Skip to main content

Council Housing

Volume 400: debated on Tuesday 25 February 2003

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Motion made, and Question proposed, That this House do now adjourn.— [Dan Norris.]

7.31 pm

I am pleased to have the opportunity to raise before the House this evening the important subject of a future for council housing. I am especially pleased that the Minister for Social Exclusion and Deputy Minister for Women is to reply. because she has visited my constituency, albeit an ancient market-town, within the past two years.

It is somewhat of a contradiction for me to say that housing is a growing problem in my constituency, in the sense that Braintree, Witham and the other 45 villages that make up the constituency form one of the fastest growing areas in the country. Between the last two general elections, 7,000 extra voters were added to the list, and that has risen by another 4,000 since the last election. The town of Braintree is ringed by new housing developments, but they are mainly of executive-style houses with some social housing. The other major town in the constituency, Witham, is only 45 minutes from London Liverpool Street.

People who move to the area from London, or even from Brentwood and Chelmsford further south in Essex, regard the Braintree district as a relatively cheap housing aria, but everything is comparative. Cheap in Braintree means that the average price is £153,000 for a house. Hon. Members will begin to see the difficulty in attracting key workers and others to move into the area when prices are running at that level.

That difficulty is exacerbated in the villages that surround the main towns. They are picturesque villages with country cottages that people would go out of their way to buy if only they could, but over the years the cottages have been renovated, refurbished and given every modern improvement. They are now way outside the price range of the local people who have grown up there and the families who have lived there for generations. Many local people live in the council houses that still exist in most of the villages, although many have been sold. Some social housing schemes have been built through housing associations but the number built is insufficient to meet the need.

Braintree has a larger council housing stock than many authorities. In 1979, we had 14,000 properties in the Braintree district, but that has now fallen to 9,000. Of course, the population was much smaller in 1979, so the ratio is rising all the time.

Witham is a mediaeval market town. It expanded enormously in the 1960s and 1970s. The Greater London Council developed estates there, and people were attracted to the area to work. The housing was considered to be cheap compared with that in London and the inner-city suburbs. The local authority ensured that people who went to Witham to work had adequate housing, whether bought or rented.

One of the schemes run by the old Witham urban district council involved houses built for sale. The council would build and sell the houses, and grant 100 per cent. mortgages on them so that people could move in straight away to work in the town. By chance, Mr. and Mrs. Hopkins from Witham came to my advice surgery on Friday. It emerged from our conversation that they arrived in Witham in 1969. They were just married. Mr. Hopkins was working at the Crittall window factory in the town, earning £30 a week. He went to the council for a house, and was offered a new house—semi-detached, with three bedrooms—for £4,275. The council also offered him a 100 per cent. mortgage. His only outlay was £126 for legal fees and stamp duty. Recently, his son looked at a one-bedroom flat, priced at £105,000. Workers in the same position as Mr. Hopkins today would have to earn £54,000 a year—the same as a Member of Parliament, and not what a factory worker earns.

Over the past century, housing policy has ebbed and flowed. The Labour party can claim credit for a number of policies, including Wheatley's Housing Act 1924, which allowed local authorities to subsidise council house building. That was the first spur that allowed large numbers of working people to have decent housing accommodation.

David Lloyd George's remark about "homes fit for heroes" is often quoted, as though he betrayed the promise, but 1.5 million council houses were built between 1918 and 1939. To people used to slums and tenements, they were like small palaces. On the walls of many of the older council estates—in Witham, or Dunmow, for instance—one can still see the crest of some long gone urban or rural district council. They may be faded or covered in ivy, but they show the pride local authorities took in providing housing for their residents.

After the second world war, the two main political parties vied with each other as to how many houses they were building. Between 1945 and 1951, the Attlee Government built 1 million houses. The Conservatives said that they would build more, and did—although we said that they were not as good as ours. The point was that the two main parties were taking part in what amounted to an auction, striving to build more and better houses for millions of working people.

However, the shadow of the end began with the Heath Government of the early 1970s, when the sale of council houses started. It is true that our former colleague, when Prime Minister, was still building houses as well as selling them, but the change in the philosophy had already occurred. Of course, that led to the right to buy under Lady Thatcher's Government of the 1980s. It was a political—or cynical—stroke of genius. It was ultimately and understandably impossible to persuade tenants that they should not be allowed to buy their houses. How can those who already own houses argue with those who wish to buy them? However, the policy had a consequence.

Restraint on capital receipts and ring fencing moneys meant that councils could not even bring themselves to think about building affordable houses for rent. The figures speak for themselves. In 1953, 200,000 council houses were built. That may represent the peak, but for a long time, the figures for construction in one year competed with those of the previous year. Yet at the beginning of the new century, the figure was 700. I appreciate that we should add housing association properties to that, but they amounted to only 17,000 in 2000. There is a chasm between the actions of our political forebears and ours.

