§ 12.4 a.m.
§ Mr. Eddie Loyden (Liverpool, Garston)
I sympathise that hon. Members have been detained at this late hour and in the dying stages of this Parliamentary Session, but because of the importance of the issue that I want to raise tonight—namely, Liverpool's housing and rents position, I make no apology.
I, with other hon. Members on this side of the House, welcomed the action by the Government in making one of their first priorities on being returned to power the repeal of certain parts of the Housing Finance Act 1972. Only this week we have been dealing with some of the 689 residual problems carried in the wake of that Act. In my opinion, it created the greatest upheaval within local government and a great deal of resentment amongst tenants because of direct interference by the Government particularly in the regulation of rents. It was with some pride and satisfaction that I served as a Member on the Housing Rents and Subsidies Bill Committee—Standing Committee A—which dealt with the repeal of parts of the 1972 Act.
The main purpose of bringing this matter before the House is to point to what appears to be a major discrepancy in the intention and spirit of the Government regarding the Housing Rents and Subsidies Act, on the one hand, and the action, intention and interpretation by Liverpool City Council of that Act, on the other hand.
In Committee on the Housing Rents and Subsidies Bill I raised a question concerning a matter which had been brought to my attention at that time—namely, that the then controlling body on the Liverpool City Council had acted almost instantly, before the Bill had reached finality in Committee, and projected rent increases in Liverpool of £1 per week per dwelling. That was a matter of concern to myself and to other hon. Members at that time. Therefore, I raised with the then Under-Secretary of State for the Environment the question whether it would be in accord with the spirit and intention of the Bill to invoke increases in rents of the order of £1 per week per dwelling. As reported at col. 194 I said:It has been said in Liverpool, with what sort of authority I do not as yet know, after some appraisal of the Bill's effects that rents next year could go up by £1 per week per dwelling. I do not know whether that was an authoritative statement. I do not know whether the analysis of the Bill was based on figures possibly not available at that time. Nevertheless, the chairman of the housing committee in the locality made that comment.In reply, at col. 199, the Under-Secretary of State said:There is no reason why rents in Liverpool should be increased by £1 a week. I am sure that the hon. Member for the Isle of Wight (Mr. Ross) will be in touch with his friends in Liverpool and will tell them that the best way for it not to be used as a political football is not to seek to put up rents by £1 a week.My hon. Friend, in reply to me again, said that he considered that rents of that size would not be acceptable. 690 At col. 194, the Under-Secretary said:We should have to consider very carefully the use of Clause 2 if a local authority of the size of Liverpool were to put rents up by £1 a week, taking into account the generous subsidies we are making available. There is no reason why average rents should rise anywhere near £1 a week under the subsidy arrangements under this Bill."—[Official Report, Standing Committee A, 5th December 1974; cc, 190–99.]I refer to those points to clarify the position, because in spite of the fact that those figures given in December 1974 may have to be altered marginally because of the increase in the rate of inflation at that point, everyone agreed that there can be no justification for arguing that rents should be increased beyond what was considered at that time to be reasonable between 40p and 45p. At that point in time the considerations were on the basis that a 50p rent increase would be not considered reasonable.
We now have a situation in Liverpool where there has been a 100 per cent. increase. Those in local councils should act in accordance with the responsibility the Government have given to them for determining the level of rents. It may be argued that the rent increase of £1 is not a tremendous amount.
I want to draw the Minister's attention to the reply which I received today—a Written Answer to a Question about the rent increases in Liverpool. I was astounded to find that the Minister for Housing and Construction said:I understand the average rent increase is £1 a week from 4th August 1975. Allowing for two rent-free weeks this represents about 60–65p a week spread over the current financial year.Some time ago Liverpool adopted a system that instead of having rents spread over 52 weeks, rents were spread over 50 weeks. This benefited the city's housing department, because administration was made easier, and also, to some extent, the tenants. The effect of this action was not to have a rent-free two weeks, but that the rent was calculated on an annual basis and divided by 50 instead of by 52. Bearing in mind the reference in the answer that the two rent-free weeks mean that the average rent increase represents about 60p to 65p a week, this means that the £1 increase is reduced by 35p to 40p a week. As hon. Members will appreciate, this would be impossible under the rent 691 formula used by Liverpool, and the average figure would be nearer 96p.
However, that does not tell the whole story. The Liverpool City Council has not been even-handed in its approach to rents. We are not talking about a £1 a week increase. In some pre-war walk-up flats rents have risen by as much as £.86 per week.
These are massive increases in areas that have poor environmental qualities. This has been a deliberate act of retribution by the Liberal leadership on the Liverpool City Council on those areas that traditionally vote Labour. There is no doubt in my mind that the people of Liverpool are aware of this.
