Council and Social Housing

Debate between Rehman Chishti and Austin Mitchell

Tuesday 6th March 2012 Westminster Hall

[Austin Mitchell]

The hon. Gentleman is exactly right, of course. A number of calls, initiatives and gimmicks are being pursued, but there is no firm conclusion, in terms of house building.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I congratulate the hon. Gentleman on securing this important debate and on the passion he has shown on the subject for many years. He referred to some of what is being done as a gimmick, but in terms of substance, does he welcome this Government investing £4.5 billion in affordable housing over the next four years? That will help to increase supply and provide a major boost to people on housing waiting lists.

[Austin Mitchell]

Of course I welcome the statistic that the hon. Gentleman read so brilliantly from the brief, but those are hypothetical houses not yet built, and the problem is now. The situation now is that starts are at their lowest level since 1923, and that is what we need to deal with.

--- Later in debate ---

[Austin Mitchell]

Absolutely. The system causes instability and damage to the estates. People cannot keep up with their payments, so houses are repossessed and sold at auction. Somebody buys those houses as a speculative venture because they are cheap; they put in any kind of tenants because there are no controls, and those tenants claim housing benefit. The rent goes up, and the public sector is drained to pay for that folly. That is the result of many years of sales. I agree with the hon. Gentleman. We need to maintain controls and regulation in the private sector, because otherwise we will have the return of Rachmanism and a situation where Cathy has to come home time and again. “Cathy Come Home” came out in 1966, and followed a long period of difficulty in the private rented sector. Such difficulties are now returning, and we need to dramatise the situation to get the same kind of public reaction that “Cathy Come Home” received.

The situation is hitting the low-paid, the poor, the unemployed and the vulnerable—exactly those people who any civilised society should be helping. It is also hitting other sectors. How can we have good health without good housing? If people live in overcrowded, unsanitary and damp conditions, a health problem will arise. Good housing is the basis of a good health policy. How can we have a good education policy if kids are being shunted from school to school as their parents are forced to move, or if they do not have room at home to study or work in? It is impossible. How can we maintain stable, crime-free communities in which people want to live together, if they are being moved in and out as if they were in a transit camp? People need housing, but they are being shunted around because they cannot afford to pay for their housing, perhaps because of the bedroom tax or cuts in housing benefit, or because a decision by the council means that if they improve their position, they will have to move out of their home. Those policies will produce instability, insecurity and disturbance of the worse possible kind, and will turn places into transit camps.

The only answer—this point is central to the whole debate—is to build big, to build now and to build more than we ever did. We must build affordable, high-quality, public rented housing. It is the cheapest housing to build and run; it returns money to the councils because the rents produce more income that it costs to maintain and manage the estates, meaning that councils will make a profit. Rents are not set to maximise the income of private individuals, but are fixed at an acceptable social level that people can afford and will provide a return to the council. That is the kind of housing that we should be building for people who cannot afford to buy, and that should be the priority.

[Rehman Chishti]

The excellent portfolio holder for housing in Medway said that the way forward should involve

“More financial encouragement for social renting tenants to become owners of newly built or renovated homes, thereby freeing up socially rented properties.”

Does the hon. Gentleman agree?

[Austin Mitchell]

I do agree; I always have. Interestingly, before Grimsby council became North East Lincolnshire council, it was one of the first authorities to sell council housing to tenants. When I was in the New Zealand Labour party, we argued for years over whether state housing should be sold to tenants. We finally decided that it should be, and pioneered that policy in New Zealand, which was welcome. Such policies work provided that each sale of a council house is replaced by a build, so that the stock remains constant or builds up. That is the criterion; it is not about selling off houses ad lib to pick out the eyes of the estates. It must be a policy of sell and build.

The Government say that we cannot afford to build. We can afford foreign wars, high-speed trains and Crossrail, but we cannot afford decent housing for our people. Decent housing is an investment; that is why we should build. We could finance it through municipal bonds—that is how council housing used to be financed, and that is what happens in other European countries. Houses are secured by the asset created by the bonds. We could let pension funds invest in social and public housing; we could even use the revenue created by printing money, or quantitative easing. At the moment, money created by quantitative easing goes into the banks and is stashed away in the reserves. Why should it not be used to pay for contracts for social and council housing, which will house people and create an investment, from which we can derive income that can be secured? There are all sorts of ways to invest in housing, but if we do not invest, we slide into crisis.

I shall conclude on an important point: if we invest in housing, we stimulate the whole economy. Look at what happened in the 1930s when recovery from the depression, which was as bad as this one, was precipitated and stimulated by building the houses in which many of us—including me—were brought up. That changed the face of England in the 1930s; it stimulated the economy, created jobs and took us back to higher employment. Housing policy launched the recovery that was sustained by rearmament from 1938. Housing could do the same now, because it creates jobs and demand. People have to furnish their houses and provide everything in them, and that stimulates the entire economy. Everything—social need and economic sense—points to a big housing programme, particularly for social and council housing. Since everything points to such a programme, why are the Government not building? Why not begin that building programme now to stimulate the economy and serve the people?