HOUSES, UPMINSTER (SURCHARGE) (Hansard, 15 March 1968)

§ Mr. Arnold Shaw (Ilford, South)
From time to time various matters concerning constituents are brought to this House by hon. Members which, while appearing to be narrow in scope, nevertheless impinge upon much wider issues. My present submission is one such instance, and to some extent challenges the validity of the prices and incomes policy pursued by the Government. I am glad that my hon. Friend the Joint Parliamentary Secretary is present to answer, as he is fully aware of all the facts of the case.
On 2nd December last at my constituency consultation session I was visited by a young couple who were in a state bordering on a mixture of acute indignation and despair. This had been engendered by a letter they had received on 23rd November from Thurrock District Estate Agents stating, with regret, that the price of the house they were buying on the Rose Valley Estate, Stanford-le-Hope, Upminster, at something under £4,000 was to be increased by £100. This latter amount, I should add, is actually the equivalent of £150 as my constituents had agreed to surrender a part of their garden for the sum of £50. The bald reason for this surcharge was said to be "recent Government measures". Since devaluation had been announced by the Chancellor just a few days previously, I can only assume that the reference was to that action.
1997 Unfortunately, my constituents had not exchanged contracts of sale, unlike the majority of the purchasers of properties on the estate, and so were given the option of accepting the new terms or having their holding fee returned. One can understand their feeling of despair, after saving jointly for a considerable time and having eventually achieved the necessary deposit, on being asked for this further imposition. In their own words, "It was the last straw." The cause of their indignation was that the house was already built to roof level and the timbers were already in the country but were held up at the docks owing to the strike, which had then been settled, so that the effects of devaluation would appear to be minimal.
It occurred to me that the developers were being unreasonable, and I wrote to my right hon. Friend the Minister of Housing and Local Government on the subject. After a lapse of six weeks I received a reply from the Ministry, signed by the Joint Parliamentary Secretary. It being the Ides of March I wonder whether the assassination of Julius Caesar 2,000 years ago was due to the despatch of some such letters to members of the Roman Senate?
When my hon. Friend said in his letter that he was now able to write fully in reply he was not joking. The reply was certainly full of all the reasons why house prices should rise—because of wage awards, increased prices of materials, the withdrawal of the Selective Employment Tax premium, the increase in the Bank Rate and so on—but there was not a word about recent Government measures. There was, however, an expression of doubt about the justification for the increase of £150 if the house was already completed to roof level, and there followed some gratuitous advice to my constituent to shop around and so force the builder into a more competitive frame of mind. Hon. Members can well appreciate the value of such advice to this young couple who were already regarding the house as their own and were watching its progress with eager anticipation.
My hon. Friend's reply afforded me no satisfaction and I asked him for an interview, which was readily granted. From this meeting I gathered that he was sym 1998 pathetic to my point of view but that the Government were relying on the building industry to keep prices within reasonable limits voluntarily. I gathered that, on the whole, there had been a most favourable response—but apparently there was no desire on the part of Rose Valley Properties Ltd. to meet the Government's appeal for restraint.
On 6th February I wrote to the Thurrock District Estate Agents with a plea on behalf of my constituents and at the same time offering to take up with the appropriate authorities any excess in the cost of materials which might substantially influence the final cost of the house. There was an immediate reply, dated 7th February, from Rose Valley Properties Ltd. stating that my letter had been handed to it by its agents and curtly refusing to discuss the matter.
I was surprised at the speed with which the Thurrock District Estate Agents of Grays had been able to hand my letter to Rose Valley Properties Ltd. of North Ockenden, Upminister, to enable a reply to be received the next day. The reason soon became apparent when I noticed that the signatory to the letter of 7th February was Leslie G. Tully, now sole director of Rose Valley Properties Ltd., who had also signed the original letter from Thurrock District Estate Agents to my constituents, although there were three directors of the Agents, Michael, Geoffrey and Sophia Tully, but no Leslie. I can only deduce that Leslie Tully has more than a passing interest in both companies and that he passed my letter from his right hand to his left, or vice versa.
As a matter of courtesy I wrote to Mr. Tully expressing my disappointment and informing him that I should pursue the matter further. On 20th February I tabled a Question asking the Minister to refer to the Prices and Incomes Board the heavy surcharge imposed by Rose Valley Properties Ltd. on its houses in the course of construction. The answer given on that occasion by my hon. Friend was along the lines already expressed in his correspondence, and stated a refusal to meet my request. I therefore asked leave for an Adjournment debate, and I am grateful for this opportunity to air a grievance which I feel for more than one reason.
First, I feel very deeply for the plight of my young constituents and, indeed, 1999 for so many others who fall victim to the cupidity of certain property developers who show absolutely no sense of responsibility to the society which undoubtedly affords them a pretty comfortable way of life.
Appeals for restraint in order that this country might recover its economic strength falls on deaf ears so far as they are concerned. Even then, having rejected the Government's appeal to absorb extra costs as far as possible, what justification can there be for an increase of £150 on a figure of less than £4,000 for a house well on in the process of completion when a reliable estimate of the effect of devaluation on a house of such price from the onset of building would be about 2 per cent., or £80?
As I stated at the beginning of my speech, there is the general issue which tests the validity of the Government's prices and incomes policy. If swingeing increases of this kind are allowed to pass unchallenged, how can the wage or salary earner be expected with any reasonableness to make the sacrifices asked of him?
I would therefore appeal to my hon. Friend to look further at this matter and examine the best possibilities of obtaining some redress if he still thinks that this is not a case for the Prices and Incomes Board.

