Jeremy Corbyn
Main Page: Jeremy Corbyn (Independent - Islington North)
Jeremy Corbyn (Islington North) (Lab)
I beg to move,
That this House has considered the matter of social housing in London.
I thank the Backbench Business Committee for making it possible for this debate to be held. Social housing in London is obviously a crucial issue. I appreciate that Members outside London are busy with the elections in their communities and therefore cannot take part in the debate.
The points that I want to make are probably incredibly obvious ones about the desperate situation of many people facing housing issues in London. I imagine that any London MP of any party would confirm that housing is the biggest single issue that we all face. The vast majority of our constituency casework is housing-related in some way, and the wider implications for society in London are often housing-related as well.
Housing issues in London are not new. It is the capital city. It has been a very fast-growing city. It had an unenviable reputation in the 18th and 19th centuries of being the fastest-growing city in the world when huge quantities of very poor-quality buildings were thrown up. A whole industry developed of slum landlords. The great social reformers of this country often started their work in the east end of London. I think of Charles Booth, Angela Burdett-Coutts and so many others, who did so much to try to improve the levels of housing stock. In the 19th century, there were serious reforming moves. Housing charities were set up to improve conditions, but they were always in competition with the viciousness of the private sector market, in which excessive rents were charged, with the potential to make huge profits.
How did London’s housing stock ever improve? The answer is a combination of things. There were the campaigns of the great social reformers, there was a growing social consciousness but, above all, there was the development of council housing in the early 20th century. I get very angry when I read in some of the weekend intelligentsia-related newspapers that council housing is a thing of the past, or that council housing models are outdated. Council housing made it possible for millions of people in London and throughout the country to live in decent housing and bring up their children in a safe, secure, affordable environment—something that we all aspire to.
Mr Mark Field (Cities of London and Westminster) (Con)
I do not disagree with the hon. Gentleman, but does he recognise—I see it particularly in my constituency and other inner-London areas—the importance of what has been done by many philanthropists, the most obvious of which is the Peabody Trust, whose house building and flat building programmes have stood the test of time? They remain some of the most exciting and sought-after social housing in many of our constituencies, 120 or 130 years after they were first built.
Jeremy Corbyn
The hon. Gentleman is referring to George Peabody and the Peabody Trust, which has a very large number of properties in his constituency, that of my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) and many others. The Peabody buildings were of very good standard—very high quality—and they have stood the test of time. It pains me to the quick when I see the Peabody Trust and others being forced, because of their financial situation, to rent at commercial rents or sell off properties that were built for people in desperate housing need. That is not what George Peabody or others wanted to do, and we should look at that.
Frank Dobson (Holborn and St Pancras) (Lab)
In my constituency there is a block called Parnell house, which was built in 1848, before George Peabody. The Peabody Trust took it over some years ago and has run it fairly well, but recently has started selling into the open market flats that have been social housing since 1848. That does not really help people in desperate housing need.
Jeremy Corbyn
It seems a sad reflection on the great revolutions of 1848 that we should expunge them on the altar of the housing market in 2011. I shall return to council housing in a moment.
There were consistent campaigns and demands for security of tenure for people beyond council housing. Council housing has traditionally provided the most secure form of affordable tenancy and has provided for effective, stable communities. I commend those councils—I choose Camden because my right hon. Friend the Member for Holborn and St Pancras was leader of the council—which did a high level of building when they were able to. They also adopted a planning policy that has ensured that there are stable, mixed communities stretching right into the Camden part of central London—working-class communities alongside the business areas of central London. We should be proud of that record in this city, and I would like to see it reflected in all parts of London. The same does not apply in the case of Kensington and Chelsea and—I hesitate to say it with the hon. Member for Cities of London and Westminster (Mr Field) present—in Westminster where the policies have been different. I think one should commend boroughs such as Camden.
Mr Field
While I accept that the policies are somewhat different, and I suspect that most of my residents in Westminster are rather glad of that, there is a more serious point to be made. The hon. Gentleman rightly refers to stable, mixed communities. Does he not recognise that the London market has become ever more polarised? London is not just a capital city but a global city. That polarisation means that, for want of a better phrase, the squeezed middle is an ever bigger group in London. There are those who simply cannot afford to get on the ladder even if they are earning multiples of the average weekly wage and there are those who are so impoverished that they can qualify for social housing. In my constituency the Peabody Trust is trying to create a mixed community, by ensuring that there are in those communities, for want of a better term, yuppies—relatively well-off people in their 20s—who may only be short-term tenants, for three or five years, until they are in a position to afford their own home.
Jeremy Corbyn
The hon. Gentleman touches on an important point. In my borough, there are 15,000 names on the list of people who have applied for, and need, council housing, but only 5,000 of those are on the list of those who are able to bid—in other words, to make an application. The number of those who are likely to be successful is probably very small indeed. Single people in London cannot, for the most part, even get on a housing list.
Some 30% of people in my constituency are in private rented accommodation. A large number of them are young, single people who pay extraordinarily high rents, although they are not necessarily particularly well paid; they are earning between £18,000 and the low twenty thousands a year. They are probably spending 60% or 70% of their take-home pay on housing. That is an extraordinary figure. I do not have the comparative figures for the rest of Europe, but having talked to friends and colleagues about the issue, London seems to be one of the most expensive places in the world to live, in relation to income levels.
If we do not address the whole problem of the cost and supply of housing, London will become a divided city, and the people who do all the vital jobs in the ambulance service, hospitals, the Post Office, gas, electricity, road maintenance, and street cleaning—the people in all those essential professions—simply will not be able to live in London. It is extraordinary how fast social changes are happening in London. I met a street-sweeper in the borough who commutes in on a 45-minute train journey because he cannot afford to get a place anywhere near the borough. I see Labour colleagues nodding. I suppose that we all support the principle of housing for special grades of workers—priorities for nursing, the police and so on. There is a point to all that, but the real point is the general question of the supply and affordability of housing.
Mr Field
I thank the hon. Gentleman for being so generous in giving way. I would like to associate myself with what he just said, and I think many other Conservative MPs with London seats would, too; it is a problem that we all feel acutely. For some years, that stark divide in pockets of inner London has been part and parcel of our concerns on housing, but he is right to say that there has been phenomenally rapid demographic and other change. The phenomenon that he identifies now applies virtually throughout London, including in what might in the past have been regarded as the leafier suburbs of outer London.
Jeremy Corbyn
Absolutely. London is a rapidly changing city, and that is, in many ways, part of the joy and attraction of it, but it falls to local government—to boroughs, the Mayor, and the Greater London authority—and central Government to recognise that if we want London to remain a successful, cohesive, coherent city, we have to address the issue of the provision of social housing in London. Otherwise, we will be looking at a city moving into decline, with greater division. It is a very serious issue.
I think about exploitation, the apocryphal stories of what Rachman did in the 1950s and ’60s in Notting Hill, and what was done by various other appalling people who used the rapidly rising property prices to winkle out tenants so that they could resell the buildings. I am not saying that the problem has quite come back to those levels yet, but excessively expensive private rented accommodation that becomes unaffordable for poorer people leads to landlords not maintaining, supporting, improving or looking after properties, and virtually forcing people out of them so that they can rent them out at a much higher rent. Later, I shall make some points about the need for intervention in the private rented sector, because in many ways, in London there has always been a conflict between the social desires of many people to ensure good-quality, decent housing on the one hand, and the pernicious effect of the property market and rapidly rising property prices on many people across London on the other hand.
On inequality, my borough of Islington commendably established in May last year a fairness commission, which has been taking evidence at very well-attended public meetings in community centres, schools and so on across the borough over the past year. It had a very effective final meeting last week, in which a whole paper was put forward on how public policy issues can be addressed. I quote a short part of the section on housing:
“Ensuring that the allocation process for social housing is transparent and effective is essential for addressing fairness in housing. Islington has more than 12,000 people on the housing register but only 5,000 households whose level of need is sufficient for them to qualify for Choice Based Lettings.”
The paper goes on to make recommendations on improving efficiency, changing the allocation system and under-occupation. That underlines the point about the need for new house building.
