HC Deb 26 June 1969 vol 785 cc1729-37

4.15 p.m.

Mr. Speaker

The next Amendment selected is No. 29, with which I suggest we take Amendments No. 30 in page 13, line 27, after '£1,250' insert: 'or, in the case of a dwelling within the area of the Greater London Authority £2,500'. No. 33, in page 15, line 19, after '£1,000', insert: 'or for each dwelling within the area of the Greater London Authority £1,250'. And No. 34, in page 15, line 33, after £1,250', insert: 'or, in the case of a dwelling within the area of the Greater London Authority £2,500'.

4.15 p.m.

Mr. Frederick Silvester (Walthamstow, West)

I beg to move Amendment No. 29, in page 13, line 14, after '£1,000' insert: 'or for each dwelling within the area of the Greater London Authority £1,250'. This group of Amendments affects only the Greater London area. Their purpose is to raise the amount of Government grants for improvements generally from £1,000 to £1,250, and to increase the amount for improvements to a property which a local authority or housing association also has to purchase from £1,250 to £2,500.

The costs of housing in London greatly exceed those in other parts of the country. The Ministry recognise that there is a special situation in London by having a London weighting in the Rate Support Grant. In its Circular 31/69 it gave a 20 per cent. London weighting in the revised housing cost yardstick.

Experience in my borough suggests that the cost of an improvement running up to £2,000 is not uncommon. When one is dealing with the cost of improvement plus the cost of acquisition the limits written into the Bill hit London boroughs very severely.

According to the Co-operative Permanent Building Society, in the last quarter of 1968 the average cost of a house in London was £5,033, while in the North-West, for example, it was £2,500. Although prices vary from area to area, that difference is not uncommon. In my constituency a property which would be worth improving could cost about £3,500. It is unlikely that one could buy one for less. My Amendment would still allow for £1,500 for improvement, which would just about be adequate. If we left it at £1,250 the Government would be contributing inadequate amounts to the costs of the acquisition and improvement.

Another effect of the Bill as it stands would be to provide an incentive to pull down buildings and rebuild rather than to improve, and that is not something that the Bill seeks to encourage. We are seeking to renovate existing areas in which people have become accustomed to living and make them better places to live in.

My local authority has worked out an example of what happens under the present system of housing subsidies and what would happen under the Bill. If a place is acquired and completely demolished and rebuilt, the council receives a subsidy of £204 per unit under the present subsidies. At present rents this represents a deficiency to the housing revenue account of £56 per unit. Under the Bill, if it acquires property and improves it it receives a subsidy of £96 a unit, which on the same rent assumption would produce a deficiency in the housing revenue account of £210 a unit, which is four times as great. In those circumstances, it will clearly think much more in terms of pulling down and rebuilding than of improving.

I understand that the London Boroughs Association supports the idea behind the Amendment and is making representations to the Minister. I hope that he will be able to say what his intentions with regard to the Greater London area are.

There are powers in the Bill for the Minister to make variations. It does not specifically say that they will be regional variations. It is odd that in some things like rates and rateable value it is not uncommon to treat Greater London differently from the rest of the country. The rates in the Bill are inadequate for the purposes required, and it seems to me unreasonable not to make this Amendment and put in the higher figures from the start.

Amendments Nos. 33 and 34 extend the same principles to housing associations as local authorities.

The Minister of Housing and Local Government (Mr. Anthony Greenwood)

I very much appreciate the point the hon. Member for Walthamstow, West (Mr. Silvester) has made. It is one with which all of us must have some sympathy, but I hope to be able to persuade the House that the Amendment is not necessary.

My hon. Friend the Joint Parliamentary Secretary told the Standing Committee that we are already in discussion at officer level with the London authorities on this subject. As the hon. Gentleman appreciates, by virtue of Clauses 22(3) and 25(5) I have power to approve costs above the normal amount in particular cases and classes of cases. It is a discretion extending both to cases where works only are concerned and also where acquisitions for improvement or conversion are concerned. Therefore, we have the power to make this variation, and we had better see how the talks with the London local authorities go. It might be undesirable to include in the Act special reference to London, as other parts of the country may put in a claim for similar or comparable treatment.

I must ask the House to resist the Amendment.

Mr. Walter Clegg (North Fylde)

I support the arguments of my hon. Friend the Member for Walthamstow, West (Mr. Silvester). Although I do not represent a London constituency, I can speak with some experience of what it costs to have ordinary household tasks done in London. When I came down South I was horrified. Perhaps there is a case for other regional variations, but at present this is the outstanding one and I would like to see it incorporated in the Bill.

Mr. Oscar Murton (Poole)

I, too, support the Amendment. The right hon. Gentleman's attitude is extraordinary, since we accept the principle in the Rent Acts and the Leasehold Reform Act that rateable values are higher in London than in the provinces. This presupposes that higher rents are obtainable and the fact that costs are higher in London and that, therefore, rents are higher. To be logical, surely London should be treated as a special case in this Bill.

