HOUSING

HC Deb 16 June 1975 vol 893 cc965-1098

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coleman.]

3.53 p.m.

Mr. Timothy Raison (Aylesbury)

There are few moments when a debate on housing is not relevant, but I think the House will agree that this is an occasion when it could not have been more relevant.

As the Secretary of State knows full well, and has made clear in recent speeches, the country is at the moment in the throes of a grave economic crisis, and a drastic curtailing of public expenditure is clearly necessary. Yet in the matter of housing, public expenditure has rocketed and new public sector housing in particular has often become hideously expensive. Subsidies and the local authority debt burden have soared. Yet, in spite of this, housing remains, I believe, our greatest social weakness.

I suspect that many hon. Members on both sides of the House, like myself, will join in saying from their own experience in their surgeries and through their correspondence that of all the things which are put to them, housing is again and again the most serious and most worrying.

The purpose of this debate is to establish, first of all, exactly what is happening and to explore what can be done. But it is also to point out to the Government the folly of some of the Government's present policies and the damage that their doctrinaire blindness is doing to ordinary men and women who are desperate for somewhere to live. What we are seeing is, on the one hand, profligate and often ineffective public spending and, on the other hand, bigoted policies over private tenancies, land and so on, which are clearly cruel in their effects.

I want to look first of all at the present situation. It is perfectly true that the latest figures for starts from February to April are up on both the private and public sides. The private sector starts are up 40 per cent., public sector starts are up 3 per cent.—and that is something. But the comparison is with 1974 which was the worst year for house building since 1951. Has anybody any confidence at all that these present latest figures can be maintained in present circumstances?

The percentage increase in private sector starts in particular is from a quite abysmally low level of 104,800 last year, which was the worst since 1953. I understand that the latest Department of the Environment Private Enterprise Housing Inquiry suggests that 1975 would see 135,000 private starts, which is 30,000 fewer than in any of the 15 years between 1959 and 1973. So, as I say, the improvement is only on the dreadful year of 1974.

The fact is that at the moment we have substantial unemployment in the building industry, but we still have huge brick stockpiles. The reports from the industry on the sales side are particularly depressing. Although the improvement in mortgage availability is welcome, and the Secretary of State, I think, has been sensible in his emphasis on achieving stability, the number of mortgages supplied for purchases of new houses is slightly down between the last quarter of 1974 and the first quarter of 1975. At the same time, the £100 million cut in local authority mortgages will not help because this will hit the lower income groups who find it hardest to get mortgages.

Taking the picture in public sector housing, the situation is clearly equally critical. Part of it was summarised in an article in The Times of 12th May when the planning reporter said: The economic crisis, for perhaps the first time, has focused public attention on the enormous and ever-growing cost of public housing programmes. On March 31st 1973 the local authorities' housing debt totalled £8,889 million. By the end of the current financial year it is estimated that the figure will be some £16,500 million. The article goes on to say: …there is a real possibility that if things go on as they are councils will find themselves unable to service their debts. Local authorities are faced in some parts with huge costs of building new houses. Yet some persist in addition in enormously expensive municipalisation programmes, though it must be said that the Government at last seem to be, partially anyway, stamping down on this.

I will not embarrass the Secretary of State by quoting the highly pertinent articles of Messrs. Booker and Gray. I will not rehearse the examples of Camden and other areas, which are proposing to pay astronomical sums of money for new house building. Hon. Members and the country are familiar with these stories. But the Secretary of State has to recognise that the cost of new housing in the London area ranges from £20,000 to £50,000 a unit, and clearly that cannot go on.

Interestingly enough, members of the GLC, or some of them, are coming to recognise this. In the Daily Telegraph of 23rd April there was a report that the Chairman and Vice-Chairman of the Policy and Resources Committee, Mr. Harrington and Mr. Stutchbury, have told the ruling Labour group that they must face drastic cuts in their programme. It was a gross over-simplification of the then Under-Secretary, whom we see here today, last week to draw the attention of local authorities to the fact that they are able to build without a subsidy ceiling and that many local authorities could be building far more if only they had the will to do so."—[Official Report, 11th June 1975; Vol. 893, c. 402.] His actual words, the House will recall, were "to build without a ceiling." I think the word "subsidy" was incorporated in the course of revision of the Hansard text. His actual words were somewhat more to the point than the version which appears in Hansard.

The public expenditure problem in housing is prodigious. It has been summarised recently in an illuminating paper by Dr. Edward Craven of the Centre for Studies in Social Policy, with which I am associated, which is to be published shortly. He says: Throughout the 1960s, spending on housing represented about 5 to 6 per cent. of total public expenditure, even though this included a period during which a previous Labour Government was giving housing priority. In 1972–73, it still accounted for only 6 per cent. But then came the jump. There was a big increase in 1973–74; housing indeed was the only major programme to be specifically exempt from the December 1973 expenditure cuts. And by 1974–75 housing expenditure represented 9.4 per cent. of total public spending. In volume terms in that two-year period, housing expenditure went up from £2,047 million to £3,616 million, a 77 per cent. increase: in cost terms, it rose by a staggering 119 per cent. Against this: Total public expenditure increased by only 14 per cent. in volume terms, and 22 per cent. in cost terms. What were the consequences of this? Dr. Craven continues: … the sharp increase in expenditure has not been reflected in a similar increase in housing output in bricks and mortar terms, or at least not on anything like the same scale. Almost all indicators of housing output—improvement grants, new building, level of slum clearance—fell or are to increase relatively slowly over the period 1972–73 to 197576. A very large part of the increase went into refinancing the housing programme, into transferring stock from the private to the public sector, and into cushioning families from the effects of price inflation. In other words, what has been happening is that in terms of additional housing—which, after all, is what really matters—the results can only be said to be bitterly disappointing.

Why has public expenditure soared? There are a number of reasons for this. I just want to pick out two. First of all, the big drop in the sales of council houses has seriously affected the figures. In 1972 over 60,000 council houses were sold. In 1974 only 1,000 or 2,000 were sold. The consequence of this is that between 1972–73 and 1974–75 there has been a fall in receipts from this source of £276 million. Quite apart from this, there are very strong objections to the Government's policy.

Secondly, there has been the enormous growth in subsidies, which account for a third of public expenditure on housing today. Subsidies increased by 113 per cent. between 1972–73 and 1974–75, and they now stand, according to an answer to a Question on 11th June, at £1,218 million. As Dr. Craven says: This rise reflects a number of factors but the most important of these is inflation—and more specifically the Labour Government's decision to use the housing programme as an instrument of incomes policy and incomes maintenance on an unprecedented scale". That is at the heart of our present problems.

Under the Government strong element of distortion has entered into housing policy. It is perfectly true that the rent rebates and allowances which we introduced and support account for 28 per cent. of the increase in subsidies. However, the crucial factors include the rent freeze from March 1974 for one year. The loss of income from this to the housing revenue accounts was about £90 million. This rent freeze was at a time when earnings were increasing steadily.

Over the years there has also been the general tendency for rent to provide for an ever-smaller proportion of housing revenue accounts. The net contribution after rebates is now well below 50 per cent. In 1973 unrebated rents contributed 69 per cent. towards the housing revenue accounts. Now that is down to only 55 per cent.

I regret having to put these statistics before the House because this is never the most attractive way of arguing, but we have to examine this area in these hard times. This situation simply cannot continue. Neither the ratepayer nor the Exchequer can bear this burden, particularly where the incomes of a considerable proportion of council tenants have been rising well ahead of inflation. The fact is that average earnings have raced ahead of rents.

The Secretary of State must now state his policy for rents in clearer terms. What does he have in mind? He simply cannot leave this matter to the local authorities. It is quite clear that this problem has become far too vast to be left simply to the decisions of individual councils. Equally, he cannot leave the whole problem until next year because the pressure on public expenditure is so great that he must take action now.

Mr. Frank Allaun (Salford, East)

I have listened carefully to the argument advanced by the hon. Gentleman. Is he advocating—and I hope I am not correctly summarising his argument—that the Government should compel local authorities to raise rents?

Mr. Raison

If the hon. Gentleman is strongly opposed to that policy, he will find himself shortly fighting with his colleagues. The Secretary of State has to use powerful influence over the local authorities in this matter, which is what he will have to do anyway.

At the same time there is the long decline in the private rented sector. The House knows that in 1950 private rented dwellings accounted for 45 per cent. of households in the United Kingdom. In 1973 that figure was down to 17 per cent., including housing associations. The Labour Party revels in this. It believes that this is social progress. Labour Members say so over and over again. I believe that they are profoundly wrong. I suggest that they read an article by Dr. David Eversley of the Centre for Environmental Studies, which was published in New Society on 16th January this year. I should like to quote what he said about the consequence of not having private rented houses. What are we going to do to enable people to move house when they need to change jobs? What are we going to offer, besides a council house after a very long wait, to young couples getting married and perhaps wanting to start a family? If the answer is 'nothing', then no one should be surprised if large cities cannot man their essential services, if homelessness is on the increase, and if fertility is falling faster than even the optimistic had demanded. There remains a further question—whether a state of affairs where there is no choice, other than ownership or local authority tenancy, represents the environmental millenium we wanted? It is a question, however, which we should ask those seeking homes, not the theorists. It is hard to see what joy the strangulation of the private housing market has brought to those most in need of a roof over their heads. I believe that those words would ring true with very many poorer people in our big cities if only they were to read them.

Mr. Bruce Douglas-Mann (Mitcham and Morden)

Perhaps the hon. Gentleman is aware that in a Fabian Society pamphlet on the subject of municipalisation similar words were written by me. Would the hon. Gentleman not take into account the fact that the greatest and sharpest decline in the stock of privately rented dwellings took place between 1957 and 1964 at a time when the 1957 Rent Act was taking premises out of control? Would he not agree that the measures taken have protected a large number of tenants from being evicted as a consequence of the lack of protection under the Rent Act?

Mr. Raison

I fully accept that this has been an ongoing decline for a long time. However, I believe that the hon. Gentleman is wrong in a way that is typical of his party, because it approaches this in terms of an obsession with security rather than with provisions. Above all we need provision. Whether we can ever get substantial new investment into the private rented sector is obviously a substantial question. I should like to see it, but clearly there are difficulties. What cannot be doubted is that there is real hardship at the moment arising from Labour's war on landlords. This hardship applies equally to small landlords and to the homeless alike.

The truth is that the long years of control and, in particular, the folly of the Rent Act 1974 have taken their predictable toll. I believe that forcing landlords to subsidise tenants through control means quite simply that landlords give up. The drying up of furnished tenancies caused by the Rent Act 1974, which we predicted last year, is now taking place, with cruel results. Obviously none of us can give exact figures for what is happening. No doubt when he replies to the debate the Minister will talk about the evidence. But we all know what is happening. Every hon. Member who has people coming to him in a desperate search for housing knows that the 1974 Act has seriously diminished the stock of rented housing. There is no question about it. The evidence from estate agents, who are in a position to know, confirms this point completely. This has happened, and with cruel results.

The Parliamentary Secretary to the Treasury (Mr. Robert Mellish)

Nonsense.

Mr. Raison

I should have thought that the Chief Whip would have cared about this.

Mr. Mellish rose——

Mr. Raison

I am not quite clear whether the Patronage Secretary is seeking to intervene.

Mr. Mellish

I think that it is impertinent of the hon. Gentleman to talk about care about housing. The record of the Conservative Party when in Government is pretty grim. Most of us have spent a long time, in the House and outside it, trying to stop the Tory Party supporting landlords whose objective has been to destroy property and the initiative of those who want to buy it.

Mr. Raison

I suggest that the right hon. Gentleman turns his powers and eloquence on to his colleagues on the Government Front Bench and tries to rub some sense into them on this matter.

The Secretary of State must think of ways of alleviating the problem created by the Rent Act 1974. It is absolute madness to encourage under-occupation at a time when we should be thinking of the reverse. There is no question that the Rent Act 1974 is encouraging under-occupation.

The truth is that at a time when we have enormous public expenditure and inflationary problems, the Government are making matters far worse through sheer Socialist folly. Firstly, as I have said, there is their excessive use of housing policy as a means of supplementing incomes, which in many cases do not need it. Secondly, there is total commitment on their side to housing as a social service, rather than seeing the social service element as something which should be brought in to help people in need. Thirdly, there is persistent bias against the private sector, especially the private rented sector. Fourthly, there is bias against selling council houses, which is doing nothing for our housing stock and is adding again to public expenditure.

In addition to this, we still have the incredibly expensive demolition and redevelopment which are beloved of Socialist councils, and municipalisation for municipalisation's sake, even though we are now seeing a slowing down of the latter. We also have a very worrying picture on improvements. The figures for house renovation grants are down from 89,700 for the first quarter of 1974 to 29,900 in 1975.

