HOUSING, BLYTH (Hansard, 31 January 1962)

§ Mr. Edward Milne (Blyth)

Blyth is a town of shipyard workers, railwaymen, miners, dock workers, shop and office workers, and others which follow similar callings. It is a typical working-class community which makes a major contribution to the economic well-being of the nation. And it has a housing problem. Had it been peopled by financiers and speculators, had it numbered take-over bid merchants among its inhabitants, this housing problem would not have existed.

But for Blyth, as for other parts of industrial Britain, the housing problem is an industrial one, and the reason for this intervention on the Adjournment tonight arises from Questions tabled to the Minister of Housing and Local Government on this subject.

Last November the Blyth Council expressed concern to the Ministry about the effect of the prevailing interest rates on its housing programme. The Minister in his reply to the Council made the following statement: The Minister notes the council's concern about the effect of present interest rates on housing programmes. The Government take the view, however, that it is reasonable for the rates payable by local authorities, like those payable by the Government and all other borrowers, to vary according to the general economic position of the country. The present rates are a reflection on the general pressure of demand for capital and the Government do not consider that local authorities should be insulated against a trend of this kind. As you will know, there have been two reductions in the interest rates charged by the Public Works Loan Board during the past six weeks. Replying to Questions, the Minister claimed that there were only two problems affecting Blyth; shortage of land, due to mining subsidence, and the need for a new sewage disposal scheme. He also talked about pooling rents and subsidies, and applying a differential rent scheme so that additional resources could be found. As I said at the outset, Blyth's housing problem is a financial one, visited upon it by the Government's policy which they have pursued during the last ten years.

1248 If we look at the position in comparison with 1955, what kind of problem do we find that the Government have created for the Blyth Council, and for the people whom it seeks to assist in their housing needs? In 1955, the Public Works Loan Board was charging interest at 3¾ per cent. over a period of 60 years. If we take the average cost of a dwelling in the borough at £2,000, we find that in 1955 the annual loan charges amounted to £84 per annum, or £1 12s. 4d. a week, with a total, over the 60 years, of £5,040. When the council wrote to the Ministry, the interest rates had risen to 7 per cent. and the annual loan charges had risen to £142, or £2 14s. 7d. a week, with an overall total over 60 years of £8,520—an increase of £3,480 since 1955.

What does that increase mean to the council making the protest? It means that each new house completed imposes on the housing revenue account a charge of £70 or £80 a year and, on the present building programme, the account's present surplus would be whittled down in 2½ or 3 years. That is the measure of the Government's financial policy, and its anti-social effect on the people of Blyth. The town has a waiting list of about 1,300 people. In the year under review, the council was able to rehouse about forty applicants, but the new applicants on the waiting list greatly exceeded the number rehoused in new houses completed during the year.

Some of those in overcrowded conditions have been living in these conditions for six years, and the occupiers of condemned property have to wait for 15 or 18 months from the operative date of the order before they are rehoused by the council—very often leaving behind them properties that are in a dangerous state. That, again, is the result of ten years' of housing policy pursued by a Government which have repeatedly and increasingly impeded the efforts, even the best efforts, of councils to tackle this very great problem.

I do not want to deal with Blyth's problem only on the basis of figures, although those figures are alarming in themselves. What we have to consider, and what we are considering—but what 1249 the Government do not appear to be considering—is the tremendous social and human problem that follows in the wake of policies of this description.

I have received numerous letters from constituents who realise that this is a local problem, but who, nevertheless, want to let their Member of Parliament know the circumstances and their feelings about being in a position of this description. I want to quote from one of these letters. It is from a constituent who has since been rehoused but who, I believe, voices the hopes and aspirations of all parents faced with a problem of this sort. In his letter to me he said: I feel I cannot tolerate this appalling existence for my family any longer, eight of us cooped up in one bedroom and by day eating, washing clothes and cooking our food in the one scullery in somebody else's house where there are three families comprising thirteen persons. We are told about juvenile delinquency and about extending the educational facilities for children, but this is what the letter goes on to say: My children are being brought up far too harshly in order to keep them quiet for our ageing parents and more recently for our own fraying nerves. This unnatural upbringing we are sure has caused lasting if not permanent damage to at least three of our more impressionable children That is the stark human tragedy behind the figures and behind the speeches made by successive Ministers of Housing. It is the stark reality of the human problem that lies behind statements made by Ministers in which they say that outside the large cities in Britain the housing problem has been virtually solved.

