Robert Neill
Main Page: Robert Neill (Conservative - Bromley and Chislehurst)
Clive Efford
I will in a moment. Calm down. [Interruption.] Hon. Members will notice that I was more restrained in my comment.
Those people did not lack aspiration or exhibit all the problems that people have given as reasons for not investing in building social rented accommodation. We have lost sight of the issue. It has been suggested that such people lack aspiration and that such areas become concentrations of high unemployment, low educational attainment and high levels of crime, particularly antisocial behaviour among young people. Such circumstances become self-fulfilling prophecies as a result of people having to be housed according to priority need.
Over the years, the housing supply has been constantly reducing. Because of the right to buy, the amount of social housing for rent went down consistently, in spite of the new building that was taking place, until only a couple of years before the previous Labour Government left office. The only time there was an increase was from about 2008 onwards as a result of the investment of the previous Labour Government. Just as we got to the end of our last term in office, we actually got it and finally started to invest in building again, and so the building of council housing began again. There were projects in my constituency and my local authority was successful in bidding for money to start to build council housing again. That is what we have to get back to. It will be no good the Minister’s coming to the Dispatch Box and saying that it has all been bad under both Tory and Labour Governments. We have to get this right for future generations.
We have heard about the flexibility of having 80% of market rents. To give them credit, many registered social landlords and housing associations are saying that going for 80% of market rents would fundamentally change their ethos. It would mean that they were no longer providers of social housing and they believe that they would be wrong to go down that route. To accept rents of 80% of market rents would be to accept the principle that people who live in social housing should subsidise the future development of social housing—that they should pay for it rather than the general taxpayer or anyone else. For many years, people buying private housing got enormous subsidies. A myth has built up that there are huge subsidies for council housing, but the housing revenue account has paid its own way for decades. Even my local authority, in its response to the consultation on social housing rents, made the mistake of believing that there was a cost to the taxpayer of providing social housing.
It cannot be right, at a time when the Government have stated that they want to cut the housing benefit budget, to introduce a policy of moving social housing rents towards market levels. That has to be counter-intuitive. The people who cannot afford to find rented housing in the private sector or to buy will, by the very nature of the problems they are facing in their lives at times of crisis when they search for social housing, be likely to get priority and be on lower incomes, so that policy is likely to have an impact on housing benefit if rents of 80% of market rents are encouraged. At the same time, the changes in housing allowances and the new 30th percentile rate will increase the amount that people will have to contribute to their rent if they are in the private rented sector. That will force many people who live in central London to move to areas such as mine where rents are lower, relatively. That is bound to increase the demand for housing there, which could have an impact on the private rented sector and, again, have a negative impact on rent levels if demand goes up. If the private rented sector refuses to rent to people on housing benefit, what will happen to those people and what will be the consequences for local social housing and the level of demand? How will the council deal with that?
What the Government propose in their social housing strategy does not add up or make sense and will have very contradictory outcomes in many areas. The fundamental problem behind what we are dealing with is supply. Some hon. Members have argued that we should have flexible rents that change as people move through social housing and that people should move into the private sector as they gain employment and increase their income. I do not agree that people should be in social housing only at times when they have a low income and that they should be encouraged to move through the system. Such arguments about the management of social housing are to do with the fact that we are managing a limited supply of housing. That is the fundamental problem and we have to increase that supply.
One issue with which we have faced problems in the past—successive Governments have been at fault in this regard as well—is the supply of land. We have put too many obstacles in the way of local authorities’ supplying land to build social housing. In fact, we have often put incentives in their way to dispose of it. We end up in the curious situation whereby local authority land is sold to a private developer for it to build a housing estate, so that we can try to get a residual amount of properties through that development for social housing under planning gain—usually through a housing association whose rents are higher than the local authority’s target rents. That is certainly the case in my area. That approach has failed to deliver the number of properties that we needed over the past two decades, and is a major contributory factor to the huge shortage of social housing in London.
