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Westminster Hall

Volume 496: debated on Thursday 16 July 2009

Westminster Hall

Thursday 16 July 2009

[Joan Walley in the Chair]

Housing and the Credit Crunch

[Relevant documents: Third Report from the Communities and Local Government Committee Session 2008-09 HC 101 and the Government response Cm 7619. The Eighth Report of the Communities and Local Government Committee, Housing and the credit crunch: follow-up, HC 568.]

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr. Ian Austin.)

In opening the debate, I want to set the report in context and draw Members’ attention to the fact that a second report on this issue has just been published—the Committee’s eighth report of this Session—which is the second stage of our look at housing and the credit crunch. I shall refer to some of that report’s content, although the Government have not yet had time to respond to it.

Let me start by restating the importance of housing policy to Members across the House. That is reflected in the number of inquiries that my Committee has published this Session on matters of housing policy, notably our reports on affordability and the supply of housing and on rental housing. Almost all Members of Parliament know from their constituency case load what an important issue housing is. The mix of relevant issues will differ between constituencies, but a big issue for all MPs is the difficulty that people have in accessing affordable housing, whether to buy, part-buy or rent. That is the background to the report.

In our earlier reports, we endorsed the Government’s decision to set very challenging house building targets, including on the proportion of affordable housing and homes for social rent, so the Committee has been greatly concerned by the effect that the credit crunch has been having on the Government’s ability to deliver those targets and by its other effects on the housing market. As a result, we decided to have a one-off session in December 2008, which is discussed in the main report, and a follow-up session with the same witnesses in June 2009.

I shall go through some of the main points that came out of the report and the Government response to it, starting with house building targets. We have already welcomed the Government’s targets to deliver 2 million homes by 2016 and 3 million by 2020, which equates to 240,000 homes a year. The Government were starting to increase the rate of house building before the credit crunch intervened, at which point house building rates dropped through the floor. There were then voices calling for the Government to revise their targets on the basis that they would have difficulty in delivering them, but we do not think that they should change the targets.

Clearly, the timeline to reaching the targets will be different, but they are important; indeed, we think that they still are not high enough. The latest results from the national planning and housing advice unit suggest that rather than 240,000 extra homes a year being required, 252,000 will be required up to 2031 if we are to deliver on housing need and to meet not only the continued growth in households but the backlog that built up in the decades when house building did not keep pace with household growth. So we think that the targets should be retained, even though we recognise that the Government will have difficulty in reaching at least the 2016 target, because of the credit crunch.

We welcome the various measures that the Government announced before our first report, as well as the extra £1.5 billion that they have subsequently brought forward. We welcome in particular the provision of additional funding to housing associations, and now councils, to enable them to bring forward more social rented homes. We also welcome the steps that have been taken to improve the flow of mortgage finance, because we have received considerable evidence that the lack of mortgage finance is a huge problem for those who are attempting to buy at market rates and in the shared-ownership sector.

We have highlighted the key issue that, if house building is to recover when we start coming out of the recession and as a result of the measures that the Government have been taking, we have to retain the skills and expertise of those who work in the construction industry within that sector. If we do not, we will repeat what happened after the last recession, when it took the house building industry far too long to recover and rebuild its skills once all the other factors were removed and once mortgage finance was flowing again and people were able to buy. So we are very concerned about retaining skills and capacity. We are particularly concerned that, when the Government consider how to increase house building, they should reconsider the mix of housing types, because we believe that the change in the economic situation has altered people’s ability to exercise the home-ownership option.

Now that I have given an overview of the issues that we have raised, let me pick out one or two of them for discussion. I am pleased to see that several other hon. Members have arrived in the Chamber; no doubt, they will wish to contribute to the debate from their different viewpoints. I have mentioned the difficulty that first-time buyers and people on low-to-moderate incomes have been experiencing in expressing their need for housing through having the economic ability to buy. We are particularly concerned that low-cost home-ownership schemes have suffered because of people’s inability to access the mortgage finance that they need.

We have also raised our concern that the Government, in their commendable wish to tailor schemes to meet the evolving needs of different groups, ended up with a complicated system with a variety of low-cost ownership schemes that it is difficult for people to navigate their way through. The Government have responded to that concern by saying that all the schemes are at least delivered through the single point of a contact homebuy agent. I know from my constituency how effective such measures can be, but we are pleased that the Government have now launched a rent-to-homebuy scheme to meet the further needs of people who want to rent before moving into shared ownership. However, we still feel that the Government need to go further in clarifying and properly signposting the different schemes that are available, so that people are able to benefit from the scheme that is most appropriate to them.

On the balance of housing tenure, I think that we all recognise that most people aspire to own their own home. It is clear, however, following the chaos that ensued with the sub-prime mortgage market and the practice of encouraging people on uncertain and irregular incomes to enter into heavy borrowing commitments that they were then unable to maintain, that even when the mortgage system is up and running properly again, a tranche of people who would previously have been able to access mortgage finance through the sub-prime market will no longer be deemed to be prudent risks and therefore will not be able to access mortgage finance.

As a result, we think it is obvious that more people will need to rely on the social rented or market rented systems in future and that the Government should recognise that and reconsider their overall policy. We have previously pushed the Government to increase the annual target for new social homes, and we are pleased that they have raised it to 45,000. They should perhaps be keeping that under review and increasing the target still further, because there will be a greater need for social rented homes.

The various steps that the Government and others are taking to encourage the transition between rental and ownership, such as the rent-to-homebuy scheme, are extremely welcome. There is possibly a need for more such schemes. I should like to mention a housing association scheme in my constituency, which is run by Places for People at Wolverton Park. I have spoken about that development before because it is in the old railway engineering works, so it is architecturally interesting as well as being a mixed-tenure development. It has come on stream just when finance is particularly tricky, and Places for People has responded to that by developing a range of financial products to offer to potential buyers, including 100 per cent. mortgages with no deposit, an equity loan of up to 30 per cent. and a buy-back guarantee for the first three years to protect the individual against negative equity.

Places for People is also encouraging people to rent first, with the option of buying subsequently, so that it can maintain a truly mixed-tenure development, while ensuring that the properties are occupied and homes are not standing empty. That is a good example of how a housing association can work to complement the measures that the Government and, of course, some private developers are taking to make sure that houses are occupied and are not left empty simply because individuals do not have access to the mortgage finance that they need.

Although I think that everyone accepts that the slow-down in house building is primarily related to the inability of individuals to buy and the reduced access to mortgage finance, some have suggested that a relaxation of environmental standards on new homes and possibly also a relaxation of other requirements on developers, such as the existing section 106 requirements, would enable developers to bring forward housing more quickly. The Committee was absolutely clear that it felt the environmental standards set out in the code for sustainable homes and in building regulations must be maintained. It would be short-sighted to reduce those standards, because the homes that are being built are not just for now; they are for the next 50 years at least.

Such standards are also a key part of encouraging the construction skills and products that underpin increasing the environmental efficiency of our homes, so it is important to ensure a guaranteed market for those products. If the Government were to reduce those standards now, it would send an extremely bad signal and reduce still further the market for the sort of construction skills and equipment that are necessary if we are to improve our housing stock and ensure that new houses are built to much higher standards. Obviously, the Government’s target for all new homes to be zero-carbon by 2016 is an important part of that.

On mortgage finance, we were particularly concerned—I am trespassing slightly here because this was in our second report rather than our first—that the feedback we got from the mortgage lenders indicated that the Government’s asset-backed securities guarantee scheme did not seem to be working as well as it should. Although that is primarily a matter for the Treasury Committee rather than us, it is important to flag up the issue. The Treasury Committee has taken evidence along roughly the same lines and will, doubtless, be making recommendations on how it believes that mortgage finance schemes can be improved.

The final subject to which I shall turn is that of existing home owners and the measures that need to be taken to try to prevent them from losing their homes through repossession if they have problems in sustaining their mortgages. We were concerned that some of the measures that the Government have put in place— the pre-action protocol and the Financial Services Authority guidelines on the ways in which lenders should approach people who are in danger of mortgage repossession—cannot be enforced, and we wanted the Government to consider sanctions that could be put in place for non-compliance. We certainly had evidence that suggested some lenders are using repossession as a first resort, rather than as a last resort. That is why we were particularly concerned that lenders should be held to the commitments and guidelines to which they are supposed to comply.

We welcome the various schemes that the Government have put in place, particularly the mortgage rescue scheme. However, it has already been noted that the scheme has helped many fewer people than expected. From the evidence that we were given, it was not at all clear whether that was because a lot fewer people were in the eligible group and at risk of mortgage repossession than expected, in which case the scheme would obviously not help that many people, or whether people were not aware of the scheme and were not gaining access to it. The Government need to look much more closely at what is happening in relation to mortgage repossession schemes and to consider whether or not the lack of people being helped is good news in the sense that not that many repossessions are going forward.

Like many of us, I am sure that my hon. Friend has noted the Council of Mortgage Lenders’ downward revision of the number of anticipated repossessions from, I think, 75,000, which it was forecasting earlier this year, to the latest figure of 60,000. She gave her surmise about the impact of the Government’s measures and the fact that the protocol is leading to forbearance and the avoidance of repossession action. Those figures seem to suggest that repossessions are being avoided on a larger scale than was perhaps expected. Would she like to comment on that?

That is certainly probable. It is a matter of concern that nobody seems to know the answer one way or the other, but it is most likely that that might be a contributing cause. The lenders themselves gave evidence that indicated a much more active process is taking place at the moment and that individuals who are having financial difficulties are speaking to their lenders at a much earlier date than they had done previously.

We are all aware of the psychology of people putting their head in the sand and hoping that their debt problems will go away. Many of us have constituents who come to us with consumer credit problems and the first thing we say is, “Why on earth didn’t you seek help earlier?” People have a tendency to wait until the whole thing has become completely insurmountable before asking for help. Probably because of all the publicity about repossessions and the schemes available, it appears that people are at least speaking to their lenders at a much earlier stage.

Let us be blunt and point out that the lenders themselves have recognised that the state of the housing market means that it is not in their interests to repossess, because the only point in a mortgage company repossessing a property is so that it can sell the property and achieve a capital inflow. The current state of the market means that mortgage companies would not be able to sell, so it is in their interest to maintain the person in the home and to get some regular payments from them, even if the amount is less than what is actually due.

A further issue is that a significant number of repossessions have been in respect of buy-to-let mortgages. That is obviously of concern to the person who owns the home, from whom it is repossessed, but there is a separate issue regarding the tenants of buy-to-let landlords, many of whom first realise that they are losing their home when the property is repossessed, despite having paid rent to the landlord. The Government have taken measures to try to sort that out and to make sure that tenants are given decent notice. Again, encouragement has been given to mortgage companies repossessing such homes to maintain the tenants and just collect the rent off them.

It is not clear why there has been such low take-up, and that points to the fact that when the Government introduce such a scheme, some monitoring would be a good idea, so that everybody is aware of how it is working. If few people need to use it, the public money allocated to it could be redirected to some other group that could make use of it, including, presumably, housing associations which could build more houses.

We met the CML for a briefing this week, and several interesting points came out about the rescue scheme. First, it took some time for people who might benefit, but also local authorities to become aware of it. Certainly my own authority, Sheffield, to begin with denied any knowledge of the scheme or that it should be involved in it. That has taken a bit of time.

Secondly, people almost certainly look for alternatives. They see a rescue scheme as a last resort. They would prefer to defer their interest payments for a time and hopefully get back into work.

The CML also said that very few people have come out at the end of the rescue scheme, having completed it, but that there are now many more people in the pipeline being processed. That will take a bit of time as well.

Absolutely. Again, that points to the need for the Government to keep a close eye on how a scheme is operating so that they can get early intelligence as to whether they need to step it up, or, as I said, step it down a bit and reallocate the money elsewhere.

I want briefly to touch on housing associations. We welcome many of the steps that have been taken to increase social housing grant money to housing associations. We were convinced again of the sense in the Government’s decision to create the Homes and Communities Agency. That decision, and the fact that the agency is up and running, have been particularly helpful during the credit crunch. The HCA has been able to respond more flexibly and in a more timely manner than might have been possible if we had still had the two separate agencies, the Housing Corporation and English Partnerships. The HCA definitely was created at just the right time, and it has come into its own, so to speak.

Similarly, we welcome the proactive approach taken by the Tenant Services Authority to facilitate dialogue between housing associations and lenders. We were concerned by the evidence that we heard in December about the way in which some lenders seemed to take advantage of any slight change in housing association governance to increase the costs of borrowing.

One example was a housing association that had been attempting to reduce its costs by a sensible reorganisation, which it put off because, had the reorganisation gone ahead, it would have incurred enormously increased borrowing costs. The bank would have taken advantage of the change to alter the terms on which it lent to the housing association. We thought that such behaviour was particularly unhelpful.

We had concerns about the interaction between housing associations and their lenders, and we continue to have concerns about the ability of housing associations to deliver new housing under the model of finance that was in operation before the credit crunch.

I will conclude by saying that this report was intended to be a snapshot of the situation in December, and the follow-up report was to be a further snapshot. We are beginning to see some slight green shoots in the housing market, which, clearly, are welcome, but the scale of the turnaround that is required, if we are to get back on target to deliver the number of homes that are required to meet people’s needs, is so great that we think that the Government need to continue to look at what more they can do to get the upsurge in house building back on track more quickly. They need to look not just at the amount of money that they are putting into rejuvenating house building but at whether there might be further measures that they need to take. They also need to think about the longer term: when we do come out of the recession, will there need to be a bit of a rethink overall about the models for financing new house building? In particular, do new ways need to be found to bring in private finance in addition to direct Government funding?