As I have said, we are an industrial community with an unemployment problem sufficient to place us within the scope of being an area scheduled for industrial development. So some of the strictures of the Government on the council for the financial assistance that is required fall, to a large extent, on deaf ears. We are told in speeches about a property-owning democracy, but, of course, the affluent society stopped short of the borders of Northumberland.

If at this stage we go outside the realms of council house building we find that the building societies are telling people who want to buy their own houses that they must be earning at least £1,000 1250 a year. I have already explained to the House the type of community that we are. When we talk about the drop in council house figures in Blyth and elsewhere we are told about the increases in private building figures. But this, again, does not solve the problem of an industrial community of this description, and it is to deal with this problem in the borough that I have raised this matter tonight.

It may be that the question of private building will be referred to by the Minister when he replies to what I have to say. We have had that type of statement before. I think that, in the main, with a few honourable exceptions, private builders have failed the people of Britain, and that the opportunity given to them by this Government has been used merely as a means of adding to their own profits and not of detracting from the problem of the people. There has been no real protection from the Minister behind the slogan of "Let the builders build."

The rates payable by local authorities vary according to the general economic position of the country, said the Minister in his letter to the council. But we cannot put the borough of an area which is scheduled for industrial redevelopment on the same economic basis as boroughs in the Midlands and in the Metropolitan area. One must look at this question in some respects bearing in mind the economic situation of the area, rather than the supposed economic situation of the country as a whole. I have tried to keep this within the scope of the appeal both by the council in its letters to the Ministry and in my Questions to the Minister.

Three factors must be closely watched. Firstly, we have a housing problem; secondly, that problem has been increased and aggravated by the financial policy of the Ministry concerned; and—thirdly—by the financial policy of the Government.

A £2,000 house cost in 1955, on the rates of interest then prevailing, just over £5,000 on a 60-year loan. The rates of interest at the time of the exchange of letters between the Ministry and the council made that figure reach well in excess of £8,000. That means that if one adds the interest charges to the price of the dwelling, one has 1251 three dwellings covered by the interest charges, but only one house. It represents one house in place of the price of three—the money going in interest charges and to the interests behind the financial speculation that has been unleashed on Blyth and the nation. I urge the Ministry to give careful and very special consideration to this plea I have made tonight.

§ The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Geoffrey Rippon)

I can well understand the interest which the hon. Gentleman the Member for Blyth (Mr. Milne) has shown in housing, particularly in his constituency. Some of the matters which he raised come primarily within the jurisdiction and competence of the Blyth Borough Council. Some of the other issues are of a wider interest, and perhaps I might begin by dealing with the points the hon. Gentleman made about interest rates.

As the hon. Gentleman said, Blyth Borough Council wrote to the Ministry on 10th November about this matter and the hon. Gentleman received a copy of our reply. That reply made the Government's position perfectly clear and I am happy to stand here tonight to repeat it. We take the view that the local authorities, like the Government and other borrowers, should pay the market rate which varies inevitably according to the general economic position of the country. Local authorities really cannot expect to be insulated as a special section of the community from these general trends.

In fact, as the hon. Gentleman pointed out, since that letter was written by Blyth Borough Council interest rates have been reduced slightly. On the day after the letter was written—and not because of it—the Public Works Loan Board's interest rate on loans for 60 years, the traditional period for loans for house-building, was reduced to 6¾ per cent. If we succeed in strengthening the economy, we can hope that that downward trend will continue.

What I am sure would be wrong would be to allow local authorities to borrow, presumably from the Public Works Loan Board, at less than the current rate of 1252 interest. We do not want to add differential rates of interest to differential subsidies and differential rents. Such a policy would be highly inflationary unless the difference between the market rate and the special low rate was covered by taxation. It would be nothing more than a concealed subsidy.

The Housing Act, 1961, to which the hon. Gentleman did not refer, has improved subsidies for those local authorities in the greatest need. I am sure that that is the right way of tackling the problem. If there is to be a subsidy, it should be direct and, as far as possible, distributed according to need. The two basic rates of subsidy payable under the Act are £24 and £8 a dwelling for 60 years. Which of those two rates a local authority shall receive will be determined on a financial calculation—partly a notional one. In fact, each authority's actual expenditure will be compared with an assumed income made up of the actual subsidies and miscellaneous income received, together with twice the gross value of its house property. That will encourage some of them to have a sensible rent policy.

