* Liberal Democrats
Serving Bath since 1992











Don Foster, Liberal Democrat MP for Bath, speaks for the party nationally on Transport.

Don introduces Affordable Housing motion
Don introduced a motion stating that more than 80,000 new affordable homes are required in the UK. Read the Hansard record of the debate here.

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Mr. Don Foster (Bath): I beg to move,


That this House notes that the current crisis in affordable housing has reached such a level that there is a national need for more than 80,000 new affordable dwellings per annum for the next decade and beyond; regrets the failure of the present Government to take earlier action while welcoming additional funding for that housing announced in the Spending Review 2002 and recent measures to tackle homelessness; and believes that urgent action is needed better to link local and regional planning and housing policies, to bring back into use empty properties, to increase the density of housing developments, to encourage local authorities to implement fully PPG3 and to reform the right to buy to prevent abuses of the system, while resisting the Conservative Opposition's proposals for its extension.

Judging by the amendments to our motion, there appears to be a great deal of agreement about the existence of a crisis in affordable housing, and a recognition that in recent years, inadequate attention has been paid to it. Of course, we could get bogged down in a debate on the definition of "affordable housing", and I am well aware that some make a very strong case for the alternative definition of "social housing". However, I hope that we can avoid definitional arguments and address instead the crisis that undoubtedly exists, and which has been brewing for many years.

Party manifestos of the past 50 years have promised action. It is interesting to note that the 1950 Labour party manifesto stated:


"The demand for new homes is pressing. We must move forward until every family has its own separate home, and until every slum is gone."

In 1966, the Conservative manifesto called for the following:


"Increase council house building for slum clearance. Expand the work of housing associations, so as to provide more good homes, at reasonable prices."

Dr. Julian Lewis (New Forest, East): I thank the hon. Gentleman for his courtesy in giving way. While he is on the subject of manifestos, what has he to say about the Liberal Democrats' 2002 alternative Budget, which proposed the infliction of VAT of up to 7 per cent. on all new building? How would that help to increase the supply of affordable housing?

Mr. Foster: I will answer that in full at some point, but I hope that the hon. Gentleman will not mind waiting until later in my speech. Various Labour and Conservative manifestos have contained many fine

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words on the subject, but despite that the crisis is mounting. The Deputy Prime Minister honestly accepted that when he said:


"We know the problems...We...recognise in the country and on both sides of this House that we have not done enough over the years. We need more homes where people want to live, near where they work, in the north and in the south, at a price that people can afford and in a way that protects our countryside."—[Official Report, 18 July 2002; Vol. 388, c. 442.]

That is a clear admission that enough has not yet been done. Fine words in manifestos and on the Floor of the House have not led to sufficient action to prevent the problem.

Mr. Andrew Love (Edmonton): As the hon. Gentleman is speaking about manifestos, I wonder whether the Liberal Democrat manifesto at the last election included a commitment to provide 80,000-plus new affordable dwellings, as suggested in the motion.

Mr. Foster: The manifesto proposed a range of solutions for the crisis that I am describing. If the hon. Gentleman will bear with me, I shall list several measures that were contained in the manifesto that would—I am sure he will agree—be sufficient to solve the problem. I hope that we will see much agreement across the Chamber tonight.

What do the problems mean in real terms for real people? In Friday's Evening Standard, I read about Emily Hill, aged 27, who teaches at Forest Hill school in Lewisham, where the shortage of affordable housing is acute. She earns £21,000 a year and is unable to find an affordable home. Indeed, only six new affordable houses have been completed in Lewisham since January. As a result of Emily Hill's particular problem, she may have to leave London.

The housing problem varies from one part of the country to another. Bath, for example, has increasing difficulty attracting so-called key workers. Applications for teaching jobs are falling dramatically, because potential applicants fear that they will not be able to find somewhere to live. An average home in Bath costs some £160,000, which is nine times the average starting salary for a teacher. Even a one-bedroom flat is likely to be beyond the means of a new teacher. We also have difficulty attracting nurses to our Royal United hospital. For a nurse, the average house price is 10 times his or her likely salary.

With such house prices, rents have also become unaffordable for teachers, nurses and other young people and families. Before anyone suggests that the Government's key worker scheme will help, I should point out that funds for the scheme are such that only 10 teachers in my constituency are likely to benefit. I question the merits of a scheme that is likely to fuel house prices instead of helping the vast majority of key workers. Surely it would be better to use the funds in building more affordable homes.