Let me finish this thought. It seems unlikely that the kind of profits that used to be available to private developers will be reinstated once we are out of the credit crunch.

Has the Committee yet had a look at trying to bring in pension fund finance? My hon. Friend knows that I am a great advocate of the community land trust model. We are looking seriously at whether we can persuade pension funds to get involved in that, because there are long-term returns and, obviously, they have not been too successful with some of their other investments. I wonder whether the Committee might look at that, if it has not already done so.

We have not looked at that in particular, and it is unlikely that we will have a chance to look at it in the immediate future, but I am sure that the Minister has taken note of what my hon. Friend said. There needs to be innovative thinking across the board to explore all the possible ways forward, because—I reiterate this—the scale of the increase in house building that is required to meet housing need is so great that we must explore all possible avenues.

I welcome the new Minister to his post. I suspect that we shall be speaking to him on many occasions. I am afraid that I, as a representative of an inner-city seat, will take every opportunity that I can to lobby him on what is, in the end, a key issue for the vast majority of my constituents.

When I was first selected as the Labour candidate for Member of Parliament for Islington, South and Finsbury, my predecessor, the right hon. Chris Smith, asked me, “What is your interest in housing?” I said, “Not much,” and he said, “It will be.” And it is, because when I knock on people’s doors, they open them and say, “Oh, Emily. Can I just show you how I live?” They show me in, and I see the most appalling circumstances, day in, day out. When they come to see me in my surgery, I sit there hoping that they will ask me about anything other than overcrowding. I almost feel that I can help them with anything else, but I cannot help them with overcrowding.

I do not mean to exaggerate, and I will not. In every speech that I have ever made about housing since I have been elected, I have kept to a certain golden rule, which is that I will speak not about my worst case but about my last case. I had a surgery last Saturday, and, if I may, I will illustrate how bad the housing crisis is in Islington with the following cases.

A woman named Nelopa came to see me last Saturday. She lives in a one-bedroom flat with her two sons, one of whom has attention deficit disorder and behaviour problems. The flat has a combined kitchen and living room, which means that all three family members have to sleep in one bedroom. Islington allocates housing on the basis of points which are supposed to reflect need. I am afraid that those of us who live in Islington have a kind of ticker in the back of our head, and we can work out how many points someone is entitled to. Nelopa does not even have enough points to be eligible to bid for property. Even if one could bid, they probably would not get a place, but she is not seen to be in sufficient crisis need even to be given the opportunity of bidding for housing. Yet there are three people in a one-bedroom flat.

Another woman came to my surgery on Saturday; I will call her Sarah. She first came to see me two years ago. She was living then in a two-bedroom flat with three children. At that time, she was pregnant with twins and she needed to move. Two years later, she comes back to see me again. She is living in the same flat, but she now has five children. In addition, her teenage sister has come to live with her as well. So there are eight people in two bedrooms and they have scant hope of being rehoused. That is intolerable and it is very difficult for me, as a Labour MP, to see these people and to know what to say to them.

I do not always want to talk about bad news; I have already broken my golden rule by doing so today. Consequently, I have taken from the top of my letters pile from yesterday a letter that I was about to sign, which contains good news. I have seen a couple of people for many years and I have been trying to help them to get rehoused. They were living in a two-bedroom flat with their three children. One of the children has type 1 diabetes, another one has autistic spectrum disorder and the third is fine, apart from the fact that he has had to sleep in the same bed as his dad for years. This family have been bidding for a three-bedroom flat for a very long time, but now they have been successful. Such successes sometimes happen, but far too rarely. Sometimes there is a glimmer of hope.

However the difficulty is that, because our housing system is overlaid by these very hard cases at the top, the woman who comes to see me as a regular thing every six months—I have referred to her before but I feel as if she is a kind of base line—is overlooked. She is a single woman with two girls in a one-bedroom flat. She also does not have enough points to bid. However, she comes to see me every six months and says, “Remember, Emily, I’m one of the ones who don’t even have enough points to bid.” It is because of the hard cases at the top of the system and because we can offer so little hope to them that the vast majority of the people who are overcrowded suffer. As far as I am concerned, that woman should not have to sleep on a sofa for the rest of her life, which is what she is going to have to do because she does not have any chance of going anywhere else.

The housing crisis within Islington is made worse, first, because we have not been building anything new and, secondly, because we are essentially kettling people in; we are putting them into a pressure cooker. When I was a council tenant in the 1980s, I was a Greater London Council tenant, so I could move around London because I was in social housing that was provided on a GLC basis. Now, however, all social housing is provided on a borough basis.

There are supposed to be a couple of schemes available; I think that one is called Seaside Homes and another one is called Move UK. They are not working; they have collapsed. It may be that the Minister will be advised contrary to that and on paper those schemes may be supposed to be working. However, I can assure him that they are not working and people cannot move out of Islington. So they are stuck.

Then I turn to my local authority, because in the end it has to be my local authority, working in partnership with the Government, that produces new homes. Before I go any further, I should say—it is only right that I do so—that, when I first began to knock on doors in Islington, all the social housing in the borough was a disgrace. The lifts did not work, the passageways were full of urine and the properties were damp, disgusting and squalid. I fully appreciate that that had a great deal to do with previous central Governments turning their back on the poor of Islington and not giving sufficient central Government grant to have allowed for that social housing to be kept up to a decent standard.

When the Labour Government came in, I fully understand why it was so important that we got all our social housing, throughout the country, up to decent-home standard. I am very proud of that; it is absolutely the jewel in Labour’s crown and we do not say enough about it. One of the reasons why we do not say enough about it is because, although we are now proud of the social housing that we have, people are in such overcrowded circumstances within inner London in that social housing. I know that there are problems throughout the country, but the problems that are particularly associated with inner London are truly exceptional. Given those problems, I feel that we should have London-specific policies to deal with them.

I am very proud to work on the Communities and Local Government Committee. I know that I am irritating in the extreme to my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey), who is the Chair of the Committee, in my overwhelming interest in housing. However, I have that interest because I try my utmost to be a proper representative of my constituents and their desperate housing need.

Having said that, there are other issues that I ought to raise at this point. It was very important—the Select Committee highlighted it in our report in February—that the Government stepped in, particularly given the credit crunch and the crisis in housing. We urged the Government to step in, to ensure that the housing crisis would not mean that there would be a lesser focus on housing. We urged the Government to stick to their target for affordable homes that was set in 2007, to prioritise the provision of more social rented housing within those targets and to invest more money in the homes that we need.

In essence, the 13,000 families that are on the housing waiting list within Islington are not in a position to buy or part-buy; I assure the Minister that that is the case. That is because house prices are so high. I have written to the Minister about this issue and I have written again to him explaining that house prices are now at such a level in Islington that those families cannot even afford to buy a proportion of a property. Within the parameters that the Department for Communities and Local Government have set, they still cannot afford to buy a small one or two-bedroom, ex-council flat on the estates in Islington. The house prices have moved beyond the parameters set by the Department and I ask the Minister to look at that issue again.

In reality, for the people on the waiting list for social housing within Islington, affordable housing is social rented housing. I believe that in my constituency in the last 10 years, when the council has been run by the Liberal Democrats, the Liberal Democrats have had their priorities entirely wrong. We should absolutely be prioritising the building of social rented housing but far too much part-ownership property has been built by the Liberal Democrats, which has not meant the rehousing of those people on the housing waiting list.

It is difficult, given how extreme our—

I was listening to the hon. Lady’s speech and I was enjoying it enormously until she got to the party political points, so I thought that I had better return the favour.

Does the hon. Lady not believe that the Government need to do a great deal more to enable councils to build more affordable housing for rent? I am sure that that is a point that we firmly agree on. For example, it is a shame that it has taken the Government 12 years to agree to dismantle the housing revenue account.

I will move on to discuss that point about the HRA. Now, however, is perhaps the time that I ought to move on to another specific point. But before I do so, I will say that the analysis that I have done on new build within Islington shows that, in the last 10 years, only one in seven new flats have been social rented housing provided by the Liberal Democrats, which means that the housing waiting list continues to get worse and worse, because people simply cannot afford to buy. Although I agree that, in an ideal world, it would have been a very good idea for the Government not only to do up all the social housing within Islington but to build more social housing, nevertheless it may be that reality steps in and there are limits in the budgets that we have.

The one thing that we could do and should do but have not done in Islington is to stand up to developers and say, “You cannot build in this area unless 50 per cent. of what you are going to build is affordable housing and, in the Islington context, that is social rented housing.” Because my local authority has not done that and instead copped out of doing it, many opportunities have been lost.

The situation is not helped by the fact that much publicly owned land in Islington has been sold off by the local authority, so that now the Government are focusing on building more affordable housing—social rented housing, in my book—there is very little public land upon which we can build social rented housing. That is a great shame and the problem continues to this day. For example, in just two weeks City Forum was given planning permission to build thousands of flats in a very large area of Finsbury. City Forum is building a large amount of student properties. Frankly, we have enough students. I like students, but we have too many students. We have enough student accommodation as it is and the precious land of Finsbury should not be used to build more student accommodation. Of course, the problem with student accommodation is that it is planning-flat. It does not become part of any percentage section— 30 per cent., 20 per cent., 50 per cent., or whatever—that has to be met and so it just becomes neutral. Consequently, what always happens within a new development is that property for students is developed and whatever is left is parcelled up to the absolute minimum that the developer feels that they can get away with. Personally, I feel that we should be standing up to developers much more than we have been. We have lost an opportunity and we have lost too much land. People like Nelopa and Sarah are still languishing on the waiting list, because we have not been pragmatic and used the opportunities that have been available to us.

My local authority recently stated that it would build a handful of council houses to rent, and I welcome that. At the same time, however, the Government are putting together a fund to kick-start projects that have started to dwindle and to augment the work that local authorities are doing, and I am concerned that my local authority has not stepped up to face the challenge. It has a handful of homes—that reveals the poverty of its ambition—but it is not committed to building as many social rented houses as it can. It is bidding for some of the funding, and we welcomed that until we realised from the small print that it wanted to use the funding simply to replace money that it had put to one side to build more council housing.

That is not the purpose of the fund. If the Government are stepping in to give local authorities more money, authorities should use it in addition to any money that they have set aside. It is wrong that we should end up with as little as we would have if the Government had provided no additional money. I lobby the Government to get additional funding for Islington, but then I see it fly out the back door because the local authority uses other funding for other purposes. In the meantime, Nelopa and Sarah sit on the waiting list.

I understand that proposals to reform the housing revenue account will be published during the recess. I realise that such reform is a complex, technical matter, but if it means that local authorities can take the lead in public housing programmes, it will be very welcome in Islington. It is vital that we get more money for new homes in whatever way we can, and I understand that there are advantages to borrowing through housing associations, for example, because that does not add to the public debt. In the end, however, my constituents do not care whose tenant they are as long as they get somewhere to live.

Many of us were interested in the suggestion that councils could borrow in ways that were seen as “reasonable”, “prudential” or “sustainable”, but will the Minister explain what that might mean in practice? Furthermore, I would ask the Government to ensure that tenants of councils such as Islington are protected from changes in the HRA subsidy system. For a variety of historical reasons, such councils have large debts to service, and it is vital that Islington tenants do not suffer as that debt is repaid.

Finally, I turn to the balance of tenure among new homes, and I underline once more the importance of social rented housing—in the end, that is what is important to those on the council waiting list in Islington. The strategic role of local authorities is vital and the HRA review is important, but it is for politicians and campaigners to debate the issues before us. The view of those on the waiting list is that we need more social rented housing. In Islington, we will be pragmatic and take that housing however we can, because we have an absolute crisis.

I begin where the Chairman of the Committee, my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) left off—with the Homes and Communities Agency. Obviously, the agency was not created to deal with the present crisis, but thank goodness that it was created. Along with the Tenant Services Authority, it has been proactive in at least ameliorating the damage that has been done in the current difficult situation.

The reality is there for all to see: some people cannot get mortgages; others are worried about the future of their jobs, so they are concerned about moving home or buying their first home. The fall in demand for housing has led to a dramatic decline in house building, but we argue in our reports that the need for housing is just as great as it was one or two years ago, even though there is lack of immediate demand because people cannot afford homes that they could have bought a year ago or because they are concerned about their future. There has also been a switch in the nature of immediate demand. For a long time, most people would look to buy, and that is what the Government focused on.

There has been great excess demand for a long time, and as we were reminded by my hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry), there has been a chronic shortage of social housing to rent in many parts of the country. That is also true of my constituency. The position in Sheffield has been variable. At one stage a few years ago, the Liberal Democrat council was actually knocking council houses down, which seems rather a mistake in hindsight, and it is now looking to build houses on the same sites. That happened in the north of the city, but the south, where my constituency is located, has always had a greater shortage of social housing. We have not traditionally had as many large council estates, and many of the estates are very attractive, so large numbers of people have exercised the right to buy.

Even before the credit crunch, therefore, housing need was very real and was often unmet. People are now waiting longer and longer to gain access to a home that meets their needs. With the credit crunch, people who might have bought a couple of years ago cannot buy or choose not to do so, so demand for social housing has gone up even further.

At CLG questions the other day, I mentioned the case of Katie Wilson, who is one of my constituents. She tried all the Government schemes to get part-ownership of a house, and she failed at every hurdle. Eventually, she had to fall back on her position on the waiting list, which she has been on for about 17 years. She simply wants a home to rent in the part of the city where she grew up and where her family lives. That is not a big thing to ask for. She now informs me that she is renting privately for £500 a month, which is quite a lot for people on low incomes and quite a high rent for Sheffield.