If this debate does nothing else, it should at least give the Government the chance to state what is happening. At present we have statements and circulars following each other with such bewildering and sometimes contradictory rapidity that no one knows where he stands. It is extremely difficult to follow these circulars as they come out and contradict each other. As if that were not bad enough, we have such astonishing policies as the Community Land Bill.

I do not propose to go into detail today on the Community Land Bill, but quite apart from its other grave defects it can only harm housing, certainly private housing, very severely indeed. The truth is that it is already, by the mere threat of its existence as an Act, drying up the supply of land. To come up at this time with a measure which does nothing to make for cheaper housing seems to me absolutely extraordinary. I beg the Secretary of State to drop it, even if it means some unpleasantness among his colleagues.

May I also say to the Secretary of State that the way that this Bill is being handled in Committee is absolutely disgraceful. I hope that both the Secretary of State and the Chief Whip will study the leader published in this morning's edition of The Guardian on this subject.

The situation is clearly out of hand. The question now is what should be done. Because it is so out of hand, on the public expenditure side especially, it is particularly difficult, clearly, to put it right. But we must try to pick something up out of the ashes. The need to cut Government expenditure makes it imperative that housing policy should be rethought in such a way that we get the best out of such money as there is. For a start, this means jettisoning Socialism. Socialism has nothing to offer in housing policy today. It is expensive. It pays far too little regard to the desires and needs of individuals. It is geared to mass housing, at a time when we need human scale housing. It is geared to authoritarian paternalism, at a time when we need choice and sensitivity.

Over and over again, Conservative instincts about what people want have been proved right, not least because of our emphasis on choice and variety. We on our side accept the place for council housing, but there is a pressing need to give fresh life and stability to the private sector, both owner-occupied and rented. This is not only a matter of desires and needs. It is also a fact that support for the private sector is a much more cost-effective way of providing housing where one can do so. It is clear that the cost of subsidising each new local authority house—initally, anyway—is about three times the tax relief on a mortgage for each new purchaser. The figures come from the Government and assume loan charges based on an interest rate of only 9.6 per cent., which is well below the current borrowing rate.

How can we stimulate home ownership? First, I believe that we should return to encouraging the sale of council houses. With the rise in incomes and a static level of private house prices, this should be easier than it was a year or two ago.

Mr. Joseph Dean (Leeds, West)

Having quoted figures for council houses sold some years ago, is the hon. Gentleman aware that most of those were "given away" for less than £2,000 and that quite a number have since had to be bought back by the authorities which sold them, because of their housing shortages, for sums ranging between £8,000 and £10,000? Does the hon. Gentleman consider that to be good economics, when the balance has to be found, in the main, by the local ratepayers, from rents and from the taxpayer in general? Is that the hon. Gentleman's philosophy?

Mr. Raison

The figures must be approved by the district valuer. The fact that houses can be sold back seems to be an advantage in the scheme rather than a disadvantage. One of the arguments against selling council houses has always been that some people may not be able to afford to keep up their payments. If they can sell them back, that is all to the good.

Secondly, I believe that, again for public expenditure reasons, we must give additional support for mortgages if at all possible and certainly do what we can to hold down the rate. As I have said, I think that the present supply is adequate, but I believe—the Secretary of State has, I think, acknowledged this—that the rate needs to be watched very carefully. Thirdly, we must make more available for larger loans, because a bottle-neck has built up at the higher end of the market.

Fourthly, we must scrap the Community Land Bill and encourage people to bring forward land for sale and get on with the job of implementing Dobry. One of our charges against the Community Land Bill is that it has put the Dobry Report on the shelf at a time when it would be of great value to be able to push ahead with its recommendations.

Fifthly, we must look closely at new forms of buying. There is the half-and-half scheme, which has received publicity lately, and possibilities of partial shares in equity, and high-start schemes, and so on. This is not the time to adopt an excessively doctrinaire view, but the great need is to keep the market going.

I turn to the private rented sector. For a start, clearly we must repeal the Rent Act 1974, or alternatively, at the very least, bring in some new form of short-term lease which does not confer longterm security. The North Wiltshire approach, which has been discussed recently, is a start, although I have doubts about how widespread its value might be. Better still, we should take seriously the approach of my hon. Friend the Member for Kensington (Sir B. Rhys Williams) for some form of shorthold. [Interruption.] It is no good Ministers and ex-Ministers mocking this, because at present the need is desperate. We should also seriously consider the possibility of restoring some real point in investing in private lettings. Perhaps that can be done through depreciation or through capital grants, for example. The need is clear and it is being acknowledged even within the Labour Party. The House may recall that in the Daily Telegraph of 23rd April Mr. Stutchbury said: I think it is now clear that London's housing problem cannot be solved from the public sector. The main reason for this is the doubling of interest rates over the past two years. Later it was reported that Mr. Stutchbury argues that the Government has done this, as a start to subsidising the private landlord so that he is not, as at present, subsidising his tenant. They should move towards a situation where the private landlord can get an economic return on his property and afford to keep it in repair. What about the council sector? The money which is available for this sector must be used for building provided it is at a reasonable cost. Secondly, there is a strong case for trying to keep the improvement programme going. Thirdly, I hope that we can maintain mortgages for those who do not meet the level of the building societies. Fourthly, there is the continuing need to keep housing associations under way.

Clearly rents must rise and account for a substantially greater proportion of the housing revenue account than at present. We also need to attack under-occupation in the public sector as in the private sector. For example, I think we could do more to encourage transfers and ex- changes. We could do more to increase the number of smaller units and to encourage lodgers in council houses, making it worth while to have them. At the same time, we should review management policies and move towards an effective tenants' charter of the kind which the Conservative Party has advocated.

What about the crucial question of the council rent system? I have a suspicion that the Secretary of State may now be somewhat ruefully regretting his party's attitude to the fair rent system in the Housing Finance Act 1972. It may be true that next year's rent increases will be approximately double the 50p which would have been allowed under that Act. Whether or not fair rents should be brought back can be debated. It may be better to work through a mixture of subsidies and the proportion of the housing revenue account which is to be borne by rents. I do not begrudge the Secretary of State his present inquiry into housing finance.

Mr. Douglas-Mann

Is the hon. Gentleman suggesting that if his party had been in office it would have limited rent increases to the 50p per annum envisaged in the Housing Finance Act 1972, when at the same time he is suggesting that we should be increasing rents still further? What is he advocating? Is he seriously suggesting that his party would have kept rent increases down to 50p.

Mr. Raison

I am suggesting that we have to face a vast problem and that the cries which were put forward by Labour Members, including the hon. Member for Mitcham and Morden (Mr. Douglas-Mann), during the passage of the 1972 Act have now been shown to be complete hypocrisy.

I do not begrudge the Secretary of State his present inquiry into the whole subject of housing finance although I think it is high time that he embarked on it. I also accept that there is an important need to establish the basic facts of the situation—for example, the extent to which we need new housing. However, it is certain that if the Government continue to approach their housing policy in the spirit of narrow partisanship, which characterises the Minister for Housing and Construction more than anyone else, there will be no hope of meeting the real needs.

Housing is an area in which we must achieve a great degree of agreement and stability. If the Government do not recognise that and if they persist in their bigoted and inflationary housing policies, they will do the gravest disservice to the long-suffering people of this country, and the homeless and ill-housed above all.

4.29 p.m.

The Secretary of State for the Environment (Mr. Anthony Crosland)

As a veteran of more than five years of debates as my party's spokesman on housing, I again welcome the hon. Member for Aylesbury (Mr. Raison) to his new job. I have no doubt that, very properly, the hon. Gentleman is extremely pleased to have attained his position, but he should not allow his spirits to rise too high.

Crosland's law states that to be appointed Tory spokesman for housing is the kiss of political death. Let us remember the roll of honour over the past five years. First, there is the position of the right hon. Member for Worcester (Mr. Walker). Where is he now? He is very much out of sight on the back benches. The right hon. and learned Member for Hexham (Mr. Rippon) wisely committed political suicide only hours before he was due to be guillotined. The right hon. Member for Brighton, Pavilion (Mr. Amery) sits sadly and disconsolately on the back benches, as does the hon. Member for Southend, West (Mr. Channon). The hon. Member for Chelsea (Mr. Scott) is in a similar position.

It is a poor, sad, miserable prospect that lies ahead of the hon. Member for Aylesbury unless, of course, he manages to follow the one exception to this hideous tale of carnage—namely, the right hon. Member for Finchley (Mrs. Thatcher), the present Leader of the Opposition. However, to judge from the private mutterings of her supposed supporters, even the right hon. Lady does not seem to have total security of tenure.

The hon. Gentleman showed an almost sublime impertinence in criticising the Government's housing record after his Government had been in power for four years and when we have been in power for only one and a quarter years. I must remind the House briefly of the situation which we inherited in March of last year from the hon. Gentleman's Government. To reverse the words he applied to this Government, the Conservative Government were unsocialist, non-partisan, unbigoted and undoctrinaire. They showed care for the private rented sector and were motivated by good Conservative instincts. What did they do with that non-partisan outlook?

First, I turn to new house building. In 1973, the Conservatives' last year in office, the total number of new houses completed was below 300,000, the lowest figure since they were previously in office in 1963. Council house building was at its lowest level for 25 years. Private house building had virtually collapsed. House prices had doubled during the years of Conservative rule. Land prices had trebled. The mortgage rate had increased from 8½ per cent, to 9½ per cent., 10 per cent. and 11 per cent. The mortgage feast of 1971–72 had given way to the famine of 1973. Generally the would-be home-buyer received a clobbering such as he had never had in living memory. There are many thousands of young couples who will never forgive the Conservative Party for what happened in those years.

Mr. Michael Latham (Melton) rose——

Mr. Crosland

No, I have only just begun. In the council house sector the determination of rents had been taken away from democratically-elected local authorities and handed over to non-accountable rent scrutiny boards. Despite the fact that, against their wishes, subsidies increased as inflation gathered pace, Conservative Ministers, through the sheer clumsiness of the Housing Finance Act and its frontal attack on local democracy, managed to alienate almost every council and council tenant in the country.

In the private rented sector, about which the hon. Member for Aylesbury had so much to say, the Tory Government simply abdicated. There was only drift and muddle. They finally conceded, about 10 years later than all other informed commentators, that the sector could not be sustained, yet they refused to extend security to the furnished tenant, the chief victim of the decline. They refused to accept the advice on municipalisation that was given in Layfield and in other reports. They refused for years to stop the misuse of improvement grants which was leading to gentrification.

Finalyl, I turn to land. When I hear the hon. Gentleman attack our land Bill I become more charitably disposed towards the Bourbons. They may not have learnt anything but at least they forgot nothing. Conservative Members, however, seem to have forgotten everything. They have forgotten the Klondyke rush for land in 1971 and 1972. They have forgotten the enormous profits that were made by land speculators. They have forgotten that, contrary to their free market economics, higher prices led not to greater land availability but to land hoarding in the hope of still further profits. They have forgotten that when the land price balloon at last burst the financial position of many house builders was disastrously weakened and the task of restoring the house building programme made much harder. I find it quite impossible to give any credence to Conservative criticism of our housing policy.

Faced with the situation that we inherited in March last year, we had to take swift emergency action right across the housing field. At the same time we wanted this emergency action to fit into the broad strategy for housing which was clearly needed. What did we do?

First, new house building. In the public sector, we started with Circular 70/74 in April 1974, which made it clear that the Government were prepared to make available the necessary extra money for local authorities to increase their programmes. We then, in the Housing Rents and Subsidies Bill, devised a subsidy system which provides strong Exchequer support for new house building, and we greatly reduced the restraint imposed by the cost yardstick control.

The result—although, with respect, the hon. Gentleman was extremely grudging about this—has been a heartening increase in new building in the public sector. In Great Britain, completions last year were 20 per cent. up on 1973, starts 30 per cent. up, and—most significant of all—dwellings in new contracts approved 34 per cent. up. The increased momentum is being sustained this year. The figures for the first four months of this year show further sizeable increases in completions, starts and approvals over the same period last year. So, though I am still not satisfied, this is success No. 1.

In the private house building sector—where one would never have gathered what was the position a year ago from listening to the hon. Gentleman—the first priorities were to bring to an end the disastrous mortgage famine and prevent the imminent rise in the mortgage rate to 13 per cent. We achieved both these objectives by the £500 million loan to the building societies—a loan which was strongly attacked at the time by the right hon. Lady the Leader of the Opposition. So the mortgage rate has been held at 11 per cent. and the building society net inflow is running at a record level. Contrary to what the hon. Gentleman appeared to suggest, the number of commitments per month has been rising substantially in recent months, and I am happy to say that all this is now being reflected in the figures for private house building. Again, this up-turn received rather a grudging response from the hon. Gentleman.