Mr. Greenwood

Anything that would spare the hon. Member for North Fylde (Mr. Clegg) from being horrified would have my enthusiastic support. I hope that the House will realise that I have genuine sympathy with what is proposed. I can say that the talks with the London authorities are going well and I hope that we shall be able to reach a satisfactory conclusion which will please both them and us.

I hope that the hon. Member for Walthamstow, West (Mr. Silvester) will not persist with his Amendment.

Mr. Graham Page

We appreciate the sympathy which the right hon. Gentleman has shown towards the Amendment. My hon. Friend the Member for Walthamstow, West (Mr. Silvester) made out a very strong case for it. It is well known that the wages of building operatives in London are much greater than elsewhere and increases in costs in London for building repairs and improvements have been recognised in the cost yardstick. We recognise the differential between London and the rest of the country in the Rent Acts and the Leasehold Reform Act.

Although the Minister has power to approve an increase of this sort, and discussions are going on, we would wish to record our view in the Division Lobby that London is such a special case that the Bill should recognise it. It may be that, later, the figure ought to be increased still further but to have in the

Bill a clear differential at this stage would, I am sure, be of great assistance in its administration. For that reason, we would like to record this fact in the Bill itself.

Mr. Greenwood

The hon. Gentleman the Member for Crosby (Mr. Graham Page) has given me my case in referring to the special cost yardstick for London. A special cost yardstick for London is not included in the Statute. It is an administrative arrangement, made by the Minister, of exactly the same kind that we have in mind in the case of the proposition before us at the moment.

Question put, That the Amendment be made:—

The House divided: Ayes 126, Noes 166.

