HC Deb 25 June 1974 vol 875 cc1229-67

A local authority shall be bound to sell a house or flat which it owns to a tenant who makes a formal request to purchase it at a market price less a percentage reduction based on a formula related to the length of tenancy, but no request may be so made until the tenant has resided therein for a period of not less than seven years and the reduction shall represent 5 per cent. for each year after the third up to a maximum of 30 per cent., which figures may be subsequently amended by Order so as to increase the percentage; if the tenant, having so purchased, sells the house or flat subsequently within a period of 20 years, it shall be first offered to the local authority at a price which shall reflect the original purchase price increased by any improvements the tenant may have carried out and related to the current market price; but after twenty years, there shall be no further obligation upon the tenant to offer the property to the local authority.—[Mr. Michael Morris.]

Brought up, and read the First time.

Mr. Michael Morris (Northampton, South)

I beg to move, That the clause be read a Second time.

Mr. Speaker

With this new clause it will, I think, be for the convenience of the House to consider the two amendments in the name of the hon. Member for St. Pancras, North (Mr. Stallard), amendment (a), in line 1, leave out "local authority" and insert "private landlord" and amendment (b), leave out the first "it" and insert "he".

Mr. Morris

New Clause 15 was lodged within a few minutes of the end of the Committee proceedings. Before I explain the details of the new clause it would be appropriate to look at the principle behind it.

The new clause would make it mandatory on a local authority to sell flats or houses to sitting tenants. Hon. Members may question why such a new clause should be brought in at this time. Bearing in mind that there is increasing concern over rates, not least in my county of Northamptonshire, we should remind ourselves of the principal purpose of local government in relation to housing. The prime function in this respect, in the view of members of the Opposition, is that local government should serve citizens and should not become a property owner at the citizens' expense. Any other philosophy would imply that the town hall was there to provide a profit motive and to put a return on the citizens' capital. We could not support such a proposition.

Many people would say that in theory there should be no need for local authorities to build houses for renting, but if we are to be realistic we must realise that ever since the end of the First World War private rented accommodation has become increasingly scarce. We must now acknowledge that, with certain exceptions, the age of the private landlord with rented accommodation is restricted.

We ought to be clear that the rôle of the local authority is to do for citizens those things which they cannot do for themselves. Therefore, it must be wrong if local authority housing became so influential that it so dominated the lives of the people living in its area that they would feel restricted and unable to move to other areas. That has happened in certain parts of the country. That situation is far worse than the tied cottage system which the House debated last week.

It is appropriate to consider the advantages and disadvantages of the clause. There must be at least five or six advantages to the tenants. The fundamental one is that this proposal would enable the tenant to become a member of the property-owing democracy, to become a member of his district and to put down his roots and take an active and constructive interest in the community. I suspect, and the evidence suggests, that he will feel that it is worth while making a little extra effort and adding a few extra trimmings to make the flat or house a home as opposed to a shell. He knows that this will benefit him. Not least, many people believe that, by having the chance to colour his own front door, a man is able to show his own identity.

Despite the ups and downs in the property market, owing one's own home is still the best hedge against inflation. It is wrong to deny this opportunity to a large section of the people. Some who have been tenants for 30 or 40 years have had a lifelong liability, which they sometimes have to leave to a widow. It must make economic sense for those who wish to do so to be able to turn that liability into a sound asset.

With our complicated tax system, it must be in the interests of the House to encourage council tenants to take advantage of the reliefs available to owner-occupiers. The proposal would also enable younger people, who early in their married lives do not have the resources, to save and become home owners. Others who may not be so young may find the same possibility if their circumstances change.

In view of the discussion which has gone on for a long time, hon. Members may wonder whether there would be any advantages for local authorities in this proposal. I see some real ones, although they are not accepted by every local authority. It would remove the need for rent rebates and for subsidies on the houses sold. It would also remove the need to repair and maintain those houses. I suspect that no hon. Member really believes that his local authority is good at maintenance. [An HON. MEMBER: "Yes, I do.''] There may be odd exceptions and I should be delighted to give way if the hon. Member wishes to elaborate. In the long run, this should lead to savings in staff as well.

But there is another financial element which was not so acute a few years ago. The great majority of the older properties that may be covered by the clause were financed at interest rates of 4 or 5 per cent. Today if a tenant takes the option to buy his property he will be paying a mortgage rate of 11½ per cent., so there is a financial gain there to the local authority. It will also have a capital gain, because the property was probably built pre-war or shortly after the war and is on the books at a written-down price. Despite any relevant levels of discount the absolute capital price would be considerably in excess of the book value. So there would be a financial incentive to local authorities in this area, too.

Local authorities of both political persuasions are selling council houses. The majority are Conservative authorities, although we have some laggards who have not understood the benefits of this proposal, and there is a minority of Labour authorities which are still selling.

Clearly, it is important that anything done in this area should not adversely affect the remaining tenants who do not wish to purchase. The Secretary of State has explained how resources are stretched and there is a problem over rates. It must be right for local authorities to concentrate the available resources on those in need—single-parent families, the poor, the handicapped, the helpless and the homeless. It is in that context that the financial aspects should be considered. This is the primary rôle of local authorities and one that all hon. Members now accept. Local authorities rightly clear slums and develop areas, but they need to weigh up also whether it is not better to sell houses and concentrate resources on those in need.

There would also be an advantage to the nation. Every housing authority is still subsidised, and any reduction in those subsidies must help the nation. There is also a psychological point. One finds large numbers of people who, either as part of tenant co-operatives or otherwise, sincerely want to own their own homes. It must be in society's interests to encourage that trend.

Three disadvantages are often quoted—first, that it is against the local authority's interests to release property that it might want in future. If an authority knew that it wanted that property, it would be wrong to sell it—just as any legal search for private property would throw up difficulties—in which case the tenant should be offered an equivalent alternative property.

Second, it is claimed that a house sold will have to be replaced at today's prices or the price of the next three or four years, but this does not stand up on analysis. The very fact that a tenant wants to buy suggests that he would never move anyway—

Mr. George Cunningham

He may die.

Mr. Morris

The 20-year option on return for the local authority would cover that.

The third criticism is that the house is lost to society, particularly those who want to rent, and particularly for relets, which are about 2 per cent. of the national total of lettings. This is the only real disadvantage that can be listed. One must weigh the 2 per cent. relet disadvantage against the positive benefits that I have listed. This disadvantage would be weakened by what some might call the more restrictive provisions about the seven-year and 20-year periods. The ideal of a property-owning democracy is now within our grasp. Already over half the people are owner-occupiers.

4.30 p.m.

We have a real chance today in this Chamber to transform this concept for all, or a vast majority of, council tenants and for them to join in what so many of them want very much in their hearts. I suspect that very few of them if asked would want to remain part of the standardised, uniform system in our society. A majority want to be able to reflect their own creative abilities, their own individual characters in their own homes. Society is changing. Home and marriage are under a lot of pressure today, and I suspect that we should reflect very seriously whether we should not at this time at least give a lead to council tenants in our society by giving them the chance to own their own homes.

The question is: do we give this lead now, and do it, obviously, on an all-party basis, knowing that there are, up and down the country, local authorities on an all-party basis which believe it is right? Or do we reject it? I submit to the House that if we reject it we are putting our heads in the sand, because the property-owning democracy is coming sooner or later and it is right that this Parliament should give a lead so that people may create their own homes. I hope very much that the new clause will commend itself to both sides of the House.

Mr. A. W. Stallard (St. Pancras, North)

I have tabled an amendment to the proposed clause, in line 1, leave out 'local authority' and insert 'private landlord'.

I have no wish to follow the hon. Member for Northampton, South (Mr. Morris) on this new clause but listening to him I rather felt he was at least 20 years behind the times. I seem to recollect that he was at one time involved in an inner London borough not far from my constituency. I suggest to him that he is a long way out of touch with the situation certainly in inner London and in the borough in which he used to be involved. The trend is almost the exact opposite in inner London nowadays. The hon. Member should know that, far from council tenants or tenants of flats in inner London asking that the local authority should sell them the place in which they live, we have, certainly in my constituency, thousands of private tenants petitioning the local authority to buy their flats. The demand in the inner London area by private tenants is that the local authority should take them over.

Mr. Michael Morris

I was an alderman of the borough referred to by the hon. Member until only a few weeks ago. I thought I made it very clear in my speech that I was talking of the right of council tenants to purchase. I did not cover the question of private tenants asking local authorities to purchase their premises, and I accept what the hon. Gentleman says on that. But would he not agree that within the London boroughs there are large numbers of council tenants who believe that the way out for them is to remove the local authority and to replace it by a tenants' co-operative?

