HOUSING, BIRMINGHAM (Hansard, 29 April 1960)

§ Mr. Victor Yates (Birmingham, Lady wood)

I am grateful for the opportunity of calling attention to the housing situation in Birmingham, and I appreciate that the Minister himself has come here to give this matter his personal consideration. Birmingham is facing a grave housing problem which is causing anxiety and suffering to many thousands of people. The tragedy is that the Corporation and its chief advisers, who understand the problem and see a way to its solution, are completely frustrated by enormous obstacles which Government policy alone can remove.

Consequently, this grim social menace, on present assessment, appears likely to haunt the lives of many thousands of our fellow citizens for many years ahead—and I stress the words "many years ahead." Birmingham estimates that by 1979 the housing need will be 127,700 houses This includes 57,100 657 dwellings needed to house the population of existing and future redevelopment areas, and more than 64,000 needed to accommodate those who are at present on the housing waiting list.

That is a tremendous problem. The local authority, after a most careful and exhaustive examination, is only able to estimate the physical possibility of providing for 113,650 houses. That is based on the assumption that 11,850 dwellings will become available as a result of overspill arrangements. On present and past experience, I would say that that assumption is somewhat doubtful. Even on that assumption, however, Birmingham estimates a deficiency in nineteen years' time of 14,050 houses.

The Minister has refused repeated requests for the provision of a Government-sponsored new town, and has stated that Birmingham should undertake the building of a new town at its own cost. He must surely understand that that would add between £45 million and £50 million to the city's existing burden, and no political party there could think of putting forward such a proposition.

Four major problems face Birmingham. They are millstones hanging on the back of the city, and they are getting heavier. The Minister alone, and the Government, can do something to relieve that burden. First, there is the present housing debt, which has now reached the colossal figure of £89,540,000 out of a total debt of £157 million, and I am advised that this figure is growing at the rate of £7 million a year.

In 1950, the average rate of interest chargeable on the housing debt was slightly more than 3 per cent., but I am advised that for 1960 and 1961 it will be higher than 4 per cent. This means that the annual interest charges on the housing debt this year will be £900,000 more than they would have been had the 1950 interest rates been maintained. This alone represents an average rent increase on Corporation houses of about 3s. 6d. a week. I am further advised that the recent 1 per cent. increase in the Bank Rate, announced almost immediately after a new scale of rents had been determined, will add a further burden of £230,000 per annum. Surely there is a case for the lowering of interest rates.

658 Secondly, there is the high cost of an extensive programme of slum clearance. In 1946, as the Minister knows, Birmingham led the way by embarking on a most imaginative scheme for demolishing 30,000 houses in five areas within twenty years, without any financial assistance from the Government. It is, of course, true that the Minister offered financial assistance for such projects eight years later, and after a survey in 1955 Birmingham submitted proposals to deal with 50,250 houses that were unfit for human habitation, out of a total of approximately 312,000 houses.

The progress report shows that at 31st March this year, 11,092 of those houses had been demolished, involving the rehousing of 13,432 families, while 18,379 houses have been completely reconditioned from foundation to chimney pot. That is a magnificent achievement —but what of the cost of that reconditioning? It has cost £4,622,000, which is equivalent to an overall cost of £251 per dwelling. That, of course, does not include partial or interim reconditioning. It is complete reconditioning.

If one took the total figure, the capital expenditure has been nearer £7 million. The Government subsidy for such work is pitifully inadequate—£3 per annum for fifteen years, a figure which was arrived at when the average cost for reconditioning a house was £150 and at a much lower rate of interest.

What of the remaining houses? There are still 44,908 to be dealt with. The Corporation is completely reconditioning houses at the rate of about 2,000 a year. The cost for reconditioning a house has been increased and at present the average cost is £320 per house.

May I quote a letter which I have received this week from the Birmingham Housing Manager, Mr. J. P. Macey, dated 21st April. He says: … practically all our new houses attract the slum clearance subsidy … He goes on to say: … I think I ought to point out that a much more serious problem is already with us. This arises from the serious inadequacy of the slum clearance subsidy… If we analyse our present programme and assume that Birmingham builds 2,500 houses in the next twelve months and that 15 per cent. of these are one-bedroomed dwellings earning the £10 general subsidy while all the remaining 85 per cent. earn the slum clearance subsidy and if we further take rents on our new 659 basis (which is 21/10 times gross value) then there is still a deficiency of £120,000 a year plus a Rate Fund contribution of £47,000 a year. This £120,000 has to be carried on the shoulders of other municipal tenants and next year a further £120,000 will fall on their shoulders and so it rises from year to year unless the city were to stop building altogether. The recent Rents Review dealt only with the problem immediately before us. Even after the recent rent increase we are only just keeping our heads above water. What is to happen as each year's crop of new houses produces a fresh burden of £120,000 over and above what the ratepayers bear? That shows that if we are to go on at this rate this loss will reach more than £1 million in ten years' time.

It is no answer to say that rents should be further increased and that a rebate scheme should be adopted, as we are often told. Birmingham has already adopted such a scheme and the rebates are already running at a rate of £250,000 per annum.