If on this basis the income is less than the expenditure, the basic subsidy of £24 per dwelling is payable. Otherwise, the basic subsidy will normally be £8. Furthermore, supplemental subsidies may be given to authorities with special financial difficulties whose housing expenditure greatly exceeds their income when measured by the local yield of a penny rate. In such cases the £24 may become £29, or £34 or £40. That is quite apart from the special subsidy provisions for high building, town development, and so on.

On this basis it looks as if the Blyth Council will qualify for the £24 subsidy, although that is not quite certain. What I would say is that it is wrong to take a figure for one particular house and then apply the mathematical calculation that the hon. Gentleman did to that particular house. The housing revenue account should be looked at as a whole. If the Exchequer subsidies are pooled—and they should be—and if all council tenants pay a reasonable rent, as they should do, it should be perfectly possible for an authority with an urgent need to continue to build and let its houses at a reasonable rent which 1253 tenants can afford. It is not right to make these calculations in respect of one particular house. One must take a broad view of the whole picture.

There seems to be no evidence that local authorities are stopping essential house building merely because of financial difficulties. Apart from the help they receive from these new subsidies, it may be that the Blyth Council can improve its financial position and that of its poorer tenants by reviewing its rent policy. That is a matter for the council. But there is no rent rebate scheme in Blyth, and I am told that the question has not even been considered in the last four or five years. So much for the general background.

I should like to say a word about Blyth's building problems, building programme and building record—not quite the same things. There is a problem. In 1955 the council put forward a slum clearance programme for 535 houses to be dealt with in five years. At the end of 1961 it had dealt with 391 houses, nearly half of them by way of individual demolition and closing orders. This made redevelopment rather more difficult than might otherwise have been the case. The council has had to buy land piecemeal under Part V of the 1957 Act. Apart from slum clearance, the council has a waiting list of 1,300 including 136 old people. In addition, it will eventually have to rehouse the families from 106 temporary bungalows and 59 type B.2 aluminium bungalows which are liable to erosion.

The council owns land for about a hundred dwellings on which site works have not yet begun. I appreciate that although there is sufficient land allocated in the town map for ultimate use, much of it cannot be used until 1963–68 because of instability caused by mining subsidence and the need for new sewage disposal schemes.

If one looks at the building programme and the building record of the borough council one gets the picture more in perspective. The council in its letter assessed its need at about 250 houses a year. But there is a distinction between the programme and the record, the target and the performance. In 1958 the council asked for a programme of 1254 140, was given one of 80 and submitted tenders for 44. In 1959 it was given a programme of 30. This was increased to 97 after it made representations. In the event, it submitted tenders for 24 houses. In 1960 and 1961 there were no formal allocations. The council submitted tenders for 18 in 1960 and 52 in 1961. These proposals were approved.

I notice that in a supplementary question which he put to my right hon. Friend on 12th December, the hon. Gentleman said that Last year, in the Borough of Blyth … no new houses were built".—[OFFICIAL REPORT, 12th December, 1961; Vol. 651, c. 204.] I am sure that he will agree that that is not accurate. Forty-one were completed in 1960 and six were completed in 1961. At the end of the year, there were 56 under construction.

The hon. Gentleman referred to private enterprise. It may be of interest to him to know that private enterprise completed 603 houses between 1958 and 1961 and had 73 under construction at the beginning of this year.

In its letter to the Ministry of 10th November, 1961, the council said that 70 houses would need to be put to tender in 1962. We asked the council the number likely to be allocated for priority purposes, and we were informed that 26 in the proposed programme would be for old people and the remainder for rehousing people from slums or badly overcrowded conditions. Accordingly, we informed the council on 22nd of this month that the 70 houses for which it asked could be put into contract in 1962. I only hope that this year it will be luckier than in past years in actually completing the programme for which it has asked and for which approval has been given.

Bearing in mind the difficulties that the council undoubtedly has in regard to land and sewerage, there is really no reason to believe that it is being held back in any way by the Government's financial policies or by any of their housing policies.