The problem is repeated elsewhere. I probably will not have as many absolutely disastrous cases as my hon. Friend the Member for Islington, South and Finsbury—however bad the position is in the south of Sheffield, it is even worse in the south of Islington—but I have an awful lot of very bad cases. My heart sinks, just as my hon. Friend’s does, when somebody walks into my surgery and says, “Mr. Betts, we’ve got this really serious housing case. Can you sort it out for us?” They will go through all the facts, and I will sit there listening. I will say “I absolutely agree with you. We should be able to house you. I see your circumstances.” They may want to live near a parent with real caring needs, or their bus route may have changed, so they have to move to keep their job. They may also want to move near a grandparent who can look after the kids, so that they and their partner can work—that has become increasingly common over the years. However, I sit there thinking, “They’ve got a very strong case, but so had the last three people I saw, and none of them is probably going to get re-housed in the foreseeable future.”

The need for social rented housing is there and it has become greater. Our latest report therefore welcomes the Government’s extra £1.5 billion, which comes on top of the money that was previously made available. That extra money has been offered to local authorities to build homes for rent, and it is great even in principle that we are building council houses again. Some of us remember the days when we had major house building programmes, and they were not all disasters. People often say, “Look at the high-rises that were built,” but they probably forget that councils tended to build to Government direction in those days, and it was a national policy that sent us down that route. However, councils also built many attractive houses, and I hope that we can get into that business again. There will be a bit of a learning curve for many authorities, and it will take a bit of time to get the process going.

However, councils must be prepared to put their land in for free. If the Government are putting in social housing grant, councils must make a financial contribution, too. I have certainly encouraged Sheffield city council to do that. It is Liberal Democrat controlled, but all five Labour MPs in the city put a letter in our local paper, The Star, the other day saying that social housing is an absolute priority. We said that we could work on the issue across the political divide and that we were prepared to offer the council any support and assistance that we could when it bids for Government money, because housing is crucial for the people whom we represent.

In our report, we raise another question, which the Minister probably cannot answer today. A new programme of council house building cannot just be a quick fix for our current economic crisis and housing problems. There is a long-term problem with providing more social housing, and councils must play a real role in tackling it in the long term. We would like a commitment from the Government on that. We know that there are uncertainties about future public finances, and we always hear that health and education are a priority—the Leader of the Opposition certainly makes that clear, although the Opposition then talk about reductions in public expenditure, so we get the horrible feeling that housing might be one of the areas where they are talking about making reductions. We must make it clear not only that social and rented housing is a priority for us now, but that it will continue to be so in the future.

Allocations are a difficult issue, but I was pleased with the Government’s announcement the other day. I accept that there are differences in different parts of the country, and I have explained my understanding of the even greater pressures in parts of London, but I have had concerns for a long time—the new Housing Minister and the Secretary of State recognise them—about people being on the waiting list for years and never getting the priority that would enable them to secure the homes that become available.

The classic case is something that happens regularly. People come to my surgery and say, “Mr. Betts, a house has come up down the road, and our children would like to move into it, so we can look after the grandchildren. They currently live five miles away, so it’s all a bit difficult. We’re really upset because someone has just moved in as homeless, and we understand from talking to them that they have only been on the housing list for two weeks. Our children have been on it for 12 years. Why”—this is just the way that people think—“couldn’t they have had the home that my children want to leave, so that they could move near us? As things stand, they’re just going to tread water on that housing list and never move anywhere near the top of it.”

I thoroughly understand that if people are homeless, with children, in priority need and not intentionally homeless, they must be found a home, but there must be a better way to allocate properties than by saying that, because they are in immediate need, they get whatever house is available in any area, at the expense of people who have been waiting for that area for good personal reasons and for a long time. The Government have got that right, and it will be interesting to see the guidance and local authorities’ response.

I welcome the housing revenue account decision. We had a good sitting of the Select Committee, with the Housing Minister, the other day. I pressed for a long time for the decision, which will give local authorities—particularly those with arm’s length management organisations—greater certainty. The other day, I chaired a meeting of the all-party group on arm’s length management organisations, and the message that came across clearly was that we need stability for ALMOs; they are an excellent development that brings tenants more into the management of homes, but many tenants are concerned about their instability, because of the complications of the housing revenue account and their inability to plan financially for the longer term.

Tenants have got the message, and the officers who came from ALMOs all over the country said that the quicker that the reform could be achieved the better, because it would provide enough financial certainty for things to move on. The Minister told the Committee the other day that he might have to get the agreement of all councils, because of the need to transfer debt between them; however, he said he might look at allowing those councils that wanted to become involved in the arrangements, after the two-month consultation period, to opt for the new scheme even if all authorities had not come in and primary legislation was needed to bring them in. I hope that the Minister will consider that, because speed is of the essence and we do not want ALMOs to start to unravel because of financial problems and the inherent instability of the current system.

I agree that the decent homes programme is a major step forward, but ALMOs want to move on now and ensure that they have the resources to maintain their stock to those high standards—even to improve them, particularly by energy-saving measures. They also want to build new homes. The Minister spoke to us about the need for equity in financial arrangements between those authorities that have not carried out stock transfers and those that have and about the ability that he hopes to develop for authorities to borrow prudentially against the rental streams from their homes, which would enable the new building to happen. That is an interesting development, which can put more money into social rented housing in the future and take us on from our current position.

The Government have acted well on repossessions. The Committee was concerned, in the initial report, about whether the protocol would work. However, because of the fall in the number of repossessions forecast by the Council of Mortgage Lenders, there is probably more confidence now that the protocol may be ameliorating some of the worst effects. Ways are being found, with the deferment of interest payments, to help people who are in difficulties whose homes might have been repossessed in past recessions. The bringing forward of help through the support for mortgage interest scheme—it now starts at three months, rather than nine months—has undoubtedly saved many people from getting into even worse debt, and that is welcome, too. I have already commented on the mortgage rescue scheme.

I hope that the Government will come forward soon, having previously announced an intention to act, with measures to deal with the problem of private tenants who unwittingly find that they are in a property that is going to be repossessed, where the lender did not know that a tenancy had been created. The tenants are there in all good faith but have virtually no standing in law at present. That is an important issue on which we need to act.

Finally, I want to emphasise three issues that emerged from the report. First, in our second report, we came back to the asset-backed securities guarantee scheme. Everyone thought that the Government acted with commendable speed to the Crosby review, but unfortunately did not get the answer quite right, because the scheme is not working. John Heron of the Intermediary Mortgage Lenders Association told the Select Committee that although the association was

“impressed with the Asset-backed Guarantee Scheme that was announced and subsequently introduced, it is a great shame that it falls short of its objectives.”

He said:

“There is only so much risk that a government-sponsored scheme can reasonably take, and that is the position they are in, but the problem with that is that it is rather like half a leap across a chasm: very impressive but doomed to failure.”

The Government are halfway there, but currently the scheme is not working.

I accept that it is a Treasury responsibility to deal with the matter, but I hope that the Minister has been listening and will go straight to knock on the Treasury door to see whether improvement to the scheme can be made quicker. It is crucial that, as well as dealing with the issues of social rented housing on which I have concentrated, we should get some money back into the mortgage market. It is not just a matter of using the retail savings; we need to get the wholesale market moving, and clearly, at present, that is not happening. The concern is not only that the money is not available, but that the rates of interest being charged are starting to rise. Five-year fixed rates have gone up by about two percentage points in the past month, and those were the most attractive rates. In the current circumstances, a high cost on fixed or variable rates is probably a bit worrying for many people, particularly if they fear losing their job or have already lost it, or are on short-time working. Getting that money back into the mortgage market is crucial.

Skills and capacity in the construction industry are relevant. The last thing that we want, after the present collapse in house building, is not to be able to bring it back. That happened in the recession at the end of the 1980s and 1990s. The industry took an awfully long time to come back, because the skills had gone. We may eventually get some skills recycled from the Olympic sites in the south. We probably will not get the same number of people from eastern Europe as we have had, because those economies are starting to improve in the longer term and real wages are growing in the countries in question. We may not be able to rely on Poles and Czechs to come and build, as they were doing before the credit crunch.

We must think about how to retain skills and bring more skills into the industry, as a matter of urgency. It is a question of encouraging young people to go into the schemes in colleges and start training, even though there may not be a job immediately at the end of the line. The Government must think about that. Some young people who went into apprenticeship schemes through the colleges a few months ago are starting to say, “What’s the point? There won’t be a job when we’ve finished our time in college.” That is a challenge for the Government.

Another challenge for the Government is to consider the future for private rented housing. It has a bad image; there is some pretty awful, squalid stuff out there. The all-party group on urban development did a report that included the issue a few months ago, with the support of the British Property Federation. It recognised in the past that some property developers might like the commercial property model to come into play in housing. In that model, the developers develop the housing, retain ownership and manage it to a high standard, rather than just selling it on to some landlord who would probably not be as interested. The developer would become very concerned about the standard of the property it was building, because it would be managing it in the future.

The ideas are interesting, and the Government must get the financing right to help with them. Currently, the commercial property world is probably as lacking in confidence as the house building world, because it has suffered a major collapse in its values in the past few months. However, I think that it would be an interesting way to provide additional high-quality rented housing for the future—perhaps for different groups of people, who are younger and more socially mobile. That would add badly needed housing to the stock.

I have covered some of the key items in the report, which was well timed, with good suggestions. I welcome what the Government have done so far, but some things that still need to be done have been identified.

I draw attention to the interest declared in the Register of Members’ Interests.

I congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) and her Committee on an admirably thorough, thoughtful and constructive report on a complex subject. I also congratulate my hon. Friend the Minister on his new appointment. He comes into an important post at a challenging time, and I wish him every success.

There is no question but that the state of the housing market and the consequent challenges that it presents is hugely important for all of us. It is the biggest economic challenge that the country has faced for decades, and the downturn, as we all know, has impacted particularly sharply on the housing market. There are implications not just for people who aspire to own their home. Throughout the housing market, people’s ability to secure affordable housing, whether to own or to rent, is challenged by the current economic circumstances. Against that background, the Government’s response to the challenge has been energetic, comprehensive and imaginative. I contrast that with the experience during the recession of the early 1990s when the then Government took a long time to recognise the scale of the problem affecting the housing market. Their responses, when they came, were fragmented, and some were not very effective.

The right hon. Gentleman’s knowledge of housing matters is supreme, except in one regard. Does he recall the number of affordable homes that were built in 1992? I seem to remember that the figure was 70,000.

I am grateful to the hon. Gentleman for raising that, because it is a classic illustration of the then Government’s response being fragmented and not entirely effective. After spending a long time wondering how to deal with the problem, they devised something known as the housing market package, which was additional funding for the Housing Corporation to enable housing associations to go out and buy properties on the open market. They did, but the problem was that they bought a lot of poor-quality property, and were subsequently faced with serious problems of managing properties that were not of a sufficient standard, or size in many cases, for social housing needs.

That is exactly one of the lessons from the past that I and others have been pointing out to the Government for the past year and a half. It is helpful during a recession for Government agencies to use resources to acquire empty properties, which should not be left empty when there are housing needs, but the acquisitions must be carefully chosen to ensure that they are of a sufficient size and quality to provide decent homes for the people who will be renting them.

When people buy a home, it may be a loose fit. They may buy a house that is larger than they need. They can choose to have extra space, and if they find that they are a bit cramped, they can move on if they have the resources to do so. When people are allocated a social housing tenancy, they are usually allocated a home with a tight fit that is sufficient for their needs at that time, but not with spare bedrooms. The opportunities to move are often limited. It is important to maintain the quality and attractiveness of the social housing stock and not to make ill-advised acquisitions. That is one reason why I am partly, although not wholly, critical of the then Government’s response to the recession in the early 1990s.

Not all the present Government’s measures have been wholly successful either, but they have been wide-ranging, and have included measures affecting the mortgage market, people’s ability to acquire shared equity products and other means of bridging the gap between the cost of a property and their ability to raise mortgage finance, helping to avoid unnecessary repossessions, assisting in the acquisition and construction of additional homes, and intervention to facilitate the continuation of regeneration schemes that otherwise might not have been viable and would have stalled. I have not mentioned the whole range of measures, but they have been an heroic response to a very serious challenge. I compliment the Government on recognising the scale of the problem and the degree to which they have responded.

The cumulative impact of the range of measures has been important in limiting the scale of the damage, which could have been greater than it has been. During an intervention on my hon. Friend the Member for Milton Keynes, I referred to the Council of Mortgage Lenders’ latest forecast of repossessions. Some 60,000 homes are expected to be repossessed this year, and that is not comfortable, but it is still better than the 75,000 that was forecast a few months ago. That is an example of limiting the damage.

I am listening to the right hon. Gentleman’s speech with interest. Will he acknowledge that the CML said that it downgraded its forecast partly because of the Government’s intervention, but also because interest rates are very low, which has prevented some of the repossessions that might otherwise have happened?

I accept that entirely. Interest rates are down, but the hon. Lady will recall that the CML’s previous forecast was issued after interest rates reached the current level, so we are dealing with a static position. Its latest revision downwards is against a background of a similar interest rate position as that which it took into account when making its previous forecast.

With the exception of last year, will the right hon. Gentleman remind us of when the CML did not, in the year in question, revise its estimate down?