Mr. Stallard

No, I would not accept that, certainly not in the inner London boroughs, about which I know a certain amount having spent almost a quarter of a century in local government in inner London, so that I know almost as much about it as some hon. Members opposite. I have never ruled out the eventual participation in this field of local authorities. This will come up perhaps in the wider discussion, certainly not on this Bill, on tenants' and councils' participation generally in the field of home ownership and local authority housing. That is a much wider subject than the hon. Gentleman raises in his new clause and much wider than we can discuss in relation to this Bill.

For the purposes of this Bill and certainly as we see it for the foreseeable future in London, I suggest that the amendments I have put down are relevant and almost the whole of the hon. Gentleman's speech on the new clause could be related to them. I am suggesting that, instead of a local authority being bound to sell a house or flat, it would be far more progressive if the private landlord was bound to do so. This is not just a party political point. It is facing up to the real situation in inner London, where rented tenants, sitting tenants, controlled tenants, private tenants and all kinds of tenants are being ousted by many different means from accommodation in which they have lived for many years.

In a previous Parliament I tried to expose the problems of the "winklers", harassment and so on. Thousands of tenants have been moved from their homes by illegal and sometimes criminal activities. If the hon. Gentleman's views are anything to go by, those people would find themselves unable to get a council flat. They would find themselves thrown on to the market, where they could not possibly hope to get a mortgage or to purchase a house. So I would hope the hon. Gentleman would see the merit of the amendment to provide that in that situation a landlord should be bound to offer one of the sitting tenants or those in the house the right to purchase—and I accept his restrictions on that. The real need is to give those who are being forced out of inner London, and, indeed, out of London—forced to leave their homes, their jobs and the places they have worked in and known for many years—a chance to remain in London. One way of doing that is by accepting the amendment and forcing private landlords to sell their houses or flats.

Sir Raymond Gower (Barry)

I am very grateful to the hon. Gentleman for giving way. Would he accept the view that, while it is undoubtedly true that in inner London and several other large conurbations, in great cities like Manchester, there are pressures which we all understand, there are many local government areas in large parts of the United Kingdom where this kind of new clause would be very beneficial and where tenants of council dwellings could purchase their houses without any bad effect and, indeed, with a very healthy effect on those areas?

Mr. Stallard

I accept the sincerity of the hon. Gentleman who has just inter vened. I said at the beginning that I did not rule out the possibility of just such a situation. But I see it in the context of no housing shortage. I do not think the sale of council houses could be envisaged while there are hundreds of thousands of people still on the waiting list. That would be premature. I could never envisage such a situation in inner London and other big conurbations while there remains the kind of shortage we have at present. It may well be that in areas where there is no housing shortage this could apply but it is certainly not the case in inner London. If there are such areas we certainly do not need a new clause in this Bill at this time to cover the point.

Eventually, I foresee the time when if there are many private tenants in inner London demanding that the council takes them over, discussions on participation will take place because of the immensity of the problem. One aspect, one element, in that may be some kind of co-ownership or co-operative form of home ownership; but we are a long way from that and this is not the Bill or the place to do it. I would have hoped that the House could accept the very modest amendment which makes sense of this new clause, certainly in inner London and the bigger conurbations; that is, if the new clause is essential anyway.

Mr. Emery

I shall intervene only briefly now because no doubt there will be a certain amount of debate on this issue, which we think is extremely important. The basic principle behind the excellent speech of my hon. Friend the Member for Northampton, South (Mr. Morris) is supported by the Opposition Front Bench, although some of the details need to be looked at with care.

One of the basic principles for which the Conservative Party stands is that council tenants, with a few exceptions. who wish to purchase their dwellings should have the right to do so. The few exceptions are, for example, occupiers of special-type cottages for the use of park keepers and so on, or of special accommodation which has been specifically built for disabled people or for others with particular problems. We believe that every local authority should be willing to sell its properties to its tenants.

However, not every local authority is, or has been, so willing. I may add that this applies not only to Labour-controlled councils. Some independent-controlled councils in the West Country have consistently refused to sell their property. The opposition are, therefore, making the principle clear. The issue shows the difference of approach between Government and Opposition to the sale of council properties.

In Scotland, where I was yesterday, there is no attempt to encourage a person to stand on his own feet by owning his own home. The Labour Party is quite happy that the ordinary person should be able to turn to the Government and the local authorities to provide him with whatever he requires, particularly in housing. We, however, wish to do everything possible to encourage people to own that which is probably the greatest asset that the majority of our people ever have a chance of owning.

There have been several surveys in the past few months in different areas. For example, in the South of England, out of a sample of over 2,000 people 84 per cent, said that as long as it was financially possible they would like the chance to own their own home. In a major area of Scotland, where home ownership is not so usual, still 71 per cent. of those interviewed said that they would like the opportunity to own their own home.

Mr. Stallard

The hon. Gentleman will remember that I asked a number of Questions of the Conservative Government in the last Parliament about house prices. A one-bedroomed flat—a very modest dwelling—in my constituency was costing between £15,000 and £16,000. My simple question of the Conservative Government was, what were their plans to enable postmen or bus drivers to buy their own homes in inner London? Houses with two or three bedrooms cost between £25,000 and £30,000 in inner London.

Mr. Emery

The hon. Gentleman has raised a number of points. The Opposition are looking at the whole method of mortgage procedures to try to ensure that lower income groups are able to obtain mortgages. This is something which the Conservatives recognise most fully. However, if the hon. Gentleman propounds the case in that way, I might ask him why a postman or a bus driver who happens to be living in a council dwelling should not be able to buy it if he wants to and can afford it. That is the question which the Labour Party has to answer. I believe, however, that the answer is that the Labour Party does not want council tenants to buy their own homes because it is not in its own best interests to see more and more council property being turned over to owner-occupation.

Mr. Stallard


4.45 p.m.

Mr. Emery

There is positive proof of the Labour Party's attitude in the April circular of the Department of the Environment, which set out specifically to discourage council house sales. That was made clear by the Secretary of State himself. There is no doubt of the way the Government are moving.

Let us look at the subsidy and tax aid given to someone moving into a three-bedroomed council house costing about £10,000 compared with the aid given to a person moving into a similar owner-occupied house. The State aid to the council tenant runs in the area—I say in the area "because I accept that some of the figures given may not be accurate—of £850 to £900 a year. The aid that goes to the person with a mortgage is in the area of £280 to £340 a year.

Mr. Freeson

The hon. Gentleman has taken those figures, no doubt, from the submission by the National Housebuilding Council to my Department. I hope that he will take it from me that the figure of £900 a year going to each local authority tenant of a new dwelling through rates and taxes, which is what is stated in that document, is very inaccurate.

Mr. Emery

I am delighted to accept what the hon. Gentleman says. Perhaps he will tell the House what the true figure is. I said that the figure was in the area of £850 to £900 because I did not want to be accused of trying to mislead the House. I hope that the hon. Gentleman will give us the exact figure.

By this new clause we are attempting to establish the basic principle that council tenants should, as a matter of right and not as a matter of decision by the local authority, be able to purchase their own house. It is in order to encourage that thinking that I hope that hon. Members will debate fully the principles lying behind it. What the local council tenant wants to know is whether he has a chance of being able to buy the property in which he is living. Many council tenants improve the property by their own work. Why should they not be able to benefit from it? Why should they be permanently excluded from home ownership?

The basic principle of the new clause is right. But any scheme for the sale of council properties must be simple and easy to understand. It must not be in such a form as to put tenants off. I know the frustration which occurred in my constituency when a tenant asked to buy a council property. It took months to get a valuation, only to find that the deeds did not exist because the house was one of a number on a piece of land for which no deeds had previously been drawn up. This dragged on for 18 months, and then the local authority suddenly said "We had better have another valuation". The offer price was then suddenly upped by a matter of £2,000. That sort of thing cannot be right when dealing with council tenants.

Therefore, the scheme must be simple and capable of being quickly applied and brought about to the benefit of the tenant and not to the benefit of the local authority. It is the tenants of council property that the Opposition, by the new clause, want to look after.

Mr. Joseph Dean (Leeds, West)

I find some of the remarks of the hon. Member for Honiton (Mr. Emery) somewhat hypocritical in respect of the Conservative Party's so-called concern for the municipal tenants, in view of the attack made on such tenants' pockets by the previous administration in the Housing Finance Act, when the highest ever increases were forced on municipal tenants with some of the most punitive clauses that have ever been operated against local authorities.

Let me disabuse the House of some of the points made by the hon. Member for Northampton, South (Mr. Morris). He gave the impression that council house tenants in overwhelming numbers were waiting for the gun to go off so that they could cash in and take an option on this type of purchase. A study of applications by council tenants to purchase council houses shows that that proposition has no credibility. In some large Conservative-controlled authorities where schemes such as that proposed in the new clause were operated and a 30 per cent. maximum was applied, over three years, hardly anywhere did the number of applications reach above 5 per cent. of tenants.

