Local councils need more powers to help them provide more affordable housing for rent, say the Liberal Democrats.

Don Foster, the Lib Dem local government spokesman, said it was a "disgrace" that three quarters of a million houses laid empty while 200,000 households were homeless.

The government insists it is working to tackle the different housing problems that affect northern and southern England.

Social Exclusion Minister Barbara Roche would act to help people in urban areas find affordable homes.

'National disgrace'

The exchange came in a Commons debate on the issue called by the Lib Dems.

Mr Foster said: "In every region of the country there are more empty properties than homeless households - a national disgrace."

Local councils could get more powers to make owners of homes left empty for "unacceptable periods" sell the properties to them, said Mr Foster.

Right to Buy was one of Thatcher's flagship policies

Council tax could also be charged on empty properties, he argued, and VAT rules changed so the tax fell equally on new homes and renovations.

New homes are currently not subject to VAT, but there is a 17.5% tax on renovations. Mr Foster suggested the level should be about 5% on both.

It was not just the homeless that lost out from the lack of affordable homes, said Mr Foster.

"We all lose," he said. "If key workers can't find housing, crucial public services on which we all depend will collapse."

Help under way

Defending the government's record, Ms Roche said its starter homes scheme would help 10,000 vital public service workers buy their first homes in high cost areas.

She agreed there were too many empty properties, but said the government was working with local councils and other agencies to cut the numbers.

"Very careful consideration" was going to proposals to give councils the power to take over management of homes left empty for long periods, said Ms Roche.

"Excellent progress" had been made towards making every social housing home achieve decent standards by 2010, she said.

"We will also be setting out a comprehensive long-term programme of action, which will meet the different needs of both north and south."

Right to Buy changes

Deputy Prime Minister John Prescott this month suggested the right to buy council homes could be scrapped in areas of severe housing shortage.

The Conservatives have followed that announcement by proposing to extend the Right to Buy to housing association tenants.

Ms Roche said ministers were looking at how to tackle abuses in the Right to Buy scheme.

But the Tory proposals would lead to a greater shortage of affordable homes, she said.

Concrete concerns

Conservative spokesman Geoffrey Clifton-Brown stressed his party's plans to encourage building on more former industrial sites would spare greenfield areas.

"If the government and the deputy prime minister's proposals to build an extra 100,000 houses in the green belt are enacted, more and more of our green belt and green fields will be swallowed up," he warned.

The issue of empty properties needed to be carefully examined, said Mr Clifton-Brown.

But he argued that raising VAT on new homes, as Lib Dems want, could "wipe out the development business altogether".