I do not blame private developers. They do what private developers do. They swim in the sea of regulations that we create for them. The profits that they can make from private developments—buying the land, developing it and selling it on—are absolutely huge. We have failed to tap into those profits to recycle resources and invest in future social housing. As a consequence of that policy, until only a few years ago we saw, effectively, a year-on-year reduction in the units of social housing available for rent. So we need to ensure that the land is made available, and that local authorities are encouraged and given incentives to make that land available for future developments.
Where there have been developments they have often been of the wrong type, in which the properties are not available to local communities. Shelter did a study of eight local authority areas. One was Tower Hamlets, and although that is not my local authority the report makes very interesting reading. Between 2006 and 2010, 10,430 properties were built in Tower Hamlets. Barclays bank, whose headquarters is in Canary Wharf in Tower Hamlets, has just paid out over £1 billion in bonuses to its staff. I wonder what that £1 billion could have done for the 21,000 local people on the housing waiting list in Tower Hamlets if it had been invested in local housing.
Of the houses that were built in the four years between 2006 and 2010, 8,500 were in the private sector and just under 2,000 were built by housing associations. None were local authority builds. Fifty-four per cent. of the properties in Tower Hamlets have been built since 1966, and yet there are 21,000 on the waiting list. There is a very high vacancy rate in the new-build properties in private ownership. So we have been building houses at a heck of a rate in Tower Hamlets, but we have not been building them to meet the housing crisis there. I am not attacking the local authority; I am not attacking anyone. As I have said, it simply highlights the fact that the policy is completely and utterly wrong.
I have a development in my constituency, the Kidbrooke Regeneration. I visited some of the brand-new properties that had been built as the first phase of that development— beautiful properties. The price is £300,000 for a two-bedroom property overlooking one of my local parks. I asked who the target market was for those properties—who was expected to buy them. Was it local people living in big three or four-bedroom houses who were nearing retirement, whose children had moved on and who wanted to downsize to a comfortable flat? I was told “There may be one or two of those, but mainly we’re advertising abroad.” In that regeneration we have knocked down 1,900 local council properties. About 30% or 35% of the 4,400 properties will be social housing, provided through a housing association. Most of the private properties will be targeted at people who are not local.
I am not attacking the developer; it works in the market that is out there, and is trying to maximise its profits, as any company would. However, clearly we need to look at how we encourage development, and who we encourage it for, if we are ever to deal with the lack of supply that is at the root of all the problems that we are debating today.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
I do not intend to intervene very much. The hon. Gentleman raises an interesting point, but how does he reconcile his proposition with the commitment of the previous Government, the current Government and the Mayor of Newham to the desirability of encouraging mixed communities, so that there is a range of tenures, occupations and populations in an area, which benefits the economy of the area?
Clive Efford
I am grateful to the Minister for that point, but I am slightly confused because I saw him nodding encouragingly to the hon. Member for Hendon (Mr Offord) when he said that Bob Crow should be evicted. I thought Bob Crow was doing his part to create mixed communities.
Clive Efford
I would like to know what public subsidy the Minister is referring to; perhaps he will elaborate when he makes his speech. One of the myths frequently peddled about social housing is that it is publicly subsidised.
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.
Jim Fitzpatrick
The Minister and I share several passions: the Thames Gateway, because we both live there, the no to AV campaign and West Ham United football club. He is also a former constituent of mine on the Isle of Dogs. I raised earlier issues about market rates in the Canary Wharf area and people in Tower Hamlets who cannot afford 80% market rates on those terms. Given his background—I would not challenge his credentials and pedigree as a Londoner—does he not recognise that the Government’s policy of trying to force market rates of 80% rents for social landlords and council housing will drive local people out of Tower Hamlets and into wherever they can find decent housing?
Robert Neill
I understand the hon. Gentleman’s point, but two things have to be recognised. The first is the acceptance in his party’s manifesto that the current model of dealing with housing benefit was not sustainable. Secondly, I will go into this in a little more detail in a moment—I hope that he will forgive me if I return to it in the order that it appears in my speech—but there remain significant numbers of houses in London that are affordable. It cannot be sustainable for people who happen to be in receipt of housing benefit who can afford houses not to have to make the sometimes difficult choices that people in work at lower wages have to make.