Over the three months from February to April, allowing for seasonal fluctuations, private starts were 40 per cent. up on the previous three months and now run at about 12,000 a month. Annual completions at about the same level were 12 per cent. up on the same comparison. Confidence is returning to the market and there is no doubt that the trend is in the right direction, compared with the unprecedented slump in private house building caused by the disasters of 1973–74. So, though I am still very far from satisfied, this up-turn in private house building is success No. 2, and it derives from the Government's commitment, not just in words but in action, to the support of owner-occupation.

The action which we took on mortgages last year was successful in tiding us over the immediate crisis, but it also had a deeper significance. It represented a first step towards mortgage stabilisation. I, personally, as some hon. Members know, have been committed to this concept for many years, and it is now a key element in our housing policy. It is not a simple matter. We are nowhere near the end of the road on this yet, but the agreement of 11th April with the building societies has given us for the first time a firm basis for achieving mortgage stabilisation in the future. I willingly acknowledge the helpful way in which the building societies are working with us in the Joint Advisory Committee.

Mortgage funds, although important, are not the whole answer. In January we announced a further package of measures to help the private house building industry—measures worked out by the Government in close discussion with the house builders and the building societies. The low-start scheme for the first time buyer, the emphasis on the need to cut down planning delays, and so on, have also contributed to the return of confidence to the industry.

Despite this evidence, the hon. Gentleman again repeated today the claim that the community land scheme in some sinister way sounds the death knell of private house building. It of course does nothing of the sort. The health of the house building industry is a matter of close concern to us in the Government, and the scheme has been carefully designed with this in mind.

Any radical measure of reform such as the land scheme involves difficult changes and adjustments. Some will inevitably have doubts as to how matters will work out and will rightly seek reassurance, in particular on the key issue of the continuity of land supply. We are still in discussion with the house building industry, and the special arrangements we propose about, for example, builders' land banks and the small sites have already shown our strong desire to help smooth the initial stages.

Our commitment to a high level of new house building, public and private, is clear, but we must ensure that our building programmes reflect the actual needs of our population. For example, we need far more dwellings for smaller households, both for renting and for owner-occupation. I am looking here for a shift of emphasis in local authority programmes and for greater awareness on the part both of private builders and of planning authorities of the demand for smaller houses for owner-occupiers. These were the essential messages of Circular 24/75.

From new house building, I turn briefly to the existing stock of houses. The worst problem here—to this extent I agree with the hon. Gentleman—lies in the pri- vately rented sector. This sector, as we all know, has been declining steadily since 1918, or since even before the First World War, but the decline has been more rapid since the end of the First World War, and the decline has been as fast under Conservative as under Labour Governments. Many of us, as the hon. Gentleman fairly said, welcome this decline as a matter of social policy, but it carries with it the danger of a loss of low-income rented housing on a scale which we simply cannot afford.

Although the hon. Gentleman had a lot to say about the private rented sector he told us nothing, except for the vaguest hints, of what the Conservative policy for that sector would be. If there were some equitable policy for the sector which could be found to prevent the loss of low-income rented housing, presumably the Conservatives would have found it between 1951 and 1963 or between 1970 and 1974, but they did not. As one of my hon. Friends pointed out, the decline has been at least as rapid—in one case more rapid—under Conservative as under Labour Governments.

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

Does not the right hon. Gentleman appreciate that, whatever is Conservative policy on rented houses, the Labour Party must give an undertaking? In 1961 I said in the Chamber that if the Labour Party would give a guarantee not to interfere with or control the flow of houses we would build 50,000 houses a year. That would have given us 750,000 houses, and the problem would have been nearly solved by now.

Mr. Crosland

The Conservatives had a fairly long period of office between 1951 and 1964, and if there were an equitable method of increasing new investment in this sector they would have found it. The hon. Member for Aylesbury mentioned the possibility of new investment but was utterly vague on how that might be achieved. That is one danger—the loss of low-income rented housing.

The other feature in the private rented sector is that it contains a disproportionately high share—about 40 per cent.—of all older substandard housing. These two facts underline the crucial importance of municipalisation. On the one hand, this is often the only method by which we can get substandard property improved. It is also the only method by which we can preserve in the rented sector enough property to let at rents which people can afford.

We recognise, of course, that full social ownership cannot be achieved overnight. Public expenditure restraints have obliged us to go more slowly than we would have liked in an ideal world. In spite of these constraints, we have provided for a very substantial increase in public expenditure for acquisitions by local authorities. Last year this expenditure was running at £180 million, which compares with around £50 million in earlier years. I have recently announced that I propose to switch money to municipalisation to make sure that spending is maintained at the same figure this year as last year.

Mr. Arthur Jones (Daventry)

Will the Secretary of State tell us what "full social ownership" means in housing terms?

Mr. Crosland

In the terms in which we are immediately speaking, it includes acquisitions by local authorities and acquisitions by housing associations. Looking ahead, we hope that there will be other forms of social ownership. My hon. Friend the Minister for Housing and Construction will perhaps be speculating aloud about other possible forms in the future. Municipalisation is pointless unless we find money to improve municipalised property. Here there has been a great deal of misunderstanding. My hon. Friend the Minister for Housing and Construction, who knows all the Section 105 arguments backwards, will no doubt have some important words to say about this matter this evening.

It has been said that we have cut expenditure on improvement of council-owned housing by about 50 per cent. That is not so. The actual reduction in England, in constant prices, is from £305 million last year to £255 million this year. That still leaves councils spending almost five times as much in real terms on improvement as they were spending as recently as 1969–70. That they are spending five times as much shows what an enormous boost has been given to the improvement of our public stock of housing.

I do not say that we have yet got the right balance in these matters. To help us try to find it, we have set up, with the local authority associations, a study group which will examine all these matters. Chaired by my hon. Friend the Minister for Housing and Construction, this study group is now hard at work and we look forward to seeing its conclusions.

There is much else which I could say about the better use of our existing housing stock. The hon. Member for Aylesbury listed a number of points like con versions, empty houses, lodgers, the encouragement of transfers and the rest. I shall not repeat them all, but I was grateful to him for repeating almost verbatim our circular "Housing Needs and Action" which refers to the importance of every single one of the points he mentioned.

Mr. Dafydd Wigley (Caernarvon)

The Secretary of State referred to the cut-back in England. Does he agree that the figures for Wales on the degree of rehabilitation and modernisation of publicly-owned houses shows a decrease from the £29 million of the last financial year to £9.4 million expected for the current financial year?

Mr. Crosland

I do not have the figure at my finger tips, but I shall ask my hon. Friend to deal with that point when replying. The position in Wales is different, for reasons that the hon. Member knows very much better than I. Owner-occupied housing represents a much higher proportion of the total housing stock there than in England so that there is a different balance between private improvement and public improvement.

Having discussed investment in housing, I now turn briefly to the cost of housing and the question of subsidies. First there is the would be owner-occupier. By the time we came into office last March, the man on average earnings wanting to buy a house had been to a large extent priced out of the market by a combination of the explosion in house prices and the rise in the mortgage rate.

Now, however, due partly to the stability of house prices over the past two years and partly, and I fully concede this, to wage-inflation, the relationship has returned to something more normal. Given our agreement with the building societies on mortgage stabilisation, I see no reason to expect—indeed I am determined to avoid—a price explosion of the kind we had in 1972–73.

Mr. Michael Latham

Will the right hon. Gentleman say, supplementary to the statement he made on his agreement with the building societies recently, whether he has given them any guidance that they should impose positive restrictions on mortgages as some building societies have already voluntarily done?

Mr. Crosland

No, I have given them no more guidance than emerges from the joint statement that we put out a very short time ago.

1 turn now to council rents, which will present us with an extremely difficult situation in the years ahead. While house prices have gone up much faster than average earnings in recent years, rents have gone up much more slowly, and this is especially true of the two years 1974–75 and 1975–76—due partly to last year's rent freeze and partly to the special element of housing subsidy in the Housing Rents and Subsidies Act.

Since May 1973 the retail price index has risen by 39 per cent., average earnings by 45 per cent. and average unrebated rents by 23 per cent. The consequence is that the contribution of rents to the costs of the housing revenue accounts has been steadily falling since the late 1960s. Curiously it fell even through the years of the Housing Finance Act. In 1968 it was 74 per cent., now it is 55 per cent., and these are average figures. In some parts of the country—London for example—the contribution of rents is much lower than the average figure of 55 per cent.

This growing gap between rent income and housing costs has of course been covered by subsidies—it could not be covered from anything else—partly from the rates but mostly from the Government. This year Government subsidies will be three times in real terms what they were five years ago. They are in consequence pre-empting a higher share of the housing money we have available, and that reduces the share available for capital expenditure on improvement, municipalisation and the rest.

Now the Chancellor has announced that he is seeking a saving of £65 million in housing subsidies, of which about £50 million relates to local authorities in England. Unless I am to make deeper cuts in essential capital spending on housing, this saving can be found in only one way, and that is through rents. So rents next year will have to go up faster than they have recently.

This year, on present indications, they will rise by only about 12 per cent.—far less than the likely rise in earnings. Next year, the increase will have to be larger. Exactly how much it will need to be is a matter for detailed discussion between Government and local authority associations in the course of the rate support grant negotiations over the next few months. We cannot yet give a figure in money terms, partly because we do not yet know what next year's inflation rate will be.

However, it is clear that increases will have to do more—and quite a bit more—than merely to keep pace with inflation. Rents will have to start making the kind of contribution in real terms towards housing costs that they have done prior to the most recent developments.

Despite this, housing expenditure will remain one of the Government's highest priorities. Some of my hon. Friends continually press me for still more spending on housing and my sympathies are entirely with them. But I wonder whether they realise the actual rise of expenditure on housing last year, and how it reflected the extremely high priority we give to housing.

In 1973–74, in effect the Tories' last year in office, public expenditure on housing in Great Britain amounted to some £2,740 million at 1974 prices. In 1974–75 it rose—still at 1974 prices—to some £3,470 million. This is an increase of more than a quarter in a single year, which represents a large shift in Government priorities in expenditure.

Now the country faces an economic crisis far more serious than any we have faced since the war. The priority claims on our national resources are the balance of payments and higher industrial investment. We therefore cannot expect any significant further increase in housing public expenditure over the next few years. Housing did well last year—spectacularly well. From now on we shall have to do our best within what is still an enormous total, but without the freedom of manoeuvre which continuous growth would provide.

In this situation we shall have some hard decisions to take. Priority programmes must be protected. But from now on more spent in one area means that less is available somewhere else.

Mr. Arthur Jones

I am unable to marry up the figures the Secretary of State has given—the figure of £2,740 million for 1973–74 and £3,470 million for 1974–75 being spent on housing subsidies. Will he give us the origin of these figures?

Mr. Crosland

I believe these are from the last public expenditure survey but if that is not the case I shall ask my hon. Friend the Minister to say so when he replies. I take it for granted that they were from that survey.

I have no absolute confidence that we have got all our priorities completely right. I have a lot of sympathy with the comment in this month's Municipal Review: What appears to be needed is a critical judgment of the allocation of housing resources across the board. It is true, as the Secretary of State has rightly pointed out, that the total national housing programme has reached a plateau with expenditure of the order of £3,500 million a year as compared with £2,500 million in real terms two years ago. But it does not seem certain that all the priorities are yet right. I admit that, and this is one of the basic reasons I have set up a long-term housing review.

I am sorry that the Opposition have not put down a motion today because had they done so we might have learnt what their housing policy was. There is no more assiduous reader of the speeches by the Leader of the Opposition than myself, but if I were asked what Tory policy on housing was I would not have the faintest idea even after listening to the speech by the hon. Member for Aylesbury this afternoon.

We had a lot of "Perhaps we should do this", "Perhaps we should do the other", "Perhaps we should look at this" or "Perhaps we should look at the other." We had a certain amount of praise for new developments last year, almost all of which were the responsibility of the Labour Government or Labour councils.

I turn to what the Conservatives would do and how far that differs from what they did under the 1972 Act. On this subject we are absolutely in the dark. I revert to a speech made by the right hon. Lady the Leader of the Opposition, last week. That speech was purported to be—so I understand from the Press reports—a major speech on the economy. Over and over again the right hon. Lady said and this was implied today by the hon. Member for Aylesbury—that subsidies are a thoroughly bad thing. I hope that the closing speaker for the Opposition—no doubt another new appointment—will illustrate what that phrase means. The hon. Member for Hampstead (Mr. Finsberg) is one of the hon. Members who knows most about housing, and I am delighted to learn that he is to reply. I hope that he will elucidate what "dislike of subsidies" means in the area of housing. Does it mean that the Opposition have now ditched their disgraceful election pledge to subsidise mortgage rates down to 9½ per cent.? If they have not, their Leader stands exposed as a hypocrite. If they have, it is time they said so openly to the country.