I notice that the new clause says to sell a house or flat. I know of a large authority that had at the time 90,000 properties. I do not know of a case in which, even with such a large authority, there was one application from a tenant of a council flat to buy the flat. The only applications that were made were for the most desirable properties, which were being sold at a knock-down price. There was not one application to purchase by a tenant of a municipal flat in the authority which had 90,000 properties.

If this type of policy had been forced on local authorities such as that which I have mentioned, we could have ended up with the large local authorities remaining with the most undesirable properties—I use the word "undesirable guardedly—walk-up flats, three storeys high, which most of us who are interested in housing and social problems want to get rid of. No one wanted those flats. One could not have given them away.

It has been said that the new clause will help to ease the housing situation. But how can this be when most large authorities in conurbations have an ever-increasing waiting list? I am not talking about the London authorities, which can be adequately dealt with by hon. Members who represent London constituencies.

We ought not to be talking about disposing of council houses where there is a shortage. I am not against the sale of council houses when there are more houses than there are tenants who require them. That would be a logical thing to do. I am not against the sale of council houses where there is an abundance of them. But could any hon. Member show me a stress area in which a local authority can say that it has more council houses than it needs? For every three or four families housed in council property, one finds another family on the waiting list, waiting for one of those properties. Most of the large authorities have between 20,000 and 30,000 families on their waiting lists—if one takes into account their slum clearance programmes as well.

It is said that the new clause would ameliorate the pressures on the taxpayer and the ratepayer. That is complete nonsense. Does the hon. Member for Northampton, South understand housing finance? Does he not know that every council house built, irrespective of whether one returns to the previous subsidy system that was introduced under the Housing Finance Act 1972, brings an added burden on the taxpayer and the ratepayer, a burden of ever-increasing dimensions? How can one justify disposing of property that was built at a lower cost, historically, and replacing it at a cost of about £10,000? That cost will not be £10,000 much longer at the present rate of escalation of costs. The proposition is complete nonsense.

It has been said that people will buy council houses and never move out of them once they become settled in their then privately-owned houses. But why do the national and local newspapers contain every day an abundance of advertisements for the average three-bedroomed semi-detached house for sale? That is the average house. How does that come about in a year in which we have seen the lowest building rate that we have ever had? Why are there thousands of family houses on the market for sale in the private sector? They are advertised as being for sale by people who want to move out of them. The people who move from council houses for various reasons, as a percentage of the population, are just as numerous as those who move out of houses in the private sector.

I can well understand the concern of the hon. Member for Honiton about council house tenants investing their money in improving their houses. As an ex-chairman of a large housing department in a local authority, I agree with the hon. Gentleman on this matter. But he did not say how many thousands of tenants in the private rented sector have to improve their houses without any option because private landlords will not spend a halfpenny on doing that. The hon. Gentleman had no regard to that matter. When we are dealing with clearance orders in our constituencies, how many of us are met with comments such as "But, Mr. Dean, I have spent so many hundreds of pounds on improving my house, and the landlord will get any well-maintained payment or compensation. Under the law I do not get a halfpenny." Where is the concern for such people? The whole thing is based on hypocrisy.

In regard to selling houses at market value, it is obvious that some of the council houses built in the last 10 years were built to higher standards than their contemporaries in the private sector, which do not have to meet Parker Morris standards. If they were valued correctly, they would be infinitely more costly to buy than those built in the private sector. If one values them with a broad equation one finds that some of the demands in standards of structure, flooring and heating are 20 per cent. higher under Parker Morris for houses in the municipal sector than the demands imposed on the private sector. Houses built in the last 10 years in the private sector, two-bedroomed or three-bedroomed houses, are now being sold for £9,000 to £10,000. But the true costs of council houses would be 20 per cent. higher.

In the last attempt to sell council houses by some local authorities when they became Conservative controlled, I know of a house that was disposed of. It was valued at about £2,900. Because of the discount, the tenant obtained it for about £1,800 or £1,900. On the very day that the five-year covenant expired, that house was advertised for open sale and sold for nearly £9,000. No one can tell me that in that case the taxpayer and the ratepayer have not been rooked. That is what happened in one case about which I know. But in how many thousands of instances does this happen and not come to light?

Sir R. Gower

The hon. Member seems to be arguing from conflicting points of view. First he was complaining that the houses which were sold were the best and most attractive, and later he said that those which were sold were those which were built at an historically lower cost. He cannot have it both ways.

5.0 p.m.

Mr. Dean

The hon. Member misunderstood what I said. A house built 12 months ago was built at an historically lower cost than one built today. With the current rate of inflation, all costs become historical. To make this provision compulsory would lead to all sorts of subterfuge to prevent the provision operating. I know of no one concerned with housing in the large conurbations who would accept this legislation willy-nilly. It would be diametrically opposed to the interests of the people on the waiting lists.

Some local authorities impose geographical restrictions on the allocation of housing, limiting it to people inside their own area or to people with suitable marital qualifications. If the list were completely open, there would be a further explosion of people who wanted to be rehoused by the authority which, in spite of its shortcomings and difficulties, would have an infinitely better record as a landlord for the lower paid than would anybody in the private sector. At the rate things are going, in a few years the private sector will no longer exist anyway.

I hope that the House will reject the clause because it is not in the best interests of the tenants. I only hope that if something along these lines is accepted it will provide that the local authority "may" and not "shall" comply, and shall retain its autonomy in these matters. Local authorities have had enough in the past of Governments making decisions and then ramming them down the authorities' throats. As a former local authority man I know that this would be one piece of legislation which would be more bitterly resented even than legislation passed by the previous Government, which is still being bitterly resented.

Mr. James Allason (Hemel Hempstead)

. I first declare an interest as a landlord and property manager. My plea to the Government is not to be doctrinaire in their opposition to the sale of council houses. There is a close parallel here with the situation in the new towns. For many years both major parties refused to sell new town houses other than those which had been specially built for the purpose.

Mr. Freeson

The hon. Member appeals to the Government not to be doctrinaire. My response to that is to ask whether he has read the Government's circular on this matter. Is it doctrinaire to say "you may" or is it doctrinaire to say "you shall"?

Mr. Allason

The Minister has a fair point there, but the trouble is that that circular sought to discourage the sale by local authorities and as a result the supply has dried up.

In 1968 the Labour Government changed their policy on the sale of new town houses. They recognised that where a tenant wished to purchase it seemed unnecessary to stand in his way. I welcomed that, and it did not mean a great rush of people to buy their own houses, or that the new town authorities were left without houses to let. It meant that individuals who were house-proud and wanted to own the house into which they had put so much effort could do so.

Much the same situation applies to council houses. An agreement to sell does not result in a great flood of people to buy. Unfortunately in March the Government halted the sale of new town houses—even those built for sale. They did so because they were reviewing the whole policy. I cannot accept that permitting the sale would damage the fabric of an authority. It is only right to give the customer what he wants. It would not lead to a big loss because the house would be sold to those who planned to live in it anyway. There is a preemption provision lasting 20 years in the clause and the authority would not therefore lose the house except where the family lived in it for 20 years.

The responsibility for financing that house would pass from the authority to the family who would be prepared to take on the heavy burden. Why should we stop that? I appeal to the Government therefore to make it possible for every council house tenant to be able to buy his own house, and for this to apply to new town houses as well.

Many of the 17,000 of my constituents who are public authority tenants want to buy their homes, and many of them want to buy a flat, which disproves the suggestion by the hon. Member for Leeds, West (Mr. Dean) that because he knew of no one who wanted to buy a flat, therefore no one wanted to buy a flat.

Mr. George Cunningham

I regret that the Opposition have seen fit to bring this subject up for debate. We had a run over the ground in Standing Committee. The subject does not appear in any part of the Bill as it stands. If the Opposition want to discuss it—and I do not deny that it is important—they should take a bit of their Supply time so that we can spend half a day on it without interrupting important consideration of the Bill.

Mr. Michael Morris

Perhaps the hon. Gentleman's memory is not too hot. Surely he recalls that we made it clear in Standing Committee that we would not debate the matter in Committee but would accept the Ministers' appeals to be brief while giving notice that we would raise the matter on Report.

Mr. Cunningham

I am not suggesting that the Opposition did not give due notice. I say that they should not have raised the matter because there are better things to spend our time on today. On that argument I suppose I should sit down. but having heard what has been said in the debate it is impossible for me to remain silent, in spite of the excellent case advanced so well and so forcefully against the clause by my hon. Friends. The hon. Member for Hemel Hempstead (Mr. Allason) directed himself exclusively to the sale of houses in new towns. That raises different issues as there has been a restrictive policy regarding the sale of new town houses. I should like to see some relaxation of that policy. However, the same considerations do not apply in many other parts of the country.

