Council Houses

Speech by Bob Russell MP delivered to Adjournment Debate - Hansard on Wed 11th Jun 2003

When social historians write the history of the 20th century, they will contrast the huge advances made in the living standards of the British people between 1900 and 1999. Even allowing for two bloody world wars and the years of economic depression, by the end of the century the quality of life had improved dramatically for the mass of the population, beyond the wildest dreams of those doughty pioneers of social change who sowed the seeds in Victorian Britain for better health, higher standards of education, longer life expectancy, improved working conditions, wider opportunities and vastly superior housing conditions for most people.

While the improvements in the overall quality of life spanned the 100 years, for millions of people it was in the middle 50 years or so of the 20th century-the second and third quarters-when the greatest advances were made in housing. Council housing did it-not the private sector, not quango housing associations or arm's-length management operations, but the democratically accountable local authority council housing departments that were funded by central Government. In those days, one-nation Conservative Governments who championed municipal enterprise and civic pride would compete with real Labour Governments for who was the best when it came to building council houses for the general population.

As a consequence, by the time that the final quarter of the 20th century arrived, the concept of homelessness was in effect a thing of the past. Cardboard city was unheard of. Not only had the curse of homelessness been tackled and beaten, but the relatively few families at any one time living in sub-standard accommodation or in housing that was inadequate for their needs were certain that it would be only a few months in most cases before the promise of a family home would become a reality-oh, happy days.

Where has it all gone wrong? We are told that this country has the world's fourth richest economy, but why does Britain now have a housing crisis the like of which I have not witnessed before in my more than 30 years of elected public office? It is most certainly not the fault of the councils. I pay tribute to the excellent work of local authority housing staff in difficult, challenging and, in some respects, hopeless circumstances in trying to help the homeless and families living in substandard accommodation to be better housed. The front-line staff deserve praise for trying to achieve the near impossible. I pay particular tribute to the housing staff at Colchester borough council who assist the homeless and who recently achieved beacon status for the council-staff who help the victims of the Government's failed housing policies.

Until the Thatcher years, families in need of decent housing would have been housed, but not now. What Thatcher started, the Major and Blair Governments have continued. Indeed, it could be argued that new Labour is more hostile to the concept of council housing than even the measures put forward during 18 years of right-wing Tory Governments.

I do not criticise the principle of people buying their council home. Indeed, it was my refusal to oppose council house sales that the Labour party in Colchester used against me and which played a part in forcing me out of the party in 1981. Now Labour is more enthused about getting rid of council houses than the Conservatives ever were. It is a funny old world.

According to the House of Commons Library to which I am grateful for statistical information, in the final five years of the Conservative Government, 190,418 council dwellings were sold. In the first five years of this Labour Government, sales totalled 240,200.

While I am not opposed to the principle of the right to buy, the mass disposal of public assets at hugely discounted prices was not something that had any economic justification. That Thatcherite policy failed because of the Government's refusal to allow councils to reinvest the money from those sales in building new homes. Had that happened, we would not have a nationwide housing crisis today.

In Colchester, more than 3,250 council homes have been sold since the right to buy was introduced. That represents about 30 per cent. of the original stock, but a high proportion of the sales have been family houses, and houses-not flats, or dwellings for the elderly-are in desperately short supply for homeless families. One person has managed to acquire a dozen houses, which he rents out for more than a council rent. He has become a millionaire.

All the evidence suggests that the problem deteriorates. According to the statistics provided by the House of Commons Library, nothing shows that the sale proceeds are invested in new housing stock.

The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Tony McNulty) : The hon. Gentleman has just cited evidence that suggests that large-scale voluntary transfer deteriorates housing stock. Can he cite the evidence that he is using?

I refer to new dwellings. As I have no first-hand evidence of stock transfer leading to the improvement cited by the Minister, I have to throw open the question for consideration. Why cannot that investment be given to local authorities to improve their stock? Why does it have to take either a privatisation, a semi-privatised or a quango route? Why are the Government so hostile to local councils that they would not even trust them with the money to invest in and modernise council housing stock?

