HC Deb 15 June 1961 vol 642 cc799-808

Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]

11.9 p.m.

Mr. Joseph Slater (Sedgefield)

This has been an interesting day on which debates have taken place in which much feeling has been shown. At the close of the day I am privileged to raise an important matter on the Adjournment. After eleven years as a Member of the House this is the first occasion on which I had had the privilege of raising a subject on the Adjournment.

I am grateful, therefore, to you, Mr. Speaker, for the opportunity to raise the question of increased rents in Newton Aycliffe. I am sorry that the Minister, in refusing my request for him to meet a deputation from the local parish council, left me no alternative but to raise this matter on the Floor.

Rent increases in this new town were to date from 1st April, and were to range from 1s. 6d. to 5s. a week. When this fact was made known to the tenants they were shocked and dismayed in view of the general statement made by the Newton Aycliffe Development Corporation—which, in the opinion of many people, could not be substantiated—that the financial position in the accounts disclosed or indicated a condition of prosperity.

A deficiency of £8,579 was shown in the general fund account, but for five years in succession a surplus had been shown and this surplus would have been practically wiped out had it not been for a decision taken in 1958 that surface water drainage for highways was not to be treated as a sewerage undertaking, but as highway development, and that interest charges were a charge on the general revenue account. Overnight, the deficiency on that account was increased by no less than £6,525.

The total capital expenditure of the corporation amounted to £609,000 and £536,000 was borrowed, the remainder coming from revenue. Bearing this fact in mind, it can be readily seen why the tenants of this new town were shocked by the announcement of the corporation of its intention to increase its rents by the figures which I have already mentioned. Before these increases were announced, let me inform the House, the development corporation asked to meet the parish council and to explain the reason for the increase in the rents. This, I think, indicates that while the Minister was not prepared to recognise the importance of this parish authority at Newton Aycliffe, the corporation did; hence the reason for this meeting.

I know the chairman personally, and have a great regard for him and for the position he holds. This meeting, with the chairman of the corporation acting as spokesman, informed the council—so I am advised—that it was a Ministry decision that the state of the housing revenue account was the determining factor in regulating the rents; and that the position of the corporation as a whole, and as shown in its published general revenue account, had no bearing whatever upon the rents in this new town.

Perhaps the Minister will tell us tonight whether such a statement is correct. The council was further informed that, unless the rents were increased, then in the next three years there would be an average loss of £50,000 a year on the housing revenue account. Hence these increases. In view of this statement, a request was made by the members of the council to be allowed to examine the various revenue accounts. This was turned down and no explanation was given as to how the estimated deficiency would be sustained.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Sir Keith Joseph)

Perhaps I missed it, but did the hon. Gentleman say by whom the request was made that the accounts should be seen?

Mr. Slater

By the parish council to the corporation, in view of the statements made by the chairman about increased rents.

In the light of no explanation being offered, the council could only arrive at one conclusion, and that was that if there were to be losses as estimated, then they should be substantiated by facts. If the housing revenue account was to be treated in isolation, then we are bound to get questions which can only be answered by examination and publication of the various revenue accounts. The whole cost of the maintenance of the greens and the forecourts in the new town is charged to the housing revenue account. The tenants in the new town and the local authority ask why this should be so. There is also the question of £86,000 which was taken from the housing account and transferred to the repair fund. Even this amount averages £26 per house, which, according to my information, is greater than in the case of any other new town corporation.

What it amounts to is that this enormous sum of £86,000 is being used as a cash balance free of interest charges. I do not deny the wisdom of having a good, solid repair fund, or the manner in which it is used, but if it is to be accepted that the housing revenue account is to be treated in isolation, surely we are faced with the question of how much free interest money is being used to benefit other revenue accounts or, on the other hand, how much money is coming from the housing revenue account to subsidise the other accounts of the corporation.

