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Westminster Hall

Tuesday 3 July 2001

[Sir Alan Haselhurst in the Chair]

Housing (London)

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Kemp.]

9.30 am

Jeremy Corbyn (Islington, North): I am pleased to debate housing needs in London. I take this opportunity to congratulate my hon. Friend the Member for Northampton, North (Ms Keeble) on her appointment as the Under-Secretary of State for Transport, Local Government and the Regions, and I look forward to her reply. I realise that she does not represent a London constituency, but she is a former leader of a London borough and must be acutely aware of the housing problems and other issues that Londoners face. Her background knowledge will be invaluable in persuading her Department, and perhaps reluctant colleagues, of the need for housing investment in London. I am sure that she will bring her skills to the problem.

Housing in London is a huge problem. During the election campaign, Londoners raised individual problems on the doorstep with candidates from all parties. Tragically, however, those problems did not surface in the reporting of the election. Indeed, most of the media reported the reporting of the election rather than the issues raised by the electorate, which was regrettable. It was also regrettable that London's media, with some honourable exceptions, seemed to deal almost exclusively with the private sector market and house prices. They continually wrote about the gains that people could make by selling their property rather than the desperate housing situation that many people face.

One does not have to travel far on the London underground to realise that there is an enormous and growing gap between the haves in London—those who are on the property boom ladder—and the have-nots. That problem is compounded by a new practice among building societies: they are offering huge mortgages for houses for private rent, which drives up the private rented market and house prices, and leads to an even greater gap between the haves and the have-nots in London.

Matters are not much different outside London. Much of the south-east suffers the same problem, with booming house prices and a shortage of affordable rented housing. However, the midlands and the north of England, and to some extent Scotland and Wales, suffer another problem: under-occupation of estates and the related question of housing management. That was brought home to me when I visited the May day rally at Burnley. My hon. Friend the Member for Burnley (Mr. Pike), who spoke extremely well, said that the Government needed to sort out Burnley's housing problem: there are 5,000 empty properties in Burnley. That enormous problem leads to massive deprivation, vandalism and social exclusion. Clearly, it must be

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addressed. London, however, does not have that problem. London's problem is one of huge shortages. That is what I want to draw to hon. Members' attention this morning.

My borough of Islington has the same problems as most inner-London boroughs. My hon. Friends the Members for Bethnal Green and Bow (Ms King) and for Hampstead and Highgate (Glenda Jackson) both represent London areas with acute housing stress. The constituency of my hon. Friend the Member for Hampstead and Highgate has areas of enormous wealth and of enormous poverty. Less than half a mile—in some cases, only a few hundred yards—separate them.

My borough suffers from much the same problem. There is an image problem. Parts of the borough are extremely wealthy. Everyone there eats in expensive restaurants every night and their only concern is whether to eat Indian, Chinese or French food; nothing else bothers them. In reality, my borough is the eighth most deprived in London. Unemployment is as high or higher than in many northern towns. The borough has massive housing problems, most of which I am told about at my advice surgery every week.

Over the years, Islington, like other London boroughs, has developed comprehensive housing strategies. During the 1960s and 1970s, there was a great building programme, but I am glad to say that few tower blocks were constructed in my borough—it was mostly houses set on a traditional street pattern with gardens. In the 1970s, when my hon. Friend the Minister for Universities was the chair of its housing committee, the council adopted a policy of purchasing within the private sector. She expertly developed the policy, which meant that many families were moved out of the few high-rise blocks in the area and given houses with gardens—something to which we should all aspire, especially for families with young children.

Following the Thatcherite counter-revolution in the 1980s, for a while, London boroughs managed to borrow their way out of the Government's policies and continued expanding their affordable rented housing stock. Eventually, however, the policy became impossible to continue. The supply of new affordable accommodation dried up. The constant cuts in local authority expenditure meant that borough after borough tried to save money each year by not investing in housing repairs or capital improvements; they did not have the money to do it. My borough was no different. By 1997, when the Labour Government came to office, there was a £500 million repair backlog. Massive repairs had to be carried out. The Government had inherited a difficult problem.

At the start of this Parliament, I tabled several questions about the construction of dwellings in each London borough. I shall not weary hon. Members with all the details that I received, but just quote a few figures. In my borough in 1996-97, private enterprise constructed 49 new properties; registered social landlords constructed 17 and the local authority constructed none. In 2000-01, private enterprise constructed 213; registered social landlords constructed 44 and the local authority constructed none. The list that was provided in response to my question shows that the number of properties built for affordable rent is low.

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The London borough of Waltham Forest seems to have one of the best records. Almost uniquely among London boroughs last year, private enterprise constructed 216 dwellings, registered social landlords constructed 257 and the local authority constructed 260. I have not checked all the details yet, but I believe that Waltham Forest was the only borough that constructed more properties—they were aimed at people in need of affordable rented housing—than the private sector. Other boroughs had similar or worse results than Islington.

The consequences of either councils or housing associations not building sufficient properties for affordable rent are enormous. It is expensive, in both financial and social terms. People who visit my advice surgery live in grossly over-crowded accommodation, as do my friends. Let us imagine the social tensions of bringing up six children in a two-bedroomed flat, with one child wanting to play music, one child wanting to do homework and another child wanting to sleep. It is difficult to match those three activities in one room. We must bear in mind those tensions, as we must family break-ups, the lack of achievement by children at school, and youth vandalism and disinterest in society. Young teenagers often want to go out, but they also want to be able to return home when they want. If they can go home only to a flat that has one child sleeping in a corner, or to a bedroom that they must share with other siblings, they will prefer to hang about the streets at night instead.

I invite hon. Members to visit hostel or bed-and-breakfast accommodation, some of which is appalling. London's children are living in abominable conditions: 40,000 families are living in temporary or bed-and-breakfast accommodation without proper washing or cooking facilities. That is disgraceful. Such accommodation is also expensive—local authorities pay hundreds of pounds per week through the housing benefit system straight into the pockets of bed-and-breakfast landlords. In addition to the financial cost of such accommodation, there is the high cost in social terms—the under-achievement of school children and ill health.