There is also a problem about the number of people living in private rented accommodation who are in receipt of housing benefit in London. As I say, 30% of my constituents are in private rented accommodation, and the number is rising fast. The proportion of owner-occupiers is now below 30% and falling. Nationally, the figure is falling a bit; in London, it is falling faster, and in inner London it is falling very fast indeed. In the next five to 10 years, we will probably get to the point where 25% or even 20% of housing in inner-London constituencies will be owner-occupied. The majority of new tenancies are not social tenancies, but private rented tenancies.
People who receive or are entitled to housing benefit are suffering grievously because of the Government’s announcement on how they, in their infinite wisdom, will meet the problem of the increasing costs of housing benefit—and those costs are huge. I do not deny people’s right to apply for housing benefit, but there is a public duty to question the cost of that benefit. That duty should fall on the question of how much rent is paid to landlords, rather than result in the punishment of the tenants in the properties.
The London figures show that local housing allowance rates in my borough are £245 a week for one bedroom, £290 a week for two bedrooms, £340 a week for three bedrooms, and £400 a week for four bedrooms. To some people, that sounds an awful lot of money, and it is, but the reality is that many people in desperate housing need are living in private rented accommodation that is paid for by housing benefit. On the anniversary of their application, all those housing benefit payments will be reviewed and—there is not much discretion available to the local authority—housing benefit will be reduced, which causes a terrible problem for the people in receipt of it.
I shall give the example of a constituent whom I know well, but I will not give their name as that would be invidious and wrong. In November 2010, the local housing allowance for the four-bedroom property that they live in was £700 a week. That is to be reduced to £400 a week under the housing benefit changes. There is no way that that family can find the difference. They have lived in the property for a very long time. They have children in local schools, they are very much part of the local community and they have caring responsibilities and all the things that go with that. They will be forced to move, which is damaging to them, the children, and the local community.
Mike Gapes (Ilford South) (Lab/Co-op)
My hon. Friend makes some very important points. The knock-on consequence of those people being forced to move is that they will look to relatively cheaper private rented accommodation in outer-London boroughs, including Redbridge, where we have thousands of people on the housing list and almost no social housing. We have a lot of private rented properties, but in some cases they have appalling landlords and terrible letting agencies. The local authority has stopped using them, but inner-London boroughs will have to use them. They will send people out, and those people will need school places. Hundreds of young children in my borough cannot get a school place at the moment. This is the wrong policy at the wrong time, and it will have terrible consequences.
Jeremy Corbyn
I can only agree. If the problem were limited to housing benefit in the private rented sector, that would be bad enough. However, in parallel with the cut in housing benefit payments, the Government have refused to introduce rent controls or even countenance the idea of controlling private sector rents. I hope that we will deal with that when we return to government in 2015 as a new Labour Government—not “new Labour”, but a newly elected Labour Government; I do not want anyone to think that I have changed my ways.
Jeremy Corbyn
Possibly, yes. I would like that Government to bite the bullet, just as Harold Wilson’s Government bit the bullet in the 1960s and 1970s, and were prepared to introduce rent controls and security of tenure in the private rented sector. That policy area needs to be developed.
Another important issue is the increase in the notional rent levels for local authorities and housing associations to 80% of market rates. That has had absolutely devastating effects on the affordability, or otherwise, of council properties in areas where councils choose to charge 80%. As my hon. Friend the Member for Ilford South (Mike Gapes) intervened on me, I shall cite the case of his borough. The average income in Redbridge of non-housing benefit tenants is £381 a week, and the average weekly rent is £102 a week. The median market rent of 80% of 2010 levels is £160 a week, so tenants in Redbridge are looking at a £60 a week rent increase, which is pretty bad, and I question the affordability of paying £160 a week on an average income of £381 a week.
Other boroughs are in a far worse situation. In Kensington and Chelsea, average income for non-housing benefit tenants is £370 a week, and current average rent is £113 a week, with 80% of market levels at £440 a week—in other words £110 a week more than such a tenant earns, so totally unaffordable. The borough with the lowest average income in London is Barking and Dagenham, where income levels in 2010 for non-HB tenants were £329 a week. Current average rent is £91 a week, and 80% of market rates is £148 a week. Even in Barking and Dagenham, which is regarded as “the most affordable place in London”, we are looking at 50% of pay going on rent alone in the public sector, never mind the private sector. The figures are available for every borough, and they make very grim reading indeed. The discretionary payments to London authorities to try to ameliorate the change to housing benefit should be much greater and more permanent, and the Government and the Select Committee on Communities and Local Government should look at rent controls and security of tenure in the private rented sector.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
My hon. Friend is making a powerful case for the social housing policy that Opposition Members strongly support, and I know that some Government Members do, too.
In Tower Hamlets, one of the poorest boroughs in the country, 80% market rents around Canary Wharf, which sits right in the heart of my constituency, are astronomical for ordinary people. If local authorities and housing associations apply the 80% threshold, they will drive local people out of the area where their families have lived for generations. In the case of the Bangladeshi community, for example, that area constitutes their arrival point, so they will no longer be able to stay within the bounds of their own community.
Jeremy Corbyn
Absolutely, and I endorse what my hon. Friend said. The average for Tower Hamlets is £248, but if it is assessed on an extremely local level—housing around Canary Wharf or at the edge of the City of London around Spitalfields—rent will become astronomically expensive and there will be rapid social cleansing.
What happened with Lady Porter in Westminster some years ago was regarded as appalling and disgraceful, and was social cleansing. People are coming to me for advice—and I am sure this is true for all London MPs—in desperation, frightened after what has happened, scared of where they are going to go and worried about the disruption of their children’s lives as they are forced out of private rented accommodation. We cannot sit back and watch the private rented sector grow rapidly in London without a greater sense of responsibility and intervening to protect people living in that sector.
What is the solution? Clearly, it ought to be the building of more homes for rent. I remember the halcyon days when my hon. Friend the Member for Edmonton (Mr Love) and I were members of Haringey borough council, and we berated the council leadership—we did a lot of that; they probably deserved it—for not building more council housing. However, I take it all back and apologise. In 1979, Haringey council built 1,000 council house dwellings. Other boroughs did broadly the same. A lot of that building was very good; a lot of it was homes with gardens; a lot has become very nice properties which, because of right to buy, have been sold on and have become very desirable properties indeed. I do not have a problem with people living in desirable properties—I am glad that they do—but I want everyone to be able to do so, with some security, and I want children to grow up with enough space, preferably with a garden. The achievements by many London boroughs at that time are something that we should applaud and seek perhaps to repeat, because there is a desperate need in London.
Mr Andrew Love (Edmonton) (Lab/Co-op)
My hon. Friend mentioned 1979, which has a resonance for many of us, because it was the year in which Mrs Thatcher was elected. If we look at the history books, we see that in 1980 she made massive cuts to housing investment programme capital funding. Does that have anything to do with the problems suggested by my hon. Friend?
Jeremy Corbyn
The cuts in the Budget are even greater than those made by Margaret Thatcher’s Government in the 1980s. I remember very well the points that my hon. Friend made, because at the time, I watched housing demand rise and new build virtually disappear. The only surviving new build for affordable rent was undertaken by housing associations. I was disappointed that the Government who came in in 1997, who invested a great deal in improvements to existing council stock and who did a lot about homelessness and housing rights, did not in the early days do anything like enough to invest in new house building. I hope that that is something that we will not repeat when we return to office in 2015, because I want to see a process of new build.
It is difficult for local authorities to undertake new building at present, but I want to pay tribute to Islington council and James Murray, the executive member for housing, as they have managed, despite all the difficulties, to squeeze £10 million a year out of the council budget to invest in new build for rents at existing levels—not the 80% level. I applaud them for doing so. I want other boroughs to do so, and I want the Mayor of London, whoever it is—this Mayor or, hopefully, Ken Livingstone in future—to use his powers to return to building for social housing need, which has a huge benefit for people across London.
Mr Mark Field
I thank the hon. Gentleman for giving way again. He is making a thoughtful speech, and I hope that he will forgive me if I return to a point that he made earlier and the general thrust of his concern about the private rented sector. Does he share my worry that one of the difficulties in housing policy, going back to the institution of rent Acts in the first world war, is that too often it has just been an Elastoplast in trying to solve the most recent problem, which has been looked at in a small way? Does he have any thoughts about the huge explosion in the buy-to-let market, which is one reason why there has been an enormous increase in the private rented sector in his constituency? As London is a global capital, a huge amount of foreign money is coming in to buy up large blocks of flats and other properties. Do we need to look at that, and what suggestions can he make about the way forward?
