COUNCIL HOUSES (SALE) (Hansard, 13 June 1972)

HC Deb 13 June 1972 vol 838 cc1263-70 1263

§ The Minister for Housing and Construction (Mr. Julian Amery)
Mr. Speaker, I will, with permission, make a statement on the sale of council houses.
The demand for home ownership has never been stronger than it is today. The Government are pledged to meet that demand. One of our first actions on taking office was to remove the restriction imposed in 1968 by the previous Government on the sale of council houses.
The response from many local authorities has been encouraging. But there are still local authorities which refuse to sell council houses to their tenants and some which used to sell but have now ceased to do so. The Government consider that for the very great majority of 1264 local authorities there is no conflict whatever between the adoption of positive policies for the sale of council houses to their tenants and their other housing responsibilities. The local authorities, as the present owners of the houses, have it in their power to meet the desire of their tenants for home ownership. In the Government's view, they have a duty to use this power. If they do not, they will be failing to take proper account of their housing responsibilities. They will also be failing to play their part in helping to secure an adequate supply of houses for sale at a reasonable price.
The Government have accordingly decided that the time has come for all local authorities to review their policies in this important field. A circular is being sent today to all local authorities in England urging them to adopt a policy of selling houses to those of their tenants who wish to buy. In view of the interest of right hon. and hon. Members in this matter, I have arranged for the text of the circular to be included in the OFFICIAL REPORT.
I understand that my right hon. and learned Friend the Secretary of State for Wales is sending a circular in similar terms to all local authorities in Wales.

§ Mr. Freeson
There had been a rumour that the Government were to make a statement about the possible deferment of the Housing Finance Bill. That would have been far more relevant to our housing need and to the inflationary situation than the pathetic announcement we have just had. Why did the right hon. Gentleman ever bother the House with such a statement?
Is the right hon. Gentleman not aware, as Minister for Housing and Construction, that the shortage of good property to let at reasonable rents is much graver for most city and town areas of the country than the shortage of houses for sale? Is he not aware that, while there may be an undoubted demand among some sitting tenants on council estates for owner occupation, it would be far better if local authorities were able to build specifically for sale in addition to building for rent rather than sell off rented accommodation which is already in short supply? Is he not further aware that the increased provision of non-rented housing is disinflationary compared with the sale of existing 1265 properties on the private market, which is inflationary? Is he not further aware—

Hon. Members
Too long.

§ Mr. Freeson
—or let him be aware, that the Labour Party will resist the Conservative Party's policy of wholesale and indiscriminate selling off of rented dwellings? Is he also aware that we believe that local authorities could provide more rented houses at reasonable rents, not fewer, and that if there is to be provision for owner occupation it should be by building for sale by local authorities? Specifically on that point, what does he intend to do about the score or more authorities already listed in his Department which wish to build for sale in addition to rent? What will he do—

§ Mr. Speaker
Order. The Front Bench has certain accepted latitudes on these matters but there must be a limit.

§ Mr. Freeson
What is the Minister going to do about the present price of all kinds of properties for sale, including council houses costing as much as £10,000? Will he now—

§ Mr. Speaker
Order. I intervened just now. The hon. Member must realise that he has now cut out at least two or three back benchers.

§ Mr. Freeson
If I may say so, that is a matter entirely within your discretion, Mr. Speaker.
May I put my last point to the Minister? Will he, in place of his ridiculous and irrelevant circular, issue a circular to local authorities indicating the Government's intention to back a major expansion in the building of houses and flats at reasonable rents by local authorities throughout the country.

§ Mr. Amery
The hon. Gentleman seriously under-rates the extent of the demand for home ownership from council tenants. Last year between 60,000 and 70,000 council tenants bought houses in the private sector. Had they been able, to the extent that they wished, to buy their own houses they would have satisfied their aspirations for home ownership and at the sametime would have relieved the pressure at the lower end of the housing market. The hon. Gentleman 1266 talks of the shortage of rented accommodation. The present Government, unlike the previous one, place no restriction on their approval of the building of council houses by local authorities. The rising amount of the slum clearance subsidies proposed in the Housing Finance Bill will make it easier and more attractive for local authorities to build council houses where there is a need for them.
The hon. Gentleman asks me about the price of houses generally. The present price represents the balance of demand and supply in the country. People have always wanted to buy their own homes; now for the first time they are beginning to have enough money to do so. It is interesting that in 1969 first-time mortgages were 265,000 and last year they were 370,000. Although a good deal is said about the difficulties facing young people buying houses for the first time, in 1969 105,000 mortgages were issued to people under the age of 25 and last year it was 145,000, which shows a spectacular increase.
The hon. Gentleman—I am sorry to take up the time of the House but I have been asked a lot of questions—asked about building for sale. It has always been the Government's view that the private developer is a more efficient builder. I have, equally, made it clear that I am perfectly prepared to authorise local authorities to build for sale both in specialised markets, such as houses for the disabled, and where private enterprise for one reason or another does not wish to compete.

§ Mr. Gurden
Is my right hon. Friend aware that the majority in this House are very grateful to him for his statement and that certainly many municipal tenants are grateful to him? Is he aware that I have withdrawn my Private Member's Bill which was for this very purpose, to make more home owners out of municipal tenants? Is he further aware that I hope that local authorities will see the light now and not cause such a Bill to be reintroduced?

§ Mr. Amery
I would like to pay tribute to the strenuous efforts of my hon. Friend to promote the sale of council houses. The substantial support which his proposals have received inside and outside the House testify to the strength of public 1267 opinion on this subject. I join with him in hoping and believing that local authorities will show the good sense to proceed with the sale of council houses on the lines I have indicated. Of course the Government could not remain indifferent if that was not the case.

