to examine the issues affecting social housing. To help inform the Green Paper we have spoken directly with 1,000 people who live in social housing, as well as with more than 7,000 people through online surveys. Notwithstanding the fact I have only been in this post for a short time, I have been to two workshops this year in Basingstoke and for Lancaster West residents in north Kensington. I hope that reassures the hon. Member for Kensington (Emma Dent Coad). Those workshops and the wider feedback have made a profound impression on me. We have an important opportunity to look afresh at the sector. A lot of the wider points that Members have made will feed into, touch on and resonate with some of the issues we will be grappling with. We will publish the Green Paper this year for consultation, and I look forward to engaging with all Members at that point on those wider policy issues as we strive to get the best out of the social housing sector.

More broadly, the Government are increasing the supply of homes and implementing policies that help people to access housing, whether they are renting or looking to buy in whichever sector, private or social. In 2016-17, which is the last year for which we have full figures, nearly 220,000 net additional homes were delivered. There were more than 41,000 affordable housing completions, which was up 27% on the previous year. We saw nearly 145,000 completions on the Help to Buy equity loan scheme by the end of September 2017.

Building affordable homes is a top priority for this Government. Since 2010, we have delivered more than 357,000 new affordable homes. In relation to the specific issues raised by the hon. Member for Hammersmith, about one quarter of those homes have been delivered in London. The Prime Minister recently announced an additional £2 billion of funding for affordable housing. That will increase the affordable homes programme budget to more than £9 billion. The new funding will support councils and housing associations to build more affordable homes where they are needed most: where families are struggling with rental costs and some may be at risk of homelessness.

The shadow Minister raised the issue of affordable housing in the wider context, and the hon. Member for Hammersmith made a number of political points. I hope both will forgive me for pointing out a few basic undeniable facts about affordable homes in Hammersmith and Fulham. Affordable home delivery in Hammersmith and Fulham in 2016-17 was 28% of the level of the last year of the previous Conservative administration. In the same year, Hammersmith and Fulham delivered 15% of the affordable housing that Wandsworth delivered. I note that as a matter of balance with the account of the borough given today by Members. It is worth putting it in some perspective. Nevertheless, across the political aisles and across the country—the issue is most acute in relation to London, where there is a serious housing shortage and high demand—I think we all are clear about our ambition and restlessness to go much further.

At the autumn statement in 2016, we agreed a record-breaking £3.15 billion package of funding for affordable housing in London to deliver at least 90,000 new affordable homes by March 2021. In addition, London will also get a share of the extra £3.4 billion investment in the affordable homes programme announced recently. Since 2010, we have delivered more than 357,000 new affordable homes, and about one quarter of them have been in the capital.

As London struggles to build enough homes to keep pace with demand, attention is naturally turning to the broader options regarding the regeneration of housing estates. Estate regeneration done the right way can create new improved homes and communities for the people who live there. It can increase the supply and quality of homes through densification and design. Those two can be viewed as a win-win, rather than a zero-sum game. Savills has estimated that in London there is capacity to provide more than 54,000 additional homes using a street-based model. The Government published a new estate regeneration national strategy in December 2016, which supports local partners to improve how they do estate regeneration in partnership with residents to drive better quality housing, local growth and wider opportunities for the residents of local communities.

To give some examples of good practice, in the north Solihull area of Birmingham, a focus on education with the local community infrastructure amenities has led to an increase in educational standards. The regeneration set out to change the lives of 40,000 people by building new homes of mixed tenure, developing new state-of-the-art schools and creating new village centres with improved health and enterprise facilities. The best estate regeneration schemes make the community central to the project.

The Spirit Quarters redevelopment in Coventry is a resident-led scheme. They have set up three social enterprises: a community café, a neighbourhood centre and a business centre. In addition to the physical transformation, there have been improvements in many social and economic outcomes. Overall, reported crime in the area is down by almost 20% and the number of residents claiming jobseeker’s allowance has reduced by 44%. The percentage of students leaving school with five or more GCSEs at grades A* to C has increased from 5% to 33%. Those are all incredibly positive outcomes.

The issue of tenant participation has been raised by hon. Members. Residents are clearly key partners in any regeneration scheme. They should have opportunities to participate from the start, developing the vision, design, partner procurement and delivery. Working with residents can help to build trust and consensus on regeneration. I have said this numerous times since taking on this portfolio: we need to build more homes, but we also need to build up stronger communities, too,

It is particularly important that residents have the opportunity to express their views on the final options for regeneration, whether as individuals or through the democratic process more generally. The way that is done should be agreed locally. That is the template for the national policy that we put out. The regeneration should have the support of a majority of the residents whose lives will be directly affected. At the Wornington Green estate in north Kensington, support for the regeneration was helped by early and ongoing conversations with residents. It included a resident steering group, regular outreach, independent advice and advocacy, regular public meetings, and training for residents.

It is important to set out a clear set of commitments about how the regeneration process will work and what housing options are available. Providing security and confidence through a charter early on is one option for helping to establish trust and foster positive discussions about the scheme. All existing council and housing association tenants, whether on a lifetime or fixed-term tenancy, should have the option to return to the estate. It is a legal requirement for leaseholders to be compensated if their home is demolished. However, we expect that schemes will go further and offer leaseholders a package that enables them to stay on the estate or at least close by.

