§ The Chairman
The first Amendment on the Paper, in the name of the Minister of Housing and Local Government and Minister for Welsh Affairs, in page 4, line 5, at the end, to add:(2) So much of the said section forty-three and of the said section seventy-five as prevents the making of an advance thereunder in respect of a house the estimated value of which or of the fee simple of which exceeds five thousand pounds shall cease to have effect.is out of place. It should come as the last Amendment to Clause 3. We will therefore take the Government Amendment after the Amendment in the name of the hon. and learned Member for Kettering (Mr. Mitchison), in page 4, line 5, at the end to, add a new Proviso.
§ Mr. Sparks
I beg to move, in page 4, line 5, at the end, to add:Provided that a local authority may require the immediate repayment of part or the whole of any advance made by virtue of this section if a part (but not the whole) of the house in respect of which the advance has been made is let or sublet without the consent of the authority.I welcome this part of Clause 3 as it stands, because it enables local authorities from now on to advance 100 per cent. of the valuation on dwellings for the purposes of loans under the Small Dwellings Acquisition Acts and other Acts of Parliament which permit local authorities to advance money for house purchase. My Amendment is designed to 605 establish some form of control of the use of the accommodation for which this public money is to be provided.
Generally speaking, this money is advanced on the understanding that the house is for owner-occupation, but there is nothing which says that the owner must occupy the whole of the accommodation. It frequently arises that advances are made to applicants for owner-occupation of accommodation which is too large for their purposes. In an area where the housing problem is acute I do not think that the local authorities would raise objection to such an applicant asking permission for the letting of one or two rooms which might be surplus to his requirements. Although local authorities —I believe building societies do so as well—endeavour to place in their contracts the condition that permission must first be obtained before subletting takes place, local authorities have no power to prevent subletting on grounds other than those which affect the stability or security of their money. I understand that a local authority cannot refuse a reasonable request to sublet any part of such accommodation if it is surplus to requirements.
When application is made by a borrower for permission to sublet, the local authority has to consider whether subletting advances or retards the security of the loan involved. If the local authority were to refuse permission and the applicant felt that permission was unreasonably withheld, I understand that he could go to the court and appeal against the local authority, and that on such an appeal the local authority could not argue moral grounds as the basis of its refusal. The only argument that would be entertained by the court would be whether or not the proposed subletting detrimentally affected the security of the money invested by the local authority in the property concerned.
What we must safeguard is the use of public money for excessive subletting of rooms or houses. Would it be possible for an applicant to buy a house by way of loan from the local authority and then let out each room separately, either as furnished or unfurnished accommodation, and to confine his own accommodation to one or two rooms which he might say were enough for his purposes? If 606 so, that would be an abuse of the facilities which the Committee is now considering. It might lead, in areas of scarcity of accommodation, to a serious element of profiteering in view of the present high standards of rent, particularly for furnished accommodation.
Indeed, in some districts, people buy dwelling-houses and sublet each room and they are profiteering to a very considerable extent. A case was brought to my notice the other day of two small rooms in a ten-roomed house which were let for three guineas a week. In that one house were three separate families, out of four families living in the house, paying between them nine guineas a week for two rooms each. They were also paying a proportion of the rates and something for internal decoration and repairs.
It is not right that public money should be made available for that kind of thing. One can understand money being advanced by local authorities to an applicant for owner-occupation of a house which he requires for himself and his family. There is no objection to that; but is the local authority to be asked by two adults for money to buy a ten-roomed house for which they have no use, and half or three-quarters of which they propose to sublet? Is that the purpose and intention of the Government in bringing forward this Clause?
Although, in certain circumstances, the local authority insists that there shall be no sub-letting of any part of the premises without its consent, and bearing in mind the fact that the weakness of that is that the local authority could not unreasonably withhold consent, what I should like to establish is that anyone who does receive public money to acquire a house shall not sub-let any part of that house without the knowledge and consent of the local authority. That is so that the local authority may use its powers of moral persuasion, in cases which it is felt are bordering on the profiteering principle, to say "This is too bad; you are really doing too much of this sort of thing, because you are letting more of the house than you ought to let," or "You are charging a rent which is not a fair and reasonable rent." My Amendment would be directed to those persons who ignore the local authority and do not ask that authority's permission to sub-let, but, 607 having received the money and acquired the house, proceed to let every room in the house and to charge unreasonable rents to sub-tenants.
I do not know whether my Amendment adequately covers the point which I have endeavoured to raise, and I should like the Parliamentary Secretary to throw some light on this aspect of the problem. I can assure him that in many areas where the housing problem is serious, where there is a desperate shortage of accommodation, and where the demand for rooms, furnished as well as unfurnished, is very great, there should be some sort of curb on excessive profiteering in the subletting of furnished and unfurnished accommodation in dwellings for the acquision of which public money has been subscribed.
I submit that can be achieved only by having it established that, if any person does proceed to do what I have said without the knowledge and consent of the local authority, and has, in fact, made something of a business of it, the local authority should be entitled to call in the loan or a portion of the loan on that account.
If we can, conversely, strengthen the conditions so as to lay an obligation upon the borrower to ask permission from the local authority before he proceeds to sublet, the local authority could be given the power to say that it feels that the proposals are unreasonable, not so much in relation to the security of its money, because, from the local authority point of view, the security of the money would be enhanced thereby, because of the owner's increased income by sub-letting, and, generally, there would be no trouble about the security of the money invested. I should like to have the principle established that the local authority shall have the power to be able to say that it regards such a proposition as unreasonable, in the sense that too much of the accommodation is being alienated by the borrower, and that, in its opinion, the rents proposed to be charged are excessive.
Therefore, I think the local authority ought to have some power to secure, first of all, if there is more accommodation in the house than the borrower requires, that the proportion which he is proposing to sub-let is a reasonable proportion, and, 608 secondly, that the rents proposed to be charged to the sub-tenants are reasonable rents. Unless there is some such power for a local authority to do something like that, it may well be that public funds will be used to perpetuate an element of profiteering in rents, which I think is most undesirable.
As the Parliamentary Secretary will realise, owing to the Rent Act, the door is now wide open, and there is no control of these rents at all. Sub-tenants cannot go to any court and say "I am paying too much rent." There is no redress whatever for them. In the case of a tenancy of furnished accommodation, application can be made to the Furnished Houses Rent Tribunal, but such tenants are faced with being turned out of their accommodation at the end of three months. It is the responsibility of the local authorities, which should be given a certain amount of power to be reasonable in these matters, but also power to come down hard and strong in cases which they consider unreasonable, both from the point of view of the accommodation which the borrower is alienating and from that of the rents which are to be charged.
If the hon. Gentleman can throw any light on that aspect of this problem, I am sure that it will be of interest to the Committee, and to all others in areas where the housing problem is acute, to know exactly what the Government have in mind.
§ Mr. A. Evans
I wish briefly to support my hon. Friend the Member for Acton (Mr. Sparks), although his Amendment would seem to be rather drastic. He is asking us to say that when a local authority makes an advance, it should have the right to express its agreement or disagreement with the letting of any part of the house by the person who receives the advance, and that if the occupant does not comply with the requirements of the local authority about sub-letting, then the local authority should require the immediate repayment of the money advanced. That seems to be rather a drastic requirement.
§ Mr. Sparks
I do not think that there is any other way which would have been in order in which we could have dealt with the matter.
§ Mr. Evans
That may be so, and, certainly, my hon. Friend is trying to deal with a rather vexatious problem. It arises more acutely in the densely-populated urban centres, and particularly with the tenement house, which is probably the worst form of housing in the country, which can take three or four families.
The purchaser raises his money from the local authority, and proceeds to let off rooms in the house at excessive rents. Cases are known in the London area in which this has occurred, and in which a person has purchased a house and has proceeded to let off individual rooms to three or four adults in each room, thus seriously overcrowding the house. The local authority has very little power to prevent it.
The Housing Act is being flouted, and this overcrowding is taking place now. The power of the local authority to prevent this practice lies in the enforcement of the Sections of the Housing Act relating to overcrowding, but if the authority attempts to do that, and the court decides that these people must go, the local authority has to re-house them. The local authority is not in a position to re-house people, especially in the central London area.
This is an anti-social and, from a health point of view, dangerous practice, which is to be deplored, and my hon. Friend is trying to give certain power to the local authority when it advances money to purchase a house to control the letting of that house in order to prevent the spread of this harmful and dangerous practice, which causes overcrowding particularly in the centres of our cities.
My hon. Friend may not have chosen the exact words necessary to achieve his purpose, but that is merely a drafting problem which can be dealt with later. I hope the Parliamentary Secretary will be able to tell us that he is aware of the problem and that, in collaboration with my hon. Friend, he will try to insert something in the Bill to help local authorities to deal with it.
§ The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. R. Bevins)
I gladly respond to the invitation of the hon. Member for Acton (Mr. Sparks). I am well aware that different facets of this 610 subject have also been raised by the hon. Member for Islington, South-West (Mr. A. Evans) on earlier occasions. I appreciate the motives of the hon. Member for Acton in raising this matter and I think that both sides of the Committee will agree that on the whole what he is aiming at is very desirable.
I have to suggest to him, however, that although his hon. Friend referred to the Amendment as rather drastic, the matter is dealt with already and the Amendment is not necessary at present. If one looks at the Housing (Financial Provisions) Act, 1958, one finds in Section 43, among other provisions which are to have effect, one set out specifically, which says:in the event of any of the conditions subject to which the advance is made not being complied with, the balance for the time being unpaid shall become repayable on demand by the local authority…In substance, that is what the hon. Member for Acton has been arguing. I say to him quite plainly that a large number of local authorities have included in schemes they have submitted to the Ministry a condition which prohibits subletting without their consent. As the Committee knows, a local authority scheme made under Section 43 of the Act requires the approval of my right hon. Friend. He has been perfectly willing to approve the particular condition referred to by the hon. Member on the assurance that consent to allow letting or sub-letting would not be unreasonably withheld by the local authority.
As hon. Members on both sides of the Committee will appreciate, there are circumstances in which a limited amount of letting or sub-letting may be desirable. It may be desirable on social grounds. Some other authorities which have not sought to import this condition of the Act into their lending schemes, make a practice of importing the condition into the mortgage deed. I am advised that that practice is general.
For those reasons, I say to the hon. Member and to his hon. Friend that the existing powers to cope with what quite clearly is a danger in the London area are in our view adequate. If we were to accept the Amendment we should be accepting something which in the nature of the case would be universal and highly rigid, whereas, under the present system as I have described it, there is an element of flexibility which enables local 611 authorities to use their judgment and discretion according to the circumstances as they exist in particular areas. For those reasons, I hope the hon. Member for Acton will not feel inclined to press the Amendment.
§ Mr. Sparks
The hon. Gentleman has not explained the implications of that condition. I am told that the implicacations do not involve some of the considerations I have advanced. The local authority can refuse consent or disapprove of an application for sub-letting only if that would jeopardise the security value of the money it has advanced. I understand that a local authority cannot refuse such an application on the ground that the borrower is charging an excessive rent for what he proposes to sub-let.
The local authority cannot refuse consent if it thinks the borrower is sub-letting too much of the accommodation and not retaining what the authority thinks is adequate for the family of the borrower. It can refuse only if consent would jeopardise the security of the money it has advanced. If consent were refused for any other reason, a borrower could go to the court and probably get permission from the court to do exactly what he wanted if it were not found that that would jeopardise the security of the money advanced.
The Parliamentary Secretary should put us right about that. If I am wrong, I am sure we should all be glad, because we are looking for means to provide a certain measure of control by local authorities over abuses which I am sure will arise from time to time in excessive sub-letting and excessive, unreasonable rents. If local authorities have that power under the terms of the Act referred to, we should all be pleased to hear that, but I understand that is not the case.
§ Mr. Bevins
Frankly, from the practical point of view I see no difference at all between the present procedure under the Housing Acts, which involves local authorities and my right hon. Friend, and what would occur if the Amendment were accepted, because the position would be identical.
§ Mr. Sparks
I do not wish to press the Amendment to a Division. The hon. Gentleman has not quite answered the 612 point I made; nevertheless, I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. Mitchison
I beg to move, in page 4, line 5, at the end to add:Provided that, in relation to advances made under this section, being advances which could not have been made if this section had not been enacted, the following conditions shall be observed—613 5.30 p.m.