The third major problem is the high constructional cost of building multistorey flats. The average cost of building a flat in a high block of flats in Birmingham is £2,800. To borrow this sum at present average rates of interest—that is, 5½ per cent.—involves repayments over sixty years of £9,628. At the current Public Works Loan Board rate of 5⅞per cent. it would cost £10,200—a fantastic figure for a £2,800 dwelling. Already, over 50 per cent. of the Corporation's new housing is in high flats from six to 16 storeys and 27 per cent. in four-storey development.

After charging rents at 21 times the gross rateable value, and after taking into account any subsidies available and substantial contributions from the rate fund, deficits occur on each new block of dwellings varying from £44 per annum for two and three-storey dwellings to £79 per annum for the high storey dwellings. These deficits in present circumstances can only be met by further increases in the rents of other Corporation dwellings or from further rate subsidies.

The Minister should realise that this ever-mounting rate fund contribution in respect of normal and unfit houses will, in the next year, reach £1,107,000, equivalent to a rate of 1s. 4d. Can he, therefore, be surprised that the Corporation is at present seriously considering whether it can afford to go on building 660 in present proportions? Does our situation not call for more generous treatment on his part?

Birmingham is now paying upwards of £13,000 per acre for such building land as remains available within the city boundaries. At present, about 2,400 houses are being completed each year, but, in about four years, all available building land will have been used up and the rate of house building within the city will fall to about 1,000 per annum. That is a serious matter.

What is Birmingham to do? The Minister refuses to establish a new town. The Corporation felt that there was no alternative but to seek permission to build in the adjoining areas of Solihull and Bromsgrove. After an extensive inquiry, the Minister has now flung into Birmingham's path the gravest obstacle by his refusal to permit the city to develop in this way, which is the only way which appears to the Corporation and its advisers as the practical way of dealing with this massive problem.

In his letter of refusal of 5th April, the Minister admits that Several thousand Birmingham families will have to find houses outside the City boundaries and also the Council will have difficulty within a few years in maintaining their rate of rehousing unless the provision made outside the City can be greatly accelerated". Does he realise that, after the most patient and exhaustive efforts which Birmingham made since the overspill scheme started, at 3rd March this year, not more than the miserable total of 1,000 overspill houses had been completed? If the Minister examines the reasons which have been given by 241 applicants refusing offers of overspill accommodation since 1st January, 1959, he will realise some of the enormous difficulties.

Having refused Birmingham's request, he is now under an obligation to say how he proposes to generate the good will of which he speaks in his letter to enable vast improvements to take place. What should Birmingham do that it has not already tried to do to persuade other authorities to receive thousands of homeless people from Birmingham? How does he propose to ensure a movement of industry quickly to places like Droitwich, Kidderminster, Redditch and Coventry? Yesterday, the Town Clerk 661 informed me that Droitwich, for instance, cannot consider such a big scheme as was recently put forward. There was a poll by post in Droitwich by which people indicated that they were opposed to it and, therefore, they may consider only a smaller scheme.

It is for the Minister to say how these improvements are to take place. Otherwise, Birmingham must build up and up. Does he wish to compel the workers there to be housed vertically, up to the sky, while their bosses are housed horizontally at Sutton Coldfield and Solihull? Is it a one-class city for which we should strive?

The Minister's action has thrust Birmingham into a grave dilemma. On behalf of the Corporation, I appeal to him to help the people of that city who are haunted by the prospect of being homeless for many years. I ask for more generous treatment financially. We want more land. The Minister can help us. This will not be the end of the matter, but the beginning of a crusade which Birmingham must wage —I shall certainly take part in it—until the Government are moved to act in a more generous and realistic manner to enable Birmingham to eradicate a great social cancer which at present haunts and threatens the lives of thousands in Birmingham for many years ahead.

§ The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke)

The Government are prepared to do everything they can to co-operate with Birmingham in solving Birmingham's serious housing problem. The problem is serious. We are to debate housing nationally in this House on Monday.

I have never made any concealment of my view that there are certain big cities where the housing problem is exceptionally grave. London is one of them, and Birmingham is another. I refused Birmingham's recent application to build at Wythall, not because I thought that Birmingham's housing problem and the future need for land were not serious, but because, quite frankly, that did not seem to me the right solution. I made clear in my decision letter that I agreed with my inspector that there were grave disadvantages in the course proposed by 662 Birmingham of taking land there for building houses and placing industry, that it was a third or fourth best, and that we might be forced back to some building on that land, but the situation did not seem to me to necessitate that we should here and now make a serious incursion into the Birmingham green belt, which is of value to everybody, Birmingham people most of all, until we had made absolutely certain that there was no way of finding a practical solution for the future need of land in some other way.

I do not think that the hon. Member, for all that he said in his speech, will challenge Birmingham's own assessment that absolute land shortage for housing is a future and not an immediate problem. Certainly, there are difficulties. Every big city with housing needs has increasing difficulties. As blitzed sites are redeveloped and as infilling is completed, there remain fewer and fewer large sites within the city boundaries.