Division No. 291.] AYES [4.23 p.m.
Alison, Michael (Barkston Ash) Harris, Frederic (Croydon, N. W.) Pym, Francis
Amery, Rt. Hn. Julian Harrison, Brian (Maldon) Quennell, Miss J. M.
Astor, John Hawkins, Paul Renton, Rt. Hn. Sir David
Atkins, Humphrey (M't'n & M'd'n) Heald, Rt. Hn. Sir Lionel Rhys Williams, Sir Brandon
Awdry, Daniel Heath, Rt. Hn. Edward Ridsdale, Julian
Batsford, Brian Heseltine, Michael Rossi, Hugh (Hornsey)
Beamish, Col. Sir Tufton Higgins, Terence L. Royle, Anthony
Bell, Ronald Hill, J. E. B. Russell, Sir Ronald
Berry, Hn. Anthony Hirst, Geoffrey St. John-Stevas, Norman
Black, Sir Cyril Hooson, Emlyn Scott, Nicholas
Body, Richard Hunt, John Sharples, Richard
Boyd-Carpenter, Rt. Hn. John Irvine, Bryant Godman (Rye) Shaw, Michael (Sc'b'gh & Whitby)
Boyle, Rt. Hn. Sir Edward Jennings, J. C. (Burton) Silvester, Frederick
Brewis, John Johnson Smith, G. (E. Grinstead) Sinclair, Sir George
Brinton, Sir Tatton Jopling, Michael Smith, Dudley (W'wick & L'mington)
Brown, Sir Edward (Bath) Kaberry, Sir Donald Smith, John (London & W'minster)
Bullus, Sir Eric Kershaw, Anthony Speed, Keith
Campbell, B. (Oldham, W.) Kimball, Marcus Stainton, Keith
Campbell, Gordon (Moray & Nairn) King, Evelyn (Dorset, S.) Steel, David (Roxburgh)
Carlisle, Mark Lancaster, Col. C. G. Tapsell, Peter
Channon, H. P. G. Lane, David Taylor, Sir Charles (Eastbourne)
Chataway, Christopher Langford-Holt, Sir John Taylor, Edward M. (G'gow, Cathcart)
Clark, Henry Lewis, Kenneth (Rutland) Taylor, Frank (Moss Side)
Clegg, Walter Lloyd, Rt. Hn. Geoffrey (Sut'n C'dfield) Thorpe, Rt. Hn. Jeremy
Cooke, Robert Lloyd, Rt. Hn. Selwyn (Wirral) Turton, Rt. Hn. R. H.
Corfield, F. V. Longden, Gilbert van Straubenzee, W. R.
Vaughan-Morgan, Rt. Hn. Sir John
Craddock, Sir Beresford (Spelthorne) Lubbock, Eric Vickers, Dame Joan
Crouch, David McAdden, Sir Stephen Waddington, David
Dance, James McNair-Wilson, M. (Walthamstow, E.) Wainwright, Richard (Colne Valley)
Doughty, Charles Maddan, Martin Walker, Peter (Worcester)
Elliot, Capt. Walter (Carshalton) Monro, Hector Walker-Smith, Rt. Hn. Sir Derek
Errington, Sir Eric Montgomery, Fergus Walters, Dennis
Eyre, Reginald More, Jasper Weatherill, Bernard
Fortescue, Tim Morgan, Geraint (Denbigh) Whitelaw, Rt. Hn. William
Foster, Sir John Morrison, Charles (Devizes) Wiggins, A. W.
Gibson-Watt, David Murton, Oscar Williams, Donald (Dudley)
Gilmour, Ian (Norfolk, C.) Nabarro, Sir Gerald Wilson, Geoffrey (Truro)
Goodhew, Victor Page, Graham (Crosby) Winstanley, Dr. M. P.
Grant, Anthony Page, John (Harrow, W.) Worsley, Marcus
Gresham Cooke, R. Peel, John
Griffiths, Eldon (Bury St. Edmunds) Pounder, Rafton TELLERS FOR THE AYES:
Grimond, Rt. Hn. J. Powell, Rt. Hn. J. Enoch Mr. R. W. Elliott and
Hall-Davis, A. G. F. Prior, J. M. L. Mr. Timothy Kitson.
Allaun, Frank (Salford, E.) Bagier, Gordon A. T. Boston, Terence
Archer, Peter Beaney, Alan Bottomley, Rt. Hn. Arthur
Atkins, Ronald (Preston, N.) Bidwell, Sydney Bradley, Tom
Atkinson, Norman (Tottenham) Bishop, E. S. Brooks, Edwin
Bacon, Rt. Hn. Alice Booth, Albert Brown, Bob (N'c'tle-upon-Tyne, W.)
Buchan, Norman Hughes, Hector (Aberdeen, N.) Oswald, Thomas
Butler, Herbert (Hackney, C.) Hughes, Roy (Newport) Page, Derek (King's Lynn)
Cant, R. B. Hunter, Adam Paget, R. T.
Carmichael, Neil Hynd, John Palmer, Arthur
Chapman, Donald Irvine, Sir Arthur (Edge Hill) Pannell, Rt. Hn. Charles
Coleman, Donald Jackson, Peter M. (High Peak) Park, Trevor
Corbet, Mrs. Freda Janner, Sir Barnett Parker, John (Dagenham)
Craddock, George (Bradford, S.) Jenkins, Hugh (Putney) Parkyn, Brian (Bedford)
Crawshaw, Richard Johnson, Carol (Lewisham, S.) Pavitt, Laurence
Crossman, Rt. Hn. Richard Johnson, James (K'ston-on-Hull, W.) Pearson, Arthur (Pontypridd)
Dalyell, Tam Jones, Rt. Hn. Sir Elwyn (W. Ham, S.) Peart, Rt. Hn. Fred
Darling, Rt. Hn. George Jones, T. Alec (Rhondda, West) Pentland, Norman
Davidson, Arthur (Accrington) Judd, Frank Perry, Ernest G. (Battersea, S.)
Davies, Ednyfed Hudson (Conway) Kelley, Richard Perry, George H. (Nottingham, S.)
Davies, G. Elfed (Rhondda, E.) Kenyon, Clifford Price, Thomas (Westhoughton)
Price, William (Rugby)
Davies, Dr. Ernest (Stretford) Kerr, Russell (Feltham) Rankin, John
Davies, Ifor (Gower) Lawson, George Rees, Merlyn
Dobson, Ray Leadbitter, Ted Richard, Ivor
Doig, Peter Lipton, Marcus Roberts, Rt. Hn. Goronwy
Driberg, Tom Luard, Evan Robertson, John (Paisley)
Dunn, James A. Mabon, Dr. J. Dickson Roebuck, Roy
Dunnett, Jack McCann, John Rogers, George (Kensington, N.)
Eadie, Alex MacColl, James Rowlands, E.
Edwards, Robert (Bilston) Macdonald, A. H. Shaw, Arnold (Ilford, S.)
Edwards, William (Merioneth) McGuire, Michael Sheldon, Robert
Ellis, John McKay, Mrs. Margaret Short, Mrs. Renée (W'hampton, N. E.)
English, Michael Mackenzie, Gregor (Rutherglen) Skeffington, Arthur
Evans, Fred (Caerphilly) Mackintosh, John P. Slater, Joseph
Evans, Ioan L. (Birm'h'm, Yardley) Maclennan, Robert Small, William
Faulds, Andrew McMillan, Tom (G'gow, C.) Strauss, Rt. Hn. G. R.
Fernyhough, E. McNamara, J. Kevin Symonds, J. B.
Fitch, Alan (Wigan) MacPherson, Malcolm Taverne, Dick
Fletcher, Raymond (Ilkeston) Mahon, Peter (Preston, S.) Urwin, T. W.
Fletcher, Ted (Darlington) Mahon, Simon, (Bootle) Wainwright, Edwin (Dearne Valley)
Foot, Michael (Ebbw Vale) Mallalieu, J. P. W. (Huddersfield, E.) Walker, Harold (Doncaster)
Forrester, John Marquand, David Wallace, George
Fraser, John (Norwood) Mellish, Rt. Hn. Robert Watkins, David (Consett)
Gardner, Tony Mendelson, John Weitzman, David
Ginsburg, David Mitchell, R. C. (S'th'pton, Test) Wellbeloved, James
Greenwood, Rt. Hn. Anthony Molloy, William Whitaker, Ben
Gregory, Arnold Moonman, Eric Whitlock, William
Grey, Charles (Durham) Morgan, Elystan (Cardiganshire) Wilkins, W. A.
Griffiths, David (Rother Valley) Morris, Alfred (Wythenshawe) Willey, Rt. Hn. Frederick
Griffiths, Eddie (Brightside) Morris, Charles R. (Openshaw) Williams, Alan Lee (Hornchurch)
Hamilton, William (Fife, W.) Morris, John (Aberavon) Williams, Clifford (Abertillery)
Harper, Joseph Murray, Albert Williams, W. T. (Warrington)
Harrison, Walter (Wakefield) Newens, Stan Wilson, Rt. Hn. Harold (Huyton)
Herbison, Rt. Hn. Margaret Noel-Baker, Rt. Hn. Philip
Hilton, W. S. Ogden, Eric TELLERS FOR THE NOES:
Hooley, Frank Orbach, Maurice Mr. Ernest Armstrong and
Howarth, Harry (Wellingborough) Orme, Stanley Mr. Neil McBride.
Hoy, Rt. Hn. James