- (a) no advance shall be made save to a person who occupies the house or a dwelling consisting of or comprised in the house and has in relation to the house such an interest as is mentioned in subsection (3) of section five of this Act or, as the case may be, is indicated in subsection (3) of section twenty of this Act;
- (b) the house or, if the house comprises more than one dwelling, every dwelling in the house shall be already provided with the standard amenities referred to in subsection (1) of section four or, as the case may be, subsection (1) of section nineteen of this Act and shall be in such condition as not to be unfit for human habitation (so, however, that for the purposes of this paragraph a house or dwelling shall be deeemed to be already provided with the said standard amenities, if an application for a standard grant in respect of that house or dwelling has been approved under section five or, as the case may be, under section twenty of this Act);
- (c) such proportion, not being less than one per cent. nor more than ten per cent., of the advance as the local authority may, either generally or in any particular case, decide, shall be treated and described by the authority as a repairs advance and a corresponding proportion of every repayment of and every payment of interest on the advance shall be paid into a repairs fund, which and the proceeds of which shall be managed by the authority and applied by them to pay for repairs of all houses in respect of which advances made by virtue of this section are from time to time outstanding in whole or in part;
- (d) the person receiving the advance shall undertake, for so long as the advance is outstanding in whole or in part—
- (i) that, while he or a member of his family continues to occupy the house or a dwelling comprised in the house, he will not sell, dispose of or encumber his interest in the house save to or in favour of the local authority;
- (ii) that, if the house or such a dwelling as aforesaid ceases to be occupied by him or a member of his family, he will not sell the house without having first offered it to the local authority for purchase on terms and at a price stipulated by him; and
- (iii) that, if within thirty days the local authority have not accepted the said offer, he will not within or after those thirty days sell the house on terms more favourable to the purchaser than those terms or at a price exceeding that price, unless the local authority consent to the sale.
This Amendment, like the preceding one, can relate only to 100 per cent. advances made by virtue of the Clause we are considering. Unlike the previous Amendment, it is mandatory in the sense that it seeks to impose conditions on those advances and not on other advances.
What we shall get for the purposes of 100 per cent. mortgages will generally be houses for which the owner cannot manage to put up the deposit required under existing arrangements, whether those arrangements are made with local authorities or with building societies. Accordingly we have to consider what we now propose in the light of that. We shall be dealing to a considerable extent with houses belonging to people of very moderate means.
Let us take the proposals one by one. The first is that the advances should be made only to owner-occupiers. "Owner-occupier" is in this case to include a person who has the long leasehold title indicated in Clause 5 (3) of the English part of the Bill and the corresponding provision in the Scottish part.
This is not an unusual provision. If we come back to the Small Dwellings (Acquisition) Acts we find that the provision is only for occupying owners. I agree that in the Housing (Financial Provisions) Act there are provisions as to the title and the duration of the mortgage which to some extent overlap this provision, but I put it forward not to stand by any particular length of leasehold interest nor indeed as a final and complete solution in place of what might well be a more complicated Clause submitted by the Government on Report after they have accepted the principle of the Amendment. I take this provision for the reason that it corresponds with the leasehold interest required for the purposes of standard grants in the later part of the Bill, and, without going into it in great detail, there is convenience in having the same extent of title in the two cases. I will give the reason for that as I proceed.
The provision in paragraph (a) is not very novel. There is nothing in the Bill as it stands to prevent advances being made to other or lesser titles—people who are not necessarily owneroccupiers—save in so far as it can be found in the Acts themselves which it is sought to amend.
614 We come to what is in my opinion an even more important condition. It is that when advances are being made on a house, the house should be one which has the standard amenities which are intended to be provided under the later parts of the Bill and should comply with a condition of standard grants under the Bill by being not unfit for human habitation. I would say that it does not seem to me practicable or possible as a condition necessarily to carry those matters on for the full period of the advance, although there are some other statutory provisions tending in that direction.
There is one proviso to a proviso which I should mention. It is intended that the house should qualify if the standard amenities are to be provided under the Bill quite soon after the advance is made. It is hoped that, for the smaller houses which might well be the subject of these advances, the two sets of provisions can be combined. That, I think, is the Government's intention, or so we were told on Second Reading, in relation to some of the building society advances which we have been considering. The condition which I propose would therefore allow the acceptance of an application for a standard grant to be treated as equivalent to the provision of the standard amenities. This is a mere question of timing. It would mean that a man who had made an application, and whose application had been accepted, would be able to get the advantage of the resulting standard grants in the amount to which he would be entitled under the advance.
The third condition is that a part of the advance made should be treated as earmarked for repairs. In a Bill of this kind we cannot provide for anything more than that. We are dealing with the advances, and what is to be done will have to be financed out of them. It was said by several of my hon. Friends and some hon. Members opposite on Second Reading that one of the difficulties in all these advances, be they building society or local authority advances, is that under modern conditions a man often cannot find a rented house anywhere and, as an alternative, has to buy a house and is forced to buy on terms which may sometimes be oppressive and difficult and which are highly likely to 615 strain all his resources. If he is to put up a deposit he may have to scrape together every penny he has and wait some time to collect the money.
That does not apply to the 100 per cent. advances, but this means that when he comes to repay that 100 per cent, advance he may, in the same way, be straining his weekly pay packet to repay it. In the nature of the case he is both paying interest and repaying the advance, and he will accordingly have to pay more under a 100 per cent. advance than he would pay as rent of a rented house, other things being equal.
That being the position, it seems to me that the risk—and it is a risk which is borne out by my own experience in my constituency and I am sure by that of many other hon. Members—is that people will commit themselves to every penny which they have in order to get a house and then will get into trouble the moment the repairs bill has to be met. These 100 per cent. advances are particularly liable to that sort of trouble because they will be made to people who cannot find the deposit and they are also more likely to be made on the smaller and older type of house than are other advances. They are therefore likely to be advances on houses which will need repairs expenditure fairly soon. If they are to be made out of the local authority funds, it is obviously right that steps should be taken to see that the property is properly preserved and that the borrower's individual difficulties—they may not amount to individual imprudence but probably will be difficulties into which he has been driven by lack of a rented house in the area—do not result in the house falling into grave disrepair.
Accordingly, we have provided in an earlier Clause that the house should be in a reasonable condition, as far as the provision about fit for human habitation does that, and we are now on the correlated question of keeping the house in reasonable condition. The provision contemplated is that a certain percentage of the advance should be treated in the first instance as made on account of repairs. That is rather a book-keeping and notional matter intended to direct the borrower's attention to what is happening. Secondly, the provision is that as his 616 repayments are both capital and interest repayments, a similar proportion of them should be set aside into a repairs fund.
There is another point about the repairs fund. In some cases local authorities, the larger authorities at any rate, will be making use of the possibility of 100 per cent. advances in more than one case in their areas, and it may well be in quite a number of cases in their areas. It seems, therefore, much better, if they are to do so, that they should treat the repairs question not as one with which they will have to deal house by house but as one which affects a conglomeration, if I may so call it, of the houses upon which they have made advances.
That is the way in which the local authorities would normally treat one of their housing estates, and while there is no reason to suppose that the houses on which they make these advances will all be situated in the same place, there is some possibility that that will be so in some types of area, and there is certainly no objection to the local authorities adopting the procedure I have suggested. From a financial and administrative point of view I should have thought that it was far simpler.
Accordingly, the proposal is that a percentage of these repayments and interest on the advance should be put into a repairs fund, and that repairs fund should be applied by the local authority towards keeping in repair all the houses in respect of which 100 per cent. advances have been made. I cannot but feel that that is, on the whole, the right way of doing it as a practical matter.
What it amounts to is that the man himself is contributing indirectly towards it in the amount of his advance and by a proportion of his repayments on capital and interest being handled in that way. I agree at once that it does not follow that the amount will always be sufficient. We cannot be sure of that. It does not seem right, where the whole thing depends on the difference between the 100 per cent. and the 90 per cent. advance, which is the existing one, that too much should be set aside for this purpose, excellent though it is.
The suggestion, therefore, is that the local authority should be bound to make some allocation of this sort, but the allocation should not exceed 10 per cent., 617 which represents the difference between the 90 per cent. and the 100 per cent. advances taken, with a minimum of 1 per cent., which seems to me to be a reasonable minimum for this purpose. The provision, therefore, is for the allocation of such proportions between 1 per cent. and 10 per cent. as the local authority may think fit. It leaves it open to the local authority to distinguish between one house and to say that in a particular case a house is likely to need more repair expenditure and, therefore, to charge a higher proportion to the repairs on that house and to allocate it accordingly. It is elastic in that sense, and it leaves it to the local authorities to decide not only the percentage in general, if they choose to do it in that way, but a percentage in the case of each individual house.
The last provision is again one for which there is precedent in this type of advance. It is that the borrower who gets the advance should undertake to continue to occupy the house. I think that is one of the provisions in the Small Dwellings Acquisition Acts, and if we are to make advances to owner-occupiers some provision of that sort is quite reasonable. Obviously no one wants to make a man continue to occupy a house for ever. Equally one wants to allow for cases in which he dies or moves or some family arrangement results in another member of the family occupying the house. Accordingly, for the purposes of the next condition which I am coming to, broadly speaking the occupation by the member of the family is treated as the occupation of the man to whom the original advance was made.
What happens when this man moves? We have to consider the purpose of making the advances in these older statutes applicable only to owner-occupiers. I think that the reason is quite obvious. It was felt that they were the people whose hardship, or possible hardship, required special help from the local authority, help to be given under Parliamentary powers in some Statute, and that there was no such need in the case of a landlord who would have the qualifying title, but who would not meet with the same hardship. If he were seeking to acquire a house, he would not be acquiring it for the purposes of living in it, otherwise he would be the owner-occupier, but simply 618 for the purpose of letting it. I do not think that anyone has ever suggested that there is anything wrong in that distinction.
Accordingly, these have tended to be owner-occupier cases. If we allow the owner-occupier to depart whenever he chooses—and one wishes not to interfere unduly on questions of this sort—then, unless we put some such provision in the Bill, the whole intention of this legislation can be avoided by a man getting an advance as an owner-occupier and later taking advantage of it by letting the house to someone and making more out of it than he had to pay to the local authority for the advance. That is an ever present danger in the present housing position in the larger towns.
After all, houses are very hard to come by. I need not dwell too long on that. Every hon. Member of the Committee knows what the position is. We know that, partly on account of the lack of accommodation in the centre of the larger towns and partly on account of the legislation of the Government, there is a real shortage of housing accommodation. People submit to the most harsh and unreasonable conditions, if they are able to be imposed and if they cannot get houses in any other way. That is the present position. While I would not expect the right hon. Gentleman for one moment to agree with my statement of it, since it is something for which he himself was largely responsible, I would expect him to agree that there are cases in the larger towns at present where people are driven to make bargains unfair to themselves in respect of houses, and, consequently, cases in which landlords can profiteer in letting in one way or another.
It seems to us on this side of the Committee that there is only one way to deal with the matter. These are houses upon which local authorities have originally made 100 per cent. advances. They may, in the first instance, have paid for them. If such a house is to be vacated by an owner-occupier or a member of his family, it is only right and reasonable that the local authority should have the first call upon it.
Accordingly, paragraph (d) of the Amendment provides, in the first place, that the man who has had the advance, 619 if he is still in occupation of the house, cannot sell, dispose of it or mortgage it to someone else. That is an obvious necessity. He would thereupon cease to be the owner-occupier. Again, there are provisions of that sort in the statutes which we are considering. He must give the first offer to the local authority if he or a member of his family no longer occupies the house.
As a corollary to that, having given the local authority a reasonable time to accept an offer and the local authority not having done so—we are leaving it entirely to him as to the price he asks—he shall not thereafter sell it at a lower price to someone else. That, I think, would discourage him from asking an altogether excessive price from the local authority because in those circumstances he might find it difficult to dispose of that house to anyone else.
This is not a very stringent provision. It calls for a first offer to the local authority. It leaves it to the man in question to stipulate his price and conditions, and if the local authority does not take advantage of the offer all he has to do is not to offer a lower price or better conditions to anyone else.
I recognise at once that in many respects these provisions are very similar to those already appearing in legislation dealing with 90 per cent. advances. That legislation was originally meant for advances of a smaller percentage, but here it is intended only to deal with 100 per cent. advances, and we have adapted our provisions as best we can to that sort of case. It is not, of course, a coincidence that they happen to tally exactly with the proposals made by my party in relation to 100 per cent. advances in the excellent book "Homes of the Future". At least, they tally as far as we can achieve it within the terms of the Act, and, in case he has forgotten them, I might perhaps, call the right hon. Gentleman's attention to the proposals in that book. They are:In order to qualify for a 100 per cent. advance, the purchaser would have to do three things…. Agree to modernise the house so as to provide, where practicable, a fixed bath or shower with hot and cold water, and means for the disposal of waste water.The first of those is one of the standard amenities, while the second is included 620 among those matters that have to be taken into account when ascertaining the conditions that make a house fit for human habitation.
