HC Deb 03 April 1974 vol 871 cc1395-405

10.0 p.m.

The Under-Secretary of State for the Environment (Mr. Gerald Kaufman)

I beg to move, That the Housing Corporation Advances (Increase of Limit) Order 1974, a draft of which was laid before this House on 21st March, be approved. The draft Order is quite simple. It enables the Secretary of State for the Environment and the Secretaries of State for Scotland and Wales between them to lend up to a further £150 million to the Housing Corporation. The loans are made from the National Loans Fund, normally for 40 years, and are repayable with interest over that period. The power to lend this further amount is permissive. As is common form for the other nationalised industries and public authorities, the corporation will have no automatic right to this further £150 million, and will remain subject to the normal annual public expenditure limitations imposed on them by the Secretaries of State.

As the House knows, the Housing Corporation was set up under Part 1 of the Housing Act 1964 to foster the building of dwellings for rent by non-profit making housing societies. In essence the corporation was intended to be primarily an institution for channelling public capital to housing societies, much as building societies provide private capital to owner-occupiers. It was hoped that building societies would lend at least two-thirds of the cost of housing societies' schemes. As it turned out, their contribution has more normally—and certainly since 1970 —not exceeded half.

The Housing Act 1964, which established the Housing Corporation, authorised lending to the corporation of an initial £50 million. It also provided for further amounts to be authorised by an order or a series of orders up to a total ceiling of £100 million. Orders of this kind were made in 1969 and in 1971. The ceiling figures in the 1964 Act were then raised in Section 77 of the Housing Finance Act 1972 to £150 million, further increasable by order to £300 million. This latest order has the effect of raising the corporation's borrowing limit from £150 million to the £300 million maximum allowed for in the Housing Finance Act. It was one of the few beneficial provisions of that Act, most of which is now due for the knacker's yard.

In addition to raising the ceiling in advance Section 77 of the Housing Finance Act also enabled the Housing Corporation to lend to a much wider range of housing associations than the housing societies to which they had been restricted by the 1964 Act. These associations were tied by the Housing Finance Act to letting unfurnished accommodation at no more than fair rents, and the associations are now stuck with the soubriquet of "fair rent associations".

At 31st March, the corporation had borrowed £137 million of the £150 million which it may be lent under the 1964 Act as amended by the 1972 Act. At the present rate of lending, the limit of £150 million will be reached by the end of this month. Further lending on schemes already approved, without any new schemes at all, could involve the Corporation in lending up to total of £265 million, if the building societies manage to complete their share of lending on co-ownership societies schemes, and £315 million if they do not. It will be obvious, therefore, that this further tranche of £150 million is necessary, and urgently so. The housing associations will not, of course, draw the whole £150 million at one go; they will make drawings of the amount required each month.

The House will want to know the scale and scope of the work of the corporation as well as the fundamental commitment which makes this additional £150 million so essential. Work is proceeding on about 200 schemes of new construction, totalling about 9,000 dwellings, and more than twice that number of schemes, totalling about 20.000 dwellings, are in the pipeline. The greater part of the capital required to finance these dwellings is still to be provided.

I think it emerges clearly that without any new schemes at all the corporation needs to have assured access to the full £150 million which can be provided for in this order. To go on with supporting more new schemes the corporation's maximum borowing ceiling of £300 million will need to be raised by further statutory provision. The House will know that the Housing and Planning Bill, which rose and fell in the last week of the old Parliament, made provision for an increase in the ceiling to £750 million.

Nothing in the order prejudices or prejudges the reintroduction, in whatever form is decided, of the Housing and Planning Bill, or inhibits a wider rôle for the Housing Corporation as envisaged in that Bill. I hope, therefore, that the House will agree to this Order.

10.5 p.m.

Mr. Paul Tyler (Bodmin)

I wish to speak not so much about what the order contains, as about what it leaves out. I must declare an interest, in that I have been advising the Royal Institute of British Architects, and it wishes me to continue to do so. It may be that some architects will benefit from an increase in the borrowing powers of the Housing Corporation.