Therefore, would it not have been better if money taken from the housing revenue account and transferred to the repair account had been followed by some form of loan charge, this being credited to the housing revenue account? Another equally unfair debit is interest charges on the houses under construction. Last year, according to my information, these charges to Newton Aycliffe amounted to £7,600, and the total to date during the lifetime of the new town corporation has reached £50,800.

During the discussions between the parish council and the development corporation, it was brought out that the rent increases were to cover a three-year period. I have no doubt that, in making these assessments, the development corporation took into account every contingency.

Following the decision to raise the rents, we had an announcement by the Minister in the House of an increased subsidy of £8 per annum for each dwelling. I wonder whether the Minister can enlighten me tonight about whether the development corporation was informed of this prior to the taking of the decision to raise the rents. I should very much like to know, and, no doubt, my constituents in Newton Aycliffe would like to know. How will this additional £8 subsidy per house affect the corporation's finances? Will it increase the housing revenue account? If the corporation's finances benefit from this new subsidy, there would appear to me to be little justification for further increases after three years.

After the meeting between the development corporation and the parish council, a parish meeting was held on 7th March to discuss the matter. I understand that it was a well-represented meeting. After long discussion, the following resolution was carried unanimously: That this meeting is gravely concerned about the high rent increases in Newton Aycliffe and requests the Great Aycliffe Parish Council to appoint a deputation to meet Mr. J. Slater, Member of Parliament for Sedgefield Division, with a view to meeting the Minister of Housing and Local Government to discuss the proposed rent increases. This resolution was approved and adopted by the parish council at its meeting on 28th March. I met the deputation from the parish council. I listened to its case and posed certain questions, and then I contacted the Minister by letter. I have raised the subject by Question in the House, and this debate is the final stage.

I believe that the Minister could have met this deputation, with the Member for the constituency. Anyone who knows anything about this new town knows full well that the parish council, with other interested bodies, has been endeavouring to build up a community spirit in the new town. It may be that the council's efforts are not meeting with the success which they deserve. A major cause of this, no doubt, is the apathy which high rents is breeding among many of the tenants. It must not be overlooked that to meet these high rents at Newton Aycliffe, and other incidentals in building up a home within this community, both husband and wife must seek to have some form of employment, for they could not manage on one income.

No one wants to see this new town prosper more than with a good community spirit prevailing at all times, but this recent action in increasing rents in no way assists to that end. Questions are continually being asked, and answers have to be given. Through what medium must the tenant look for answers to his many questions? I have gathered from conversations with people, not of any particular group, that if these rent increases continue to take place at Newton Aycliffe, the rents will become too high, with result that instead of drawing people into the new town, we shall find those now living there seeking to get out.

In its circular to the tenants about this increase, the corporation drew their attention to what had been happening in regard to wages, which placed additional costs on its building programme. It stated that there had been an average increase of nearly 20 per cent. in wages since 1956, with a 5 per cent. increase in the cost of building materials and an increase in the cost of borrowed money. But this has applied itself not only to new town building, but to local authority building throughout the country. I venture to suggest that these increases, on average, have not reached a figure equivalent to an increase of 5s. a week in basic rents. I have endeavoured to bring the objections to the Minister's notice, and no doubt the tenants of Newton Aycliffe new town are anxiously awaiting his reply to their objections.

Anything that the Minister can tell me tonight which will allay the fears of the tenants of Newton Aycliffe of further increases will be greatly appreciated. This new town is growing. People are going to it from all parts of the country. There has been a true community spirit. But apathy is creeping in. I fear that if this continues there could be a form of disintegration; instead of a true community spirit, there could be an apathy which would retard the development and the progress of the town. Instead of a happy community we should have a community expressing much dissatisfaction.

11.24 p.m.