The present Government inherited a mess created by the two previous Conservative Governments, but they have not tackled the housing crisis. That would have been done under the real Labour Governments, such as the Attlee Administration in the years immediately after the war and those of Wilson and Callaghan in the 1960s and 1970s, while one-nation Conservative Governments such as those led by Macmillan and Heath would not have allowed it to happen in the first place. New Labour has allowed the situation to deteriorate to an appalling level at which homelessness is increasing all the time and families living in inadequate accommodation know that their chances of being offered somewhere better to live are becoming more remote.

The contrast between 1979 and today is stark. In 1979, more than 75,000 local authority dwellings were built. In 1999, just 171 were built throughout the country. In the 15 years after the second world war, more public sector than private sector housing was built. I am not arguing for a return to that split. However, if the Government want to be true to the principles and ideals of their party's founders, they should make it a policy to return to the days when the Government funded local authorities to build more council houses to meet the needs of their communities.

If the Government are going to claim that housing associations and the private sector are making up the shortfall in council housing, I am bound to observe that figures from the House of Commons Library say the opposite. In 1979, in addition to 75,000 local authority dwellings, registered social landlords and housing associations built 17,835. By 1997, there were 27,502; but in 2001-02 that figure had fallen to 20,692, by which time virtually no local authority dwellings were being built. There were 140,481 private enterprise dwellings in 1979, 152,530 in 1997 and 141,125 in 2001-02. However one looks at it, whether in terms of councils, housing association or private enterprise, the figures for all sectors building new dwellings have fallen under new Labour. No wonder we have a housing crisis.

Housing associations would love to build more homes, but they rely on funds from the Housing Corporation, which in turn is funded by the Government. One aspect of housing association developments causes me considerable concern-what I call "Heineken housing", or building on sites that private developers do not want to reach. Land that the private sector knows would not be suitable for houses for sale is deemed okay for social housing tenants.

There must not be double standards, but there are. That is proved by three examples from my constituency. First, family houses were built on top of a 100-year-old slag heap of foundry waste. Secondly, planning permission was given just two weeks ago for social housing to be built on a greensward and car park behind a block of shops next to a mobile phone mast and under overhead electricity supply cables. Thirdly, there is a site for which the developer had failed for years to get permission because of planning objections, but all those mysteriously disappeared when a social housing element was included.

Double standards should not be permitted. I should like to see a return to the Parker Morris standards, which used to apply to council houses. However, if the Government are looking to housing associations to build houses for rent-by the way, what does the term affordable rent mean?- I am told that the bids to the Housing Corporation are three times greater than the available finance. Will someone please tell the Chancellor? In his euro speech on Monday, he said:

"Britain has experienced difficulty in balancing supply and demand in housing."-[Official Report, 9 June 2003; Vol. 406, c. 411.]

He promised that there would be an increase in the supply of new housing, but can anyone recall him mentioning the need to provide housing for rent? There is no room at Gordon's inn for the homeless.

Tomorrow, the Minister for Housing and Planning is due to give what is billed as a keynote address at the Millennium grandstand at Newmarket race course at the launch of the regional housing strategy for the east of England. Will that include building new council houses? If not, why not? The Chancellor said that there was a risk of a cycle of boom and bust in Britain's volatile housing market. We are told that he is considering massive increases in stamp duty and capital gains tax as a way of damping down any house price boom. He said specifically that "further housing reforms will be put in place in the coming year . . . that will help to ensure that by having a reduced propensity to house price inflation, which is in everyone's interest, stability can be further entrenched."-[Official Report, 9 June 2003; Vol. 406, c. 411.]

