Social Housing (Houghton and Sunderland South)

Lord Stunell Excerpts

Wednesday 21st July 2010 Westminster Hall

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

I congratulate the hon. Member for Houghton and Sunderland South (Bridget Phillipson). She is following in the path of her distinguished parliamentary predecessor, Fraser Kemp, and I am sure that she will in time establish the same strong reputation that he had for sticking up for constituents. She has done so very well just now. I thank her for bringing this question to the attention of the House and for giving me an opportunity to respond to it.

We need to start with the real situation facing this country as far as financial circumstances are concerned. The hon. Lady made it sound as though the coalition Government have taken decisions purely on a whim—as though we had a choice—and overlooked the fact that we have inherited the worst financial situation of any Government in western Europe, save Ireland.

[Mr David Anderson (Blaydon) (Lab)]

I welcome my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) to the House. It is great that she is now the MP for the place where I spent some of the happiest years of my life.

The Minister makes a point that we hear continuously—that there was no choice. The truth is that there was a choice. We all agree that we have a terrible deficit to sort out, but the choice that the Government parties are taking is different from the one that my party would have taken if it had been in government. We do not have to choose what the Minister has chosen. That needs to be nailed to the wall now.

[Andrew Stunell]

I thank the hon. Gentleman for his contribution, which is one that I have heard several times from Members on the other side of the House. Unfortunately, it is no more relevant or close to reality than the projections that were made before the election, which were that everything was fine and that we could just carry on.

If things were so good beforehand, it is astonishing that so little social housing was built by the previous Government. House building in England is now at its lowest level since 1946, with just 118,000 completions in 2009. I remind Opposition Members that they were in charge at that time. Excluding the war years, they achieved the lowest rate of house building across England and Wales since 1923. That is not a record that allows them the strength to criticise what this Government are doing now.

[Bridget Phillipson]

The argument that the Minister makes is a good one in many ways. He refers to 1946 as a key point. Much of my constituency is composed of post-war modern developments built when Britain was groaning under the weight of the debt we accrued to fight the second world war. Surely, sometimes it is a question of priorities. We choose to prioritise what matters, and if we choose to prioritise housing, we not only secure the future of our communities and regenerate them, but, equally, create much-needed jobs in a time of deficit.

I accept the Minister’s point that the previous Government should have done more on social housing. I pushed hard on that point. I would contend that latterly they were doing more, but that the rug is now being pulled—

--- Later in debate ---

[Mr James Gray (in the Chair)]

Order. Interventions should be as brief as possible.

[Andrew Stunell]

I thank the hon. Lady, who acknowledged the reality of what I said. As she correctly says, this is a matter of priority. I shall come to exactly what the Government’s priorities are, and why we took the decisions that we have announced.

We need to be clear that there is a significant gap between the supply and demand for new homes. For decades, the housing market failed to keep up with the needs of our growing population, which has led to problems with affordability, people coming on to the council house waiting list and people seeking to buy their first home. That, in turn, has led to social and economic problems, and the hon. Lady eloquently set out some of the problems affecting her own community.

The long-term demand for housing is strong and fed by rising population, increasing affluence—taking 10 or 20 years at a time—and people’s strong cultural preference for homes of their own. Under-supply has led to some serious consequences for us.

I want to make it clear to the hon. Lady that we, too, share her commitment to having more affordable housing, and we remain committed to the provision of social rented housing for those in need. We will promote shared ownership schemes and help social tenants and others to get on to the housing ladder, although that has to be done within the constraints of the financial position that the Government find themselves in.

If constituents came to hon. Members’ surgeries with a problem and explained that they were on £300 a week but were spending £400 a week and putting the extra £100 on their credit cards, which had £50,000 on them, we would, as responsible Members of Parliament, say, “You need to see whether you can increase your income and reduce your expenditure.” People would get such advice from any sensible debt counsellor or MP. We, as sensible MPs, and as a sensible coalition Government, have to say that our commitments and aspirations must be measured against the resources available and the constraints of the financial position that we are in.

[Pat Glass (North West Durham) (Lab)]

We hear that mantra from the Government every time they open their mouth; it is their answer to every question. The Government are looking to wipe out the deficit in three to four years simply so that they can deliver tax cuts before an election. They are doing that at the expense of the constituents of my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson).

[Andrew Stunell]

It would be nice to think that we could wipe out the deficit, but the Government’s financial plans say that we will have stopped adding to the overdraft. It is not that we will reduce the £50,000 credit card debt that I mentioned, but that we will stop increasing it. The hon. Lady needs to get a grip on reality.

To return to the subject of the debate, we are absolutely committed to wider home ownership and helping those who aspire to own their own home; the figure is estimated at some 1.4 million households. We want first-time buyers who cannot get into the housing market to do so, and we want social housing waiting lists to be reduced. We want to ensure that the affordable housing supply is increased.

That means building new homes, where they are sustainable, in places that are attractive to people and near to work. We know from the performance of the previous Government that top-down targets are not the right way to go about that. In fact, the higher the targets were raised by the Labour Government, the fewer houses were completed.

We intend to return decision making to democratically elected councils and to remove regional housing targets. We will reform the planning system to give neighbourhoods more say, provide incentives to local authorities to deliver sustainable development and create new land trusts that will make it simpler for communities to provide homes for local people. We will drive up housing supply by providing financial incentives to local authorities that build additional housing. I would have thought that that was helpful to the hon. Member for Houghton and Sunderland South in respect of the debate.