I will return to the detail later, because there are some useful points to make. However, it is also worth saying something else—something that I am sure the hon. Gentleman and others will reflect on. I put this as gently as I can to Opposition Members, but they are not really in a position to criticise this Government for trying to do something to deal with the housing crisis in London when they left us in such a heaven’s awful mess in the first place. We heard a grudging acceptance that things were not quite right from some Opposition Members, including one or two who served in the previous Government, but let us put things where they are: the lowest levels of house building in peacetime since 1924; social housing waiting lists at record levels; 250,000 families in social housing living in overcrowded conditions; and—this is a particularly worrying factor—only half of social tenants of working age in work.
That is the inheritance that this coalition Government are trying to pick up, and at a time when there is less money available from the public finances, because of the economic mess that the previous Government left behind. I can understand that people such as the hon. Member for Islington North, who have been consistent in their criticism, are entitled to make the points that they do. However, there are other Opposition Members who—if I may politely say so—have selective memories, and I am not prepared to brook criticism from that source.
There is some common ground between us, however, so let us look at what we need to do. The hon. Member for Edmonton (Mr Love) talked about the need to increase supply, which is obviously right. We need to increase supply right across the types of tenures that are available, because the complexity of the London housing market is such that there is no single bullet. That point is right, and I will deal with it later. We also need to look at flexibility in social housing, which includes the questions of tenure and so on. There is probably common ground there, too. We also need to accept that there is an obligation to protect the most vulnerable and disadvantaged—something that I also want to touch on.
On the first point, about supply, I am not going to rehearse the rights and wrongs of our disagreement with Labour about the targets approach to the delivery of housing. We know where the previous Government stood; Labour Members know where we stand. However, at the end of the day, there was a failure to deliver an adequate supply of housing. We are determined to take steps to address that, which is why we are seeking to incentivise housing right across the board. That is why the new homes bonus is an important factor in again giving communities a real stake in giving permissions. That will be important in dealing with the reluctance of some communities previously to accept needed development because they felt that they had no stake in it and that it had been imposed on them without having a proper say-so. That is why we propose to reform the community infrastructure levy and turn it into a localised tariff, so that—to deal with the point that the hon. Member for Hayes and Harlington (John McDonnell) made—the community that receives development has a means of getting back a meaningful proportion of the planning gain arising from it.
Those are some important supply-side issues, but we are also setting aside £1 billion over the comprehensive spending review period for the new homes bonus scheme—I would politely point out to the hon. Member for Edmonton that the first £200 million, in the first year, is additional money from the Treasury. We seek to incentivise those authorities that are prepared to accept necessary and sustainable growth. We are investing a further £6.5 billion in housing, which includes more than £2 billion to make existing social homes decent and nearly £4.5 billion in new affordable housing to help to deliver up to 150,000 affordable homes. There is therefore significant investment taking place, against a background of seeking to pay down the debts that we inherited as a Government.
Those are supply-side issues that we are seeking to deal with, but the other key issue to the supply side is getting the economy right. Ultimately, confidence has to be restored to the markets, so that people start lending and builders can build once more. Getting the economy right—on which the Opposition have not been exactly supportive of the Government so far—is key, too.
Heidi Alexander
The Minister is talking about supply-side interventions. Can he explain why the Government have insisted on the new homes bonus gimmick, rather than putting that money directly into capital subsidy for building new affordable homes?
Robert Neill
It is not a gimmick; it is a holistic solution. With respect, the hon. Lady is making exactly the error that Labour Members sometimes make, which is to pluck out social and affordable housing policy and to treat it as though it were separate from the rest of the housing market. Everything is interlinked, however, and the key objective is to increase supply across the board. An increase in supply will lead to greater mobility of people, which will free up accommodation in the often hard-pressed social rented sector.
