§ 10.25 p.m.
§ The Under-Secretary of State for the Environment (Mr. Reginald Eyre)
I beg to move,
That the Housing Associations (Increased Contributions) Order 1972, a draft of which was laid before this House on 16th May, be approved.
This order has been made under section 22 of the Housing Act, 1969, which gives my right hon. Friend the Secretary of State power to vary, among other things, the Government contribution paid under Section 21 of that Act in respect of dwellings provided or improved by housing associations acting under arrangements with local authorities.
The Government contribution at present consists of an annual payment, made for 20 years, equal to three-quarters of the loan charges on the "allowable cost". The "allowable cost" is half the total approved expense of acquisition and works, subject to certain limits.
The purpose of the order is to increase the percentage rate of the annual contribution under Section 21(7) of the 1969 Act from 75 per cent. to 100 per cent. Putting it another way, this means that the Government contribution will in future consist of half the total approved expense of a scheme, within limits, instead of only three-eighths.
The voluntary housing movement holds a distinctive place in the Government's housing policy. It can and does make a special contribution to meeting people's housing needs. From the outset the present Government have sought to encourage the voluntary movement, and this measure provides further evidence of our continuing support.
During the various consultations which took place during the preparation of the Housing Finance Bill and subsequently, the voluntary housing 178 associations expressed tears about the Bill's effect on their finances, especially the provision which from 1st January, 1973, brings housing association tenancies—but not the members of co-ownership associations—within the fair rent provisions of the Rent Act, 1968. Housing associations represented that this would lead to a decrease in their rent income since the rents now normally charged for converted or improved dwellings are higher than fair rents are likely to be. It was said that the result of restricting new tenancies to fair rents would be that many housing associations would not be able to undertake any new schemes of conversion or improvement.
Clearly this was not a situation which should be allowed to arise and, accordingly, an undertaking was given during the 48th sitting of the Standing Committee on the Housing Finance Bill on the afternoon of 16th March, 1972, by my predecessor that a draft order to increase the rate of Government contribution would be laid after the Housing Finance Bill had received its Third Reading in the House of Commons.
The Third Reading of the Bill took place on 8th May and the order was duly laid on 16th May. This order will apply to contributions made in pursuance of arrangements made between housing associations and local authorities after 31st July this year. This will be well in advance of 1st January, 1973, the date on which the fair rent provisions should begin to apply to housing associations.
The local authority associations, which were of course consulted before the draft order was laid, generally welcomed this proposal, and representatives of the voluntary housing movement have also welcomed the Government's action.
Perhaps I should add a word of explanation about the position as it affects the development and intermediate areas. The House will recall that under the Housing Act, 1971, housing associations operating within the development and intermediate areas receive contributions amounting to three-quarters of the approved expense of improvement or conversion schemes, provided that the works are completed before 23rd June, 1973. Subsequently we have announced our intention to introduce legislation in due course to extend this period for a further 179 year until 23rd June, 1974. But the higher rates of grant in the assisted areas are not affected by the order now under consideration, which specifically excludes cases to which the 1971 Act applies. I hope that makes the position clear.
Finally, it might assist the House if I were to give a more concrete example of what the new arrangements will mean in a particular case. In greater London the housing associations have a specially determined limit of £5,000 on the approved expense of improvement schemes. The existing annual contribution towards this limit is about £200. The increase in the rate of Government contribution made by this order will give an extra cash subsidy of about £66 a year for each dwelling in this kind of case.
I am sure that right hon. and hon. Members on both sides of the House will welcome this further substantial incentive to the work of housing associations, and on that basis I recommend the order to the House.
§ 10.31 p.m.
§ Mr. Reginald Freeson (Willesden, East)
We welcome the order, but we cannot leave it at that because we have to consider the situation which has given rise to it and also because the problems of that situation will not be solved by the order.
The Minister gave a rather euphemistic description of the theme of the discussions between housing associations and the Government about the position that could arise following the Housing Finance Bill's becoming law. I followed what was going on as closely as I could without being privy to the detailed discussions. My personal contact with housing associations goes back quite a long time, certainly before I came to the House, and in my view the theme was somewhat different because this situation would have arisen even had there not been a Housing Finance Bill.