I am concerned only with the latter part of the Minister's remarks. He spoke briefly about the Housing and Planning Bill, which fell on the Dissolution of Parliament. When that Bill came up for Second Reading on 5th February, there was a great deal of discussion about the rôle of the Housing Corporation. I believe that that discussion was well-merited, because the corporation does not receive as much attention in this House as it deserves. On that occasion the right hon. Member for Grismby (Mr. Crosland), who is now Secretary of State for the Environment, said: I turn briefly to the Housing Corporation and the housing associations. I welcome the provisions of Parts I, II and III of the Bill. I am only too well aware that in my party there has traditionally been a certain suspicion of the voluntary housing movement. He continued: I support the movement, not as a substitute, but as a complement.… I welcome the new range of powers for the Housing Corporation in Part I, and I particularly welcome, for the reasons which made the hon. Member opposite nervous, Clause 6, an admirable clause which will have our strong support in Committee. It would be the basis for a large-scale competitive public enterprise in the construction industry."—[OFFICIAL REPORT, 5th February 1974; Vol. 868, cc. 1084–5.] This order seems to provide additional funds to the corporation without at the same time providing it with the additional rôle which was intended in the previous Bill. I do not complain that this Government have not adopted that legislation. My complaint is that the House is being asked to add very greatly to the borrowing powers of the corporation without being given the opportunity to think about the corporation's rôle. An additional borrowing limit from £150 million to £300 million is a considerable increase. We should be told whether the Government have it in mind to take a radical look at the rôle of the corporation.

My interest is that the corporation has expertise, which could be greatly developed in a new direction, and, although I recognise that it is not directly relevant to this order, I think that we should be given an opportunity to think about the rôle of the corporation.

Rather than suggesting that we should prop up or subsidise the building societies, I think that the corporation, which already has to raise considerable sums from official sources and from the international money market and the building societies, would be an ideal instrument for channelling to local housing authorities the funds which they require to be able to offer mortgages to people unable to get them by normal means. I have in mind particularly first-time house buyers on low incomes.

The Housing Corporation, because it is in the money market and because its business is housing, would be able to offer to local authorities, especially the smaller ones, the financial expertise which they do not all have. Therefore, it would be able to make available to them funds which they could, in turn, use for such admirable borrowing facilities as low-start mortgage schemes, equity-linked mortgages, and so on, which local authorities have no hope of instituting at present.

We are asked to provide very considerable additional funds to the Housing Corporation when we could be taking a bold step forward to expand its whole role. I am convinced that there is within the corporation the necessary expertise—financial, legal and technical. I am convinced, too, that with the drive of its new chairman, the noble Lord, Lord Goodman, this body could afford considerable assistance to local authorities in their policies for home loans.

We are being offered a wasted opportunity. I hope that the Minister will be able to assure us that the rôle of the Housing Corporation has not been forgotten and that it can be given a greater influence for good in assisting smaller local authorities to be more efficient organisers of finance for those who cannot otherwise accumulate it.

10.12 p.m.

Mr. Michael Latham (Melton)

I want to intervene briefly, as the hour is late and the House wishes to conclude the discussion on this matter. I decided to do so as a result of the intervention by the hon. Member for Bodmin (Mr. Tyler).

This is not the time to discuss the rôle of the Housing Corporation. I hope that the Government will give us a chance to discuss that matter properly by re-introducing the Housing and Town Planning Bill. I have asked Ministers about their policy in the matter. So far, they have not made up their minds. The Minister himself gave that impression from the Treasury Bench earlier this evening.

I, for one, am not too happy about the future rôle of the Housing Corporation as it was envisaged in the Housing and Town Planning Bill. Although I should be out of order if I discussed the matter at length, I must say that I was unhappy about the proposed powers contained in the Bill introduced by my right hon. Friend in the last Parliament. I do not want to see too many developments in that direction. Nor am I happy about the present powers and therefore the corporation's Hite under the order. Nor am I very happy about the development of co-ownership at this time.

The House is aware of my interests in the building industry—interests which have been declared on every occasion. At present, when many houses are unsold and many builders are unable to build houses, the rôle of co-ownership in the competition for scarce resources of material or land is a subject that the House should discuss more exhaustively before we have a substantial increase in the borrowing powers for this purpose.

I merely mark my hon. Friend's card, because I know that the Bill was originally introduced by my right hon. Friends and a Conservative Government would no doubt now be introducing a similar order. The House should consider in more detail the whole rôle of the Housing Corporation and housing associations because we shall reach a stage where the roles are confused. We need a full debate on a proper Bill.

10.13 p.m.

Mr. Hugh Rossi (Hornsey)

I welcome the order, which permits the advance of the statutory maximum of £300 million to the Housing Corporation to enable it to perform its functions of promoting and assisting housing associations.

