HC Deb 30 January 1974 vol 868 cc579-88

10.25 p.m.

Mr. Alexander W. Lyon (York)

I begin by apologising to the Under-Secretary for obliging him to come here at this hour to answer this debate. It was intended originally to be on another subject, and I am grateful to him for taking over at such short notice.

The subject which I wish to raise is one on which, over the last few months, I have had some correspondence with the Department, and the Minister will be aware of my concern.

In the city of York, with a population of 100,000, the 1971 census showed that there were 36,000 householders. Of that number, 18,800, or roughly 52 per cent., were owner-occupiers; about 11,000 were council tenants—that is, roughly 30 per cent. of the households; 4,500 households were unfurnished private tenancies—12.5 per cent.; and 2,000 were furnished private tenancies—that is, 6 per cent.

It is clear that the amount of private rented accommodation available in the city of York is very limited. As a new university town, the pressure upon rented accommodation is made heavier by the desire of students to live within the city boundary. Some houses have been converted into furnished flats which are used by university students, thereby reducing the number of houses available.

When one looks at the returns of the census, one sees that the situation is made more serious by the condition of unfurnished accommodation in 1971. Eighteen per cent. had no hot water, 33 per cent. had no bathroom and 40 per cent. had no inside lavatory. Subject to the improvements made since, the standard of private rented accommodation is fairly poor.

It is no surprise, therefore, that although there are 11,000 council houses, there are 1,320 families on the waiting list and there has been an increase of 20 per cent. in the last 12 months, the figure having risen from 1,060 to 1,320. That means that a 12 per cent. increase in the housing stock would be required to rehouse families who need that kind of accommodation.

About 300 houses become vacant each year, but even if they are left to the existing housing stock the present waiting list could not be accommodated within four years. In a city such as York, surrounded on all sides by acres of green fields, without the difficulties which such places as central London or central Birmingham have, it is intolerable that the housing lists should be as long as they are.

The average rents for the houses, even after the second stage of the implementation of the Housing Finance Act, are about £3.10. The average price of a private house in the city is about £5,000. Even fairly small two-bedroomed terraced houses with no bathroom are fetching prices not much less than that, which means a mortgage payment of nearly £10 per week at the present rate of building society interest. Such repayments require an income of at least £2,000 per year. Most of my constituents cannot afford anything like that. Therefore, they have to rely upon a fairly small stock of private rented housing which is of poor quality, or they have to rely upon the local council for provision of council houses.

Other alternatives have been put forward. The first is one on which both Governments have placed new stress in recent years, namely, the improvement of existing stock. But that does not make any more houses available. Some of the people on the waiting list may be living in inadequate housing which could be improved and they may not wish to move into a council house—but that is doubtful. It is true that under the 75 per cent. scheme, which applies in York, as it is in an intermediate area, there have been many applications for improvements. One of the difficulties which I want to raise with the Under-Secretary—I have raised it in correspondence—is the problem that will beset intermediate areas when this 75 per cent. grant terminates in June of this year.

The Government argue that it is right to terminate the 75 per cent. grant this summer because a substantial impetus has been given to improvements and they want to reallocate resources differently. I can appreciate that. But it will be terribly unjust if someone has been allowed an improvement grant and has commissioned a builder to begin alterations but for various reasons—often enough the pressure on labour in the area concerned—the builder has been much slower in meeting the deadline than he expected. As a result, people will find in June that they are in the midst of building work which will cost several hundred pounds, sometimes £1,000, when suddenly the grant of 75 per cent. from the council which they expected will be reduced to 50 per cent. of the permitted cost. That may mean a substantial increase in costs, especially for people who are elderly and fairly poor.

In those circumstances, I hope that the Minister will alter his present position, which is that he does not propose to give any extension of time, even in cases such as I have mentioned.