§ Mr. Pardoe
Is the right hon. Gentleman aware that if political dogmatism could build houses he would be the most successful Housing Minister ever, whereas he is in reality the least successful Minister we have had for many years? Will he admit that he has been in the business of selling council houses for two years now? Will he tell us how many he has sold, and will he say how his circular will contribute to getting more houses built and bringing down their cost?

§ Mr. Amery
In 1970 6,000 council houses were sold; last year the figure was over 16,000. In the first quarter of this year the figure was 7,000; that is, more than the whole of the 1970 total. If we go on at that rate 30,000 will be sold this year, and I would hope to see the total go well over50,000 if all goes well. The hon. Gentleman asks what effect this will have on house prices. As he knows, local authorities are authorised to sell at a discount of 20 per cent., and even 30 per cent, in some cases, to sitting tenants. If this provides more houses for sitting tenants to buy and reduces the pressure at the lower end of the private sector this will contribute to the stabilisation of prices.

§ Mr. James Hill
Is my right hon. Friend aware of the disappointment of many hon. Members on this side of the House? Is it not time he made it mandatory that we sell council houses? Is it equitable that in some areas council tenants can buy and in others they cannot? Would he answer his own conscience? Can he not give us some indication of his plans?

§ Mr. Amery
The Government prefer to rely on persuasion and the good sense of local authorities at this stage. I have confidence in the response of the local authorities to the circular which we have issued. If the circular should be ineffective in increasing sales of council houses the Government could not remain indifferent.

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§ Mr. George Thomas
Is the Minister prepared to answer detailed questions on the application of this circular in Wales? If he is not, and as there is no one from the Welsh Office on the Government Front Bench, when will the Government give us an opportunity to put questions on the detailed effect of the circular in the Principality?

§ Mr. Amery
The right hon. Gentleman and his hon. Friends from the Principality can no doubt put down their own Questions to my right hon. and learned Friend.

§ Mr. Thomas
Further to that point of order, Mr. Speaker. Is it not offensive—[Interruption.] I am raising a point of order. Is it not offensive that Welsh Members are precluded from asking questions on a circular which will have a great effect in Wales? In the City of Cardiff there are nearly 4,000 families on the waiting list for council houses, and we cannot ask the Minister any questions about the matter. Will the Minister ensure that his right hon. and learned Friend will come to the Dispatch Box and submit himself for questions?

§ Mr. Amery
Further to the right hon. Gentleman's point of order, Mr. Speaker. The right hon. Gentleman totally misunderstands the situation. He asked me whether I was prepared to answer detailed questions. Such questions would be difficult to answer in respect of England as well as Wales without notice. I am prepared to answer general questions because of their wider application to both England and Wales.

§ Following is the circular—

1. I am directed by the Secretary of State for the Environment to express his concern at the response of local authorities to Ministry of Housing and Local Government Circular No. 54/70. That Circular emphasised the Government's intention to encourage the spread of home ownership and removed the restrictions imposed in 1968 on the sale of council houses in certain areas.
2. The Secretary of State appreciates that many local authorities share the Government's wish that council tenants should have the opportunity of buying the house in which they live, that the number of local authorities who sold houses increased significantly in 1971, and that there has been a substantial increase in the number of individual sales. But he notes with regret that many authorities continue to adopt policies which frustrates their tenants' desire to own their home. In recent months he has received numerous representations on this score from tenants and other persons.
3. The Secretary of State accordingly urges all local authorities who are reluctant to sell council houses to those tenants who wish to buy them to reconsider their policies. In his view, unless the local circumstances are quite exceptional, a local authority who deny their tenants the opportunity to own the house which they have made their home would be failing to exercise their powers under section 104 of the Housing Act 1957 in a manner which is appropriate to present circumstances. The housing duties of a local authority extend to the consideration of all the housing needs of their area. In the opinion of the Secretary of State these needs include those of the tenants of the authority who aspire to home ownership. He is convinced that it is possible for an authority to meet those needs in a way which is compatible with their responsibilities for meeting their area's requirements for dwellings to let. Many council tenants who are anxious to buy their home would not wish to move if they were denied this opportunity. Sales to such tenants would not there fore affect the supply of accommodation which the authority could let to prospective tenants. Sales to other tenants could normally be offset without difficulty by further building. The Government does not propose to restrict the numbers of further dwellings which authorities can provide to meet local needs.
4. It is often argued that council tenants aspiring to home ownership ought to be content to buy a house in the private sector. In the Government's view, this argument fails to do justice to the legitimate desire of many council tenants to remain in a house which they have made their home and not to sever their ties with a congenial neighbourhood. Moreover if council tenants can buy a house only in the private sector, their council needlessly creates additional demand for houses in that sector which can only aggravate the present pressure on house prices, particularly for houses in the lower price ranges.
5. The effect on the Housing Revenue Account of selling council houses will depend on the circumstances of the case. Should 1270 the transaction give rise to a deficit, e.g. if the authority found it necessary to provide additional new dwellings to replace sold houses which would otherwise have been available for letting to prospective tenants, the subsidies proposed under the Housing Finance Bill will, if the Bill is enacted, meet the major part of such a deficit. In addition, as was announced in Circular No. 51/72, contributions payable under the Housing Act 1969 for improved or converted council houses which are sold on or after 1 April 1972 will continue to be payable for the normal 20 year period.
6. Accordingly the Secretary of State urges those authorities who have not so far felt able to give those of their tenants who wish to buy their home the opportunity of so doing, to review their policies on this issue in the light of this circular and to have regard to the wishes of their tenants. In his view, the great majority of authorities will fully discharge their housing responsibilities only if they pursue the policies recommended in this circular. Authorities are reminded that, as was explained in Circular No. 54/70, they may sell at up to 20 per cent. below unrestricted market value where resale conditions are imposed.