Mr. Michael Stewart (Fulham)

Before the Minister replies, I should like to underline two points put forward by my hon. Friend the Member for Sedgefield (Mr. Slater). I was surprised to learn that the Minister of Housing and Local Government had refused to receive a deputation which was to be introduced by my hon. Friend. If it be said that, after all, there are many parish councils in the country, and the Minister cannot possibly meet them all, it must be realised that it is not every local authority in whose area rents can be directly determined by ministerial policy. If it was really impossible for the Minister to see the deputation, could not the Parliamentary Secretary himself have undertaken to do so?

I was also surprised to learn that it had apparently been impossible for the persons concerned to see the relevant accounts of the corporation. If I understood my hon. Friend correctly, I would have thought that these were public documents. If my hon. Friend himself wished to have access to them, surely he could not be refused. I hope that the Parliamentary Secretary will deal with that point.

11.25 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Sir Keith Joseph)

In answering this debate, it is necessary for me to go back a little, and to explain what the hon. Member for Sedgefield (Mr. Slater) may know but which ought, nevertheless, to be on the record. Ever since the time when the noble Lord, Lord Silkin, was in my right hon. Friend's position there has been a consistent policy about the rents in new towns. Each Minister, no matter what his party, has required that the development corporations should raise by rents, in addition to the subsidies they receive, sufficient in aggregate to cover the outgoings of their housing costs.

Because, over the years, the costs of building houses and of servicing the capital needed to finance them have increased, the cost of houses in the new towns has also tended to increase. In order that this should not impose an unfair rent on those who happened by chance to occupy the houses at a later stage in the new towns' history, more and more of the new towns have adopted a rent pooling policy, which seeks to ensure that, broadly, the same rent is charged for houses of a single type, irrespective of the historical cost of the house concerned.

The Newton Aycliffe Development Corporation went on to a pooling system for houses in 1956. At that time, because it was moving to a pooling system, there were some rent increases, but the corporation then undertook that there would be no further rent increases for a period of three years. That was in 1956. In fact, the corporation has been 66 per cent. better than its words; very roughly, there was not a rent increase for five years.

The first increase since 1956 was on 1st April, 1961, and is the one to which the hon. Gentleman has referred. It is true that in a few cases the increase was as much as 5s. a week, but only where the house was let with a garage—and only then in a few cases. It is true that there were also a number of cases where the rent increase was as much as 3s. 6d. per week, but the bulk of the rent increases were no more than 1s. 6d. a week—and this, after a five-year interval of no increases, and no increase of rent charged, according to my information, in the case of elderly people—old-age pensioners. I hope that that puts the position about rent increases in proportion.

The different increases arise from the corporation's endeavour to arrive at fair letting values for each type of house in present-day conditions, bearing in mind the relative popularity of different types of house as well as their size and amenity and, of course, their age and position in the town. That is why some houses had different rent increases from others, but all within the figures I have given.

The hon. Gentleman has told the House quite correctly that the development corporation carefully and courteously invited the parish council along before the increases were made, and informally told the council what the proposals were. I am told that, in fact, the council has not been back to the corporation since then. It is true that it called a public meeting, and it is, of course, true, as the hon. Gentleman explained, that at that public meeting the resolution was passed inviting him to take up the question of rent increases with my right hon. Friend.

It is also true that this meeting was called by the parish council and a resolution passed at the meeting. But, so far as the occupants themselves were concerned, it is interesting to see how many of them protested themselves. There was a protest on behalf of the members of the Newton Aycliffe Tenants' Association. They did not, so far as I am informed, back it up with any details of real hardship. The development corporation has had one letter complaining of hardship.

In the case of an individual tenant—who says that the rent increase will cause him hardship—the development corporation is trying to arrange a transfer for him from his present house to a cheaper house which will still suit him. I am told that the development corporation has offered him two different houses, both at cheaper rents and that, up to now, he has refused both. Thus, an attempt to rehouse, to his approval, the one tenant for whom hardship is claimed, is going on.