The second method put forward by the present Government for improving the housing situation—there is a clear party division between the two sides of the House on this matter—is that there should be a greater sale of council houses. This was advocated and tried by the York City Council when it was under Conservative control, and a number of people were interested in buying houses at that time. No one would object to the sale of council houses if there were plenty of them about, but the difficulty is that when a council house is sold there is one less house in the housing stock for allocation to people who may be in greater need than those who can afford to buy. In most cases the person who buys is himself a council tenant and would have remained so if he had not bought the house, but with allocations of about 300 a year out of 11,000 houses, a number of those houses would have become vacant in any event.

A point which is not always faced by the Government is that the kind of prices at which council houses were being sold in the initial days—not so much now, I suspect—were much lower than the cost of building a new house. When this scheme was being operated by York City Council, under Conservative domination, the price being asked of tenants who were potential buyers was about half the cost of building a new house. Therefore, two council houses had to be sold in order to provide the money to build just one house in replacement. At the same kind of price now, four council houses would have to be sold in order to provide one new house.

If the council which comes into office in April—which will also be Conservative-controlled—reverted to the system of selling council houses it would have to sell at considerably higher prices in order to make the economics of the case justify its policy, but in such circumstances it is very unlikely that the tenants would be able to afford to buy at present rates of building society interest.

In the final analysis the only sensible answer to the York situation, whatever may be said about other situations, is that more council houses will have to be built. The council wants to build more. It has a scheme for building 64 houses at Hewley Avenue, 17 at Thores-by Road and 300—as the first stage of a 900-house project—at Foxwood Lane. These are the only areas in the city in which a substantial number of houses can be built. The first two are obtained only by infilling in council estates where there are large gardens which must be reduced in size so that these small areas of land can be made available.

The scheme at Foxwood Lane troubles me most. It would eventually provide 900 homes and would virtually break the back of the York housing problem. If those homes could be built quickly they would relieve a great many of my constituents from the distressing need of substantially good housing. Unfortunately, we face the difficulty of the housing cost yardstick. The original tenders for Hewley Avenue and Thores-by Road were more than 60 per cent. over the cost yardstick. They were tendered last June. The Minister refused to allow these tenders and refused to meet a delegation from my council to discuss the matter. He said that it would be better if they applied again for new tenders, in the hope that the cost would come down. The council applied again, with the result that the tender for Hewley Avenue went up to 100 per cent. above the cost yardstick and the tender for Thoresby Road went up to 120 per cent. above the cost yardstick. In the intervening six months the excess over the cost yardstick was doubled.

Only one tender has been put forward for Foxwood Lane, and that is nearly 100 per cent. above cost yardstick. After some discussion between the city architect and the local area office of the Department in Leeds the requirements of the tender have been cut down, so that it is now about 83 per cent. above yardstick limits, but if the Minister does not relent it will not be possible to build these houses. My great fear is that we shall go on for another year or more with my constituents living in greater misery, with future tenders even higher than those offered at the moment.

It seems to me a nonsense that we should not build these houses now. No doubt the argument will be that public resources are not unlimited, that it would not be right to spend too much on a given house, and that these houses will be costing £9,000 or £10,000 apiece on that tender. But it is also true that according to the philosophy of the Government's case the scheme will become economic because in the end the cost of the houses will fall upon the tenants—subject, of course, to the subsidies that will be paid in the form of rent rebates.

In these circumstances it is wrong for the Government to say that we, as a nation, cannot afford to pay this kind of price. The cost in human misery for the people who come each week to my surgeries is enormous. Surely we should try to rehouse them decently in modern, up-to-date houses in this year of Grace 1974.

10.40 p.m.

The Under-Secretary of State for the Environment (Mr. Reginald Eyre)

The hon. Member for York (Mr. Alexander W. Lyon) is deeply concerned about the housing situation in that city. I am grateful for the opportunity he has given to discuss the matter in the House, even at the short notice he so kindly referred to.

I know that the hon. Member is also deeply concerned about the position of York as one of the historic cities of Europe. But most citizens of York have to live in ordinary houses like most of the rest of the population in this country. The city council and the district council which will succeed it in April face problems of this kind which confront other less well-known towns and cities. We do well to spend time in considering them in detail.