Does it mean that it is now Conservative policy to remove or reduce the £680 million subsidy which owner-occupiers receive by way of tax relief on their mortgages? What does it mean for subsidies to council housing, for rents and for council householding?

We know that they would repeal security of tenure for furnished tenants. We know that they dislike municipalisation. We know that they would encourage the sale of council houses. But beyond that everything is in utter darkness.

In a brief year and a quarter we have not yet solved the housing problem. Of course we have not. But we have started firmly along the right road. Local authority house building is up. Private house building is up. The mortgage situation has been stablised. We are acting positively to improve both the condition and the use of our existing housing stock. Above all, housing is receiving a much higher priority in terms of public expenditure than it did under the Conservatives.

I am far from being satisfied with our progress, but at least we have begun to make progress. It hardly lies in the mouths of Opposition Members, who left us the shambles of a year ago, to carp and criticise today.

4.52 p.m.

Mr. Julian Amery (Brighton, Pavilion)

I have not spoken in a housing debate since I left the Department of the Environment in 1972, though naturally I have watched from the sidelines the evolution of housing policies. Both sides of the House approach the matter from rather different angles, yet what has impressed me most, from listening to the debate today and, indeed, to previous Government statements, is how much closer we are now than we appeared to be in the long days and nights when we crossed swords during the Committee stage of the Housing Finance Act 1972. Certain agreeable aspects of that Act, such as rent rebates, allowances, slum clearing subsidies, and so on, have been accepted and endorsed by the Government. That came as no surprise to me. Indeed, in Committee the right hon. Gentleman who is now Secretary of State paid tribute to some of these ideas.

I was very glad to hear the right hon. Gentleman say today that although there had been some shortfall on housing improvement grants compared with the high point to which we had brought them, they were still a great deal better than they were in 1969–70. At least he was doing his best to keep up with the standards which we had tried to set. We must never forget the importance of housing improvement socially, even more than in terms of accommodation unit provision.

On council house rents, we seem to be on much closer ground than we were before. In Committee the right hon. Gentleman as well as the Minister for Housing and Construction lambasted me on two grounds, first, that we were raising the rents, as they said, inordinately, and, secondly, that we were depriving the local councils of their autonomy and freedom in determining the rent level. It now seems clear that the rents will be raised in many cases substantially higher than the Housing Finance Act would have raised them.

It is all very well to say, as I think the hon. Member for Leeds, West (Mr. Dean) said, that of course if we had been in the present economic situation we too would have had to put them up higher. My reply is that we would never have allowed ourselves to get into that situation, but, of course, that is an academic answer.

I turn to the freedom of local authorities to determine their rents. Under the limitations that seem likely to be imposed on them by the Treasury, their freedom will be what used to be termed in good old Socialist parlance as "freedom to sleep under the bridges", because that is the only place to sleep. I do not propose to go into all the details which have been raised.

Mr. Joseph Dean

When the right hon. Gentleman says that rent increases may be in excess of what would have been charged under the Housing Finance Act, has he forgotten that the original increases were only of a limited duration, and that the Act catered for three-yearly reviews upwards? The 50p per year was for only three years, and would have been increased thereafter.

Mr. Amery

I was saying that what we had proposed was of a fixed character. It now appears that rents will be raised still higher than we had proposed. It is all very well for hon. Gentlemen to say that "If you were in office and had the present economic situation to deal with you might have to put the rate higher than you had intended." If we had been in office, we would not have had this situation to deal with. But, as I said, this is an academic point, and I do not want to dwell on this argument.

There is common ground between us that the rents have had to increase at least as high and almost certainly higher than we had proposed and that the freedom of local authorities to determine the rent will be severely limited.

I do not want to go into the very important but largely administrative points that have been debated. I stand strongly for the maximum extension of private house ownership. Therefore, I hope that we shall not go back on the election pledges of my right hon. Friend the Leader of the Opposition. We must do everything to encourage home ownership through the building societies and through the sale of council houses.

Of course, there remain differences of emphasis between us. However, the gap between us is substantially narrower than it appeared to be in 1972. While there remain differences of emphasis which no doubt justify us in dividing the House this evening, on this major element of social policy the two parties—or, at any rate, the representative and serious elements in both parties—are closer than they have been for some time. That is an undoubted gain.

4.59 p.m.

Mr. Ernest G. Perry (Battersea, South)

After listening intently to what the right hon. Member for Brighton, Pavilion (Mr. Amery) said—

Mr. George Cunningham (Islington, South and Finsbury)

What did the right hon. Gentleman say?

Mr. Perry

He said a considerable amount.

I recall the halcyon days of 1971 and 1972. I think that about 15 of the hon. Members present served on the Committee considering the Housing Finance Bill—[Interruption.] Halcyon days and nights, I agree.

If we examined the Official Report of the Committee proceedings, some of us on both sides of the House might find that we had to eat some of our words.

I agree with the right hon. Gentleman that it would be devastating if the Leader of the Opposition ever went back on her pledge to reduce the mortgage interest rate for potential house buyers to 91 per cent. That was a promise, and there can be no back-tracking on it.

In March 1974 we inherited a mortgage interest rate of 11 per cent., and it is still 11 per cent. But many people, particularly in the London area, are paying much more. The rate of 11 per cent. is the minimum. I know of many families in my constituency and elsewhere in the London borough of Wandsworth who, being unable to obtain a mortgage through the local authority or a building society, turn to finance houses. I am referring to some of my immigrant population, for whom it is not easy to find anywhere to live. They have to pay as much as 13 per cent. and even 16 per cent. to buy a house. No one should be under the impression that 11 per cent. is the maximum rate.

I agree with the right hon. Gentleman that we must try to encourage home ownership among ordinary people. The Labour Government achieved more than 50 per cent. owner-occupation. One of my aims in life is to see that figure reach 60 per cent. or even 75 per cent. I am sure that the right hon. Gentleman also wants to see the extension of owner-occupation.

The invective of the hon. Member for Aylesbury (Mr. Raison) against the Government was disconcerting. If we are ever to solve the housing problem it must be done by co-operation between all those who engage in house building and all those in politics and Government. The hon. Gentleman had only two solutions to the housing problem. One was the sale of all council houses and the other was the increase of council tenants' rents. Anyone with any idea about housing knows that those are not the answers. More than 50 per cent. of council tenants live in large blocks of flats which are not conducive to owner-occupation, unless there is some form of co-operative ground landlordship by the tenants themselves. I am not averse to that. It is a good idea.

The sale of council houses and putting up council rents do not produce one more brick or one more house for people to live in. The hon. Gentleman said that 65,000 council-owned houses had been sold to their occupiers. Later, he said that about 10,000 of these had been sold when we were in power. When the councils sold 65,000 houses to their tenants it did not produce one more house, but it gave the ownership of a council house to any people who could have afforded to buy a house on the open market, and so provide a house for people not so well off. That would have been a much better policy.

What I am really interested in is the situation in London, and I want specifically to deal with that. The Conservative Government, through reductions in taxes of all kinds, released on to the market an enormous amount of money that they thought would be invested in industry. Instead, in 1971, 1972 and 1973 it went into property development, into acquiring new sites. The result has been that, particularly in London, hundreds of acres are lying idle, owned by firms which are going bankrupt because they cannot meet the interest charges on the money they borrowed to buy the sites. This is happening not only in inner London but in my own borough, the London borough of Wandsworth.

I must point out to my right hon. Friend the Secretary of State that local authorities were encouraged to buy houses where the owner-occupier could not sell to a private bidder. In my constituency the Wandsworth council has bought hundreds of houses from owner-occupiers who could not sell them and who wanted to move away. Each house was bought for conversion into two flats, but unfortunately they remain empty and their condition is getting worse every day. They are being damaged because the council does not have the necessary money to convert them. The sooner more money is made available to local authorities in London to convert them the sooner will some of the homeless and those living in overcrowded conditions find somewhere suitable to live.

What I have just said applies to both the public sector and the private sector. One can walk through Wandsworth, Battersea, South and Battersea, North—wherever one likes—and see house after house that was privately occupied and is now empty and becoming structurally worse, week after week. One of the reasons is that although the owners can find buyers the buyers cannot obtain mortgages.

I see in the Chamber several Members representing London constituencies. They know as well as I do that there is a barrier to people living in London obtaining a mortgage sufficient to buy a house in the area in which they live. In Wandsworth the price for the average type of house ranges between £15,000 and £28,000. As soon as the building societies know that it was erected towards the end of the last century or early in this century they tell people applying for a mortgage "We are very sorry. We do not have the funds for this type of property at present" or "We have exceeded our quota "or" The building is far too old". This happens to many people in London wishing to buy their own houses.

I appeal to the building societies. Surely a compromise can be found, perhaps with the Government guaranteeing the interest due on the money borrowed, and giving a guarantee if, for example, the house has to be used for development in 20, 30 or 40 years' time. I see no objection. I see no reason why thousands of houses should remain empty in London because building societies will not advance the money for their purchase As local authorities have such a dearth of money for their house purchase schemes, perhaps we can reach a compromise on the matter.

Last week, I put down a Question to my right hon. Friend about the agreement that he had breached with the building societies in order to get some money from them to help people in the inner urban areas. His reply was not satisfactory. As the Government helped out the building societies to the extent of £500 million last year, surely they can reciprocate now that they are getting such enormous sums from investors. Surely the huge insurance companies could allocate some of their money for use in extending home ownership, or for modernisation of houses which are empty at present.

Mr. Crosland

I am listening attentively to my hon. Friend, but it seems that there may be some misunderstanding. First, the £500 million last year was a loan, and almost all of it has been repaid. Secondly, we have announced an agreement with the building societies whereby they are willing in principle to help make good the £100 million cut in local authority lending. I hope therefore, that there will not be any cut in total mortgage lending.

Mr. Perry

I am grateful for that intervention. But £100 million is but a drop in the ocean of the problem of home ownership and the modernisation of old property. We have to go much further than that. Thousands of houses are lying derelict. The process is always the same. First, the windows are broken, then boarded up; then a wall is knocked down; rubbish begins to be dumped in the garden; squatters may move in, and finally, methylated spirit addicts may move in. The Government must tackle the problem of the inner urban areas and ensure that empty property that can be used is used.

We must be prepared to do much more if we are to solve the housing problem and the social problems which that brings in its train. We must have cooperation between the Government, the local authorities and the building societies, and I would also bring in many of the institutions with enormous financial assets. They should be able to get the same return on the money they invested as the building societies should get, and it should be guaranteed by the Government.

I am sure that hundreds of millions of pounds are lying idle in many banks and insurance companies, and a Government guarantee in such terms would surely help to release much of it in order to tackle the enormous housing problem of the inner urban areas. Unless that problem is solved in the next 10 years, it will get worse and worse and become the greatest sore on the country that we have ever known. It is getting steadily worse month by month and year by year.

I am sorry to use such strong language, but this is an enormous problem in London. I was born in London and I still live there, and I feel sad when I see the deterioration of the capital. We see thousands of acres lying idle. We see thousands of derelict buildings. Huge stretches of land once used by industrial companies to produce goods now lie unused because those companies have gone—some of them forced out by freeholders.

If such a situation occurred in Northern Ireland, or in Wales, or in Scotland, or in the North-East or the North-West of England, we would have debates about it in the House. It seems, however, that anything can happen in London and Londoners just have to tolerate it.

Mr. Andrew Welsh (South Angus)

It has happened in Scotland. If the hon. Gentleman reads the Department of the Environment's circular on urban deprivation he will see that Scotland has 95 per cent. of the most deprived areas in the United Kingdom. The hon. Gentleman would see the sad situation in Glasgow.

Mr. Perry

I do not deny what the hon. Gentleman has said, but I am saying that, while other areas in the United Kingdom get a chance of public debate about their problems, London rarely does. I make the plea that London should get more time in this House, more Government money and more money from financial institutions, so that it does not sink into the slough of despond. Anyone with pride in London wants to see the present deterioration stopped.

London's housing is not only a problem of empty property. At this time of the year, for example, a great deal of decent housing accommodation is taken over by developers and turned into hotels for the millions of tourists visiting London.

Mr. George Cunningham

Under Government subsidy.