I found the remarks of the hon. Member for Northampton, South (Mr. Morris) who for many years had experience of inner London conditions as Leader of the Islington Borough Council, remarkably unreal. One would think, to listen to the hon. Gentleman, that there were thousands of council tenants who could afford the cost of their house or flat and who could get a mortgage to buy. The hon. Gentleman seemed to suggest that such tenants were prevented from becoming owner-occupiers only by the resistance of the local authority to sell.

The hon. Gentleman should recall, it he has not supressed the memory—and I can well understand why he might do so—that when he was Leader of the Islington Borough Council it was the council's policy to sell council flats to any council tenant who wanted to buy them. I have forgotten the number of takers who came forward in response to that offer. I do not deny that there was a great deal of desire to take up the offer. However, when the figures were worked out, even on the most generous basis that the Conservatives in Islington could provide, it simply was not possible for the kind of people who were in those flats to afford the service of the loan that would have been required. As a result, not one flat changed hands in that way—not just no block of flats but not one individual flat.

We are up against the difficulty of interest rates. That is why council tenants are not moving from their flats into owner-occupied premises. No one is saying "You have become council tenants, you are for ever doomed to remain in council tenanted property. You may not move into the private sector." Council house tenants move into the private sector, of course, but they do not buy council flats because they are retained for those who cannot afford anything else or for those who for the time being have a requirement for mobility.

Sir R. Gower rose

Mr. Cunningham

I do not want to be too long and I shall be grateful if the hon. Gentleman will allow me to proceed with my few remarks. It has been said that the new clause would relieve the country of providing a subsidy through the Exchequer and the local authorities. It is suggested that the country would be relieved of the burden of subsidy if council property were sold, but the benefit of subsidy, which the hon. Member for Honiton (Mr. Emery) grossly distorted, falls upon owner-occupiers just as much as upon council tenants.

The hon. Member for Honiton trotted out a figure which I cannot believe he had considered for a moment. He suggested that a house costing £10,000 attracted a subsidy of approximately £1,000. At present rates of interest a £10,000 house would have an interest charge of approximately £1,100. On a 60 years basis, the additional capital amortisation would be very low. The most that service charges could amount to would be approximately £1,200. Is the hon. Gentleman saying that with service charges of £1,200 the total subsidy, both local and Exchequer, could amount to anything in the region of £1,000?

5.15 p.m.

I wish that Opposition hon. Members would recall that there has been only one major policy initiative that has encouraged owner-occupation. We can encourage owner-occupation only by giving encouragement at the margin. There is nothing that we can do to encourage the company director to own his own house because he will do so whatever we do and whether or not we take away all tax relief. Whatever happens, the company director will still own his own house. If we want to encourage owner-occupation we must do so amongst those people who are at the margin who want to own their own property but who cannot afford to do so.

What was the policy initiative that was taken? The option mortgage scheme that was introduced by the Labour Government during 1964–70 is the only thing that has been done to encourage owner-occupation. The charge that we are ideologically opposed to owner-occupation does not bear a moment's serious consideration.

Mr. Freeson

In fact, the first move by any Government to assist local authorities in a move towards home ownership was by a Labour Government in the 1920s which introduced the Small Dwellings Acquisition Act to encourage owner-occupation at the lower end of the market.

Mr. Cunningham

I am glad that it was a Labour Government not just in recent years but in an earlier period which gave such encouragement.

I suggest to Conservative hon. Members that it is necessary only to look at the local circumstances to decide whether it is desirable for a local authority to sell some of its rented accommodation. I can remember during a party conference at Blackpool a few years ago reading a local newspaper which reported that the highly Conservative local authority of Lytham St. Annes was in the midst of a debate on this subject. The Conservative chairman of the housing committee said that he would resist to the last the selling of local authority accommodation because it would only mean that the authority would have to buy at a higher price as it would sell at a lower price.

I ask Conservative hon. Members to bear in mind the problems of inner London. If we were to sell council accommodation in inner London there would immediately be no effect. The people who are occupying council accommodation as tenants would continue to occupy it as owner-occupiers until they died or decided to move. At that stage the problem would arise. For example, the bus driver who bought a flat in inner London cannot be compelled to sell it to another bus driver. He would, of course, sell it to whoever was prepared to offer him the most money. Therefore, he would tend to sell the property to professional people moving into that sort of area.

It may be argued that social change within a population is desirable and that we should not impede social shift, but unless we have enough accommodation in the inner London area for bus drivers and those who make London work, the services of London will be in an even worse state than at present. That is a reason which is related to local circumstances which apply in my area and, for example, in the borough of Camden, which would make it highly irresponsible to sell off one unit of council accommodation.

Sir R. Gower

The new clause has my cordial support. I understand the point which has been made by some Government hon. Members that the extension of home ownership owes a good deal to the initiative of people from all parties. I accept that policies which have been initiated by successive administrations have had beneficial results. Further, I accept that there are local authorities of all parties, and dominated by various parties and by independents in various parts of the country, who support the principle of home ownership, and that there are other authorities of all parties which object to it or which oppose it in their practice.

Unfortunately the very tone of the speeches that we have heard from some Government hon. Members suggests that the principle that we are now discussing is rather lower in their list of priorities than it is in my mind and the minds of my hon. Friends the Members for Northampton, South (Mr. Morris) and Honiton (Mr. Emery), who expressed Front Bench support for the new clause. I believe that the policies of successive Governments since the end of the last war have led to an expansion of home ownership. This has been one of the best things that has happened in post-war years. It owes much to the initiative of many. But we still have a long way to go, because the proportion of home owners in the United Kingdom is lower than the proportion of home owners in other countries such as Canada and the United States.

If we are to get a variegated pattern of housing, if we are to inject a mixed pattern of housing into areas which are now wholly local authority owned we must follow this type of policy. I can take the hon. Member for Islington, South and Finsbury (Mr. Cunningham) to places in my constituency, and elsewhere, council estates which I know well, where some of the privately-owned houses can be identified because of their appearance. [Interruption.] The hon. Member for St. Pancras, North (Mr. Stallard) makes a noise suggesting disagreement. I could take him, and I will take him if he comes to my constituency, to places where some, not all, of the houses can be identified as being privately-owned. As soon as people acquire them they have an extra motive to improve them. They would be fools to do otherwise.

If I were living in rented accommodation of any kind, whether it was owned by an individual, a company or a local authority, I would have little incentive to spend money on its improvement. We cannot expect people living in rented accommodation to expend the same amount of energy and money, to use the same initiative and imagination on improvements, as some owner-occupiers naturally do. We should give a vast impetus to home ownership because in some parts of the country this process has not even begun. In others there has been only a modest response. This is understandable because to many people this idea is something new and different. They have not contemplated home ownership.

Since it became possible to purchase houses in this way in one part of my constituency I have received letters and petitions from constituents in the other parts who are not able to buy council houses. It is a matter of regret that there is not universal opportunity.

I accept that the amendment may not be perfect in format. I can see some objections beyond those which were put by my hon. Friend the Member for Honiton. I do not necessarily accept that its universal application would be justifiable.

In the last Parliament during the passage of a housing measure I tabled an amendment which gave the Secretary of State the power to exempt an area of extreme stress if he deemed it advisable. On the whole, however, there may be little or no objection to the general principle that in most of the country, outside areas of extraordinary stress, tenants should have this right. I want to see more and more tenants owning the premises in which they live.

If I may comment on the amendment of the hon. Member for St. Pancras, North, I would like to see tenants of private housing likewise acquiring ownership. In many cases they do so. The owners of those premises in recent years have been only too glad to get rid of them. I had only one or two very small premises of that kind left to me in a will and the first thing my brother and I did—we were joint beneficiaries—was to sell them to the tenants.

Mr. A. P. Costain (Folkestone and Hythe)

Can my hon. Friend tell me of a single case in which a tenant wants to buy out a private landlord but the private landlord does not want to sell.

Mr. George Cunningham


Sir R. Gower

I agree with the inference of my hon. Friend. Most of the owners of houses which have been let for a long time are only too glad to sell on reasonable terms. In many cases they regard the property as a source of anxiety to them, something which produces a low rental income and a totally unforeseen repair bill. I hope that the Government will reconsider their earlier attitudes.