I cannot give a detailed response, but I will look at the figures and will happily respond to the hon. Gentleman in writing.

It is important that there has been a downward revision, because many people might have expected the figure to go in the opposite direction. I certainly recall that in those difficult days of the early 1990s the repossession figures escalated upwards, and the trend was extremely worrying and in the wrong direction. What we are seeing now is a serious rise in repossessions—that is a cause for real concern—but the latest projections are slightly lower than previously forecast.

Does the right hon. Gentleman recognise that many economists have been saying that although the figures may have come down in the short term, there is a worry that the long fuse of unemployment may result in repossessions later? The former chief economist of HSBC has said that there may be 100,000 repossessions come 2011 or 2012. I am afraid that the story is not over, and it would be unacceptable for us to be complacent.

The hon. Lady will see from Hansard that my remarks showed no complacency whatever. They indicated concern about the problem, but noted that the latest CML forecast showed a slightly less worrying pattern than previously expected. I believe that that is the result of Government intervention, as well as the impact of relatively favourable interest rates. I accept entirely that that may not continue if interest rates begin to rise, and particularly if a continued rise in unemployment causes people to have difficulty in maintaining their mortgage.

I am not for a moment minimising the problem, but we need a serious, thorough and thoughtful response, rather than simply trying to pick up figures that may make national headlines. To illustrate that, the Nationwide building society recently and sensibly accepted the need to provide mortgage advances of more than 100 per cent. to people in negative equity. If people with negative equity need to move home, they are trapped unless such mortgage facilities are available.

The hon. Lady will recall the torrent of abuse on the Nationwide from various media, implying that it was reverting to the pattern of generous loan-to-value ratios among lenders before the credit crunch. We now want lenders to be more cautious, but we do not want them to be unthinkingly cautious and to swing the pendulum from one extreme to another without recognising the need to be attentive to the requirements of individual households. If those households can afford to meet the repayments, a loan of more than 100 per cent. may be justified. That illustrates my concern that we should have a serious debate about the issues, rather than one that is driven all too often in the media by headline figures and scare stories that do not prompt a full understanding of the complexity of some of the issues.

I want now to talk predominantly about two issues: the availability of credit, and the types of intervention that are most appropriate to help to ease our way through these very difficult times. I have said that banks and mortgage lenders have swung like a pendulum from one extreme to the other in the past two years. From a position in which they were lending money in a way that many people believed was very imprudent, they have now switched off the tap so that many people who could service a mortgage on a new property are finding it impossible to acquire a loan. We have gone from feast to famine very rapidly.

The problem with that is that in too many cases lenders are using the credit crunch as an excuse for restricting the availability of mortgage lending, rather than doing what they should do, which is to examine closely the individual circumstances of the applicant and to judge, on a proper assessment of the applicant and the property, whether the loan is a prudent one to make and, if so, what percentage of the value it is reasonable to offer as a mortgage advance.

I would like to see mortgage lenders moving back to what they used to do, which was to examine closely the individual circumstances and creditworthiness of the people involved and the condition of the property, rather than have the tick-box mentality that has become part of the mortgage lending culture, in which if people satisfy a particular percentage, they get a loan, and if not, they do not. Often the judgement is made with little or no regard to their circumstances. That partly explains why the mortgage lending business got into such a mess: it made many loans without examining the creditworthiness of the people involved. The sub-prime market in the United States was a classic illustration of that, but there were many similar illustrations in the UK and the lenders burnt their fingers badly. Why they have not recognised the need for more thoughtful attention to the individual loan, I do not fully understand. I hope that that issue will be considered more thoroughly.

I am extremely wary of the people who argue that regulatory formulae should be imposed such as a ban on loans of more than a particular per cent., for precisely the reason that I gave in responding to the hon. Member for Brent, East (Sarah Teather). There may be circumstances in which an advance of more than 100 per cent. is justified, even today. A tick-box approach that sets arbitrary figures and requires all lending to fall within that does not satisfy what I believe should be the key criterion, which is a proper assessment of the creditworthiness of the individual and their ability to service a loan on a property that hopefully will provide adequate security. Those are the factors that should be taken into account, and mortgage lenders should be giving more attention to that.

We also need to consider how to assist people who for the moment cannot acquire a loan because the percentage that a lender is willing to offer falls far below their ability to raise a deposit. The range of shared equity models that the Government have promoted and that are offered by housing associations, the Homes and Communities Agency and some house builders have an important role to play. I welcome the attention given to those options, which assist people whose income is sufficient to repay a loan to secure a mortgage advance and to buy a property, rather than being trapped in a position in which they believe that their only option is to look for social rented housing—of course, that increases even further the pressure on individuals looking for social renting.

The right hon. Gentleman has been most generous in taking interventions. I hear what he is saying about shared equity schemes. Is he, then, as disturbed as I am to hear that the Government cancelled the most popular of those schemes—Ownhome HomeBuy—just a fortnight ago?

This is an interesting story, and it is not a new one. That scheme, which enabled people to acquire a property of their choice on the open market, followed in a long line of similar schemes, of which perhaps the most famous historically was known as DIYSO—do it yourself shared ownership. That followed a similar model. The individual identified a property that they wanted to buy and then went to a lender and secured a shared ownership advance on that property. The scheme was popular with the public, but unfortunately it was rather expensive in terms of public subsidy and did not deliver quite the same benefit as a more targeted scheme.

At a time when we are looking to assist developers to begin to develop again, when we want to generate new homes and when we want, as my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) rightly highlighted, to ensure that we are sustaining capacity and skills in the construction industry, it may be right for the Government to put the focus on the elements of homebuy that are geared towards supporting new construction and new building, rather than assisting people to buy properties on the open market. I rather regretted the passing of DIYSO, because it was popular, and I regret the fact that the Government have taken what seems to be a very negative stance on the latest formulation, but I understand the logic in times when finance is inevitably very tight and there is a clear wish to use public resource to best effect.

As my hon. Friend the Member for Milton Keynes, South-West rightly said, the Homes and Communities Agency is playing a vital role in the current situation and, had it not existed, there would undoubtedly be a strong case for creating it. I pay tribute to Sir Bob Kerslake and his team. What they have managed to do in very difficult circumstances is remarkable. The agency was created against a background of expectation that it would drive an expansion programme. When the agency came into existence at the end of last year, it was clearly in a completely different context, in which it had to operate a rescue scheme to assist the housing market to come through the worst crisis that it had faced for many years. Sir Bob Kerslake and his team have responded admirably to the challenge. We are already seeing, in a series of ways, results that are testimony to their effectiveness. I sincerely hope that they can continue to intervene in a range of ways to help individual new schemes to go ahead—sometimes regeneration schemes that would otherwise have stalled. Such interventions allow an increase in the output of social rented and affordable housing, and ensure that the skills base is maintained and capacity retained in various parts of the country where that is necessary. They also ensure that people can afford to obtain housing that otherwise they would not be able to. The HCA plays a vital role.

My concern is about the lukewarm position of the Opposition in relation to the HCA. I hope that the hon. Member for Welwyn Hatfield (Grant Shapps) can amplify his party’s position when he responds to these comments, because I recall that when we were members of the Committee that considered the Bill that became the Housing and Regeneration Act 2008, which brought the HCA into effect, there were quite strong voices in his party that questioned whether the agency had any purpose and whether it should come into existence. I am pleased that he has not been adopting a strident line of promising the abolition of the agency, unlike some of his colleagues, who seem to believe that calling for a bonfire of the quangos is a good news story. It may be. It may get a cheap headline, rather like the headlines about mortgage lending of more than 100 per cent., but it may be wrong. In the position that we are in at the moment, an agency that has shown itself to be so competent in addressing the problems and challenges of a very difficult market, that has given confidence in relation to a series of regeneration schemes that otherwise would not have happened, that has assisted with maintaining output of social and affordable housing at a higher level than otherwise would have been possible and that is helping to restore confidence in the market is vital.

During the run-up to a general election, it would be damaging for there to be speculation about the continued existence of the Homes and Communities Agency, were the Conservative party to form the next Government. I hope that the hon. Gentleman will put our minds at rest that that agency, which has played a vital role, will continue to be able to do so, whatever the outcome of the general election.

I would like to say some words about the expansion of affordable and social housing. That expansion is essential and has been called for on many sides. We all recognise the need not only to deal with the large backlog of people in need, but to ensure that we sustain capacity and support a recovery faster than would occur otherwise. I am concerned to ensure that we do not lurch back into what I believe was one of the most pernicious characteristics of housing in the last century—the social segregation of people according to tenure.

The pattern of building single-tenure estates, with social housing uniquely for social tenants in one area, and owner-occupied homes uniquely for home buyers in another, has not served us well and is an historical anomaly. Traditionally, it was not the case that people of different economic circumstances lived in entirely segregated areas. Of course, richer people lived in larger, pleasanter and more attractive homes or, in some medieval towns I can think of, in the larger and more attractive rooms of a house that was also occupied by poorer people. That was the pattern historically. People of different economic circumstances did not have to live geographically segregated from each other.

One of the great Housing Ministers in the history of this country, and one of the great figures of the party that I am proud to be a member of—Aneurin Bevan—made a famous speech on the subject in the 1940s, and talked about his dream of seeing a community where the doctor, the greengrocer, the artisan and the baker all lived in the same street and were not segregated. We must retain that vision of social cohesion and communities that are not segregated by tenure.

Earlier this week, I was pleased to be present at the launch of a new Fabian pamphlet, “In the mix”, which strongly endorses the case for sustaining mixed-tenure housing and building mixed communities.

I agree with my right hon. Friend. My only concern is that sometimes his remarks might be misunderstood, and it could be thought that the two of us are at opposite purposes. I entirely agree that we need to have mixed communities. Within a constituency such as mine, there are streets containing people from all sorts of backgrounds, and small estates next door to the Lord Chancellor’s residence. We are a very mixed community, but we do not have enough social rented housing.

As my hon. Friend will recall, I stressed the importance of increasing the output of social rented housing and other affordable housing. My comments are about the importance of ensuring that we do not lurch back into the pattern of mono-tenure estates. There are some pretty nasty examples of those—I think of the Ferrier estate in my own constituency that is currently being demolished. The last thing we want to do is spend money producing housing that is so unsatisfactory that it has to be pulled down 30 or 40 years after it was built. Instead, we should produce environments where people will be happy to live for centuries, because they are built to a high standard and achieve the level of social integration that I and my hon. Friend feel is essential.

This issue is often characterised by saying that we can achieve a sustainable mix by having homes for ownership, and affordable social houses for rent next door to one another, or within the same estate. However, we could also have lots of different types of housing for rent. I wish that we could think more flexibly about that, especially at a time when it is difficult to get mortgages for shared equity properties, for example, or even to sell at market value.

The hon. Lady makes a good point. Diversity does not stop at outright ownership, shared ownership and social rented housing. Of course we want a wider mix of options. Some of the good options now being looked at include the “rent now, buy later” scheme, which would help people who are not currently able to raise mortgage finance, but who probably will be able to afford to buy in due course and are therefore given an option to rent in the short term. I wholly endorse the comments from hon. Members on both sides of the Chamber about the merits of looking for ways to attract more institutional investment into the private rented sector, so as to provide more good-quality private rented housing.

Diversity of tenure is absolutely crucial. Economically, it is a good safeguard against the kind of problems that we have seen over the past two years. Where there is diversity of tenure, there are options for people to move between tenure if they are in difficulty. It should not be only a one-way process of people moving from a rented tenure into owner-occupation. There are many circumstances where people in owner-occupation might find it easier to move into rented accommodation. That could be to remove the burden of meeting mortgage obligations that they find difficult to satisfy, or because they do not want to continue with the obligations of maintaining the property if they are getting elderly and require support and help. A more diverse tenure pattern is admirable, and something that we should work for.

What my right hon. Friend says is thought provoking. Would he be equally critical of private developments, particularly gated private developments, where there is no mixture of tenure at all?

Of course. That is the obverse side of the coin and is a consequence of what I believe was a terrible mistake made during the last century—that of segregating households between tenure. The obverse of the sink estate, which is stigmatised because it is seen as solely housing poor people in unsatisfactory accommodation, is the “exclusive” gated community of exclusively wealthy people who have said, “We don’t want anyone else anywhere near us, and we are putting a barrier around our homes to keep other people out.” That is why the policy is so wrong. It results in social exclusion and social segregation rather than the kind of inclusive and more coherent society that I believe we should promote. We must not, even in difficult times, forget the longer-term objective, which is the creation of a housing market that satisfies the full range of needs with a choice of options and tenures, and a strong commitment to quality.

In the past, when the focus was on housing numbers—there are some indications that in recent years that has again become a focus—there was a risk that quality was forgotten. When we produced large numbers of houses, they were not always of good quality, and I have referred to some poor-quality social housing estates that have had to be demolished. Equally unsatisfactory were the unsustainable private estates that were built to low densities with poor energy efficiency standards. They now contribute seriously towards the problem of global warming, but that would take me into another subject that does not form part of this debate.

I will conclude my remarks by congratulating the Government on the steps that have been taken to date. We are not anywhere near being out of the woods; we still face huge problems and, during the years ahead, we must sustain the kind of commitment that there has already been. I hope that the Opposition will also show a commitment to sustaining and keeping in place agencies such as the Homes and Communities Agency, which can help to ensure that this country continues to respond to the huge challenges in the housing market.

The report is most useful, and I congratulate the Select Committee on a timely and interesting contribution to the debate.

