Social Housing (Houghton and Sunderland South)

Wednesday 21st July 2010 Westminster Hall

16:15

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gray. I refer to the Register of Members’ Financial Interests, in which I declare that I own a house, which I rent out privately.

The debate is the first in Westminster Hall that I have secured. I am pleased to take the opportunity to raise an issue of such importance to my constituents. Housing remains a pressing priority in Houghton and Sunderland South, and indeed across the north-east region. Time and again, constituents tell me of their frustration at being unable to secure a home to rent, in particular in a community in which they grew up and where their family continue to live. Their expectations are not unreasonable, and shortage of supply understandably gives rise to frustration and resentment.

In April 2009, there were 2,184 households on Sunderland city council’s waiting list for social housing. In 2008-09, 217 people in Sunderland were accepted as homeless and in priority need. That figure is down from 597 in 2004-05, and I commend Sunderland city council’s housing advice team, whose preventive work, advice and mediation prevent more families from becoming homeless. In 2008-09, the team undertook 710 homelessness prevention cases outside the statutory framework, helping to protect families from the misery and chaos of losing their home and all the social problems that that causes.

However, I am concerned that cuts to local authority funding, with more expected in the autumn, will financially squeeze councils such as Sunderland. Councils will find it increasingly difficult to invest in the vital preventive work that ultimately saves money and alleviates pressure on social housing. I seek reassurance from the Minister on that point.

Under the previous Labour Government, Sunderland’s largest registered social landlord, Gentoo, secured a grant of £34 million from the Homes and Communities Agency under the kick-start scheme. That funding has been crucial in regenerating key areas in Houghton and Sunderland South, such as Doxford Park and the Racecourse estate. I know that such funding has also been crucial in the constituency of my hon. Friend the Member for Sunderland Central (Julie Elliott).

Research carried out by Gentoo estimates that the overall benefit to the local economy of that Government investment was £60 million—from a grant of £34 million. Jobs in construction and associated trades were secured and created through the investment, which is important in the context of the global recession, when construction workers were struggling to find work as home building ground to a halt.

Local people have benefited from hundreds of new homes to rent and much needed regeneration. I must also commend Gentoo for ensuring that all its social housing stock meets the decent homes standard, five years ahead of the previous Government’s deadline. The challenge is not simply ensuring that we have adequate social housing built to meet our needs, but enabling existing tenants to live in modern homes.

Social housing, which many of us used to know as council housing, has an important role to play in our society. For too long, we heard negative comment about so-called sink estates, with social housing seen as, at best, a second-class option and, at worst, a last resort. As someone who grew up in a council street, the major problem to affect our quality of life and that of our neighbours was the lack of investment in our homes in the 1980s and 1990s—no proper heating systems, damp, no damp-proof course and rotten windows.

[Julie Elliott (Sunderland Central) (Lab)]

As my hon. Friend said, mine is the neighbouring constituency—Sunderland Central has housing provided by Gentoo and Sunderland city council. Does she agree that the standard of housing built in recent years by Gentoo in my constituency, such as Leafields, has not only improved the standard of housing that people live in, but had a great impact on reviving communities and improving their facilities? Often, such housing projects have been built in conjunction with other new builds such as Sure Start centres and schools. That impact is in danger of being lost through the cuts being threatened in such areas.

[Bridget Phillipson]

Yes, I agree absolutely with my hon. Friend. Doxford Park is a particularly good example in my constituency of social housing at its best. Like the development in her constituency, it has a variety of homes: bungalows, flats and family homes. Equally, there is mixed tenure in such developments. There are homes for rent and homes that can be bought, often at affordable prices that are in the reach of local people.

My hon. Friend makes the good point that such development needs to be continued. We still have a pressing need for regeneration in some areas of Sunderland. I appreciate and accept the concerns of many of my constituents that, at times, regeneration has been too slow. I am keen to see it continue, but from discussions that I have had with Gentoo I know about the difficulty that it faces. It would like to build more homes for rent, but because of lack of money from the Government, at times it has little option but to reduce the number of homes it can rent, relative to the number of affordable homes it can sell.

In 1997, the Labour Government inherited a vast backlog of necessary repairs to the social housing stock. The homes were simply not fit for habitation and were crumbling. Social housing should be a genuine choice for my constituents, and I would argue strongly for that choice. Owning a home remains out of the reach of many of them due to their income, so investment in social housing must remain a key priority of the new Government.