The position is not so much that the imposition of so-called fair rents would bring rent levels below the cost of providing the dwellings and therefore action had to be taken. One should really put the reverse description on it. Costs have been rising so rapidly, particularly in the already high-cost stress areas such as inner London, that it has become inevit- 180 able that there should be increased assistance from the Exchequer towards the work of housing associations in improvements and conversions of old houses into flats. The increased assistance is necessary to enable housing associations to continue with their work. The position is as serious as that, and I am not exaggerating.
The increase, welcome and marked though it is, is already being overtaken by events. The order will provide about a 25 per cent. increase in Government assistance on existing levels of help, but property prices in London are rising at a rate of at least 30 per cent. per year. This is particularly true in the inner London area where we are most concerned with this kind of work. That is the rate of increase before the improvement and conversion work is undertaken.
My main point is that we start from a position of soaring house prices and of land which is unprecedented. One can always say that prices are unprecedented, but it is the rate of increase that is unprecedented. Its like has not been seen before in this century. The prices of existing properties—I am not talking about houses being built—are running at about double what they were in 1969. In the stress area of London, the rate of increase is far higher. In just such an old Victorian area, Queen's Park in my constituency, large Victorian houses which were sold in 1969 for £9,000—just the type of houses concerned in this field of housing association work—are being reinsured on professional advice for £20,000.
Although we are concerned with properties which will eventually be redeveloped by housing associations, the cost of land is not central to the issue. But it is as well to bear in mind that the land cost element rose by about 65 per cent.—more in some areas—between the end of 1970 and the end of 1971 or the beginning of this year. That is one of the major factors in the rising costs.
Housing associations are at serious risk of being priced out of the market. Only this evening I was speaking to an hon. Member about another matter and he mentioned that a mutual acquaintance of ours had become a consultant and manager for a worthwhile housing association in London, which I know personally. Having got the whole thing 181 organised earlier this year, they could not get the properties. I invited them to tour my district because I wanted to see them active there. They had to opt out: they did not undertake one project there because of the cost. I understand that they are having the same experience elsewhere in inner London this year.
Either the total cost of purchasing the property and then improving or converting it exceeds the limits laid down by the Government or it exceeds the limits laid down by the local authorities which lend the money, usually in line with Government subsidy limits. On the other hand the rents which are likely to be produced are too high on the feasibility study, so they have to opt out. They are being caught increasingly between these two aspects of the situation.
§ Mr. Arthur Jones (Northants, South)
Does the insurance figure of £20,000 mentioned by the hon. Member imply that the property is worth £20,000 on the open market, or is it replacement value, building cost value?
§ Mr. Freeson
I will have to make the same insurance decision shortly myself although not about a £20,000 property. I understand that this is what would be required to purchase a similar property in the same area. The companies are advising people to keep pace with the market. The figure relates, I understand, to the market cost. This was not unexpected. It is in line with what one has seen taking place in many areas of London and, at different levels, in other parts of the country.
§ Mr. Ernest G. Perry (Battersea, South)
Is my hon. Friend aware that in the London Borough of Wandsworth, particularly in South Battersea, houses that housing associations could buy two years ago for £5,000 or £6,000 are now being sold for £17,000?
§ Mr. Freeson
That does not surprise me in the least. The figures which my hon. Friend mentions are particularly relevant to a specific point which I shall put to the Government shortly.
I was dealing with the two-handed situation in which housing associations are finding themselves. Many associations are saying, perhaps, as I hope, over-despondently, that this year they are 182 finding it impossible to expand their work or to expand it more than marginally. They are consolidating and concentrating their minds on managerial matters. In itself, that is not wrong. However, it is most unfortunate that this feeling should be growing among an increasing number of associations. I do my best to dissuade them from that feeling because, no matter what the difficulties, there is a task to be done in our inner city areas, and the associations, alongside local authorities, have a part in undertaking it.
