Housing

Alan Brown Excerpts

Tuesday 15th December 2015 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

The motion is about a scattergun approach to a very important topic. I understand it is aimed mainly at the last five years of the coalition Government and the direction they took. Of course, a standard one-line dig is now levelled at the SNP Scottish Government, as if that is somehow going to transform Labour’s fortunes north of the border.

Current policy ties in with decades of housing policy of Governments of all hues. There is no doubt that the roots of the current housing crisis stem from the Housing Act 1980—an Act that Labour contemplated introducing before it lost power—which led to the decimation of housing stock across the UK as a whole, the biggest problem being that those houses were not replaced. The reason they were not replaced was that the moneys from the sale of stock were either used to offset debt or reclaimed by the Treasury, so it was impossible for councils to replace stock.

Fast-forwarding to Scotland now, the SNP has recognised this issue. That is why we scrapped the right to buy. As of this year, the right to buy council houses has been eliminated in Scotland. We are also opposed to the extension of the right to buy to housing associations. By removing the right to buy and opposing it in housing associations, we preserve stock and allow better targeted new building of social housing to meet local housing needs. Labour had 13 years in power in the UK but did not do that and Labour did not do it in Scotland when it was in power for eight years. Labour could have invested in a council house building programme but, like the Tories, in the main chose to leave affordable housing to the markets and to social landlords. We have heard about the sorry state of affairs whereby the coalition Government actually built more council housing in five years than Labour did in 13.

On the council housing theme, I point out that in Scotland the Scottish National party has now delivered more than 6,000 council houses, which compares to a grand total of six that Labour delivered when it was in power. [Interruption.] I said that right, the figures are 6,000 versus six. There is no doubt that greater council house building just makes more sense. Councils can borrow at a lower rate, they can use their land supply and they can target regeneration. Those were all things I was pleased to be involved with as a councillor for East Ayrshire Council.

Given the increased discounts put in by the coalition Government for right to buy, what council in England is going to invest in council house building in the future, as its stock will be at risk of getting sold off? The same goes for the extended right to buy in respect of housing associations. They will not be able to borrow securely when they no longer know accurately what their future rent projection will be. Clearly, they could build houses but those could then be sold off, which distorts the whole model that housing associations were built on.

Let me now deal with one-to-one replacement. Despite what we heard from the Minister for Housing and Planning, it is a complete sham. It is based on a three-year cycle, and I understand that that is to allow for planning and getting houses coming out of the ground. The Government say that they have already achieved the one-to-one, but they are comparing the first year’s right-to-buy sales with the replacements over a three-year period. There has been a massive increase in the right-to-buy sales since then. The Library briefing paper shows that to stay on track against the increased number of right-to-buy sales, 4,650 houses need to be built every six months. In the first six months of this year, there were only 730 starts and acquisitions, so for the first six months of this year the Government have achieved only 15% of that required target. There is therefore no doubt that going forward the one-to-one replacement will not happen. When that is combined with the forced sale of the highest-value council properties, it is clear that this Government are going to create a worse housing situation in the long term, rather than do something to sort it, despite all the bluster we have heard.

There is still no definition of what one-to-one replacement is. The target is a national one, so it does not compel councils and housing associations to replace houses locally. It means that local needs and supply assessments do not govern the replacement strategy or housing strategy, whereas in Scotland the local needs and supply assessments are a prerequisite of Government funding The SNP Government, when funding social housing and council housing, are making sure that they take local needs and assessments into account. That is a proper strategic overview, which is the only way in which housing stock can be managed.

Another major issue I have with the right-to-buy policy is that councils are forced to subsidise home ownership through the sales programme as well as fund the rebuild without any Government money being added. Monetary experts agree that this is the time to invest in infrastructure, and clearly housing is integral to infrastructure. If the Government used the £10 billion to £12 billion subsidy that is getting used for right to buy for housing associations, we could create additional housing. That would help to tackle the housing problem, it would create more jobs and it would lead to a more sustainable model. If the Government were actually willing to put money up front, that would also lead to Barnett consequentials for Scotland, and I know that the SNP Government would use that wisely.

