Stephen Pound
Main Page: Stephen Pound (Labour - Ealing North)
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.
Stephen Pound (Ealing North) (Lab)
The Joseph Rowntree Foundation produced a report on the desirability of mixed tenure back in 1990. We have had that argument, and we have moved on a bit. With regard to my hon. Friend’s point about the development in Kidbrooke, does he agree that one of the real problems, referred to earlier, is the people who buy to let? Does he agree that it might not be too fanciful to suggest returning to the days when a person could have only one mortgage, rather than having 10, 15 or 20, in a way that rips the heart out of any housing development?
Clive Efford
I agree. Buy to let has not been the success that some thought it would be in providing rented accommodation and encouraging people to enter the private rented market; that idea has been consigned to the history books. I hope that we do not go back down that route again.
We need to deal with the problem of the supply of social rented accommodation. I point out to the Minister, before he attacks the previous Mayor of London’s record, that thanks to the last Government’s subsidy, the number of affordable house-building starts in 2009-10 was 16,000. Last year that was down to just over 2,000. This year, 2011-12, the figure is 2,000. From 2012-13 it is zero. I do not know how the Minister will explain at the Dispatch Box how the Mayor of London will hit his 50,000 homes target without building a single home in 2012-13 or 2013-14—unless, that is, the Mayor moves a whole host of Bob Crows. [Interruption.] The shadow Minister, my hon. Friend the Member for Westminster North (Ms Buck), is waving an informative graph at me; coincidentally, I happen to have a copy. It is from the Homes and Communities Agency, and she will no doubt refer to it in her speech. It officially confirms the figures that I gave; they come not from a Labour party press release, but from the Homes and Communities Agency. Boris has clearly failed in his objective and his promise to provide affordable housing for people in London.
Another policy that we must confront is the one that Boris described as “Kosovo-style social cleansing” when it was announced. I have never agreed with him more—but unfortunately, the following week he went on to say:
“My consistent position has been that the government is absolutely right to reform the housing benefit system which has become completely unsustainable. I do not agree with the wild accusations from defenders of the current system that reform will lead to social cleansing.”
Boris says one thing in front of a microphone when the policy is first announced, but he secretly makes those comments at a later date. When the matter is in the media and it is discussed on the 6 o’clock news he appears to stand up to the Government, but after he has been sat on by the Minister and everyone else, he sneaks out a press release a week later saying that he absolutely agrees with their policy—a policy that will result in people on low incomes being moved from large areas of inner London to places outside London where private sector rents are lower.
There have been huge clearances of estates, to which my hon. Friend the Member for Hammersmith (Mr Slaughter) will doubtless refer, as perfectly good council housing, in which millions of pounds has been invested under the decent homes programme, will be knocked down to make way for private luxury developments. The Conservatives just do not get it when it comes to housing. Surprisingly, the Liberal Democrats do not get it either. My hon. Friend the Member for Hayes and Harlington (John McDonnell) made a point about how essential it is that people on low incomes should be able to live in mixed communities across the capital. During the earlier spell of cold weather, my local authority kept the roads clear so that people could get to work. I am sure that that was true, too, of Hammersmith and Fulham, Kensington and Chelsea and other areas.
There is affordable housing in those areas for people who do all sorts of jobs in the local economy, from driving refuse lorries to sweeping the roads and pushing trolleys in local hospitals or even cleaning floors in posh houses in the leafier parts of central London, but those people will have nowhere to live in those communities if the Government continue to pursue their policies. Those people will not be there to do jobs such as stacking shelves in supermarkets. They are an essential part of our local economy, but they will disappear from many of our communities. The biggest effect on the Tories will perhaps be that their cleaning costs will go up, because of the shortage of cleaners, pushing up the hourly rate.
During the crisis in the freezing cold weather, many of us could get to work only because fairly low-paid people in local authorities across the capital got into work early in the morning, driving gritting lorries, clearing roads and so on, so that buses could run and other people could keep the economy moving. Those people are an essential part of our economy. I suspect that they will not qualify, even if they can afford it, for key worker schemes, to buy properties in those areas. They will be forced out by higher rents and the lack of housing benefit designed to support part-time workers who provide essential jobs such as child minding and caring and other roles. Under the policy, they just will not be there.