The Committee made a number of recommendations and conclusions, most particularly on the need to continue building social housing and affordable housing to rent, a point made by the hon. Members for Islington, South and Finsbury (Emily Thornberry) and for Sheffield, Attercliffe (Mr. Betts). I agree with the recommendation that it is more sensible for the Government to focus on affordable housing for rent rather than on low-cost home ownership models, because of the difficulties of selling caused by the unavailability of mortgage finance.

The right hon. Member for Greenwich and Woolwich (Mr. Raynsford) spoke of the need for sustainable communities and how they could be achieved. In a sense, we have an ideal opportunity to do that, given the Government’s policy of dealing with housing developments being started but not completed, and the money being provided to the Homes and Communities Agency to invest in private development. We have an opportunity to drive that model forward. I hope that the Government will think seriously about mixing different types of rented tenure. It does not necessarily have to be a long-term solution.

The hon. Member for Sheffield, Attercliffe, who is no longer in his place, asked whether we could encourage developers to continue owning properties and renting them, and whether they would then take a particular interest in the quality of their developments. If the taxpayer is to invest in property, we have an opportunity to ensure a mix of tenure, with affordable housing to rent, and intermediate and private rent. We should not focus on the model of home ownership, part or wholly owned, and affordable housing for rent as being the only option for mixed tenure. It is not. We need to progress that model quickly, particularly as the taxpayer is about to invest in certain developments.

Will the hon. Lady join me in condemning Boris Johnson for changing the mix of affordable housing in London from a 70:30 split— 70 for social-rented housing and 30 for intermediate ownership—to 60:40? If she joins me in that, will she join me also in condemning Islington Liberal Democrats, who in their planning strategy consultation favour a 50:50 split?

We all want to ensure that housing is built, and that we have as much affordable housing as possible, but the means of achieving it is a matter for debate. The Government’s insistence on particular targets for various local authorities does not seem to have worked. They have been unable to deliver. Whether we will be able to deliver more through negotiation I do not know. I like to think that negotiation and consensus are a better way of delivering more housing, but we shall have to see what happens. As the hon. Lady would expect, however, I do not join her in condemning Islington Liberal Democrats. Indeed, she was most unwise to invite me to do so—but it was a nice try. I was trying to make a serious point. I attend many housing debates in Westminster Hall, and they are usually more thoughtful. Sadly, however, a lot of straw men were built this afternoon and then knocked down.

The Committee’s report helpfully focused on the need to maintain skills in the building and construction industry. If we lose those skills, it may take a decade to regain them, but there is a desperate need to continue building. I accept that there are problems with continuing to build as a result of the unavailability of private finance and so on, but if those skills are lost in the long term it will create a massive bubble in house price inflation. That will have a knock-on effect for a decade or more. Unless we focus on maintaining the industry’s capacity, we shall regret it for a long time.

I realise that the Government have brought forward finance for the HCA and that the agency has been trying to be more flexible in working with housing associations, which have struggled to continue building with the cross-subsidy model. That finance has taken time to filter through, however, and housing associations are still concerned about Treasury targets on subsidy per unit. Even if the finance is brought forward now, they may find a hole later and be unable to achieve the Government’s targets.

The most obvious thing that the Government could have done earlier—it would have made a significant difference—was to give councils the power to build. Unfortunately, the House rises next week, and the Government will not produce their consultation on the housing revenue account until Thursday 23 July. Giving councils the power to build would have made more difference than anything else that the Government could have done, and it is frustrating that it has taken them so long.

If councils are to build more property, they will need access to HCA grants; they will also need to be certain of their revenue stream, their rental income and their asset base. I do not know what will be in that consultation document, or what mechanism the Government propose in order to deal with the question of negative and positive subsidy. However, there is no legislation in place to enact it in the short term, so I see no prospect of it being introduced in this Session.

Perhaps I can help the hon. Lady on that last point. The Committee took evidence from the Minister for Housing this Monday on proposals for the HRA. Obviously, he was not totally explicit, as that would have anticipated the statement, but if local authorities are agreeable to the proposals once the consultation is completed, they could go ahead without the need for primary legislation. I understood from the Minister that primary legislation would be required if not all local authorities agreed to the scheme.

I hope that Members of all political parties could put it strongly to council leaders that although the outcome may not be precisely what they would wish and may not be quite as advantageous to their councils as they might, in the best possible circumstances, have wished, there is an opportunity for compromise. If the Local Government Association were able to get all its members to agree, the changes could go ahead without the need for primary legislation, to the benefit of the generality of councils even if one or two had to bite a slightly bitter bullet and take slightly less than they hoped for.

Unfortunately, the Minister left part way through the suggestion made by the Chair of the Select Committee, so we will not know—

The hon. Lady’s intervention was helpful. I hope that the Government will bring forward proposals that are agreeable to all councils. The devil will be in the detail. My council, like many London councils, is in receipt of subsidy; the question is what will happen to it. We have argued that that subsidy should be paid out of general taxation. It is untenable for poor council tenants in areas such as Cambridge or Kingston, who pay a lot into the system, to have to subsidise repairs for tenants in my area. It should be paid out of general taxation—by those who can afford to do so.

I do not know what model the Government will use. Authorities such as mine will be in a difficult position if they lose money and later find themselves unable to borrow in order to build. The Government’s approach matters. We have been arguing the point for 10 or 15 years, but if they require local authorities to buy themselves out of negative subsidy, something that they have considered previously, it will be a disaster for authorities such as Cambridge. If they do not top up subsidy for authorities such as Brent, that, too, will be a disaster. We shall have to wait to discover what model they propose, but I would not want to push all authorities to agree to something that might be highly detrimental to their tenants. I hope that the Government bring forward something that is useful.

I feel a little frustrated that the Government are publishing the consultation document on 23 July, as the House rises the day before. I presume that the consultation will run throughout the recess, so there will be no opportunity to debate it in Parliament. If the consultation proposes something that is not helpful to local authority local residents, we will not be able to raise the matter with the Minister in Parliament until October. By then, I dare say that the Department for Communities and Local Government will have closed the consultation. That would be deeply regrettable.

Had the Government dealt with the issue 10 years ago—or even three or four years ago—or brought forward the consultation, local authorities may have been in a position to push forward with building and to be at the forefront of the fiscal stimulus that the Government were hoping to introduce. Although I said that the Government have brought forward money, there are other things that they should have done. Instead of making a VAT cut, they should have invested the money in building housing. However, not all the money that has been allocated for the VAT cut has been spent, so the Government could still reverse the decision and build 10,000 to 20,000 more homes, which would make a considerable difference, and help to keep the building industry alive.

If the Government are going to cut VAT, they should cut VAT on renovation and rebuild. That would significantly help to keep skills in the construction industry and ensure that building work continues. Moreover, it would help us to deal with the issue of empty properties, which was touched on in the report when it dealt with areas of unsold properties. That problem is one of the consequences of the recession. We will see a heavy rise in the number of empty properties. Dealing with such properties will be made much easier if we were to reduce the VAT level on renovation and rebuild.

I hope that the Minister will focus on the issue of empty properties when he makes his reply. I am hoping that his civil servants are taking note of some of the things that I am saying, or that someone will read my comments in Hansard. Half of the hon. Members who have contributed to the debate seem to have left the Chamber during my speech. That is the normal situation that Liberal Democrats face when they speak in debates. None the less, it is not particularly courteous.

As I said, I think that we will see a considerable rise in the number of empty properties. I should like to hear what the Government will do with major regeneration projects, which was an issue touched on in the report. We have a major new deal project in my own constituency. I met teams from pathfinders projects this week. If there are problems with private finance and cross-subsidy, such projects tend to stall for a period of time. That will cause difficulties, especially if there has been stock transfer or people moving out of an area. We will see whole streets or estates being emptied for an extensive period of time—much longer than was anticipated during the regeneration project.

I should like the Government to encourage local authorities, pathfinders and new deal projects to make better use of short-life housing. Perhaps they need to provide incentives in the form of grants and loans. They could work with local co-operative organisations and even private companies. Whatever they do, they must ensure that housing is not lying empty because that will reduce confidence in an area. We must boost the sense that something is happening in such areas. The psychological impact of regeneration is often as important as the building projects. Moreover, such properties will provide short-term housing for many people who are in dire need. I am glad to see that the Minister has reappeared. I am sure that he is now listening attentively to my contribution.

A number of hon. Members focused on the issue of repossessions. Earlier, I said that it was frustrating that so many straw men had been built and knocked down during the debate. When I challenged the right hon. Member for Greenwich and Woolwich on the issue of long-term projections for repossessions, he responded by saying that there was an issue around mortgages and mortgage finance. However, I did not criticise that particular building society for offering more than 100 per cent. mortgages to people in specific circumstances who want to move.

My hon. Friend the Member for Twickenham (Dr. Cable) raised the issue in a debate here at the end of June. We often focus on the short term, with the consequent danger that we forestall repossessions. At some point, interest rates will almost certainly rise. People in negative equity have found themselves unable to move their mortgage. It is not necessarily about moving house; they may be unable to get another fixed deal. Lots of people who are over-mortgaged have been accustomed to moving their mortgage every three or four years to another fixed deal. That may not be a healthy situation, but it is how an awful lot of young people on a mid-range salary cope with buying a property. They will find that they are unable to move. When interest rates rise, some of them will inevitably fall into arrears.

There may be a time lag with unemployment, which is what we almost always see in recessions. Unemployment figures tend to lag behind what is happening with the economy, so even when the economy starts to pick up, redundancies will continue for six, nine or even 12 months down the line. Many of those people will fall into arrears and some will lose their homes. I do not mention the figure of 100,000 to try to create scare stories. I just want the Government to think in the long term about how we are going to plan for the future of those people. Not all of the mechanisms that have been introduced will help them in the long term.

Does the hon. Lady accept that had the Government not intervened in the way in which they have done to try to reduce the incidence of repossessions and to restore some confidence to the mortgage market, it might well be that the kind of figures that she is talking about will already have happened, and we would be talking not about scare stories but about human casualties? If that is the case, will she give some credit to the Government for acting in a way that has helped to limit the extent of the problem?

The right hon. Gentleman has not been in quite as many housing debates in this place as I have in the past three or four months.

The right hon. Gentleman has in the past 10 or 15 years, but not in the past three months. If he had been in any of the debates in which I have spoken, he would have heard me give credit to the Government for making significant advances, particularly on income support for mortgage interest, which I have welcomed regularly and which have helped many people. My point is not to say that the Government have done nothing. My point is that they must think long term. I have not criticised them for everything that they have done, and I am trying to make a constructive contribution to the debate, which, so far, has involved an enormous number of straw men being knocked down. The right hon. Gentleman need not knock down another straw man now. I have welcomed the contributions to ISMI. What I have also said is that some of the Government’s policies have been very tightly drawn, which has meant that a lot of people have fallen through the net. That is why I have consistently argued for mortgage law reform.

The report picked up a point about the pre-action protocol and said that the Select Committee was concerned that it lacked teeth. I have consistently pushed the Government on the issue of mortgage law reform, and I hope that the Minister will consider the issue favourably.

The hon. Member for Sheffield, Attercliffe spoke about the difficulties that tenants find themselves in. The Committee Chair, the hon. Member for Milton Keynes, South-West (Dr. Starkey), also spoke about the issue. I know that the Ministry of Justice is considering the matter at the moment. I argued in the previous debate that we had in Westminster Hall with this Minister that I hoped that mortgage law reform could be used to give courts the power to intervene. Guidance could then be issued. We would not necessarily need primary legislation to enforce a longer notice period for tenants who find themselves in difficulty because their landlord has got into arrears on their mortgage.

I hope that the Government will look on that favourably and take action soon, because we are about to go into recess. Although the Ministry of Justice is looking at the matter, we do not have any time scale on when such a measure will be brought in. Which law are the Government hoping to amend? Will it happen through secondary or primary legislation? Will that be in the next Queen’s Speech? How long will it take, because enormous numbers of people will find themselves in difficulty and may fall through the net?

Finally, I want to pick up on a matter that was in the report and that I asked the Minister about in our previous debate. He said then that he did not know the answer, so I hope that his civil servants have briefed him ahead of this debate. I am talking about sale and rent back. The Government have consistently said that they want the OFT to regulate that area. However, I am still seeing notices on lamp posts across London saying, “We can buy your house and you can rent it back. We can get you out of difficulty if you are in debt.” Given that the mortgage rescue scheme is predicted to rescue only 6,000 people, there will be many who get themselves into arrears, take part in those schemes and lose their homes some 12 months later. When will the Government regulate that kind of sale-and-rentback scheme? The Committee said that the matter was urgent in February when the report was published and the Government have been promising such regulation for several years, so I hope that the Minister answers that question.

I congratulate the hon. Member for Milton Keynes, South-West (Dr. Starkey), the Chairman of the Committee, on two excellent reports, particularly the first report. The second report is a very good update—it is bang up to date—on the situation and includes information about the Government’s most recent “Building Britain’s Future” announcements. They provide a good basis for the debate.

I welcome the new junior Housing Minister to his place. This is the first full debate that we have had as opposing Front-Benchers. Previous Housing Ministers have not had the longest tenure. I have worked out that the four Housing Ministers whom I have faced across the Dispatch Box were in place for an average of 211 days. It is slightly better news for the Minister: he is only the second junior Housing Minister whom I have faced. Junior Housing Ministers usually last slightly longer than Housing Ministers on average, but with an impending general election, time will tell.