The total number of houses built has decreased. In 1968, 350,000 houses of all sorts were built. In 2000, the figure was 135,000. Again, that represents an enormous drop. The crisis is not equal throughout the country; the pressure is concentrated in the south and the east. Councils must consequently juggle with an impossible position. They are statutorily bound to house people, but they do not have the houses. That means that the composition of council tenancy is totally different from that in more egalitarian times.

I am encouraged by the starter home initiative and plans to help key workers, but I understand that the total number for Essex, one of the more populous counties, will be 179. Even if we greatly expand the programme, it will not deal with the devastating problem of the shortage of affordable housing.

The Union of Construction, Allied Trades and Technicians is running a vigorous campaign on several fronts, especially on stock transfer from local authorities to arm's-length or third-party organisations. We await the outcome of the National Audit Office's evaluation; it is about to announce its results. UCATT is also campaigning for a programme of social housing and seeking solutions to an overheated housing economy.

We all know that prices have soared in past few years in the south and east of our country. Low interest rates currently offer some comfort. However, not long ago, interest rates reached 15 per cent. If those times returned, current mortgages mean that a genuine housing disaster would loom. As Brer Rabbit rightly said about the old well, "What goes down must assuredly go up." Equally, what goes up must assuredly come down. We should remember that.

I believe that there is an old saying, "Planning the future by studying the past." I invite the Minister to examine the part of the past that I recently studied and consider reinstating the programme of build for sale. The right to buy has created mental paralysis, and low cost housing is not constructed in sufficient numbers. If councils were empowered to build low cost housing for sale, backed by municipal 100 per cent. mortgages, we might begin to create decent houses for people on lower incomes.

The Government should make land available. They and their many agencies have huge land banks. They are disposing of them, normally for private housing in a more expensive bracket than the sort of housing that I believe to be necessary for many ordinary working people in this country.

Of course, the beauty of build for sale is that the mortgage repayments would be roughly the same as rent. On the sale of properties, the person who bought them would keep the profit, the mortgage would be returned to the council and the money would recycle—the beginning of a pump-priming programme. The gem of the scheme is that right to buy is no longer a problem, as the houses will have been sold. I understand that some houses will be needed for rent and that many people will never be able to buy outright, but for modest-income families, build for sale with 100 per cent. council mortgages is a way of restoring the situation and providing the sort of house that my constituent, Mr. Hopkins, bought in 1969, and which my father bought in 1938 on the private market. We have to make certain that this generation can do as well as the previous one.

In conclusion, we must not be so timid. In five or six years, the Attlee Government created the national health service, built a million houses, furthered the welfare state and established the national parks. It did so against the background of the crisis of the second world war, rearmament for Korea and a serious international financial situation. I believe that we can take steps along the road that I have indicated.

In my constituency is situated the village of Silver End, which was founded in 1926 by my Labour predecessor as Member for Braintree, Sir Valentine Crittall. The Crittall family built the village as a farseeing model village for the people who worked in their factories. It was a wonder of its time. The motto of the Silver End coat of arms demonstrates the will to act as a lesson for us today. That motto reads: "Why not?"

7.46 pm

The Minister for Social Exclusion and Deputy Minister for Women
(Mrs. Barbara Roche)

I warmly congratulate my hon. Friend the Member for Braintree (Mr. Hurst) on raising this very important subject and on the extremely eloquent way in which he has done so. It is right to say that we do not discuss issues of housing and affordability as much as we should in this House, so I am very grateful to him for giving me the chance to air them in the Chamber. He was right to set the debate in the context of what previous Labour Governments have achieved. I hope that towards the end of my speech, I will have convinced him that what we seek to do is place the issue in today's context, but in a way that pays due tribute to those who came before us.

I well understand the sort of pressures that exist in my hon. Friend's constituency, which I have had the pleasure of visiting. Indeed, I hope to visit the area again soon—something that we discussed earlier this evening, before this debate. The sort of pressures that exist in his constituency are a good illustration of what is happening generally in the south-east. Like many districts in the south-east, Braintree has experienced significant population growth. It also benefits from its location near to key roads and is well connected with Europe. As my hon. Friend made clear, it has obviously been experiencing significant economic growth.

The truth is that in recent years all Governments, of whatever political complexion—this is not a party political point—have failed to face up to the implications of economic success, population change and the need to provide adequate levels of housing, especially in London and the south-east. On a constituency note, speaking as a London Member of Parliament, I know that only too well from my own experience.

Quite rightly, my hon. Friend has spoken about the importance of council housing. There is no doubting the innovation in the building and the reconstruction that took place in the post-war period. My hon. Friend has accepted that people have different aspirations. We must provide them with a variety of options. Some will want tenure of social housing or to be in a housing association, while others will want owner-occupation. The desire for owner-occupation is not new; it goes back a long way.

Our focus has to be on the interests of tenants, the conditions of their homes and the services that are provided to them. My hon. Friend mentioned arm's-length management organisations. We will certainly return to that subject. It is the standard and decency of homes that is important, not who owns them.