Arising from this serious situation, whatever one's views about it, however partisan one may be in one's criticism or defence of Government policy, or capacity or incapacity, one must conclude that more Exchequer and local authority help is necessary along the lines of the order but going beyond it.
I come now to deal with this point. If my figures are a little out of date, no doubt the Under-Secretary will correct me. As I understand it, the price ceiling for the receipt of Exchequer subsidy upon which contributions under the order can be made is, outside London, £2,500 per dwelling. Inside London, until early this year, when there was a revision, the figure was £5,000 per dwelling. For large houses capable of housing families of up to six people, the ceiling is now £6,500. Here my hon. Friend's intervention is relevant. The figure is £5,500 for smaller families' dwellings and £5,000 per flat where there are conversions producing three flats.
There are other details but that is the basic framework within which local authorities are operating, outside and inside London. Those figures bear repeating in the light of the situation which housing associations, like others, are having to face. Outside London the ceiling figure is £2,500. If the property goes above that figure associations will not receive a contribution from the Exchequer and will, presumably, be in serious difficulty with their local authorities as well, in like token. Inside London the figure is £5,000 per flat in cases of conversions to three flats. For individual family dwellings the figures are £5,500 to £6,500. Anything above that figure does not qualify for the contribution.
Will the Under-Secretary, on behalf of the Government, explain to the House 183 and to the many housing associations and their prospective tenants in need, just how one can get within that kind of figure in the high-cost stress areas of London? How can one find in my area, which is just such a stress area, properties capable of producing this accommodation, modernised with grant aid, with this Exchequer contribution which has a ceiling of £5,500 for an ordinary three-bed roomed family dwelling and £6,500 for a large house? It is rare enough to find properties capable of conversion into three flats at an upper limit of £5,000 per flat in the London area, but how much more difficult will it be in some other parts of the country where the limit of £2,500 still obtains? Where is it expected that housing associations will get properties in the high-cost stress areas within those limits?
Whatever one's views about the background and cause and effect, and what is to be done about the problem, it is obvious that the time has come for something to be done to raise the ceiling figures within which housing associations may qualify for the contributions with which we are dealing. It is an urgent matter, especially if house prices are to continue to increase at the rate of 30 per cent, a year in London with high percentage increases in other parts of the country as well.
I suggest that in connection with this order and the contributions under it, and in connection with the price ceiling to which I have referred, two things must be done. First, there should be an undertaking that there will be an annual review, not simply a review which takes place as a result of pressure building up. It took about 10 months of pressure from the housing associations before action was taken by the Government this year.
There are special problems within the high-cost stress areas of our cities where a complex of factors makes it particularly difficult and expensive to undertake conversion and improvement work. We can think of North Kensington, areas of Paddington and certain other pocket areas. They are not such small pockets, but they are areas within the general stress area in London and they have their equivalents in other cities. Serious thought should be given to treating these areas as special areas. This might well 184 marry up with ideas about designated stress areas which have been mooted from time to time in connection with other Government services.
We welcome the increase provided in the order. It is necessary. It will be helpful, but there are other financial factors which must be mentioned. I have referred to the ceiling on the cost of buying. This price ceiling is far too low. It is taken as a guide by very many local authorities—I do not know how many but I think the majority—for fixing loan ceilings. If the Government lay down a ceiling of £6,500 for a large family dwelling according to which housing associations may qualify for the contributions, there is a tendency for a large number of local authorities to fix their loan ceilings accordingly.
Example and advice need to be given by the Government. The Government should set an example by increasing the ceiling in the order and they should advise local authorities which operate this kind of restriction to bring themselves into line with the new ceiling.
The important thing is the underlying situation on prices. Whatever the Government do, whether they extend their help along the lines I have suggested or not, they will not tackle the basic problem which faces housing associations, local authorities, moderate income earners in the private rented sector and the moderate income earners who desire to be owner-occupiers in these areas.