Social housing is not just a benefit that is means-tested and provided by a welfare cheque. It is an essential part of our communities and economy. To get rid of it in large parts of the capital is a hugely retrograde step that we will all come to regret. Social housing is also essential not just for people on low incomes, but for those who aspire to buy their own homes. We know now that the house lending market has changed—probably for ever, but certainly for a long time. It will no longer be possible to gamble on the future value of a house to borrow 100% of its cost on the understanding that we know that it will be worth more in the future; 100% mortgages are a thing of the past. Any bank or building society will make it clear that no one is lending 100% mortgages any more, and they do not foresee that happening. That means that people will have to be savers for a long time before they can become home buyers. Even people in social housing who aspire to buy their own home will have to save for a long time.
In a study published in October 2010, the Home Builders Federation came to the conclusion that
“In London, first time buyers aged between 22 and 29 cannot pay their rent and save for a deposit—this would cost 10% more than their net monthly income.”
It goes on to state:
“The average deposit across the UK is 230% that of average salaries—almost 300% in London.”
Even if people wanted to become home owners, if they are forced into the private rented sector they can never save enough money to do so. That tells us that affordable rented accommodation is not just about people on benefits or on low incomes, people who lack aspiration or are in a crisis in their lives, but is essential to the future of the housing market, particularly in London where deposits will be high. If we do not provide affordable housing at levels at which people who may aspire to become future home owners can reasonably be expected to save at a decent rate, we are undermining the future of our own housing market. To have a home construction industry in the future, we will be relying on developers of schemes, such as mine in Kidbrooke, where they sell to people not from the local community, not even from the UK, but to business people from abroad. That cannot be right. That is not right for the future of our city, and we should not encourage it.
My final point concerns the social management of council rents and registered social landlord rents in order to create mixed communities. As my hon. Friend the Member for Ealing North (Stephen Pound) said, we have debated that for many years and it has never worked. When I grew up in rented accommodation in Southwark, surrounded by friends who all lived in rented accommodation, we had mixed communities. In those days, under a Labour Government, unemployment was not prevalent. Under the most recent Labour Government we increased employment enormously, and that is the policy that we need to return to, rather than the huge cuts that we see from this coalition Government.
The idea that we cannot create mixed communities because we have social rented properties is something that we should put behind us and never return to. It is not a matter of the tenure, but the people who live there. If we provide employment, we provide mixed communities, whether Bob Crow lives there, the local GP or shop owner, or someone experiencing a temporary period of unemployment. We need a Government who are prepared to stand by people and help to create jobs in those communities and invest in them in order to ensure that we do have mixed communities. They will not be created by flexible rents and social engineering.
Angie Bray (Ealing Central and Acton) (Con)
Thank you, Madam Deputy Speaker. Having rightly been chastised by you for allowing my intervention to run a little long, I thought that I would expand it into a very brief contribution in the form of a speech.
I want to reiterate the point that I was trying to raise with my hon. Friend the Member for Hendon (Mr Offord). In a number of areas, London has a particular set of circumstances that are not shared by the rest of the country. I sometimes feel that London does not get fully considered in the general policy making of Governments of all persuasions. That is why it is so important that we London MPs should sometimes get together and have an opportunity to raise some of the specific issues affecting our constituencies. What we are debating is a particularly important example.
I want to draw the Minister’s attention to something brought to my attention by representatives of a couple of London housing associations, who came to see me to express concerns. They are very keen to build more family-sized houses, which is what we all want. As I said before, it is fine to have large numbers of the sort of very small affordable flats that the previous Mayor of London was famous for building, but there are not the family-sized homes that we all want.
The issue is that the housing associations would very much like to build family-sized homes, but to be able to—in London, particularly—they will probably have to go to the 80% of market value to generate the kind of funds that will make such building possible. There is concern that they may find it difficult to charge that rate to a number of their tenants, but without that 80% they will find it difficult to deliver the kind of homes that we all want so badly. A bit of a problem has been thrown up through the particular circumstances that pertain in London.