Mr. Perry

Yes. But all the people of London have to suffer the consequences. The problem gets worse year by year. When my right hon. Friend is considering where to get the money from, he should think of the enormous sums which successive Governments have provided to private institutions and companies in order to keep them going. It is about time the process was reversed and that some of these huge insurance companies, building societies and other financial institutions coughed up money, under guarantee, at a fixed rate of interest, in order to help provide decent living accommodation for the people of London and, at the same time, more employment in the building industry, which needs it so much.

I regret the terms of the motion, but at least it has given us an opportunity to bring into the limelight the conditions in London. The problem is spreading from inner London boroughs like Camden, Wandsworth and Hammersmith to outer London boroughs like Croydon and Sutton. The problem must be solved in the next decade. I urge my right hon. Friend to get some money from somewhere to stop London from sinking into slumdom.

5.18 p.m.

Mr. Peter Fry (Wellingborough)

Whatever our political differences, the hon. Member for Battersea, South (Mr. Perry) always tries to put some sound ideas into the debates in which he takes part, and I want to take up two points that he raised.

First, the hon. Gentleman queried the statement by my hon. Friend the Member for Aylesbury (Mr. Raison) about the selling of council houses, saying that it does not add a single house to the housing stock. I accept that. On the other hand, it does release cash which the council can then use to build more houses. It also enables people who would not otherwise buy their own home to do so—people who, for a variety of reasons, do not want to move from the house in which they have lived for many years but which they have probably paid for two or three times over in terms of rent. It would be wrong to deny such people an opportunity to buy their homes, and it is certainly not a retrograde policy. I believe that it is also a way of giving people a little more individual freedom. In any case, the majority of such people would never leave their homes, which would therefore not become available on the housing list because, invariably, the children take over the tenancy as their parents die.

Secondly, the hon. Gentleman referred to London's problems. I am not a London Member, but I represent a constituency in which there is an expanding town which contains a large number of ex-Londoners. One of our difficulties is that some of the problems of London are being exported because of what I believe to be the mistaken policy of the London housing authorities.

For example, we find that houses are being provided in our area for Londoners, but the rest of the services—the necessary infrastructure—have to be paid for by ratepayers already in the area. Many of them find that cost enormous. I agree with the hon. Member for Battersea, South that it would be much better to spend the money on providing houses in London, which most of these people would prefer if they had the choice.

In spite of the cautious self-satisfaction of the Secretary of State, I do not think that any hon. Member has any reason for satisfaction with the current housing situation or the house building industry. Some 30 years after the war we have probably the worst housing situation in Western Europe. Even behind the Iron Curtain there is more owner-occupation than we have.

A few weeks ago, I had the privilege of visiting Yugoslavia, and I went to a province that even its inhabitants would describe as the most backward the autonomous province of Kosovo. The authorities there are in the process of bringing a largely rural population into the towns to try to develop industry. One saw the development of flats and houses usually seen in growing towns. I said in all innocence that I presumed that the homes were provided by the local authority, but I was told that more than 70 per cent. of the new homes in the province were being bought by the people who were to live in them.

This decision has been taken in Communist Yugoslavia for the one simple reason that the authorities there have realised that they cannot possibly house all the population out of public funds—that they have to harness the desire of the ordinary individual to buy his own home. The fact that 70 per cent. of all new homes going up there are owner-occupied is a lesson for us in our mixed economy.

I, too, wish to touch briefly on the three main areas of housing, and I should like first to consider the public sector, which is causing considerable concern. The other day figures were released of the enormous amount of loan capital required to finance the present house building programme. It is estimated that building 150,000 houses adds about £ 1.000 million to the borrowing requirement. That is in just one year.

It is also apparent from the current figures of new council houses—I have been given the figure for Croydon as being about £17,500—that there is no hope, without massive subsidies, of doing more than touch the fringe of demand for houses in and outside London. Assuming that about £300 a year is paid in rent, the astonishing figure of £1,500 to £1,600 a year has to be provided in subsidy by ratepayers or taxpayers. It is obviously hopeless to think that we can solve the housing problem by relying almost entirely on the public sector.

There has to be a change of emphasis on the part of the Government. They have to say clearly to the hundreds of thousands of young couples who want a home "We cannot hope to provide you all with council houses in the foreseeable future. Yet in our surgeries these young people tell us that they see no other choice. They say that they cannot possibly obtain a privately rented house or flat and do not feel that they can afford to buy a house. Their only remaining choice is to go on the local housing list. It is deceiving these people not to be honest and say that, no matter how much money is poured into the system in the next few years, many of them cannot possibly be provided with a local authority home. I would much rather the Government were fully honest about this issue. They would have far greater respect inside and outside the House if they were.

The second area needing urgent consideration is the private sector. I am getting tired of sending letters to the Minister on behalf of constituents who are almost at their wits' end because they happen to be the owners of private property that they have rented or leased. Last week, a gentleman came to see me about two houses that he owned. One, he admitted, was old and below the standard required for him to be able to apply for a fair rent. He obtained 76p a week in rent for it. At the moment it is habitable. His expenses this year alone will be about £75 or £80.

He said "Frankly, I shall not do the essential repairs". All that will happen will be that the house will fall into disrepair and eventually have to be taken over. Its occupants, presumably, will be rehoused at the expense of the ratepayer and the taxpayer, the cost being about £25 a week.

Mr. George Cunningham

Under the latest legislation he is able to make repairs and recover the cost as an addition to the controlled rent that would otherwise obtain.

Mr. Fry

In this case he is unable to do so because of the low rateable value.

He has made repairs on the other house, for which he gets 85p a week. For those repairs he has been awarded the princely sum of £2 a week, well below the economic return on any property in which a family could live.

Mr. George Cunningham

As the hon. Gentleman has obviously not looked up the latest legislation, perhaps he will advise his constituent to do so, for he may find something to his advantage.

Mr. Fry

I am grateful to the hon. Gentleman.

The result of this and other examples is that many people feel that property that they are able to let or lease is a millstone round their necks. Many of them, especially in view of the 1974 legislation, have decided to dispose of these properties as soon as possible, or even to take them right off the market.

Thus, already we have two factors: the problem in the public sector, which will not be solved simply by pushing in more public money, and the problem in the privately rented sector, where the supply of accommodation is being reduced. It cannot be much sense for Government supporters in these circumstances to talk about ending the tied cottage system. In many rural areas to do so will only exacerbate the housing problem.

An interesting survey has been made of people living in tied cottages. The majority of those who had been in such accommodation for some years were happy about living in a tied cottage and at the same time were earning more than those who were dissatisfied—generally those who had been there for only a short time. The reason is in the nature of the system.

By having a tied cottage a farmer is able to provide accommodation for a stockman to live near a herd. The system is accepted in many other walks of life. I agree that the present Prime Minister does not live in No. 10 Downing Street, but it is a tied house. School caretakers live in tied cottages, and I understand that there are no proposals to abolish that aspect of the system.

We have to face the fact that if we go ahead with legislation that has a doctrinal basis, all we shall do is worsen the housing situation in many areas. Farmers will find it impossible to obtain skilled workers, and the country's food production will suffer as a result.

Mr. Andrew Welsh (South Angus)

In Scotland the National Farmers' Union and the farm workers favour the tied cottage system, unlike the situation in England.

Mr. Fry

I wish that the farm workers in Scotland would talk to the union in my country to see whether they could make our workers agree with the Scottish workers.

The third area is the owner-occupied sector. Here, the problem is more psychological than monetary. Many people, especially young couples, are nervous about embarking on buying a home of their own, and they have a variety of reasons for their nervousness. What they desperately need is the confidence that they will be able to keep their jobs, and thus maintain the repayments.

I accept that that is largely outside the province of this debate because it is tied up with the general economic situation, but there are things which the Government could do, particularly to help the large number of people who feel that they cannot afford to buy a house. The Secretary of State made an interesting speech some time ago suggesting that local authorities should investigate new ways of providing cheaper houses more quickly. He talked, for example, about erecting mobile homes. Yet there has been remarkably little advance in that direction.

Local authorities still seem to be steeped in age-old ways. I am disturbed because local authorities seem to be slow to take up new ideas. I have heard it said that not all housing associations can obtain sites as quickly or as easily as they would like. They find it difficult to deal with many local authorities. That is why I am doubtful about the value of the Community Land Bill. It places far too much power in the hands of local authorities. They will decide far too many things, such as what land will be made available and who will have it. We would all agree that there is a regrettable tendency in local government for empires to be built and for local officials to want more power.

My suggestions are twofold. First, we should look more closely at system building. It has now been proved that using system building techniques a house can be built in four weeks as compared with about six months using conventional techniques. If system builders were given contracts by local authorities there could be a dramatic increase in the number of housing starts and in the number of young couples who would be able to find accommodation. The Government ought to encourage this method of house building.

Second, there is the whole question of the provision of land for private builders. It is all very well for the large firms, but the small and medium-sized builders are in a state of crisis, largely because of the high cost of land. Recently their difficulties have been made worse because the value of the land they hold has dropped. As a result, its collateral value against bank overdrafts has been reduced. Many small builders are now in desperate circumstances. They are certainly in no position to buy another plot of land These people, usually local builders, could build a small development. They need the active co-operation of Government and local authorities. Why should not many more local authorities allocate certain areas of land, leasehold, to local builders under certain conditions? In that way the builder would pay nothing towards the cost of the land. The rent on the land could be paid to the local authority.

The small builder could erect a number of houses at the lowest possible cost to take account of those at the bottom end of the scale who would welcome the chance to buy their own homes. This could be done widely, yet it is not being done. Instead, many small builders are going out of business because they cannot obtain land. The Secretary of State should encourage local authorities to arrange this.

Basically, the whole problem facing the industry and those who want to buy homes is to do with confidence in the future. The best thing the Government can do is to show that they will take a firm grip upon inflation. In that way people will not be so worried about what their money will be worth in a few years' time.

The situation is becoming exceedingly critical. What we need is action, not just strong speeches. It is all very well for the Secretary of State to say that the party has got to stop. He must realise that for far too many people the housing party never started. I think that many Labour Members believe this, too. The right hon. Gentleman will find a considerable amount of all-party agreement if he enables more houses to be built, thus injecting confidence into the industry and into house purchasers.

5.35 p.m.

Mr. Frank Allaun (Salford, East)

A fortnight ago three Labour Members—my hon. Friends the Member for Leeds, West (Mr. Dean), Wolverhampton, South-East (Mr. Edwards) and myself—wrote to the Prime Minister making three proposals of ways to resolve the desperate housing situation. This weekend we have received a reply, covering four foolscap pages, which I have here. The reply is prompt, and treats our arguments seriously.

Nevertheless I and my two colleagues cannot accept the objections made by the Prime Minister—objections which are probably shared by the Secretary of State and his ministerial colleagues. We sought a great and immediate housing drive, a vast expansion of the house-building programme. The Prime Minister replied: I do not accept that this is necessarily the right course. There can be no mistaking the Government's view of its priorities and the place held by housing among them. But we simply cannot ignore the immense economic difficulties we face and I do not think we can reasonably expect to make further additions to the much increased provisions we have been able to make for housing in spite of all the pressures we have already had to face. I take the opposite point of view. Far from it being economically inopportune for such an expansion I believe that it is the ideal time. In Italy and Germany, as soon as unemployment began to grow recently, those countries stepped up their already considerable housing programmes. There are today 152.000 workers in the building trade in this country, plus 30,000 in related industries such as brickmaking and furniture, who are out of work.

It costs up to £2,000 a year to keep an unemployed building worker and his family in State benefits. Surely it would be better to have something to show for the money. We should remember that at the depth of the Depression in the 1930s in America President Roosevelt proclaimed his New Deal—the National Recovery Act. There were 16 million men and women walking the streets at that time. The New Deal not only developed great areas of the country but also provided the necessary lobs. We should do the same.

Apart from a small amount of copper the only import needed would be timber. A great deal of timber is now produced in this country. Much of it could be substituted. Light steel frames could be used for roofs in place of timber, so that there would be little strain on our balance of payments.

Mr. Stephen Ross (Isle of Wight)

Will the hon. Gentleman accept that the yards of the timber merchants are full of timber which they cannot sell, all of it bought two or three years ago?

Mr. Allaun

I am grateful for that intervention, which greatly strengthens the argument. The same applies to brickworks.

In his letter the Prime Minister refers to the improvement on the 1973 figures for starts and completions. I welcome this, but those figures were the lowest for almost 26 years. We must contrast the 268,000 completions last year with 413,000 houses completed in 1968. There is a mighty big leeway to make up.

Will the growth in housing continue or will it be halted? Certain remarks made by the Secretary of State today have increased my apprehension. In 1967, the Prime Minister told us that although other social services had been cut back the housing programme was sacrosanct. You, Mr. Speaker, may remember that remark. Tragically, it was not sacrosanct.