The Under-Secretary made a valid point in reply to my hon. Friend the Member for Hemel Hempstead (Mr. Allason). He quoted from the White Paper and posed the question whether there should be compulsion or whether there should be permissive powers. I would not want to see compulsion. I would like it to be said that the council should give the tenant the choice. There would be no compulsion on the tenant to buy. We want the choice to reside with the tenant. It is better that the council should, in all except the most extraordinary circumstances, be obliged to give the tenant that option. Perhaps this will be but a modest addition to the means we have devised for extending home ownership. If we incorporate this provision in legislation it may be a long time before it makes an impact. Nevertheless it is right and proper that it should be done.

I hope Labour Members will not think that this is a bad thing but will see that it is a good thing and will support what my hon. Friend has in mind, namely that tenants of municipal dwellings should in most cases have the chance of acquiring the ownership of the home in which they have lived for most of their life.

The hon. Member for Islington, South and Finsbury said that they can move away and acquire a home of their own elsewhere. He is saying in effect that such people can acquire homes only if they move away from an area, leaving all their friends. I want them to be able to buy a house in the neighbourhood in which they have always lived. In some parts of the country, by definition, that is a council house. I hope that the Government will accept the principle of the clause.

Mr. Paul Tyler (Bodmin)

I declare an interest, although a very indirect one, in this clause in that I have advised the Royal Institute of British Architects on housing policy in the past and I continue to inform it about parliamentary affairs. I do not think this arises on this clause but perhaps this is the right moment to mention it. I find the debate quite extraordinary. Conservative Members have appeared to be alleging that the Minister and the Government are being dogmatic.

Yet, as the Minister has rightly pointed out, the new clause is the most dogmatic statement I have seen for some time: A local authority shall be bound … no request may be so made until the tenant has resided therein for a period of not less than seven years …". If that is not dogmatic I do not know what is, especially coming from a party which in the last Parliament introduced legislation for local government reorganisation which, we were told, would give fuller responsibility to the local authorities for carrying out more of the functions put upon them. We were told that they would be bigger and they would be in a position to take bigger decisions. There would be less control from Whitehall. Yet this clause seems to impose new controls over local government housing policy.

If I may be somewhat parochial, I can demonstrate how the housing authorities in my area would be put in a very awkward position indeed if this clause were to be passed.

5.30 p.m.

We know of the severe housing shortage in central London and the difficulties with which housing authorities in central London are grappling. But it is not only the central areas of our cities that face the most chronic housing shortages. My own constituency, which is a rural area with small market towns and slightly larger industrial towns, has a long waiting list for council houses. The new district authority which came into being on 1st April has a waiting list of 1,800 people. My post bag—as many hon. Members who represent rural constituencies will also bear witness—is full of letters from deserving people who wish to be rehoused in council property.

At the same time in my Cornish constituency there is a large number of houses built by private enterprise for which buyers cannot be found. Yet I understand that some hon. Members are suggesting that preferential terms should be given to tenants of council houses who perhaps can afford to buy a house in the private sector.

Mr. Cyril D. Townsend (Bexleyheath)

Before we get too deep in Bodmin Moor, may I ask the hon. Gentleman whether the Liberal Party is in favour of the principle of selling council houses?

Mr. Tyler

If the hon. Gentleman will be patient, I will come to that point.

This is the worst possible moment to put forward the clause, not only for central London but for the rural areas. From my bitter personal experience I know that this is the worst possible moment to impose this new requirement on a local authority area such as mine. In the fullness of time we may want to move from the present permissive stage to a more mandatory stage. My party hopes that we shall take every step in our power to increase home ownership. It is extraordinary that Russia and Hungary have a higher proportion of owner-occupiers than does the United Kingdom. That is a condemnation of successive Governments, not merely of this Government, who have been in office for only three-and-a-half months.

The wrong way to go about it at this juncture is to impose on local authorities a requirement that they shall be bound to act in this way. That would be to the grave disadvantage of the private house-building industry. I am surprised that the usual advocates of that industry are not taking that point. Conservative Members who often speak for the housing industry must have been badly briefed if they think that private house builders would welcome a provision like this at a time when throughout the country there are endless houses awaiting buyers.

Are there so many council tenants marching on their town halls asking to buy their properties? Why should they? There is a falling market and, if they are lucky enough to get a mortgage, they do not want to buy a council fiat, they want to purchase on the open market which is at present comparatively good for the buyer. By all means let us move as fast as we can into a position where more people can purchase and own their own houses. I believe in the eventual aim of a property-owning democracy, but the option mortgage scheme is a much better way of achieving that result. It would be of great benefit if by some form of equity-linked system of mortgages tenants could begin to obtain part of the equity in their property rather than having to buy the property outright, as the clause proposes.

The clause is ill thought out and it is totally inappropriate at this moment in central city areas and many rural areas. If it is pressed to a vote, my right hon. Friend, my hon. Friends and I will support the Government.

Mr. Freeson

I will make as unprovocative a speech as I can. It is about time that the Conservative Party dropped this gimmicky obsession. It is about six years since this idea came into Conservative Party policy and campaigning began in local and national elections. The opposition are putting to the House, not for the first time, a narrowly conceived view, which they have raised in town halls throughout the country. It is a view that does not take into account the question of tenure in all its forms, and does not consider how we should move forward to a variety of methods by which people may have stakes in their own homes. The Conservatives do not examine the situation on the ground and relate their policies to those situations. They are waving a tatty, worn banner.

Conservative policy does not bear any relation to the facts on the ground, nor has it taken into account what the general tenure pattern of housing should be. It takes no account of the various ideas which have been developing and which the Government are intent on studying with a view to action after the next election when we come back for a good long run of office. Even if we are in opposition we shall look at the matter constructively and not take up gimmicky ideas as a panacea for the country's housing problems. I will come back later to the current situation, which is at least partially the responsibility of the previous administration.

I want to look first at what is proposed, as it is written. In the light of the views expressed by the hon. Member for Barry (Sir R. Gower), he should vote with the Government on the clause. That might also be true of the hon. Member for Hemel Hempstead (Mr. Allason). I understand that the vote on the clause will be pressed.

The basic purpose of the amendment which the Opposition wish to write into the law is to require that local authorities shall sell a dwelling, without qualification, to a tenant who has been in residence for at least seven years and who wishes to buy it. I agree with the hon. Member for Bodmin (Mr. Tyler), who asked why it was necessary to lay down that the tenant must have been in residence for seven years. There are circumstances in which it would be proper for a local authority to sell council houses without laying down a statutory minimum period of residence. The statutory responsibility which the amendment seeks to place on local authorities is to be placed on them irrespective of local circumstances. Is that what the hon. Members for Barry and Hemel Hempstead want?

Mr. Allason

I made the point that the house would remain in the possession of the same family for the next 20 years whether it is council owned or owned by the tenant.

Mr. Freeson

I find it a little baffling to see in the clause reference to 20 years when all the information shows that the average mortgage runs from five to seven years. In the South the figure is five years and elsewhere it is seven years. I do not know why there should be so much talk of a period of 20 years.

I wish to make the much more important point that, whatever the redemption period, one has to try to meet the argument involving a mandatory policy. That policy overlooks the management aspect of local authority housing in areas where they need flexibility and movement of families, even within estates, to keep people on the move from slums, bad housing conditions and the like. One has only to go to any stress area to find a large number of vacancies being made available for families who come off waiting lists, from slums or from other bad housing conditions in any one area. This may involve two or three moves within an estate. However, once property is sold in a mandatory fashion in areas of stress, it will put managerial manacles on local authorities and will not solve the housing problem. Surely Conservatives do not believe that, irrespective of circumstances, in stress areas in the great cities a mandatory responsibility should be placed on local authorities, as the new clause envisages.

Much play has been made of the Government's doctrinaire attitude. I interrupted the hon. Member for Hemel Hempstead to ask whether he had read the circular and whether he thought it doctrinaire to say to local authorities "You may" or to say "You shall". It was a rhetorical question and required no further comment.

If we look at Government policy, I am sure we shall agree that it is not doctrinaire. Circular 70/74 under the heading "Sale of Council Houses" starts by saying that we refute the view expressed by the previous Government that local authorities should sell their houses indiscriminately whatever the local housing situation". What is wrong with that statement? The circular continues: The first duty of a local authority is to ensure an adequate supply of rented dwellings. Does anybody refute that? It is surely the first duty—perhaps not the only duty—to ensure that there is an adequate supply. The circular then says: In areas where there are substantial needs to be met for rented dwellings, as in the large cities, the Secretaries of State consider that it is generally wrong for local authorities to sell council houses. Again, what we are saying is that where there are substantial needs for rented accommodation, surely it is wrong to sell the properties which one requires for one's needs. This refers to cases where there are unmet needs for rented accommodation. One can establish that situation only by looking at the facts on the ground, not by passing the mandatory requirement in the clause.