I hope that the Government, particularly the Homes and Communities Agency, will bear those circumstances in mind when making the assessments. I am delighted that the HCA is going to be taken into City Hall, because that will make it a great deal more sensitive to the needs of Londoners. It is important that the gap should be considered properly to ensure that there are family-sized homes in the affordable sector. They need to be built, because they are such an important part of building our communities.
Stephen Pound
I am grateful to the hon. Lady, my neighbour, for giving way. She says that family-sized homes are the homes that “we all want”. May I urge her to accept the fact that not everybody wants to live in a family home? A great many people with disabilities, or widows, widowers or people on their own quite enjoy the small properties that she rather put down and implied were some creation of Ken Livingstone that nobody wanted to live in. Actually, a great many people do.
Angie Bray
I thank the hon. Gentleman for that important contribution. Of course it is true that not everybody wants to live in family-sized homes, but the problem in the past was that small properties were the only affordable housing on offer. A large number of families in our communities need affordable houses, and one or two-bedroom, even three-bedroom, flats simply do not accommodate them properly. It would also be nice to think that families might have a bit of green space outside and not always be housed in large blocks of flats.
Of course there has to be a balance, but in the past family-sized houses were neglected; it was too easy to tick boxes, as the previous Mayor did, to say, “I’ve delivered X affordable homes,” but they were flats rather than the family-sized houses that many of us think of when we hear the word “homes”. My request to the Minister is that he ensures the Government are fully aware that London’s special circumstances make it important to recognise the particular problems of housing associations when they are providing housing in areas where market rents are high.
Frank Dobson (Holborn and St Pancras) (Lab)
Research by the school of medicine at University College in my constituency suggests that apart from smoking, the principal sources of avoidable illness and premature death are overcrowding, homelessness, a poor standard of housing and insecurity of housing. We need to bear that in mind when discussing anything to do with housing.
The previous Government achieved quite a lot in improving the existing stock, but were carried away by the fashionable idea that the first step on the housing ladder is the cheapest place that people can buy. It seems to me that the first step on the housing ladder is somewhere decent to live that meets the needs of the people concerned, whatever the form of tenure. There is no excuse for the state of housing and the massive pressure for further social housing in London, including my area of Holborn and St Pancras, and Camden in general, because we should have a big drive to start building more houses.
It is very simple. We do not need a degree in some fantastical form of economics to conclude that if there are not enough houses, one of the things we do is build more of them. It has been done in the past—admittedly when I was leader of Camden council. I do not say that vaingloriously, but because it demonstrates that things can be done and problems addressed. During the 1970s, Camden council built no fewer than 500 new homes a year, and sometimes started as many as 1,000 a year. We were much mocked when we bought between 5,000 and 6,000 flats from the private sector, largely at the behest of the people living in them, sometimes in real slums but sometimes in mansion flats overlooking Parliament Hill Fields. Those people wanted to become council tenants because they wanted security of tenure and to get away from Rachmanite private landlords. The arrangement had the benefit of giving them security but it also meant that when anywhere fell vacant the council could let the property to people on the housing waiting list.
One of the consequences, which strikes me almost violently, is the difference between what happens at my advice surgeries now and what happened when I was first elected in 1979, at the end of the period of building and of the municipalisation of housing in Camden. When I was first a Member of Parliament, if people came to me and said, “We need somewhere decent for our family”, I would write to the council, which would write back. I used to tell people, “If you haven’t got a new flat in six or nine months, come back and see me.” Hardly any of them had to do that because they were rehoused. If I said that now, they would all be back because hardly anybody is rehoused any more. The problem has been that all those who form the leadership in our politics have not given sufficiently high priority to building and providing social housing for people who cannot afford to purchase a home.
Instead of buying and building property, there has been a lot of selling. Some councils, including Camden under the Lib Dem-Tory coalition—we had some experience of that between 2006 and 2010—sold off valuable street properties to the private sector. The housing associations in Camden, two of which were established as niche organisations to help solve problems, started selling off properties. Circle 33, which was founded in Primrose Hill in the 1970s, grew and grew, became Circle Anglia and started selling off much-needed property in my constituency so that it could use the funds to build social housing in Cambridge. That was not its purpose, in my opinion and that of most of the people I try to represent.