I cannot bore the House with the details of the increasing number of reports I have been getting, as other hon. Members must have done, about professional people who, through their agencies, their trade unions, their business houses, their factories and their managements are getting into touch with local authorities asking for special help for housing because they can no longer afford to buy the housing which they could have afforded a year or two ago. They face the same kind of problem as do the housing associations, as is reflected in the increased benefits under the order.
The time will come when the Government must take action on a number of fronts. I select only one for the purposes of our discussion, because the discussion would range too wide if I went beyond it. A ceiling will have to be considered on the price of properties bought by 185 developers for modernisation and improvement with the benefit of public funds. I could go into some detail about how such a scheme should work, and I have done so elsewhere. Sooner or later if ordinary people, and housing associations in particular, are not to be driven out of the very areas of our cities where it is most important that housing associations, along with local authorities, should be operating on a much bigger scale, a ceiling will have to be applied to these properties, particularly where public funds have been involved. In the inner parts of our cities properties are increasingly being bought up by speculative developers, converted with the aid of considerable public funds and then sold at a profit of anything from 100 per cent. to 300 per cent.
I am not exaggerating; I know of such cases. I know of properties bought for £3,000 to £4,000 two or three years ago being converted into four or five flats, which have been sold for between £5,000 and £12,000 apiece. They are not exceptional cases and they are growing in number. Everybody involved knows that this is going on, and something must be done about it because it is driving the housing associations out of this field of work.
Both housing associations and local authorities, working together, must have Government backing to expand their activities in a programmed way equal to an increased new building programme. These areas must be held as areas of housing for reasonable income earners of all classes. I am not speaking now of just the poorest people. People of a range of incomes are being driven out of such areas by the excessive costs which have led to the increased help given in the order. We welcome the order as we welcomed the Act, introduced by the last Labour Government, that gave rise to it. But it is only a palliative. We must take further steps along the lines I have suggested, and beyond them, although I will not range any further tonight
§ 10.52 p.m.
§ Mr. W. Benyon (Buckingham)
I do not want to be drawn into a general debate on housing along the lines the hon. Member for Willesden, East (Mr. Freeson) mentioned. I agree with him in certain respects on the problem he posed, but it would take a far longer 186 time than I have available to me to go into its various aspects.
The order essentially increases Government finance for housing associations and therefore it is to be welcomed. It redeems a pledge made during the Committee stage of the Housing Finance Bill. I pay tribute to the assistance the Government have given to the voluntary housing movement, which is greatly appreciated.
My right hon. Friend the Secretary of State has said that he would like to see the voluntary housing movement expand in the way that the building society movement has expanded over the past 50 years. But if the finance for the movement is to be dependent on local authorities and therefore to a certain extent at the whim of the district valuer, progress will inevitably be slow. It is essential to attract to the movement private investment. I believe there are large sums available if only we can get some sort of Government guarantee for such investment. Underwriting of that kind has been carried out most successfully in both the United States and Sweden. In the United States in particular—
§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)
Order. The hon. Gentleman should not stray too far from the terms of the Motion by suggesting other things. We must keep strictly to its terms, as did the hon. Member for Willesden, East (Mr. Freeson), and discuss the amount of the contribution. Passing references to other things are in order but they should not be developed.
§ Mr. Benyon
I apologise, Mr. Deputy Speaker, but I was seeking to show that perhaps not quite so much finance would be needed if the kind of measures I suggest were carried out.
In neither country that I have mentioned have the Government guarantees been invoked by any lender, and in each country the Government have made considerable profits from the underwriting. There are precedents in this country, such as the export credits guarantees and the Home Office guarantees for the building of approved schools. What is essential is that the voluntary housing movement should play its part in increasing the capital formation in housing in this country. I think all hon. Members will agree that overall this has been low in the 187 United Kingdom as a percentage of the gross national product. The order is a step in that direction.
If the low-cost rented sector is to be the exclusive preserve of the local authority and housing associations, it is absolutely essential that we get greater finance into the movement from other sources. To do that there has to be some sort of over-seeing body. I suggest that the Housing Corporation is such a body. I hope that my hon. Friend the Under-Secretary will take this point and perhaps seek to call a conference of the voluntary housing movement at which these additional sources of finance can be investigated.