Mr. Gary Streeter (South-West Devon): I am listening carefully to the hon. Gentleman's speech on what is a serious and important issue. Does he agree that it is of immense concern that the Government do not seem to have realised that the crisis in affordable

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housing afflicts the west country as well as the south-east and London? Is not it a pity that the challenge fund money is not available to us in the south-west, but only to those in the south-east?

Mr. Foster: The hon. Gentleman is absolutely right. The Government seem to be myopic about the needs of the south-west in many respects. We are losing out in the area that the hon. Gentleman has described and it seems that we will continue to lose out in terms of local government funding and the provision of improved public transport facilities. He gives but one example of the Government's myopia in respect of the south-west.

In the country as a whole, housing is in a significant mess. More than 80,000 statutory homeless households live in temporary accommodation—the highest figure ever—and 100,000 children become homeless every year. More than 500,000 households are overcrowded. More than 3 million people live in poor housing.

It is no wonder, therefore, that Jon Rouse, the chief executive of the Commission for Architecture and the Built Environment, should have told the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Select Committee that we have "a housing crisis" on our hands. He is absolutely right.

The hon. Member for Edmonton (Mr. Love) referred to the need for specific figures for affordable housing. He is right. Cambridge university's housing and planning research centre estimates that, to meet current and future needs, between 83,000 and 99,000 new affordable homes will needed every year for the next decade, and well beyond.

This year, the lowest number of new houses has been completed since 1924. There are far too few affordable homes—more than 80,000 are needed each year, but fewer than 20,000 will be added to the stock this year. Although some 10,000 additional properties have been acquired, converted or rented for affordable housing, even that means that there will be only 30,000 extra homes, compared with the need for well in excess of 80,000.

Bob Spink (Castle Point): The hon. Gentleman is right to bring this matter to the House's attention. It is most important, especially for my constituents. Does he agree that it would be a good idea to extend the right to buy to certain categories of housing association members, provided that all the receipts went towards the building of new social housing? Would not that be a way to secure the extra social housing that is so badly needed?

Mr. Foster: The simple answer to that question is no, it would not. I apologise for giving so many similar replies, but Conservative policy on right to buy is of great interest to the House, and I shall return to it is some detail later.

Mr. James Gray (North Wiltshire): Will the hon. Gentleman give way?

Mr. Foster: Go on then.

Mr. Gray: I am most grateful to the hon. Gentleman, who is my near neighbour. [Interruption.] That was close. My mobile telephone nearly rang. I shall put it down.

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The hon. Gentleman mentioned the importance of building large numbers of new houses. How would Liberal Democrat Budget proposals to impose value added tax of 5 per cent. on new build affect that? Surely that would mean that there would be fewer houses, not more of them.

Mr. Foster: The hon. Gentleman has a problem with his mobile, and with listening to the debate. Had he come into the Chamber slightly earlier, he might have heard us deal with that point. However, the good news is that I have promised to reply in detail to that point later.

Mr. Geoffrey Clifton-Brown (Cotswold): Will the hon. Gentleman give way?

Mr. Foster: Of course.

Mr. Clifton-Brown: I am grateful to the hon. Gentleman, who has been generous in giving way. When he winds up his speech, will he also explain the Liberal Democrats' proposals on land value taxation, set out by the hon. Member for Torbay (Mr. Sanders)?

Mr. Foster: Yes, I will. I shall cheat slightly and leave it to my hon. Friend the Member for Torbay (Mr. Sanders) to catch your eye, Mr. Speaker, so that he can give a full explanation a little later, but I want the House to be aware that I fully support the proposal.

I have been trying to say for some time that the Government have made some progress, and I pay tribute to them for that. Indeed, the motion notes their recent measures to tackle homelessness and the increased funding made available for housing. I note that the spending review 2002 promises an extra £1.4 billion for housing capital investment by the year 2005–06.

Additional resources are desperately needed. However, they alone will not solve the affordable homes crisis entirely. We have not yet had a definitive statement on how those additional funds are to be spent. It is difficult to know how much will be used to plug the affordable housing gap. We are conscious that some will go towards the important issues of tackling low demand in areas of the north and the midlands, while some will quite rightly be used to bring up to standard existing housing stock. Shelter estimates that what may remain of the total additional funds that will be available is still likely to lead to a shortfall of between 25,000 and 35,000 new affordable homes each year. Therefore, those additional funds will not, by themselves, end the crisis.