Jeremy Corbyn
I thank the right hon. Gentleman for that extremely valuable point. In London, at one end of the scale, somewhere near Hyde park, there is the world’s most expensive apartment. I cannot remember the exact figure, but it was around £1.5 million for a very small apartment. I checked my own mortgage capability and I did not seem to get anywhere near to it. At the other end of the scale are former council flats or houses that have been bought under right to buy, sometimes with the assistance of fairly disreputable or dodgy people who offer money to help people undertake that, which are then rented out, on housing benefit, at levels 200% to 300% higher than the neighbouring council rent. That makes me extremely angry every time I come across it, because they were built by the taxpayer for people in housing need and now we are allowing someone to make a great deal of profit out of them.
There are a number of ways to try to deal with that. One, which seems worth considering, is that a sitting tenant who buys a former council property under right to buy should be allowed to rent it out only at council rent plus 10%, taking away the incentive to do that. There are other incentives to consider, but we must be serious about this. The new build that councils and housing associations want to undertake at the moment can be funded under the Government’s new regime by doing what Islington is doing, which is scraping around to find what is a modest amount of money compared with the need, but nevertheless welcome, or by raising rents to 80% of market rates and using that for investment in new build, which makes housing association or council places unaffordable for those who desperately need them. As a result, people who are offered a council place will be unable to accept it, particularly if they are in work, which is regrettable. Housing associations are being told to build for sale and for commercial rent, and if they have any money left, to build a bit for social renting.
I seem to remember housing associations being founded on the principle of self-help to provide secure, good-quality accommodation for people in housing need. I am now being told by their chief executives that they are in a bind, which I understand and which is not of their making, and have to go down the road of becoming essentially house-building companies, where there might be the equivalent of a section 106 add-on with a bit of social housing at the end of it. That will not solve London’s housing problems.
Mr Mark Field
The issue in London today is: what is housing need? I know it sounds absurd—the hon. Gentleman was one of the first to ridicule the current Mayor of London when he talked about people on £60,000 a year being in housing need—but this is part of the problem. Many people working in our constituencies simply cannot afford to live anywhere near, not even central London, but London as a whole, and have to commute long distances despite earning multiples of the average. They surely also have a housing need, and it is that housing need in the modern day that many of our social housing providers are trying to recognise in balancing their responsibilities to ensure that we have proper community cohesion within central London.
Jeremy Corbyn
Obviously people on what are seen as relatively high incomes do have housing needs and are paying, as I outlined earlier, incredibly high levels of rent in order to survive, as a result of which they cannot save and therefore, even if they wanted to get into the owner-occupied market, simply could not do so. A young couple or single person in London earning £25,000 a year and paying £500 a week for a flat has only a limited ability to save and so will stay in the private rented sector for a very long time, if not for ever. People who do buy into the owner-occupied market usually rely on modest levels of inheritance to put down the deposit to do so. We are making housing unattainable for people on relatively high incomes, as the hon. Gentleman points out.
Mr Andy Slaughter (Hammersmith) (Lab)
The definition of “affordable” in Hammersmith and Fulham now goes up to £80,000 a year, and I am sorry but I do not accept that that is reasonable. Let us put one myth to bed today, and that is that Boris Johnson is in some way committed to affordable housing in London. His own figures show that there will be fewer than 2,000 affordable housing starts this year and none next year.
Jeremy Corbyn
I pay tribute to my hon. Friend for the way in which he has represented his constituency and pointed out what the council in Hammersmith and Fulham is doing, and what he is trying to do to meet the needs of people who are in desperate housing need.
I come back to the issue of people on housing waiting lists. What is the route for a homeless family, or a concealed homeless or about-to-be-evicted homeless family, in an inner-London borough, or probably any other London borough? If they go to the council and present themselves as homeless, they will probably get a hostel place. Hostels are grim places and have a devastating effect on the psychology and well-being of children who go into them. If they are there for a long time, it is an awful experience. If they knew it was for one, two, three weeks or a month, and that at the end of that they would have a secure council flat, that would probably be bearable. But if they are there for six months or longer and are told that the only pathway out is to go into private rented accommodation, and they ask me as their MP whether to accept that, I have to say that they must, because if they do not the council will have absolved itself of its responsibility to them.
A member of that family will say, “But Jeremy, housing benefit will have to pay this huge rent, and that means I can’t get a job, otherwise I will lose the housing benefit.” They are moving into the most awful bind. Quite often they are placed in flats in the constituency of my hon. Friend the Member for Edmonton—no reflection on him; quite the opposite—and they then come and tell me what the flat is like: slum landlord, inefficient heating, badly maintained, possibly vermin infested. They can get no redress from the landlord because the landlord knows for certain that there will be no problem in renting it again through an agency. We report the matter to the local authority but this can go on for years. They move from one private rented property to another until, perhaps five or 10 years down the line, they achieve the gold medal of a council flat. That is a lifetime for a child. They will move primary schools several times, lose their friends and social contacts, their youth club and their networks. That is what is happening to dozens and dozens of children and families all over the city at this time.
I ask the Government: please think through what is happening. Think of the desire for somewhere safe and secure to live. Think of the housing benefit that is being wasted in excessive rents to private landlords, and allow local authorities to do what the old London county council, the Greater London council, and lots of London boroughs of all political parties did, which was to invest in good-quality bricks and mortar of secure housing for people to live in, which they could call their own home and know is their own home. That is what brings about stability in communities. The alternative leads to underachievement, homelessness, crime and the misery of unsustainable communities.
I do not call such building a waste. I listen with interest when building workers tell me that they are being laid off because there is nothing for them to do. There is a housing crisis out there that can be solved by the building of new properties that can put those people to good work and solve the social problems at the same time. London is crying out for a socially responsible approach to housing. Let us not leave it all to the market; The market is what created the problem in the first place.
Joan Ruddock
I am most grateful to my hon. Friend. He anticipated what I was about to say—[Interruption.] There is no need for an apology, because he is so right, and I am glad to have my point reinforced in advance.
I was about to say that when we turned our minds to the housing crisis in the capital, we made progress. In my constituency a raft of Government policies, including the decent homes programme, led to huge improvements in conditions. Many large council estates were completely demolished and rebuilt, removing the tower blocks and providing modern energy-efficient homes in low-rise blocks and, in some cases, terraces with gardens. No longer did constituents come to me begging to be got off an estate or crying because the cold was so intense—because of crumbling windows, poor insulation and lack of central heating—that they could not endure the winters.
Overcrowding continued, however, and new starts did not keep up with the demand, particularly for the larger family-sized units. Making up for the lack of investment under a decade of Tory policy became impossible, because property and land prices rose by an unprecedented degree. However, the effort continued, and the Labour Government concluded their period in office having made available £5 billion of investment for housing in London between 2008 and 2011. As a consequence of the Labour Administration, new starts in affordable house building peaked in 2009-10 at almost 16,000 units. That Labour programme is nearing its completion, however, and hereafter numbers look certain to collapse, as my hon. Friend the Member for Hammersmith (Mr Slaughter) suggested in an intervention might happen.
In addition, Boris Johnson, the Mayor of London, has abandoned Labour’s target of having 50% of all new build as affordable homes. In my borough the number of homeless households in temporary accommodation at the end of March was 924, and at the end of February there were 16,000 on the housing register. Once again we have a growing housing crisis in London.
Jeremy Corbyn
Of the 16,000 on the Lewisham housing register, how many are in a position actively to bid or apply for properties as they become vacant?
Joan Ruddock
Some 50% of those on the list are deemed to have a choice and a need. None the less, the other 50%, who are in the lowest band and so stand no chance of being offered anything, have a housing need too. I can testify to that, having seen hundreds—probably thousands by now—of them in my surgeries. They are on the register because they cannot find an alternative, or because what they have is absolutely unacceptable. They do not, however, have a bedroom deficiency.