Even under Mrs Thatcher—I must give her credit for this—when public land became surplus, be it from the railways or the hospitals, the local authority was given first choice of whether it wanted to buy it for socially useful purposes. That prevailed for a long time when Mrs Thatcher was Prime Minister. Subsequently, doubtless at the Treasury’s behest, things were sold to the highest bidder. It is about time we went back to giving first go to using surplus public land for public social purposes.
In my area, it is as if someone has declared war on the prospect of providing more social housing. There is a proposal, which I support, for the biggest laboratory and research centre in the country to be located behind the British Library in Somers Town in my constituency. It is a combined effort by the Medical Research Council, Cancer Research UK, the Wellcome Trust and University College. It will undoubtedly make a major contribution to medical research worldwide, but it is located on a site, a substantial part of which was originally designated for housing. All the time that the talks were going on, I argued that some land that the Medical Research Council owns at the National Temperance hospital should be made available for the housing that would be displaced from the laboratory site. However, the Government have decided, “Oh, no. It should be sold on from the public sector.”
Similarly, when properties became surplus after the new University College hospital was built, a proposal, which local people and the council overwhelmingly supported, was made to knock down buildings and build decent housing on what was known as the Middlesex hospital annexe site. Two and a half years ago, a proposition by English Heritage to list the building was duly turned down. The law states that if a Minister wants to reverse that decision, they cannot do it within five years unless something new comes up. Someone managed to cobble together a connection between this ex-workhouse and Charles Dickens and claimed, at one point, that it was the workhouse described in “Oliver Twist”. Well, they had obviously not read even the first page of that book, because Oliver had to leg it to London from the workhouse in a country town often believed to be Kettering.
Stephen Pound
I am reluctant to intervene on my right hon. Friend, but as one who spent 10 years as a hospital porter at the Middlesex hospital, I can assure hon. Members that the connection is that Charles Dickens frequently gave public readings that funded the hospital’s building. That is the connection, although on Kettering my right hon. Friend is spot on.
Frank Dobson
But no one claimed that famous connection. Indeed, English Heritage was quite happy to nod through the demolition of the whole of the Middlesex hospital—we are talking about the annexe that was left. Anyway, that programme for a large number of new flats has been set back for God knows how long.
Similarly, there is meant to be the building of a lot of social housing on the King’s Cross railway lands behind King’s Cross station, but I understand that the project has been set back because Ministers are not prepared to help the private developer comply with the section 106 agreement that the developer entered into in order to get on and build some new flats. As a final encore from the Government, they are proposing not just to prevent the building of new social housing, but to knock down social housing for 360 people who live in the blocks of flats that will have to be knocked down if High Speed 2 is going to come into Euston, which is itself a ridiculous proposition.
We feel a trifle beleaguered in Camden. We are massively affected by the ludicrous increase in property prices in our area and the ludicrous increases in commercial rents. However, at the same time as rents are soaring out of sight, the Government, including those caring Liberal Democrats, have proposed the slashing of housing benefits. To demonstrate just how out of touch they are in setting the new housing benefit maximum levels, I will provide a simple illustration. A Member who lives outside London and needs to rent a single-bedroom flat in London is given the money—rightly—by the Independent Parliamentary Standards Authority. IPSA has decided that the going rent in London for a single-bedroom flat is £340. That is the most it will pay. However, £340 appears to be a magic figure among public bosses these days, because the Government have decided that £340 is also the maximum housing benefit that can be paid to anybody in London for a three-bedroom flat. So officialdom now says, “One-bedroom flat for an MP: £340. Three-bedroom flat for a family: £340”. The fact is that the going rate for a one-bedroom flat probably is £340, but for a decent privately rented flat in London, £340 goes nowhere near towards meeting the costs of family accommodation.
There are all sorts of arguments about what we should do about this problem. My point is this: If in that great centre of capitalism, New York—so that includes Wall street—they still have rent controls in the private sector, I see no reason why we should not reintroduce rent controls in this country. If that upsets a few property developers or if the Gaddafi family’s property portfolio suffers from a cut in rental income, I do not really mind. I want rents to come down and there to be a massive increase in housing for those most in need, because as my hon. Friend the Member for Eltham (Clive Efford) pointed out, there are legions of people whose daily contribution to the life of this city makes it a tolerable place to live.
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.