The local authority could decide that the only solution to the problem of family X living in over-crowded accommodation is to move them out of the borough, which sounds good. There are empty properties in Lincoln, Coventry and Newcastle, to which they could be sent. However, life is not so simple and I do not believe that we live in a centralised state in which local authorities or the Government can order people to move to designated areas.

One family showed me their offer of accommodation 150 miles away from London, which, at one level, was attractive—it was a reasonable property with a bedroom for each child. However, what would happen to the grandmother living down the road, the family's jobs and the children's education? Why should a family be uprooted from the area in which they have grown up and that they love, merely because we as a society are not prepared to recognise the housing needs of such families? I hope that the Government understand those concerns.

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The alternative to renting affordable accommodation—buying housing in the private sector—is not realistic in London because of the high cost involved. We must consider the consequences for all of us of the housing shortage in London. Towards the end of the previous Parliament, the Government proposed a scheme to provide specialist housing, initially for teachers, police officers and nurses. I understand the Government's reasons for doing that. We are all acutely aware of the shortage of teachers, especially in inner-London schools, the difficulty of retaining such teachers and the consequences of high teacher turnover. Similar problems affect the recruitment of police officers and nurses—at high cost to the national health service, which is forced to employ agency nurses because of the impossibility of employing permanent staff, who cannot find affordable local housing.

The offer of specialist housing may be an attractive proposition for a teacher, but, in some parts of London, there is a shortage of postal workers and, in other parts, a shortage of hospital cleaners, road sweepers, plumbers or carpenters. There will be shortages of all sorts of people if we allow such a massive imbalance in housing provision to continue. I urge that we look rationally at the matter and ensure that a greater proportion of new dwellings in London is in the affordable rented sector. I hope that the Minister will offer some hope that that will happen.

Research has been conducted into the problem. There is a mass of books and glossy and not so glossy reports, of which I have a few, including the Government's Green Paper and the excellent report from the Mayor's Housing Commission, chaired by Chris Holmes of Shelter, entitled "Homes for a World City". Many people who are actively involved in housing were members of the commission. Another good document is the Association of London Government's "A housing strategy for London" which is a good summary. In the preface to that document, Tony Newman, chair of housing on the ALG, talks of the challenges in improving the quality of housing stock in London:

We have inherited problems in London such as the poor quality of housing stock and management, and the huge level of repairs required. There are 48,000 households in temporary accommodation in London, of which 6,000 live in B and Bs. One hundred thousand households need permanent housing in London. There is clearly a need to deal with that. Additionally, 31,000 new households come to London every year, of which a proportion—perhaps a third—will be in need of affordable rented housing.

I hope that the Minister will reflect on the problem of the sale of existing council properties and the demolition of some parts of estates to create a better quality of life. I support the latter policy because it is possible to make a deeply unattractive housing estate much better by selective demolition of parts of it to create more open

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and communal space and to develop community facilities. That can turn a community around. However, there is a cost: the loss of some housing stock that must be replaced elsewhere.

On the sale of council houses, I realise that the Conservatives' campaign in 1979 was largely based on offering £10 notes for a fiver to tenants on housing estates—buy the property and all will be well. Sadly, some people bought property in very poor condition and, as a result, are paying high repair bills, service charges and all that goes with that. Other people bought street properties that were later sold. It is sometimes galling to go to an area where the council formerly owned many street properties for people in housing need. Those houses were sold to tenants who later sold them in the private market. They are now inhabited by extremely wealthy people, or rented to people on housing benefit, which means that we the public pay housing benefit of £200 or £300 a week, rather than £70 or £80 a week on exactly the same property. The only difference is that the money is paid to a private landlord rather than to the local authority.

Again, that is a hidden cost to the public. The strategy of the sale of council properties has led to a huge reduction in affordable rented stock, which seldom, if ever, comes back to the public sector. Perhaps initially, we could give local authorities the opportunity to buy back properties that have been sold. Homelessness costs are rising because of that problem, but we must examine the way out. We must build and purchase more properties in London.

The land supply issue in London is huge. It is not possible to build our way completely out of the housing crisis, although by planning and examining every vacant site it is possible to do a lot. Indeed, "A housing strategy for London" suggests that in the next 15 years it will be possible to construct a further 381,000 properties in Greater London. I do not know what proportion of those houses will end up as affordably rented, but it is clearly possible to make a big dent in the problem.

Mr. Geoffrey Clifton-Brown (Cotswold): The hon. Gentleman is making a thoughtful contribution, and I congratulate him on securing the debate. Does he support the proposal in the Mayor's spatial development plan that, in all private developments of more than 15 houses, 35 per cent. must be social housing and a further 15 per cent. must be intermediate housing? Does he think that that will increase housing in those categories?

Jeremy Corbyn : I support the principle behind the Mayor's spatial development strategy, although I feel that he has set the figure rather too low; I suggest that such housing should make up half of the development site and that the threshold should be lower than 15. In my borough, few sites are large enough to come under the spatial development strategy because most sites are very small.

When intervening on the Secretary of State for Transport, Local Government and the Regions yesterday, I made the point that I would like the opportunity to intervene on planning decisions to force half of developments to go to affordable rented housing and that the threshold should be lower than

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15 houses—seven or eight even. Most of the developments in inner London are very small and we miss out as a result. Indeed, the figures that I cited earlier show that last year only 8 per cent. of new property in Islington was for affordable rent. The council could do little about that because of the law. I support the principle behind the Mayor's proposal, but the figure should be lower.

The other stark issue that we must consider is house prices in the private sector. As I said, the opportunity for people to buy their way out of the housing crisis in London is extremely limited. People in my borough and, I suspect, in Camden and neighbouring boroughs who are on quite good incomes find it impossible to buy anywhere to live. The cheapest property available in my borough costs about £100,000: that would, with luck, buy a one-bedroomed flat above a shop on a main road. A two or three-bedroomed property or a house with a garden in inner London would cost about £300,000 or £400,000, and in some parts even more. Unless they have inherited income or lottery winnings, for example, a couple buying such a home—an ordinary property in London—must have a joint income of more than £100,000 a year. Average incomes in London are slightly higher than in the rest of the country, but not that much higher. The housing opportunity gap is much greater in London than in other parts of the country.

