Emily Thornberry
Main Page: Emily Thornberry (Labour - Islington South and Finsbury)Housing and Planning Bill
Emily Thornberry Excerpts
Greg Clark
My hon. Friend makes an excellent point. I hope I have made it clear from the Dispatch Box today that the constructive approach that we found easy to accommodate with the housing associations is absolutely open to representatives of London local government—indeed, we are already having some productive conversations.
Let me deal with starter homes. During the last 20 years, the proportion of homeowners under the age of 40 has fallen by a third.
Greg Clark
I think the hon. Lady will agree, on reflection, that I have already been generous in giving way to London Members.
Mr Speaker
I hope it is a genuine point of order. I say that as much in hope as in expectation, but let us hear from the hon. Lady.
Emily Thornberry
The point of order is this, Mr Speaker. The Secretary of State speaks again and again about the Bill’s importance in relation to London, but will not take any interventions from any London Members on the Opposition Benches.
Mr Speaker
The hon. Lady has, in a sense, advertised the claims of London Members, and I am sure that they will be at the forefront of the Secretary of State’s mind.
John Healey
My hon. Friend knows as much about this as anyone in the House, and in her characteristic way she has put her finger on a fundamental problem that the Secretary of State and his Ministers are now facing. It is a problem of trust. Just three years ago, councils and housing associations were given a 10-year guarantee on the rents that would be in place for them and the properties they manage, so that they could plan their businesses’ development and maintenance. How can they now trust this Secretary of State and his Ministers to keep their word in the future? This is a serious problem for housing associations. How can they trust a voluntary deal, the terms of which are not in the Bill? They have no guarantee that the Secretary of State or his successor will not welch on the deal, or that the Chancellor of the Exchequer will not march in with his big boots to override the Secretary of State. Unless the guarantees that they are seeking as a basis for this deal are placed in the legislation, I fear the worst for them.
Emily Thornberry
Does my right hon. Friend know—has the Secretary of State perhaps told us—what will happen to the 261 National Housing Federation members that are not represented in this deal?
John Healey
This is a problem. We are not being given the details of the so-called vote taken by housing associations to enter this voluntary deal. The deal does not reflect the majority, or certainly a large number, of associations, which did not respond or were not consulted. There are serious questions for the Secretary of State about this. Despite many of the housing associations saying that they do not want to sign up to the deal—or not having said that they will do so—the Bill will nevertheless give regulators the power to enforce compliance by those housing associations on “home ownership” measures. How can we take at face value the words of Ministers about this being a voluntary deal for housing associations when behind it lies regulation that will enforce compliance? And if the right to buy is not put in place, what will happen to the tenants? The Secretary of State hardly mentioned them in his speech. How can there be a “right” to buy without the legislation to create that right? Without that legislation, and without giving tenants the ability to challenge landlords if they say no, this will not be a right to buy; it will be a right to beg to buy.
Emily Thornberry (Islington South and Finsbury) (Lab)
I represent an inner London constituency. It is the most overcrowded in the country. We have very little green space. We love the little bit that we have, but all our development sites are brownfield sites. Despite the coffee bars and the Georgian squares, we have the third worst child poverty statistics in the whole country, and the gap between rich and poor is getting worse. Many of our problems arise from housing. Will the Bill help my constituency? No, it will not.
The Bill will damage the supply of affordable homes across the country, and in Islington its effects will be particularly severe. Much has been said about forcing local authorities to sell the higher-value homes. I have a great deal to say about that, but in the time available I will not do so today. I have much to say about the effects of a policy whereby an ordinary three-bedroom council flat would cost £520,000.
The Government ask rhetorically why higher earners should live in social housing at subsidised rent, and presumably it could be asked why higher earners should be subsidised to buy. The answer is that without a subsidy it is not affordable, but what is sauce for the goose is sauce for the gander. High earners are defined as households earning £40,000. In some areas where social rent is only 50% below market rent, the hike in rents would be hard to meet, but not necessarily impossible. In Islington, where private rents are more than 200% higher than social rents, this creates a major problem. Shelter has said that London renters need an income of £70,000 to make ends meet. What would happen to a Londoner who lives in a household with an income of between £40,000 and £70,000? What would happen to that group of people?