The hon. Member for Sedgefield and the hon. Gentleman the Member for Fulham (Mr. M. Stewart) are upset because my right hon. Friend will not receive a deputation. Both hon. Gentle-merit are disturbed that the development corporation will not disclose all its accounts to the parish council. I can inform the hon. Member for Fulham that to the extent that its accounts are public, they are available, in due course, to anyone. But I imagine that what the hon. Gentleman demands are the calculations leading up to those public accounts.

The reason why the Minister will not receive a deputation is, of course, that he and his predecessors have laid down broad policy for development corporation rents. It would be intolerable if members of development corporations were then called to account by the Minister at the wish of bodies that, although elected, are elected to carry out functions other than housing, if the development corporations are, in fact, acting within the policy laid down by the Minister.

The moment he believes that a development corporation is acting outside the broad policy he and his predecessors have laid down, action to correct that lies with him. Of course, if he heard, from whatever quarter it might be, that a development corporation was acting outside that policy, he would consider what action he should take. In this case, the development corporation is acting within the policy laid down by the Government and, therefore, it would be wrong of my right hon. Friend to interfere with its discretion and with its policy.

A parish council is an important body. It is an elected body and it has responsibilities. But those duties do not happen to include the responsibility for housing. It must be the development corporation that carries out those duties. The hon. Member for Sedgefield asked how he, as the elected Member of Parliament for the area, could carry out his job if he could not have access to the Minister—

Mr. Slater

With the deputation.

Sir K. Joseph

Yes, with the deputation.

Let me inform the hon. Member how he can. It is his duty, if he knows of any case of real hardship arising from the policy of the development corporation, to inform the corporation of it. He should put it to them. I am sure that the corporation will do its best to take into account any cases of hardship brought to its attention by the hon. Gentleman.

In this case, the hon. Gentleman has come to the House and, so far as I could gather from his speech, he has spoken in general terms. He did not cite one case of real hardship, and I repeat, no rent increase took place for about five years, the bulk of the increases that did occur were of 1s. 6d. a week, a few of 3s. 6d., and where there were garages, 5s. a week.

Mr. Slater

Is the hon. Gentleman now trying to suggest that there have been no cases of hardship? If I had known that he wanted such cases, I could have got all those I required. It is not a matter of citing single hardship cases, but of my seeking to present the general picture on behalf of the local authority.

Sir K. Joseph

Surely the hon. Gentleman agrees that if he has a case of real hardship he has no reason to bring it to my right hon. Friend unless he can show that he has been to the development corporation and the development corporation agrees that it is a case of hardship and will not do anything about it. In fact, at the moment, despite the public meeting and despite the interest of the tenants' association, the development corporation has received evidence of only one case of real hardship, and in that case it is doing its best to rehouse the tenant at a lower rent.

I am not seeking to do any more than suggest that the development corporation would be more than anxious to hear of any case where real hardship is being caused and to see if anything can be done about it.

Mr. Slater

A public meeting was held. Representations were made to the parish council for certain action to be taken. I have had a long experience of local government before coming to this House, and I do not want the hon. Gentleman to tell me what my duties are. So far as the parish meeting was concerned, the people of Newton Aycliffe had a right to know what really happened to the representations which have been made to the Member of Parliament and, through him, to the Minister. That is what we are waiting for tonight.

Sir K. Joseph

I am suggesting that those representations should be made to the development corporation in the case of any hardship, because the development corporation carries out my right hon. Friend's policy, and it must be left to carry out that policy at its own discretion, provided it remains within the limits laid down.

I fear that that is all I can say to the hon. Gentleman. I appreciate that he is doing his duty in bringing the matter here. I very much hope that the single case of hardship that has come to light as a result of this comparatively gentle rent increase—the first to take place for five years in Newton Aycliffe—will be satisfactorily solved by the efforts of the development corporation that are now going on, and I am sure that any further case of real hardship that is reported to the development corporation will be considered sympathetically and constructively.

Question put and agreed to.

Adjourned accordingly at twenty-three minutes to Twelve o'clock.