HC Deb 24 July 1974 vol 877 cc1593-4
24. Mr. Stanley

asked the Secretary of State for the Environment what is the average cost, including land, of constructing (a) three-bedroom council houses and (b) three-bedroom council flats in the South-East at the latest convenient date; and what proportion of this cost receives Exchequer subsidy.

Mr. Kaufman

£5,700 was the average construction cost for five-bedspace houses in tenders approved in January to September 1973 by local authorities in the South-East, excluding greater London. This amount does not include land or site development works, for which reliable figures are not available. Very few five-bedspace flats are built and a similar average is not produced. Under the present subsidy arrangements in 1974–75 any deficit arising on an authority's housing revenue account from the provision of new dwellings would attract 80 per cent. subsidy.

Mr. Stanley

Will the Minister confirm that the overall subsidy cost of rehousing a family in the South-East by means of a local authority tenancy is now £700 more per annum than the subsidy cost of providing the same family with the means to own its own home?

Mr. Kaufman

The two situations are not comparable. The subsidy provided for an owner-occupier is larger than the subsidy for a family housed in a council house. The hon. Gentleman need not shake his head. These are official figures based upon the subsidies given by the previous Government. If the hon. Gentleman is implying that, because everybody cannot yet be housed through owneroccupation—we are anxious to champion owner-occupation—by a £500 million loan facility—we shall nevertheless not provide them with council houses, it is a strange argument to deal with homelessness.

Mr. Fernyhough

As my hon. Friend is able to give us the cost of a house but not the cost of the land, may I ask what percentage of the cost is represented by materials, labour and profit?

Mr. Kaufman

Not without notice and not without a pocket calculator. Under the Labour Government which went out of office in 1970 the cost of construction was falling. Under the Conservative Government the cost of construction soared from £4,050 in 1970 in greater London to £5,370 in 1972.