I believe that the hon. Member for Brentford and Isleworth (Mary Macleod) genuinely accepts the need in London and seeks to do the best for her constituents, but in all the schemes that the Government have put in place, or plan to put in place, there is nothing that meets my constituents’ need for affordable new units. There is a complete deficiency of supply, and I see no way of it being made up. There is also to be no security for tenants of social housing, and there are to be draconian cuts and changes to housing benefit that will result in thousands, including those at work and renting from private landlords, being thrown out of their homes because rents have become impossible. Those who currently enjoy security and pay substantial housing association rents will find themselves in rent arrears as rents are forced to rise to 80% of the private sector average.
Is no one—Lib Dem or Tory—in this Administration aware of incomes levels in London? How much does the army of workers serving the private sector—business and enterprise—in the capital city earn? In my constituency, people earn as little as £10,000 a year to support a whole family, and the average median wage is £26,500, yet the gross annual income required to afford housing association rents at 80% of market levels ranges from £35,500 for one bedroom to £83,770 for four bedrooms. At 60%, the range is £26,500 to £83,500, and so on. Analysis by Hometrack published in Inside Housing suggests that in London a household income of £44,500 per annum would be required to cover the higher rents.
The difficulties with house purchase are obvious. We all know that the price of property in London, even for a one-bedroom flat, let alone family-sized accommodation, is so many times the annual average income that it is impossible for the average worker in London, on whom all our prosperity and welfare depend, to become a home purchaser. It is a cruel deception to suggest that people should just rely on council housing in difficult periods and be able to move on. It just cannot happen, and we will quickly find ourselves with a revolving door to homelessness.
A divorced woman who was caring for her two children, was in work and had not been able to sustain a mortgage, recently came to see me. She had given up and gone into the private sector—she was not deemed eligible for council or social housing—and was paying an enormous amount of her wages to secure the housing, but the landlord had, as he was entitled to do, increased the rent. She came to me in total despair. She said, “What am I to do? I can’t pay this, I can’t get more housing benefit. Do I have to give up my job? Do I have to take my children into a hostel, after the family breakdown and everything they’ve gone through?” What could I say? There are no council or social housing units available to that family at this moment, and no prospects of one.
I saw another family—one of the most desperate I have seen—where the man, a bus driver, was supporting his non-working wife, who had two very young children, and his mother and mother-in-law, all living together. The two mothers were in wheelchairs. They lived in a maisonette and one had to stay upstairs, never leaving, while the other had to stay downstairs, but for the housing shortage, and for no other reason. Who could not deem that family to be in desperate need of specialised family accommodation? There was no alternative for that family. From lifting the mothers in their wheelchairs and so on, the husband now had a major back problem and faced the prospect of possibly not being able to continue in his job.
Whether they give a description or not, I know that every Member who speaks in this debate will have had harrowing cases of housing need where families are suffering immensely. It is, of course, the children who suffer. Sometimes there are three children in a bedroom, perhaps with asthma or in unhygienic conditions, or perhaps the oldest child is studying for exams in secondary school, but cannot get any peace and quiet because the whole family is living in two rooms.
In the past year in Lewisham there has been a 30% drop in re-lets being made available for social housing offers. The lettings outcome at the end of the year was reasonably positive, but only because of a high out-turn of new builds. However, the local authority, in giving me some information for this debate, said, “There’s a real concern that if re-lets continue to drop—and everything suggests that they will—along with new build decreasing as a result of reduced grant, the available supply to meet need will be dramatically reduced.”
The hon. Member for Brentford and Isleworth said that the Opposition had to offer some solutions. One solution, of course, would be for Londoners to elect a Labour Mayor next year. The Labour candidate, Ken Livingstone, has made a whole raft of suggestions. He has suggested, for example, using the Mayor’s planning powers to negotiate the maximum reasonable amount of affordable housing in private development schemes and making better use of publicly owned land to provide affordable homes in mixed developments, including through an expanding council house building programme.
Joan Ruddock
My hon. Friend is absolutely right. Indeed, I pay tribute to the Labour administration in Lewisham for working so hard with the Mayor of London and social housing landlords in the borough to achieve considerable levels of new build, an effort that was defeated at times only by the price of land, which was often difficult to acquire.
Let me conclude. My greatest fear is that by the time I leave this House, we might have come full circle. We might be back to the kind of housing conditions that I saw and experienced through my constituents when I entered this House in the 1980s. At that time, Londoners and visitors to London were used to seeing those cardboard boxes under the arches on the south bank. There are some people here who will not have those memories, but they are so powerful for those of us who lived in London at the time. I have a terrible fear that instead of getting people into work and making London a better and more prosperous place, where people are properly housed, all the Government’s changes, along with the cuts and everything that goes with them, will return us to those terrible times.
Jeremy Corbyn
Every borough has a duty to deal with homelessness, but is my right hon. Friend aware that although there are usually charities that deal with people who are sleeping rough, the number of rough sleepers and people sleeping in parks or on park benches in London is increasing dramatically? I fear that we are looking again at the misery of the 1980s, when there were all those cardboard boxes.
Joan Ruddock
I agree with my hon. Friend. He uses the term “rough sleepers”, but we should bear in mind that those are often people with a multiplicity of problems in addition to their housing need. They need special programmes, special treatment and special care—provision that the Labour Government made available, reducing the number of people on the streets with additional problems so dramatically.
My greatest fear is not just that those numbers will increase, but that ordinary families and single people who do not have additional problems will be affected. Their only problem will be that they have become homeless because of Government policies, and that there will ultimately be no means for local authorities to cope with the strains and stresses of trying to house homeless people. What will happen is that the acceptance criteria will become more stringent, and many people who do not meet them will end up on the street.
However, I also have some hope that the people of London will not allow that to happen, but will apply sufficient pressure—through their local authorities and representatives, including Members of this House—to persuade this Government that however they thought up these policies, they must meet the test of practical experience, and that test shows that the market will not provide for the people of London. That is not to the shame of the people of London. It is not that they cannot earn their own living and pay their way—they can do all that—but they must have sufficient social housing provision in which to conduct their lives.
John McDonnell (Hayes and Harlington) (Lab)
I also want to apologise for having to leave the Chamber for a period—not because of an appointment with the referendum, but because I have a debate in Westminster Hall, which might be more important. I congratulate my hon. and good Friend the Member for Islington North (Jeremy Corbyn), who I think has become the conscience of the House on this issue over recent decades. He continually reminds us of the plight of many of our constituents. I also thank him for raising this matter because it provides us with an opportunity to get some of the issues associated with it off our chests.
My constituency faces the worst housing crisis since the second world war—perhaps even worse, given the level of demand. To be frank, I cannot cope much longer with my constituency advice surgeries, which I find so distressing. I have mentioned this before, but I find it difficult when I see how my staff are having to cope with it. We have even talked about whether we should be trying to get some counselling for the people concerned. So far as the role of being a local MP is concerned, I find the surgeries to be just about the most distressing experience of my life. I cannot cope with any more families coming in with their children at their ankles, in tears and desperate for a roof over their heads. I simply cannot understand why the sixth wealthiest country in the world cannot solve the problem.
I was born in Liverpool. My dad was a docker and my mum a cleaner. We lived off Scotland road. I have read from sociological studies that it was one of the worst slums in Europe, but we just called it home. I remember the day when we moved out into a council house prefab and I also remember the day when we moved from the prefab into a brick-built council house of Parker Morris standards, with a garden and all the rest of it. We celebrated as a family. I can remember us celebrating getting a decent roof over our heads in a decent environment. When people come to my surgery nowadays, however, I cannot offer them anything. I cannot even offer them a crumb of comfort; it is so distressing.
We are all going to quote our constituency figures. I now have 900 families homeless and 7,600 on the waiting lists. On average, it takes seven to 10 years before they have any real prospect of getting a council house or social housing. In my constituency, people have to be earning £51,320 a year just to afford any prospect of living in an average house—and that is well beyond the means of most of my constituents. The reasons have already been stated. The bulk of council housing in my area was sold off after the Thatcher policies and there has been no replacement. The money was not reinvested; often for political reasons under certain administrations, it was used for other purposes such as reducing the rates in order to get re-elected.
I am equally critical of the last Administration. It must be admitted that one of the most significant failures of the last 14 years under new Labour was the failure to provide adequate housing, although we did many good things, such as refurbishment. As was pointed out by my right hon. Friend the Member for Lewisham, Deptford (Joan Ruddock), that has had consequences for health, education, social well-being, and community life in general.