We believe that a number of other initiatives are needed. First, we need to tackle the scourge of empty properties. It is a disgrace that with 200,000 homeless households in this country we have, and have had for far too long, some 750,000 empty properties. Every region has more empty properties than homeless households, and that is a national disgrace. Urgent action is needed to start bringing back more of those empty properties into use. To do so would make a significant impact on the crisis in affordable homes.

For example, the southern regions of England have some 325,000 empty properties, more than 90,000 of which have been empty for more than12 months. If all those were brought back into use, they would constitute

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two years' worth of the required supply of affordable housing in the southern regions. It is, of course, a well- known problem. Indeed, only last week, in answering a question from me, the Deputy Prime Minister said:


"The point about empty homes is obvious".

He also admitted:


"we have not done anything about that."

Sadly, he is right. Nothing has been done about the scandal of empty homes.

Many steps could and should be taken. I said last week:


"Is it not a disgrace that, if someone wants to build a four-bedroomed, double-garage, mock-Georgian site on a greenfield site, they pay no VAT, yet they have to pay full VAT at 17.5 per cent. to renovate empty properties? Should not VAT be equalised for both at 5 per cent?"

In answer to the hon. Member for North Wiltshire (Mr. Gray) about the implications of an increase in VAT for house building, the net effect of the measures that I have just described, by reducing for renovation and increasing for house building, would be zero. There would be no additional cost to the taxpayer and there would be increased opportunity to bring back many empty homes into use. Therefore, I was delighted when the Deputy Prime Minister, in an uncharacteristic display of generosity to the Liberal Democrats, said:


"That sounds like quite a good policy."—[Official Report, 16 October 2002; Vol. 390, c. 300.]

He went on to indicate that it might even come to fruition if only he could persuade the Chancellor. I hope that he does. However, other steps could also be taken.

Dr. Brian Iddon (Bolton, South-East): Will the hon. Gentleman give way?

Mr. Foster: I should like to make a little progress.

Local authorities could be given increased powers compulsorily to purchase houses that have remained empty for an unacceptable period. They should also be given powers to charge council tax on such homes. Their powers could be extended still further so that they have the same borrowing rights as housing associations. We should also introduce site value rating, a point on which my hon. Friend the Member for Torbay will elaborate, if he should happen to catch your eye, Mr. Deputy Speaker.

Second homes are another problem, often remaining empty for far too long. Ending council tax relief on such properties, as we have long proposed, would encourage owners to make better use of them, perhaps renting them out when they would normally lie empty. The Government have promised to adopt this policy, but so far we have not heard when. It was expected to be included in the draft local government Bill, but it was not. I hope that we will hear from the Minister today precisely when the Government intend to introduce that Liberal Democrat policy. I hope that we may also hear her say that she is willing to go still further on second homes. In some sensitive parts of the country, the requirement for local authority planning consent for a change of use for a second home would be very welcome.

We can make better use of empty properties and we could also make better use of land, and I do not mean any further encroachment into the green belt.

Chris Grayling (Epsom and Ewell): Will the hon. Gentleman set out his views on the Government's plans

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for substantial investment in affordable housing, which I believe were the centrepiece of the Deputy Prime Minister's proposals to the House earlier in the summer? Those would include substantial developments around Stansted airport and Milton Keynes, for example. Does he support that policy?

Mr. Foster: The hon. Gentleman has heard me say on a number of occasions that the central determination of housing provision is not a sensible way forward. We have long argued that, within a regional framework and regional guidance, local authorities should make such determinations. Therefore, it would be inappropriate for me to pass judgment on the rights and wrongs of a particular housing measure. I hope that I have already indicated, however, that the additional investment from the Government, which is very welcome, will be insufficient to meet all the affordable housing needs and that other measures, such as those that I have proposed and others that I will mention, are vitally necessary.

It should be possible to meet the need for affordable housing without reneging on the 60 per cent. target for building on brownfield sites. Indeed, it should be possible to increase that target to somewhere in the region of 75 per cent. There can be little argument about the fact that land supply is restricting house provision. We continue to waste land throughout the country because of the density of housing developments. The figures for 2000-01 show an average density of housing of around 25 dwellings per hectare. We have not moved forward for a number of reasons—largely, inertia and resistance to change on the part of local authorities and developers and a reluctance on the part of the Government regional offices to intervene to enforce national planning policy guidance. If the sites developed for housing in the past year had been developed at an average density of 40 dwellings per hectare—midway in the unambitious minimum range set out in PPG3— 60 per cent. more housing could have been provided on exactly the same amount of land. The waste of land is a serious issue and it affects the entire country, not only the pressurised south-east.