Before I conclude with a few policy thoughts, I bring to hon. Members' attention a grim statistic relating to the supply of housing for affordable rent, whether council or housing association. As a result of council house sales and the demolition of parts of badly designed estates, in the next 20 years, there will be a net loss of about 130,000 properties in Greater London. The issue is not, therefore, that current building is insufficient, but that current building does not even begin to meet the gap created by demolitions and loss. A radical agenda is necessary to make a genuine dent in London's housing needs, which I hope the new Government will be able to do.

I should like the Minister to consider three policy issues. I hope that this is not the only time that we debate housing in London. I suspect that we shall return to it time and again. I intend to keep returning to it, because I can no longer stand being in advice surgeries week after week with families coming to me with sick, under-achieving and badly behaved children because they simply can no longer cope. They and the community as a whole deserve better.

The post-war Labour Government managed, despite shortages and financial turmoil, to build much good-quality housing for rent that radically improved the lives of many Londoners, such as the wonderful London county council cottage-type estates that were built after the war. I realise that times have moved on, that supply of land is not what it was and that we cannot necessarily achieve that. However, local authorities developed imaginative solutions in the 1960s, 1970s and 1980s for good-quality housing—high density but on a street pattern—and changed the lives of a lot of people. I look to this Labour Government to achieve similar results, so that we may reverse what happened in the 18 years when the previous Government missed those opportunities.

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I should like the Minister to comment on three policy issues. The first is estate transfers in London—an issue that is deeply controversial and about which many tenants are extremely worried. It is hardly a level playing field when tenants are offered a ballot that essentially states that they can transfer their estate if they want to do so, and that if they go to a housing company or association they will receive money for improvements and development and if they stay with the local authority they will not. That is hardly fair. The documents that were presented to the Labour party conference and the national policy forum made it clear that an awful lot of people felt that we should offer a level playing field in decision making. A level playing field means that all the options are open and that public investment is the same, whether the transfer takes place or responsibility remains with the local authority.

My second point relates to the growth of housing companies and registered social landlords. Last week, I asked a parliamentary question, which the Minister answered, concerning the structure, democracy and running of housing associations—or registered social landlords, as they are now more commonly known. Although I accept that there is tenant representation on their boards and that, usually, there is local authority representation and some independent representation, we need to look again at the issue of democracy with regard to the running of housing associations. Although they often started out as small enterprises, many of them are now major landlords that are involved in massive financial dealings, and they have a huge impact on people's lives. They also eat up large sums of public money through various forms of subsidy, and they use that as an accelerator to borrow even larger sums from the private sector. Democracy and accountability with regard to housing associations must be addressed: we must ensure that they are well run and properly account for their money, and that tenants have a far greater influence over what happens within them.

My third point concerns housing benefit and its administration. In Camden, which is ably represented by my hon. Friend the Member for Hampstead and Highgate, it has been demonstrated that it is possible for housing benefit to be well run in-house by public employees in the public sector, so that the people who deserve benefit, receive it—and those who do not, do not. It is not rocket science; it is about getting money in, and then giving it to the right people. Unfortunately, the boroughs that have gone down the road of outsourcing to a private contractor—my borough has outsourced to a company called ITNET and there are many other such companies in the area—face unbelievable chaos, which causes terrible stress to the tenants concerned. If contractors fall down on the job, we should say bluntly to the local authorities concerned that they should terminate the contracts, bring them back in-house and ensure that they are run properly. It is appalling that people should be subjected to such high levels of stress as a result of the bad administration of what is, after all, not a local benefit, but a national benefit—although for some bizarre reason, in 1981, the then Prime Minister decided that it should be handled by local authorities. I thought that her decision to make them responsible

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for a new benefit that they did not want to administrate was her perverse way of saying that she disliked local government.

Mr. Edward Davey (Kingston and Surbiton): I assure the hon. Gentleman that it is possible to get rid of a private sector administrator of housing benefit. Unfortunately, in Kingston, a company called EDS—Electronic Data Systems—administered our housing benefit. After two years of chaos, the council eventually acceded to my demand and that of a local Labour councillor to get rid of EDS. Now the service is back in-house and is working very well.

Jeremy Corbyn : I am relieved to hear that, and I am sure that the people of Kingston are even more pleased about it. After the debate, would the hon. Gentleman be kind enough to make a telephone call to the Liberal Democrat leader of Islington council to tell him that, on 19 July, he has an opportunity to end, rather than extend, the contract with ITNET? If the hon. Gentleman is free on that evening, perhaps he will join me on a demonstration outside Islington town hall calling for the end of the ITNET contract. I will accompany him on the train to Islington, if he thinks that he might have difficulty in finding his way there.

With regard to the wider issue of housing benefit, figures from the past 10 years or so demonstrate that public investment in bricks and mortar as a proportion of total housing expenditure has more or less halved, and public investment in housing benefit has roughly doubled. I am, of course, not asking that we abandon the principle of supporting people in housing need by assisting them with their rent, but we should take a hard look at a strategy that creates millionaires by putting so much housing benefit into the pockets of private and bed-and-breakfast landlords. It seems that we are moving in the wrong direction. We should perhaps be investing in bricks and mortar to provide affordable rented properties in our society.

This is the first debate on London's housing in the new Parliament, and we will frequently return to the issue, but I want to repeat the points that I have made—and that many others will, I am sure, keep on making—over the coming years. London's children deserve something better than the quality of accommodation that so many of them live in. If we invest in good-quality housing, we will give them a good start in life, which in turn solves other problems. If we continue down the expensive road we have taken so far and do not provide good-quality accommodation, we will reap a social whirlwind as a result. I hope that the Minister, with all her experience of London government, will recognise that these problems, difficult as they are, are not intractable or impossible. However, central Government need to take a determined approach to bring about the solution to London's housing problems that London Members so desperately want.

10 am

Ms Oona King (Bethnal Green and Bow): I congratulate my hon. Friend the Member for Islington, North (Jeremy Corbyn) on securing the debate. He is a determined and expert advocate on behalf of those in housing need. I also congratulate the Minister on her promotion, which brings with it her new responsibilities

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for housing. I am especially delighted to welcome her as a former London council leader. Members of Parliament and the general public often complain that Ministers do not understand what it is like on the ground. I know for a fact that this Minister does. The downside for her of that understanding is that even greater expectations will be placed on her to deliver. She has had to deal with the frustration, devastation and sheer hopelessness of so many who wait on housing lists throughout London, hoping for the chance to have a decent roof over their heads. I know that she will do her best to move housing up the agenda.