The right-to-buy measure in effect privatises housing associations. I draw a parallel with what happened during an early reading of the Scotland Bill when a proposal was made to devolve the Crown Estate. The hon. Member for North East Somerset (Mr Rees-Mogg) made an impassioned defence of the Crown Estate on the basis of the principle of not imposing a change of ownership. No Conservative Member is willing to come to the defence of housing associations, yet it is the same forced change of ownership.

Under the right to buy, large family houses have all but disappeared from council stock in some areas, and private renting has had to increase to compensate. That drives up housing benefit costs, which is counterproductive for the taxpayer in the long run. Many sold properties end up in the rented sector, especially flatted properties. Someone exercises the right to buy. Then they die; the flat is passed on to family and the family have no need for it. It ends up as a buy-to-let and the taxpayer pays more money for someone to rent that property than for the person in the council house next door. In a study by Glasgow university, this is estimated to have cost the taxpayer an extra £3 million a year in Renfrewshire alone. We also know that 40% of flats in England sold under the right to buy have ended up in the buy-to-let market. Clearly, that will only increase under the extended right to buy for housing association tenants.

We heard in the autumn statement of an additional levy on people who buy additional homes. That is supposed to provide some income to the Treasury and have a balancing effect on the buy-to-let market, but there is no doubt that it will not do anything. It will give the Treasury a wee bit more money, but the returns that buy-to-let landlords get will at least offset that one-off levy. So the taxpayer will still pay more money in the long run in housing benefit. Going forward, it is almost guaranteed that the only way the housing benefit bill will be reduced is if the Government take further punitive measures.

I think I have made it clear that I am against extending the right to buy to housing association tenants. It will lead to social cleansing—to a clearing out of people.

[Jake Berry]

They will still live in the property.

[Alan Brown]

They might do in the short term, but I can guarantee that they will get money from the taxpayer as a discount, then they will sell the property. Property developers will move in, they will demolish and rebuild and there will be an ongoing moving out of people. The social houses will not be rebuilt in that area so people on lower incomes will not be able to rent in the area that they were staying in. [Interruption.] I think I should be pleased. I am getting a wee bit of chunter, and that is maybe a good thing.

Affordable homes clearly need to be truly affordable. The SNP Government have made sure that that is the case, and it is part of our plan going forward. It is not the case here in London. A cursory glance at my local estate agent in Kennington where I have a flat for when I stay down here shows that the costs for one-bedroom flats are truly mind-blowing. I can understand why London has a housing crisis.

In Scotland the SNP Government have delivered 30,000 affordable homes since 2011, backed by £1.7 billion of investment and they are committed to 50,000 affordable homes, of which 70% will be available for social rent, if they are re-elected. Despite what the motion says, I can inform the House that the chief executive of Shelter Scotland has welcomed this commitment. We have had no such commitment from Labour as yet in Scotland.

Although we are against the extended right to buy, we are not against home ownership. I accept that many families welcomed the original right to buy and many people have benefited from it. However, the scheme has had its time and it is time to move on. The rhetoric comes back to whether we are for or against home ownership, but that is not the right message. I have concerns that the UK Government proposals for Help to Buy and right to buy will encourage more people to borrow. At present interest rates are at an all-time low, so homes may be on the cusp of affordability. People can borrow now, but when interest rates go up there will be a risk to the affordability of those homes.

Although the Government talk about reducing borrowing, the one-for-one replacement scheme is funded by additional borrowing by councils and housing associations. As we now know, housing associations are adding to the public debt and are on the public books, so there is no benefit from what the Government are doing. The long-term economic recovery plan appears to give a discount to home owners, but it will increase personal debt and force borrowing elsewhere for replacement housing. All in all, it is not a plan at all.

To meet people’s requirements, we need more houses to be built, based on local need and demand. Those must be truly affordable homes that are energy efficient. This would deliver health benefits and reduce the long-term housing benefit bill. A house building programme would create jobs, improve the welfare bill as more people would be working, and improve the Treasury’s income. That is the strategic plan that the Government should work to. It is one that the Scottish Government are doing their best to implement and they certainly will do so if re-elected next year.

[Several hon. Members rose—]