Mr. Clifton-Brown : The hon. Gentleman has come up with an inconsistency. On centralised Government targets, he said that decisions should be taken at a local level, dictated by the local regional assembly via its regional spatial strategy; on the other hand, he wants central Government to intervene on density through the regional assemblies. He cannot have it both ways. Either central Government are going to intervene through the regional assemblies, or they are not. Which is it?

Mr. Foster: The hon. Gentleman should have read the wording of the motion and listened to what I said. I spoke of the need to encourage local authorities to accept guidance. I did not suggest that the policies should be imposed

Mr. Streeter : Send them flowers.

Mr. Foster: Sending flowers might help some local authorities, but probably not those that are Liberal-Democrat controlled.

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I would pursue the argument about the importance of the revisions to PPG3 with the hon. Member for Cotswold (Mr. Clifton-Brown). I am well aware that his party and mine accepted that the Government's revisions to that policy were very welcome. We have argued that, where possible, local authorities should adopt those recommendations. The sad truth is that the Government are not doing enough to encourage local councils to adopt them. For example, we know from research that about 37 per cent. of councils have not bothered to update their figures for available brownfield sites. We also know that, sadly, many local authorities have not done enough, or what is recommended in PPG3, to link their planning policies more carefully with their housing policies. Much more work needs to be done to encourage local authorities—not to force them—to accept the recommendations.

Mr. Adrian Flook (Taunton): Will the hon. Gentleman give way?

Mr. Foster: No, I want to make some progress.

There would be widespread agreement that more work needs to be done. I also suspect that there would be agreement as to the need for the privately rented sector to play a greater role in meeting the need for affordable housing. I note that the Conservatives' amendment refers to that point, although they might not agree with some of the measures that we think should be introduced to assist in increasing that role—for example, the use of tax credits to encourage landlords to provide accommodation at sub-market rents.

However, the hon. Member for Cotswold and I might agree that we can see no way at all in which the latest announcements about revisions to housing benefit can help. As my hon. Friend the Member for Northavon (Mr. Webb) has pointed out, the Government seem to believe that there is a world in which those on housing benefit are happy tenants, surveying a wide range of quality affordable accommodation with the opportunity to sit down with landlords to discuss the rent over a mug of coffee. That is certainly not the world in which I and many of my constituents live.

Much help could also be given to enable the private sector to work with others. There are many useful self-help and part self-build schemes throughout the country that need more encouragement. I draw the Minister's attention to the excellent habitat for humanity team, which is doing good work in Southwark with the private sector, the local authority and would-be tenants to develop and build affordable housing in the area.

There will not be agreement, however, about the right to buy. I return to the question put by the hon. Member for Castle Point (Bob Spink). More than 1.5 million houses have been sold under the right-to-buy scheme since it was introduced in 1980, but the receipts have been wholly insufficient to replace the stock of affordable homes that were lost. In the current year, although 52,000 properties were sold, fewer than 20,000 new affordable homes were built. The Government are right to consider changes, not least to end some of the unacceptable exploitation that currently exists.

Dr. Julian Lewis rose—

Mr. Gray rose—

Mr. Foster: I promise that I will give way in a moment.

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The hon. Member for Cotswold referred to one practice as a scam. He said:


"When a local authority has decided that a compulsory purchase order should be implemented, it is totally wrong for developers to be able to come along and make an instant profit."—[Official Report, Westminster Hall, 16 May 2002; Vol. 385, c. 355WH.]

I entirely agree with him. He is right.

Sadly, however, that is not the only scam. In this month's edition of London Housing magazine, Julian Blake describes another—a legal exploitation of the rules—which he claims involves about 20 companies in London alone. Those companies cash in on the discount of up to £38,000 offered to tenants exercising their right to buy and sidestep the laws on resale. A company offers cash incentives to tenants to buy under the right to buy, subject to the tenants signing an agreement immediately to vacate the property so that the company can rent it out. The tenants formally sell the house to the company only after the three-year period during which they would normally have to repay the discount. As a result of that scam, valuable homes are being snapped up for private gain at sub-market prices, with the permanent loss of valuable, affordable housing stock. That scam should end. It cannot go on. Rather than row back on the right-to-buy scheme, however, the Conservatives want to extend it.