Mr. Deputy Speaker (Mr. George Thomas)

Order. I am grateful for the promotion, but the hon. Gentleman must not remind me of my past: it is disconcerting to me.

Mr. Allaun

Very well, Mr. Deputy Speaker, I shall never commit that crime again.

When the International Monetary Fund and the international bankers laid down conditions for loans, I believe that a cut in housing was one of their conditions. In 1968 a cut certainly took place. We have gone down from 1968 onwards. Shall we see them crack the whip again in a few weeks' time? And will the Secretary of State stand firm against Treasury demands? He should. A certain red-headed member of the Cabinet has fought hard, and, I think, successfully, to protect her corner. The Secretary of State must fight for his.

Where is the money to come from? It will come as no surprise to hon. Members when I say that it should come partly by cutting arms spending instead of increasing it, as we are doing. To take one item in the arms budget, expenditure on military research and development this year will rise to £550 million a year. With that sum, at £10,000 a house, we could provide an additional 55,000 homes for families, which I know the people of this country would prefer. Until arms spending is cut, some of us will resist a penny being cut off any form of housing expenditure—and it is now coming off not construction but improvements, repairs and municipalisation.

Contrast the housing situation in Germany and France, which have similar economic systems to ours and almost identical populations. Each of those countries builds more than 500,000 homes a year. It is no miracle. France builds twice the number that we build because she devotes 6.6 per cent. of her gross national product to housing compared with our 3.6 per cent.

Secondly, in our letter we asked the Government to permit local authorities to requisition houses empty for six months or more without good reason. The Prime Minister replied: … we have examined the possibilities very carefully. But it is clear that requisitioning powers, in practice, would not he a more effective or speedy way of bringing empty housing into use than administrative measures such as those that the Minister for Housing and Construction is examining, operated within the framework of existing powers. The unfortunate fact is that the Minister has not brought forward such measures. Meanwhile, 750,000 homes stand empty. Many of them have been empty for years and are becoming write-offs.

I received a letter last week telling me of a house which had been vacant for 19 years—this at a time when people are in absolute misery because of the lack of homes. Last week a young newlywed couple came to see me about a house empty for a long time in Salford which they would like to buy and put in order. The owner does not live there. They cannot trace her address, although they know her name, so they have asked me to forward their offer to buy the house to her via the local authority, which has her address.

The council should be authorised to requisition in such cases. A great advantage of requisitioning is that it completely avoids the floating of huge loans to purchase the properties, which is said to be highly inflationary. Instead, the council would install tenants on its waiting list and pay the rents to the owner after deducting repairs. What could be fairer than that?

My Private Member's Bill, supported by the majority of hon. Members, is still awaiting a Second Reading. It was interesting that when it was introduced under the Ten Minutes Rule the Government Whips voted for it, but I regret to say that the Ministers of the Department of the Environment did not.

The third proposal which we made to the Prime Minister was that buildin9, societies should lend their surplus funds to local authorities at 11 per cent. to provide mortgages to residents unable to secure them from the building societies, usually because the houses were old or they were people on low incomes. The Prime Minister replied: What we are doing is to explore urgently with the building societies how far they may be able to help in filling the gap caused by our decision to switch resources from local authority lending to municipalisation and improvement—a request that they have promised to treat as sympathetically as possible. But the brutal truth is that local authorities have recently received a letter instructing them immediately to cut their supply of mortgages to 50 per cent. of what they were last year. This morning I received a letter from my city treasurer about a constituent who had approached me. The treasurer wrote: I am afraid that he is going to be one more of hundreds of would-be house purchasers who because of the effect of Circular 64/75 of 9th June cannot in the foreseeable future be helped by the council. This is happening all over the country.

I do not share the criticisms made today by the Opposition—a lot of ideological balderdash—but I think that there is something in the criticisms that I am making and which have been made by my hon. Friends. Out of 32 London boroughs, 23 have stopped lending altogether and another five have imposed restrictions, so there will be a further strain on the waiting lists for council houses.

Councils are having to pay up to 15 per cent. interest on borrowing, compared with 11 per cent. for building societies. The Government should require the societies to transfer several hundred million pounds of surplus funds at 11 per cent. to the local authorities.

All that I have time to say on rents is that I am bitterly disappointed that on the housing finance working party which the Secretary of State has established there is not a single representative of the people most directly concerned—the tenants. Nobody seems to think about them. The Association of London Housing Estates and other excellent tenants' associations have experts who should be appointed and serving on that committee—and it is not too late.

Finally, I wish to say a few words about the private building firms which are exploiting the councils and the homeless, although there are honourable exceptions. Why should a new council house in the provinces cost £10,500, quite apart from the land cost, and, as we have been told today, £30,000 to £50,000 in London? Why should it cost £4,000 to improve a council flat? Ten years ago, in Salford, bathrooms with hot water and inside lavatories were being installed for £220 in terraced houses. I know that there has been inflation, but, my goodness, not to that extent. I blame some firms of architects. They are paid commission on a percentage basis: the higher the cost, the higher the commission. In a recent sheltered housing scheme in Salford costing £300,000, no less than £40,000 went on professional fees for architects and quantity surveyors.

As for faulty work, I could provide hair-curling stories from all over the country. Let me quote one or two from Salford. In three tower blocks the columns have cracked and at this moment are having to be propped up with steel girders inside and out. In a number of other tower blocks in the city, a major job is looming because of the movement of parapet panels and suspect joints. A new bridge over the river Irwell collapsed. Yet the bridge builder was actually paid his fee!

Damp abounds, affecting walls, clothes, bedrooms and furniture with green, grey and black mould. There is a serious effect on health. Damp results chiefly from faulty design by architects who should have been forced to live in these flats for six months—

Mr. Perry

And partly from shoddy work.

Mr. Geoffrey Finsberg (Hampstead)

Is the hon. Member indicting just private architects and developers or also local authority workers and direct labour departments?

Mr. Allaun

I am glad that that point has been raised. If the hon. Gentleman can contain himself for 20 seconds, I shall be there.

Then there are the high alumina cement developments. Now are added the fears over woodwool slabs. Why is something not done about the firms responsible for these faults? I have friends who are architects and they tell me that they take out huge insurance policies to cover disasters. Yet these firms are not sued or prosecuted, when things go wrong. Instead, the heads of some of them are honoured. Frank Taylor, of Taylor Woodrow, built Ronan Point, the collapse of which eventually cost this country £100 million paid for half by the taxpayers and half by tenants and ratepayers. What happened to Mr. Taylor? He was knighted. As far as I know, Taylor Woodrow did not pay a penny of compensation, and its profits of £6 million in 1967 had trebled to £18½ million in 1973.

The answer is to check soaring contract prices by employing those direct labour departments which have proved successes. Manchester, which employs 4,500 men, has built 16,000 council houses and has a wonderful record of success. Neighbouring councils in the Greater Manchester conurbation would like to employ Manchester's direct labour department to build houses for them. That would certainly bring down the tenders of some of the building firms. But this is forbidden by some outdated circular.

The Secretary of State told me at Question Time last week that he was permitting Manchester and Sheffield to work for other councils, but I understand that while they may do certain repair work they will not be permitted to build houses. I cannot see why that should be. A Manchester councillor tells me that it will be 1977 before an Act is pushed through to change that situation. Surely it is not beyond the wit of the Secretary of State, or of man generally, to alter that regulation without having to wait two years. Where there's a will there's a way.

Mr. Joseph Dean

On this point, is my hon. Friend aware that the end of the Manchester department's massive building programme is coming very close and that it would be expedient to examine the situation to allow it to build for other authorities in the conurbation so as to assist them with their housing programme?

Mr. Allaun

I am very grateful for that intervention. It shows that these men who have experience could be kept fully employed in building houses, which is what they want to do. I shall be listening very carefully to what the Minister has to say later tonight.

5.56 p.m.

Mr. Stephen Ross (Isle of Wight)

I am glad to speak after the hon. Member for Salford, East (Mr. Allaun), who has made the most perceptive and common sense speech of the debate so far. I also congratulate the hon. Member for Battersea, South (Mr. Perry) who highlighted many of the problems that we see in our constituencies. He was particularly concerned with the London area, but even in my constituency we have the unheard-of situation of between 2,000 and 3,000 people on our waiting lists while properties stand empty and rotting—some owned by local authorities. We cannot understand why that is allowed to continue. In the county town of Newport, to which I am about to move, I photographed no fewer than 50 empty properties, one of which had been empty for over 20 years.

The situation has deteriorated since our last housing debate, despite what I accept are some encouraging new starts in the public and private sectors. Some of the Government's present housing policies are very hard to understand, which is putting it kindly. We have heard about the lack of mortgage finance which local authorities are facing. I was in Cornwall on Saturday and I was told that practically all authorities there are right out of money. Some are saying that they can lend no more local authority money this financial year.

We know that about 50 authorities are unable to lend at under 14 per cent. I am sure that the Minister will have had his attention drawn to the deputation from Stevenage, which some of us met the other day. That is not in my constituency, but I was asked to attend as spokesman for my party. It was a frightening experience. Those people were in no mood to take "No" for an answer, having to face mortgage rates of up to 14 per cent. when their mortgages, on new town houses, were originally granted at 8 per cent. They could not understand that huge increase.

In my constituency, one authority now lends at up to 14 per cent., if one can get it, and the other at 11 per cent., so anyone buying a small property tends to go to the area of the latter. But both face reductions in lending and I do not suppose that they will be able to continue lending for much longer.

The housing waiting lists seem to grow longer. There was a period when my postbag did not get so full and not so many people came to see me on Saturday mornings. It is a forlorn experience when one has to interview decent people, often with a reasonable income, who are unable to get a home at all, sometimes suffering nervous breakdowns and seeing a doctor, and when one knows that there is nothing one can do to help except make a plea to the housing manager, who himself is at his wits' end.

Local authority modernisation schemes are almost at a standstill. In my authority, some additional money has been released on one scheme, but it is a different story with others. Properties in London and elsewhere will have to stand empty because of the cut-back—

The Minister for Housing and Construction (Mr. Reginald Freeson) indicated dissent.

Mr. Ross

I am glad to note the Minister's disagreement, and I hope that what I have said is not so. However, improvement grants are severely restricted. I have written to the Minister twice in recent months asking for the bottom limit of £175 rateable value to be raised. Rating valuation lists prove that small properties valued above that figure cannot be improved.

Turning to the speech of the hon. Member for Aylesbury (Mr. Raison), I am forced to put on record my sympathy for the Government, because of the fact that many of their problems result from the deplorable goings-on during the period of the last Conservative Government. The hon. Member for Salford, East described some of those things. A prime example is the use of high alumina cement. The cowboys who were allowed to operate in the private sector between 1971 and 1974 were a disgrace to this nation. It will take years of suffering to put that situation right.

I have found that the whole of the drainage system of a property that I am buying is completely condemned by the local authority and that it will cost between £1,000 and £2,000 to put it right. The builder had no previous experience. In those days building houses was a "good act to get in on." Inexperienced builders built those houses. The country will live with that fact for years.

The greatest disservice was the enormous rise in prices. It has made it almost impossible for the ordinary person to buy a small property. This is the problem with which the country is faced. Both sides of the House should arrive at a consensus so that the problem can be solved.

I do not suppose that the hon. Member for Salford, East will agree with my following remarks. There are up to 1 million dwellings which are empty but ready for occupation now. We all know of cases in which people have left the country temporarily. There are people who own two homes. They are prepared to help the housing situation. Not all property owners have an evil intent. Many people would like to let their spare properties. I refer to those who own properties which have become unexpectedly vacant through a relative's death. Others have bought houses for eventual retirement.

Those property owners are frightened. They are advised by their lawyers that they must not let their properties. If they do let them they may find themselves in an unfortunate situation. We all know what happens. Tenants make promises that possession will be given, but when the time comes they are unable to leave. Those tenants are protected. The protection applies to both furnished and unfurnished tenancies. We must give private landlords the opportunity to help in this situation. We have heard about the scheme in North Wiltshire, which is a start. That scheme provides for local authorities to guarantee short-term lettings. The local authority will take over the tenancies. That offers one way forward. However, the scheme is at present making only slow progress. The administrative costs and subsequent management charges are under £25 per annum. That scheme should be examined and extended.

However, there is a need to go further than that. We should make special arrangements for the first letting of houses, subject to satisfactory safeguards. I do not wish to return to the 1959–64 situation. That went wrong. The rent officers must be allowed to assess fair rents. The tenants must know exactly where they stand when they enter into the agreement. The landlord must know that he will not lose all control. If a local authority can give a guarantee, so much the better. In that context, I support the Private Member's Bill in the name of the hon. Member for Kensington (Sir B. Rhys Williams). We must face up to the situation. We must make use of all our existing housing assets.