Then there is slum clearance, and I am the last person to under-rate the slum clearance needs of the city of Birmingham. They are enormous. If one is to go forward with slum clearance, one must do it with a proper phased programme, making sure that there is always new development going on on some land into which the people can be moved from the houses which it is necessary to demolish. That all creates and maintains the demand for land, but the acute land shortage which was set before the public inquiry by those who spoke for Birmingham Corporation was an acute shortage in the future. Here, certainly, on behalf of the Government, I can say that we are ready to help in every way we can after we have thoroughly analysed the problem. The task is to find additional land for Birmingham housing, if possible, beyond the green belt, in time so that Birmingham building is not brought to an end by real land famine.

I cannot accept the hon. Member's statement that Birmingham's housing progress has become completely frustrated by obstacles which Government policy alone can remove. I note the fact that for a number of years past I have agreed that Birmingham should have the housing programme which it desired year by year, and, so far as I am aware, there is complete agreement between my Ministry 663 and the City Council as to the programme of the current year—a programme of 3,250 houses, with the possibility of discussions, if later on the corporation should wish to increase it to 3,500. That will be considerably ahead of the completions in recent years.

The hon. Member, in effect, charged the Government with parsimony over the subsidies. I think I am entitled to remind him that I cannot debate today the question of possible subsidy increases. The subsidies which he criticised as inadequate, the slum clearance subsidy and the annual payment for patched houses, are all fixed by Act of Parliament, and it would require legislation to alter them. It is therefore not possible for me to debate them on the occasion of an Adjournment debate.

The hon. Member spoke of the colossal housing debt hanging round Birmingham's neck. Every local authority which presses on with housing work, with school building or anything else, necessarily piles up debt. The party to which the hon. Member belongs was anxious, up to the time of the last election, vastly to increase that debt because it appeared to favour a policy of municipalisation of rented houses which would have added enormously to the housing debt that the hon. Member mentioned. I could not understand his forecast that the recent increase of 1 per cent. in Bank Rate would bring about a substantial addition to the interest charge that the City Corporation would have to pay on its existing debt. Bank Rate is concerned with short-term rates. The Birmingham Corporation, presumably, is borrowing, in the main. long term.

I realise that the hon. Gentleman is opposed to the Government's policy of not giving a concealed subsidy to housing authorities by allowing them to borrow at an artificially low rate of interest when the market rates go up. The Government's view—this has been argued many times in the House and elsewhere—is that housing cannot be the one service or activity insulated from steps that have to be taken to manage the whole economy in the general interest to avoid inflation and that subsidies for housing, when given, should be given openly and not in any secret way.

664 The hon. Member spoke of the heavy cost of Birmingham's housing activities to the ratepayer. I understand that the Birmingham Corporation recently reviewed its rents. Frankly, I think that the Birmingham ratepayer would have been much better off if the Corporation had not pursued for many years an unrealistic rent policy. I cannot see what is gained by keeping the rents of council houses artificially low and enabling people who could afford to pay the full economic rent to live at a subsidised rent. It seems to me that those are just the people who ought to bear their full share of the cost of housing. If they do not wish to pay the full economic rent of a council house, then, under the Government's policies, they have the opportunity to buy a house for themselves.

The hon. Member spoke of the high cost of multi-storey building. The Birmingham Corporation has decided that it should go on with multi-storey building. I have seen some very interesting schemes that it is carrying out. The hon. Member will be aware that the subsidies for those tall blocks of flats on expensive land are already considerably higher than the subsidies obtainable for ordinary houses. Here again, I am on dangerous ground, and I must not discuss subsidies because they are fixed by legislation. As far as I can judge the position, the recent fall in completions of houses in Birmingham has been due largely to the fact that it has gone over to multi-storey flats, which take longer to complete.

In the remaining three minutes, I should like to speak of the overspill problem. In the decision letter, I said at the end: The Minister proposes that the Department should now arrange to meet the authorities concerned in order to discuss with them ways and means of accelerating provision for the movement of people and industry out of the city. Those words, read in context, indicate movement, leap-frogging over the Green Belt into further land beyond.

Without delay, my Department took steps to seek to arrange joint meetings with Birmingham and the planning authorities around, the county authorities who might be affected. We wanted those meetings to start early in May. I have now received a request from the Birmingham City Council to receive a 665 deputation. I am glad to do so and that is being arranged. I feel that I must see the deputation before we go on with the plans that I had already put in train for the joint meetings with the other authorities. I still think that it would have been better to allow those joint meetings to go forward than to have individual deputations to the Minister at this stage. I am, however, extremely anxious not to say anything here that will prejudice the outcome of those discussions.

Whatever meeting we have, I want to examine what other sites, neighbourhoods and areas are, or can be, available for the export of Birmingham's housing and industry. If we can arrive at a reasonable measure of agreement 666 on what the most appropriate sites and areas are, the next thing will be to discuss the appropriate machinery for carrying out the movement and helping and stimulating it.

That is the note on which I wish to end. I for my part pledge that the Government are anxious for these discussions. They are ready to do all they can in co-operation with Birmingham to help them to fruition.