As the housing market has slowed and the deposit required for a mortgage has sharply increased, turnover of social homes has dropped significantly in Houghton and Sunderland South, and across Sunderland. That particularly affects young families, who are forced to turn to the private sector, where rents are often higher, there are still unscrupulous landlords and there is not the same security of tenure.

I contend that if the Government will not prioritise investment in social housing, it is all the more important that additional safeguards are put in place to tackle rogue private landlords. However, the Government have offered no commitment on that issue and have dismissed as bureaucratic any suggestion that further regulation of the private rented sector is needed. Further measures are required to provide protection to private tenants in constituencies such as mine, and to provide protection against antisocial behaviour committed by tenants where the landlord does not take action, or where properties are left to stand idle by absentee landlords who are sometimes as far afield as Hong Kong.

My hon. Friend the Member for Blaydon (Mr Anderson) used to live in my constituency. Some of the private landlords who bought properties in the area lived in Hong Kong, and the city council had significant difficulty tracking them down to push forward much-needed regeneration. Sometimes homes become a public health hazard or a focus of antisocial behaviour.

Moreover, the proposed reforms to the housing benefit system will push private tenants into poverty as they struggle in constituencies such as mine to make up the shortfall. It is not uncommon for private tenants in Houghton and Sunderland South to top up their rent by some £10 to £15 a week. For such tenants, the top-up could double when their finances will already be under pressure because of a freeze in child benefits, cuts to tax credits and the VAT rise.

The changes to housing benefit will increase homelessness in my constituency, which will, in turn, lead to greater pressure on social housing stock when we already have a shortage. Local authority housing advice teams such as those in Sunderland will struggle to deal with the additional people who register as homeless. In fact, many local councils support homeless people in accessing private tenancies, and they will now face a massive strain on their already limited budgets. I urge the Government to rethink that damaging element of the housing benefit reforms. In my constituency, it will prove divisive and punitive, and exacerbate social housing need.

Along with many others, I urged the Labour Government to prioritise investment in social housing and recognise the need felt in communities such as Houghton and Sunderland South. Investment did increase, and I was pleased that they listened. However, I am deeply concerned that that progress will be lost. The House of Commons Library makes it clear that the Homes and Communities Agency will see a 10% reduction in its capital budget this year—a total of £450 million when our need for social housing remains as strong as ever, and when crucial construction industry jobs might be secured or created.

Indeed, that cut, combined with the cuts to the Building Schools for the Future programme, will damage the already struggling construction industry in Sunderland, where vital jobs could have been created and much-needed projects could have gone ahead for the benefit of my constituents.

I shall draw my comments to a close as I am anxious to hear the Minister’s response. Again, I am grateful for this early opportunity to draw attention to a serious issue that affects my constituency and wider Sunderland.

16:19

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

I congratulate the hon. Member for Houghton and Sunderland South (Bridget Phillipson). She is following in the path of her distinguished parliamentary predecessor, Fraser Kemp, and I am sure that she will in time establish the same strong reputation that he had for sticking up for constituents. She has done so very well just now. I thank her for bringing this question to the attention of the House and for giving me an opportunity to respond to it.

We need to start with the real situation facing this country as far as financial circumstances are concerned. The hon. Lady made it sound as though the coalition Government have taken decisions purely on a whim—as though we had a choice—and overlooked the fact that we have inherited the worst financial situation of any Government in western Europe, save Ireland.

[Mr David Anderson (Blaydon) (Lab)]

I welcome my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) to the House. It is great that she is now the MP for the place where I spent some of the happiest years of my life.

The Minister makes a point that we hear continuously—that there was no choice. The truth is that there was a choice. We all agree that we have a terrible deficit to sort out, but the choice that the Government parties are taking is different from the one that my party would have taken if it had been in government. We do not have to choose what the Minister has chosen. That needs to be nailed to the wall now.

[Andrew Stunell]

I thank the hon. Gentleman for his contribution, which is one that I have heard several times from Members on the other side of the House. Unfortunately, it is no more relevant or close to reality than the projections that were made before the election, which were that everything was fine and that we could just carry on.

If things were so good beforehand, it is astonishing that so little social housing was built by the previous Government. House building in England is now at its lowest level since 1946, with just 118,000 completions in 2009. I remind Opposition Members that they were in charge at that time. Excluding the war years, they achieved the lowest rate of house building across England and Wales since 1923. That is not a record that allows them the strength to criticise what this Government are doing now.