Secondly, there must be adequate heating and lighting. That, again, comes within the matters to be regarded within the statutory definition of fitness or unfitness for human habitation. Thirdly, there must beSelf-containment of any separate household units.That means that there should be the necessary facilities for living in that unit in just the same way as if the unit were the whole house. That is provided for in the Amendment by making the conditions apply not only to the house but to a dwelling in the house.
Next, the purchaser must agree to contribute to a repairs fund. We could not put that in that form in this present Measure, but I think there is a great deal to be said for the contribution being made as I described earlier—by allocation of part of the repayment of and interest on the advance.
Next, he mustAgree to remain in personal occupation and to give the local authority first opportunity of purchasing the house, at a price to be fixed by the District Valuer, if he or she wishes to resell.We want to carry with us the Government on this Amendment. It so closely resembles earlier legislation that we feel sure that they will see the complete reasonableness of what we put forward. However, we felt that if we referred to the district valuer's price we might have a little more difficulty in carrying the Government with us. Indeed, the purpose of that condition is really met by the provision that I have just indicated, because all that is really required is that these advances should not be used to enable a man to get a higher price afterwards by reason of the advance or to let at a higher figure by reason of the advance.
I do not attach very great importance to the distinction, but if the Government do not like the Amendment in its present form we can always seek to bring in the district valuer on Report, if it is thought that it imports any grave matter of principle, although I do not think that it 621 does. Substantially, the Amendment follows, on the one hand, two pieces of previous legislation in almost every respect—not exactly in this form, but directed to the same point in relation to 90 per cent. advances—and, on the other hand, the excellent proposals put forward in "Homes of the Future", to which I have just referred.
If I may say so, it shows how sensible those proposals are that it should be possible to say, and to substantiate saying it, that they are very similar in many respects to what has already been provided. I do not think that they contain anything at all revolutionary. If there is anything revolutionary, it is the repairs fund. Those of us who are concerned with the social effect of advances of this sort and with the living conditions that people have to accept because of housing troubles will feel that a more sensible arrangement for pooling repairs under the auspices of the local authority is only in conformity with modern conditions and modern requirements.
§ Mr. F. Harris
I have listened very carefully to what has been said by the hon. and learned Member for Kettering (Mr. Mitchison). I am deeply interested in this subject, and I am very anxious to ensure that those wishing to take advantage of these 100 per cent. advances from the local authority—and we all want to see that come about—shall not in any way be hampered too much when they want to become the real owner-occupiers of their houses.
The hon. and learned Gentleman said that there should be a stipulation that advances should not be made by the local authority to anyone except an owner-occupier. I cannot imagine that a local authority would consider making them to anyone else—and I shall refer later to what may happen after the man has been the owner-occupier for some time.
The hon. and learned Gentleman's second stipulation was that the advance should not be made by the local authority if the house was at all unfit for human habitation. I do not think that any local authority would be lax in that respect. We must trust local authorities in this matter. No local authority, knowing its responsibilities, would make any advance unless it was well satisfied that the house satisfied in all respects the standards in the mind of the hon. and learned Gentleman.
622 I found the hon. and learned Gentleman's third point extremely confusing. He suggested that between 1 per cent. and 10 per cent. of the advance should be held back by the local authority, or be put in a pool to meet the cost of subsequent repairs—
§ Mr. Mitchison
I quite agree that it might have been put more clearly in the Amendment, but I said that I regarded it, in the first instance, as a purely bookkeeping arrangement. The local authority would just say to the man, "We shall call X per cent. of your advance a repairs advance." It would make no difference to the man getting the advance but, when he repaid it, 4 per cent. of the principal and of the interest would be put into the reserve fund. And he would know that a contribution was being made in respect of repairs.
§ Mr. Harris
I appreciate the point, but I think that the hon. and learned Gentleman will agree that this can lead to considerable confusion. When a man takes over a house he becomes the proud owner of it, and makes himself responsible for keeping it in good repair. That is the way I would like him to look upon it if he were a 100 per cent. owner of the property.
Anything which might savour of, or tend to convey, the idea that the local authority, in some form or other, would provide money for such repairs would greatly confuse matters. There would have to be some limitation, for instance, if the repairs went on and this pool was available for a year or two, and, then, after that time, a man found that he would have to find the money for the repairs himself. I confess that this particular point which the hon. and learned Gentleman advanced seems extremely confusing.
I regard the final suggestion that the hon. and learned Gentleman made as rather hard on the person who wants to take advantage of the 100 per cent. advance from a local authority to buy his own home. I do not think we should tie his hands any more than we possibly need in our desire to feel that the Government's plan is being well and properly carried out. Whether the man or the local authority still owns the house, he will feel himself to be the true owner, 623 and ultimately, when he becomes the owner, much will depend upon the way he look upon it in his actual possession of the house.
My hope will be that he would look upon it—I would certainly take this view in Croydon—as a proud owner, and he would want, wherever he could, to make adjustments and alterations inside it, as the proud owner usually does in his own property. Any stipulation that he could not, a few years later, fairly comfortably resell it because he had done well with it but he must instead offer it back to the local authority or, at any rate, offer it at a certain stipulated price, would tend rather to discourage him from doing what most of us wish any man to do in his own home.
§ Mr. Mitchison
The hon. Gentleman is paying such careful attention to all that I said that I am sure he would not mind my correcting him on one point. I pointed out that this Amendment differed from the policy pamphlet in one respect, and that I had deliberately left the price and the conditions of the offer to the local authority to the man who was then occupying. He could do what he liked, and I suggested that it would be a sufficient check on him if he could not take a better price or impose better conditions afterwards when selling to anyone else. He would find himself landed with an unsaleable house if he asked an excessive amount of the local authority or he sought to impose unreasonable conditions.
§ Mr. Harris
There is, I think, a genuine difference of view here in our approach to this matter. For instance, the hon. and learned Gentleman made references to the district valuer. I myself am not much in favour of district valuers.
§ Mr. Mitchison
I am sorry to take up the hon. Gentleman's time, but I did point out that I had not put that in the Amendment and I explained why. It does not strike me as a matter of great importance, but I did not put it in because I knew that a great many hon. Members would react to the words "district valuer" rather in the way that some people react as soon as they hear the words "atomic bomb".
§ Mr. Harris
I am obliged to the hon. and learned Gentleman for reaffirming 624 that point. My whole purpose is to say that I strongly feel that, when a man is put in the position of receiving a 100 per cent. advance from a local authority to buy his own home, he should, as far as humanly possible, be left unfettered. He should feel that it is his house and that he can get on with the job of improving it as best he may. There should not be too many conditions attached.
If I were the type of man—admittedly, perhaps, someone not having very much money—who might come along to a local authority and ask for the 100 per cent. advance, and then I found myself up against all these stipulations as soon as I was asked to take it on, I should feel that I did not wish to take advantage of whatever offer was available from the local authority. That is the point I am trying to make. I want such people to be encouraged. That is the purpose behind what the Government are trying to do, not to frighten them off doing what we really wish them to do.
§ Mr. James MacColl (Widnes)
As a result of the drafting skill of my hon. and learned Friend the Member for Kettering (Mr. Mitchison), we are able, on this Amendment, to discuss a number of the very important implications of the policy to provide for 100 per cent. advances towards home ownership. I wish to address myself to one of those conditions, namely, the one dealing with repairs, the one which the hon. Gentleman the Member for Croydon, North-West (Mr. F. Harris) found a little confusing. I hope that I shall be able to help him a little.
I begin from the point where he left off. We are anxious that home ownership should be a success. I suggest that it would not be a success if the result were that people found themselves under a burden of financial obligation far too great for their limited resources. If home ownership becomes a sort of "Sinbad of the sea", so that a man will have his house hanging over him, as it were, as a burden instead of a thing of joy in which he can put his creative zeal, to which the hon. Gentleman referred, a burden he just cannot cope with and which grows worse and worse, the whole idea of home ownership will fall into disrepute. There will be a feeling that, from the point of view of the community as a whole it will not lead to the care and attention being devoted to houses 625 which we want, but it will create a tragic situation for many humble people with limited resources.
Two things are, I think, beyond argument. First, the whole idea of this proposal for 100 per cent. advances is to bring into home ownership people who, in ordinary commercial conditions—a phrase bandied about in discussing the work of the building societies—would not undertake home ownership at all. They would not have the means and facilities to do so. Broadly, they would be people who would not have the experience to do it because they would be those who had not been accustomed to the responsibilities.
Secondly, a house is a wasting asset. That is something which it is most difficult for many people to remember. One becomes accustomed to thinking of a house as something permanent, a fixed part of one's life. I confess that I fall into the habit myself sometimes of thinking that a house is something which goes on and on and will continue to do so. That, of course, is not true. A house is an asset like a motor car and, like any other asset, it wastes away with time. Unless money is spent on it, and it is kept in repair, it will slowly become more and more obsolescent and unfit for habitation.
It is, therefore, of tremendous importance that people who undertake the obligations of home ownership should realise that it is not just a matter of paying so much down and signing a chit with a building society, thereafter feeling that for ever and ever it will just go on and they can think to themselves, "We are not like tenants. We need have no worries about insecurity of tenure. We have a roof over our heads". Houses, like men, grow older and they require more and more expenditure on them as they get older. I regard those two points as common ground between us all, and they are reinforced in this particular case by the avowed intention of the Government to extend home ownership to older houses.
All those conditions which apply to any house apply particularly, of course, to houses which are over forty years old. By the time they come into the possession of the new owner they will be old houses which, in many cases—and, again, I think 626 that this is common ground—have been neglected in the past and have not been kept in proper repair. Therefore, the important thing is that if home ownership is to be a success there should be a regular and steady building up of reserves against the day when repairs have to be done.
I have held these views for quite a long time. They are not novel. The idea of having a repair fund for houses is common enough in most countries where home ownership is widespread. It is certainly common enough in Scandinavia. There is nothing new about it. I am fortified to find that in the special bulletin of the Building Societies Association, dealing with the implications of this Bill, which I quoted yesterday and which was published in November, 1958, this statement appears:It is obviously in the interests of both the borrower and of the building society that houses which are more than 40 years old should be maintained in a good state of decoration and repair and borrowers under the scheme will be encouraged to save regularly with their building society so as to create a fund for this purpose.There we have building societies looking at the matter purely from the point of view of their own commercial interests and in order to safeguard their own security, realising the importance of encouraging home owners to save into a repairs fund. I know that we are not discussing that point at the moment for a variety of reasons, some of them involving points of order. What we are discussing is the extra grant paid by the local authority towards the houses and not the building societies share.
However, the need is reinforced where a grant is proposed, because it brings into the scheme people who have, by definition, no resources behind them. If people have financial resources behind them they probably would not find it difficult to meet the 10 per cent. of the cost of the house which should be deposited. We are dealing with people who, by definition, have very limited resources and the kind of people who will be severely hit by any sudden and unexpected expenditure needed on the house simply because they have not the resources behind them.
Some people who have criticised the proposal have said that it is bad because it will mean that it will prevent poor 627 people becoming owner-occupiers, whereas more prosperous people can afford to pay an extra amount and become owner-occupiers. One might almost say that that is an irresponsible political agitation. The result would be, if one took it seriously, that all sorts of people would find themselves crippled by having to meet expenditure which they did not expect.
I therefore suggest that there is not much doubt that some kind of reserve against repairs needs to be built up. As I have said, building societies, from their commercial approach, recognise that and it is, therefore, all the more important that we and local authorities, from the point of view of preserving the house as an asset and to make home ownership workable, should be all the more desirous of bringing it about.
The next argument which has to be met is that these proposals in the bulletin are voluntary. The questions may be asked: would it be right to make them compulsory and why should not we leave it to voluntary arrangement? That kind of argument is continually advanced and it is very difficult to draw a clear line of demarcation. This question has arisen for years in all discussions on compulsory insurance. It arose when National Insurance first began, when it was said that the prudent man would save up against sickness and that it was wicked to make the purchase of insurance stamps compulsory. I am old enough to remember the fury which was caused when, for the first time, ladies were compelled to insure their domestic servants.
The same kind of argument in a quite different context can be put forward about compulsory third party insurance for motorists. It has been said: why not leave it to the prudent man to safeguard himself by making arrangements for insurance? The real point is that people are liable to be too optimistic and take risks, and it is in the general interest that a repairs fund should, to some extent, be made compulsory.