It is no coincidence that my first speech following the general election should be on housing. No other single issue affects my constituents more than poor-quality housing. During the election campaign, I was accosted—although that word may not exactly convey what I mean—by hundreds of people in Tower Hamlets, who said, "Please do something about housing. Come into our houses and see how we're living." I never want to sound rude to any of my constituents, because I am horrified by the conditions in which so many live, but such invitations happen so often that I have to say, "No, I'm sorry, I can't come to see the 12 members of your family living in two bedrooms. I know that there are six of you to a bedroom, that you have a mattress in the bath and that some of you are sleeping on the floor. I know that your children are sick, that they have asthma, that their education is suffering and that your life is being ruined by the lack of proper housing." Even when I say that, my constituents still want me to visit. They cannot believe that in this day and age such things can be happening to them and that no ambulance is arriving, siren blaring, and that no one is coming with a solution to their problems.

The problems go back a long way. Council housing began in the east end before anywhere else in Britain, because historically the area has the worst housing in Britain. The Boundary estate was built exactly 100 years ago on the edge of the City of London, on a site that was a notorious slum in the 19th century. It was known as the "Old Nichol" and immortalised by Arthur Morrison in his book, "Child of the Jago" and reflected in James Thomson's "City of Dreadful Night". Unfortunately, London remains a city of dreadful night for many people who do not get a decent night's sleep in their houses. The Prince of Wales opened the Boundary estate in 1901. The design was groundbreaking and an architectural vision of the future, but if a week is a long time in politics, a century is virtually a millennium in terms of social housing. Residents would not call the Boundary estate an architectural vision of the future—they regularly tell me that it is a vision of hell.

Will the Minister examine what makes life on the Boundary and so many other estates in Tower Hamlets such hell? There are two aspects to the problem. One, as we all know, is the lack of repairs. When the Labour party took office after the Tories, there was a £19 billion repair backlog. The other aspect is overcrowding. Families often have to wait on the housing register for five, 10 and 15 years. Someone even came to me who had been on the waiting list for 19 years. While waiting, families often live in situations of terrible overcrowding, such as those that I described.

Will the Minister be good enough to undertake to visit Tower Hamlets to see the worst overcrowding in the United Kingdom? Tower Hamlets has the highest

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density of poverty in the country, which is obviously reflected in the housing. Will she also consider the rules that govern statutory overcrowding to see whether there is any way of reducing levels of overcrowding?

My hon. Friend the Member for Islington, North dealt very well with another issue that causes my constituents great distress. Their children do not have a hope in hell of being able to afford a house in east London or to stay in the area in which they were brought up unless they earn more than £50,000 a year. That is the figure for a couple. The average house price in London is £150,000. To get a mortgage for a very small house, a single person would have to earn a Member of Parliament's salary. That is truly disgraceful. The need for more affordable housing runs through this entire debate. If we cannot create a greater stock of affordable housing, we shall be unable to solve the problem.

Another part of the problem is the use of bed-and-breakfast accommodation, which I know that the Minister discussed yesterday. I am pleased that, in response to concerns about the growing use of such accommodation and to the Adjournment debate that I secured in the previous Parliament, Ministers have set up a bed-and-breakfast taskforce. I am especially glad that it is to consider setting targets for local authorities to reduce the use of such accommodation. However, I hope that Ministers will give it a strong steer by acknowledging today, or when the Homelessness Bill is in Committee in the near future, that the use of bed and breakfast for anything other than a reduced four-week initial assessment period is simply unacceptable.

I know that the Minister is well aware of the recent papers by Shelter and the National Housing Federation, which set out clear methods for reducing the use of bed and breakfast. The problem is that that will always involve additional investment, but I trust that she recognises that it is a much more sensible approach. My hon. Friend the Member for Islington, North outlined in some detail how much money we are wasting. Nowhere is that more evident than in the extortionate rents charged by many owners of bed-and-breakfast accommodation. It is no wonder that landlords are amenable to the rich pickings that can be made at the taxpayer's expense.

The problems would be eased if we could guarantee the level of investment required to tackle housing need in London. I am pleased that the Government started by concentrating their efforts on tackling street homelessness and people with priority need, but we must tackle the even deeper problem of hidden homelessness, which accounts for so much of the overcrowding that I described. We must do much more to help those trying to raise young families in single rooms, and we need to build more family-sized accommodation for those who live in overcrowded one-bedroomed and two-bedroomed flats.

I was encouraged that extra funding was identified in last summer's comprehensive spending review. Although that Government money far outstrips anything that the Conservatives ever invested in social housing, it is not enough. We need more. Only in the final year of the comprehensive spending review will we even begin to approach the levels of funding needed.

We are not yet planning to build new homes in the numbers needed to reduce the waiting lists in London, which in itself forces more and more families to

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approach the local homeless persons unit. The London Housing Commission estimates that 43,000 homes will be needed in London in addition to the 57,000 planned in each of the next 10 years. The majority of those homes must have an affordable rent. I hope that the Government will consider again the number of new homes that are planned, and increase further the advance development programme funding available to the Housing Corporation. In turn, I naturally have to say that I hope that the Housing Corporation will ensure that the area currently ranked in greatest need in terms of housing—Tower Hamlets—is given more money, so that it can add to its stock of affordable housing.

The other issues that I would like to raise centre on the fact that the way in which the system deals with the homeless and housing problem in London wastes money. I want to see the Government's commitment to improving public sector services broadened to cover housing. The country is debating the need to improve public sector services, and the Prime Minister is specifically considering health, education, crime and transport. The first three of those problems are directly affected by poor housing.

Without decent housing, the costs on the national health service increase incredibly. Think of the cost alone of nebulisers to treat children with asthma. Nebulisers are handed out by doctors who have told me that they want to prescribe a decent home for their patients, rather than a short-term measure that does not deal with the root of the problem. Similarly, how can people attain what they ought to in education without anywhere to study, without any peace and quiet and without things that middle-class children take for granted?