I believe that the Rent Act 1974 was necessary at the time, but it is nonsense to talk about the effect its repeal will have. Furnished property usually commands a high rent of between £20 to £40 a week. I do not think that repealing the 1974 Act will help the situation. Even so, landlords of either furnished or unfurnished property should be allowed the unrestricted right to let for the first time.

I do not think that the suggestion made by the hon. Member for Aylesbury (Mr Raison) about private developers building houses to let is feasible today. I do not see how anybody can build property to let at a realistic rent, as costs are now every high. Local authorities are very often at fault in that they allow their own properties to stand empty. It takes a long time for them to make a move.

The Rotary Club in my county town tried for some years to obtain premises in the centre of town so that they could provide meals for old people. At long last something is being done. A building which has been derelict for over 10 years is being made available, because the redevelopment scheme there never got off the ground. Why should it have taken so long to do that? Why should not the local authorities provide buildings for charitable and housing associations to let on a short-term basis? They could renovate those properties and make them habitable. That would be a move in the right direction.

I could instance schemes in other parts of the country. In Portsmouth properties scheduled for demolition are being taken over by a housing association. Accommodation is being provided for unmarried mothers. The properties are being converted into flats. Local authorities should be encouraged to set up such schemes.

I agree with the mandatory rating of all empty premises. It should be mandatory on all local authorities to rate empty dwellings. I agree also with the requsitioning of empty properties. Where premises are flagrantly left empty the local authorities should be empowered to requisition them. However, owners of such properties should first be given the opportunity to make proper use of them.

I believe that the financial institutions and banks should be obliged to help local authorities to grant mortgages. I do not think that the building societies should be forced to do so. I hope that the Government will direct the financial institutions to deposit funds with local authorities so that mortgage schemes can be funded. Building societies' funds are already fully taken up. I understand that the banks already run mortgage schemes for their employees at favourable rates of interest, which are sometimes as low as 4½ per cent.

I am in favour of low-cost housing schemes. People are often satisfied with one-bedroom units or two-bedroom units. Such units can be built for approximately £6,000, or possibly less. Those schemes should be more actively promoted. I believe that local authority planning officers are reluctant to consider those schemes. I heard of a case recently where a private developer was prepared to build one-bedroom units, leaving purchasers the opportunity to extend their accommodation afterwards as their families increased. I was told that the building society which was approached did not look upon this as a suitable investment for mortgage money. That is nonsense. I must make it clear that I am not referring to all building societies. I do not wish to receive letters contradicting me, as I did the last time I made remarks about a building society.

I hope that it is not the policy of all building societies not to lend money on low-cost houses. The same remark applies to flats and maisonettes. I constantly receive letters from estate agents and others saying that the building societies do not lend money on flats and maisonettes. The building societies could do a great deal more to help, as many people could afford low cost units.

I favour the idea of making outright grants to first-time buyers. Such grants would be of enormous assistance to them. Why is there no way in which that can be done? I know that the idea has been considered from time to time. In some areas local authorities put aside part of the rent paid by first-time occupiers and allow their deposits to build up. Perhaps that scheme will work better now that the market is stable. The idea is to build up accounts for first-time occupiers so that they have a deposit to put down on a house. Such a scheme would work to the benefit of the Government. I do not say how much grants to first-time purchasers should amount to. I suppose that the grants should range between £1,000 and £1,500.

The Community Land Bill is a tragedy, although I agree with the basic idea behind the Bill. However the Government are approaching the matter in the wrong way. The Bill is unlikely to produce any cheaper land. The local authorities will be the speculators of the future. They will buy the land at existing use value. They will then undertake the planning and sell the land at open market value. I do not think that will help one iota.

I can imagine people on the finance committee of a local authority saying "We are advised by the planners that we can have only eight houses per acre, and this is a five-acre site. If we were to erect blocks of flats we could get far more money." They will look for the biggest financial return. That is one aspect of the Bill which will not help the housing situation.

I also wish to refer to the frustrations of housing associations, particularly charitable organisations, of one of which I am a member. We started with the intention of building up to 50 or 60 houses a year in my constituency. We started off with 30 schemes, 27 of which have now fallen to the ground through lack of co-operation of one sort or another. Very often the owner of a site will not agree a price with the district valuer, and that is a problem which we cannot overcome unless there are compulsory powers in the background.

More often the local authority is not very helpful. I know of one which has been very helpful, but others are not. They are not prepared to provide mortgage finance. In addition, it took my housing association two years to get registered. There are many frustrations, and many good people who have come forward to help are now almost giving up in despair. The willingness has been there, and the patience of these people has been tested enormously.

May I now refer to the Parker Morris standards. It so happens that I was at Milton Keynes New Town this morning and I saw a case in which it was unnecessary to stick to Parker Morris standards—a big bedroom wardrobe. I am not opposed to the provision of good standards but we do seem to go to excessions in providing high standards which are not required by occupiers. Very often when people move in they throw out these items which have been built to such a high standard.

I wish to see the future of housing planned on a regional or county structure. We should put houses where they are most needed. This is very important because we are now running up against the problems of drainage and sewerage. Because we have set up these new river and water authorities, the new local authorities no longer control the water and sewage disposal, and frequently a water authority is found not to have the necessary money to provide the drainage for a new develop- ment. In a regional context houses could be built where there are already adequate sewerage facilities. We must have the cooperation of the building industry. A great deal more could be done to get help from the industry to assist in development on a regional basis.

I agree with the hon. Member for Salford, East on the subject of high alumina cement and wood wool filling. We have read in the Sunday newspapers about the filling of cavity wall structure houses, and I should be grateful if the Minister would comment on this. I believe there is an inquiry into the use of high alumina cement and that there is to be a report published by July. I do not know whether people who are affected by the use of these materials can look to this report for assistance, but it would be helpful if a comment could be made particularly on wood wool filling.

The lack of a decent home is the cause of many of our ills in society. If we cut down on costs in our housing programme we are liable to add to our health and social security burdens. Radical new policies are urgently required some of which I have tried to outline in my speech today.

6.14 p.m.

Mr. Andrew Welsh (South Angus)

If housing has been described as the great British failure, it is surely the great Scottish disaster. The recent Department of the Environment Report on Census Indicators of Urban Deprivation shows clearly that Scotland's housing is the disgrace of Europe.

Of all the indicators of deprivation, this report shows that the West Central belt of Scotland has the greatest concentration of all kinds of multi-deprivational factors—poverty, low wages and so on—in the whole of the United Kingdom, and of these, housing is by far the most important and fundamental. In Scotland we have slum housing which is a disgrace to any civilised, self-respecting modern democracy. That is the proven record of consecutive London Governments, both Labour and Conservative.

This report on urban deprivation, which I recommend as statutory reading for every Minister, shows clearly the extent of what is, by any reckoning, a truly formidable task. There is at present no adequate governmental machinery existing to undertake this vital role. Housing in Scotland at present is the responsibility of an Under-Secretary of State who deals also with farming, fishing and forestry. Housing and fishing—what a combination! What sort of ingenuity must have been required to combine those two activities?

The Under-Secretary is responsible in turn to a Secretary of State who himself has to deal with a host of portfolios—education, health, police, housing, farming and forestry—any one of which would require all the brain power which any one man has to offer, and then demand more if they are to be dealt with adequately. Each one of them has a Minister to itself in England. No wonder Scotland has lost out. No wonder Scotland has suffered from a poverty of new ideas and initiatives.

I ask for the immediate creation of a fully fledged Scottish housing Minister with his own Department, backed up by adequate finance, and responsible to the people of Scotland through our own directly elected Scottish Assembly, or, better still, through our own democratically elected Parliament. If the problem is to be solved, the Government machinery capable of solving it must be created. I ask the Government to initiate an immediate all-Scotland housing survey, using Scandinavian standards in order to ascertain the fitness or unfitness of each house. Our universities, local authorities and other appropriate bodies could be called upon to help in this essential task.

There must now be a switch in emphasis in the use of housing standards. For far too long we have been too happy to accept standards of mediocrity where "minimum tolerable standards" really have been minimal. They have been the lowest common denominator under which human beings should be asked to live.

I ask the Government to start talking in terms not of standards of mediocrity but of standards of excellence. To do this the present house building programmes will have to be drastically revised. The inadequacy of past and present house building programmes in Scotland and the potential options open to a Scottish Government can be seen in the actual achievements of similar small nations. The Scandinavian democracies, for example, have consistently built more and better houses than we have, and cumulatively Scotland is falling further behind. Between 1963 and 1972 Sweden built 620,000 more houses than Scotland did. Denmark in the same period built 58,000 more houses than we did. When we talk about the most prosperous nations, Finland is rarely mentioned, but even Finland has built at an annual rate of twice the number of houses that we have achieved in Scotland.

I ask the Government to review their attitude fundamentally towards the financing of house building. The sums involved are not necessarily astronomically high. In 1973, in order to achieve a better house building record, Sweden spent only £21 million more than was spent in Scotland, and in the same way Norway spent only £18 million more, yet achieved a far better record. Sums of £18 million or £21 million more are hardly astronomical, especially for a nation with a gross domestic product in the region of £5,300 million. These sums are easily within the reach of a careful dedicated and sensible Scottish Government.

Those who say that Scotland gets more than her "fair share" of United Kingdom expenditure should take a good look at the housing statistics. They will see that Scotland has 10 per cent. of the United Kingdom population. Yet year after year Scotland, with the worst slum housing problem in the United Kingdom, has been allocated less than 10 per cent. of the total United Kingdom house building expenditure. In real terms over the past few years the Government's allocation for Scottish housing has actually fallen.

Mr. Robin F. Cook (Edinburgh, Central)

Would the hon. Gentleman explain to the House how, if expenditure on public housing is so low in Scotland, Scotland has one-tenth the population and one-fifth of the council houses?

Mr. Welsh

I was making the point that those who say that Scotland gets more than its fair share should look at the expenditure on housing. With one tenth of the United Kingdom population and a far bigger problem, Scotland has consistently been allocated less than one-tenth of the total United Kingdom housing.

Mr. Douglas Crawford (Perth and East Perthshire)

Perhaps my hon. Friend would comment on the fact that the area with the worst deprivation in the United Kingdom—the West of Scotland—has been consistently ruled by Labour local authorities and it is to them that blame should be attributed.

Mr. Norman Buchan (Renfrewshire, West)

Does the hon. Gentleman have the figures?

Mr. Welsh

I am happy to supply the hon. Gentleman with the figures. In the three years 1969, 1970 and 1971 Scottish authorities have achieved only a tiny fraction above the 10 per cent. I mentioned.

Mr. Buchan

Is the hon. Gentleman withdrawing his statement?

Mr. Welsh

I said that Scotland had consistently failed to get less than 10 per cent. I have pointed out that only in three years have we received only a tiny fraction above 10 per cent.—and I do mean a tiny fraction.

Attitudes to housing and thus to housing standards and priorities reflect social values as well as the availability of resources. If the Government spend a small proportion of their GNP on housing, clearly they do not view housing as a major priority. By their own record and to their shame the Government, therefore, do not look upon housing as a serious priority in Scotland.

The Scandinavian example has shown the possibilities open to us, and when the vast potential revenues from our oil are taken into account as a bonus, a Scottish housing Minister will have all the financial resources that could possibly be required for these purposes.

I ask the Government to undertake an immediate and comprehensive attack on Scotland's poor housing standards. I ask them to create the machinery required, to allocate the finance needed and to apply Scandinavian-style determination to tackling the problem. There must be new ideas and initiatives. The traditional expertise and ability of our long-established financial institutions must be encouraged to create and to pioneer new methods of housing finance. Employers, trade unions, co-operatives and other appropriate organisations could be encouraged to provide Government-backed housing finance schemes as part of their service to their workers and their customers.

All sources of help, both public and private, must now be called into play if this problem is to be tackled properly. I ask the Government for action. We have had plenty of past reports. For example, the Bowhouse Report has been in existence for three years and little or nothing has been done to cure the problems that it underlined. It is the people of Alloa who suffer while the Government dither.

Let there be no more Bowhouses or Blackhills, no more Govan redevelopment schemes—which are now lagging 10 years behind schedule—no more part-time or half-hearted management of Scottish housing problems, no more 95 per cent. of extreme urban deprivation huddling together on Clydeside, and no massive Drumchapel or Castlemilk type of urban sprawls which were built without adequate facilities to back them up.

I ask the Government to learn from past mistakes and to translate present potential into future reality by always keeping in mind the needs of individuals.