Therefore, it ought to be part of all these transactions that a small amount—in the nature of things it cannot be a large amount—should be paid into a repairs fund, so that if at the end of five, ten or fifteen years the roof is suddenly blown off, or a burst pipe leads to terrific damage from water, there is some 628 money behind the owner-occupier upon which he can draw to meet that disaster.
My hon. and learned Friend the Member for Kettering remarkable, though he is, cannot put everything into an Amendment. He cannot write a book on the subject and incorporate it in an Amendment. But I should like to see a sort of no-claims bonus attached to the repairs fund so that it would be an incentive to the home owner to do the work himself and to leave the fund alive for future use. In other words, as the hon. Member for Croydon, North-West fairly said, we do not want a home owner to feel that there is money in the "kitty" and, therefore, he need not do repairs himself. An incentive must be given to the home owner to do the work himself so that the money in the fund will accumulate and that when major repairs are necessary money is available out of which the repairs can be carried out.
This matter is very much on all fours with the kind of problem that arises in the Health Service. We know that in America one of the greatest worries for the middle class is that when they become ill they have to pay out crippling sums of money to get better. They are, therefore, encouraged to have voluntary systems of insurance. We in this country say, "No. We recognise that that is a common risk which people have to face and it is a thing which can be best met by compulsory insurance."
I would apply the same analogy here. If one is a home owner one must recognise that, sooner or later, money must be spent on repairs. I suppose that at one time or another we have all kept our fingers crossed and said, "I hope that the damp will not come through next year", or, "We can go another year without putting a lot of new slates on the roof", and then we have bad weather and our improvidence catches up with us. I am sure that nearly all of us who have the joys of owner occupation have had that experience.
It is reasonable to say that the time has now come when that kind of risk is something which should be saved against. I therefore warmly support the part of the Amendment which deals with a repairs fund.
§ Mr. Mitchison
May I say to my hon. Friend that the fund is to be managed 629 by the local authority. That is a fairly wide term, and management of housing estates justifies arrangements about rent rebates, and so on. It is quite possible that that might cover the sort of arrangement my hon. Friend has in mind, but it may be that special provision ought to be made for it.
§ Mr. MacColl
I do not need to say to my hon. and learned Friend that I was not even breathing, whispering or thinking criticism of the comprehensiveness of his Amendment. He is a master draftsman whom we all admire. I was merely drawing out of it certain implications which might not have been immediately clear to somebody who read it quickly.
§ Mr. William Ross (Kilmarnock)
I should like also to express my appreciation of the draftsmanship of my hon. and learned Friend the Member for Kettering (Mr. Mitchison), and to say that it is exceeded only by the clarity and care of his exposition of his Amendment. I had almost given up hope, after what I had experienced over the past few days in another part of this building, of being able to understand any Amendment of any length at all, and I was terrified when I saw that this Amendment extended to 36 lines. But my hon. and learned Friend took us through it section by section and satisfied us that not only did he know what it meant, but that he could explain it to our satisfaction, so much so that he has almost convinced me.
I wish to say right away that I am not one of those who are greatly enamoured with proposals for assisting people to buy old houses. The conditions may be different in England or in Wales. We have had some saddening experience—and I am sure the hon. Gentleman the Joint under-Secretary of State for Scotland would be the first to agree with me—of people in Scotland who, by the compelling circumstances of housing shortage, have been forced to buy old houses; and what a mess they have got themselves into.
If we are to encourage the spread of house ownership in relation to older houses, we must have stipulations. I want to plead with the hon. Gentleman that what my hon. and learned Friend has proposed is the absolute minimum, if we have to have a proposal that is at once 630 practical, prudent and reasonable from the point of view, not only of the house purchaser, but of the local authority, too. He mentioned, and I agree with him, that the first section of the Amendment deals with the fact that it is for owner-occupiers only. That is a matter of obvious draftsmanship that simply had to be included.
When my hon. and learned Friend spoke about the second provision, which related to the standard and quality of the house and whether it was fit for human habitation, I should agree with him if that is all that was there. I probably would have been satisfied if that is all that had been there, but specific reference is made to the need to have the standard amenities that are laid down in relation to the improvement provisions to which we come later. In other words, it is not just to be a house that is fit for human habitation. If it were that case, it would not have my support and I hope that no local authority would be satisfied with it. If people are to buy houses, we want them to buy something that is worth while, something in which there is a reasonable measure of human comfort. I certainly would not be agreeable to a local authority putting forward 100 per cent. grants to allow people to buy substandard houses.
I plead with the Joint Under-Secretary of State for Scotland. He knows that the danger is there. How many sub-standard houses are there? There are about 120,000 of them. They are houses which, with every year that passes, are coming nearer and nearer to the state of being slums. I ask the hon. Gentleman to think of this in a United Kingdom context and to say that we cannot do without these stipulations that are in proviso (b).
I wish to put forward the suggestion that we have to be even more careful. These houses that may well be bought in Scotland will be houses that are part of a block of property. It is no good one of these houses being worth buying if 10 of them in the same block are slums, because when, eventually, judgment is passed on the property it will not be passed in relation to the one house but in relation to the 10 that are slums and the whole lot will come down. So it may well be that the local authority will need to be even more careful in relation to the surrounding houses.
631 I could not agree more with the remarks of my hon. Friend the Member for Widnes (Mr. MacColl) on the question of the repairs fund. This is where we have so often seen home ownership breaking down, with people scraping up everything they have to buy a house, not for the pride of being the owner-occupier, but out of the desperate need to have a house. Having spent everything, they suddenly come across something that they had overlooked, an unexpected need or liability that they did not even know existed in respect of the house they bought, particularly if they buy one which is part of a very much larger property.
I agree with my hon. Friend right away that when people become owner-occupiers they are proud of their houses. I am proud of mine, but there is a limit to what I can do with it. Sometimes my wife does not seem to appreciate that. There are certain jobs that the owner-occupier just cannot do for himself. Remembering that we are dealing with older houses, if the job is not done, the standard of the property, which was probably not very good at the start, anyway, will be considerably reduced. We must keep in mind the maintenance of the standard of the property, which we want to see improved.
I welcome very much the suggestion that we should have a repairs fund. Anyone who thinks about the matter will appreciate that this is just the kind of thing which will happen. Anyone who has ever bought a second-hand motor car knows exactly what happens after a week or after a month, when one suddenly discovers unexpectedly that it requires a tyre. So it goes on. To meet the unexpected in relation to the repairs to the house, it is essential that we should make this insurance by way of the repairs fund.
There is only one aspect that I wish to question. I do not know whether my hon. and learned Friend hopes to speak again. It concerns the variation of the amount that is to be put aside in respect of different houses. My hon. and learned Friend said that it should vary from 1 per cent. to 9 per cent., perhaps 1 per cent. in one case and 9 per cent. in another. Then, my hon. and learned Friend spoke not only about a fund, but about pooling. Is it my hon. and learned 632 Friend's suggestion that there should be a general pool, or is there to be a fund in respect of each house?
§ Mr. Mitchison
The intention was that there should be a general pool in respect of all the houses where there had been a 100 per cent, advance.
§ Mr. Ross
That is a very good idea, because it may well be that the unexpected will happen and something will crop up which the actual individual contribution or imagined assumed contribution in relation to the house will not meet. I am very glad that my hon. and learned Friend has cleared up that point.
The hon. Gentleman the Member for Croydon, North-West (Mr. F. Harris) said that all these stipulations would put a person off. We have to be fair to the Committee. If we did not make these three stipulations it would be possible for a person then to become not the owner-occupier, but the owner able to let the house, and probably to let the house at an uncontrolled rent, and make a profit out of what had been done by the local authority. We do not want that, and I am sure that the hon. Gentleman does not want that. Therefore, I think that the stipulations whereby the local authority should have the first option on the house is justified. After all, it is the local authority which has provided the 100 per cent. advance and it is the local authority which has either done the repairs or provided the money for the repairs.
I say to my hon. and learned Friend that I have always been suspicious of encouraging people to buy these older houses, and I have been particularly suspicious of that in Scotland. I put it to the Government, and particularly to the Joint Under-Secretary of State for Scotland, that we shall obviously have a certain amount of this encouragement, and that provisions such as these in the Amendment are the minimum which would be demanded by hon. Members, certainly on this side of the Committee, representing Scotland if they were to go forward with this extension of ownership of house property without having considerable doubts.
§ Mr. Bevins
I think I can quite safely say that the one thing which both sides of the Committee are agreed upon is the 633 desirability that houses, whether they be owner-occupied or rented, should he properly maintained. As hon. Gentlemen know, the Government have had something to do with that part of the problem during the last year.
Considering the research which the hon. Member for Widnes (Mr. MacColl) has made into this subject and his writings upon it, which I have had the opportunity of reading during the last few years, I thought his intervention today was almost uncharacteristically modest. He allowed himself only one exaggeration, I thought, when he was on the compulsion argument and when he referred to the universal acceptance of the idea of third-party insurance. That is perfectly true, but it happens that third-party insurance in the context in which he was speaking of it is compulsory in this country because the liability is unlimited. That is hardly so, to put it mildly, in house repairs and maintenance.
The hon. Member for Kilmarnock (Mr. Ross) referred eulogistically to the drafting of this Amendment by the hon. and learned Member for Kettering (Mr. Mitchison). I concede to him that it is a feat of drafting, but even so there are one or two things I shall venture to say about it in a moment.
As for the hon. Gentleman's apprehensions that local authorities or perhaps building societies may freely engage in a policy of advancing money, whether public money or private money, for the purchase of old houses of the sort he described—he described some in Scotland—I think I can reassure him that local authorities and building societies are just as hostile to the advancing of money on unfit properties as the hon. Gentleman himself. I do not think he need have many fears on that score.
§ Mr. Bevins
I think we perfectly well understand each other in this discussion.
I turn to the detail of the Amendment. The intention of the Amendment, as the hon. and learned Gentleman made quite clear, is to impose certain conditions 634 when 100 per cent. advances are made by local authorities, and the Amendment includes three or four conditions all of which, as my hon. Friend the Member for Croydon, North-West (Mr. F. Harris) said, are, by their nature, restrictive in their impact on house purchase. I agreed entirely with him when he said that to the extent that these conditions are restrictive they must in practice prove a discouragement to house purchase arrangements as between the citizen and the local authority.
I want to say a word or two about the four parts of the Amendment, first of all about paragraph (a) which, as the hon. and learned Gentleman said, has the effect of restricting advances to owner-occupiers who hold the freehold interest or a lease of at least fifteen years. I agree, of course, that the vast majority of advances under these provisions will, as in the past, be to owner-occupiers, but, of course, there is no reason in either logic or equity why these advances should be limited to owner-occupiers if the local authority considers that the security is sound. If anyone wants to buy a house, whether it be for owner-occupation or for letting to a third party, I think he should be free to do so under these arrangements, as, indeed, he is at present under our housing legislation.
I perfectly well understand, of course, why from his point of view the hon. and learned Gentleman takes a different line. He takes a different line because, although he says—and I believe him—that the party opposite now, in its reformed mood, supports a policy of home ownership, it is not particularly enamoured—I am being perfectly fair about this—of any extension of private ownership of rented houses.
Paragraph (b) requires that every house on which a 100 per cent. advance is made shall actually possess the standard amenities, or, failing that, shall have a standard grant, approved for the purpose of providing those amenities. Here, I am bound to say, there has been a little deviationism from the party pamphlet, "Homes of the Future". I think the hon. and learned Gentleman will agree that what the Opposition stated in that statement of policy was that the man who bought a house on a full mortgage would have to undertake to bring it up to date by providing amenities similar to the 635 standard amenities. I think I am probably right when I say that this part of the Amendment is aimed at implementing that declaration of policy.
I think hon. Gentlemen opposite will see that it goes beyond that, and the view of my right hon. Friend is that it should be left to the individual to decide when he will install the standard amenities if they do not already exist. Of course, in the overwhelming majority of cases they will exist.
Now a word on the pre-emption provided for in paragraph (d). This paragraph is a particularly important one and it would have a most restrictive effect on people contemplating seeking a mortgage from a local authority. As I have understood, what the party opposite have always said is that a man who has the advantage of a 100 per cent. mortgage would be required to give the local authority the first opportunity of buying his house if he wished to sell. The position here, of course, is that the purchaser is paying the market price for his home. There is no question of his purchasing a property below the market value. Why then compel him to give the local authorities a right to pre-emption? I do not begin to understand the reasoning behind that argument, but I do not believe for one moment that the machinery embodied in the Amendment for this purpose would work at all.