Given the Minister’s short period in office, he will still be struggling—excellent though he will turn out to be—to get his head around some of the key housing figures, and of course it can take a long time to comprehend the housing lexicon, so I thought of a few basic facts to lay out some of the background to these excellent reports. Not all those facts are referred to in the reports, so perhaps there have been one or two omissions.

The first key figure for the Minister is that far too few homes have been built in the past 12 years—that is the underlying cause of everything that is written about in the reports. How many too few? The answer is about 24,000 a year—missing homes that were never built under this Government, by contrast to the trend of the previous couple of decades. That has left a huge hole in housing in this country. Simple maths tells us that that is one reason why we are in the current mess. However, that is not the only problem.

Most of the debate has focused on affordable housing for rent, purchase or part-purchase. The bad news of the overall house-building statistics gets even worse when it comes to affordable housing numbers. Less affordable housing has been built in every single year of this Government than in any of the years under the Governments of Margaret Thatcher and John Major. That is a rather damning indictment of a Government who I am sure would like to be thought of as being on people’s sides and assisting with things such as housing for those most in need.

This year, it is likely that 70,000 to 90,000 houses will be built in total, which is fewer than half the Government target of 200,000, which is supposed to increase rapidly to 240,000. We are in a mess. The single greatest lesson that the new junior Housing Minister could learn from the two reports and the current housing situation is that those top-down targets simply do not work. In fact, not only do they not work; they probably make the situation slightly worse. Regrettably, he will not find that conclusion in the reports.

I am afraid that the Committee has in many ways fallen for the Government’s warm words on housing, which they deliver all the time. The Government have always been very polite about housing. They never told anybody that they were going to get fewer homes of all types built in this country, including affordable housing—it has just happened over a number of years. It is almost as though, as long as the Government come out with new and supposedly ambitious or challenging targets—as they are variously described—everyone, including, I am afraid, members of the Committee, will buy the argument and congratulate them on having so much aspiration.

The truth is that aspirations, targets and challenges do not build homes, and nor do headlines. All too often, the problem with the Government’s housing policy has been that they chase headlines. There were supposed to be 10 eco-towns—five by 2016 and the other five by 2020—yet today, it was announced that there will be only four and they will probably take till 2020. By the way, the houses will not be as environmentally friendly as the zero-carbon homes that we will be building by 2016. The houses in the eco-towns, which is a sham name, will only be at sustainability level 4—I am sure the Minister has already discovered that level 6 is the zero-carbon level. We have an incredible situation in which the rhetoric is so far distant from the reality that even Labour Back Benchers and those who are most experienced in housing dare not challenge the raw facts of a failed, top-down housing policy.

I do not believe that the Government want this situation or that they lack the compassion to change things, and it is not for the lack of warm words about new headline-grabbing schemes and initiatives that we are in this situation. It is worth reflecting on some of the schemes mentioned in the reports, even if there is not the forensic detail that one would like. To be fair to the Committee, such detail would be impossible to provide, simply because the numbers change daily, although not by much.

In the hon. Gentleman’s comments so far, we have been given a very general picture. He has said that the Opposition are in favour of more social housing and that we cannot have a top-down approach, but I have not heard him say how, if there are going to be spending cuts under a future Conservative Government and if health and education spending will be completely protected, funds will be available to build the social rented housing for which he is arguing.

If the hon. Gentleman would be so gracious, I shall come to that. I am on only the first page of my four pages of notes, and the last page describes precisely what we will do to get more from less, as he describes it.

Is not one of the problems of building new housing that people do not seem to want new housing schemes near them? An awful lot of that involves Conservative councils that do not give planning permission for housing schemes. If, for example, 250 Islington families wanted to move into the hon. Gentleman’s constituency, would planning permission for social rented housing be given?

The Government are obsessed with the idea that they have failed miserably after 12 years to build enough social houses because of someone else, but they are misleading themselves. To answer the hon. Lady directly, I believe that local communities will accept much more housing, and much more affordable housing, if there is something in it for them. She asked how my constituents would feel. As I have said on many similar occasions, my constituents cannot be told to accept 10,000 or 15,000 new homes—that is specified by regional spatial strategy for the eastern region—when their local hospital is being closed. The two things are simply incompatible. Until the Government try to join those things up, they will never succeed in building new homes. In fact, I am confident that a future Conservative Government will build far more than, say, 250 affordable homes in my constituency, but we will do it with people rather than against them.

Some Government schemes are outlined in the report, which is welcome, even if detail on performance is lacking. We have heard the enthusiasm of the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) for the rent-to-homebuy scheme, whereby a person can rent a home and, over a period, buy the house if they want to. Although the scheme undoubtedly sounds like an excellent idea and a good way to help people gradually on to the housing ladder, he did not mention—perhaps he does not have the figures to hand, but I was given the information in a parliamentary answer just the other week—that £87 million has been spent on the scheme in more than a year, but not a single person has moved into home ownership. The rent-to-homebuy scheme is not a spectacular success so far, at an average cost of £33,000.

The hon. Gentleman seems surprised that a scheme that is designed to help people through a period when mortgage finance is very difficult to obtain should not have led people immediately into home ownership. Is not the whole purpose of the scheme precisely to enable people to rent now and buy at some future date when circumstances are easier?

For £87 million, I am not surprised that not every single person who took up the scheme has ended up buying, but I am surprised that not a single family has been able to buy. Incidentally, the scheme costs £33,000 on average and has not helped a single person into their own home, whereas the homebuy direct scheme costs only £24,000 and has proved at least slightly more successful. The problem is that the rent-to-homebuy scheme is costing a lot of money but is not working.

What about social homebuy, the great scheme launched in a fanfare to help 5,000 families a year? The Minister should know that so far, it should have assisted 15,000 families already in social affordable rented housing to buy their own homes. Will he include the up-to-date number in his response? When I last asked, not 15,000 families but just six had been helped to purchase their own home in all that time. I would be grateful if he gave us an update on social homebuy and how it is failing.

What about homebuy direct? The £480 million programme was designed to help a lot of people, but at the last asking, only 200 families had benefited from it, although I should add that only a fraction of the money has been spent. Off the top of my head, I think that the figure is £4.7 million. The scheme is not working in any direction. It brought a lot of hope to a lot of people, but it does not seem to be going anywhere.

The Select Committee report welcomed not just the schemes to help people buy their own homes but the schemes to help keep them in their own homes, such as mortgage protection schemes, two of the most notable of which are similarly named. The Minister will be struggling to get his head around all the acronyms, so I shall touch on them both briefly.

Under the mortgage rescue scheme, as the Minister will immediately recognise, a registered social landlord can purchase all or part of somebody’s home to help them out of trouble. It was launched in January this year and is designed to help 6,000 families over two years. When I last asked, not 6,000 families or anything close to it but six families had been helped. Can he give me an update on the number of families assisted by the mortgage rescue scheme?

I ask the hon. Gentleman to reconsider the wording. It is my understanding that the mortgage rescue scheme was originally designed on the basis that probably about 6,000 families would fit its eligibility criteria and that the money was therefore set aside accordingly. That is a slightly more accurate description than suggesting that the scheme has failed if it does not reach 6,000 people. As I pointed out, we do not have the data to know whether 6,000 people met the eligibility requirement, were in danger of repossession and therefore needed the money.

I certainly understand the point that the hon. Lady makes, and I know that the evidence gathered by the Select Committee will have been considered thoughtfully.

As we are debating the reports and the Government’s response to the first one, let me give my criticism. Why was the Select Committee not slightly more forensic in its questioning about the outcomes and success of the schemes? Although the hon. Lady may well be right to suggest that not all 6,000 people would ever be helped, it is still certainly the case that a Minister stood at the Dispatch Box—I remember it well; it happened in January—to announce the scheme in a headline-grabbing manner that made the 10 o’clock news and sounded as though thousands of people were about to get great help from the Government. As the reality six months later is that only six families have been helped, it does no Government—and no newly appointed Minister—any harm to step up to the Dispatch Box and admit the reality: perhaps the scheme, along with the others that I have outlined, is not functioning as it was initially designed to.

If we are not happy with how the mortgage rescue scheme is operating, what about the home owner mortgage support scheme? It was first announced by the Prime Minister on the same day as the Queen’s Speech and is designed to allow home owners to defer their mortgage interest for up to two years. When the Prime Minister usurped the Queen’s Speech to make that surprising announcement in the debate immediately afterwards, he suggested that it would cover some 70 per cent. of the mortgage market. The scheme was not launched in the spring; it was April before it came into operation, at which point, depending how one calculates—by volume, money or number of mortgage lenders—only 25 to 55 per cent. of the marketplace was covered.

Before today’s debate, I looked the issue up. As I understand it, a vast number of household-name lenders are not within the Government’s home owner mortgage support scheme: HSBC, Barclays, Abbey, Alliance and Leicester and Nationwide. None of them are included. The Government promised, “Don’t worry. Others will come down the line.” They said that another six were at the tipping point and about to sign up. I checked again today, and only two have come on board since.

I do not have time to go into the further schemes intended both to assist people into housing and to help them once they are there, but many of them have been nowhere near successful or are abject failures. It is about time that somebody from the Government stood up and explained why they think that the schemes have gone wrong and whether they were motivated by the prospect of catching great headlines on the day, in the hope that no one would notice when hard-pressed families were not helped in the long term.

Interventions in this debate have focused on what Her Majesty’s Opposition would do if we were in government, so I will reflect on one or two ideas that should be in the report but do not seem to be covered. The biggest is simply to stop thinking in terms of top-down targets and telling people what to do, where and how many, and to focus instead on a system of incentives that would allow communities to make some of their own decisions in return for money.

Under a policy launched by us, that money would be provided through council tax. Specifically, every local area could keep 100 per cent. of council tax—in fact, they would get 100 per cent. on top of that—for a period of six years. Let us say that an eco-town, such as the one in north-west Bicester, got the go-ahead and was locally approved and all the rest of it. Over a period of six years, based on the likely outcome of the average council tax, the town would get £45 million to £50 million for the local area. That would be a huge incentive for local communities to develop and get something in return.

We would also ensure that more affordable housing would be built—a subject that is of interest to many Members here today—by ensuring that local areas got 125 per cent. of council tax to keep, a larger proportion than is being paid by residents, for every home built. That would create an inbuilt incentive to build more affordable housing without the need for top-down targets, which—let us face it—have failed, whatever one thinks of them.

Other hon. Members have mentioned community land trusts, which were not covered in great detail in the report but are agreed by all parties to be an exceptional idea. They were added to the Housing and Regeneration Bill in 2008 after much pushing, having been voted down by the Government several times and eventually agreed on at the last moment. They provide a framework for communities to get together and build long-term sustainable housing, as the land is locked in perpetuity for the use of local people. It is a tremendous idea.

I invite the Minister to take on board local housing trusts, an idea from our recent housing Green Paper; he can rename them whatever he likes. They take the concept of the community land trust, which many of us like so much, and provide communities with the ability to grant themselves planning permission to go ahead with building, without having to go through any rigmarole at all, apart from holding a referendum of local people to ensure that that is overwhelmingly desired.

Incentives, community land trusts and local housing trusts are all things that the Minister could take on board. He could also pick up and use our empty property rescue scheme. Nearly 1 million properties in this country are empty and could be used rapidly. We have described how, with a bit of flexibility in some of the rules and regulations, they could be used to house people today.

It is simply not good enough that, after 12 years, the number of people languishing on the housing waiting list has gone up not by just a little, but by 80 per cent.—from 1 million to 1.8 million. It is not acceptable to sit by while families are living in temporary accommodation because they cannot move into empty properties on the flimsy excuse that they do not meet up to a particular code.

Some people are not in accommodation at all. Last night, I met a man who was begging through the carriages of the train I was on. He said to everybody, “Excuse me, I am sorry to bother you, but I have fallen on hard times.” The woman across from me gave him some money. I gave him the number for Thames Reach, because hostel places are generally available if people want them. The Government have put a great deal of emphasis on their homelessness strategy. Unfortunately, that strategy has not been as honest as it should be. Bizarrely and incredibly, the homelessness count claims that just 483 people sleep on the streets in this country. That is not true; everyone knows that it is not true, and everyone recognises that there is a problem with the way in which the figures are counted. One big problem is that the returns from local authorities are bracketed down when they have been estimated.

The Minister’s predecessor promised to address that issue and carried out a consultation on it. Unfortunately, rather than solve the problem, the consultation said that authorities that did not carry out street counts should not be asked to return figures at all. Therefore, for a local authority that estimated that there were five rough sleepers in its return and had that bracketed down to zero by the Department, the figure will still be zero because such authorities will not be asked to return any numbers. Will the Minister address this issue again? I understand that by keeping the rough sleeper count the same, there will be a baseline to indicate what is happening. However, with the attempt to get to zero rough sleepers by 2012, it is surely important to count the numbers accurately, so that we can understand the situation and focus resources. If he does not do that before we come to power, we have a pledge to do so.

I was waiting in expectation for a commitment to fund social housing. Apart from the incentive for local communities, I did not hear one. Is there a commitment on the number of social houses that will be funded? Despite the hon. Gentleman’s lack of love for top-down targets, a future Government would presumably have a target. What will happen if these bottom-up local initiatives do not produce the number of houses that are needed by people in this country?

You have got to love those targets. The simple fact is that targets have not worked, so what is the point of putting more targets in place? There is almost an obsession with targets. I know that they are comforting and that people feel better when there is a target, but it is cruel to have a target that is not delivered because it disappoints people. For example, twice as many homeless children live in temporary accommodation in this country than 10 years ago, despite the targets to do away with homelessness and child poverty. Such targets are not helping. To answer the hon. Gentleman’s question, if we find that not enough housing is being built, including affordable housing, we will increase the incentives. We will not increase the target even though it is not being delivered.