As the Under-Secretary mentioned, the corporation was created in 1964 by the then Conservative Government and by my right hon. Friend the Member for Leeds, North-East (Sir Keith Joseph), then Minister of Housing and Local Government, to meet a long-felt need in housing, namely, to help people who were not able to buy their own house in the open market and who did not qualify for local authority housing because they did not comply with the criteria of housing need as laid down in the Housing Acts.

Two groups, in particular, have been helped by the housing associations and the Housing Corporation, namely, older people unable to raise mortgages because of their age, and young married couples looking for rented accommodation because houses on the open market were beyond their means. Young couples being newly married and not in housing need in the accepted sense would not be considered for one moment by local authorities.

The Housing Corporation assists these groups of people by co-ownership schemes and also the fair rent societies, as they are now known, which receive the benefit of the considerable new building subsidies under the Housing Finance Act 1972.

In the present economic circumstances, there is probably an even bigger rôle for housing associations and the Housing Corporation to play to help the people I have mentioned, especially the young married couples who are even more disadvantaged today than they were in 1964, because of the high cost of housing in the inner cities and the high cost of mortgages. For those reasons, it was the policy of the last administration to seek greatly to strengthen the Housing Corporation, and it did so by introducing the Housing and Planning Bill, which fell because of the last General Election.

I am glad to receive the Under-Secretary's assurance that it is intended to reintroduce the Housing and Planning Bill in some form. In particular, he mentioned the intention to increase the power to make available to the Housing Corporation advances to the limit of £750 million, which was the intention of the last Government.

The Housing and Planning Bill proposed also to give much greater powers to the Housing Corporation. My hon. Friend the Member for Melton (Mr. Latham) has expressed certain misgivings about those powers. His misgivings are well understood, but, because of the housing situation, my right hon. and hon. Friends felt it necessary to expand housing in that way. The intention was to give the Housing Corporation powers to develop and manage properties and on its own account to acquire, develop and dispose of land for housing and other purposes. In effect, it was to act as a housing agency in its own right.

The Housing and Planning Bill made particular provision for hostel accommodation. The hon. Gentleman will know that part of the housing shortage in our cities is caused by many young people taking up and sharing accommodation that otherwise would be available for families.

There is a need for the provision of hostel accommodation for young, single people to release a great deal of housing otherwise taken up by them. This was the policy of the previous Government, which they intended to promote in their Housing and Planning Bill, and it was felt that this would be a great advance towards solving some of our housing problems.

I should therefore like to ask the Under-Secretary a number of questions. He has already mentioned that it is the intention of the Government to introduce measures similar to those in the Housing and Planning Bill to expand the functions of the Housing Corporation. I ask him—if he cannot answer today, perhaps he will be able to write to me later—whether it is the intention of the Government to introduce a measure expanding the powers of the Housing Corporation in the terms contained in the Housing and Planning Bill and to give the financial assistance that is mentioned in that Bill.

I come to the activities of the Housing Corporation and housing societies. Will the Under-Secretary confirm that 10,000 new dwellings a year have been provided by co-ownership schemes? Will he also confirm that there has been a great expansion in the building, management, improvement and conversion of houses for letting by means of the fair rent societies since the Housing Finance Act?

Will he please give the figures—because I am afraid I do not have them available—of the number of dwellings that have been provided by those societies? Will he also say whether the Government agree that the voluntary housing movement could and should play a far greater part in the future in the provision of homes especially for renting, and whether the Government will give every encouragement to the voluntary housing movement to work side by side with local authorities in areas of particular housing stress?

I do not go all the way with the hon. Member for Bodrnin (Mr. Tyler) when he says that the function of the Housing Corporation should be to provide additional finance for local authorities. I do not think that any of us should be complacent about the growing monopoly in housing provision which many local authorities have in their areas. On the point he mentioned about the ability of local authorities to do this work as compared with the expertise of the Housing Corporation, the reorganisation of local government and the creation of larger authorities has now given local authorities the potential to do on their own all the work that they want to in housing.

I should particularly like the voluntary housing movement and local authorities to work together in housing in stress areas, both to provide new homes and to bring about improved standards in existing older houses through the concentration of improvement grants on these stress areas, and I hope that we can have an assurance on these lines.

I hope that the Government will give the whole voluntary housing movement the boost it needs, so that we can say that this is something that we all support, irrespective of party politics. We all want to see more housing, and more choice in housing, both for sale and for rent. If we can find the means of effectively expanding the voluntary housing movement we shall have done a great deal to provide more choice in both these fields, with co-ownership as a genuine alternative to home ownership in the ordinary way and with renting from a housing association as an alternative to a council house or to renting from a private landlord.