Ms Diane Abbott (Hackney, North and Stoke Newington): Before my hon. Friend leaves the question of health, I should like to say that I have been an inner-city Member of Parliament for 14 years, and I am sure that she will have seen, as I have, many women come into advice sessions and burst into tears. Those women are suffering from acute depression because of having to put up with overcrowded and damp housing conditions and the family problems that ensue. Depression among working-class women on our estates is an important issue.

Ms King : I thank my hon. Friend for raising mental health issues, which are critical. One cannot escape such issues when one holds a surgery. It seems that 90 per cent. of the people who come for help have their prescriptions in tow and are desperately depressed. The problem is especially acute in ethnic minority communities.

Housing should be at the top of the agenda. For that reason, I ask the Minister to arrange a meeting with Lord Macdonald, who will be heading the delivery unit, or with the other organisations that have been set up by the Prime Minister to help the Government deliver on public services, such as the Office of Public Service Reform.

The other issues raised by my hon. Friend the Member for Islington, North, such as stock transfer, are very important and should be examined in the same way

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that the Institute for Public Policy Research has been examining the relative costs and benefits of public and private sector involvement in our public services. I would like a similar amount of thought and energy to be given to housing.

I hope that the Minister will be able to find the time to come to see the reality on the ground in Tower Hamlets.

10.16 am

Mr. Edward Davey (Kingston and Surbiton): I welcome the Minister to her position and congratulate her. I am glad to hear from the hon. Member for Bethnal Green and Bow (Ms King) that the Minister has experience of London's housing problems. That is welcome news, and I hope that when she replies to the debate she can give hon. Members good news about her approach to the problems.

I also congratulate the hon. Member for Islington, North (Jeremy Corbyn). He has a strong record of raising housing issues in the House. He has been a persistent challenger of all Governments on the issue and has raised it in his usual forceful manner today.

The hon. Gentleman was right to stress the extent and nature of the problem in London, and how it has changed over the years. Clearly, it was very different just after the second world war, when hundreds of thousands of houses had been destroyed and many damaged. The housing challenge for Government during the post-war period was different. The population was lower and land was less scarce.

The environment now is different even from that 10 years ago. The population of London is growing relentlessly; in the recent past, it has grown faster than it did 10 or 20 years ago. Those population growth trends look as though they will continue, so the pressure on London housing stock and on land for the building of affordable housing will be ever greater.

The challenge that we face today in London is completely different from the challenge that we have faced in the past, so we need a different response. Unless we tackle the housing problem, it will put a brake on the London economy. Private sector employers are already experiencing shortages of labour for key undertakings across the diverse economy of Greater London. Wage inflation is picking up in London because of the shortage of housing. Children are affected because many now have to travel much further to school than they used to, and so is the public sector. The Greater London Assembly report, the Mayor's report and the Assembly reports on the problem of housing for key public sector workers are important contributions to the debate. I hope that the Minister will reflect on them.

The hon. Member for Bethnal Green and Bow was right to link the debate on public service reform to housing: they are inextricably linked. In my constituency and, I am sure, in other London constituencies, housing problems are at the root of difficulties in recruiting and retaining quality staff for schools, hospitals, the police force and the wider public services. Until we tackle that problem, we shall not be able to improve our public services. In London. probably more than anywhere else in the country, housing is fundamental to the Government's agenda. If they do not tackle housing, they will not solve the problem.

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I agree with the hon. Member for Bethnal Green and Bow that the Minister should talk to the new Office of Public Service Reform. I also recommend that she speak to the Chancellor of the Exchequer, who is undertaking the latest comprehensive spending review, which is to report in June 2002. A recent written answer from the Treasury set out the remits of that review, and of the cross-departmental reviews that it will encompass. One—I think that it was the second listed—included a look at the overall labour market in the public sector and its recruitment and retention requirements. We as London Members and the Minister with that responsibility need to feed into the cross-departmental review to ensure that the housing needs of public sector workers in the capital are reflected in the cash and policy innovations that result from that review.

I should like to highlight a Liberal Democrat recommendation that was picked up in the Assembly's report on key public sector workers and housing needs in London. It concerned the need for a London weighting—an independent index of how much it costs people to work in London, identifying extra housing costs. There used to be one under the Labour Government in the early 1970s. Not surprisingly, it was one of the things that Baroness Thatcher got rid of when she was Prime Minister. She did not like it because it told her that she might need to spend more money in the capital. It needs to be resurrected; it will strengthen our argument with colleagues in other parts of the country and with the Treasury. If we want a higher level of public service, we must ensure that the London weightings for key public sector workers are larger than they are now, so that such workers can afford to live in Greater London.

It is important to arm ourselves with statistics about the grants to London councils to tackle some of their problems. Let us be honest: we have heard rumours that such grants are under threat. We need to ensure that the Government recognise the greater cost of providing services in London. An index should be published—it may be available somewhere, but if it is, it has been given no prominence—to show the post-tax, post-housing cost incomes of Londoners. If we compared the incomes of Londoners, after deducting tax and housing costs, with those of people living in other parts of the country, I bet that our incomes would be substantially lower at almost all levels, even before adjusting for quality of housing. Until we have such figures and indices in our armoury, we shall not be able to win the argument.

Ms Abbott : That is a very important point, and I shall take it further. The take-up of the working families tax credit, one of the flagship poverty alleviation measures of the Labour Administration, is lower in London because the inflated housing costs there result in its having become not worth claiming.

Mr. Davey : The hon. Lady makes a good point. The reform of housing benefit was part of the unfinished business of the previous Parliament. Some of her colleagues have told me that they are worried that housing benefit is too complicated. That is a worry because it is most relevant to the needs of Londoners. People on low incomes need help with their housing costs, and housing benefit is not meeting that need.

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I shall be slightly parochial for a moment and return to my constituency of Kingston and Surbiton. I am the first Member for an outer-London constituency to speak in this debate. It would be dishonest of me to say that the housing problems in my constituency are as severe as those in the constituencies of the hon. Members who have already spoken; of course, they are not. However, housing problems in some parts of my constituency are nearly as bad.