§ 10.56 p.m.
§ Mr. Arthur Jones (Northants, South)
I welcome the proposals in this Statutory Instrument. However, is my hon. Friend the Under-Secretary satisfied with the organisation that we see for housing societies and housing associations? Is he happy with the working of the arrangements with the multitude of organisations which undertake this vital improvement? Are those organisations in a position to make the best use of the funds which are being made available to them?
I was a member of the Cohen Committee which considered the organisation of housing societies and associations. Unfortunately that committee was appointed in 1968 and did not have an opportunity to finalise its investigations and prepare a report.
Clearly there is tremendous fragmentation in what is generally termed the third arm of housing. I agree with the hon. Member for Willesden, East (Mr. Freeson) that we should do everything possible to help the many people who voluntarily engage in this work. On the one hand there are the housing associations. More or less anybody can get together with others and form a housing association; there are no statutory requirements. As long as it is non-profit making, any group of people is entitled to set itself up and call itself a housing association.
On the other hand, a housing society needs to be registered with the Registrar of Friendly Societies under the Industrial and Provident Societies Act, 1965. I am told that there are no less than eight different types of model rules for 188 societies, two published by the Housing Corporation, to which my hon. Friend the Member for Buckingham (Mr. Benyon) has referred, and six by the National Federation of Housing Societies. It is to that body that my hon. Friend the Member for Buckingham was referring. That is where co-ordination of the activities of housing societies should lie. I agree that we need to look at ways and means by which the present arrangements can be improved, so that the best possible use is made of public moneys used by housing associations and societies.
Substantial sums of money are involved. This was made clear to us by Mr. Waddilove, the Chairman of the National Federation of Housing Societies, who is himself a strong advocate for a measure of co-ordination and the bringing of order into what is a very confusing situation for those of us who have some familiarity with these organisations, but is even more confusing for the public.
§ Mr. Deputy Speaker
Order. I am sorry to interrupt the hon. Gentleman but he is going a little far from the order. I am sorry to disappoint him. I have been as tolerant as I can, but I must have regard to the order.
§ Mr. Jones
I am grateful, Mr. Deputy Speaker.
The Greater London Council is providing £125 million to housing associations and societies over a five-year period from 1970 to 1975. It expects, if this money were utilised—this is one of the problems which the Government face—to provide 25,000 houses for which nominations by the GLC would total 14,000. If ways and means can be found to stimulate and encourage the work of housing associations and societies, significant help can be given to the housing programme. I recognise that my hon. Friend the Under-Secretary would find great difficulty with the legislative programme to try to make any progress in this sector, but perhaps I may have an assurance that it is in the Government's mind.
§ 11.2 p.m.
§ Mr. Thomas Cox (Wandsworth, Central)
I am sure that hon. Members on both sides of the House will warmly acknowledge the valuable work that housing associations do throughout the country. Certainly, as my hon. Friend the 189 Member for Willesden, East (Mr. Freeson) said, those of us who represent inner London constituencies, where unfortunately the recurring problem we face is housing, readily acknowledge that, together with local authorities, the work of housing associations offers opportunities to people to be rehoused in decent accommodation. The class of person involved is unable to look with any hope at the kind of property sales advertised in local and, indeed, national newspapers where prices of £20,000-plus are being asked.
I realise the limited scope of the debate, but if we wish to see the work of housing associations continue we cannot see it in isolation against the unfortunate things that are taking place certainly in inner London and in many other parts of the country where that work is being hampered by the abuse of property speculators concerning improvement grants.
If a housing association wishes to buy a property, there is a limit to which it can go in the amount it is prepared to pay. Unfortunately, this is not generally so with someone who sees an empty property, realises that he will be able to get substantial public moneys to make improvements and shortly afterwards sell it at a handsome profit. Housing associations are not in being to do that. However, because this is allowed they face great hardship in buying suitable properties.