I want to turn to the changes to flexibility in rents and market rents. Those proposals have been made because affordable rent is a less grant-dependent system than previous models. Criticism has been made about the grant, but we have had to reflect the fact that money is limited because of the mess we inherited. We have moved to a model that we think is proportionate and less grant intensive, in order to make better use of the money. This also recognises the reality that we need to encourage housing associations. I am sorry that there has been a degree of criticism of housing associations. They vary; in my experience as a London MP, I have found that some are very good, and others less so. It is wrong, however, to denigrate the whole sector, just as it would be wrong to denigrate the whole private landlord sector. Lest I forget, let me place on record the fact that my entry in the Register of Members’ Financial Interests refers to a single property from which I receive some income.
If we are to generate income for reinvestment in new affordable housing, there has to be an income flow into the housing associations. As a result of the mess that we inherited, that cannot be entirely dependent on Government grant, so it is necessary to get that money from somewhere else. That is why we believe that an affordable rent model will lead to more houses being built, and more households being able to access the benefits of what is still a sub-market rent.
We are all concerned about the specific situation in London, which is why we are devolving the Homes and Communities Agency’s powers to the Mayor. The Mayor has raised issues about the way in which he intends to operate these functions in London, and we will look at the flexibility of that. We will also look at the responses of various associations, and the Minister for Housing and Local Government will respond to those in due course. That is why I will not go into that matter further at this stage.
It is important to recognise that the housing policy spend in London is significant, and that the Mayor has already established a good track record in this area. He is on track to deliver 50,000 affordable homes by the Olympics, but he has been up front and said that, because of the economic situation, that might have slipped by a year. However, he preferred to be honest and say that it had slipped a year because of external economic factors, compared with the previous Mayor, who set a 50% target that was not met in any of the eight years that he was in office. The best he achieved was 34%, so Mayor Johnson is much more on track than his predecessor. He has also recognised that we will need transitional arrangements to deal with the issues arising from the change to an affordable rent model in the sector.
The reform of tenure was recognised before the election by the right hon. Member for Don Valley (Caroline Flint), in one of the periods when she was off the Front Bench, as an issue that needed to be tackled. In that context, existing tenants will be protected. It seems perfectly reasonable to say that, if we are to encourage a more flexible supply of tenure, people who go into a new tenancy should do so in the knowledge that, if circumstances change, it will be appropriate to review that provision.
Robert Neill
I will finish this point, then I need to make way for the hon. Member for Islington North.
Some of the more alarmist comments about churn in a city that has a great deal of population churn anyway are unjustified.
Ms Buck
Will the Minister confirm something for the record? I understand, following the consideration of the Localism Bill in Committee, that existing tenants who voluntarily downsize to smaller properties or move from overcrowded properties will, after the new rules are introduced, be subject to short-term tenancies. That does not seem to me to be consistent with what he and others have said about current tenants not being affected.
Robert Neill
The point is that it is a voluntary change in the arrangements, not what exists at the moment. At the end of the day, we must be sensible and recognise that, if we want more new homes, either we go down the route of pumping more and more public money in—when, thanks to the actions of the previous Government, there is no public money—or we go down the alternative route of using a bit more common sense and imagination and being prepared to look at more flexible models for dealing with the situation.
Ultimately—I am conscious of the need to allow the hon. Member for Islington North time to respond to the debate—this Government are strongly committed to housing in London. The current Mayor is committed to housing in London and there has been a 35% increase in the number of affordable starts since Mayor Johnson took office. Increasing the number of family-size properties is another important issue and there has been a 40% increase in three-bedroom houses, so we do not think that we have anything to be ashamed of in respect of our housing policy in London. I am confident that, when we debate the subject again in perhaps a few years’ time, I shall be able to defend Mayor Johnson’s record after he has been re-elected. I am sure that the hon. Member for Islington North will still be there to raise housing issues with the same passion and vigour. I hope that I have left him enough time to conclude.