The circular makes a very important point and replies to the indiscriminate policy which was attempted, largely unsuccessfully, by the Tory Government. It says: There may be areas where the sale of council houses into owner-occupation is appropriate, in order to provide a better housing balance, but this should not be done so as to reduce the provision of rented accommodation where there is an unmet demand. What is wrong with that as a statement of fact?

Mr. Emery

Presumably one could claim that there is an unmet demand if there are only a few people—or even one—on a waiting list. This takes no account of the way in which many people in accommodation have no intention of moving to fill that unmet demand. Judging from questions asked across the Floor of the House in seeking to interpret the circular, we have the impression that there is strong pressure by the Government not to continue with sales.

5.45 p.m.

Mr. Freeson

The hon. Gentleman is straining and stretching on this matter. It is not good enough. That sort of statement does not contribute to honest debate. It is misleading, intentionally or otherwise, to members of the public and elected members of local authorities. It will mislead many people as to what Government policy is. I am referring to the policy contained in the document which we are sending out to local authorities. We ask people to read what we are saying. The circular was a carefully considered document. It was looked at by every Minister in detail, and much of it was written in language drafted by Ministers on the basis of the draft presented by officials at the request of Ministers.

Mr. Emery rose

Mr. Freeson

I shall give way when I have completed this passage of my remarks. I am trying to establish what Government policy aims at doing, as distinct from what it is claimed to do as interpreted by Conservative spokesmen. There may be cases where the sale of council houses is appropriate. This may happen where there is no unmet demand to be satisfied. There may be areas where one needs a balance of provision. We want local authorities to ensure that there is such a balance. The circular says: Indeed, there are many areas where there is an inadequate supply of rented accommodadation relative to the supply of owner-occupied houses. That is particularly true when one looks at the geographical disposition of different kinds of tenures in inner and outer city areas.

It may be said that there is too much rented accommodation in some parts of the country. It is equally to be argued that in present circumstances there are parts of our cities where the balance is far too much in favour of owner-occupation to the disadvantage of people who cannot afford such accommodation and who at the same time cannot obtain decent rented accommodation.

Mr. Michael Morris rose

Mr. Freeson

I will give way to the hon. Gentleman in a moment. I have almost finished this passage of Government policy. This also requires a balanced policy by Government and local government. That is what we are seeking in the circular, as distinct from the indis criminate policy which was pursued by the Conservative Government and which is now advocated by the Conservatives in opposition.

The circular continues: … in addition to municipal rented dwellings local authorities should sponsor tenants' cooperatives as well as housing associations. What is wrong with that as part of policy? The Secretaries of State look to local authorities, in the exercise of their discretion"— I emphasise the word "discretion", in other words their freedom— in this matter, to adopt policies in accordance with those views. I must make it clear that this envisages a balanced policy to be pursued by local authorities as distinct from a blanket indiscriminate policy, such as that which is being put to the House in the new clause.

Paragraph 36 of the circular, under the heading "Building for Sale", says: … local authorities should build directly for owner-occupation where they can contribute usefully to meeting a demand for houses for sale. Similarly, local authorities should consider building for long lease to housing cooperatives. Such activities should not, however, prejudice local authorities in their primary duty to provide rented accommodation. I maintain that that reflects, adequately or inadequately, a genuine attempt at a balanced policy in the matter of tenures. That is very different from what is now being put to the House. It is very different from the policy which, to a large extent I am glad to say, was pursued unsuccessfully by the previous administration.

Mr. Emery

The hon. Gentleman accused me of misleading the House. That is the last thing that I ever wish to do. He is propounding the view that local authority policy is still to encourage the sale of council houses. I ask him the direct question: if that is the policy, does he believe that it is succeeding? I suggest that the number of local authorities proceeding with council house sales today is very small compared with what was happening two years ago.

Mr. Freeson

I will not pursue all that was said by the hon. Gentleman. I did not intend to say that he was being deliberately misleading. 'That can be done inadvertently or as a result of incompetence as well as by deliberate intent.

On the specific matter that he raises, I have to disappoint him. It was during the last year of the Conservative administration that we saw a drop by 25 per cent.—

Mr. Emery

I asked about the position two years ago.

Mr. Freeson

I hope that the hon. Gentleman will allow me to answer in my own way. We saw a drop of 25 per cent, in the number of council houses being sold, despite an increase in the number of local authorities wishing to sell them, according to my figures. If there has been a decline, it did not start during the three and a half months that we have been in office, whatever may be the future as a result of our more balanced policy. It started during the period in office of the previous administration.

It may be that, despite all the comings and goings in debate on this issue, we are wasting our time, whichever view we take, because there are bigger economic forces at play than these debates which will decide whether local authority dwellings are sold in the numbers that opposition supporters in their indiscriminate fashion wish to see sold.

Mr. Tyler

Is the hon. Gentleman aware that the circular to which he referred laid the responsibility on the local authority to look at the housing shortage in its own area and to see whether there was a long housing list? I cannot understand how the main Opposition party can complain of the results of the housing policy of the previous administration. It collapsed last year and, rightly, local authorities do not find it sensible or profitable to sell off council houses.

Mr. Freeson

The hon. Gentleman, in his own way, has made the very point that I was attempting to make. There are bigger forces at play here than the issues that we are debating in this amendment.

Mr. Michael Morris

Surely in this debate we are dealing with a matter of principle. It is the right of the tenant to buy. Today's market forces may well be against him but, by the time that this and other measures reach the statute book, we hope that the position will have changed.

The hon. Gentleman talks about there being an inadequate balance. My constituency takes in a great many houses in new towns. It is all very well to send a plausible-sounding circular to new town corporations, but even new towns are restricted to 25 per cent. while the Government are thinking about the situation. Is not this once again a demonstration of the fact that, far from local authorities being allowed to do something, in this instance they are absolutely restricted and confined and, as a result, the opportunities for owner-occupation are reduced?

Mr. Freeson

I welcome the hon. Gentleman's confidence in the effect of this Government's policies on the housing market. I hope that we can produce an upturn in the market as rapidly as he forecasts. This Bill is due to become law within a matter of weeks. I should love to feel that our policies would produce success so rapidly.

As for the other matter referred to by the hon. Gentleman, I stress that this is not a debate on a principle. We are not a debating society. We are debating a clause which the Opposition wish to see written into law. We must debate that clause and not just some principle about whether there should be more local authority houses sold, or whether there should be 25 per cent., 20 per cent., 35 per cent. or any other percentage of new town dwellings sold into owner-occupation. That is not at issue. This is a clause seeking to impose a mandatory duty to sell any or all local authority houses to people who ask to buy them.

For the reasons that I have given, this proposal is totally doctrinaire. It is obsessional. It is about time that the Tory Party dropped the subject and came to a more balanced view about housing policy. We might not have had such a disastrous inheritance if the previous administration had given as much attention to other aspects of local authority housing as they did to this one in the various circulars and near-directives that they sought to impose.

I could spend a great deal of time going through the clause point by point to indicate how technically it would be nonsense in law, quite apart from the issue of policy that we are debating about its intent. It does not allow for any exemptions. It allows for no exceptions in the case of houses for the elderly and the disabled. There are no exclusions in the case of flats. Presumably local authorities could embark upon break-up and sale operations, which would not be very good for housing management in years to come. I could quote many instances to show that the clause would be writing a nonsense into the laws.

Mr. Costain

Surely the hon. Gentleman intends to comment on the amendment tabled by his hon. Friend the Member for St. Pancras, North (Mr. Stallard). He may need his help one day. What is his view about it?

Mr. Freeson

I am not sure whose help I am being offered today. I had by implication discussed the kind of policy underlying what my hon. Friend seeks to do. Since I am invited to make some further observations, I am glad to do so.

I said earlier that this Government were intent on looking at all aspects of tenure and the enfranchisement of tenants. I did not say that for debating purposes. Those hon. Members who served on the Standing Committee will remember the exchanges that we had from time to time about various aspects of the enfranchisement of tenants, leaseholders of flats and the like. I spoke with sincerity. We have already embarked upon a preliminary examination. We are examining the possibility of expanding in both the private and public sectors schemes of cooperative housing, which is a form of social ownership that I wish to see expanded. We are looking at various other aspects of tenure and enfranchisement. We intend to pursue this line rather than the narrow approach reflected in this clause.

It was in that spirit that my hon. Friend the Member for St. Pancras, North (Mr. Stallard) sought to change the character of the clause before us now. He placed priority where it should be placed if we are to have a greater variety of tenure.

Let us get more rented housing into social ownership in order to introduce greater variety of social ownership along the lines proposed by my hon. Friend and which I put to the Committee upstairs when we debated the matter. We have been in office a few months. Give us another few months and we may be able to present proposals along those lines as the start of a new development in this sphere.