Mr. Gray: There is no doubt that the type of scam described by the hon. Gentleman must be stamped out. However, does he agree that if he does away with the 60 or 70 per cent. discount under the right-to-buy scheme and replaces it with the 25 per cent. scheme proposed by the Liberal Democrats, it would make homes much less affordable? Secondly, does he recall the Liberal Democrat document entitled "A Home of Your Own", which stated that


"we recognise the benefits that owning a home can bring. We would extend the right to buy rules that apply to housing associations to all . . . housing providers"?

When did the Liberal Democrats change their view?

Mr. Foster: We changed our view in the run up to the last general election and we changed it for the reasons that I have given—that increasingly we began to be concerned that in some sensitive areas of the country there were growing problems associated with the shortage of affordable housing. We changed it because we recognised that, under the rules introduced by the Conservative party, there was no possibility that the money released from the right-to-buy scheme would be sufficient to provide a one-for-one matching with a new affordable home. We also recognised that, in any further moves in that direction, such as those which the Conservatives are now proposing, there was no possibility whatever of a matching one-for-one proposal. I therefore believe—

Mr. Paul Tyler (North Cornwall): Will my hon. Friend give way?

Mr. Foster: I hope that the hon. Member for North Wiltshire (Mr. Gray) will acknowledge—

Bob Spink: Will the hon. Gentleman give way?

Mr. Foster: No. I shall just finish answering the question.

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I hope that the hon. Member for North Wiltshire will acknowledge that anyone who is sensible, having reviewed how a policy has worked and its implications and effects, would be prepared to change their mind. [Hon. Members: "Wrong."] Sadly, that is what the Conservative party is not prepared to do. It is very interesting—[Interruption.] I hope that the hon. Member for North Wiltshire will listen, because both the leader of the Conservative party and the right hon. Member for Haltemprice and Howden (David Davis), at their recent party conference, announced their so-called "new" right-to-buy policy. The right hon. Gentleman said:


"We will give more than a million Housing Association tenants the same rights as council tenants to their own homes".

"New", for the Tories, is a very flexible word. Most of us would certainly not consider "new" a policy first announced in 1979, as it was in the Conservative manifesto at that time.

Bob Spink: Will the hon. Gentleman give way?

Mr. Foster: No. I will not.

But 1 million is also, for the Tories, a rather flexible number. They claim that 1 million people will benefit from their policy and yet—I hope that the hon. Member for North Wiltshire will correct me if I have got this wrong, but the figures are very clear—already 300,000 housing association tenants have the right to buy under the 1980 legislation, and 200,000 have the slightly different right to acquire under the 1996 legislation. So for the Tories, for new read old and for 1 million read 500,000.

Mr. Tyler: Is my hon. Friend aware that under the Conservative rules, a further scam has taken place in areas of considerable housing shortage, whereby some properties have ended up, under the right to buy, as second homes? Is he also aware that that has exacerbated the situation in areas such as the south-west—Cornwall and Devon? Is he further aware that if the Conservative party's proposals were pursued, it would be central Government dictation to local authorities to do something that they know is completely mad in local circumstances?

Mr. Foster: I entirely agree with my hon. Friend. That is why, first, we have made the proposal—shortly, we hope, to be accepted by the Government—in relation to council tax subsidy, and secondly why we will continue to urge the Government to introduce the planning requirements at a local authority level for a change of use to a second home.

Mr. Clifton-Brown: Will the hon. Gentleman give way?

Mr. Foster: No, I want to conclude. There is no doubt whatever—

Jeremy Corbyn (Islington, North): Will the hon. Gentleman give way?

Mr. Foster: No, I have said that I want to finish now.

There is no doubt whatever that the Conservative party proposals to extend the right to buy are totally uncosted. It is clear that they will never, under their

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proposals, be able to help to solve the affordable housing crisis. We have a very significant crisis in affordable homes, and it is not just the homeless, the overcrowded, the poorly housed or the poorly paid who are losing out. We all lose out, because if key workers cannot find housing, the crucial public services on which we all depend will collapse.

Everyone deserves a decent home; it is a scandal that not everyone has one. Despite many fine words—[Interruption.]—although not from the hon. Member for Epsom and Ewell (Chris Grayling), not enough has been done. Now we must act.


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