It is important that home purchase options are made available. Residents should be given the opportunity to change tenure if they so wish. Regeneration can help first-time buyers get a foot on the housing ladder and provide opportunities for tenants to own their homes. Shared ownership has an important role to play in helping those who aspire to home ownership but cannot afford to buy. For example, residents of the Rayners Lane estate in Harrow have been guaranteed the right to remain in affordable housing on the estate, with the extra 260-plus homes creating a vibrant mixed-tenure community through the introduction of outright sale and shared ownership. All of that requires strong leadership from local authorities.

Our strategy highlights the importance of devolution and the leadership role of local authorities working with their communities to support estate regeneration. We have seen good examples of that type of strategic leadership and co-operation. Notwithstanding the criticisms that have been made, I hope we will not throw the baby out with the bathwater and lose sight of the good examples and the positives.

[Andy Slaughter]

Will the hon. Gentleman give way?

[Dominic Raab]

I will make a little more progress and the hon. Gentleman can comment at the end.

Combined authorities in the Tees valley, the west midlands and Greater Manchester are now tackling housing and regeneration alongside transport, infrastructure and skills as they take a more holistic approach. Strategic regeneration plans can act as the catalyst for delivering place-based services and infrastructure through, for example, new community hubs and schools that service the areas being regenerated.

Opposition Members have sometimes accused me of focusing too much on London and the capital. However, the regeneration of Anfield in north Liverpool has focused not only on housing, but on the place as a whole, including the commercial offer and the wider infrastructure. Your Housing association, Liverpool football club and Liverpool City Council created a partnership that enabled them to consider the needs of the community across the whole Anfield area. That was important and is a good example of the strong joint partnership and long-term community engagement that has transformed Anfield into a place where people want to live.

[Andy Slaughter]

I appreciate the tone of the Minister’s speech and what he said about not giving a view on the regeneration scheme. However, may I press him a little on two points? First, if he cannot say what his position is, can he indicate—this is not unreasonable after two years—when there is likely to be a decision on the right to transfer? Secondly, there are many regeneration schemes, but so many of them involve a reduction in the number of social rented homes. When we have a new deal for Earl’s Court and West Kensington, will he agree to work with the other players there to ensure that we preserve and enhance the existing community?

[Dominic Raab]

The hon. Gentleman has made his point in a constructive and reasonable way. I appreciate his frustration on the time issue. After the length of time and all the issues that have been churned over, no one will say this has been done in a rushed way, but we need to take the time required to get the decision right. I cannot give him a specific timeframe, but we will move as expeditiously as we can. I certainly will take back to the Department the point that he has made.

On the wider question, we have an opportunity through the social housing Green Paper. We will collate the extraordinarily wide range of feedback we have had. We will put that into the proposals through a Green Paper for consultation. I look forward to working with the hon. Gentleman and hearing from him at that stage.

In conclusion, I want to make sure this debate does not lose sight of the fact that local regeneration can offer enormous scope to build more homes and at the same time build up our local communities, which, whatever side of the political argument we sit on, is the shared objective. It requires ambition from local authorities, which many are providing. It also requires that residents have a strong voice in the process to shape the local plan, and support from central Government, which London and many other communities are receiving, not least with the recent homes infrastructure funding that has been made available. It also requires strong leadership to carry local communities with us.

14:27

[Andy Slaughter]

I am glad we had a civilised debate, but that does not detract from the fact that what has happened, particularly to the tenants and residents of the West Kensington and Gibbs Green estates over the past 10 years, has been an outrage. It would not have been tolerated were this not an area of social housing. Threatening to demolish 750 private homes in the same way simply would not happen. All we ask is that similar standards are adopted. That is why I am delighted with the Mayor’s new guidelines and his wish to use his own power and economic clout to ensure that tenants are fully consulted in future.

I want to make two or three quick points. I accept that local authorities can always do more and that it is very difficult to build genuinely affordable housing in London, where land values are high, but it is not impossible. I do not want to dwell on the political past, but I will give one statistic: in the past three years of Conservative control in Hammersmith and Fulham, the number of social rented homes actually fell. It is the only borough in London where that happened. I would be willing to draw a line under the past and to accept at face value what the Government say and what some Conservative councils now say about a new commitment to social rented homes. I suspect the new settlement will not be until after the local elections because Capco, like all desperate gamblers, will want one more throw of the dice to see if it can get a more sympathetic administration. I suspect it will be unlucky on this occasion, not only in Hammersmith but in Kensington. I invite the Minister to work with all players after that time to ensure that we begin to build the homes that Londoners need and can afford.

I end where I began by thanking everybody who has taken part in the debate, particularly my hon. Friends the Members for Rochdale (Tony Lloyd), for Kensington (Emma Dent Coad), and for Westminster North (Ms Buck), who are passionate about these issues, as I am. Most of all I thank the tenants and residents not only for giving up their day and being here—they have given up so many days—but for everything they have done for their community. By resisting the demolition that was due in the area, they have prevented it from happening to other communities in Hammersmith and elsewhere. For that we all owe them an undying debt of gratitude.

Question put and agreed to.

Resolved,

That this House has considered social housing and regeneration in Earl’s Court and West Kensington.

09:00

Sitting adjourned.