§ Mr. Hugh Delargy (Thurrock)
Stanford-le-Hope, to which reference has been made by my hon. Friend the Member for Ilford, South (Mr. Arnold Shaw) is in my constituency. It has been there for a long time—rather more than 1,000 years. During most of that time it has changed very little from century to century until our own times, when it became heavily industrialised and attracted a larger population. The population of Stanford-le-Hope and the neighbouring parish of Corringham, where these builders are at work, has more than doubled in the last 15 years. Hence the great demand for housing in this area. Many of the people have been accommodated by the urban district council of Thurrock and by the boroughs of East and West Ham. From these people we receive no complaints. But many are housed, being housed, and will be housed in future, by private builders, prominent 2000 among whom is the company mentioned by my hon. Friend, Rose Valley Properties Ltd. I have received no complaint about the standard of workmanship, but the allegations made by my hon. Friend are so serious that I hope the Government will investigate them
Earlier this week, the Minister of Public Building and Works, who is advised by experts on these matters, said that due to devaluation building costs could rise this year by about 2 per cent. The rise imposed by Rose Valley Properties Ltd. is nearer 4 per cent. To paraphrase what my hon. Friend said, that company practically backdated it as well. I have a grave suspicion that this company is behaving like so many others—chain stores, shop-keepers and combines—who are cashing in on devaluation. We have three things at once, all of which they love very dearly. They are pushing up the cost of living, they are enriching themselves, and they are blaming it all on the Government. It is high time that the Government began defending themselves as well as the persons being exploited. That is why I strongly support the plea made by my hon. Friend that the Government should again look into the matter very closely.

§ The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl)
If I might make a few points in reply to my hon. Friends the Members for Ilford, South (Mr. Arnold Shaw) and Thurrock (Mr. Delargy), about this matter, I should like to explain that my position was handicapped in the same way as was that of my hon. Friend the Member for Ilford, South. When he wrote to my right hon. Friend I caused inquiries to be made from the developers for some information to justify their use of this phrase, "owing to recent Government measures". I received the same flat refusal to give any information at all. A private developer is entitled to do that, but if he does so it means that I am not in a position to be at the service of my hon. Friends and hon. Members if they raise issues such as this. There was a subsequent telephone conversation with the firm which threw some more light on the matter, but I am not really in a position to be able to go into the detailed matters raised by my 2001 hon. Friend who has given so much attention to this subject.
The figure of 2 per cent. which my hon. Friend the Member for Thurrock quoted is right. The figure quoted here is 4 per cent. The firm has doubled its margin. I believe that the explanation may be that a number of houses were completed under fixed price contracts. The firm could not vary these, and it therefore compensated itself on the houses for which there was no contract. This is bad luck on the unfortunate young people who were caught by it. As my hon. Friend said, it is not easy to evaluate the phrase "owing to recent Government measures". I do not know how far it is accurate, but it is a convenient phrase to use. It will cover increases of any kind.
I should like to say why we have not gone to the Prices and Incomes Board in connection with houses for sale. This is not a lazy decision, or one that was reached because we did not want to have a row. When my right hon. Friend the Lord President of the Council was Minister of Housing and Local Government in August, 1966, he said to the Federation of Registered House Builders: What are the implications of incomes standstill for house prices? We are not proposing any statutory control. For one thing it would clearly be very difficult to establish a basis for statutory control in view of the great diversity of types and costs throughout the country. The Government does, how 2002 ever, look to builders and developers, who will benefit from the standstill in labour and other costs, to hold down the prices of new houses. From my information, as my hon. Friend fairly said, that is being done.
I suppose that about 50,000 sales have taken place since devaluation, and we have received only 32 complaints in the Department. This firm is not a registered house builder. It is not a member of the National House Building Registration Council, which is the body the Government recognise as having some say in the standards to be adopted by builders. We co-operate with the Council, and get good service from it. This firm is not a registered builder, and, therefore, we cannot ask the Council to help by moral persuasion.
I agree that these increases in prices can go towards upsetting the Government's incomes policy which is so important. I do not say that my right hon. Friend may not have to look at this situation again if it gets worse, but on the whole I think that our policy seems to have worked, and, despite my hon. Friend's rather severe comments about my letter, I am grateful to him for having raised the matter and giving me the opportunity of saying what I have.