[Bridget Phillipson]

The argument that the Minister makes is a good one in many ways. He refers to 1946 as a key point. Much of my constituency is composed of post-war modern developments built when Britain was groaning under the weight of the debt we accrued to fight the second world war. Surely, sometimes it is a question of priorities. We choose to prioritise what matters, and if we choose to prioritise housing, we not only secure the future of our communities and regenerate them, but, equally, create much-needed jobs in a time of deficit.

I accept the Minister’s point that the previous Government should have done more on social housing. I pushed hard on that point. I would contend that latterly they were doing more, but that the rug is now being pulled—

[Mr James Gray (in the Chair)]

Order. Interventions should be as brief as possible.

[Andrew Stunell]

I thank the hon. Lady, who acknowledged the reality of what I said. As she correctly says, this is a matter of priority. I shall come to exactly what the Government’s priorities are, and why we took the decisions that we have announced.

We need to be clear that there is a significant gap between the supply and demand for new homes. For decades, the housing market failed to keep up with the needs of our growing population, which has led to problems with affordability, people coming on to the council house waiting list and people seeking to buy their first home. That, in turn, has led to social and economic problems, and the hon. Lady eloquently set out some of the problems affecting her own community.

The long-term demand for housing is strong and fed by rising population, increasing affluence—taking 10 or 20 years at a time—and people’s strong cultural preference for homes of their own. Under-supply has led to some serious consequences for us.

I want to make it clear to the hon. Lady that we, too, share her commitment to having more affordable housing, and we remain committed to the provision of social rented housing for those in need. We will promote shared ownership schemes and help social tenants and others to get on to the housing ladder, although that has to be done within the constraints of the financial position that the Government find themselves in.

If constituents came to hon. Members’ surgeries with a problem and explained that they were on £300 a week but were spending £400 a week and putting the extra £100 on their credit cards, which had £50,000 on them, we would, as responsible Members of Parliament, say, “You need to see whether you can increase your income and reduce your expenditure.” People would get such advice from any sensible debt counsellor or MP. We, as sensible MPs, and as a sensible coalition Government, have to say that our commitments and aspirations must be measured against the resources available and the constraints of the financial position that we are in.

[Pat Glass (North West Durham) (Lab)]

We hear that mantra from the Government every time they open their mouth; it is their answer to every question. The Government are looking to wipe out the deficit in three to four years simply so that they can deliver tax cuts before an election. They are doing that at the expense of the constituents of my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson).

[Andrew Stunell]

It would be nice to think that we could wipe out the deficit, but the Government’s financial plans say that we will have stopped adding to the overdraft. It is not that we will reduce the £50,000 credit card debt that I mentioned, but that we will stop increasing it. The hon. Lady needs to get a grip on reality.

To return to the subject of the debate, we are absolutely committed to wider home ownership and helping those who aspire to own their own home; the figure is estimated at some 1.4 million households. We want first-time buyers who cannot get into the housing market to do so, and we want social housing waiting lists to be reduced. We want to ensure that the affordable housing supply is increased.

That means building new homes, where they are sustainable, in places that are attractive to people and near to work. We know from the performance of the previous Government that top-down targets are not the right way to go about that. In fact, the higher the targets were raised by the Labour Government, the fewer houses were completed.

We intend to return decision making to democratically elected councils and to remove regional housing targets. We will reform the planning system to give neighbourhoods more say, provide incentives to local authorities to deliver sustainable development and create new land trusts that will make it simpler for communities to provide homes for local people. We will drive up housing supply by providing financial incentives to local authorities that build additional housing. I would have thought that that was helpful to the hon. Member for Houghton and Sunderland South in respect of the debate.

Ours will be a bottom-up approach, allowing local communities to control the way villages, towns and cities develop through local plans and letting them derive direct benefits from the proceeds of growth in their areas. We need to remind ourselves again that the affordable housing supply was down by more than a third under the previous Government. We recognise that there is continued need for affordable housing for social rent and for low-cost home-ownership housing, and we remain committed to delivering on that.

Some Library figures on spending reductions being applied to the Homes and Communities Agency were mentioned. If the hon. Lady looks carefully at the expenditure plans that we have set before the House, she will see that the previous Government’s housing pledge committed £1.5 billion to the agency’s funding. We have now secured and authorised £1.25 billion. In other words, by struggling and kicking we have pushed forward a sum that is just £250 million short of the original pledge, which was based on wobbly finance. The Government are strongly committed to pushing that programme forward. We will make the radical changes needed to incentivise housing supply and ensure that local communities are empowered so that they can take advantage of that.