We know that there is need for more houses in the city. We also agree with the council that its unfit houses should be cleared and that there is a need to improve substandard houses owned by the council and private owners.

We must consider the present—and difficult problems—which face the city, but we should not overlook what has been achieved in the past. The council has built nearly 7,000 houses since the war and over 5,000 private houses have been erected in the same time. About 2,500 unfit houses have been cleared. In recent years, we have seen a welcome increase in house improvements, and since York became part of an associated area in 1972 further impetus has been given to this drive.

All this work represents a substantial improvement in living conditions for the people of York and it shows what can be done. I offer my good wishes to the new district council and hope that it will succeed in making York an even better place to live in. I accept without reservation that there is little advantage in living in a slum and in desperately overcrowded conditions even if the surrounding city is architecturally glorious.

I must refute any implication that the housing cost yardstick is being used as an instrument to inhibit council house-building I do not think the hon. Gentleman intended to imply that. In fact, we made the yardstick more flexible in November 1973 to cope with a difficult and erratic tendering situation, which varied in different parts of the country with special difficulties in and around York.

As to the future of the yardstick system itself, I know that there has been a good deal of criticism, more particularly in recent months, for various reasons. Certainly I should not wish to pretend that we regard the present arrangements as ideal, but they have provided flexibility and we do keep them under review. We shall naturally continue to do so.

I share the city council's concern about its 1973 housing programme. While the schemes at Hewley Avenue and Thoresby Road amounted to only 81 dwellings, they would have helped the city to meet its housing need. I am pleased to see that the Leadmill Lane scheme is going forward and that the Tuke Housing Association scheme was approved.

The Department considered the tender costs for the Hewley Avenue and Thoresby Road schemes most carefully on each occasion they were submitted. Even though we accepted that there were difficult market conditions in York, we could not offer approval in 1973. The hon. Gentleman will understand that local councils are trustees on behalf of the ratepayers and the central Government are trustees on behalf of the taxpayers, and that both seek earnestly to get value for money in contracts. The costs were simply too high to justify acceptance of these contracts. The level of the tenders was well in excess of anything approved in the whole region, and this included some other areas of difficulty.

The city council decided to invite fresh tenders and its most recent efforts have met with even higher figures. We have not yet given a decision on the council's latest approach, but I want to make one point about these costs. The fact that tender prices have continued to rise is not evidence that the initial price was reasonable. Even by today's standards, these prices look high. It is all too easy, with the benefit of hindsight, to say that a particular tender should have been accepted because the cost has subsequently increased. There are other examples where retendering has produced more competitive prices. In practice, few schemes were refused loan consent in the Yorkshire and Humberside region in 1973. The number of council houses covered by tenders accepted was in excess of the 1972 figure. Considering the difficulties experienced during 1973, this supports the view that the flexible yardstick arrangements introduced in 1972 have operated with some success. I know that this does not resolve York's difficulties. The fact that other authorities have been more fortunate may only add to the disappointment.

The hon. Member also mentioned York's latest project—a major scheme of over 300 dwellings at Foxwood Lane. He had earlier mentioned the scheme to my hon. Friend the Minister for Housing and Construction, and there have been a number of discussions about it between officers of the city council and the Department. The hon. Member has also discussed some of the issues arising on the scheme. My hon. Friend will, of course, consider these representations carefully before coming to a decision. But there are obvious difficulties. It is difficult to make an assessment when there is only a single tender and the costs are high. Further, this scheme represents rather more than three times the average number of council houses per year built in York over the past five years. Given that it is necessary to build these houses, we still have to consider whether it is likely to be possible to do so in a single contract extending over two and a half years.

I assure the hon. Member that we appreciate the difficulties and the needs of the local situation. My hon. Friend the Minister for Housing and Construction will watch the situation closely.