Kingston is sometimes thought to be a leafy borough. It was given that label by the Deputy Prime Minister in his first local government grant settlement speech in the previous Parliament. That did not go down well in the housing estates of Kingston. The borough is not homogenously wealthy and prosperous. It has pockets of severe deprivation. On the Jarman index, the Norbiton ward is the most severely deprived ward in outer London. My constituency has pockets of severe poverty. When I visit those estates—I recently delivered quite a few leaflets there—and when I hold advice sessions, it is obvious that Kingston has some severe housing problems. I recognise some of the descriptions that have been given, and I strongly support some of the solutions.

Some of Kingston's problems are parochial. The cash that Kingston council receives for dealing with its housing problems has been restricted in recent years. The cap on housing benefit has made life particularly difficult for those of my constituents trying to rent in the private sector, because the rents are sky high and housing benefit covers only a portion of those rents. They have been priced out of the private rented sector as a result. Although the local government grant settlement made some changes to the way in which the housing benefit regulations operate, it did not go far enough.

I refer again to my exchange with the hon. Member for Islington, North about the administration of housing benefit. I shall pass on to the leader of the Liberal Democrat administration in Islington our experiences in Kingston, although they may be different from Islington's. To meet its internal financial targets, EDS, the private sector firm that managed that contract, slashed the number of people dealing with administration. It claimed that, by introducing net technology, it would be able to overcome that reduction in labour.

The reality is that housing benefit claimants often need help to fill in forms and to follow up their claims; they need a high level of customer service, which the computer is not able to give. Unfortunately, EDS and possibly other private sector suppliers did not realise that. That is an example that the Government should take on board: an example of private sector involvement not providing a better service. It helped to reduce costs in the short term, but in the longer term it massively increased them. In an outstanding court case, Kingston is trying to extract compensation from EDS, so I shall not say more about that. However, it shows that messing up the administration of housing benefit can have knock-on effects on the provision of social housing.

Even though EDS has been long gone, the problem that the people of Kingston are still living with is that private sector landlords will no longer rent to housing benefit claimants. They did before EDS came on the

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scene, but because they were fed up with the bungling, the delays, the incompetence and the downright rudeness of EDS, they decided not to rent to housing benefit claimants. Winning back their confidence and trust will be a long job. Unfortunately, in some cases, it will be impossible.

The landlords became so fed up that they took the capital gains that were available to them and sold up. That was much less hassle than obtaining the rent by way of housing benefit from the council. Our problems in Kingston were exacerbated because of that experience. From the looks and nods that I have been receiving from hon. Members, it seems that they are aware of the problem.

Glenda Jackson (Hampstead and Highgate): I was one of the hon. Members who nodded vehemently at the hon. Gentleman's comments. However, I was nodding on behalf of my borough, which my hon. Friend the Member for Islington, North (Jeremy Corbyn) defined as excellent in delivering housing benefit in-house. Putting housing benefit services into the private sector has had a knock-on effect throughout London. That is increasingly so because private sector landlords have heard the horror stories and will not consider taking on a tenant who pays his rent via housing benefit, even in a borough such as mine where the administration of that benefit is extremely good.

Mr. Davey : I am disturbed by the hon. Lady's remark. It shows the extent of the problem. When the Government are digesting the recommendations of the Institute for Public Policy Research and some of their other advisers, they should be careful how they introduce the private sector to such matters. I am not saying that it does not have a major role to play in solving such difficulties. In terms of public-private partnerships for capital spending and investment, the private sector is the key to London's housing problems. The challenge for the Government is to know how to use and to work with the private sector. If they get that right, such a partnership can be fruitful.

Planning is the answer to some of London's housing problems and several of the Mayor's recommendations are heading in the right direction. A much greater proportion of affordable housing needs to be set down in planning agreements. The under-15 rule needs to be scrapped. We must consider allowing section 106 conditions to apply to smaller developments. We also need greater flexibility. We must not examine only one application, but a whole group. Councils must have the powers to examine applications more widely—to examine what is happening in their boroughs as a whole.

I look forward to the Minister's remarks about how to change planning powers in London. Some private sector builders are worried at the prospect of a higher proportion of affordable housing being attached to planning applications. They are saying that they would not build if such a rule were introduced. I do not believe them. Many private sector builders would still be keen to build. There are still many opportunities for profit. It is in the community's interest to demand a share from those developers. Let us remember that, without the key workers—those who clean the roads, teach the children

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and police the streets—private sector properties will be devalued. I hope that the Minister will bring her experience to bear on the issue and regard it not only as an isolated matter, but as one that impacts on all the lives of those who live in London.

10.34 am

Glenda Jackson (Hampstead and Highgate): I congratulate my hon. Friend the Member for Islington, North (Jeremy Corbyn) on securing the debate. I also congratulate my hon. Friend the Member for Bethnal Green and Bow (Ms King) on relieving me of the burden of having to detail some of the housing realities of many of my constituents. I shall not go over that ground again—my hon. Friends have given graphic accounts of stories that could have come from any inner-London borough. They also detailed reasons why so many people in this great capital city live in the most appalling housing conditions. The question is not why the situation is as it is, but how we can ensure a better future for our constituents.

It is interesting that the debate is entitled "Housing (London)". The London boroughs, the Mayor, the Greater London Assembly and, perhaps more importantly, the Government, should examine London's housing problems with a pan-London vision. My hon. Friend the Member for Bethnal Green and Bow urged the Minister to meet her, her constituents and members of the Government who have been given the clear responsibility to improve public services. She made the extremely strong point that there is no more important public service in London than affordable social housing.

If the Government are not moved by the human tragedies that the appalling lack of affordable social housing lays on too many people in London, I make a side point. This city has always been presented—as indeed it is—as one of the greatest, most powerful, richest and interesting cities in the world. What is detailed less often is that within London we have the largest number of deprived wards in the United Kingdom. Unemployment rates are higher than in the north-east of the country and, regrettably, London lost out during the first comprehensive spending review due to the lack of money that the Government are affording London's budgets. Labour Members know and applaud the Government's reason for making that shift, which was that they were putting much-needed money into coalfield communities. The Government argue for equality of opportunity, tackling child poverty and eradicating poor health, which I strongly endorse. However, there is little point in that if they do not take on board the fact that a contributory factor to all those demerits in our constituencies can be laid clearly and succinctly at the door of poor housing.