6.0 p.m.

I should like to underline the seriousness of the background against which we are looking at the clause and against which we must decide how to vote. We estimate that the number of privately rented dwellings in England and Wales is, and has been for several years, falling by about 100,000 or more per year. Indeed, the rate in the last two to three years may have been nearer 150,000 per year. These are not exact figures. In addition, rightly or wrongly, about 140,000 local authority dwellings have been sold out of the rented sector in the last three to five years.

Earlier, I explained our balanced policy on this matter. If we pursue a policy of pushing more housing out of the rented sector we shall drastically worsen the housing situation in city areas. The biggest single demand in stress areas now and for some time to come, as for some time past, as far as it is possible to make a policy projection, is and will be for reasonably rented accommodation for many people who in due course wish to go into the owner-occupier market but find it increasingly more difficult to do so because they cannot start married life in reasonably rented accommodation. It is no longer available. It has disappeared completely or the rents now being charged for private accommodation in inner city areas are so exorbitant as to drive these people into rooming houses and other multi-occupied accommodation that so many hon. Members representing such areas have been trying to find solutions for. Deliberately to embark on a policy to remove hundreds of thousands—maybe millions—of such dwellings out of the publicly rented sector into owner-occupation in an indiscriminate fashion, which is what the Opposition are advocating, would worsen the situation in those areas if that policy were successful.

The cutback and rundown in new starts—now at about 200,000 dwellings per year—the grave loss of rented accommodation particularly in stress areas in recent years, the need to get a balance of accommodation instead of the polarisation that is going on in so many city areas, and the need to work out a greater variety of tenure in future in all spheres inevitably lead us to reject this mandatory requirement approach. If none of these issues is of sufficient concern to hon. Gentlemen opposite, may I implore them to accept that it would be wrong to place a mandatory instruction upon local authorities in place of their freedom to use their discretion to achieve the kind of balanced policy that the Government are pressing upon them. It is in the end a question of freedom for the local authorities to look at the facts and to pursue a balanced housing policy which we hope to enhance by initiatives that we shall take in future.

Mr. Rossi

I will be brief. I had not intended to intervene in the debate. However, it has become so wide-ranging that I felt I must make one or two points to clarify the Opposition's position.

First, I assert that we adhere to the principle of the sale of council houses as an important aspect of our housing policy. Secondly, we wish the sale of council houses to be on extremely generous terms to sitting tenants—possibly far more generous than anything contemplated hitherto.

We believe it necessary for the future to have closer regard to the element of compulsion as many local authorities merely pay lip service to the concept of the sale of council houses against the wishes of many council tenants. I accept that there must be safeguards in certain areas and possibly appeal machinery to the Secretary of State. However, these are the general principles that we wish to establish.

We wish to see the policy of the sale of council houses pursued. First, it will provide a return of capital resources which local authorities can use for further housing activities. Secondly, it is an opportunity for tenants, after years of paying rent to local authorities, to have something to show at the end for themselves and their families. At the moment a council tenant can go into occupation early in life, pay rent for the whole of his life, and have nothing to show at the end. That is not a desirable situation.

The point has been made by the Minister and by the hon. Member for Bodmin (Mr. Tyler) that whilst there are queues of people waiting to go on housing lists it is wrong to dispose of council properties. That argument completely disregards the facts of life of council accommodation. If a person goes off a council list into a council property he remains there until he is carried out in his coffin. The amount of casual vacancies is very limited.

Mr. Michael Morris indicated assent.

Mr. Rossi

My hon. Friend, who used to chair the Islington Housing Committee, indicates his agreement. Experience shows that once a man becomes a council tenant he is always a council tenant and that that accommodation is frozen. It is effectively removed from the housing pool.

Therefore, we suggest that if that tenant is to live in council property for the rest of his life he should have the opportunity of acquiring and making it his own property. Indeed, the time may come when he says "I have lived in Islington for 30 years and paid my rent to the Islington Council. Now I should like to go to Worthing, but I cannot because I cannot afford to buy a bungalow there and I cannot get a transfer on to the Worthing housing list because it has its own problems. I am stuck in Islington and must spend the rest of my days here. However salubrious and pleasant Islington is, I should like to go to the seaside."

By giving people the opportunity of buying these properties for themselves we are also enabling them to save capital for the future. When they move the properties will come back and be available for others who want to live in the area. In addition, pride of possession, home ownership, means that people will look after the properties much better. Pride of possession also gives them greater dignity in life. It means that they are no longer the feudal tenants of their local political masters in the town halls.

That is why we wish to give people the opportunity of buying their homes if they possibly can.

Question put, That the clause be read a Second time:—

The House divided: Ayes 185 Noes 211.