Ours will be a bottom-up approach, allowing local communities to control the way villages, towns and cities develop through local plans and letting them derive direct benefits from the proceeds of growth in their areas. We need to remind ourselves again that the affordable housing supply was down by more than a third under the previous Government. We recognise that there is continued need for affordable housing for social rent and for low-cost home-ownership housing, and we remain committed to delivering on that.

Some Library figures on spending reductions being applied to the Homes and Communities Agency were mentioned. If the hon. Lady looks carefully at the expenditure plans that we have set before the House, she will see that the previous Government’s housing pledge committed £1.5 billion to the agency’s funding. We have now secured and authorised £1.25 billion. In other words, by struggling and kicking we have pushed forward a sum that is just £250 million short of the original pledge, which was based on wobbly finance. The Government are strongly committed to pushing that programme forward. We will make the radical changes needed to incentivise housing supply and ensure that local communities are empowered so that they can take advantage of that.

On Monday, the Prime Minister and the Secretary of State for Communities and Local Government attended an event in Liverpool, which was the first of a series of events to kick-start the big society. It was announced that four pilot local authorities would immediately be given the opportunity to take forward some of the ideas for devolving power and making things happen locally, to supersede top-down decision making from Whitehall and get things going on the ground. I hope that, soon, the hon. Lady will see those pilots delivering success and that she will strongly encourage Sunderland city council to join in.

The hon. Lady mentioned housing benefit, which I want to discuss. We—the Government and taxpayers—are paying more in housing benefit than we do for the police and universities combined. In real terms, the cost of housing benefit has risen from £14 billion to £21 billion in the past 10 years. I will give her the opportunity after the debate to score a few points at my expense. This is the second time that I have debated housing benefit in Westminster Hall with a Member representing Sunderland South. The previous time was on 12 January 2000, with her predecessor—she may want to look it up in Hansard—who said:

“The overriding objective of the housing benefit system is to enable those with no income of their own and those on low incomes to provide for their reasonable housing costs… housing benefit should not subsidise someone to live in a property that is unreasonably expensive. If it did, tenants would… have no incentive to look for more reasonably priced accommodation and landlords would have no incentive to seek more reasonable rents.”—[Official Report, 12 January 2000; Vol. 342, c. 108WH.]

At that time, her predecessor was a Minister with responsibility for communities and I was in the hon. Lady’s place, making bitter complaints about what was happening to housing benefit. Since then, housing benefit expenditure has risen by £7 billion.

[Bridget Phillipson]

Does the Minister accept that, subsequently, the local housing allowance was introduced to deal with that problem and that although the reforms of the housing benefit system were far from perfect—it is a complicated, means-tested system—the LHA was designed to tackle some of the difficulties, including rents being too high or tenants not being encouraged to find more affordable accommodation? We do not need wholesale cuts to adapt system more adequately to meet the needs of tenants.

[Andrew Stunell]

I am sure that those matters will be debated during the consultation on the plans that have been announced. Since the hon. Lady’s predecessor made that statement to the Chamber, expenditure on housing benefit has increased by 50%, from £14 billion to £21 billion. A simple ready reckoner helpfully provided by my Department shows that that £7 billion would have allowed us to build 60,000 social houses in each of the past 10 years—600,000 houses could have been constructed. That would have satisfied her and me, but it would have required restraint on housing benefit.

If the coalition Government’s proposals are implemented in the form in which they have been introduced, they will save £1.8 billion, which is equivalent to 20,000 social houses. In a time of constraint, the hon. Lady and I must weigh up housing benefit costs against the possibility of increased social housing. Those are the tough choices that her predecessor offered to me 10 years ago, and which it is now my duty to offer to her today. The reforms that have been announced will allow us to make better use of our social housing. A key point relates to the way that social housing is occupied. We all know that there is a mismatch between the size of households and the size of many council houses. We know that that is also an issue.

When resources, affordable housing and rented accommodation are scarce, waiting lists are high, and financial constraints on the country are great, we must ensure that we make efficient and effective use of the resources and homes that we have. The hon. Lady referred to the hardship that will be caused to her constituents as a result of applying the new rules, but I remind her that the discretionary housing payment allowance to local authorities is £20 million, which will rise threefold to £60 million to help households to adjust. As the name suggests, the payments will be entirely at the discretion of local authorities.

Hon. Members are rightly interested in housing need, which increased under the previous Government, despite a 50% increase in spending through housing benefit. I suspect that there is not much of a gap between the hon. Lady and me on what might have been a better use of that money in delivering social housing for people to rent. We have inherited record-low house building. We have waiting lists for social housing of 1,800,000 households, and turning that around will not be easy. However, I assure the hon. Lady and other hon. Members that we are absolutely committed to turning it around and to providing safe, secure, sustainable housing for all who need it.

[Mr Anderson]

I thank the Minister for taking this intervention; I did not want to interrupt his flow. Will he provide us with the figures? I lost track a little, but I think he said that 600,000 houses could be built for £7 billion. Can those figures be put in the Library or shared with Members so we can check them out?

[Andrew Stunell]

It is a good job that I did not say that, because if I had it would have been completely incorrect. If I conveyed that impression, it is a good job I am responding now, because that allows me to say that the difference in the cost of housing benefit in real terms between 10 years ago and now is £7 billion a year. I believe that the hon. Gentleman has seen my point. I do not think that there was anything wrong with what I meant to say. If there was something wrong with what I actually said, I am happy to put that right.