How the homeless and those in inadequate housing may have reacted to the Chancellor's comments is something to ponder. Young mothers and children living in a hostel for the homeless in Colchester, which is "not fit for dogs" according to reports in the town's Essex County Standard and Evening Gazette last Friday, would welcome the Government funding new council houses. That would, at a stroke, reduce the demand for people being forced to buy and it would, as a consequence, have a stabilising effect on house prices. That would be a return to the balance that happily co-existed prior to 1979.

How many people are in a position to buy? A large percentage are not, according to a survey carried out by Professor Steve Wilcox at the university of York for the Joseph Rowntree Foundation. A report in the East Anglian Daily Times on 2 June said:

"People aged in their 20s and 30s and key workers such as nurses, teachers and police officers are among those finding it hardest to buy their first home."

Statistics showed that 35.5 per cent. of families in Suffolk with two working adults could not afford to buy a home. In Essex it is even worse, as 39.2 per cent. cannot reach the asking price of the cheaper properties. In Chelmsford, that figure rose to 52.3 per cent., while Colchester is slightly more fortunate at 37.1 per cent. In south Cambridgeshire, the figure is 57.3 per cent.

Aspirations of home ownership for those people cannot be fulfilled. The resumption of council house building would have the twin outcome of a supply of good quality houses for families to rent and less demand in the house buying market. There is another bonus-a boost for jobs in the building industry.

When I was leader of Colchester borough council, between 1987 and 1991, at a meeting of the Essex branch of the Association of District Councils, I told the then Member for South Colchester and Maldon-now Lord Wakeham-that a combination of large-scale sales of council houses and a failure to build replacement houses would result in thousands of people being forced into the property-owning market when they would not otherwise have done so, that the demand for lower priced houses would be greater than the availability, and that that would lead to an increase in house prices throughout the entire housing market. I suggested that that did not make economic sense and that it was not fair on those who would be deprived of a decent home in which to live. I have been proved right. Tragically, the problem is considerably worse than I ever thought it would be. For the homeless and those in accommodation that is less than ideal for their needs, there is no such thing as the dream of being part of the property-owning democracy, but rather the 24-hour nightmare of housing despair. Whether we are talking about big cities, towns or villages, all have residents suffering because of the lack of council homes. In rural areas, young people are being forced to leave the villages in which they were born, where their families may have lived for generations, because there is no housing for them, or which they can afford.

Two weeks ago, BBC television in the east of England, over two nights, reported on council housing. Its survey revealed that waiting lists are rising sharply across the region. Some local authorities reported numbers up by as much as 50 per cent. in a year. When reporters asked viewers for their stories, they were swamped with calls. A representative from BBC East told me last night:

"In Ipswich, a couple were told there was a 30-year waiting list for council houses. In Milton Keynes, a nine-week-old baby sleeps in a pram because there is no room for a cot in the house. And in Norwich, a family of five are living in a cramped one-bedroomed bungalow."

Those are just three examples of Labour's housing failure. Last year in Colchester, the council received 1,456 homelessness applications. However, only 426 were accepted. I am told that that figure is the highest in the region, but more than 1,000 applications were rejected. There are 2,354 applicant households on the housing register. The council's head of housing, Mr. Andrew Murray, tells me that Colchester needs 500 affordable homes a year. The number delivered last year was 40-further evidence of Labour's housing failure.

In this morning's debate, I am concentrating on the need to build new council houses, not other aspects such as stock transfers or creation of arm's-length management operations. However, I ask why the Labour Government are so hostile to local authorities? Why does Labour not trust local councils? Why will the Government not fund authorities to build, maintain and manage council houses, which was the case for the greater part of the 20th century, and which had a track record of delivery because homelessness was beaten? We need a regime change in Government thinking towards council houses-back to that which proved so successful over the larger part of the last century. Tried and tested ways are often better than new ones. Tinkering with the system, such as last month's launch of the consultation paper with the long-winded title "Improving standards of accommodation for homeless households placed in temporary accommodation by housing authorities - England" does not produce a single new house, and it is houses that the homeless want, not temporary accommodation, or bed and breakfast.