We had three referendums on the establishment of an ALMO in my area. In two of them, the tenants voted against it. They were invited to a number of parties and receptions. I have never seen so much glossy information material as that with which they were provided. Eventually they succumbed and voted for the ALMO, and they were then transferred to Hillingdon Homes. There was a wonderful new logo and most of the chief officers received salary increases, but the arrangement was a failure, and the housing was returned to council control. There was virtually no new build, although the decent homes programme went ahead and there was some refurbishment, which I welcomed.
In my area, the ALMO was not particularly well managed. Rip-off companies made extremely high profits in return for very poor delivery. Some months ago I raised the matter in an Adjournment debate. The Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), met tenants and me, and we are still calling for a public inquiry. The poor management in my area let down many people who were expecting their properties to be refurbished.
We also have a so-called “choice” bidding scheme called Locator. Desperate families bid every week for properties to which they have no hope of ever gaining access. I agree with my hon. Friend the Member for Islington North that the problem is not simply the fact that local people with local jobs cannot afford a roof over their heads; I have known firefighters at Hayes fire station to commute from Cornwall and Devon, sleeping at the station and returning home after their shifts. There is also the problem of family breakdown, when people’s kids cannot live in their local area and have to move miles away. The whole family network breaks down, as does the social caring network. The system is completely counter-productive and it is not cost-effective, because the burden of care must fall on the state rather than on local families.
Of course housing associations play a key role in providing social housing in my constituency, but they are not as they used to be. I was involved in the development of the early housing associations, which were small and more like co-operatives. They had specialist roles, particularly in relation to the elderly and people with disabilities. No one ever envisaged their becoming the large corporations that they are now. There has been merger after merger, and takeover after takeover. Many of the tenants cannot distinguish them from private landlords. Some of the management is extremely poor. There is a slow response to requests for repairs. Within four years new buildings provided through housing associations in my area have developed damp and other construction problems because of poor standards and poor management of the construction process.
I must also put on record, because I am so angry about it, the consistently poor management by a number of housing associations in my area, and their failure to deal with antisocial behaviour. There are some extreme examples which I have raised with Ministers in the past. That problem continues, and has not been remedied.
Jeremy Corbyn
I would be grateful if my hon. Friend commented on the lack of democracy in the running of housing associations and the problems that that has created. When they were small, semi-co-operative organisations, there was a clear line of responsibility and accountability, but I do not perceive any accountability in the majority of housing associations now.
John McDonnell
Some of the smaller ones in the Irish community with which I have been involved, such as Innisfree and Casra, have done a very good job. They have remained relatively small, and have therefore managed to engage their tenants. In that sense, they are manageable. As I have said, however, most of the housing associations with which I deal now are mega-corporations. There is only tokenistic tenant involvement, with no element of real tenant control. When I, along with tenants, attend meetings with housing associations, we become supplicants, as if we were dealing with any private corporation or landlord.
Frank Dobson
I would rather not. I will just get on, because other people want to speak.
There is no chance now of a tube driver, an ambulance driver, an ordinary police constable, a nurse, a midwife or, in some cases, a junior doctor meeting anything like the going rate for a private sector home. They are out of that market altogether. If we want such vital people to contribute to making living in London tolerable, we have to go much further than we have in the past, under Governments of all persuasions, because otherwise the place will be torn apart. I know that the leader—at least for the time being—of the Liberal Democrats, the Deputy Prime Minister, objects to the term “social cleansing” in relation to driving up rents and removing security of tenure, but as the inventor of the phrase, I make no apologies for it, because that is what will happen. If people’s security of tenure is removed, and if rents are driven up and subsidies for them are also removed, they will be driven out.
People say that we are spending far too much on housing benefit—and indeed, one could not make a more truthful statement. I think the figure is £22 billion, and it is that high because the rents are too high. If we want to cut the amount of money going into housing benefit, the best thing would be to cut the rents. Rather than trying to cut housing benefit, we should cut the entitlement by ensuring that we reduce the rents.
Frank Dobson
I will certainly give way to my hon. Friend, and then I will finish.
Jeremy Corbyn
Is my right hon. Friend aware that the Government’s claim is that when the housing benefit allowance is cut, the tenant can negotiate with the landlord, who will understand the situation and therefore reduce the rent? The Minister himself told me that in his office. I expressed some astonishment and decided to check up with Islington council, which has tried to negotiate rent reductions with landlords. The council tells me that, sadly, it is very difficult to do that, if not well nigh impossible, even for the most well-meaning and determined people. Surely the answer is not only controls, but investing £10 billion in housing, rather than £22 billion in housing benefit. That way we would all be a lot better off.
Frank Dobson
I entirely agree. Even if we transferred the money from the housing benefit account into the account of, at least, the public sector landlords who are charging high rents, that would bring rents down and be to everyone’s benefit.
My final point is this. Large numbers of places have been sold under the right to buy—certainly in my area—that have then been sold on by those who bought them or their children, following which the buy-to-let people have moved in. Therefore, somebody will have bought the flat with a massive subsidy from the taxpayer, then someone else will have bought it with a tax incentive and now they will be charging a rent that is two, three, four or five times higher than it would have been had the property never been transferred from the council’s ownership in the first place. So when people talk about public subsidy for housing, they should remember that the biggest imaginable public subsidy involves those who own or are buying a buy-to-let property that was formerly a council flat. That is the sort of thing that we need to stop, rather than rabbiting on about taking away security of tenure from all sorts of other people.
I hope that the Government will eventually take this matter seriously. One of the biggest housing programmes in my constituency was carried out by Neville Chamberlain when he was Minister of Health. Indeed, one of the buildings is called Chamberlain house. Tories should not be ashamed of their distant past record on social housing; all they need to do is revert to type and stop being mad marketeers.
Heidi Alexander (Lewisham East) (Lab)
I congratulate my hon. Friend the Member for Islington North (Jeremy Corbyn) on securing this debate. I know that he has been a fearsome campaigner for social housing and all manner of other housing issues in London, and I am pleased to be able to make a contribution today.
I would also like to pick up on the comments made by the hon. Member for Ealing Central and Acton (Angie Bray), just before she leaves the Chamber. She said that London faces specific and often unique circumstances in relation to housing. Many people across the country might not understand that. When I tell my parents, who live in Swindon, that I spend a lot of my time doing work on housing, they look at me slightly quizzically, as if to say, “Why is that?”, but anyone listening to this debate must realise that London faces quite extraordinary circumstances.
According to an estimate by the Greater London authority, the cost of renting in London is 51% higher than anywhere else in the country, and the National Housing Federation has recently estimated that, in order to buy an average-price house in London, a first-time buyer would need a salary of almost £100,000. Social housing, whether it is owned by a local authority, an arm’s length management organisation or a housing association, therefore fulfils a large number of needs for people across the spectrum, including those on benefits and all the others we have heard about today: the construction workers, the public sector workers, the nurses and the doctors. Sometimes, when people outside the capital think about housing, they do not really understand the true nature of the housing market here.
I also want to reflect on the fact that we are having this debate on the day when people are going to the polls to vote on changing the voting system. A couple of weeks ago, I did my street surgery. I write to 2,000 residents once a month and say, “If you want to see me on a Saturday morning, please put this poster up in your window. I will come and sit in your front room and talk about whatever you want to talk to me about.” A couple of weeks ago, when the Westminster village and the media were getting very excited about today’s referendum on changing the voting system, all my constituents wanted, without fail, to talk to me about social housing. One elderly gentleman lived in a block of flats, and his wife had just broken her leg. They had lived there for 25 years. He said, “I just need the housing association to move us to the vacant flat downstairs.”
Heidi Alexander
Well, I am really pleased to be able to tell my hon. Friend that the housing association—it is quite a large one, London and Quadrant—responded superbly when I contacted it. I am pleased to say that that gentleman has been moved to the flat that he wanted. So there are cases where housing associations respond and provide the sort of services people need, but that is not to say that there are not other circumstances in which couples desperately need to live in a more suitable home but cannot achieve that. There are hundreds of people whom I have seen in my surgeries and out on the doorstep since I became an MP whose families are living in desperately overcrowded situations—and it is mainly for those people that I make my remarks in today’s debate.