Division No. 51.] AYES [6.11 p.m.
Adley Robert Hall, Sir John Onslow, Cranley
Allason James (Hemel Hempstead) Hall-Davis, A. G. F. Oppenheim, Mrs. Sally
Amery, Rt. Hn. Julian Hampson, Dr. Keith Orr, Capt. L. P. S.
Ancram, M. Hannam, John Osborn, John
Atkins. Rt.Hn. Humphrey (Spelthorne) Hawkins, Paul Page, Rt. Hn. Graham (Crosby)
Awdry, Daniel Henderson, J. S.B.(Dunbartonshire, E.) Percival, Ian
Baker, Kenneth Higgins, Terence Peyton, Rt. Hn. John
Banks, Robert Holland, Philip Price, David (Eastleigh)
Bell, Ronald Hordern, Peter Prior, Rt. Hn. James
Benyon, W. Howe, Rt. Hn. Sir Geoffrey (Surrey, E.) Rathbone, Tim
Biffen, John Howell, David (Guildford) Rees, Peter (Dover & Deal)
Biggs-Davison, John Howell, Ralph (Norfolk, North) Renton. Rt. Hn. Sir David (H't'gd'ns're)
Boardman, Tom (Leicester, S.) Hunt, John Renton, R. T. (Mid-Sussex)
Boscawen, Hon. Robert Hurd, Douglas Rhys Williams, Sir Brandon
Bowden, Andrew (Brighton, Kemptown) Hutchison, Michael Clark Ridley, Hn. Nicholas
Brewis, John Irvine, Bryant Godman (Rye) Rifkind, Malcolm
Brittan, Leon James, David Rossi, Hugh (Hornsey)
Brown, Sir Edward (Bath) Jenkin, Rt. Hn. P. (R'dgeW'std&W'fd) Rost, Peter (Derbyshire, S.-E.)
Bryan, Sir Paul Jopling, Michael Sainsbury, Tim
Buchanan-Smith, Alick Kaberry, Sir Donald Scott-Hopkins, James
Bulmer, Esmond Kershaw, Anthony Shaw, Giles (Pudsey)
Butler, Adam (Bosworth) Kilfedder, James A. Shaw, Michael (Scarborough)
Carr, Rt. Hn. Robert King, Evelyn (Dorset, S.) Shelton, William (L'mb'th, Streath'm)
Chalker, Mrs. Lynda King, Tom (Bridgwater) Shersby, Michael
Channon, Paul Kitson, Sir Timothy Silvester, Fred
Chataway, Rt. Hn. Christopher Knight, Mrs. Jill Sinclair, Sir George
Clark, A. K. M. (Plymouth, Sutton) Knox, David Skeet, T. H. H.
Clarke, Kenneth (Rushcliffe) Lamont, Norman Spence, John
Clegg, Walter Lane, David Spicer, Michael (Worcestershire, S.)
Cockcroft, John Latham, Arthur (Melton) Sproat, Iain
Cooke, Robert (Bristol, W.) Lawrence, Ivan Stanbrook, Ivor
Cope, John Lawson, Nigel (Blaby) Stanley, John
Cormack, Patrick Lester, Jim (Beeston) Steen, Anthony (L'pool, Wavertree)
Corrie, John Lewis, Kenneth (Rtland & Stmford) Stodart, Rt. Hn. A. (Edinburgh, W.)
Costain, A. P. Lloyd, Ian (Havant & Waterloo) Stokes, John
Critchley, Julian Loveridge, John Stradling Thomas, John
Crowder, F. P. Luce, Richard Tapsell, Peter
Dean, Paul (Somerset, N.) McAdden, Sir Stephen Taylor, Edward M. (Glgow, C'cart)
Deedes, Rt. Hn. W. F. MacArthur, Ian Taylor, Robert (Croydon, N.W.)
Dodsworth. Geoffrey McCrindle, R. A. Tebbit, Norman
Drayson, Burnaby MacGregor, John Temple-Morris, Peter
Durant, Tony Macmillan, Rt. Hn. M. (Farnham) Thatcher, Rt. Hn. Margaret
Eden. Rt. Hn. Sir John McNair-Wilson, Michael (Newbury) Townsend, C. D.
Elliott, Sir William Madel, David Tugendhat, Christopher
Emery, Peter Mather, Carol van Straubenzee, W. R.
Farr, John Maude, Angus Vaughan, Dr. Gerard
Fenner, Mrs. Peggy Maxwell-Hyslop, R. J. Viggers, Peter
Fidler, Michael Mayhew, Patrick (RoyalT'bridgeWells) Waddington, David
Fisher, Sir Nigel Meyer, Sir Anthony Wakeham, John
Fletcher-Cooke, Charles Miller, Hal (B'grove & R'ditch) Walder, David (Clitheroe)
Fookes, Miss Janet Mills, Peter Walker-Smith, Rt. Hn. Sir Derek
Fox, Marcus Miscampbell, Norman Wall, Patrick
Gardiner, George (Reigate&Banstead) Mitchell, David (Basingstoke) Walters, Dennis
Gardner, Edward (S. Fylde) Moate, Roger Weatherill, Bernard
Gilmour, Sir John (Fife, E.) Molyneaux, James Whitelaw, Rt. Hn. William
Godber, Rt. Hn. Joseph Moore, J. E. M. (Croydon, C.) Wiggln, Jerry
Gow, Ian (Eastbourne) Morgan-Giles, Rear-Adm. Winterton, Nicholas
Gower, Sir Raymond (Barry) Morris, Michael (Northampton, S.) Woodhouse, Hn. Christopher
Grant, Anthony (Harrow, C.) Morrison, Charles (Devizes) Worsley, Sir Marcus
Gray, Hamish Morrison, Peter (City of Chester)
Grieve, Percy Mudd, David TELLERS FOR THE AYES:
Grist, Ian Neubert, Michael Mr. Spencer le Marchant and
Gurden, Harold Newton, Tony (Braintree) Mr. Cecil Parkinson
Allaun, Frank Blenkinsop, Arthur Cocks, Michael
Armstrong, Ernest Boardman, H. Coleman, Donald
Ashton, Joe Booth, Albert Concannon, J. D.
Atkins, Ronald Bottomley, Rt. Hn. Arthur Cook, Robert F. (Edinburgh, C.)
Atkinson, Norman Bradley, Tom Craigen, J. M. (G'gow, Maryhill)
Bagier, Gordon A. T. Broughton, Sir Alfred Crawshaw, Richard
Barnett, Guy (Greenwich) Brown, Hugh D. (Glasgow, Provan) Crosland, Rt. Hn. Anthony
Barnett, Joel (Heywood & Royton) Callaghan, Jim (M'dd'ton & Pr'wich) Cunningham, G. (Isl'ngt'n & F'sb'ry)
Bates, Alf Campbell, Ian Cunningham, Dr. John A. (Whiteh'v'n)
Benn, Rt. Hn. Anthony Wedgwood Carmichael, Neil Dalyell, Tam
Bennett, Andrew F. (Stockport. N.) Carter, Ray Davidson, Arthur
Bidwell, Sydney Carter-Jones, Lewis Davies, Bryan (Enfield, N.)
Bishop, E. S. Clemitson, Ivor Davies, Ifor (Gower)
Davis, Clinton (Hackney, C.) Jay, Rt. Hn. Douglas Richardson, Miss Jo
Dean, Joseph (Leeds, W.) Jeger, Mrs. Lena Roberts, Albert (Normanton)
de Freitas, Rt. Hn. Sir Geoffrey John, Brynmor Robertson, John (Paisley)
Delargy, Hugh Johnson, James (K'ston uponHull,W) Roderick, Caerwyn E.
Dell, Rt. Hn. Edmund Johnson, Walter (Derby, S.) Rodgers, George (Chorley)
Dempsey, James Johnston, Russell (Inverness) Rooker, J. W.
Doig, Peter Jones, Barry (Flint, E.) Ross, Stephen (Isle of Wight)
Dormand, J. D. Jones, Dan (Burnley) Ross, Rt. Hn. William (Kilmarnock)
Douglas-Mann, Bruce Jones, Gwynoro (Carmarthen) Rowlands, Edward
Duffy, A. E. P. Jones, Alec (Rhondda) Sandelson, Neville
Dunn, James A. Kaufman, Gerald Sedgemore, Bryan
Dunnett, Jack Kelley, Richard Selby, Harry
Dunwoody, Mrs. Gwyneth Kerr, Russell Shaw, Arnold (Redbridge, Ilford, S.)
Eadie, Alex Kilroy-Silk, Robert Short, Rt. Hn. E. (N'ctle-u-Tyne)
Edelman, Maurice Kinnock, Neil Short, Mrs. Renée (W'hamp'n, N.E.)
Edge. Geoff Lamborn, Harry Silkin, Rt. Hn. S.C.(S'hwark, Dulwich)
Edwards, Robert (W'hampton, S.E.) Lamond, James Sillars, James
Ellis, John (Brigg & Scunthorpe) Latham, Arthur(City of W'minsterP'ton) Silverman, Julius
Ennals, David Lawson, George(Motherwell&Wishaw) Skinner, Dennis
Evans, Ioan (Aberdare) Lipton, Marcus Small, William
Evans, John (Newton) Loughlin, Charles Smith, Cyril (Rochdale)
Ewing, Harry (St'ling, F'kirk&G'm'th) Loyden, Eddie Smith, John (Lanarkshire, N.)
Fernyhough, Rt. Hn. E. Lyons, Edward (Bradford, W.) Snape, Peter
Flannery, Martin Mabon, Dr. J. Dickson Spearing, Nigel
Fletcher, Raymond (Ilkeston) McCartney, Hugh Spriggs, Leslie
Fletcher, Ted (Darlington) MacCormack, Iain Stallard, A. W.
Foot. Rt. Hn. Michael McElhone, Frank Steel, David
Ford, Ben MacFarquhar, Roderick Stoddart, David (Swindon)
Forrester, John McGuire, Michael Stonehouse, Rt. Hn. John
Fowler, Gerry (The Wrekin) McMillan, Tom (Glasgow, C.) Stott, Roger
Freeson, Reginald McNamara, Kevin Thomas, D. E. (Merioneth)
Freud, Clement Madden, M. O. F. Thomas, Jeffrey (Abertillery)
Galpern, Sir Myer Magee, Bryan Thorne, Stan (Preston, S.)
Garrett, W. E. (Wallsend) Marks, Kenneth Thorpe, Rt. Hn. Jeremy
Ginsburg, David Marquand, David Tinn, James
Golding, John Marshall, Dr. Edmund (Goole) Torney, Tom
Gourlay, Harry Meacher, Michael Tyler, Paul
Graham, Ted Mellish, Rt. Hn. Robert Urwin, T. W.
Grant, George (Morpeth) Mikardo, Ian Varley, Rt. Hn. Erie G.
Grant, John (Islington, C.) Millan, Bruce Wainwright, Edwin (Dearne Valley)
Grimond, Rt. Hn. J. Mitchell, R. C. (S'hampton, Itchen) Walker, Harold (Doncaster)
Hamilton, James (Bothwell) Moonman, Eric Walker, Terry (Kingswood)
Hamilton, William (Fife, C.) Morris, Alfred (Wythenshawe) Watkins, David
Hamling, William Morris, Charles R. (Openshaw) Watt, Hamish
Hardy, Peter Moyle, Roland Weitzman, David
Harper, Joseph Murray, Ronald King White, James
Harrison, Walter (Wakefield) Newens, Stanley (Harlow) Whitlock, William
Hatton, Frank Ogden, Eric Willey, Rt. Hn. Frederick
Heffer, Eric S. O'Malley, Brian Wilson, Alexander (Hamilton)
Hooley, Frank Padley, Walter Wilson, William (Coventry, S.E.)
Horam, John Pardoe, John Wise, Mrs. Audrey
Howell, Denis (B'ham, Small Heath) Park, George (Coventry, N.E.) Woodall, Alec
Howells, Geraint (Cardigan) Parker, John (Dagenham) Woof, Robert
Huckfleld, Leslie Peart, Rt. Hn. Fred Wrigglesworth, Ian
Hughes, Mark (Durham) Pendry, Tom
Hughes, Robert (Aberdeen, North) Phipps, Dr. Colin TELLERS FOR THE NOES
Hughes, Roy (Newport) Prentice, Rt. Hn. Reg Mr. Laurie Pavitt and
Irving, Rt. Hn. Sydney (Dartford) Price, William (Rugby) Mr. Ernest G. Perry
Ianner, Greville Radice, Giles

Question accordingly negatived.

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