The Amendment says that the owner-occupier would be required to offer the house to the local authority at a price stipulated by him, that is the mortgagor. The Amendment then goes on to limit the owner-occupier to selling the house to any purchaser at the same figure. I think that the hon. and learned Member for Kettering will agree that that is what the Amendment says. If that is the case, then quite clearly the owner-occupier will feel obliged to keep the price offer to the local authority at a low level, because if he puts on too high a figure he will be in danger, first of all, of the local authority rejecting his offer and then of finding himself absolutely bound to offer the house to a third party at the same figure. One is bound to accept the fact that that is really a form of price control on the owner-occupier who buys his house on mortgage from the local authority, and I do not think that it is fair.
636 Let us come to the heart of the matter—the repairs fund. I have understood for a long time, as indeed has my right hon. Friend, that it has been the avowed intention of the party opposite to insist that people who purchase a house through a local authority, particularly those who do so on 100 per cent. mortgage, should contribute to a fund designed to cover the cost of external decorations and structural repairs. I believe that has been the intention for a long time past, but the Amendment seems to go a good deal further than that.
I have listened very carefully to the speech of the hon. and learned Member for Kettering and to the construction put on it by one of my hon. Friends. Rather to my astonishment, the hon. and learned Member spoke as though he thought that this paragraph dealing with the repairs fund was to be interpreted literally. One normally does that, of course, but I had assumed, in my innocence, that what the hon. and learned Member was seeking to do was to say to the person who borrowed money from a local authority for the purchase of a house, "Yes, you will pay your normal repayments of capital and interest and you will, in addition, pay a repairs contribution." Now, to my surprise, the hon. and learned Member confirms what he said earlier, that is to say, that out of repayments to the local authorities a certain proportion not exceeding 10 per cent. would be earmarked to a repairs fund.
§ Mr. Mitchison
I may be wrong, but I take the view that to provide anything else would be out of order in the Bill. This is simply a Bill allowing local authorities to increase the advances which they make. One could obviously have put conditions on that increase, to oblige people to pay into a repairs fund, but, quite apart from the merits or demerits of the matter, that would have imposed financial results not contemplated by the Bill. That is my view.
§ Mr. Bevins
I am much obliged to the hon. and learned Member. I do not wish to harp on this point, but I should not like it to go out from the Committee, from a responsible political party, that it would ever be conceivable for a local authority to create a repairs fund out of the normal repayments made on a mortgage. If that were the case it would never be possible for a local authority 637 to redeem its own indebtedness. Quite clearly, the local authority scheme would soon become insolvent.
I come now to the objections on principle to repairs contributions and to a repairs fund as I see them. It has been made perfectly clear that the repairs contributions are to find their way into a common pool which would be entirely under the control of the local authority, and the local authority would decide how and when the money would be spent. The house purchaser, although he would be compelled to contribute, would have no direct say in the maintenance and repair of his own house. That is a conception which I personally cannot accept, and I do not believe that it would be acceptable to anything more than a very small residue of owner-occupiers.
We have also to be realistic and balanced about this kind of thing. Here we are dealing with a considerable number of local authorities, all of whom inquire about the financial status of the prospective borrower and do not normally lend unless they are satisfied that the whole business of house ownership is within the capacity of the borrower.
It may or may not have been overlooked, but it is the fact that, in any case, local authorities have power under Section 44 of the Housing Act, 1958, to accept deposits from mortgagors for the purpose of repairs and to pay interest on those moneys to the depositors. That, of course, does not envisage the idea of a pool, but of deposits paid in and drawn out by individuals as and when they require them for repairs. As far as I have been able to judge, this provision has not been very widely used by councils. One can only assume that there might well have been a feeling that the administrative work would not justify the additional results which the system would bring about.
On the matter of compulsion, which was mentioned by the hon. Member for Widnes, I certainly ask myself the question why mortgagors who borrow money from a local authority should be compelled to make contributions to a repairs fund. In theory, there may be something to be said for a purchaser having to set aside money for repairs, in the same sense that P.A.Y.E. deductions are an advan- 638 tage to the Inland Revenue. But hon. Members on both sides of the Committee who know their way about the country understand that the overwhelming majority of people who embark upon house purchase are responsible people who are quite capable of looking after their own affairs and of taking a pride in the property which they are in the process of owning. They are not crying out to be mollycoddled.
It is all very well to talk about the great need for some special provision of this sort, but I have never come across any demand from any section of the public for a repairs fund of this kind. Without a fund, a man can please himself whether he has the exterior of his house repainted in May or in September. He can plan repairs to suit the circumstances of his domestic budget, and domestic budgets, of course, vary very widely.
Two hon. Gentlemen opposite were at pains to emphasise the desirability of creating a fund of this kind, chiefly because we are now entering into the realm of 100 per cent. mortgages. It was rather suggested that local authorities would now be advancing moneys to people who were relatively impecunious. I do not accept that for one moment. The fact is that most houses bought on mortgage today are bought either by newly wedded couples or else by relatively young families. I know of people who would rush at the attraction of a 100 per cent. house mortgage because they want to pay cash down for furniture and fittings. Equally I know of other people who would prefer to buy furniture and fittings on hire purchase and to accept a lower mortgage. One cannot draw any definite conclusion from that.
In the world in which we live today people who may have limited means find available to them a number of facilities to help them in maintaining their own homes, which I recognise is not always easy. Indeed, there are literally thousands of reputable building contractors today who, week after week, are advertising repairs and maintenance for owner-occupiers on a two-year basis at a nominal rate of interest. Indeed, quite a number of the banks are prepared to finance work of that kind.
I return to the point I made earlier, that whatever may have been said in our 639 debate so far this afternoon, local authorities have the opportunity under existing legislation to accept deposits from mortgagors for this purpose. The fact that these facilities have not been widely taken up by local authorities is, in our belief, evidence of the fact that there is not a great deal of demand for them.
§ Mr. Mitchison
The hon. Gentleman has accepted some part of this Amendment and objected to other parts. I want to call his attention to one or two things, in particular to the oldest piece of legislation on this matter, the Small Dwellings Acquisition Act, 1899, which is still in force and still used. That Act provides in terms that the advances shall only be made to owner-occupiers, and as regards the advances to leaseholders the provision is somewhat more stringent than is contemplated in this Amendment. The conditions imposed there affecting a house purchased by means of an advance are that the proprietor of the house shall reside in it. Not only that, but in the matter of compulsionThe house shall be kept insured against fire to the satisfaction of the local authority, and the receipts for the premiums produced when required by them:Moreover,The house shall be kept in good sanitary condition and good repair:The house shall not be used for the sale of intoxicating liquors, or in such a manner as to be a nuisance to adjacent houses:The local authority shall have power to enter the house by any person, authorised by them in writing for the purpose, at all reasonable times for the purpose of ascertaining whether the statutory conditions are complied with.Goodness knows, the right hon. Gentleman and his right hon. Friends have messed about with quite a lot of housing legislation, but they have not touched that Act and its conditions are still imposed. To complain that what I am seeking to impose by way of conditions here is oppressive seems to me, in those circumstances, ridiculous. It is fantastic that when this Act has not been repealed and has been in use under successive Tory Governments, and was brought in originally by a Government which at that date certainly was not a Labour Government, there should be complaints now.
§ Mr. Mitchison
Yes, in 1899 it probably was a Tory Government. This only shows how much farther back the Tory Party has succeeded in getting in the interval between 1899 and 1959—sixty years advance backwards. So I really think that those complaints today are a little off the mark.
Let us turn from that to the practical side of the matter and get one thing clear first. These 100 per cent. advances are coming along by the side of existing legislation for 90 per cent. advances and in the same Bill as an extension of the building societies' power and willingness to make similar 90 per cent. or 95 per cent. advances. These are brought in for a purpose, and the purpose is to provide for people who cannot put down the full deposit. The right hon. Gentleman and his hon. Friend know perfectly well that there are many such people about, that they are quite vocal about it, and that if nothing is done it will be one additional reason why they will not vote for the Tory Party at the next General Election.
This Bill is really a rather minor vote-catching Measure that is intended to appear attractive to the various people concerned in owning their own house in one way or another. It is for that class of person and for the type of house that such a person will get. I do not say that every person who takes advantage of the Measure would be unable to find the deposit, but that is the reason for it. The majority of them will be such people and the majority of the houses concerned will be rather old ones, or out of repair, or both.
Therefore, it is necessary to have a repairs provision in the Bill, and the only thing that worries me is that I have been more moderate than existing legislation by not providing definitely an obligation to keep the house in repair. What I have done is to try to help the man who needs help, particularly in cases of this kind, by providing for a repairs Clause.
The hon. Gentleman is right in one respect. He made it sound rather gloomy when he said that the resulting municipal scheme will be insolvent. So it will. It involves in the long run a contribution from the rates, for this reason, that the repairs fund will not go merely towards repayment, it will go towards preserving the security of the mortgage on the house. 641 After all, is not that a reasonable thing to do? The Government will be lending money for a long term of years on property which, as my hon. Friends pointed out, is bound to be a wasting asset. It is property which, in view of the terms of the Bill, is likely not to be particularly good property of its kind and the money will be lent to persons who are—I will not say that they are going to be bankrupt, but who are not going to be well off. It is reasonable prudence, if that is being done, to take sonic steps other than saying that it is the personal responsibility of the borrower to preserve the security upon which the money is being lent.
§ Mr. Bevins
This is a most important point. Do I understand the hon. and learned Gentleman to be saying that if a person secures a 100 per cent. mortgage from a local authority he sees no objection to that financial arrangement being subsidised by the ratepayer, but that if the mortgage is for only 90 per cent. then he would not regard it as right that the financial arrangement should be subsidised?
§ 7.0 p.m.
§ Mr. Mitchison
The hon. Gentleman keeps forgetting that what we are doing now is seeking to amend a Clause providing for 100 per cent. mortgages. There is such a thing as control of finance and Money Resolutions by the Government of the day. This is all that I can do here. The case of the 100 per cent. borrower seems to me to be different from that of the 90 per cent. borrower. The pamphlet which I have just been reading recognises that. How far I am in order in saying this I do not know. The hon. Gentleman's question was out of order if my answer is.
My reply to the hon. Gentleman is that I am willing to recognise that the taxpayer and the ratepayer between them are making a good bargain by keeping firm the security upon which the advance is made and keeping under repair the houses of the country. I regard it as an extremely narrow-minded point of view to suppose that a contribution for the two purposes that I have indicated is a mistake. I should have thought that view was inconsistent with the purport of a mass of housing legislation where assistance has been given towards buying and maintaining houses on terms which could 642 not possibly he profitable. It does not frighten me in the least. I think it is thoroughly good.
Let me now turn to the succession provisions. I am the first to admit that someone may be able to think of a better way of doing it, but it does not seem to me to be very difficult or complicated. The Small Dwellings Acquisition Act provides not only that the man must offer the dwelling to the local authority, but that he must stay there for three years. I do not know what would happen if he wanted to leave. I imagine he would get permission. I cannot regard the proposition that the first offer must be made to the local authority as at all unreasonable when it is the local authority which by means of a 100 per cent. advance has paid for the house in the first place. I call it perfectly reasonable.
It is said that the man will be tied if he has to offer the house at a price to the local authority and then cannot sell to somebody else at a higher price. I agree; I said that earlier. That is why I have left it to the man. It is in his interest to ask a reasonable price. I offered to bring in the district valuer, but this frightened an hon. Member opposite and I rather glossed the matter over for that reason. Why should we not have the district valuer? If we get the chance we will try at a later stage to bring him in.
It was only in an attempt to meet some of the more unreasonable objections front the Government side that I put in the other ingenious piece of machinery, and hon. Members opposite did not like it because it prevented a man asking an excessive price from a local authority. The Tory Party does not mind if a man does that. It is part of Tory freedom that the man should be able to ask too much if it is only a local authority to which he is bound to offer the house.
The Amendment may appear in a Labour Party pamphlet and for that reason be anathema to the Government benches, but it follows very closely the lines of existing legislation. It goes beyond existing legislation in two respects. First, it makes practical efforts to help people who have to buy their houses because, togetherwise, they cannot get anywhere to live and have not enough money to pay the deposit formerly required, and it makes a practical effort to help them 643 by means of a repairs fund. Secondly, it ensures that the local authority has some control over the further disposition of properties upon which it has made 100 per cent. advances.