On Monday, the Prime Minister and the Secretary of State for Communities and Local Government attended an event in Liverpool, which was the first of a series of events to kick-start the big society. It was announced that four pilot local authorities would immediately be given the opportunity to take forward some of the ideas for devolving power and making things happen locally, to supersede top-down decision making from Whitehall and get things going on the ground. I hope that, soon, the hon. Lady will see those pilots delivering success and that she will strongly encourage Sunderland city council to join in.

The hon. Lady mentioned housing benefit, which I want to discuss. We—the Government and taxpayers—are paying more in housing benefit than we do for the police and universities combined. In real terms, the cost of housing benefit has risen from £14 billion to £21 billion in the past 10 years. I will give her the opportunity after the debate to score a few points at my expense. This is the second time that I have debated housing benefit in Westminster Hall with a Member representing Sunderland South. The previous time was on 12 January 2000, with her predecessor—she may want to look it up in Hansard—who said:

“The overriding objective of the housing benefit system is to enable those with no income of their own and those on low incomes to provide for their reasonable housing costs… housing benefit should not subsidise someone to live in a property that is unreasonably expensive. If it did, tenants would… have no incentive to look for more reasonably priced accommodation and landlords would have no incentive to seek more reasonable rents.”—[Official Report, 12 January 2000; Vol. 342, c. 108WH.]

At that time, her predecessor was a Minister with responsibility for communities and I was in the hon. Lady’s place, making bitter complaints about what was happening to housing benefit. Since then, housing benefit expenditure has risen by £7 billion.

[Bridget Phillipson]

Does the Minister accept that, subsequently, the local housing allowance was introduced to deal with that problem and that although the reforms of the housing benefit system were far from perfect—it is a complicated, means-tested system—the LHA was designed to tackle some of the difficulties, including rents being too high or tenants not being encouraged to find more affordable accommodation? We do not need wholesale cuts to adapt system more adequately to meet the needs of tenants.

[Andrew Stunell]

I am sure that those matters will be debated during the consultation on the plans that have been announced. Since the hon. Lady’s predecessor made that statement to the Chamber, expenditure on housing benefit has increased by 50%, from £14 billion to £21 billion. A simple ready reckoner helpfully provided by my Department shows that that £7 billion would have allowed us to build 60,000 social houses in each of the past 10 years—600,000 houses could have been constructed. That would have satisfied her and me, but it would have required restraint on housing benefit.

If the coalition Government’s proposals are implemented in the form in which they have been introduced, they will save £1.8 billion, which is equivalent to 20,000 social houses. In a time of constraint, the hon. Lady and I must weigh up housing benefit costs against the possibility of increased social housing. Those are the tough choices that her predecessor offered to me 10 years ago, and which it is now my duty to offer to her today. The reforms that have been announced will allow us to make better use of our social housing. A key point relates to the way that social housing is occupied. We all know that there is a mismatch between the size of households and the size of many council houses. We know that that is also an issue.

When resources, affordable housing and rented accommodation are scarce, waiting lists are high, and financial constraints on the country are great, we must ensure that we make efficient and effective use of the resources and homes that we have. The hon. Lady referred to the hardship that will be caused to her constituents as a result of applying the new rules, but I remind her that the discretionary housing payment allowance to local authorities is £20 million, which will rise threefold to £60 million to help households to adjust. As the name suggests, the payments will be entirely at the discretion of local authorities.

Hon. Members are rightly interested in housing need, which increased under the previous Government, despite a 50% increase in spending through housing benefit. I suspect that there is not much of a gap between the hon. Lady and me on what might have been a better use of that money in delivering social housing for people to rent. We have inherited record-low house building. We have waiting lists for social housing of 1,800,000 households, and turning that around will not be easy. However, I assure the hon. Lady and other hon. Members that we are absolutely committed to turning it around and to providing safe, secure, sustainable housing for all who need it.

[Mr Anderson]

I thank the Minister for taking this intervention; I did not want to interrupt his flow. Will he provide us with the figures? I lost track a little, but I think he said that 600,000 houses could be built for £7 billion. Can those figures be put in the Library or shared with Members so we can check them out?

[Andrew Stunell]

It is a good job that I did not say that, because if I had it would have been completely incorrect. If I conveyed that impression, it is a good job I am responding now, because that allows me to say that the difference in the cost of housing benefit in real terms between 10 years ago and now is £7 billion a year. I believe that the hon. Gentleman has seen my point. I do not think that there was anything wrong with what I meant to say. If there was something wrong with what I actually said, I am happy to put that right.