Housing Need (London)

Jeremy Corbyn Excerpts

Tuesday 29th June 2010 Westminster Hall

[Jeremy Corbyn (Islington North) (Lab)]

I am very pleased that we are having this debate, although I am sorry that it will last only an hour and a half. I am sorry that the previous debate collapsed, but we could well have used three hours to discuss housing in London, so it seems that a monumental parliamentary opportunity has been lost. I hope that the hon. Members concerned will reflect on the situation because we are sent here to represent the people and to try to deal with their problems.

I am resuming the debate on housing in London. There is a slight feeling of déjà vu—the actors in the theatre have changed only slightly—because we have discussed housing needs in London many, many times before, and I suspect there will be many more debates on the subject. London Members know that there is no bigger issue, no greater stress and no greater problem that faces all our constituents than housing, whether that relates to people who are trying to buy, people who are trying to get social housing, people who are going through the problems of being a leaseholder or people who are living in private rented accommodation.

The levels of housing stress with which MPs deal are absolutely enormous, but I need not go over that in too much detail because hon. Members in the Chamber will be well aware of it. The levels of stress associated with problems of overcrowding, and of uncertainty and insecurity of tenure, lead to ill health, underachievement in school, family break-up and unemployment, and they have a wholly corrosive effect on our society. I am not asking for something special because we are talking about London. I am asking for recognition that the whole country faces serious housing problems and that they are even worse in London than throughout the rest of the country.

One could quote many relevant statistics at great length. I shall not cite a vast number of figures, but I would like to run through some information that was helpfully provided to me by Crisis. Reading across the piece, the average house price in London is £362,000, which is £140,000 higher than that in the rest of the country, and the average income is £26,000 a year, which is £6,000 more than in the rest of the country. The gross annual income needed for a mortgage in London is £93,000—it is £109,000 in my borough—so we can easily see the disconnect that exists.

Total local authority stock in London is 432,000 and housing association stock is 350,000. The number of new lettings by local authorities was around 23,000 last year, with 22,000 lettings by housing associations. Some 353,000 families are on the waiting list for social housing in London, of whom 52,000 are in temporary accommodation, while the number of households accepted as homeless is 12,000, although that relates to the last year for which figures are available. All that information shows that buying anywhere is unaffordable, that there are huge waiting lists for social housing and that the number of homeless people is rapidly increasing. The 12,000 London households accepted as homeless represent about a fifth of the total for the whole United Kingdom.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I congratulate my hon. Friend on securing this important debate. I apologise that I will need to slip out of the Chamber part of the way through it, but I hope to be back at the end.

I want to raise with my hon. Friend—and indeed all hon. Members present—the human tragedy behind those figures. People are living in temporary accommodation for four, five or six years. They move constantly and are unable to settle anywhere. The children of such people are really badly affected by continually having to up sticks to move to other accommodation. Should we not be most concerned about that situation?

[Jeremy Corbyn]

My hon. Friend is absolutely right. I recall that in the halcyon days when I was chair of housing for Haringey council, we were able to build a large number of council houses, some of which were very good properties. We were determined to build good-quality properties not because we had a desire to spend vast sums of public money, but because we had a desire to conquer the problems of housing shortage and the stress that goes with it. Three quarters of the people in this country who are in temporary accommodation are in London, and my hon. Friend is right to point out the effects that that has.

All hon. Members have seen people in our advice bureaux who are living in their third or fourth piece of temporary accommodation and whose children have had to move schools or make very long journeys to stay in the same school. Those people are unaware of what will happen to them because of the lack of security that surrounds such a situation. We have a very serious problem indeed. I mentioned the corrosive effects of housing stress in London. One such effect is overcrowding, a second is uncertainty, a third is the problems of private rented accommodation, and a fourth is very high cost, which is the matter that I want to move on to.

If someone secures a council or housing association tenancy in London, the rent for a two-bedroom flat will be, broadly speaking, £100 to £120 a week. That is a reasonable rent—it is an economic rent, not a subsidised rent—that allows people to live somewhere reasonable, secure and safe. However, this country’s very bad record on building social housing over the past 20 years or so means that the number of people re-housed by local authorities or housing associations is low. Most local authorities say, “We cannot possibly house you; you’ll have to go into private rented accommodation.”