§ Question put, That those words be there added:—
§ The Committee divided: Ayes 131, Noes 182.645
|Division No. 33.]||AYES||[7.5 p.m.|
|Ainsley, J. W.||Hayman, F. H.||Popplewell, E.|
|Allen, Arthur (Bosworth)||Henderson, Rt. Hn. A. (Rwly Regis)||Price, Philips (Gloucestershire, w.)|
|Allen, Scholefield (Crewe)||Herbison, Miss M.||Probert, A. R.|
|Bence, C. R. (Dunbartonshire, E.)||Howell, Charles (Perry Barr)||Randall, H. E.|
|Benn, Hn. Wedgwood (Bristol, S.E.)||Hoy, J. H.||Reeves, J.|
|Benson, Sir George||Hughes, Cledwyn (Anglesey)||Reynolds, G. W.|
|Blackburn, F.||Hughes, Emrys (S. Ayrshire)||Roberts, Rt. Hon. A.|
|Bottomley, Rt. Hon. A. G.||Hughes, Hector (Aberdeen, N.)||Robinson, Kenneth (St. Pancras, N.)|
|Bowden, H. W. (Leicester, S.W.)||Hunter, A. E.||Rogers, George (Kensington, N.)|
|Brockway, A. F.||Hynd, H. (Accrington)||Ross, William|
|Broughton, Dr. A. D. D.||Irvine, A. J. (Edge Hill)||Short, E. W.|
|Brown, Thomas (Ince)||Irving, Sydney (Dartford)||Silverman, Julius (Aston)|
|Burton, Miss F. E.||Janner, B.||Silverman, Sydney (Nelson)|
|Butler, Herbert (Hackney, C.)||Jay, Rt. Hon. D. P. T.||Simmons, C. J. (Brierley Hill)|
|Champion, A. J.||Jeger, George (Goole)||Skeffington, A. M.|
|Chetwynd, G. R.||Jeger, Mrs. Lena (Holbn & st. pnos, S.)||Slater, J. (Sedgefield)|
|Clunie, J.||Jones, Rt. Hon. A. Creech (Wakerield)||Smith, Ellis (Stoke, S.)|
|Colbek, P. H. (Birkenhead)||Jones, Jack (Rotherham)||Snow, J. W.|
|Corbet, Mrs. Freda||Jones, J. Idwal (Wrexham)||Sorensen, R. W.|
|Craddock, George (Bradford, S.)||Jones, T. W. (Merioneth)||Sparks, J. A.|
|Crossman, R. H. S.||Key, Rt. Hon. C. W.||Spriggs, Leslie|
|Darling, George (Hillsborough)||Lawson, G, M.||Steele, T.|
|Davies, Harold (Leek)||Storehouse, John|
|Deer, G.||Ledger, R. J.||Stones, W. (Consett)|
|de Freitas, Geoffrey||Lindgren, G. S.||Swingler, S. T.|
|Delargy, H. J.||Mabon, Dr. J. Dickson||Taylor, Bernard (Mansfield)|
|Dodds, N. N.||McAlister, Mrs. Mary||Thomson, George (Dundee, E.)|
|Dugdale, Rt. Hn. John (W. Brmwch)||McCann, J.||Thornton, E.|
|Ede, Rt, Hon. J. C.||MaoColl, J. E.||Timmons, J.|
|Edwards, Robert (Bilston)||McKay, John (Wallsend)||Viant. S. P.|
|Evans, Albert (Islington, S.W.)||McLeavy, Frank||Warbey, W. N.|
|Fernyhough, E.||Mahon, Simon||Weitzman, D.|
|Fitch, Alan||Mann, Mrs. Jean||Wells, Percy (Faversham)|
|Fletcher, Eric||Messer, Sir F.||Wells, William (Walsall, N.)|
|Fraser, Thomas (Hamilton)||Mikardo, Ian||White, Mrs. Elrene (E. Flint)|
|Gaitskell, Rt. Hon. H. T. N.||Mitchison, G. R.||Wilkins, W. A.|
|George, Lady Megan Lloyd (Car'then)||Moody, A. S.||Williams, W. R. (Openshaw)|
|Gibson, C. w.||Morrison, Rt. Hn, Herbert (Lewis'm, S.)||Willis, Eustace (Edinburgh, E.)|
|Grenfell, Rt. Hon. D. R.||Noel-Baker, Francis (Swindon)||Winterbottom, Richard|
|Grey, C. F.||Oliver, G. H.||Woodburn, Rt. Hon. A.|
|Griffiths, Rt. Hon. James (Llanelly)||Owen, W. J.||Woof, R. E.|
|Hale, Leslie||Padley, W. E.||Zilliacus, K.|
|Hamilton, W. W.||Palmer, A. M. F.|
|Hannan, W.||Parker, J.||TELLERS FOR THE AYES:|
|Hastings, S.||Pentland, N.||Mr. J. Taylor and Mr. J. T. Price.|
|Agnew, Sir Peter||Brooke, Rt. Hon. Henry||Duncan, Sir James|
|Altken, W. T.||Brooman-White, R. C.||Eden, J. B. (Bournemouth, West)|
|Alport, C. J. M.||Browne, J. Nixon (Craigton)||Elliott, R.W. (Ne'castle upon Tyne, N.)|
|Arbuthnot, John||Bryan, P.||Errington, Sir Eric|
|Armstrong, C. W.||Burden, F. F. A.||Fell, A.|
|Ashton, H.||Carr, Robert||Finlay, Graeme|
|Baldwin, Sir Archer||Channon, P.||Fisher, Nigel|
|Barber, Anthony||Clarke, Brig. Terence (Portsmth, W.)||Gammans, Lady|
|Barter, John||Cole, Norman||Garner-Evans, E. H.|
|Baxter, Sir Beverley||Conant, Maj. Sir Roger||Gibson-Watt, D.|
|Bell, Philip (Bolton, E.)||Cooper-Key, E. M.||Glover, D,|
|Bell, Ronald (Bucks, S.)||Glyn, Col. Richard H.|
|Bennett, F. M. (Torquay)||Craddock, Beresford (Spelthorne)||Goodhart, Philip|
|Bevins, J. R. (Toxteth)||Crosthwaite-Eyre, Col. O. E.||Graham, Sir Fergus|
|Bidgood, J. C.||Crowder, Sir John (Finchley)||Green, A.|
|Biggs-Davison, J. A.||Crowder, Petre (Ruislip—Northwood)||Gresham Cooke, R.|
|Bingham, R. M.||Cunningham, Knox||Grimond, J.|
|Bishop, F. P.||Dance, J. C. G.||Harris, Frederic (Croydon, N. W.)|
|Black, Sir Cyril||Davidson, Viscountess||Harris, Reader (Heston)|
|Body, R. F.||Deedes, W. F.||Harrison, Col. J. H. (Eye)|
|Bossom, Sir Alfred||de Ferrantl, Basil||Heald, Rt. Hon. Sir Lionel|
|Boyd-Carpenter, Rt. Hon. J. A.||Digby, Simon Wingfield||Henderson, John (Cathcart)|
|Boyle, Sir Edward||Dodds-Parker, A. D.||Hicks-Beach, Maj. W. W.|
|Braine, B. R.||Donaldson, Cmdr. C. E. McA.||Hill, Rt. Hon. Charles (Luton)|
|Braithwaite, Sir Albert (Harrow, w.)||Doughty, C. J. A.||Hill, Mrs. E. (Wythenshawe)|
|Bromley-Davenport, Lt.-Col. W. H.||du Cann, E. D. L.||Hill, John (S. Norfolk)|
|Hinchingbrooke, Viscount||Macmillan, Maurice (Halifax)||Sharpies, R. C.|
|Hirst, Geoffrey||Macpherson, Niall (Dumfries)||Shepherd, William|
|Hobson, John (Warwick & Leam 'gt' n)||Maddan, Martin||Smyth, Brig. Sir John (Norwood)|
|Holland-Martin, C. J.||Markham, Major Sir Frank||Spearman, Sir Alexander|
|Hope, Lord John||Marlowe, A. A. H.||Speir, R. M.|
|Hornby, R. P.||Marshall, Douglas||Steward, Harold (Stockport, S.)|
|Horobin, Sir Ian||Mawby, R. L.||Steward, Sir William (Woolwich, W.)|
|Howard, Gerald (Cambridgeshire)||Maydon, Lt.-Comdr. S. L. C.||Storey, S.|
|Hutchison, Michael Clark(E'b'gh, S.)||Medlicott, Sir Frank||Stuart, Rt. Hon. James (Moray)|
|Hutchison, Sir Ian Clark (E'b'gh, W.)||Mott-Radclyffe, Sir Charles||Summers, Sir Spencer|
|Hutchison, Sir James (Scotstoun)||Nabarro, G. D. N.||Sumner, W. D. M. (Orpington)|
|Iremonger, T. L.||Nairn, D, L. S.||Temple, John M.|
|Irvine, Bryant Godman (Rye)||Noble, Michael (Argyll)||Thomas, P. J. M. (Conway)|
|Jenkins, Robert (Dulwich)||Nugent, G. R. H.||Thompson, R. (Croydon, S.)|
|Jennings, J. C. (Burton)||Oakshott, H. D.||Thornton-Kemsley, Sir Colin|
|Johnson, Dr. Donald (Carlisle)||Orr, Capt. L. P. S.||Turner, H, F. L.|
|Johnson, Eric (Blackley)||Orr-Ewing, C. Ian (Hendon, N.)||Tweedsmuir, Lady|
|Joseph, Sir Keith||Page, R. G.||Vickers, Miss Joan|
|Kaberry, D||Panned, N. A. (Kirkdale)||Vosper, Rt. Hon. D. F.|
|Kerr, Sir Hamilton||Partridge, E.||Wade, D. W.|
|Kershaw, J. A,||Peel, W. J.||Wakefield, Edward (Derbyshire, W.)|
|Kirk, P. M.||Pickthorn, Sir Kenneth||Wakefield, Sir Wavell (St. M'lebone)|
|Lagden, G, W.||Pilkington, Capt. R. A.||Wall, Patrick|
|Lambton, Viscount||Pitt, Miss E. M.||Ward, Rt. Hon. G. R. (Worcester)|
|Pott, H. P.||Ward, Dame Irene (Tynemouth)|
|Leavey, J. A.||Powell, J. Enoch||Webster, David|
|Legge-Bourke, Maj. E. A. H.||Price, David (Eastleigh)||Whitelaw, W. S. I.|
|Legh, Hon. Peter (Petersfield)||Price, Henry (Lewisham, W.)||Williams, Paul (Sunderland, S.)|
|Lindsay, Hon. James (Devon, N.)||Rawlinson, Peter||Williams, R. Dudley (Exeter)|
|Lloyd, Ma]. Sir Guy (Renfrew, E.)||Redmayne, M.||Wilson, Geoffrey (Truro)|
|Longden, Gilbert||Rees-Davies, W. R.||Wolrige-Gordon, Patrick|
|Loveys, Walter H.||Roberts, Sir Peter (Heeley)||Woollam, John Victor|
|Lucas, Sir Jocelyn (Portsmouth, S.)||Robertson, Sir David|
|Lucas-Tooth, Sir Hugh||Robinson, Sir Roland (Blackpool, S.)||TELLERS FOR THE NOES:|
|Macdonald, Sir Peter||Roper, Sir Harold||Mr. Hughes-Young and|
|Maclean, Sir Fitzroy (Lancaster)||Ropner, Col. Sir Leonard||Mr. Chichester-Clark.|
|Macmillan, Rt. Hn. Harold (Bromley)||Russell, R. S.|
§ 7.15 p.m.
§ Mr. H. Brooke
I beg to move, in page 4, line 5, at the end to add:(2) So much of the said section forty-three and of the said section seventy-five as prevents the making of an advance thereunder in respect of a house the estimated value of which or of the fee simple of which exceeds five thousand pounds shall cease to have effect.There is a story behind the Amendment which I should like to disclose. A little time ago, the Hampstead Borough Council made official representations to the Minister of Housing and Local Government inviting his attention to this figure of £5,000 and asking whether it could be reviewed. At the same time, to make assurance doubly sure, it asked the Member of Parliament for that Borough to have a word with the Minister of Housing and Local Government. Both those people got together and brought Scotland into consultation, since the same limiting figure appears in the Scottish Act.
As a result, the Government concluded that there was no need to retain this limiting figure of £5,000, either in Section 43 of the Housing (Financial Provisions) Act, 1958, or Section 75 of the Housing (Scotland) Act, 1950, the corresponding Scottish provision. The basis on which the Government 646 have been proceeding has been to release local authorities from restrictions which seemed to be unnecessary, certainly when those were restrictions to which building societies were not subject.