I conclude by making one further plea, which relates to the freeze on rents, which I understand affects voluntary housing associations and may place them in great financial difficulty. Will the Government make financial assistance available, on top of the advance of the £30 million which we are talking about today, to those housing associations which will find themselves in difficulty as a result of the rent freeze that the Government have announced?

10.24 p.m.

Mr. Kaufman

First, perhaps I can relieve the hon. Member for Bodmin (Mr. Tyler) of a misapprehension. He complained—I do not say that he complained in a carping spirit—that tonight the Government were asking the House for additional funds for the Housing Corporation without spelling out an additional rôle for the corporation.

It would be out of order for me to spell out an additional rôle for the Housing Corporation on this order, because the order operates within the 1964 Housing Act and the 1972 Housing Finance Act. The additional funds which we are asking the House to agree tonight are within those former pieces of legislation. An additional rôle for the Housing Corporation can come only within the context of new legislation which the Government are considering. That deals also with the point raised by the hon. Member for Melton (Mr. Latham).

Mr. Tyler

I am grateful to the Minister for his reply, and I assure him that I am not under a misapprehension. My point was that there is as much urgency in the need to re-examine the rôle of the corporation as there is in the financial situation. That was my reason for raising the question. I hasten to add that I do not think that the Housing Corporation should be simply seen in a direct relationship to the voluntary housing movement. I believe that it could also have a more positive rôle in assisting local authorities with loans to house buyers as well as with their other functions.

Mr. Kaufman

There are many ways in which the rôle of the Housing Corporation can be re-examined. The right hon. and learned Member for Hexham (Mr. Rippon) adumbrated some of these when, in February, he was speaking to the Housing and Planning Bill, on which I had the pleasure of speaking from almost the same place as that in which the hon. Gentleman is sitting tonight. We must re-examine the rôle of the housing associations, particularly as the noble Lord, Lord Goodman, to whom the hon. Gentleman referred, is extremely anxious that the corporation should play a dynamic part in dealing with the relief of housing stress.

The hon. Member for Hornsey (Mr. Rossi) is quite right when he implies that the Government are, with great care and as much speed as is possible in these matters—from his own experience he will know the pace at which one can proceed—re-examining what can be done to reintroduce a measure akin to the Housing and Planning Bill. In assuring the hon. Member for Hornscy of what we are doing, I ought to point out that he misinterpreted me. He should not worry too much that we are resiling from a +positive reconsideration of the rôle of the Housing Corporation. He misunderstood what I was saying if he took it that I was saying that a new Housing and Planning Bill will reintroduce precisely the rôle for the Housing Corporation that the last Bill did. I am not saying that it will not; we are not at the stage where we can tell the House precisely the contents of what might be called the Mark II Housing and Planning Bill.

The hon. Gentleman asked for some figures. Those which I cannot give him tonight I shall be glad to send to him. He is right in having suggested that one of the few positive outcomes of the Housing Finance Act was a remarkable growth in the number of fair rent schemes. In the year ending 31st March 1973 the number of so-called fair rent schemes approved numbered only three, with 56 dwellings, whereas in the year ending 31st March 1974 the number of schemes had increased to 227 and the number of dwellings to 9,792. So the hon. Gentleman was quite right to believe that the expansion had been marked.

I assure the hon. Gentleman of one other thing—apart from giving him my firm assurance that the Government accept his plea that we should champion the voluntary housing movement—namely, that we shall have regard to the great contribution that it could make. I pointed this out last night on the Adjournment in answer to the hon. Member for Bristol, West (Mr. Robert Cooke) when he raised the problem of homes to let. There is an important rôle for the Housing Corporation and the voluntary housing movement, particularly in the stress areas.

The hon. Gentleman raised another matter of topical importance namely, the impact of the rent freeze on housing associations. He will not expect me to reply to him in specific terms. I assure him that the problem is one to which we are giving particular and marked attention. However, I am sure he will not expect me to outline tonight the possible outcome of our consideration.

I hope that, in advance of any future legislation that the Government may feel able to introduce, the House will now agree to this limited order.

Question put and agreed to.

Resolved, That the Housing Corporation Advances (Increase of Limit) Order 1974, a draft of which was laid before this House on 21st March, be approved.

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