Councils therefore assist people to get private rented accommodation and have, in some cases, an over-close relationship with various letting agencies. The rents in such accommodation are often very high. They can be £250 or £300 a week, but I have even come across rents of £400 a week or more. If the people concerned are unemployed or on benefits, those rents are largely paid through housing benefit. For them, having a private rented place with the rent paid initially sounds like a reasonable option, but two problems can emerge. One is that such people are left in an enormous benefit trap, because if they succeed in finding a job, they will lose all or most of their housing benefit, and they therefore cannot possibly take a job unless it is incredibly well paid. One needs an awfully large salary to be able to pay £400 a week in rent. I suspect that that figure is far more than hon. Members in the Chamber pay for their mortgage monthly.

As a country, we are therefore pouring billions of pounds in housing benefit every year into the pockets of private landlords who do not give security and often provide inadequate accommodation. It is often very difficult to get them to carry out repairs, as I am sure that all Members in the Chamber who have corresponded with private landlords to try to make them carry out repairs have found. We must bear in mind the benefit trap and the huge cost to the whole country. It is fairly obvious, as a point of principle, that it would be far better to invest our precious national resources in building homes for affordable rent through councils and housing associations, rather than pouring the money down the drain by putting it in the pockets of private landlords through the housing benefit system. None of that is particularly new.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

The hon. Gentleman and I have held similar views on those matters for many years, and I have not changed mine. Does he agree that we ought to encourage local authorities to use their powers to acquire all the residential properties in their boroughs that are sitting empty? There are now powers for local authorities to take over the management of such properties, albeit not their ownership, so that they can let them at affordable rents, rather than pushing people into the private sector which, as he rightly said, makes things impossible for those who want to get back to work because of the benefit trap.

--- Later in debate ---

[Jeremy Corbyn]

rose—

[Mr George Howarth (in the Chair)]

Order. Seven Members have indicated that they wish to speak in the debate, so lengthy interventions are not fair to them.

[Jeremy Corbyn]

I take your point and I will be brief, Mr Howarth, because I want all Members who wish to speak to have an opportunity to do so.

I largely agree with the points made by the hon. Member for Bermondsey and Old Southwark (Simon Hughes). Local authorities do have the power to buy on the open market and to take over empty properties, and they should use that power. Indeed, my right hon. Friend the Member for Barking (Margaret Hodge) was chair of the housing committee in my borough in the 1970s and undertook an enormous purchase of street properties throughout the borough, which did a great deal to preserve its street character and to house many people who would not otherwise have been housed. Clearly, there will never be enough land for new build in central London, so that is one way of dealing with the problem.

I want the Minister to answer four simple questions. I am sure that he will give me positive answers to them all because I know him to be a decent, reasonable and helpful chap who wants to deal with the housing problems in London, even though he does not represent a London constituency—there is no crime in not representing a London constituency. [Interruption.] I do not wish to be controversial, because that is not in my nature. The statements that the coalition Government have made over the past few weeks are disturbing, to say the least. They initially said that they would continue investment in infrastructure in our society, which I took to include the current building programme and the enhanced building programme for council houses—the Minister can confirm whether I am right or wrong. However, last week’s Budget included a statement on housing benefit that is absolutely devastating for those of us who represent London constituencies. It is devastating for the whole country, but its effect will be particularly acute in London.

I should tell the Minister that 30% of my constituents live in private rented accommodation, that about 40% live in local authority or housing association properties, and that the remaining 30% are owner-occupiers. Many of those in private rented accommodation are in receipt of housing benefit. I will quote again from the information helpfully provided by Crisis:

“From Oct 2011, Local Housing Allowance (the new form of HB…) will be set at the 30^th percentile (rather than the 50^th as now). This is probably the most serious of the cuts and will mean many more people will face shortfalls and/or find it very difficult to find and sustain a tenancy. It will be particularly difficult in areas where more than 30% of the private tenants are benefit claimants. This may well lead to an increase in homelessness.

From April 2011, rates will be capped (from £250/week for a 1-bed to £400/week for a 4 bed). This will mean certain areas are likely to become no go areas for claimants, particularly larger families, with significant implications for mixed communities and community cohesion, through changes to the 30^th percentile will affect more people…Alongside this, working age people in social housing will no longer be able to claim HB on a property deemed bigger than their needs. This is designed”,

apparently,

“to tackle under occupancy. From 2013/14 onwards, Local Housing Allowance will be uprated on the basis of the Consumer Prices Index, rather than on the basis of local rents.”