Perhaps the hon. Gentleman will look at the issue differently. If the sky was to fall in and there was a Government of a different colour next year, how would he measure his success? How many families would be housed in social rented housing after four years of a Conservative Government? We would like to know what Conservative aspirations are, so that families on the waiting list for social rented housing have some idea of what is on offer from an alternative Government.

I can answer that directly and simply: the measure will be whether we have built more homes. If we do, we will reduce the housing waiting list. That simple measure is far more meaningful than targets, initiatives and programmes. If hon. Members are not satisfied that the programmes are not working, I can run through a list of more that are not helping people but are raising expectations. That is a cruel way to run housing policy; it is not doing any good, and we can do far better. The hon. Lady will know whether a future Conservative Government have been more successful because we will have built more homes and reduced the housing waiting list—two things that were achieved under previous Conservative Governments.

I agree with the hon. Gentleman that targets by themselves are pointless. However, in delivering the targets, the measures and priorities of the Government are focused. That must happen as well as just having the targets.

I want the hon. Gentleman to focus his mind on the topic of the debate: housing and the credit crunch. Will he explain how giving incentives to local authorities to permit developers to develop on their land would help in the current situation? We are in a credit crunch, which means that developers are not building even though they have planning permission. Will he bend his mind to that problem?

I have spent most of my time speaking about the schemes that are outlined in the Select Committee report. As I said, I do not think that the analysis is of sufficient detail to demonstrate that the outcomes of the schemes have met the intentions behind them.

I do not believe that targets are of any benefit on a national level, although local authorities will know what they plan to achieve through their local development frameworks. Such aims are more realistic because they are at a local level. Incentives would make such things more likely to happen. Our measure will be much simpler than targets. It will be whether we have built more houses and housed more people, particularly from the social housing waiting list, which is at an all-time high.

I can create policy only for after the election, not for today. We will have to assess the situation nearer the time. Eventually, the economy will come out of its current hole. I hope that we do not return to the days of housing boom and bust, which we were assured we had moved away from even as house prices doubled in a mere seven years. We will deal with that through more intelligent regulation of the financial markets, which is covered in the background to the reports.

We had the Barker reviews of 2004 and 2006 and the policy of 3 million homes by 2020 because everybody bought the argument that there were too few homes. Everybody knew that because house prices were doubling in just seven years. Although it seems obvious now, everybody did not know that one reason for that was the over-supply of lax mortgages. The ease with which people could get mortgages and the competitiveness in lending caused house prices to shoot up even faster than would have been the case purely because of supply and demand in the housing stock. That was quite different from previous housing booms and busts.

We must learn that lesson and change the regulatory framework right at the top. As we have said this week, that means putting the Bank of England back in charge of some of this regulation. The tripartite system that was put in place in 1997 has clearly failed and let us down, principally because nobody really know who was in control. There is a bigger macro picture that hon. Members would not thank me for going into in more detail.

I will return to the report and to the proposals that the Minister could adopt right now. I have mentioned the rough sleeper count and the empty properties programme. Hon. Members have mentioned the problem of renters who find out that the buy-to-let property in which they live will be repossessed in a short period of time. The Government have done a little on that by extending the period of time during which the renter should be told that the property in which they live may be repossessed, but a series of other steps could be taken. I shall not go into them now, for the sake of brevity, but we have published them and I will happily send them to the Minister, as that set of proposals is another that he could adopt immediately.

Finally, there is another area to discuss, which the reports do not address as much as they should and which has not been mentioned in the debate—the lack of mobility in affordable housing. That is at the crux of this matter when it comes to the recession, the credit crunch and the lack of social and affordable housing.

I have been waiting patiently to hear the hon. Gentleman’s observations on the Homes and Communities Agency. I heard him say “finally”, and assumed that he was moving towards his conclusion, but I hope that he will address his party’s policy on the agency and its future.

For the sake of completeness on policies that the new Minister could adopt quickly, I shall discuss those policies in a moment. First, let me say that mobility is crucial and that I hope the Select Committee will get the chance to look into that issue. There is no doubt, according to research that we carried out the week before last, that one reason why there is such a great waiting list for housing is that nearly 250,000 people live alone in three and four-bedroomed homes. So, we have the wrong-shaped families in the wrong homes creating a waiting list, with other people waiting to get into those properties.

Then there are the problems of sheer economics, particularly during the credit crunch—the subject of the report. The difficulty of moving between social houses creates an inability to move around which affects the running and flexibility of the economy. That is a key issue. We have already heard how the HOMES—Housing Mobility and Exchange Services—move programme collapsed post-1997 when the Labour Government privatised it and it went wrong, but there is now an online home-swapper programme, which moves more people around the country faster than any of the previous programmes. Will the Minister take a close look at how a proper national mobility programme and a set of measures that we have called the “right to move” could be put in place so that people who live in affordable, rented social housing can have the same mobility and flexibility to move as others?

On the Homes and Communities Agency, it is a huge quango, but we have not said that we are going to have a bonfire of all quangos. I suppose that we have said that we are going to have a barbecue of quangos and that we will check carefully what each of them does and whether it is performing to task. I have to say to the right hon. Member for Greenwich and Woolwich that I am not impressed when I see an agency that has 20 offices and spends £4.5 million a month on salaries alone, but as I have said to its chief executive Sir Bob Kerslake on several occasions, we want to see how the agency performs and what its outputs, rather than inputs, are—or what its outputs are in return for the inputs. The agency has time between now and the election to prove that it can get the stalled housing and the stalled town centres, as in my constituency, and other projects that it has an interest in, working. If it can, and if it proves to be an effective delivery model, then it or something similar would, presumably, have a role. To expect the Opposition to give a blank cheque to an agency that has been in place for only a few months—it got started on 1 December—without having seen how it really performs is unrealistic.

The same is the case for the Tenant Services Authority, which was set up by the same Act as the HCA. Indeed, the right hon. Gentleman and I both sat on the Committee that considered that Bill. I am not terribly impressed that the authority has so far spent its time surveying 27,000 tenants to get responses and then writing a draft report about what it might do. I want to see action from those organisations; they are spending a lot of public money and we need to make sure that we get proper protection to protect our tenants in the most efficient way. That is a quick round-robin of where we stand.

Does the hon. Gentleman accept that many tenants are rather pleased that the new authority is taking the time and trouble to listen to what they think? When it puts its monitoring arrangements in place to monitor what standards have been achieved by housing associations, arm’s length management organisations and others, it will surely want to ensure that those monitoring arrangements are worked out so that the tenants’ view of the standard of service that they are getting is reflected. That is its core mission, and I think that it is going about things from the start in a very admirable way.

That point gives me the opportunity to put on record that I want the absolute best, A-class service as far as representation for tenants is concerned. However, the TSA is not even doing the 1 million council houses yet, nor the ALMOs; it has focused only on registered social landlords. That will not come until 2010, so the picture is incomplete. I am concerned that it is taking so long to get things going.

I have done an in-depth study of the views of my constituents who have housing association landlords. Interestingly, what came out of that was that one housing association might be at the top of the league in one place, but at the bottom of the league elsewhere, depending on the estate. The people who have the least power are the tenants, but they are also the people who know the most about the estates—and vice versa for housing associations. There is a big leap between national representation of housing association tenants and local representation, which is very important. The new body addresses that, and that is why I am a great supporter of it.

I am grateful for that intervention. I want to finish by the top of the hour, so I shall press on except to say that I am the Conservative who represents the most council tenants in the country, and that I want my 9,500 council houses—and the greater number of council tenants in them—to have the protection of a proper regulatory structure. The fact that the TSA does not yet cover them, coupled with my concern about the speed at which things are moving, makes me wonder whether it is going about things in the best way, or whether there are other ways of helping to provide those services to my constituent tenants and the hon. Lady’s.

My final point is about the announcement, in the week before last, on “Moving Britain Forward” or whatever the latest catchphrase for a relaunch is, in which £1.5 billion was again promised to affordable housing. That is on top of the very admirable £8.4 billion from 2008-11. It is not for lack of promises that we have failed to build enough homes in the past few years. The confusion started almost from the moment that the £1.5 billion was mentioned, not least because the Government have yet to explain, even today, a fortnight later, where the cash is coming from. We understand that half has to be found from the communities and local government budget and that that money still has not been found. In the No. 10 briefings, morning after morning, we have been promised that this information will be released. Will the Minister explain where that half of the £1.5 billion is coming from? Is it the case, as many of us fear, that the only popular HomeBuy programme, Open Market HomeBuy—it gets confusing, so, for the Minister’s reference that programme takes in the My Choice HomeBuy and the Own Home programme—has been cut, at a saving of about £210 million, to contribute towards the communities and local government half of that £1.5 billion programme? If that is the case, will the Minister accept that the Government are robbing Peter to pay Paul? Given their appalling record on housing, particularly on social and affordable housing, will he admit that the game is finally up?

It is a great pleasure to take part in this debate under your chairmanship, Ms Walley. I know what a great interest you take in housing issues and that you have great knowledge and expertise on and commitment to those issues. Excellent though the debate has been, I am sure that it would have been enhanced had you been able to take part. I wanted to pay tribute to all the work that you do in Stoke to fight for better housing for your constituents and to improve housing in the city as a whole, because you have not been able to speak in the debate about your role in your constituency.

Nevertheless, it has been a fascinating debate, in which a number of Members who are acknowledged experts on these issues have taken part. I congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey), the Chair of the Select Committee, on producing the reports and securing the debate. I apologise to the hon. Member for Brent, East (Sarah Teather) for having popped out of the room—I am very sorry for having done so.

I welcome the opportunity to have this debate. In June, my predecessor gave evidence to the Committee on the issue, but a lot has happened since then and I am grateful for the opportunity to report on the progress that has been made. As a number of Labour Members have made clear, housing has always been one of the Government’s top domestic priorities and, whatever the Opposition spokesman wants to claim, I think it is fair to say that we have made significant progress over the past decade. A million more households now own their homes, and there are more than 400,000 new affordable homes and 1 million more decent homes. All of that has made a real difference to people’s lives up and down the country.

Following that period of real success, as the Committee’s report shows, housing, along with many other sectors of the economy, is undoubtedly now facing difficult times. The global economic turmoil has made conditions much tougher for developers, home owners and prospective buyers alike. The Government have had four key priorities in responding to these challenges: first, to help home owners concerned about repossession; secondly, to support first time buyers; thirdly, to restart the flow of lending; and fourthly, to increase the number of homes being built and boost skills in the construction industry. I shall set out the progress that we have made on each of those.

Supporting home owners who are threatened with repossession, so that we can make sure no household needlessly loses its home, is one of our top housing priorities. That is why we have put in a place a framework of support through the whole arrears cycle—from debt advice to court desks—which has helped hundreds of thousands of families already. As part of that programme, we have boosted the support offered by the benefit system and have implemented new schemes offering targeted financial assistance to those in the greatest need: the homeowner mortgage support scheme and the mortgage rescue scheme.

Every repossession is a tragedy for the family affected and all the figures and statistics will be of no consolation to people who have lost their home, but the measures we have introduced will help thousands of households avoid repossession. As my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) said, it is worth pointing out that the figures provided by the Council of Mortgage Lenders show that the number of repossessions in 2008 represent about 0.34 per cent. of all loans, which means that despite the fact that more than a million more households now own their home, the numbers affected are proportionately smaller than in the 1990s.

Again, as my right hon. Friend pointed out, the Council of Mortgage Lenders has already said that its forecast of 75,000 repossessions this year was looking pessimistic in light of the Government’s intervention. The Council of Mortgage Lenders has now reduced that figure and that revision is a direct result of the action that we have taken, in combination with lower interest rates and other actions to support the economy. I am glad that the hon. Member for Welwyn Hatfield (Grant Shapps) raised that point and went into it in some detail. I want to deal with the matter with the same amount of detail. To be honest, it is a bit ridiculous to judge the success of a scheme or the impact of the Government’s measures by the number of people whose homes have been sold to housing associations at the very final stage of one particular scheme and ignore the hundreds of thousands of people who have been helped much earlier in the process.

The macro-economic framework we have put in place means that millions of home owners have benefited from record low interest rates, which is in stark contrast to what has happened in previous recessions when interest rates soared to 10 per cent. for four years and 15 per cent. for a year. That caused even bigger problems for millions of families. Ensuring that lenders are offering their own forms of support to borrowers and that they are providing extra advice and protections through the courts has helped hundreds of thousands more people.

I am intervening because the Minister seems to be trying to paint a picture that suggests that, for all sorts of reasons, it does not matter that just six families are being helped through, for example, the mortgage rescue scheme. Is he aware that the real reason for that is it is almost impossible to jump through the required hoops to qualify for the scheme? I invite him to comment on that?

I will deal with that and answer the important point that the hon. Gentleman has made, but I want to take him through the whole process. To support households in financial difficulty, we have provided extra funding for debt advice, including £6 million for the National Debtline and £10 million for the citizens advice bureau. CAB figures show that 95,000 households received advice on a mortgage or secured loan last year. When a possession case has reached court, repossession is not inevitable and the right advice and support can help households remain in their home even at that stage. That is why we have put in place universal access to advice desks in courts, and have doubled DCLG funding for that vital scheme to £1.5 million for the current year. The scheme provides free legal advice and representation to people facing repossession or eviction hearings.