It may be asked in what circumstances a local authority would be likely to want to lend on a house with a valuation of more than £5,000. One must bear in mind that the provisions to which I have referred permit advances to be made not only for the purchase but for the conversion of houses. It is in the interests of a local authority if an under-used large house in its area can be purchased and converted by somebody, thereby providing additional housing accommodation.
It is certainly the case in London that houses of that kind are in the market. They have a value of more than £5,000, and if that limit were left on the Statute Book, it would prevent local authorities from doing what would seem on general principle to be perfectly reasonable. The Government considered the matter and concluded that, while the amount could be raised to take account of the changed value of money, the simplest course was to remove the limit altogether.
Local authorities are responsible bodies, and this is an optional power. There is no need whatever for a local 647 authority to go beyond a valuation of £5,000 if it does not wish to do so. At the same time, it seems unreasonable that Parliament should stand in the way when a local authority, responsibly exercising its normal functions, sees a chance of assisting a would-be owner and a would-be converter to provide additional housing accommodation in its area. On those considerations, I commend the Amendment to the Committee.
§ Mr. Mitchison
On the last Amendment, we were considering the extent to which the Tory Party had advanced backwards in the course of sixty years. In this case, fortunately, we need consider only the extent to which it has advanced backwards over ten years. This provision was introduced in the Housing Act, 1949, and it is now proposed to do away with it. It is proposed after consultation between Scotland and England—and we may take it that Wales was also included. It came from a very partial point of view and the only representation which appears to have been made to the Minister came from Hampstead Borough Council. Hampstead is not an altogether typical constituency. At any rate, not all the constituencies represented on this side of the House are as prosperous as that.
Let us first consider what the Tories said when this provision was introduced in 1949. The Tories in the Committee on the 1949 Measure moved an Amendment to reduce the figure of £5,000 to £3,000. There was an argument about that.
The basis of the argument was the control of private building that was going on at that time, which was quite soon after the end of the last war, and which had been imposed for reasons which I hope and believe no longer apply. Lieut.-Colonel Walter Elliot, as he then was, speaking on behalf of the Tory Party, said:The Minister … attempted to ride out of his difficulty on the point that this was an attempt to restrict the activities of local authorities, whereas he wished to extend them"—that is because the Tories were in favour of £3,000 at the time—If the Minister would extend them in the places where it is really desirable and necessary, where it would really lead to an alteration in the privileges of the private individual—that is to say, if he would extend the limits 648 under which local authorities can license building for the private individual—then we would be all for him. Then he would have our unanimous support,"—(OFFICIAL REPORT, Standing Committee C, 12th April, 1949; c. 1884.]Their attitude in 1949, therefore, was that we should first reduce the limit from £5,000 to £3,000, and if we did not agree to that they would say that it was all due to the control on private house building, and but for that they would be warmly in support of the figure of £5,000. We have found them inconsistent on many occasions, and much more recently than in 1949, so that we must not put the argument wholly on those grounds.
Who will benefit from the removal of the limit? One person will be the owner-occupier who cannot afford to do the work himself. It will benefit people like the Duke of Omnium by helping them to extend their ancestral castles, or tidy them up, or whatever needs to be done. It will help those who have large houses to get advances if they need them, although they may be doing well enough now, with the half-crowns of visitors, not to need it as much as they used to. At any rate, they are not the sort of people who particularly need to be helped out of public funds, rates and taxes.
Another person who will be helped is the professional convertor—the man who buys these houses and makes a little money out of converting them. We have not had many details about the case of Hampstead, and we have not heard of a single house which will not be added to or bought or converted because of the £5,000 limit. I do not believe that that limit does any harm to anybody. It merely prevents the provision of this assistance being extended to doubtful, and in many cases wholly undeserving, instances. I can see no reason whatever for the Amendment, and I do not think that we should accept it.
At any rate, we should not accept it without a much fuller statement of the reasons for it than the Minister has been able to give us today, and it ought to be accepted, if it is accepted at all, only if reservations are added to prevent it being used for the benefit of those people who do not need to take advantage of it, and those who take advantage of it only in order to get a little more money by speculation and conversion.
§ Mr. Page
The Amendment will be extremely beneficial, especially in the housing of elderly people. In my constituency there are many large houses with a value of over £5,000. One of them, formerly occupied by two elderly spinsters—it was definitely under-occupied—was recently purchased by a social welfare organisation which looks after elderly people. It has now been converted into one-roomed flatlets. I believe that there are about twelve or fourteen of these flaflets, and they are used purely and simply for elderly people.
In that case the institution had the necessary funds to carry out the work, but there are other houses in my constituency, and throughout the country, which are now under-occupied, and which it is extremely difficult to sell without some assistance of this sort. This assistance will pay local authorities well, because it will be creating dwellings for many people through the conversion of large houses. The Amendment will provide the opportunity for increasing housing accommodation, and I strongly support it.
§ Mr. C. W. Gibson (Clapham)
There are many houses of the kind referred to by the hon. Member for Crosby (Mr. Page) in my constituency, but the people who convert them for old people's benefit are the borough councils who do not need this power because they can do the work under their existing powers, and do it more successfully than private people.
§ Mr. Gibson
They do it in my part of London, and I know that a good deal of conversion of very large houses is being done in another part of London, for the benefit of elderly people. I say that although the political complexion of the council I have in mind is not mine. The removal of the £5,000 limit will not help that council because it already has the necessary powers.
I was present in the debate in Committee on the 1949 Bill when the £5,000 limit was inserted, and I remember the very violent opposition put up by the Tories, and also their reasons for opposing the insertion. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) has a good case for arguing that the only people whom the Amendment will help are the speculative builders 650 who will be able to go to a local authority and obtain permission for a loan of up to £5,000 in order to convert old houses into small flats, and make a very considerable profit in the process.
I did not think that that was the purpose of the Bill; I thought that the Bill was introduced in order to provide homes for people who have not been able to get them because they have not been able to find the necessary capital. It is completely wrong to widen the application of the Bill to such an extent that it becomes a property exploiter's paradise, enabling him to pick up enormous profits.
Local housing associations can do the job, and are doing it in some parts of London, under their existing powers. They can do it with assistance from the local authorities, and if it were not for the excessive prices at which some of these houses are being sold they would probably be able to do a great deal more. If we allow the Amendment to go through we want it to be clearly understood that it is not one which will assist ordinary wage earners to buy houses of their own on reasonable terms.
§ Mr. Norman Cole (Bedfordshire, South)
I have followed the argument of the hon. and learned Member for Kettering (Mr. Mitchison) very closely, but I could not understand why he cavilled at the consistency of our policy.
§ Mr. Mitchison
The hon. Member has missed the point. The Tory Party said that but for the existence of the controls it would support the £5,000 figure completely.
§ Mr. Cole
If we would have supported the figure of £5,000 with a diminution of controls on private building in 1949, how much more consistent it is, when there are no controls, to take the limit off 651 altogether. I suggest that the hon. and learned Member has underlined the consistency of our policy.
The hon. and learned Member has got the idea into his mind that as soon as this magic sum of £5,000 is mentioned all the people who want to buy houses to live in will rush along to get loans from the local council. He overlooks the other side of the picture. It will be possible to provide homes in the form of flatlets or parts of a house because of this provision, and I should have thought that the hon. and learned Gentleman would be pleased that this presents one more possibility of providing homes for people. I am surprised that he stresses the other point of view. A large number of people who desire to buy a house for £5,000 and upwards would not go to the local council for assistance. They would have resources of their own or would negotiate the matter through a bank or a building society.
The hon. and learned Gentleman did not refer to the discretion of local authorities to deal with this matter as they think tit. As the Minister pointed out, this is not obligatory, it is permissive. We may leave it to the discretion and common sense of local authorities.
§ 7.30 p.m.
§ Mr. Mitchison
I hope that we may arrive at a decision on this matter fairly rapidly, and I advise my hon. Friends to vote against the Amendment. I can give my reason briefly. It has been indicated by the hon. Member for Bedfordshire, South (Mr. Cole). I am not convinced that there are any cases in which the £5,000 limit has prevented acquisition or conversion. I believe that people who would require more than £5,000 can carry out the operation for themselves. I do not think there are any cases where it is desired to raise the limit. I have not heard of any, except possibly in Hampstead, which is not good enough.
All I would say about the discretion of local authorities is that I would trust a great many local authorities in this matter, but I can think of some local authorities in respect of which it would be a good thing to retain a limit which has lasted for ten years now and which is being withdrawn just before a General Election for reasons which at any rate are not very detailed.
§ Question put, That those words be there added:—
§ The Committee divided: Ayes 169, Noes 121.653
|Division No. 34.]||AYES||[7.33 p.m.|
|Agnew, Sir Peter||Craddock, Beresford (Spelthorne)||Hill, John (S. Norfolk)|
|Aitken, W. T.||Crosthwaite-Eyre, Col. O. E.||Hinchingbrooke, Viscount|
|Alport, C. J. M.||Crowder, Sir John (Finchley)||Hirst, Geoffrey|
|Arbuthnot, John||Cunningham, Knox||Hobson, John(Warwick & Leam'gt'n)|
|Armstrong, C. W.||Dance, J. C. G.||Holland-Martin, C. J.|
|Ashton, H.||Davidson, Viscountess||Hope, Lord John|
|Baldwin, Sir Archer||Deedes, W. F.||Hornby, R. P.|
|Barber, Anthony||de Ferranti, Basil||Howard, Gerald (Cambridgeshire)|
|Barter, John||Digby, Simon Wingfield||Hughes-Young, M. H. C.|
|Baxter, Sir Beverley||Dodds-Parker, A. D.||Hutchison, Michael Clark(E'b'gh, S.)|
|Bell, Philip (Bolton, E.)||Donaldson, Cmdr, C. E. McA.||Hutchison, Sir Ian Clark (E'b'gh, W.)|
|Bell, Ronald (Bucks, S.)||du Cann, E. D. L.||Hutchison, Sir James (Scotstoun)|
|Bennett, F. M. (Torquay)||Dunoan, Sir James||Iremonger, T. L.|
|Bevins, J. R. (Toxteth)||Eden, J. B. (Bournemouth, West)||Irvine, Bryant Godman (Rye)|
|Bidgood, J. C.||Elliot, R.W. (Ne'castle upon Tyne, N.)||Jenkins, Robert (Dulwich)|
|Biggs-Davison, J. A,||Errjngton, Sir Eric||Jennings J. C (Burton)|
|Bingham, R. M.||Finlay, Graeme||Johnson, Dr. Donald (Carlisle)|
|Bishop, F. P.||Fisher, Nigel||Johnson, Eric (Blackley)|
|Black, Sir Cyril||Gammans, Lady||Joseph, Sir Keith|
|Body, R. F.||Garner-Evans, E. H.||Kerr, Sir Hamilton|
|Bossom, Sir Alfred||Gibson-Watt, D.||Kershaw, J. A.|
