Damian Collins
Main Page: Damian Collins (Conservative - Folkestone and Hythe)
Sheila Gilmore
As recently as February 2009, about 1 million private rented tenants claimed housing benefit. By October 2012, that number had risen to 1.7 million. Far more people in the sector need to claim housing benefit, largely because they are on lower wages or have lost working hours because they are on poor contracts.
Damian Collins (Folkestone and Hythe) (Con)
Does the hon. Lady believe that mass immigration has contributed to the massive increase in demand for social rents and housing benefit?
Sheila Gilmore
No, I do not believe that. In fact, the number of recent immigrants who are housed by councils and housing associations is very small. The problem is the lack of building of affordable housing.
Government policy is about to stoke that problem further. They have decided to say that affordable housing is housing built at 80% of market value. They can therefore say, “We have replaced housing. We have built affordable housing.” However, that will stoke the problem further, because more people in that form of housing will have to claim benefit to afford it. The policy does not make sense. In 10 years’ time or even five years’ time, if that continues—hopefully it will not continue, because there will be a change of Government—people will turn around and say, “Why did the Government do that? Why did they yet again put all the onus on revenue and give us an even bigger benefit bill?”
As it turns out, the problem is happening not just in England. There is also a cut in the amount going for affordable housing in Scotland. We are building far more mid-rent housing, as it is called in Scotland. It is about 80% of market value. That is the only way in which housing is being built. I do not see any reason for not having some mid-market rented housing as a supplement to what is there already, but when it becomes a substitute for truly affordable housing, we are storing up problems with the balance of what we are spending.
Much has been made by this Government and the previous Government about the importance of making work pay. The cost of housing is one of the essential determinants of whether work pays or not. People get trapped by the lack of cheap, affordable housing. As my city is so short of housing, we introduced a scheme which solved the crisis for some people. I recently met a constituent who had separated from her husband two years ago. She had two children and no home to go to, so she applied to the council as homeless. She was in a crisis—the relationship had been violent—so she accepted a property under a private sector leasing scheme, in which the council leases properties from the private sector. It was a relief to her at the time, because she had a safe home for herself and her daughters. She was not working at the time; her life was in such a crisis that she had had to give up her job as well as her home, so she was receiving housing benefit to pay the very high rent.
Two years on, my constituent is ready and anxious to get on with her life. She wants to get a job, but she is stuck with a rent that is more than double the rent of a council or housing association house. She has been advised that if she got a job she would still get some housing benefit to help pay the rent, but she would still have to pay as much rent—from a fairly average wage—as she would have to pay on a council property. Everybody would lose out. My constituent would lose out, because it might not be worth her while to get a job, and taxpayers would lose out because they would still have to pay half the rent for her to live in a property that she does not now particularly need or want to live in.
We have to solve this problem and we have to do so quickly. The best way is to start investing directly in the building of affordable housing. If we do not do that, we will never be able to tackle the housing benefit bill. If that had been in the Queen’s Speech, we could have made some real progress for many people. My constituent is not alone, she is just a recent example of how people can get stuck. In fact, that is her word—she is stuck and she would have welcomed some progress from the Government in the Queen’s Speech.
Damian Collins (Folkestone and Hythe) (Con)
Several hon. Members have touched on the initiatives that the Government have put in place to try to address the cost of living. I am pleased that my local authority, Shepway district council, has frozen council tax for three years in a row—as Kent county council did this year too. Measures to stop increases in fuel duty have had a direct impact on the lives on millions of people in this country, and I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on his campaign on that issue. The Government have also taken the first steps any Government have taken to bring in measures to guarantee that consumers receive the lowest energy prices. I welcome all those measures.
One issue that has not been addressed in this debate is the Labour party’s commitment to increase borrowing—it says in the short term—as part of its programme for government. It is very reluctant to be drawn on this, but it should be drawn on it, especially in a debate on the cost of living, because of the consequences it would have. The country direly needs to live within its means and reduce its debts and deficit. If it deviates from that track because of the Labour party’s desire to spend more money—money that it does not have—we have to wonder how the money will be raised. Will it be raised in taxation—by asking people to pay higher taxes—or by higher borrowing, which will be passed on to consumers in higher mortgage rates? We have been down this track before and we have seen the consequences, which is why the Opposition are so reluctant to be drawn on the consequences of their policies and what they will mean for people’s lives.
Huw Irranca-Davies
This morning I was at a breakfast meeting with a contingent from the Civil Engineering Contractors Association, which has published a report that advocates increasing expenditure on infrastructure, not necessarily through the public sector but through imaginative use of private sector investment, including being underwritten by the Government at a time when interest rates are at a record low. Does the hon. Gentleman approve of that?