Equally, I ask the Minister to endorse other of my hon. Friend's comments. When the meeting between the great and good of the Government is arranged, the Chancellor of the Exchequer should be present, as should the Mayor and other representatives of the Greater London Authority. London needs more money—it is as simple as that. The better delivery of public services will rightly place greater burdens on local authorities. However, it is not enough to get agreement from leaders, chief executives, and directors of various departments. There must be money to retrain, co-

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ordinate and modernise many local authority services to ensure that we, the public on the ground, see the benefit of such public services. There is no sector in which that is more important than housing.

The point that I initially attempted to make before I was carried away by my own eloquence was that, if the Government are not prepared to accept what we as London Members see as the overwhelming human case for more money to be pumped into London, will they acknowledge the economic case? The Chancellor has rightly said that the London is the dynamo for the national economy. For every job that is created in London, two jobs are created in the greater hinterland of the United Kingdom. However, we will not be able to maintain London's primacy, attract inward investment and be the great financial centre, in or out of the euro—however the country decides on that matter—if London's infrastructure does not function, and it will not function if key public workers cannot afford to live in this city.

All accept that the headline key public workers are teachers, nurses and policemen. My hon. Friend the Member for Islington, North rightly made the case for another group of key public workers in this great city, and they are the people who clean the streets. Without them, will we be able to attract people to the city? The hon. Member for Kingston and Surbiton (Mr. Davey) mentioned leafy streets. If leaves are not swept up in the autumn, elderly people may, as has happened in the past, slip on compacted wet leaves and injure themselves. We are a great nation of dog lovers. If dog faeces are not cleaned up and pavements and roads are not properly maintained, will we be able to attract people? The houses might be nice, but if the surrounding environment is lousy, people will not want to live in London.

The same applies to transport. The Government are pouring more into public transport than ever before, but doing so will do no good if, because they simply cannot afford to live in their city, there are no drivers for the buses and tubes or wardens to give tickets to people who are parked illegally.

Many of those involved were born in this city, as were their parents and grandparents. If we cannot tackle the issue quickly, we shall, as my hon. Friends said, create even greater resentment that will cost us more as a nation because it will create social imbalances and possibly, in some instances, disaffection that will express itself physically or verbally on the ground. As constituency Members of Parliament, we want no more constituents with unbelievable stories about the harassment that they are experiencing as a result of a neighbour-from-hell scenario.

We are running short of time, and I shall conclude my remarks. I strongly urge the Minister to take up the suggestion made by my hon. Friend the Member for Bethnal Green and Bow of a high-level meeting between the Chancellor, members of the Government who are responsible for the improvement of public services, and representatives of the tier of London government that the Government—much to our credit—introduced to ensure a pan-London approach to some of the most essential and complicated difficulties that beset this great city. Housing should certainly be at the top of the agenda, and the issues can be thrashed out.

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In the interim—or, rather, as an addendum—will the Minister ensure that the bed-and-breakfast taskforce imposes what we would consider acceptable standards for the facilities provided in bed-and-breakfast establishments? I also urge her to speak to our right hon. and hon. Friends who are responsible for the benefit system. We have spent a great deal of time this morning discussing the inequities of the housing benefit system, which often result from the privatisation of benefits. Equally, the Government have imposed on the system enormous complexities that have a serious impact, especially on the voluntary sector that delivers services to homeless people and rough sleepers in London. I urge the Minister to argue with our right hon. and hon. Friends that, rather than housing benefit taking a decade to improve, it too can be improved in an infinitely shorter period.

I welcome the Government's commitment that they, like all Labour Members, believe in the benefits of affordable social housing. The Homelessness Bill, which received its Second Reading on the Floor of the House last night, is a step in the right direction. I cannot emphasise strongly enough the importance of tackling quickly the issue of socially affordable housing in London.

I welcome many of the measures that the Government have introduced, in particular starter packs. However, that was simply throwing good money after bad, as all that it did was further inflate rents. We shall tackle the issue only by building. People are available to effect the plans, and the ideas and creativity are there, as London has experienced the problem for many years, but we shall not achieve anything in the time scale that is essential without more money from the Government. I hope that my hon. Friend the Member for Bethnal Green and Bow will make that point when she arranges a meeting with those who are responsible for improving public services and our right hon. Friend the Chancellor.

10.45 am

Mr. Geoffrey Clifton-Brown (Cotswold): I congratulate the hon. Member for Islington, North (Jeremy Corbyn) on securing the debate. We have covered a lot of useful ground and I cannot possibly say all that I want to in the six minutes remaining to me. I shall give the Minister, whom I also congratulate, her full 10 minutes—because that is only right with a new Minister.

I congratulate, too, the hon. Members for Bethnal Green and Bow (Ms King), for Kingston and Surbiton (Mr. Davey) and for Hampstead and Highgate (Glenda Jackson). Although there are great ideological differences between us, I found myself agreeing with much of what they said.

I hope that we can move on from the point often made in debates that we have had in the past, that everything the private sector does is bad and everything the public sector does is good. In fact, there is good and bad in both. As the hon. Member for Islington, North said, we should harness what is best in the private sector to solve the dreadful housing problems, not only in London but in all our constituencies, although London's problems are probably worse than those in most of the rest of the country.

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I accept that bad housing causes personal misery, as graphically illustrated by the hon. Member for Bethnal Green and Bow. It leads to family breakdown, mental health problems, crime, antisocial neighbours and all the other problems that we desperately want to solve.

I agree with the point made by the hon. Member for Islington, North about voluntary large-scale transfers to housing associations. There has been such a transfer in my constituency. Housing association tenants do not have enough say in how associations are run; that is something that the Government should be able to tackle. We should also engender greater competition between housing associations because, in my experience, there are good and bad associations and the difference between the worst and the best is enormous. By better auditing techniques, initiatives and targets, we could encourage the worst housing associations to rise to the standards of the best.

I should put one or two statistics on the record. At a housing conference on 5 March 1996, the Prime Minister promised that Labour would do everything in its power

I make those points in a genuine spirit of wanting to improve the lot of Londoners—and it is a genuine spirit, because the task of all of us in politics should be to improve the lot of all our constituents, especially those in the country's capital. I agree with the hon. Member for Hampstead and Highgate that London is the country's economic driver and that we must ensure that London operates better than anywhere else.