My hon. Friend the Member for Battersea, South (Mr. Ernest G. Perry) pointed out in an intervention that in his part of the London Borough of Wandsworth—certainly it also happens in my part of the borough—because of the abuse of housing improvement grants which is taking place, properties which a housing association would normally be able to buy are now beyond its reach because of the price which is asked. Therefore scarce accommodation in inner London, which could be made available to people in genuine housing need, is being bought up, improved at public expense and then sold at a handsome profit. It goes to help not those in need, but those with no financial or housing problems, because those with financial resources have no housing problems.
Because of the abuse of the house improvement grant provisions, there is a 190 lack of opportunity for housing associations in inner London. The Government cannot, if they have a genuine desire to extend the scope of opportunity of housing associations, close their eyes to the abuses.
The Minister for Housing and Construction says glibly that houses thus improved help to solve the housing problem. Those of us from constituencies where the main problem is trying to find decent living accommodation for people derive no comfort in hearing the Minister say that. There are many hon. Members on both sides making valiant efforts to help constituents living in deplorable accommodation and bringing up families in great hardship.
We in Parliament, together with local authorities, want to encourage the work of housing associations. The Government can count on the support of this side of the House if they make efforts to stamp out the abuses which occur in London and elsewhere, where property speculators to whom money is no object and who can pay whatever price is asked use public money to improve property.
Unless the Government stamp out the abuses, the policy as outlined in the order is doomed to failure. I do not want the policy to fail. Unless the Government tackle the abuses there will be a continuation of the appalling hardships that decent, hard-working people in London and elsewhere must suffer.
§ Mr. Nicholas Scott (Paddington, South)
I am sure that the hon. Gentleman would not wish to mislead the House. I acknowledge the special problems that housing associations have because of the price boom. The hon. Gentleman surely is not suggesting that these "abuses"—that word was used by him, not me—began in June, 1970. They existed prior to that date and were quite common under the Labour Government. Nothing was done by the Labour Government to end these abuses. That is not to say that nothing should be done now. The hon. Gentleman would not wish to pretend that this is simply a phenomenon of the present Government.
§ Mr. Cox
I am sure that the hon. Gentleman, because of the constituency he represents, has the same problems that my constituency has. It is only in the last year or 18 months that house prices 191 have rocketed. Land and property speculators have moved into the hon. Member's area and into mine. They are able to do this largely because they know of the substantial sums of public money they will get and of the quick profit available. I condemn such people. This is why I want Government action. These speculators have no interest in helping to rehouse people in genuine housing need. This is what we should tackle.
§ 11.10 p.m.
§ Mr. Evelyn King (Dorset, South)
At this hour I shall be brief. I have enjoyed this important debate but I was a little disappointed that my hon. Friend the Under-Secretary of State, cogently though he spoke on the subject of the money that is to be granted, did not also give us some background—I hope he will do so in replying—of the progress made by housing associations in general and the difficulties which they face, which are remarkable and, I believe, abnormal. I hope that my hon. Friend will fill in that background.
The hon. Member for Willesden, East (Mr. Freeson), in whose speech I was most interested and with much of which I agree, speaks as a Member for Willesden and I understand that. But he also speaks, I presume, for the Opposition in a much wider sense, and I confess that I was also a little disappointed that he, like everyone else who has taken part in the debate, dealt almost exclusively with city problems. One would suppose that housing problems were confined to London. If I say nothing else tonight, I hope I may remove that impression. If the hon. Gentleman seeks to speak in a national context, as I am sure he would like to do—and we should listen to him with respect—I hope he will make his remarks wider and realise that there are people living in the countryside who have their problems.
I am desperately concerned about those who live in rural Dorset, but, of course, their problems can be found in any other part of rural England as well. In every housing debate I find few words spoken about their problems. I appeal to the Government to put in a word from time to time about the people who do not live in the big cities. I think I am 192 right in saying that 30 per cent. of building society advances go to those earning £30 a week or less, which is below the average wage.
§ Mr. Deputy Speaker
Order. The hon. Gentleman is going too far from the terms of the order. We are discussing the amount. It is in order to debate the amount of the increase but not to traverse the whole policy of Government contributions, otherwise we shall find ourselves in the middle of a wide-ranging housing debate.