Legal protection for home owners in difficulty has also been strengthened. In 2004, the Government introduced statutory regulation of mortgages and the Financial Services Authority’s regime affords consumers important protections and requires lenders only to repossess as a last resort. More recently, we introduced the mortgage pre-action protocol, which sets out clear guidance to the judiciary on what steps the courts expect lenders to take before bringing a claim to court. That helps ensure that lenders can only repossess as a last resort—and the measure has paid off. More lenders are working with their customers to help them stay in their homes and although, as I said earlier, every repossession is a tragedy, Ministry of Justice figures show a 42 per cent. drop in mortgage possession claims issued in quarter one of 2009 compared with quarter one of 2008. That is important as it is crucial for effective forbearance that lenders treat borrowers fairly and that borrowers talk to their lender if they enter financial difficulty.

On other measures, we are helping 200,000 through the support for mortgage interest scheme, which helps with payments towards the interest component of a mortgage. We have also introduced the homeowners mortgage support scheme, which helps people on reduced incomes to reduce their mortgage payments, and we estimate that that could help tens of thousands more households. In addition, the mortgage rescue scheme helps people stay in their homes—some by selling a stake to the housing association—and has helped up to 6,000 families, 200 of which have had repossession action in the first five months of the scheme. I want that scheme to help people as quickly as possible, but there are practical problems because households are selling their home when they enter the scheme. It is not an overnight process. We need to ensure that checks on the property are carried out and that the home owner gets proper advice before making the decision to go ahead.

However, we want to speed up the process where possible, which is why, on 30 June, the Minister for Housing, my right hon. Friend the Member for Wentworth (John Healey), announced our plans for the new mortgage rescue fast-track team, which will be up and running by the end of this month. The team will be based in Birmingham and will help manage MRS applications. Its work will include handling negotiations with lenders and registered social landlords, which should really speed up the process for some households.

The truth about the package as a whole is that millions have benefited from low interest rates—that did not happen in previous recessions—and hundreds of thousands have been able to stay in their homes because of direct help from the Government. As I said, every repossession is a tragedy and none of the statistics will be of any consolation. However, as a result of these measures, even though a million more households own their home, the numbers being repossessed are proportionately smaller than in the 1990s.

I understand the Opposition’s position on this and why they want to claim that such schemes—the home ownership and the shared ownership schemes and so on, to which the hon. Member for Welwyn Hatfield referred earlier—are not having an impact. To be fair to the hon. Gentleman, I do not think he is making such claims to score political points—[Interruption.] Although, perhaps I am being too generous. I think there is a fundamental difference in our values and the Opposition’s view of how things should be organised.

The Opposition want to say that the extra investment and the real help that we have provided is not working because they are ideologically opposed to Government intervention. When they talk about wanting a smaller state and rolling back the frontiers of the state, what they actually mean is that the Government should do less, and spend less. The Opposition would like to introduce spending cuts, so that they can do whatever they want to do on inheritance tax regarding some of the richest estates in the country. They were opposed to the action that we took to save the banks. They think our approach should have been to do much less or nothing during the recession and that we should cut public spending. We think that we should increase investment to keep people in their homes, save jobs and get the economy moving. Those are two very different sets of beliefs, are they not?

The next election will be an opportunity for the country to choose which approach it wants. But let us not reduce this to some kind of point-scoring around this or that number. Let us have an honest debate about the competing values that our different parties hold.

In addition to supporting those at risk of repossession, we have also taken action to help make home ownership more affordable. To help first time buyers get on the property ladder, we will provide increased funding for our low-cost home ownership schemes. These include the Rent to HomeBuy scheme, which enables potential purchasers to rent a property at below market rent for up to five years, giving them an opportunity to save the deposit needed to buy a share in their home.

The HomeBuy Direct scheme enables purchasers to buy a newly built home with the assistance of an equity loan of up to 30 per cent. Households with incomes of up to £60,000 that could not afford to purchase a suitable property on the open market are eligible to buy through HomeBuy. Together with the recent housing pledge, we expect to help more than 46,000 people into home ownership this year and next.

The Committee and my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) discussed finance for mortgages. In January, the Government announced measures to reinforce stability of the financial system, increase confidence and capacity to lend, and support the recovery of the economy. Those measures build on the £500 billion package announced in October last year to help restore confidence and trust in the markets.

In addition, and as a condition of accessing the asset protection scheme, lending commitments on commercial terms have been agreed with the Royal Bank of Scotland and Lloyds for the 12 months from March 2009. Other banks have also signalled their intention to increase lending. That should help families looking to buy a property and households that want to remortgage.

As I said earlier, the Bank of England has taken decisive action to reduce interest rates. Mortgages are cheaper for some prospective buyers and many in home ownership as a result of the average mortgage interest rate having fallen from 5.8 per cent. in April 2008 to 3.59 per cent. in May 2009.

Let me turn now to housing supply, which was raised by my hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry). She spoke with great passion about the problems facing her constituents. I would be happy to go to her constituency and meet some of those people and see for myself the conditions that she described. In addition, I would be happy to speak to her in more detail about the problems that she referred to with the housing market in London more generally.

The Government’s help, combined with the commitment of the registered social landlord sector, meant that more than 47,000 affordable homes were funded through the HCA in 2008-09. That is a real achievement, and we have to do more. It is fair to say that, for decades, housing supply has failed to keep up with our growing and aspiring population, and that demand for housing, both affordable and in the private sector, will continue to increase. It will be crucial that our house building industry responds flexibly to meet that challenge.

That is why our recent pledge to invest £1.5 billion to build 20,000 new affordable homes for rent and low-cost sale is so important. The pledge builds on existing programmes: the national affordable housing programme, the local authority new build programme, the kickstart housing delivery programme and the surplus public sector land programme. The pledge will increase total investment in affordable housing over the next two years to £7.5 billion, and it will mean that more than 110,000 new affordable homes will be built during that period.

The Chairman of the Committee, my hon. Friend the Member for Milton Keynes, South-West, discussed the latest projections, which indicate that the number of households will grow at a faster rate, and that we might need to build even more homes. That underlines the urgent need to maintain our ambition to provide more homes, not just for now but for future generations as well.

The Minister is being generous in giving way. He rushed through the £1.5 billion pledge without mentioning where the money will come from. Could I push him on that point?

We have, actually. We said that the money will come from reprioritising in my Department and elsewhere in Government, and from underspends in other Departments. We will provide more detail in due course, but the challenge for him is to say whether he would match the pledge and what he would invest in providing new homes, and whether that would be subject to the cuts to which his party is committed. It is all very well for him to ask these questions—

There will be a general election in less than a year, and the Opposition’s proposals will come under just as much scrutiny as our record and our plans for the future. The country will face a big choice between our plans to invest in the economy, to save jobs in the construction sector and to provide the homes that people need, and the Opposition’s plans to cut public spending. Frankly, I cannot wait for that debate, which will subject the Opposition’s proposals to the scrutiny that they have so far escaped. I believe that the people of Britain will take a very different view of the Opposition’s policies when we and the media are able to subject them to the scrutiny that they deserve.

The pledge also strengthened the local authority role in the delivery of affordable housing. The rules governing council housing finance were changed to allow local authorities to retain the full rents on new-build properties and the full capital receipt when any of those properties are sold. We propose to reform the council housing finance system to embed those reforms. Several hon. Members commented on that during their speeches. I understand that the hon. Member for Brent, East raised the matter while I was out of the room. I am sorry about that. I gather that she was unhappy about the length of the consultation period.

I am concerned that the consultation will be published after the House rises. If there are issues in our boroughs that are raised with us as constituency MPs, not Front-Benchers, will we be able to raise them with the Minister before the close of the consultation? Will the consultation close before the House returns in October? I am concerned about that, and I am also concerned that, frankly, this should have happened five, six, seven or even 10 years ago rather than now, at the end of a parliamentary term.

Despite the hon. Lady’s comments about when the consultation happens, I am sure that she welcomes the fact that it is now happening. Also, I am sure that she will not be on holiday from next Tuesday until the House returns in October, and I can assure her that neither my right hon. Friend the Minister for Housing nor I will be either. It is fair to say that she has never been slow to put her views forward, so I am sure that she will take the opportunity to express her views and those of local people. Obviously, if she wants to write to us or respond to the consultation, her views will be considered.

The changes were underpinned by additional investment through the pledge in the local authority new build programme, which provides funding for local authorities to build affordable housing on their land. The Chairman of the Committee asked about environmental standards, and whether they will be relaxed as a result of the pressures on the house building industry. I can assure her that it is not our intention to do that because of the recession. The housing pledge will create some 45,000 additional jobs in construction and related industries over the next three years.

Again, this needs to go on the record. The Minister talks about the housing pledge, and the additional homes to be built as a result of the £1.5 billion, but is he aware that in launching that pledge, the Government, without having ever mentioned it anywhere else, automatically downgraded their previous target of 70,000 homes?

The extraordinary thing about this debate is that I do not understand how the hon. Gentleman expects anybody to take seriously anything that he says about these numbers or these programmes if he is not prepared to tell us how much his party would allocate for investment in housing, how many homes they would provide and how that programme would be delivered. All this vague stuff that he talks about, such as greater freedoms, getting rid of targets and all the rest of it, does not mean a single thing. It does not mean that a single brick will be laid, a single home will be built or a single family will be rehoused. Until he is prepared to provide that sort of detail, no one is going to take seriously the points that he is making. He is point scoring on these issues.

I say to the hon. Gentleman that I think that he and his party are in for a rude awakening when the next election comes. It is interesting that they continually try to present themselves as adopting the approach that our party adopted in the mid-1990s, when we were campaigning for government after a long period in opposition. They try to suggest that they are adopting similar techniques and campaigning methods, learning from what we did and all of that. However, there is a big lesson that he should learn.

When the hon. Gentleman’s leader talks about being the “heir to Blair”, for example, and so on—

Order. I just want to remind Members that we need to restrict the debate to the Government’s response to the Select Committee report.

I will be very brief. I was simply going to say that all of the plans that we set out before the 1997 election were absolutely clearly costed. We were absolutely clearly open with the electorate, and that is why they trusted us and voted for us. The lack of detail is what is going to cause the hon. Gentleman and his party a big problem when the next election campaign comes.

I wish to concur with what Ms Walley has said. May I urge the Minister to respond to the issue that both I and my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) raised?

That is the issue of the asset-backed security guarantee scheme and whether the Minister and his Department will talk to the Treasury about modifying it to make it more effective, given that the Treasury Committee is on the same line and will doubtless make similar recommendations in due course.

I listened with interest to the points that my hon. Friend the Member for Sheffield, Attercliffe made and I have read the points that have been made in the report. I know that the Treasury is aware of those points too and I will ensure that he gets a more detailed response from the Treasury.

However, I wanted to move on quickly to the issue of skills, because I think that the report is absolutely right to identify that it is essential that we do not repeat the mistakes that were made in the last recession, when skilled workers left the construction industry. They did not come back even when conditions improved, which left a real gap between the level of skills that the industry needed for the longer term and the skills that were available. It took about 15 years for the industry to recover.

That is why we have taken significant action to help the construction industry to maintain skills and outputs. As part of that approach, we have brought forward significant amounts of Government spending to build new social housing, to repair and upgrade existing social housing and to ensure that even more privately rented homes are of a decent standard. On top of that, through the Homes and Communities Agency we allocated £350 million last year to buy 9,600 unsold new homes from private developers for use as affordable housing.

My right hon. Friend the Member for Greenwich and Woolwich is absolutely right to draw a distinction between that work and the housing market package in the early 1990s. I worked for a housing association at that time and although I had nothing to do with property acquisition I remember being sent out to drive round the estate agents of the west midlands, in what was really an arms race with other housing associations to buy up as many homes as possible. That package from the early 1990s can hardly be compared with the strategic and targeted approach that the Government are taking now.

More recently, as part of the Budget package for housing we put in place the £400 million kickstart housing delivery programme. That programme will help to restart stalled construction activity across the country by using equity, infrastructure, gap and affordable housing funding to leverage in private development finance. It has now been strengthened by the housing pledge to deliver approximately 22,000 homes, of which a good proportion will be affordable.

We are also promoting apprenticeships on Government projects such as the 2012 Olympic games, with an apprenticeship matching scheme that is led by ConstructionSkills. We expect the Olympic games to create 250 construction apprenticeships. We are also working with the HCA to put targets for apprenticeships in place across the broad range of HCA projects. By maintaining the supply of homes, affordable or otherwise, all of that investment supports skills and capacity within the house building industry.

Before I finish, I wanted to pick up on the point that the hon. Member for Welwyn Hatfield made about rough sleepers. I was planning to write to him in more detail on this issue, because I do not think that the situation is nearly as simple as he pretends that it is. The key point to make is that, whatever one thinks about the figures and however they are calculated, they demonstrate a trend of massive reduction, by about 75 per cent., since we embarked on our programme for rough sleepers. I think that anybody would concede that that is the case. The challenge for him and his party is to tell us if they will match the 2012 target, because that is another subject on which they have been entirely silent.

Before I conclude, I must say that it is important that we do not lose sight of the bigger picture and continue our vital work to put in place the conditions to accelerate a sustainable recovery. That includes ensuring a sufficient supply of deliverable land, an efficient and proportionate planning system, co-ordinated infrastructure provision that is aligned with housing plans, a strong and diverse house building sector and regulations that help to facilitate more homes that are better designed and green. I am confident that our suite of sustained investment and support will enable us to meet our future challenges and to emerge with the homes and communities that we need for a stronger and fairer Britain.

Sitting adjourned.