Damian Collins
I am grateful to the hon. Gentleman for his point, because it provides a neat segue into what I want to talk about next. Of course, the Government welcome investment in major infrastructure projects that improve the competitiveness and underlying strength of the economy, and there are numerous schemes where that is taking place. If I look at investment in jobs in my own area through the work of the regional growth funds, I see that £35 million is being spent in east Kent to create new jobs. Businesses such as Wooding in Hythe in my constituency have already received £1 million and they are hiring people on the basis of that investment. Of course we welcome that type of investment, but we are hearing from the Labour party a desire for a short-term, temporary cut in tax to act as a stimulus to the economy, with no real sense of where that money will come from or how it will be costed and paid for. My concern in this debate on the cost of living is that the people who will end up paying for those policies will be the consumers. People will pay through higher taxes, and higher interest rates on their mortgages if they are homeowners.
I will come back to the point made by the hon. Member for Ogmore (Huw Irranca-Davies) on imaginative partnership with the private sector to increase investment, which also touches on the speech made by the hon. Member for Edinburgh East (Sheila Gilmore) on the housing sector. One of the biggest elements of the cost of living is housing. Rent, servicing a mortgage or finding the money in the household budget to try to save and buy one’s first home are all significant costs. I am attracted to schemes where local authorities seek to work with institutional investors to fund the building of new homes that will be run by arm’s length management associations and councils, effectively producing a private partnership with a local authority to build new council houses and to borrow money from an institution over a 40-year to 50-year period. That is a sensible thing to do, and is what any organisation would do. If it is ultimately responsible for paying the rent through housing benefit, why would it not seek to control the end product too? That will give us more opportunities not only to provide people with lower cost homes to rent, but, in time, for even more people to benefit from the right to buy scheme, and for the money to be reinvested into providing new, high-quality homes. That would a good thing: it would reduce some of the costs of renting and be a good thing for the housing market as a whole.
Such a policy would also help to do something to address the scandal of the poor quality of many homes in the private rented sector which are offered to tenants claiming housing benefit but are not fit for habitation. Local authorities should use powers, which they already have, to take action against those landlords. I welcome, in part, the measure in the Queen’s Speech that will create an obligation for private landlords to ask whether people seeking accommodation are qualified to receive it. That will ensure that they are in the country legally and not in breach of the law. That is a good thing, because we will probably find that it is the rogue landlords who are happy to take the money and not ask any questions, and who are making money not out of people who are here illegally, but from some of the poorest people in our society. We should clamp down on that, because it is public money, paid out through housing benefit, that they are profiting from, and we should take firm action against it.
Geraint Davies
Does the hon. Gentleman agree that most landlords have a single property and rent it out themselves? They simply do not have the resources to verify whether a prospective tenant is an illegal immigrant. Making those landlords illegal is outrageous, quite apart from promoting racism.
Damian Collins
I disagree with the hon. Gentleman. I think it is very easy to ask those questions and for those checks to be made. Most landlords will probably say that they are paying very large sums to agents to act on their behalf to make these checks. Hundreds of pounds are paid on every transaction by both the tenant and the landlord in managing the private rented sector, so I do not see why those questions would not be asked. Legitimate landlords have nothing to fear. It will be the rogue landlords, who rip people off and exploit the illegal status of some of the people they give accommodation to by keeping them in cramped and unpleasant accommodation, who will have something to fear. It is good for the country that those people fear such intervention.
Many people, particularly young people saving to buy their first home, find the size of the deposit required prohibitively large, and the attempt to save that extra money undoubtedly bears on their cost of living. The Help to Buy scheme, which will support people’s deposits when they buy a new home, must be welcomed as a measure to help many people on to the housing ladder and to give them a far better standard of living and accommodation. This positive initiative will also have a beneficial legacy for the construction sector, giving people greater confidence to build on the property sites currently held in land banks that have planning permission, but which are not being built on because people are concerned that there are not enough people to buy. This scheme will give them the confidence to build, knowing that people will be able to afford the homes because their deposits will be covered.
Finally, on a subject linked to housing towards the end of people’s lives, the Care Bill will end the requirement on people to sell the property for which they have worked and saved all their life in order to meet their care costs in later life. It is unfair that people who have made sacrifices throughout their lives are asked to make the final sacrifice of selling their home to pay for some of their care costs, when others are not put in that position. It is right to cap those contributions: it will reward people’s hard work and aspiration and send out a positive message about the sort of country we are and how we want people to make those sacrifices, work hard and put something by for themselves and their family to have and use later in life. The Care Bill is a positive step in that direction.
I welcome and commend the Queen’s Speech and today’s debate.