§ Mr. King
I was about to say, Mr. Deputy Speaker, that those to whom I refer, the poorest section of the community, are in need of this grant which is about to be made. I hope that that at any rate is in order. I hope that any additional grant which is made will be related to financial need, because the financial need, as the hon. Member for Willesden, East pointed out, in the context of rising prices clearly has immensely changed and is changing almost every month.
What also bothers me about the rural scene is the lack of land. If the grant is to be increased, I hope my hon. Friend will ensure that it can be efficiently used. It can be efficiently used only if sufficient land is made available. I hope that at the same time—I know that the Department is already making grants to local authorities for the assembly of land—it might be possible for local authorities to assemble land specifically allocated to housing associations. If that were done, this grant would be even more efficiently used.
I conclude, having sought to make only that one point, with the hope that the needs of those who live in the countryside will be treated no less urgently than the needs of those who live in our towns.
§ 11.15 p.m.
§ Mr. James Hill (Southampton, Test)
I congratulate my hon. Friend the Under-Secretary of State on this welcome news. During the proceedings in Committee on the Housing Finance Bill we were lobbied by housing associations expressing anxiety that the rents of newly acquired modernised older properties would be limited by the Bill.
193 The limited nature of the debate precludes my answering the hon. Member for Willesden, East (Mr. Freeson) who has a cut-and-dried scheme for imposing a ceiling on the price of properties.
The criticisms which have been made of improvement grants are unwarranted. The grants have served a useful purpose in enabling many houses in disrepair once again to be made habitable. Admittedly the rents are open to exploitation. When I was chairman of the housing committee in Southampton I was surprised that the Labour Government, in introducing improvement grants, made them open-ended. I was afraid that developers, in the days when finance was strictly limited, would take advantage of the scheme to such an extent that landlords and owner-occupiers might not be able to get the finance they required. Since then there has been a tremendous increase in the amount of money available, and the order represents an important step forward which will be very much welcomed by the rural and suburban areas.
It has been said that housing associations are not always run with the management expertise that is desirable. There should perhaps be a tightening up of the rules so that housing associations cannot be started up by any Tom, Dick or Harry. I am sure my hon. Friend will look into this.
In my area housing associations have greatly helped with rehousing especially of the older people, and I am grateful to my hon. Friend for introducing the order.
§ 11.17 p.m.
§ Mr. Eyre
I am grateful to the hon. Member for Willesden, East (Mr. Freeson) for his kind words in welcoming the order. I am afraid I cannot follow him in detail in his remarks about the fever of demand for home ownership. It is due in part to increased confidence in the availability of credit, which has not been so readily available in the recent past. The fever of demand has become overheated, and I advise individuals if they can to postpone a decision about the purchase of property until the autumn as there is evidence that there is a prospect of the market stabilising.
The hon. Member for Wandsworth, Central (Mr. Thomas Cox) referred to 194 tenants being dispossessed. I hope he will join me in doing everything possible to explain to tenants the great degree of protection that is available to them. The housing advice centres in London are doing good work in making this clear to tenants. On occasion tenants are possibly induced by financial offers to vacate their tenancies. If they make the decision to do so on economic grounds, that is a matter for their judgment. It is important that we should all support the work that the housing advice centres are doing to make the safeguards clear to tenants.
§ Mr. Thomas Cox
During the passage through the House of the Criminal Justice Bill the Government accepted an Amendment to increase the penalties for harassment. What publicity do the Government intend to give to this measure, which generally is unknown to the vast majority of tenants?
§ Mr. Eyre
The hon. Gentleman will appreciate that the Government cannot give publicity to the effects of the Criminal Justice Bill until it becomes an Act, but great efforts will then be made to draw it to the attention of the public; I am sure that the housing advisory centres and Members of Parliament will help in that regard.
The hon. Member for Willesden, East expressed concern about housing problems in London and other heavily populated centres. I share his concern. As my hon. Friend the Member for Paddington, South (Mr. Scott) pointed out, these problems have existed for a considerable time. As we examine the total policies which have been developed, we are at least within sight of developing measures to enable us to cope with a great number of these serious problems.
