Archbishop Carey rounds on Tories' housing policies

Home ownership: Church leader warns of 'dangerous social divisions'
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Public Policy Editor

The Archbishop of Canterbury yesterday attacked the Government's housing policies as ministers declared a new target of another 1.5 million homeowners over the next decade.

Kenneth Clarke, the Chancellor, backed that with a promise of no further cuts in mortgage interest tax relief (Miras) in this Parliament as Labour accused ministers of doing nothing to help existing homeowners in the housing White Paper it published yesterday.

Tory backbenchers made it clear that the Chancellor's move was not enough. Nicholas Winterton, MP for Macclesfield, led calls for Miras to be increased from 15 to 25 per cent "at least for first-time buyers".

As John Gummer, Secretary of State for the Environment, set out the White Paper, Dr George Carey, the Archbishop of Canterbury, accused the Government of "loading the dice" in favour of home ownership.

The White Paper announced new "purchase grants" of between pounds 8,000 and pounds 16,000 to allow existing tenants to buy where housing associations agree, and that in future tenants of all new social housing will have the right to buy with the help of a grant - whether the homes are built by housing associations or new private landlords to whom the Government is to give tax breaks to encourage them to enter the market.

Dr Carey told the Institute of Housing's conference, in Harrogate: "Owner- occupation cannot be a panacea because of the need for flexibility and diversity in a changing society, and because a substantial minority of the population cannot afford it."

With only 20,000 council and housing association homes built last year - the lowest since the war - there was now a "serious scarcity of housing opportunities for many people at the bottom of the heap", Dr Carey warned.

The result was "dangerous social divisions" while the revision of homelessness legislation which the Government plans would "penalise families with children in need", he said.

The Nationwide building society announced it is to become one of the first new housing investment trusts which the Government hopes will take over council housing, using private finance to refurbish them. Trusts will also build housing for rent. Councils will be encouraged to transfer their remaining 3.8 million homes to the new trusts, to housing associations and to new local housing companies. Tenants, however, will have to vote in favour of such transfers.

The White Paper was dubbed "feeble and useless" by Frank Dobson, Labour's environment spokesman, who said it did "nothing to restore faith in the mortgage market, little or nothing to end the crisis in housing investment and nothing to help the homeless".

The National Federation of Housing Associations gave it "a qualified welcome", saying it recognised that many of its tenants wanted to become owner- occupiers. The Institute of Housing, however, said the Government was ignoring the evidence of its own research on the need for new rented homes.

Shelter damned the White Paper as "a completely inadequate response to the housing crisis". The plan to change the homelessness legislation, ending the right of some groups to permanent housing, "is a return to 30 years ago when children and their families were shunted from one temporary dwelling to another", it said.

t Our Future Homes; Cmnd 2901; HMSO; pounds 8.

Key points of the White Paper

8 Target of 1.5 million additional home owners in a decade

8 Cash grants to encourage housing association tenants to buy

8 Right-to-buy built in to future housing associations and other social housing developments

8 Councils to be encouraged to become "enablers" rather than direct housing providers

8 Councils encouraged to transfer stock to housing associations, new local housing companies and new tax-advantaged Housing Investment Trusts which will raise private finance to refurbish them. Tenants will be balloted before transfer

8 Private sector freed to compete for housing association grant

8 Aim to refurbish 1,000 worst council estates over 10 years with mix of public and private cash

8 Renovation grants to become discretionary, save for disabled

8 Landlords free to evict after 2 (now 3) months rent arrears

8 "Need-oriented" homelessness rules will end lone parent's automatic right to housing if technically homeless