4.30 p.m.

Mr. Silvester

I beg to move Amendment No. 31 in page 13, line 33, leave out 'three-quarters of'.

Mr. Deputy Speaker (Mr. Harry Gourlay)

We shall discuss, at the same time, Amendment No. 32, in Clause 23, leave out 'three-quarters of'; and Amendment No. 35, in Clause 25, leave out 'three-quarters of'.

Mr. Silvester

This Amendment refers not only to Greater London, but to the whole country. The effect would be to leave the Government paying a contribution equal to the whole of the annual loan charge on the allowable cost. That may sound generous, but the allowable cost is only half the actual cost of acquiring a house or improving it. So the real effect would be that the Government paid 50 per cent. of the total cost.

Under the present arrangements, the Government pay three-quarters of the allowable cost, which is half the actual cost, so that they are paying, in fact, only three-eighths. The net effect of the Amendment, therefore, would be to raise the Government's contribution from three-eights to half.

Why is that desirable? Again, I make a comparison between new housing and housing improvement. The scheme under the Bill makes it more advantageous to pull down and build from scratch than to improve. Under the housing subsidy arrangements on new building at current rates, the Government pay a subsidy which is the difference between the representative rate and a 4 per cent. loan charge. The representative rate for this year is 7.07 per cent., and the Government are paying the difference. This accounts for 39 per cent. of the loan charges which each council has to bear.

The current rates which local authorities have to pay are over 9 or 10 per cent. The representative rate for next year, therefore, is likely to be well in excess of 7.07 per cent. That means that the proportion of the loan charges which the Government will bear on new houses will rise from 3.07 per cent. to something over 4 per cent.; that is, more than half the loan charges on new building. Under the improvement scheme in the Bill, however, they will be paying only three-eighths.

We hope that at some time there will be a system allowing local authorities to borrow at considerably lower rates of interest, but until that time comes local authorities will face a problem: where they improve, they will have a smaller contribution from the Government than where they pull down and start afresh.

For that reason, at least temporarily, I hope that the Government will accept the Amendment to bring the two closer into line.

Mr. MacColl

I do not know whether the hon. Gentleman is coming out unequivocally in favour of subsidised rates of interest for council house borrowing. If he is, that is a helpful contribution. We are at the moment working on the principle that 4 per cent. determines the only subsidy to the rate of interest which is given.

The important thing here is to keep a balance between the private owner and the local authority owner. In Committee, my hon. Friend for Birmingham, Aston (Mr. Julius Silverman) pointed out that it seemed unfair that a local authority paid a different percentage in one case from the other. But the important factor is the amount of Exchequer contribution. The amount of Exchequer contribution is the same in both cases. In the case of the private owner, there is something extra out of the rates, and, equally, the council tenant can, if the local authority wishes, receive an extra rate contribution towards his rent.

The two positions are, therefore, the same if one takes it from the important point of view of the outside person, that is, the level of Exchequer contribution. The Exchequer is paying the same proportion in each case.

Amendment negatived.

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