I shall speak on three main themes. The first is the massive need, as others have mentioned, for more homes that people can afford to rent. The second is the Government’s proposals on housing and how they relate to the wider welfare reform changes. I have a number of concerns about how they interrelate. Thirdly, I shall speak briefly on a topic that has not been mentioned so far—the proposed changes to the planning system and how some of them might result in fewer homes, particularly affordable homes, being built. I shall reflect on how proposals in the Localism Bill might make it harder to build the affordable homes that London needs.
Let me deal with the supply side first. We know that 350,000 people are on the social housing waiting list in London, and that one in 10 households are living in overcrowded conditions. As others have said, there is undoubtedly a massive need for more homes in London that people can afford to rent. Tackling the problem of under-occupation has been mentioned, and some argue that people are living in properties that are too big for the number of people living in them. I have seen research that shows that even if we tackled the problem of under-occupation in London completely, it would come nowhere near to solving the housing crisis.
Jeremy Corbyn
My hon. Friend makes an important point in that under-occupation is only a slight issue and tackling it would not solve the problem. If children move away from home and grandchildren are born, is there not something quite reasonable, normal and acceptable in the idea of those grandchildren going to stay with their grandparents in the house’s bedroom? Why should it be that those in social housing cannot lead the kind of lives that anyone living in an owner-occupied place would assume to be perfectly normal and sufficient for them and the entire family’s needs? Why cannot we be a bit more human about it?
Heidi Alexander
I entirely agree. Many people look forward to that sort of thing in later life. We need to ensure that, whatever policies are in place in future, we recognise that issue. I would say, however, that I sometimes meet constituents who are living in a large three-bedroom house and find it too hard to manage and cope with. Lewisham has a positive record as a local authority in providing the assistance needed to make a move easier. More can be done about under-occupation, but it will not solve the problems in London, as I said. In the rest of the country, it could make a significant difference, but not in London because of the scale of the challenge we face.
Heidi Alexander
My right hon. Friend makes a very good point, with which I entirely agree. Interestingly, I spoke a few months ago at the launch of the National Housing Federation’s “Breaking the mould” report, which looked at the housing needs of older people or those moving into later life. Given that one in five children born today will live to the age of 100, it is important for us to ensure that, as more people move into later life, we provide housing that meets the specific needs of our population.
Campaigns are sometimes mounted against the building of extra care housing. When I spoke at the launch of that report a few months ago, I encountered a gentleman who had been trying to build such housing through a church-sponsored scheme in north London. He was amazed at the degree of opposition that the scheme had generated in the local population, who said that the development was too big, too ugly and too wide. I could not help thinking that their concerns might be genuine. There is a desperate need for new forms of extra care housing, but we must give thought to the specific type of housing that is required, whether it is social or private sector housing. I shall say more about that later.
The hon. Member for Brentford and Isleworth (Mary Macleod), who is no longer in the Chamber, referred to the amount being invested in the national affordable house building programme. I asked her how that compared with the level of investment over the past three years. She declined to give me the answer, but I can give it to the House now. The national affordable house building programme has been cut by 63%. Between 2008 and 2011, £8.5 billion was invested in it, with a target of building 155,000 affordable homes. In the current comprehensive spending review period, between 2011 and 2015, £4.5 billion is being invested, and the Government have a similar target, namely the building of 150,000 affordable homes. That represents a halving of the programme. The budget has been slashed, and, whatever Boris Johnson or Government Members may say, that has dealt a devastating blow to the future of house building.
I mentioned Boris Johnson, the Mayor of London. I want to say a little more about some of his pronouncements about his record of building affordable homes. We have seen him on television recently, standing in front of new flats. I often scream at the television—I do not know whether other Members do as well—
Heidi Alexander
It does not, which is partly why I am making this speech in the House.
When Boris Johnson stands there and looks proudly at new homes, I feel like saying to him, and to the public, “Those new homes are a result of the Labour Government’s investment in housing. They are a direct result of the national affordable house building programme.”
I have been involved in regeneration and attempts to build new homes in Lewisham for a number of years, and I know how long it takes to get new developments off the ground. Any homes that are being built at the moment probably went through the planning process three or four years ago, and the commercial viability of the scheme was probably assessed and agreed three or four years ago. For Boris Johnson to stand there and claim this as his victory is entirely wrong. His record will relate to what happens in the years to come. As we have heard, the Homes and Communities Agency predicts that in a couple of years no new affordable housing will be being built in London. It will fall off a cliff face. Boris Johnson should bear in mind that that will be his legacy for London, not the legacy left by the last Labour Government.
Another thing that I wish to say about my experience of trying to deliver regeneration in Lewisham is that no thanks are due to the Liberal and Tory councillors in this regard. As soon as there was the faintest whiff of local opposition to a new housing scheme, whether it was a private sector development or affordable housing, they generally chose to vote against it. Some of the plans in the Localism Bill will make it easier for some of those nimbys to block development. If we really are going to build more homes, we need to be thinking about how the planning system works.
I have talked a little about the fact that the capital grant programme has been slashed and the Government seem to be moving to a way of funding new homes that relies on the future rents that they will get in from properties. The approach of allowing housing associations to build and charge 80% of market rents seems to relate to an argument about why capital grants are being reduced. My big problem with that approach is that I fear we are simply not going to build the type of housing that Londoners, including my constituents, can afford.
I have done a bit of research on the average rents in Lewisham in the private rented sector and for housing association properties, and I have thus been able to work out what 80% of market rent would mean. At the moment, the average median rent for a one-bedroom flat in Lewisham is £170 a week and the rent in a housing association for such a property is about £80 a week. An increase to 80% of the market rental value would make the cost £136 a week and would mean a weekly increase of about £55.
That is bad enough, but the average market rent for a four-bedroom flat or house in Lewisham is £300 a week. Someone living in a similar London and Quadrant property would pay, on average, £114 a week. If London and Quadrant builds new homes in Lewisham and charges 80% of market rent, that figure would increase to £240 a week, which is an increase of about £125 a week. That represents a monthly increase of £500 and an annual increase of £6,000 in someone’s housing costs. If someone is lucky enough to be in full-time work in Lewisham and they are on the minimum wage, they will be earning less than £12,000 a year, so how on earth are they going to find £6,000 extra to pay towards their housing costs? I cannot see how that will happen and the London Council agrees with me. Its recent briefing produced for councillors in London on the affordable rent model states:
“There is already a widespread recognition that the ARM will fail to deliver on larger sized family homes; and that, at 80% of market rates, the model’s maximum rent level will be unaffordable in the capital”.
As I have mentioned, I am also concerned about families living in overcrowded situations. When they are offered a flat or house at 80% of the market rate, how are they going to be able to afford it? If they are going to have to pay an extra £6,000 a year, they are not going to move and so will stay in the overcrowded flat that they are living in.
My hon. Friend the Member for Westminster North (Ms Buck) discussed in an intervention the additional costs that could be pushed on to housing benefit, and that is precisely what the affordable rent model could result in. I recently read an interesting report by Family Mosaic entitled “Mirror, signal, manoeuvre: our drive to provide more social housing”. Family Mosaic did some research on about 50 of its new tenants who moved into properties across London at the end of last year. Some of those people were in work and some had caring responsibilities; the real-life situations of a vast range of people were researched when putting together that report.
Family Mosaic estimates that if every one of those 50 individual households lived in a property at 80% of market rent, the housing benefit bill would increase by 151%. That is a huge amount of extra money that will have to go out in housing benefit and my hon. Friend the Member for Westminster North is completely right to say that that is a way not of tackling the deficit but of making it worse.
At the end of the report, Family Mosaic asks what we can do:
“How do we go forward?”
In answer, the report states:
“To mitigate this risk”—
the risk that people might not be able to afford the rents—
“we could change the profile of our tenant group, and not let new properties to those most in need: this, however, goes against our core principles.”
I am concerned about how the affordable rent model will deliver any homes in which people can afford to live.
Heidi Alexander
My hon. Friend is completely right. Our debate about what it is affordable to pay out in housing costs was interesting. My hon. Friend the Member for Islington North gave scenarios in which people might be spending 50% of their household income on their housing costs alone. I know that the Department for Communities and Local Government, in the guidance it published a number of years ago on how local authorities should carry out strategic housing market assessments—the Minister might wish to comment on this—says that the definition of affordable housing costs is a household paying 25% of its overall income on housing. We are clearly seeing situations in which households are paying much more.
