Council and Social Housing

Andrew Percy Excerpts

Tuesday 6th March 2012 Westminster Hall

[Austin Mitchell]

I will come to that point, which is wrong. Hopes are not houses. The Government might have the intention to build an increased number of houses, but the problem is now, and it is getting worse. A crisis is building, to which the only answer is to build more public housing for rent now. That is not being done; it has not even been started. House building is so low that the tragedy will become worse in the next months and years. The right hon. Gentleman is correct in that the Labour Government’s record was pathetic. At the end, we managed to persuade the then Prime Minister—often a difficult job—that we had to build council houses and had to have a building programme. That was initiated by my right hon. Friend the Member for Wentworth and Dearne (John Healey). That was responsible for growth, and for jobs in the recovery from recession, but it was immediately cut by the incoming coalition Government, who had initially promised to maintain that building programme. They stopped it, and began a deliberate policy of diminishing, demeaning, draining and dumping social housing and those who live in it.

I say “diminishing” because of the 60% cut in funding for building social housing. Even that spending is predicated on higher rents providing revenue. That meant that areas such as Grimsby and north-east Lincolnshire got nothing, which is unprecedented. We wanted to build, but we could not, because no money was available as our rents were too low. I say “diminishing” because of the cuts in housing benefit, the cost of which is high only because the building rates have been so low. If we had built social houses over the long term and on a sufficient scale, we would not need to pay housing benefit to the homeless and to move them into expensive accommodation, and would not have the kind of abuses that are serialised every day by the Daily Mail. It is failure to build that has made the housing benefit bill so high.

Other cuts are already affecting new claimants and, from April, they will start to affect those who renew their housing benefit. First, there was a cut for adult dependants at home, which was designed to force kids—adult children—out of the household and into a single person housing market that is not there. The bedroom tax, which comes in in April next year, is a cut in housing benefit of 15% for those with a spare room, and of 25% for those with two spare rooms, to force tenants to move to smaller accommodation, which is not there, or into the private rented sector.

There is the renewal rate for under-35s from April next year, who will be getting the shared-room rate for single people. Then universal credit and caps will come in, which will produce even more difficulties, not so much in Grimsby but certainly in London and the big cities. That is the “diminishing” part of the argument.

The demonisation part is that council tenants are being treated and regarded as subsidised scroungers living on state subsidy. In fact, the Localism Act 2011 ends secure and assured tenancies, which are the basis of establishing a settled community and a good life on a council or housing association estate. It replaces them with short-term tenures. That means that if the family get better off—if the head of the household or members of the family get jobs—and income increases, the tenancy will not be renewed.

[Andrew Percy (Brigg and Goole) (Con)]

I thank my next-door neighbour but one for giving way. On the issue of longer-term tenancies, as the hon. Gentleman will know, my hon. Friend the Member for Cleethorpes (Martin Vickers) and I have joined him in the Lobby on the issue of short-term tenancies. However, what he has not said is that it will be up to local councils to decide whether to offer them, so there is an element of local democracy. It may be that our councils in north Lincolnshire decide not to do that. Secure tenancies have not gone completely; it will be up to local councils to decide whether to continue to offer them.

[Austin Mitchell]

I am a grateful for that point. I am also grateful that, for a period, in Humberside, we have agreed on the issue of short-term tenancies. I hope that the measure will not be enforced by councils, but several are already making arrangements to enforce it, and others are being campaigned against by tenants who wish to persuade them not to enforce it. We will have a patchwork quilt over the country, but the net effect will be that in many cases, people are forced out, and are forced into accommodation in the private rented sector that is not there.

--- Later in debate ---

[Austin Mitchell]

The hon. Gentleman has asked a difficult question. I do not know the answer. I take it that there was an element of financial stringency—a desire on the part of the Conservative Government to cut taxes, which meant cutting Government spending and therefore spending less on public housing for rent. Certainly, the Labour Government did not spend enough on housing because their priority was to put money into the health service and education, which, after a long period of disinvestment, did get a lot more cash from the Labour Government. The financial situation was pressing in that direction. Also, there was clearly a feeling that we had built enough. That feeling was wrong, because building public housing for rent is a means of providing employment, maintaining full employment, stimulating the economy and providing for social need.

[Andrew Percy]

There was another element; it was not quite as the hon. Gentleman suggests. As he will know from the time he spent in council housing in Hull for “Tower Block of Commons”, there was also a social change, which meant that a lot of people did not want to live in council housing. Consequently, in Hull, where I was a councillor for 10 years, we had hundreds of houses that we could not let because people simply did not want to move into them. It is not quite the case that we simply abandoned social housing the 1980s.

[Austin Mitchell]

But it is the case that a failure to invest made the estates less attractive to live in. Had those estates been updated, modernised and refurbished in the way that was needed—that was certainly needed on the Orchard Park estate—they would have been more attractive places to live in. In the ’70s, they were very much mixed communities, as all the statistics show. It was because spending was cut that they became unattractive. Housing there was also less available, due to sales, which picked the eyes out of many of the estates. That was the reason why people did not want to move in. That movement was coupled with the fact that the Government were spending less, so the housing was less attractive. They were disinvesting in the policy. I do not have the answer to why Governments were doing that—they should not have done it; it was socially divisive and damaging to other social services—but that was the reality. We were spending less, we were not building, and we were not refurbishing or modernising. There was a big modernisation under Labour, to be fair, which brought in private capital by privatising the estates. Again, that was inadequate to deal with the scale of the problem and the disinvestment that had taken place.

I want to resume my thread and talk about draining public sector housing. The new proposals for giving councils control of their housing revenue accounts involve them paying substantial sums to buy back, in order to pay off historical debts. However, that historical debt has in fact been paid off many times over the years. For instance, in the years when daylight robbery applied—that was begun by a Conservative Government, and was carried on for too long by a Labour one—£13 billion was drained out of housing revenue accounts by that system of financing, and the draining has gone on since. The Government were abstracting £1.6 billion every year from housing revenue accounts to pay off historical debts, they said, and to redistribute. The proposal that historical debt has to be repaid by councils that want to run their own revenue accounts is fallacious. It is an attempt to squeeze council financing of development of new housing once again.

The whole programme is imposing sacrifices on those least able to bear them: the poor, the low-waged, the disadvantaged and the handicapped. Given that the approach is to spend so little on social and council housing, the question is: why should those who are not responsible for the financial crisis and the recession be forced to bear the burden of paying for it? That question is never answered. The Department for Work and Pensions’ own risk assessment shows that the benefit cuts are hitting the vulnerable, the sick, the young, and the low-paid. That whole package, plus the other changes, results in fear, homelessness and insecurity. It will also result, particularly in London, in a kind of ethnic cleansing, because the cuts will hit racial minorities who have bigger families harder than other sections of society. People will be forced out to the private rented sector.

The private sector is not rent controlled. We need to restore rent control and regulate conditions more tightly to control the incipient development of Rachmanism and exploitation. Rents are too high in the private rented sector, yet in the public rented sector they are being raised to 80% of private sector level.