One or two common misconceptions arose in the debate, especially in the points made about housing benefit. I was on the Select Committee on the Environment, Transport and Regional Affairs, which considered housing benefit many times. The essence of benefits is to keep them simple. We have had 85 changes of regulation in housing benefit—one for every fortnight that the Labour party has been in power, and such tinkering makes it difficult for the council or a contracted-out service to deliver a housing benefit service with efficiency. We must shrink things to the lowest common denominator instead of trying to alter regulations to cover every possible eventuality.

In the little time available, I wish to be constructive about what a Conservative Government would do. We would allow local authorities greater discretion over where houses are built instead of dictating everything from the centre, which has led to many disadvantages. We would create new regeneration companies. It is especially important that we see more money being

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levered in by the private sector. The sort of development that I was thinking about when I intervened on the hon. Member for Islington, North is the monolithic diktat from the Mayor that all housing developments over 15 houses must contain 50 per cent. social and intermediate housing, which will lead to less development by the private sector. If the hon. Member for Islington, North and his friends really want to increase development in London, they should stop that sort of monolithic approach and examine each proposal on a case-by-case basis. We should determine how much a private developer can afford in a particular development and make him meet set targets and raise or lower them depending on the case. It is not sensible to adopt a monolithic approach.

I promised to leave the Minister 10 minutes, but she has only nine. Suffice it to say that I sympathise with the problems in London, but I have the same problems in my constituency, albeit to a far lesser degree. Nevertheless, the Government need to tackle those problems and I look forward to the Government doing better in this second term than they did in the first.

10.51 am

The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Ms Sally Keeble) : I congratulate my hon. Friend the Member for Islington, North (Jeremy Corbyn) on securing the debate on this important issue. From the contributions that have been made, it is clear that the debate will continue and that people have extremely strong and clear feelings about the matter.

Before becoming a Member of Parliament, I was council leader in one of the most deprived areas of inner London. I was probably responsible for some of the worst housing in the country.

Jeremy Corbyn : I think that my hon. Friend should rephrase that.

Ms Keeble : No, because that was the way in which I saw the problem. Whatever party is in government, one cannot duck local responsibilities. I still believe that to solve London's housing problems we need a partnership between local and national Government and the various housing agencies. There is no way to escape that.

A Conservative Government were in power throughout the time that I was council leader. We should expect nothing from the Conservatives, just as people in London could not. I will take no lectures from Conservative Members on the subject.

Two issues were raised: first, the quantity of housing and the amount of money that goes in; and, secondly, the quality of housing and what is delivered on the ground. In terms of quantity, the problems in London are well recognised by the Government and substantial extra funding has been put in. Between 1997-98 and 2001-02, allocations of housing investment for local authorities and registered social landlords in London amounted to some £31.8 billion, £1.3 billion of which was extra resources made available by the Government. That represented almost 30 per cent. of total national extra resources and reflected the Government's concern at the high level of deprivation and need that exists in the capital.

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We have put in extra money through the new major repairs allowance. We expect authorities in areas of high demand such as London to use some of that extra money to fund new affordable housing where it is a high priority. Clearly, if we are to solve some of the quantity issues, we must look at extra funding streams—hence the emphasis on stock transfers and on partnership arrangements to ensure that we get the maximum return in terms of quantity for the amount of money that the public sector can put in. However, there are profound issues concerning quality.

Ms Abbott : My hon. Friend the Member for Bethnal Green and Bow (Ms King) asked whether analysis would be conducted of how stock transfers have worked. Hackney has undertaken more stock transfers than any other London borough, and our experience has been unsatisfactory. We want some analysis before the policy is further promoted.

Ms Keeble : I am sure that everyone will look at the lessons of stock transfers. However, there are many ways to attract different funding streams to provide social housing in London and throughout the country. If we are serious about increasing the amount of housing, we must look at all those options, and deal with issues concerning quality.

The particular issue that I want to deal with is overcrowding, which has been raised repeatedly. One of my first impressions of housing in London was how overcrowded it was; it formed part of my case load as a councillor. The overcrowding regulations are very outdated, and I share the concerns that were expressed about them by my hon. Friend the Member for Bethnal Green and Bow (Ms King). I undertake to review them, although I do not undertake to prejudge the outcome of that review. However, they need to be reviewed. It is unacceptable that families in overcrowded conditions have to resort to, for example, converting airing cupboards into bedrooms. Some parents have to sleep in their cars. The general curse of an overcrowded household must be addressed: not only its health implications, but the difficulties that face children doing normal things such as homework.

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Issues about the extension of rights, particularly the extension of housing rights to young people, have been raised. They were debated at length last night. As we set about recognising the housing needs of a wider range of people—including, in particular, 16 and 17-year-olds—it is quite likely that extra pressure will be put on the housing stock, at least for a time. We must be clear that, if we are going to recognise housing need and to deal with equality issues, we must look carefully at the consequences.

My hon. Friend the Member for Islington, North raised issues about the problems of reducing stock, and what then happens to housing densities. He rightly said that, if property should be demolished because of its inadequate condition, that must be done. However, we must bear in mind that that reduces the overall stock. If we are going to increase the densities and the stock, we must be more careful about where we build the new housing. There are some innovative ideas about increasing it around, for example, shopping areas and transport nodes. I am sure that we can take such matters forward, while bearing in mind that the composition of households differs greatly.

Several hon. Members raised issues about bed-and-breakfast accommodation. The Government are conscious of the increasing use by some London authorities of bed-and-breakfast hotels as temporary accommodation for homeless families with children. We believe that people have a right to decent accommodation, and Government policy is clear that such accommodation should be used only as a last resort. In May 2001, a new taskforce was established to work with the worst affected authorities. The unit will help to develop solutions and disseminate good practice to assist authorities to avoid or reduce their use of bed-and-breakfast accommodation. Several hon. Members asked for assurances about that. In taking an interest and following through the work of that taskforce, I shall certainly try to ensure that we reduce its use as far as possible, especially for families with children, as for them it is clearly undesirable.

My hon. Friend the Member for Bethnal Green and Bow asked whether I would visit her area and consider some of its problems. We are not supposed to give such assurances, but I would be happy to pay such a visit.

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