My hon. Friend's local authority, Braintree district council, has consistently been judged as one of the best performing authorities in the east of England in the annual housing investment programme. I remind the House that measures to be introduced in the Local Government Bill will give authorities the freedom to borrow to invest in public services, provided they do so prudently. We want to free up local authorities. Each authority will be required to establish the level of borrowing and debt that it is prudent for it to take on, in line with the Chartered Institute of Public Finance and Accountancy code of practice.

Hon. Members will be aware that the housing policy statement of December 2000 set out four housing management and investment options for local authority housing—arm's-length management organisations, the private finance initiative, housing transfer, and stock retention with existing resources. Three of those options see housing remain within local authority ownership; only housing transfer sees housing moving outside the local authority. No local authority and no tenants will be forced to adopt any particular option. It will be a matter of local choice. All we will require is that each local authority ensures that it has a plan in place by July 2005 for meeting the decent home objective. I know that my hon. Friend would agree with that objective. We are making good progress towards our target on standards on decency in houses. I know that that has the support of the great majority of hon. Members.

We want to encourage the separation of the landlord function from the role of the strategic housing authority, whether or not the local authority retains ownership of the housing. That is part of our policy to improve services to tenants. In the past, there has been a lack of concentration on the broad strategic implications of the rate of economic growth. We have to ask what planning functions and what economic drivers will mean that we have to consider housing provision differently. We have to allow the landlord to focus on improvements in the physical condition of the stock, management arrangements and tenant involvement. The local authority should be free to ensure that its statutory housing duties are carried out and that housing policy decisions contribute to securing wider community regeneration.

My hon. Friend mentioned build for sale. That is an extremely interesting concept and he gave us some fascinating examples.

My hon. Friend is keen that local authorities make the best use of their land so that we can provide more housing. We are implementing policies to offer local authorities greater freedom than previously to exercise discretion in disposing of their land. In the local government White Paper "Strong Local Leadership—Quality Public Services", published in December 2001, the Government made a commitment to give greater freedom to local authorities to dispose of land held under the terms of the Local Government Act 1972 for less than the best consideration reasonably obtainable.

My right hon. Friend the Minister for Local Government and the Regions announced in September that councils will no longer need to seek central Government permission to take action on a range of local matters. He announced that 84 consent regime powers were being deregulated, including approval of local authority housing cash incentive schemes and the disposal of land at less than best consideration.

My hon. Friend mentioned the role of land held by the Government, and English Partnerships will have a key strategic role to play in the disposal of public sector land, looking at its own sites and having a say in the disposal of surplus public sector land across government. English Partnerships and the Housing Corporation are working together towards that end. So I hope that I can reassure my hon. Friend that the good idea of the past has not been abandoned and that it has its successors in some of today's schemes.

Another key issue that I want to raise is the sustainable communities plan, which my right hon. Friend the Deputy Prime Minister announced to the House only a short time ago. That plan includes a significant increase in resources—£22 billion will be spent over three years—so investment to improve housing and communities will be 42 per cent. higher by 2005–06 than in 2002–03. We are investing £5 billion in more affordable housing—double what it was in 1997. At least £1 billion of that is for key-worker housing over the next three years, which is more than three times the current annual level of funding.

A massive new house building programme, worth more than £1.5 billion, has been allocated to the Housing Corporation's approved development programme. In the past three years, Braintree has received nearly £2 million in approved development plan funding from the Housing Corporation.

The starter home initiative, which my hon. Friend also mentioned, is helping key workers whose services are vital to communities—particularly teachers, the police, nurses and other essential health staff—to buy first homes in areas where high housing costs are undermining recruitment and retention. That is a key local issue. I am pleased to say that more than £500,000 of funding from the starter home initiative has been allocated to Braintree.

We are also taking tougher action on empty properties, including discretion to end council tax discounts on empty homes and proposals to give councils powers to bring long-term empty properties back into use. We are also modernising the planning system. That is very important and will provide speedier planning consents and remove delays from the system that might slow the pace of house building. We have helped Braintree to respond to the challenges placed on its planning service, and we have allocated Braintree a planning delivery grant of £275,000 for 2003–04.

We are very aware of trying to use land as effectively as possible. That is why we are introducing new measures to identify and restore more brownfield land and compiling a register of publicly owned surplus land for housing. Braintree has completed an urban capacity study, which has identified a large number of suitable brownfield sites for future development for housing. There is a real focus on helping local authorities, working with them and making sure that sustainable plans also become reality. The plan also announced greater focus on helping people into sustainable home ownership. We want to expand home ownership schemes that free up the supply of affordable housing.

I have touched on just a few of the plans that we have for change. After decades in which the housing needs of this country have been neglected, our approach confronts the major challenges, and it will deliver. It is comprehensive and integrated, and I assure my hon. Friend that we will take into account the points that he has raised this evening. I congratulate him on raising this important issue tonight.

Question put and agreed to.

Adjourned accordingly at Eight o'clock.