The hon. Member asked what we are doing to ease the position of towns and cities like York regarding the contracting situation. I have already mentioned the flexible yardstick arrangements. In addition, we have taken steps to deal with the overheating in the construction industry. The reductions in public expenditure announced by my right hon. Friend the Chancellor of the Exchequer on 17th December will have a substantial effect on the demand placed on the construction industry, but we have deliberately excluded housing from these measures. There will be no cuts in housing. Let there be no doubt that we want to see every priority given to housing.

We have also announced changes in contract procedures, so that the period for firm price tenders is reduced from two years to one. This will remove the constraint which building contractors have complained of most regularly. This will not bring a quick end to all problems, but we look for a real improvement in the situation.

The hon. Member raised the subject of house improvement grants. I know that York has recently begun to quicken the pace of progress in dealing with its older housing stock—both council owned and those in private ownership. I am advised that grant approvals have risen from fewer than 300 in 1970 to well over 1,200 in 1973. Much of this growth has been due to the availability of the 75 per cent. grants provided for a limited period under the Housing Act 1971.

Originally, these preferential grants—I stress the word "preferential"—should have ceased to be obtainable in June of last year—1973—but the Government extended the period within which work had to be completed by a further year, to 22nd June 1974. This extension was given deliberately and specifically to allow people who would have failed to complete their work by the original deadline to do so, but, of course, we cannot keep extending the deadline of preference to accommodate the next generation of grant applicants.

I want to stress, however, that the grants will continue at the normal level applicable throughout the rest of the country Our policy is to channel extra resources to areas determined by housing need, as in the housing action areas.

I am sorry if some people are unable to complete the work in time. Councils have been asked to bear in mind local situations when making grant approvals. There has been great demand on the construction industry in York, where a new hospital, a new swimming pool and the railway museum have been built, together with the council house improvement programme.

I know that the city is making great efforts to speed up the improvement of substandard pre-war council houses. It is only sensible to provide tenants with good living conditions as well as to ensure that sound houses have an assured life. A properly phased programme is sensible, because only in this way can the demands on labour and materials be balanced with those of other housing work.

I am sure that the new district council will wish to maintain such a programme. Like other councils, it will benefit from the provisions of the Housing Finance Act, which ensures favourable assistance with council house improvements. In cases where the cost of improvements and associated repairs is more than the statutory limits, the excess may reckon for rising costs subsidy. I have referred to the measures which we hope will produce more tenders for the schemes that the council has in mind.

The hon. Member raised the question of the sale of council houses, and I think he was making a straight Labour Party point, which stresses the party's hostility to the spread of home ownership. In fact, only a tiny percentage of houses sold would have become available for reletting as voids. He mentioned 300 houses becoming vacant out of a stock of 11,000, which is a very small proportion—about 2½ per cent. Any of the houses now becoming vacant offers accommodation at the low price end of the private market. They help in this way to accommodate a family in housing need and aid the mobility of labour. The sensible policy is for a council to serve all valid housing needs by selling to tenants who desire to become owners and building for those who wish to become tenants. There is a very good prospect of such a well-balanced programme succeeding in York.

Some of the hon. Member's points on finance with regard to the sale of council housing were misleading. Sales at present-day values, which have to be certified by the district valuer—although there can be useful discounts in certain circumstances—benefit the housing accounts. New building is helped by the Housing Finance Act. The burden does not fall excessively on the tenants as it did under the bad old system that we have abolished, because tenants have to pay only fair rents for their new accommodation. If they cannot afford the rents, they are given generous help under the rent rebate scheme. So we have a well-balanced programme to deal with housing need.

Sponsored low-cost housing is another way in which the local authority can provide houses built for sale and again make discounts to assist young couples who wish to become owners. That is another useful way in which the local authority can arrange for houses to be built and then sold to help young people who are in some of the difficulties that the hon. Gentleman has mentioned.

Question put and agreed to.

Adjourned accordingly at seven minutes to Eleven o'clock.