For example, what would the Chancellor say to a constituent of mine? She is a single parent of three and earns £32,000. Her eldest boy is about to start work at a fast food restaurant on the minimum wage, so he will take home £10,000. What would he counsel her to do—to tell the boy not to work, because otherwise their rent will double? This is not a policy of a party that calls itself the party of the workers. He cannot leave home, because there is no affordable housing available for fit young men, so what should the family do? The Minister should remember that we have 19,000 people on the housing waiting list in my constituency.
The second ill-thought-through policy is on starter homes. As I understand it, starter homes involve a subsidy of at least 20% for new homes for first-time buyers, and the homes must not cost the starter more than £450,000. How does that apply in the real world of my constituency? Let me explain. In Islington, we build about 1,500 new homes. That is pretty good going as we do not have a lot of space. At the moment, the biggest development is the 1,000 homes being built at City Road Basin, but a one-bedroom flat there will cost £860,000. Is that an appropriate starter home?
What is the answer? Should we have no starter homes—should we ignore a development of such a scale, and say that it should have no affordable homes of any sort—or should we put in a subsidy? The Government intend to put in a subsidy of at least 20%, but to bring the price down below £450,000, the person buying the home would presumably get a 50% discount. That will be pretty lucky for them when they sell it in five years’ time, because they would make a profit of at least £400,000. I must say that I do not criticise the person who would take advantage of that, but is there not a better way of spending money on affordable housing in somewhere such as Islington, which has 19,000 families on the waiting list and the third worst child poverty statistics in the country?
The truth is that in order to pay for a £450,000 flat, we are talking of a household income of about £100,000, with £100,000 of savings for a deposit if the household cannot get a 95% mortgage. The fact is that such people are already at the top of the list. They will already be in a position where they could buy a flat, so why are we giving them such huge assistance when we have such a housing crisis? I would be terribly grateful to the Minister if he listened to me, because I am trying to measure the Tory rhetoric against the reality for those whom I represent.
As I now have the time, let me say something about the sell-off of housing in my constituency. Housing associations will be forced to sell their housing. Will that be replaced within my constituency, or will housing associations simply take the money and run and build elsewhere? When my local authority is forced to sell off all new build that is being built in my constituency, what will happen? Will the Minister say how many social housing flats will be left in Islington in five years’ time? Frankly, the only affordable housing in a constituency such as mine is social housing for rent, because prices are so high that no one on an average income could live in an area such as mine without the assistance of social housing.
We have already had the nonsense of the Mayor of London saying that 80% of market rent is affordable; it is not affordable. With the new planning regulations and the priority being given to the new starter homes, the problem now is that no other forms of real affordable housing will be available in my constituency.
Kate Hoey (Vauxhall) (Lab)
Does my hon. Friend agree that fully mutual co-ops are a particular strand of all this? I have a very large number of them in my constituency. If they are not exempted from all three really difficult policies, the Bill will, quite honestly, crucify all our co-ops.
Emily Thornberry
I had not thought of that very serious point. I must say that that is another point on which we should get an answer from the Minister.
If the only affordable housing on brownfield sites that we have are these extraordinary starter homes—of up to the amounts that they are selling for, for the sort of people I have identified—for which planning permission must be granted, how is my local authority ever going to get the 19,000 families on the housing list into any form of affordable home? It is no wonder that the housing benefit bill is going to continue to go up in London. In the last five years under the coalition Government, it went up from £5.3 billion to £6.1 billion. How much worse will it get before the Government start taking seriously the idea that affordable homes in central London need to be social rented housing? There is nothing in the Bill that promotes social rented housing—affordable housing for my constituents.
About 40% of my constituents live in social housing. Where will their children go? They were born and brought up in Islington. Should they not be allowed to remain in the communities in which they were born? It is not fair.
This Bill is unfair. It does not look at the reality of inner London and it ought to.