These are the people who spoke of openness and fairness in government but their intention has been to take the stick, literally, to the people of those areas in terms of rent increases. My main concern, however, does not rest on that point. I have other concerns about the rent revenue account in Liverpool and one is my concern about overspending. There is a lack of open government by the Liberal-controlled city council.
Before I came to this place I was a member of the housing committee in Liverpool, and I asked, on the question of overspending, for a special committee to be set up to investigate overspending. I have been here for 16 or 17 months and I understand that that committee has met once, and no attempt has been made to consider overspending. I am concerned about the cumulative effect on the housing revenue account which will have to be borne by the citizens of Liverpool in future.
There is a question about the facts of the arrears. It is apparent that the Liberal Party has been taking action against groups of tenants, and that this has had a serious effect on those tenants. One can imagine that if statements are made in the Press that tenants of certain blocks of flats are £x thousand in arrears, there is a mutual feeling among those who have commercial and business dealings with the tenants that they are bad payers.
This blanket statement is made without a proper examination of the rent arrears situation. The arrears position in the city council has to be seen to be 692 believed. I make one point from my own experience of this grave problem. In the Liverpool Echo of Wednesday 30th July there is an article headed "Cold facts of a computer create heated rents row". It says:The row was spotlighted by Mr. George Curphey, of Kenley Close, Newsham Park, who said he found 'long queues of anxious, bewildered people' clutching eviction notices outside the Stanley Park Avenue North district housing offices.He had gone to the offices after his invalid mother received a note asking for £ 38 arrears, and threatening her with eviction within 14 days if she did not pay".That is the humanity and understanding of the problem of the mass of the people which is shown by the Liverpool Liberals. In addition, I received over the weekend a phone call from a man of 84. There are hundreds of cases in Liverpool where rent arrears notices are being sent to people who are not in arrears. Eviction notices are being sent to people who are not in arrears, and this old man of 84 was preparing—I do not over-dramatise things—to take his own life because he had received an eviction notice. He had the pictures of his family ready round the cooker. He is a man on his own.
I telephoned the housing department to find out the reason for such an eviction notice. They admitted the notice was sent in error. Those in control of the city have been saying that eviction notices must go out because there are rent arrears. I do not know what it is costing Liverpool council to send out the notices, but they are sent out without due regard to the age and situation of the people with whom they are dealing, or whether they are sick or elderly. The notice goes out and the consequences can be grave for people in those circumstances.
There is not enough time to go into all the details of the housing revenue account that disturb me greatly. But I ask my hon. Friend also to have a close investigation carried out into the effects of Liverpool's decision, during the operation of the 1972 Housing Finance Act, to pay into the housing revenue account not the amount that it received in real rent yields but the amount determined as a fair rent on the recommendations of the city council to the rent scrutiny board. I understand that it set up a separate account and placed in it the difference 693 between the rents being collected and the rents that would have been collected if the city council's recommendations had been put into effect.
The argument, which sounds common sense, was that if there were rebates to be paid to people who had been paying excess rents, the fund would provide the wherewithal to do that. But that may well have affected the subsidy position. I do not know whether it has had a direct influence upon the problems with the Liverpool housing revenue account.
A thorough inquiry into the Liverpool situation is necessary. If we are to pursue the Government's policies, which include tackling the problems of slum clearance in areas such as Liverpool, tackling the problem of 22,000 people waiting for accommodation, there must be a different approach to the housing revenue account and the other policies now being pursued.
The people concerned, who argue that they were acting in the interests of the whole community, are holding in reserve several millions of pounds so that they can maintain the rate levels next year. They are sacrificing the well-being of the citizens of Liverpool and blaming the Government for all their own actions. It is time the people were told that the Liberal Party in Liverpool is acting independently under the powers returned to it by this Government in relation to rents and housing.
I ask my hon. Friend to study the matter carefully and to investigate closely the affairs of the Liverpool housing revenue account.
§ 11.23 p.m.
§ Mr. Robert Parry (Liverpool, Scotland Exchange)
I am grateful to my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) and the Minister for allowing me to intervene briefly. [Interruption.] We could not miss the hon. Member for Rochdale (Mr. Smith).
§ Mr. Parry
My hon. Friend has dealt adequately with the objections raised by the tenants in Liverpool to the recent Liverpool rent increases.
I wish to refer particularly to my constituency, where the Liberals have deliber- 694 ately, through political motivation, crucified the tenants with massive rent increases. At the last elections in Liverpool, the Liberals proudly boasted that theirs was the only local authority in the country to reduce rates by 1p, but they did not tell the people that they would increase rents by pounds—not just £2 or £3.
I wish also to refer to Early Day Motion No. 615 in my name, to which some corrections should be made. The figure of £4.64 per week for the highest rent increases, given in line 3, should be amended to £4.99. In line 7 I meant to include after "provide" the word "additional".
I received a letter from the city treasurer dated 26th July which reads:
In my constituency the increases are between 70 per cent. and over 200 per cent. There has never been one reduction in my constituency.