|Boyd-Carpenter, Rt. Hon. J. A.||Glover, D.||Kirk, P. M.|
|Boyle, Sir Edward||Glyn, Col. Richard H.||Lagden, C. W.|
|Braine, B. R.||Goodhart, Philip||Lambton, Viscount|
|Braithwaite, Sir Albert (Harrow, W.)||Graham, Sir Fergus||Leavey, J. A.|
|Brooke, Rt. Hon. Henry||Green, A.||Legge-Bourke, Maj. E. A. H.|
|Brooman-White, R. G.||Gresham Cooke, R.||Legh, Hon. Peter (Petersfield)|
|Browne, J. Nixon (Craigton)||Grimond, J.||Lindsay, Hon. James (Devon, N.)|
|Burden, F. F. A.||Harris, Reader (Heston)||Lloyd, Maj. Sir Guy (Renfrew, E.)|
|Carr, Robert||Harrison, Col. J. H. (Eye)||Longden, Gilbert|
|Channon, P.||Heald, Rt. Hon. Sir Lionel||Loveys, Walter H.|
|Clarke, Brig. Terence (Portsmth, W.)||Henderson, John (Cathcart)||Lucas, Sir Jocelyn (Portsmouth, S.)|
|Cole, Norman||Hicks-Beach, Maj. W. W.||Lucas-Tooth, Sir Hugh|
|Conant, Maj. Sir Roger||Hill, Rt. Hon. Charles (Luton)||Macmillan, Rt. Hn. Harold (Bromley)|
|Cooper-Key, E. M.||Hill, Mrs. E. (Wythenshawe)||Macmillan, Maurice (Halifax)|
|Macpherson, Niall (Dumfries)||Powell, J. Enoch||Thompson, R. (Croydon, S.)|
|Maddan, Martin||Price, David (Eastleigh)||Thornton-Kemsley, Sir Colin|
|Markham, Major Sir Frank||Price, Henry (Lewisham, W.)||Turner, H. F. L.|
|Marlowe, A. A. H.||Rawlinson, Peter||Tweedsmuir, Lady|
|Marshall, Douglas||Redmayne, M.||Vickers, Miss Joan|
|Mawby, R. L.||Rees-Davies, W. R.||Vosper, Rt. Hon. D. F.|
|Maydon, Lt.-Comdr. S, L. C.||Roberts, Sir Peter (Heeley)||Wade, D. W.|
|Medlicott, Sir Frank||Robinson, Sir Roland (Blackpool, S.)||Wakefield, Edward (Derbyshire, W.)|
|Mott-Radclyffe, Sir Charles||Roper, Sir Harold||Wakefield, Sir Waved (St. M'lebone)|
|Nabarro, C. D, N.||Ropner, Col. Sir Leonard||Wall, Patrick|
|Noble, Michael (Argyll)||Russell, R. S.||Ward, Rt. Hon. G. R. (Worcester)|
|Nugent, G. R. H.||Sharples, R. C.||Ward, Dame Irene (Tynemouth)|
|Oakshott, H. D.||Shepherd, William||Webster, David|
|Orr-Ewing, C. Ian (Hendon, N.)||Smyth, Brig. Sir John (Norwood)||Whitelaw, W. S. I.|
|Page, R. G.||Spearman, Sir Alexander||Williams, Paul (Sunderland, S.)|
|Panned, N. A. (Kirkdale)||Speir, R. M.||Williams, R. Dudley (Exeter)|
|Partridge, E.||Steward, Harold (Stockport, S.)||Wilson, Geoffrey (Truro)|
|Peel, W. J.||Storey, S.||Wolrige-Gordon, Patrick|
|Pickthorn, Sir Kenneth||Summers, Sir Spencer||Woollam, John Victor|
|Pilkington, Capt. R. A.||Sumner, W. D. M. (Orpington)|
|Pitt, Miss E. M.||Temple, John M.||TELLERS FOR THE AYES:|
|Pott, H. P.||Thomas, P. J. M. (Conway)||Mr. Chichester-Clark and|
|Ainsley, J. W.||Hastings, S.||Pentland, N.|
|Allen, Arthur (Bosworth)||Hayman, F. H.||Price, Philips (Gloucestershire, W.)|
|Allen, Scholefield (Crewe)||Henderson, Rt. Hn. A. (Rwly Regis)||Probert, A. R.|
|Bence, C. R. (Dunbartonshire, E.)||Herbison, Miss M.||Pursey, Cmdr. H.|
|Benn, Hn. Wedgwood (Bristol, S.E.)||Hughes, Cledwyn (Anglesey)||Randall, H. E.|
|Benson, Sir George||Hughes, Emrys (S. Ayrshire)||Reeves, J.|
|Blackburn, F.||Hughes, Hector (Aberdeen, N.)||Reynolds, G. W.|
|Bottomley, Rt. Hon. A. G.||Hunter, A. E.||Robinson, Kenneth (St. Pancras, N.)|
|Bowden, H. W. (Leicester, S. W.)||Hynd, H. (Accrington)||Rogers, George (Kensington, N.)|
|Brockway, A. F.||Irvine, A. J. (Edge Hill)||Ross, William|
|Broughton, Dr. A. D. D.||Janner, B.||Short, E. W.|
|Brown, Thomas (Ince)||Jay, Rt. Hon. D. P. T.||Silverman, Julius (Aston)|
|Burton, Miss F. E.||Jeger, Mrs. Lena (Holbn & St. Pncs, S.)||Silverman, Sydney (Nelson)|
|Butler, Herbert (Hackney, C.)||Jones, Rt. Hon. A, Creech (Wakefield)||Simmons, C. J. (Brierley Hill)|
|Champion, A. J.||Jones, Jack (Rotherham)||Skeffington, A. M.|
|Chetwynd, G. R.||Jones, J. Idwal (Wrexham)||Slater, J. (Sedgefield)|
|Clunie, J.||Jones, T. W. (Merioneth)||Smith, Ellis (Stoke, S.)|
|Collick, P. H. (Birkenhead)||Key, Rt. Hon. C. W.||Sorensen, R. W.|
|Corbet, Mrs. Freda||Lawson, G. M.||Sparks, J. A.|
|Craddock, George (Bradford, S.)||Ledger, R. J.||Spriggs, Leslie|
|Crossman, R. H. S.||Lindgren, G. S.||Steele, T.|
|Darling, George (Hillsborough)||Mabon, Dr. J. Dickson||Stonehouse, John|
|Davies, Harold (Leek)||McAlister, Mrs. Mary||Stones, W. (Consett)|
|Deer, G.||McCann, J.||Swingler, S. T.|
|de Freitas, Geoffrey||MacColl, J. E.||Taylor, Bernard (Mansfield)|
|Delargy, H. J.||McKay, John (Wallsend)||Thomson, George (Dundee, E.)|
|Dugdale, Rt. Hn. John (W. Brmwch)||McLeavy, Frank||Thornton, E.|
|Ede, Rt. Hon. J. C.||Mahon, Simon||Timmons, J.|
|Edwards, Robert (Bilston)||Mallalieu, E. L. (Brigg)||Viant, S. P.|
|Evans, Albert (Islington, S.W.)||Mann, Mrs. Jean||Warbey, W. N.|
|Fernyhough, E.||Messer, Sir F.||Wells, Percy (Faversham)|
|Fitch, Alan||Mikardo, Ian||Wells, William (Walsall, N.)|
|Fletcher, Eric||Mitchison, G. R.||White, Mrs. Eirene (E. Flint)|
|Fraser, Thomas (Hamilton)||Moody, A. S.||Wilkins, W. A.|
|George, Lady Megan Lloyd (Car'then)||Morrison, Rt. Hn. Herbert (Lewis'm, S.)||Williams, W. R. (Openshaw)|
|Gibson, C. W.||Noel-Baker, Francis (Swindon)||Winterbottom, Richard|
|Grenfell, Rt. Hon. D. R.||Oliver, G. H.||Woodburn, Rt. Hon. A.|
|Grey, C. F.||Owen, W. J.||Woof, R. E.|
|Griffiths, Rt. Hon. James (Llanelly)||Padley, W. E.||Zilliacus, K.|
|Hamilton, W. W.||Palmer, A. M. F.|
|Hannan, W.||Parker, J.||TELLERS FOR THE NOES:|
|Mr. J. Taylor and Mr. J. T. Price.|
§ Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.
§ Miss Herbison
Before we leave the Clause there are two points I should like to raise. I was astonished at the reply given by the Parliamentary Secretary on the question of houses being sold only for owner-occupation. He said that there was no logic in that, and that if the local 654 authority considered a house to be sound someone should be allowed to buy and let it. The Minister seemed to forget that under this Clause whoever was buying a house would have a mortgage of 100 per cent. from the local authority. It seems to us on this side of the Committee very wrong that that should be so, and I ask the Minister to consider this matter again before the Report.
655 No one lets a house unless he feels that he can make a profit out of the letting. The logic of the Minister's argument would be that the local authority would give a 100 per cent. mortgage in order to allow someone to make a profit. I am certain that that is not the intention of the Bill, and it is for that reason that I ask the Minister to give further consideration to it.
The Joint Under-Secretary of State for Scotland has just come into the Chamber. He knows that no one has been able to build houses to let in our country for a very long time, apart from those built by public authorities such as local authorities and the Scottish Special Housing Association. When he was sitting beside the Parliamentary Secretary he should have told him that what we are asking is important to Scotland.
I was very sorry indeed that the Government did not feel that they could accept even part of our Amendment that suggested a repairs fund. The Minister said that the owner of a house would plan his domestic budget to meet repairs. Remember that we are dealing with pre-1919 houses and that some of them may have been built long before 1919. The best manager or planner in the world could not foresee every eventuality to such a house. No matter how he planned his Budget the time would come when he would find it impossible to carry out the necessary repairs.
We believe in a repairs fund. A man owning his own house will do everything possible to keep it in repair, and when eventualities come that mean a big expense a repairs fund would help him considerably. We should make the best use of our pool of houses; we ought not to let houses become derelict because money is not there to keep them in repair.
For those two reasons we are anxious about a repairs fund, and even at this late stage I ask the Joint Under-Secretary of State for Scotland to consult the Minister to see whether, between now and Report, he will bring his influence to bear on the Minister from the Scottish point of view because of our serious lack of proper housing accommodation. The Minister and the Secretary of State for Scotland might then put down an Amendment for the Report stage that would be accept- 656 able. We do not say that our Amendment was absolutely watertight, but it was a very good Amendment, and we ask the Minister to do something—
§ The Chairman
I would remind the hon. Lady that the Amendment to which she refers does not appear in the Clause. She can only discuss what is in the Clause, as amended.
§ Miss Herbison
Even if my comments were out of order, Sir Charles, I hope that they will do some good.
§ Mr. H. Brooke
The remarks of the hon. Lady the Member for Lanarkshire, North (Miss Herbison) apply to England and Wales and Scotland equally. In accordance with your Ruling, Sir Charles, I will not follow her into references to a repairs fund.
I rebut the contention that it is unreasonable to permit local authorities to allow up to 100 per cent. on houses which are not to be owner-occupied. Very frequently they will not do it, but I can see no reason to put in a restriction to prevent them. The Small Dwellings Acquisition Acts were confined to advances for owner-occupiers, but the advances are not so confined under the Housing Acts, which permit advances up to 90 per cent. Local authorities do not always go as far as that.
We are removing that limitation and are allowing local authorities to lend up to 100 per cent. I do not see why we should go back on what is in the law already and has been accepted for many years. There may be suitable cases in which the local authority should lend on a house which is not to be owner-occupied. The obvious case is where somebody is buying a house for conversion purposes and thereby assisting the local authority by bringing into existence a greater number of separate dwellings in the area. That principle has been accepted by Parliament for a very long time and I could not accept the contention that we should go back on it.
§ Mr. Reynolds
About twelve months ago, the Metropolitan Boroughs Standing Joint Committee approached the 657 Minister and asked him to introduce legislation on the lines that are now suggested. He replied that his view was that it was desirable for prospective purchasers to provide a deposit on a mortgage granted by a local authority. Twelve months have passed, and we now have the Minister himself bringing forward legislation containing this Clause that allows the local authorities to do something that he rejected a year ago.
I do not particularly object to the provision, but I should like the Minister to tell us why we have this sudden change. There must have been some good reason for that refusal twelve months ago. How have the circumstances changed? Is it that the Minister, when making his first draft, looked, perhaps, at the Labour Party's proposal and thought this a good idea? Or is it because people are being pushed out of requisitioned houses and are also suffering from the operation of the Rent Act? Or is it because there is a General Election in the not-too-far-distant future? I think that we ought to know the reasons for the change.
§ Mr. H. Brooke
The Government gave careful consideration to this matter in the light of the new Bill they were to introduce. That Bill was not before the House when the reply was made to the Standing Joint Committee. We are now giving fresh opportunities to building societies to assist in the work of house purchase, and it seemed to the Government that this was the right occasion to review, once again, the powers of local authorities.
In that review, it emerged as somewhat anomalous that the building societies had power, by law, to lend up to 100 per cent., but that the local authorities had not. In the circumstances, there seemed no reason to maintain that restriction on the local authorities any longer. I appreciate that hon. Members opposite do not really regard local authorities as responsible bodies; but we, on our side, are anxious to give them the maximum of freedom.
§ Mr. A. Woodburn (Clackmannan and East Stirlingshire)
From what the Minister says, I understand that a local authority at present letting houses can 658 sell one of them to someone who, in turn, can let it to someone else. Is not that a somewhat roundabout road? Could not the local authority continue to let the house?
§ Mr. Brooke
The normal case with which we are dealing is the case where a man approaches the local authority, saying that he has the opportunity to buy a house already in private ownership, and would like an advance. In those circumstances, we are, by this Clause, somewhat enlarging the scope of the local authorities' power to assist him.
§ Mr. Woodburn
But did I misunderstand the right hon. Gentleman in thinking that he said that a local authority could sell one of its houses to someone who could afterwards let it?
§ Mr. Mitchison
I think that the right hon. Gentleman showed a great lack of foresight when he answered the Standing Joint Committee. He must have known, even then, that a General Election was coming.
§ Question put and agreed to.
§ Clause, as amended, ordered to stand part of the Bill.