Non-dependent deductions are another issue. When taken together, those proposals will be absolutely devastating for those of us who represent high-cost, inner-urban areas. They will, in effect, start a process of the social cleansing of claimants across London.

[Stephen Pound (Ealing North) (Lab)]

Bearing in mind your earlier strictures, Mr Howarth, I will be brief, and I am sure that all Members wish you a happy birthday.

With regard to the figures that my hon. Friend quoted in relation to private sector leasing, is the situation in his borough the same as in mine, where the majority of those PSL properties are former local authority properties that have been bought from the council and are now being leased back to it? Does he agree that one needs a strong stomach and a sense of irony to look at housing in London today?

[Jeremy Corbyn]

Many of them are ex-local authority, although not all. I am constantly astonished when I speak to people in my constituency who are living in ex-council flats that are privately rented and are paying twice, or three or four times, the rent of their next-door neighbours who are still council tenants. What is going on in London is absurd and obscene. I hope that the Minister will at least recognise that the housing benefit proposals are punishing the poor, tenants and those in housing need for a problem that they never created. I am not sure what the proposals will achieve. Unless they are linked to a huge building programme of places for affordable rent, all we will be doing is making a bad situation much worse and punishing a whole generation of young people and children across London. I want to hear about the building programme, so I hope that the Minster will be able to address that point.

I shall make my two further points quickly because many colleagues wish to speak. Has the Minister any plans to improve the situation of leaseholders who have bought places, usually under shared ownership schemes, from housing associations? There seem to be enormous problems about representation in housing associations, and many of them seem to have a generally unresponsive attitude to high leasehold and service charges.

My final point relates to planning issues. Most local authorities in London have now adopted a proposal that a proportion of all new build schemes should be for social housing. The former Mayor of London, Mayor Livingstone, wanted a proportion of 50% for those in housing need, although I would rather it was 50% for social housing. Is the Minister prepared to underline what the previous Government tried to do by providing sufficient resources so that new build can take place or providing borrowing allowances for local authorities?

My local authority has a new cabinet member for housing: James Murray, who is part of the new Labour team—not new Labour with a capital “N”; I do not ever want someone to misquote me on that. I shall end by quoting from his message to me:

“In Islington we have thousands of families on the waiting list for housing, many living in desperate overcrowding. It is not rare to see 7 or 8 people in a 2-bed flat—with the children often unable to do their homework, unable to have any privacy, and with the whole family suffering under the stress…The announcement last week of a cap on housing benefit could put a third of Islington’s private sector tenants who are on housing benefit at risk of eviction. This will only increase the pressure on social housing—and so more than ever we desperately need more investment in social rented homes. You will hear the same message from many Labour politicians in inner London—and that is because this investment is the only answer.”

--- Later in debate ---

[Tom Brake]

That is the hon. Lady’s interpretation of the coalition Government’s proposals across a number of policy areas, but it is not one with which I can agree. I agree that we need to guard against the potential impact of the proposed housing benefit changes on migration from central London to outer London boroughs or beyond, but I hope that Opposition Members accept that we are in rather a difficult financial position at the moment. I am keeping a tally of their proposals on how to address that position. They have accepted the need to cut 20% from a number of departmental budgets, including those of the Departments for Work and Pensions and for Communities and Local Government, so we need to hear some sort of explanation. Indeed, the hon. Lady said that housing benefit should be looked at, but presumably not with a view to increasing the funding available. I hope to hear at least an outline of some possible Opposition solutions or improvements to the coalition Government’s proposals. I shall wait and see.

[Jeremy Corbyn]

Does the hon. Gentleman not understand that if we invested in housing with affordable rents, through housing associations and councils, we would immediately cut the housing benefit bill enormously: instead of paying £400 a week, we would pay £120 a week?

[Tom Brake]

I thank the hon. Gentleman for his intervention. I assure him that I understand his point perfectly, but he must be aware, having spoken in many such debates in the past 13 years, that housing in London is in short supply. The previous Government did not manage to resolve the problem, but I hope that the coalition Government will do so.

I want to refer to some of proposals in the coalition programme that will address the issue.