- "1. The total average rent increase is £1 per week.
- 2. The highest increase is £4.24 per week. There were, in fact, over a thousand dwellings which had a reduction in rent and the largest reduction was £2.33.
- 3. The average percentage increase over the whole housing stock was 26 per cent."
Political motivation was involved. All along the Liverpool docklands from Dingle to Bootle no Liberal councillors were elected. They are lucky if they can attract even 100 votes. In the election last February the Liberal candidate in my constituency attracted the lowest Liberal vote in the United Kingdom. In October that vote was reduced by one half.
This buffoon, the hon. Member for Rochdale, often interrupts the debate. I challenge him to live in my constituency for one week. I suggest that he would not last for one day.
Last week, the Liberal leader of the city council was escorted by six policemen following a special meeting of the housing committee. We would need two dray horses and a big cart for the hon. Gentleman.
§ Mr. Deputy Speaker
I did not wish to interrupt the hon. Member. However, for the sake of the record, I must say that the term "buffoon" as applied to an hon. Member is an unparliamentary expression.
§ 12.27 a.m.
§ The Under-Secretary of State for the Environment (Mr. Ernest Armstrong)
I am grateful to my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) and my hon. Friend the Member for Liverpool, Scotland Exchange (Mr. Parry) for raising the important and sensitive issue of rent increases for the nearly 74,000 tenants of the Liverpool City Council. Clearly the Government is most concerned at the impact of rent increases on household budgets.
When we took office some 18 months ago, local authorities had had their traditional right to fix their own rents stripped off them and given to non-elected, and non-appealable bodies. At the same time authorities were put under a duty to increase rents each year by 50p a week as rents remorselessly progressed ever upwards chasing the chimera of "fair rents". We had to deal with that policy. I want to remind the House of our efforts made in a national context to deal with this very severe impact on household budgets.
The Government's policy nationally on council rents has been first of all to return the right to fix reasonable rents to the local authorities, where we believe that it rightly belongs. Only they can best decide how to apportion any rent increases in the fairest way because of their intimate knowledge of the state and location of their properties. Secondly we have provided additional subsidies from the Exchequer to limit rent increases both this year and next. And thirdly we have updated the rent rebate schemes already once this year and are doing so again in November.
Now, let us look at the situation in Liverpool to which my hon. Friend referred. We have been reminded of some alarming increases, which on the face of it seem unreasonable. But first we must try to assess the overall position before deciding whether a local authority is acting unreasonably. The average increase in Liverpool is £1 a week from last Monday, 4th August—the first increase since October 1973. This increase when spread over the current financial year and taking account of the two rent-free weeks averages about 60p to 65p a week. The majority of the rent increases in the rest of the country this year fall in the band of 50p to 80p a week. In Liverpool 696 I understand that 55 per cent. of the tenants have increases of £1 a week or less, which means that 45 per cent. are in the other category.
A great deal has been said about the so-called nest-egg, but I assure my hon. Friends that Liverpool has been treated in exactly the same way as any other authority in the allocation of housing subsidies.
I also understand the deep concern of individual tenants whose rent increases are very much higher than the average. Here, I would make two points. First, as I have said, we consider that locally-elected bodies rather than distant Whitehall are far better able to decide how to apportion a rent increase. They know exactly the state of repair or degree of modernisation of their dwellings. Moreover, they are answerable to the local electorate for their decisions. Fairness between individual properties can best be determined and decided locally.
Secondly, I am informed that Liverpool has based its recent rent increases on a common multiplier of the gross values of their dwellings. They therefore take into account the locality and quality of dwellings, and are independently assessed by the Inland Revenue. Both local authorities and their tenants have the right to object to the assessment of the gross values of their dwellings. So gross values can give a broad indication of the rental differentials between dwellings.
I am also told that there are tenants, particularly in the city centre, who have had no rent increase for three to four years, and inevitably for them the rent increases have been steeper than for others. But if there are cases of hardship, I trust that the rent rebate scheme will provide adequate help.
Our attitude to the fixing of local authority rents is very clear, as was revealed by our opposition to the Housing Finance Act. We were able this year to honour the commitment in our manifesto to return to local authorities the right to fix their rents. We are naturally very reluctant to interfere with this recently restored freedom.
I do not regard it as a central government responsibility to scrutinise how local authorities decide to apportion a reasonable average rent increase over their dwellings. They should know far better 697 than I what is the local situation, and they must be allowed to take such decisions, and be responsible for them to their own local electorate.
I assure my hon. Friends that I shall read carefully what they have said. They will be interested to know that next Tuesday, 12th August, representatives of the Liverpool Council will be meeting 698 officials of my Department to discuss this problem. I shall see to it that we have a thorough exchange of views on all the points that have been raised in this important debate.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-six minutes to One o'clock.