The hon. Gentleman then questioned the adequacy of existing cost limits on which contributions to housing associations are based. This is a question that is understandably causing the voluntary housing movement a great deal of concern. It is based on the proposition that the rise in the cost of buying property and the carrying out of conversion work has made present limits unrealistic. It is an entirely different question from the one which we are now considering strictly within the terms of the order, which deals 195 with the rate of contribution and not with ceiling figures.
In regard to greater London the general cost limit of £5,000is double that for the rest of the country outside the assisted areas, except in the case of Birmingham. Even higher limits in London have been fixed to encourage the provision of dwellings of a suitable size for families. I will refer to this aspect in more detail a little later.
The level of costs in London is now being actively considered. Only this afternoon I had a useful meeting and discussed this problem with a number of representatives from the housing association movement. The Department's London Standing Working Party on Housing, on which is represented the Department, the Greater London Council, the London boroughs and the housing associations operating in London, is at present looking at the case for increasing the limits in greater London. I could not anticipate any conclusions at which the working party may arrive. I can only say that I expect it to reach them soon and they will be carefully considered. I know there is concern about the difficulties of housing associations operating in the South East and other areas in the vicinity of London.
§ Mr. Freeson
Why is it not possible for the Government to do what some local authorities do; namely, not use a preconceived figure, but consider policies based on the viability of a housing scheme put forward by a housing association? Is much consideration needed to show that in the inner areas of London, and at different levels in other cities, costs have far exceeded, and will continue to exceed, the kind of figures now applied by the Government?
§ Mr. Eyre
The hon. Gentleman's point about local authorities is a matter for local decision. There is also concern about housing associations operating in the South East and other areas in the vicinity of London. The possibility of increasing the cost limits will depend a great deal on what is done for London itself.
In the development and intermediate areas my impression is that housing associations are in the main content with the existing cost limits, at least for the dura- 196 tion of the operation of the Housing Act, 1971, though there are limited areas of special difficulty which again will have to be considered. In other areas the Department is always ready to consider cases for increasing limits where it has become evident that housing associations are unable to operate within the existing ceiling.
I am grateful to my hon. Friend the Member for Buckingham (Mr. Benyon) for his remarks in support of the order. My hon. Friend spoke about the whim of the district valuer, but it is a little more than that. It is the exercise of independent professional judgment, sometimes in very difficult circumstances. My hon. Friend also asked that consideration should be given to a system of Government guarantees. I shall consider that point. Perhaps my hon. Friend will let me have the details which the rules of order prevented his giving me.
My hon. Friend the Member for Northants, South (Mr. Arthur Jones) referred to the form of organisation at present applying to housing associations and societies. With his experience in these matters, my hon. Friend will know that there are historical reasons for the present differences and, to some extent, anomalies. There is no doubt that clarification is desirable. I am happy to say that this aspect of the work of housing associations and societies is under review. We want the voluntary housing associations to be as effective as possible and, after full consideration, we hope in due course to bring forward proposals to this effect, subject always to the limitation mentioned by my hon. Friend of the availability of legislative time in the House.
In reply to the point made by my hon. Friend the Member for Dorset, South (Mr. Evelyn King), it is clear that the housing associations have made great progress, as the report up to the end of last year shows. The Government intend to see that they will be in a position to continue giving considerable help in dealing with housing problems. The Government are realistic and firm in this intention and they recognise the important contributions which housing associations can make to the solution of housing problems. I appreciate that this applies very much in the rural areas to which my hon. Friend referred.
197 I repeat that the problems raised by hon. Members and their solution will be given careful consideration. I ought to say how grateful I am to my hon. Friend the Member for Southampton, Test (Mr. James Hill) for his remarks in support of the order.
I conclude by saying that the housing associations welcome the order as a most valuable step forward. It gives me great pleasure to recommend it warmly to the House.
§ Question put and agreed to.
That the Housing Associations (Increased Contributions) Order 1972, a draft of which was laid before this House on 16th May, be approved.