I suggest that better solutions come from Shelter, which is arguably the most knowledgeable organisation dealing with the national housing crisis. Its proposals in response to the Government's published strategy, "Sustainable communities: building for the future" are ones that I hope will be adopted. As Shelter so graphically put it in evidence given to me:

"Poor housing and homelessness has a negative impact on all aspects of a child's life. Temporary accommodation inevitably means frequent moves, forcing children to change schools and friendship circles. And due to damp, cramped conditions, badly housed children are also more susceptible to diseases."

Is the Prime Minister aware of the housing crisis? If his friends have not told him, I have. It was the subject of my last question to him, when I challenged him in the House:

"When will his Government do something to provide decent housing for homeless people, particularly for the underclass that has developed under new Labour?"-[Official Report, 4 December 2002; Vol. 395, c. 907.]

That was six months ago. Sadly, I see no evidence that new Labour is giving the housing crisis the attention that it deserves. In the past, real Labour would have made a priority of providing decent homes for homeless families.

I am not sure how the Minister will respond. Perhaps he will use the charm offensive, or perhaps he will not bother with the charm. I do not hold him responsible for the housing crisis. He is the person who has been landed with it. What he tells us-I am sure that we all have nice homes-is not important. It is the message that he gives to those without a decent home that is important. The best way to tackle the twin problems of rapidly rising house prices, which put buying a home beyond the reach of more and more young people, and the increasing number of homeless people and others who are housed inadequately is the restoration of the council house building programme that brought about such a huge advance in living standards for millions of people in the 20th century. There is a housing crisis, and it is worse now than it was in May 1997.

between 1945 and 1951, and the Conservatives promised to build more-and house in Witham, under the build for sale scheme run by Witham urban district council, when he was a recently-married factory worker earning £1,500 per annum. He bought a house for £4,250 with a 100 per cent. mortgage. His wife was not working at the time. The cost of the house was less than three times his sole salary. It was a three-bedroom house, with gardens at front and rear, and a garage. It is still there now; it is a delightful house, and I suspect that it will sell for £170,000 or £180,000, which is way beyond the reach of people in a similar position to his today.

The Rowntree study that the hon. Gentleman mentioned makes fairly complicated arithmetic equations, but I shall try to break the matter down in my simple mind and compare the position now to the situation I described in Witham in 1968. I believe that a police officer's salary is about £23,000 a year. The cost of even a modest house now is six times that salary. It is also six times a teacher's salary; for a nurse, it is more than seven times. In many ways, those people are rather higher up the scale than the factory worker that I mentioned earlier. Those people are in a far worse position than they would have been 35 years ago.

Is there an answer? The hon. Member for Colchester wishes to return to a mass council house building programme. I see the merit in that, but of course there is the question of the right to buy. The issue reminds me a little of the recitation of "Albert and the Lion" by Stanley Holloway. I cannot remember the exact words, and other Members may have better accents for quoting from it than I do, but the point of it was, why go on producing children to feed them to lions? We want more houses, but we want them to be contained as far as possible in a situation that repeats itself for further generations.

There will always be a case for the rented market, but I want to think again about the build for sale scheme. Usually, with such schemes, no one has to worry about the right to buy problem because there is no right to buy, as the houses have already been bought. Build for sale operates on the basis that local authorities build houses on land that they acquire. They then sell the house to an approved purchaser, who is a member of a family in need, and they grant a 100 per cent. mortgage. That mortgage should be constructed so that the repayment is similar to an affordable rent. When the family move on, they sell the property and keep the profit, as they would in the private housing market, and the mortgage goes back to the council to be recycled on another property.

Such a scheme certainly needs a large infusion of Government money to pump-prime it and boost it in the first instance, but once it is moving along, it will start to provide affordable housing, owned by the people, in repeating patterns over a wide area of this country.