Jeremy Corbyn
My hon. Friend makes a very important point and I have intervened on her now so that the Minister can have time to think about giving us an answer later. If a local authority ensures that an offer of a property is made at 80% of market rents and the family cannot afford to move into it, according to my understanding of the law, the local authority will have discharged its duty to provide a property for those homeless people who would then have no access to any public sector housing. They would only be able to access a completely free-market private sector. We will end up building a sub-class of people who are unhouseable in law and homeless in reality.
Heidi Alexander
It is a complete trap. I look forward to the Minister’s response to that.
I used some figures to demonstrate how much more people would have to pay out were they living in a family-sized property and being charged 80% of market rates. What concern me more are the proposals for universal credit in this context and what the £26,000 will mean for people in London who are paying out such amounts of money in their housing costs.
If we assume that the universal credit means that a family in London will get no more than £500 a week and that they are paying £240 a week for a four-bedroom flat at 80% of market rent in Lewisham, they will be left with £260 a week for all their other living costs. I presume that that £260 will cover their council tax benefit as well as payments for their gas, electricity and phone. We must also remember that if those people want to move into work, the costs of child care in the capital are much higher than elsewhere in the country and so are public transport costs. I therefore take this opportunity to ask the Minister to have conversations with his colleagues about how realistic the £26,000 universal credit cap is in a London context.
I draw a distinction between London and the situation elsewhere in the country. I heard my hon. Friend the Member for Hayes and Harlington (John McDonnell) talk about his upbringing. My dad is an electrician. He has a nice house now. If he was an electrician in London, there is no way that he would live in the sort of house that he lives in now. He would tell me that £26,000 is a lot of money. His annual income has been about that figure for as long as I can remember. So I have some sympathy with what the Government are trying to do with welfare reform, but I ask them to consider carefully what that means for people in London. I have spoken a lot about figures, and they show how dreadfully difficult that reform could be for people who live in London on low incomes.
If the Government do not think that families on low incomes should be able to live in London, they should come clean and say so, because that will be the result of their proposals and policies. We have talked about the impact of housing benefit changes and the potential clearance from London of people who simply cannot afford to live in their private rented properties. They will have to move either to the outskirts of London or elsewhere.
Personally, I genuinely think that we must ensure that those people—my hon. Friend the Member for Eltham (Clive Efford) talked about them—who drive the lorries to clear our roads and who clean our offices and work in our shops can live close to their places of work. It is right to do that. It makes absolutely no sense for people to have to rely on the transport system, and it makes no sense to people’s lives when they have caring responsibilities and need to pick up their children from school. It is right that we have genuinely mixed communities of people able to live in central London. The proposals to change the welfare and housing benefit systems run a real danger of making that impossible in future.
Before I move on from the wider changes to welfare reform, I want to pick up another point: the possibility of paying housing benefit directly to tenants so that they can pay it to their landlords. Housing associations in the capital have some concerns about that. I see where the Government are coming from, and it is right to make people realise and think about quite how much it costs to live in a property—encouraging individual responsibility is a good thing—but equally, housing associations tell me that this is the worst time that the Government could consider giving housing benefit and accommodation support benefit, even if incorporated in universal benefit, straight to tenants, because we all know that their household incomes and budgets are coming under extreme pressure.
Housing associations also tell me that if rent arrears increase, they could find it harder to borrow money because their cash flow will be less secure. They are concerned that the banks will re-price their debts when they borrowed the money to build homes. I hope that the Minister will pick up on some of those concerns when he responds.
I want to say a little about planning. I served on the Committee that considered the Localism Bill for a number of weeks, and I have a number of concerns about how the Bill’s proposals will impact on the construction of new affordable homes in London. I think the Chancellor said when he announced his Budget that there would be a presumption in favour of sustainable development, and that is completely at odds with what is said about planning in the Localism Bill. I am not saying that there are not occasions on which people should be able to say, “No, that development is not appropriate.” Indeed, there is a housing development like that in my constituency at the moment in a place called Pitfold close. It is right that local people should have a say about what happens in their neighbourhood, but what the Government propose, as many hon. Members will know, is the creation of neighbourhood forums that will be able to come up with neighbourhood plans. The Minister with responsibility for decentralisation, the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark), who was on the Bill Committee, seemed to think that those neighbourhood plans would always contain higher housing numbers than the strategic plan for the local area, but my experience of attempts to bring development forward is that local people often want to say no.
I can understand people’s concerns about new homes. If a block of flats going up at the end of the road would cut out the sunlight to someone’s garden, I can understand why they might say, “I am not too happy about that.” I can understand why people might say, “How’s my child going to get into the new school?”; “How am I going to get on to the doctor’s or dentist’s list?”; or “What about all those cars coming down my road, blocking up the road network?” I understand why people are concerned about new development, but if we give too much power in the planning process to very small community groups in these neighbourhood forums, which it is proposed would include only three people, I am not sure that we will get the levels of house building in the capital that we need.
While I am on the subject of planning, there was much debate in the Committee about the 50% target, whereupon the Minister would jump out of his seat and say, “Ah, well, even though you had the 50% target, Ken Livingstone delivered only 36%,” to which I would say that at least we tried. Setting that target and saying that we believe the provision of affordable housing is so important that half of all the new homes built in the capital should be affordable is the right message to send to developers and planning officers. When those planning officers sit down at the table and start their negotiations, they should be saying, “Ideally, we want 50% of new homes to be affordable.” Yes, there will be some situations in which it is impossible to do that because of the commercial realities of the scheme, but it is right to have that target.
Mr Love
We are waiting to see. As I understand it, there is not complete clarity on how people in work will be dealt with, how “work” will be defined and whether part-time work will be taken into account. I rest my case in the hope that the Minister will respond to some of my concerns.
Jeremy Corbyn
I want to follow up the point made by my hon. Friend the Member for Eltham (Clive Efford). I was recounting the figures earlier; there are at least three London boroughs in which the 80% rule on rent levels is higher than the average income of people in work and who live in council housing association properties. There will be 100% social cleansing of Kensington and Chelsea, Westminster and perhaps some other boroughs as well. I am talking about people in work, not on benefits.
Mr Love
Absolutely. That reinforces the message that we are looking for flexibility and a recognition of the reality that people face in inner London. As has been mentioned, there are areas where rents are so much higher than anything suggested in the Government proposals. Unless the Government recognise the gap that will open up as a result of their policies, my hon. Friend will be absolutely right—the cleansing of social tenants will occur. That cannot be good for community cohesion or the economy of London; it is certainly not good for the people affected. I hope that the Government will recognise that, even now.
What are my local housing associations saying about the situation? It is early days, and they do not have firm enough data. However, they have been asked to submit proposals to the HCA. What they have come up with is that the 80% may be viable for one-bedroom accommodation. There is much more of a judgment in relation to two-bedroom accommodation, and for accommodation with three bedrooms or more, the figure is simply not economically viable. In other words, no family accommodation will be built at a time, when the real need in the social sector, because of overcrowding, is for accommodation with three bedrooms or more. There is an acute shortage of large family accommodation for those on the housing waiting list.
If we stick to the rules outlined by the Government, we will find that we are not building any large family accommodation. My housing associations suggest that there should be a target rent, rather than whatever the definition of an “affordable” rent would be. That would be intermediate between what we have generally known as affordable social renting in the past and the new so-called affordable rents suggested by the Government. The housing associations will put that suggestion to the HCA, and we shall see what eventually emerges. Anything the Minister can say about it will be helpful.
To respond to the invitation given by the hon. Member for Brentford and Isleworth, what housing associations tell me is that there must be flexibility on the £500 cap. There are different ways of doing it. The Government could separate the housing element from the rest of the universal credit, or they could give more universal credit in parts of London that are adversely affected, which would in fact include most of London. Flexibility is the key.
Another issue is increased capital investment and one way of providing that is through a bank bonus tax, as I said earlier. That investment is incumbent on the Government. If they do not want their Mayor of London to have egg on his face over his so-called target for affordable accommodation during his time in office, they need to do something about it. The system will not work as it stands. A sensible and pragmatic Government would be flexible in adapting it so that they could achieve what they claim to want—a significant increase in the supply of affordable accommodation.
I hope the Minister will be able to pick up those points. There is great concern, not just in inner London, which is mainly affected by the proposals, but in outer London too. These matters relate specifically to London; they do not apply in most other parts of the country and I hope the Minister will communicate the message to the Government. They need to be flexible about London. We all hope that things will improve in the future.
Mr Andy Slaughter (Hammersmith) (Lab)
Having listened to the whole debate this afternoon, I hope that the rest of the country leaves us to it more often, because it has been a very interesting debate. I have enjoyed all the speeches, from both sides of the House. I would make particular mention of the contributions from the Government Benches, because we have heard some of the more thoughtful and compassionate speeches from Conservative Members—that is probably why there were only three of them.
I would also like again to thank the sponsor of the debate, my hon. Friend the Member for Islington North (Jeremy Corbyn), who really does know his onions on this issue. He has driven many debates on the issue over the six years that I have been in this House, and we are all grateful that he keeps it at the top of the agenda.
Without embarrassing him, I would also like to mention my hon. Friend the Member for Hayes and Harlington (John McDonnell), who reminded us what this issue is all about. Those of us who are housing anoraks can get tied up in housing benefit regulations—particularly my hon. Friend the Member for Westminster North (Ms Buck)—and how the housing revenue account works, but in the end, this debate is about human beings. It is about our constituents. We would not think of half-teaching someone to read or performing half an operation, so it genuinely puzzles me that we should be content as politicians to leave people living in the most appalling conditions in our capital city. Not only has that happened throughout the tenure of all recent Governments, but it is getting worse. That is why the Government cannot afford to be complacent today.
The period when I was born, 50 years ago in Fulham, was what we would probably now call the heyday of social housing, following the Bevan period, when he was the Minister responsible for both health and housing in the 1945 Government. He genuinely understood the importance of housing as a public service, and although he probably would not have used the phrase “life chances”, he knew that housing is important to people’s life chances, just as it is to their basic health. That period was followed by Macmillan and other Tory Governments who would also have prided themselves on building a sufficient supply of housing—and doing so in what were, quite frankly, much more difficult economic times than today—to meet the nation’s need. Why that is no longer an ambition I do not understand. When I was growing up, council housing was the kind of housing that people aspired to. The houses had plumbing, for God’s sake! They had central heating and running hot water. They had inside toilets. In the ’60s and ’70s in Fulham, those things were not to be found in the private rented sector or even in the owner-occupied sector.
Yes, that was the era of estates, and there were good estates and bad ones, but—to follow up on a point made by my hon. Friend the Member for Hayes and Harlington—they did not start leaking and falling down after four years, as they do now. An example of that is the South Acton estate, which I used to represent. The hon. Member for Ealing Central and Acton (Angie Bray) might want to have a look at that. Many of the estates were very good ones, and they are still standing to this day and providing good-quality, affordable homes with a good space standard.
That was also the era of acquiring properties. Councils around London—Hammersmith, Islington and others—bought up private sector slum properties, renovated them and converted them into housing, sometimes with several flats in one Victorian house. There are now thousands of those properties in boroughs around London. Those boroughs are now being targeted by the designated sales policies of Conservative councils, but those were the mixed communities. When we walk down the street in Hammersmith, we see council and housing association accommodation and privately rented and owner-occupied houses next to each other in a row. Ironically, those are the mixed communities that the Government are seeking to destroy.
Fifty years ago, there were also housing action areas. Grants were available not only to private sector tenants but to poorer owner-occupiers to ensure that they had basic facilities in their homes. That was also the era that saw the start of the housing associations.
Jeremy Corbyn
Does my hon. Friend acknowledge that housing action areas came in at the end of the wholesale building clearance policy and did a great deal to preserve London’s Victorian heritage and, at the same time, to preserve communities? They are something that we should applaud and welcome.
Mr Slaughter
Absolutely. Those areas presented a win-win situation. They maintained buildings that we now value, which some politicians and planners in the ’60s and ’70s did not value, and they also provided good-quality homes in which people could live and bring up their families while enjoying the facilities that most of us take for granted today.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
I thank and congratulate the hon. Member for Islington North (Jeremy Corbyn) on obtaining this debate. As has rightly been observed, he has been a consistent advocate of housing issues in the Chamber. He has advocated them seriously and with great commitment, and although I do not always agree with all his analysis and remedy, I respect how he approaches these matters.
Robert Neill
I do not want to tempt the hon. Gentleman into being too optimistic, but I do appreciate the spirit in which he raises those matters.
It has been a worthwhile debate for all London Members. I thank all hon. Members on both sides of the House who have contributed. We have heard some thoughtful contributions. In particular, I thank my hon. Friends the Members for Brentford and Isleworth (Mary Macleod), for Battersea (Jane Ellison) and for Ealing Central and Acton (Angie Bray), who have contributed thoughtfully, as have some Labour Members. Sometimes, that standard of thoughtfulness was not consistently applied, and we have heard examples of conspiracy theories reaching almost to the delusional. However, I put that down simply to the excitement of matters elsewhere in the country at the present time.
I am a London Member, I have spent the whole of my life in London and I recognise the importance of this issue. As hon. Members said, there are particular pressures on housing in London that put it in a different category from other parts of the country. However, the affordability issues and so on are not unique to London, which is a world city. The same problems will be found, to a degree, in New York, Paris and Tokyo. However, within the UK, London is in a unique situation, and as I shall mention later, the Government are recognising that fact by devolving much more power over housing policy and housing funding to the Mayor of London, who is democratically accountable and will have, therefore, the ability to respond in a more flexible and nuanced way to the particular London demands that my hon. Friend the Member for Ealing Central and Acton and others mentioned.
I am very conscious personally of the importance of housing. I hope that Labour Members will take this in the spirit intended. My grandfather worked in the London docks. He was born in a slum in Stepney. He started his married life in rented accommodation in Canning Town. He managed to work his way to buying the semi-detached house in which I was born. Against that background, first I do not need to be lectured by anyone about the importance of affordable and decent housing for working people in London, and secondly I recognise the issue of security of tenure. However, I hope that hon. Members will recognise that that does not mean that we should automatically go down the same route that was perhaps appropriate and effective in the past. We might need now to be more imaginative in thinking of alternative solutions and other ways forward.
Jeremy Corbyn
In closing the debate, I would like to thank the Backbench Business Committee for allotting us the time for it. There was initially some doubt about whether sufficient London Members would attend the debate and whether it would be last the full time allotted to it. We have been proved wrong on that, as many Members —14, I believe—have spoken and put many valuable points on the record.
I would like to thank both Front-Bench teams. I particularly thank my hon. Friend the Member for Westminster North (Ms Buck) for her fantastic record on housing. The fact that she is still a Member after the last general election is because of her record on housing and her support for the people in her community. I would also like to thank the Minister not only for the manner of his reply but for the fact—unprecedented in my experience of watching Ministers in operation—that he has been in his place throughout the whole debate and listened to every speech. He will have heard the passion and commitment shown by many Members on housing issues.
Let me remind the Minister of these points. None of them is new; housing issues are not new; the passion and commitment of London MPs to social housing issues in London is not new—and it will not finish with today’s debate, as we will be back, back and back again because we passionately believe that everyone deserves somewhere decent to live and we passionately believe in cohesive communities.
When the Minister goes away from this debate, I would like him to reflect on four points on which he could take action. First, he should re-examine what is happening with the housing allowance, how it has been imposed and how families have been forced out of their communities, creating a huge problem that is hitting people in areas such as the one that I have the privilege to represent.
Secondly, I accept that not every private landlord is a bad landlord—but there are some bad landlords and some badly maintained properties. Private tenants pay more than others for heating, lighting and everything else because the homes are often badly maintained and inefficient—not all, but quite a lot are.
Thirdly, the Minister should recognise that the housing needs of London are special and that if we do not recognise them we will end up with a divided, inefficient, ineffective city. I do not want that; the Minister does not want that; nobody in the Chamber wants it.
Lastly, I ask, please, for money in the form of investment in good homes for a good future for our young people. It is better to put the money in bricks and mortar than to subsidise private rents. That has to be the way forward. London can do it, but we need the Government’s recognition and support if we are to succeed.
Question put and agreed to.
Resolved,
That this House has considered the matter of social housing in London.