6.24 p.m.

Mr. Joseph Dean (Leeds, West)

I am surprised at the affrontery of the Opposition—because the Government have only been in office for just over 15 months—to opt for a debate which is almost a censure motion on the Government's 15-month record. Those hon. Members involved in housing problems know that it takes two to three years for a national policy to emerge in any depth. Although I was a signatory of the letter sent to the Prime Minister which asked for additional resources, I give a qualified word of appreciation of what has been done already, because the barometer is at last moving decisively in the right direction with a 30 per cent. increase during the time the Government have been in office. I shall be delighted if the momentum continues and if that 30 per cent. is compounded in the next set of figures that is published later this year.

The hon. Member for Aylesbury (Mr. Raison) mentioned the financing of council house building. One of his arguments was that the sale of council houses would immediately make more finance available for the local authority to begin to build more houses. It is obvious that the hon. Member knows nothing about the effect of the sale of council houses on an authority where there is a shortage of housing.

Whenever the Opposition talk glibly about this subject and use the sale of council houses as a popular sprat to throw to the electorate, they never talk about the sale of council flats. I know of no area where council flats have been sold or bought to any extent. In the past the more desirable council houses have been bought at low prices and where there has been a shortage a house has gone out of local authority control. The waiting list for houses in a major connurbation such as Leeds is approaching 25,000. It is glib to say that we should start to sell council houses.

The hon. Member for Aylesbury raised the matter of the valuation of council houses. The situation arose in the last valuation of council houses that there were no adequate staff to give proper valuation because of the bonuses and discounts of 20 per cent. which were increased to 30 per cent. by the last Conservative Government. It is absolutely paramount that adequate staff are available to carry out proper valuations. The result was that some council houses were undervalued—valued below what we accept as a fair market figure. Most of the houses I would describe as being good post-war houses.

The hon. Member for the Isle of Wight (Mr. Ross) touched on the question of Parker Morris standards, but I want to deal with this in a different concept. The hard fact of life is that while those council houses were being built to Parker Morris standards, their counterparts that were being built for sale in the private sector were not to the same standards The council houses to Parker Morris standards had 20 per cent. more cubic space, and that standard demanded certain basic features, for example, central heating, which the private sector was not required to install.

Some very nice council houses were being valued at prices far too low just in order to get them into the pipeline because of decisions being taken locally. What would be the situation if the 60,000 council houses, which the hon. Member for Aylesbury mentioned, were sold in the one year? What would happen to the housing programme and the cost effect on the nation if we were to build 300,000 or 400,000 houses a year, half of them being council houses, and we were to sell 100,000 houses on a knock-down basis? Other houses would have to be put back into the pool because of the severe waiting list. I am referring to stress areas, because I would not oppose this on political grounds if there were a surplus of council accommodation. This is what the debate is about. What would happen? Most of the post-war houses were built for, on average, £4,000 ten years ago. It may have been a little higher or lower. They would have to be replaced at today's prices.

Mr. Reginald Eyre (Birmingham, Hall Green)

I appreciate the point that the hon. Gentleman is trying to make, but is he not exaggerating it enormously? Does he not realise that the family that bought the council house would have stayed as tenants?

Mr. Dean

The hon. Gentleman is assuming that no one moves from a council house, when the truth is quite the opposite. There is a tremendous national wastage every year in council houses. I had an association over a long period on the subject of housing with one of our major cities, which was demolishing 6,000 slums a year. Half of this project was being met by re-lets. Therefore it is not true to say that people born in council houses die in them. They move from such accommodation as rapidly as people move in the private sector. No one in this Chamber could be sure that in 12 months' time he will be living in the same house. That premise is completely false.

I return to my point. If we were to sell 100,000 council houses per year and they were valued as they were on the last occasion, they would be valued on a lower basis than if a private estate agent were selling them. That has been proved more than adequately. We should have to replace those houses at a cost of £10,000 per unit. The Conservative Party is saying "Let us protect the taxpayer and the ratepayer", but Conservative Members have almost said "Never mind about council house tenants." What would that load on to an authority which had to keep building, if it had to discard council houses which had been built at what was at the time a high cost but which, because of inflation, has become a relatively low cost? It would be disastrous.

I have always viewed the ploy of selling council houses as nothing but a legalised bribe by the Tory Party. I can go back to my history as the housing chairman of Manchester. I think that it was in 1971 that because of the forthcoming municipal elections—in that area it was a mini-General Election; it was a full organisation—the Conservatives upped the "anti" from 20 per cent. to 30 per cent. in an attempt to buy the votes of council house tenants. But they were massacred. They returned 18 councillors, I think, out of 99. That is how attractive the idea was.

However, the people who would remain in council houses would be the overwhelming majority. If one valued these houses properly, there would be no rush to buy them at today's mortgage interest rates. This would once again mean a quite disproportionate and unfair burden being unloaded on the backs of the remaining council house tenants.

On the question of council house rents, mention has been made of over-protection, and it has been said that the Housing Finance Act, introduced by the previous Conservative Government, was a very good thing. But there has been an inference from a previous Minister that rises in the rents may eventually exceed what was envisaged in that Act.

I was very deeply involved in that Act once it had left Parliament. I was then the chairman of the AMC Housing Committee. There was to be a 50p increase if the Act was implemented in the spring and an increase of £1 if it was implemented in the October. But the Conservative Party was talking of cloud cuckoo land. I happened to be part of a general deputation from the TUC and the AMC which met the then Secretary of State, the right hon. and learned Mem- ber for Hexham (Mr. Rippon). I produced figures which showed that between the provisional coming into effect of the Act in March, and the period to October of the following year, which was the 18 months when the second obligatory increase in the October had to be brought in, a large number of council house tenants in the stress areas and major conurbations were being asked to pay 40 per cent. more in total, rents and rates, than hitherto.

Let us not forget that this was in a period of freeze and semi-freeze, when the then Prime Minister, now the ex-Leader of the Opposition, was asking people for restraint. The case that we put forward was heard in muted silence. It was accepted. It was not denied. Nevertheless, it went by default, and people had to pay.

Let us not retain any ideas that in the past councillors were able to depress rents and keep them artificially low. There may be grounds for saying that in relation to some areas, but only minimal grounds because by law councillors had to balance their housing revenue accounts annually. There was no other option. If such accounts had been overweighted by raiding the rate fund, I am sure that the councillors would have taken the consequences at the local elections which were held every year.

I am glad that the hon. Member for Birmingham, Hall Green (Mr. Eyre) intervened, because his area was outstanding as one in which the Act made nonsense. I think that Birmingham then had a surplus of £3 million. The Act said that half of that was to go back to the Government. That money had been collected in rents. Some subsidy had been involved, of course, but can anyone imagine anything more autocratic than saying to a local authority "You have collected £3 million from your people, but we want half of it back"? These are the people who are talking about fair treatment for council house tenants.

I received some criticism within my party for the stand that I took on that Act. It was a thoroughly bad Act. I implemented it finally on the basis that I was not prepared to break the law, but I did not do so with any enthusiasm. As my right hon. Friend the Secretary of State said, it is true that rent scrutiny boards were set up. But by the time the present Secretary of State brought in legislation to nullify and destroy that Act, there was no major housing authority that had had a rent level set by a scrutiny board. They were increasing rents by Government direction and did not know what they were paying for.

This idea wants nailing. In the future the council house tenant may have to pay more rent. However, what we must do as public guardians is to make sure that such tenants are not asked to pay a disproportionate increase to redevelop a city in which they have lived all their lives, for someone else to draw the benefit. That is the unfairness of what was proposed. It is true that the Act initially covered only three years and that rents would have been reviewed under it—and drastically upwards in my opinion.

I want now to deal with the question of the housing programme. The peak reached during the term of office of the previous Labour Government was about 400,000 houses. Just over 50 per cent. of those were built by the private sector, and the rest by the public sector. I am not against owner-occupation in the right sense by the private sector. I am myself an owner-occupier. However, it is quite apparent that because of inflation, unless we go to Common Market wages—and that will not go down well with some, nor will the prospect of Common Market prices—the ordinary working class person can forget about owner-occupation. Therefore, if we are aiming at a target of 400,000 houses, it is obvious that we must go for a much bigger slice of the global sum for local authority building.

I should be the last to suggest that local authorities are the ideal that everyone would desire in housing. Each house built can be a problem. Each child born into the world becomes a potential housing problem. Even with the difficulties that have been experienced—not all local authorities are the best of landlords—I am sure that local authorities do a tremendous job. At present 6 million families are housed in local authority houses. If they were not so housed, no one would bother about them. I think that our care must be on an increasing basis and above the level of 50 per cent. being built by local authorities.

We must also consider the prerequisites in terms of building houses. One import- ant factor is money. As my right hon. Friend the Secretary of State for the Environment has said, there has been a generous increase in the amounts that have been allocated and the amounts that are in the pipeline. Land is one of the most difficult problems and I think that the Community Land Bill will go a long way towards providing local authorities with a vehicle for taking land under their control where there is a shortage. We must also consider building resources. It is clear that we have adequate building materials. We have ample supplies of wood, bricks and glass, for example. Supplies are stockpiled everywhere.

Here I issue a word of warning on system building and gimmickry. Alumina cement was a gimmick and it has soon caught up with us. I used to represent an authority that proceeded with about four huge gimmicks. Deck access flats became fashionable. All that we did was to lift slums off the ground and put lifts in them. It is easy to say that it will not happen again, but we must keep a careful watch on these matters. I speak forcibly against gimmickry and against messing around with industrialised systems.

My hon. Friend the Member for Salford, East was correct when he said that upwards of 150,000 building workers are drawing unemployment benefit. Some statistics that I saw several years ago showed that on the basis of a balanced building force it took 0.9 of a man a year to build one council house by traditional means. That means that if we have a balanced building force of 152,000 unemployed—and I have no reason to say that it is not a balanced force—we could build in excess of 150,000 in addition to the number we are already building. That reinforces some information to which I referred when I last spoke in the House on housing. I had been in touch with the secretary of the National Federation of Building Employers. He said that manpower resources existed amongst his members that would make it possible to build another 150,000 council houses a year in addition to last year's programme.

This debate amounts to almost a motion of censure on the Government's housing record. I would have expected the big guns to be brought to bear. The big guns that we have heard today from the Opposition remind me very much of the big gun that Charlie Chaplin tried to fire in "Modern Times". That gun did not go off. I think that the Opposition will have to do a little better themselves if they are to criticise the Government's performance.

I have some reservations about our programme and I would like to see it increased. I am hoping that when the economic situation improves my right hon. Friend the Secretary of State for the Environment will ensure that housing has an increasing share of the national cake in the interests of people who remain on the ever-growing waiting lists. A greater share of that cake will give local authorities the chance to build the houses that are so desperately needed.

6.44 p.m.

Mr. Jim Spicer (Dorset, West)

The hon. Member for Isle of Wight (Mr. Ross) has already spoken of the problems of rural areas. Although most people accept that the major problems are to be found in the urban areas, it should be emphasised that the rural areas have their share of misery and hardship. I accept that the problem may be on a much smaller scale.

In the countryside there is a sense of identity with the area in which a person lives. As matters stand, a movement of 15 miles, 20 or 30 miles can involve personal hardship and the loss of identity for a family that has lived all its life in one area.

We must now face the realities of our situation. I shall raise three smallish points in a general sense and then go on to one particular matter which might be of some help to the Government. I do not believe that we can accept the situation that has arisen over the past 10 years. The housing deficit has risen from £150 million in 1965 to £1,250 million in 1974. Some people may feel that that is right, but I do not believe that we can continue along those lines. It has already been illustrated by the Secretary of State in another context that that trend is not acceptable.

I do not believe that we can exist in a world in which subsidies on council house rents range from £25 to sometimes £60 a week. I am sure that none of my right hon. and hon. Friends has any objection to a subsidy being paid when it is needed by the person to whom it is being paid. What I find difficult to accept is that so many people are now paying for the subsidies through rates and taxes when very often they are less well off than those who are receiving them. That is a situation that almost everyone must deplore.

Mr. Julius Silverman (Birmingham, Erdington)

Does the hon. Gentleman apply the same principle to mortgage relief, which is given irrespective of income?

Mr. Spicer

No, I do not.

The hon. Member for Leeds, West (Mr. Dean) referred to the turnover that takes place amongst council house tenants. One of the saddest things that we have experienced in west Dorset over the past three years is a turnover of council house tenancies of 3 per cent. and rising, dropping to 1 per cent., and falling with the change of Government. There is a static population and the people at the top of the income scale were moving out as their incomes became high enough to allow them to buy a house of their own. Those people are now sitting tight because they know that they are on to a good thing. I was grateful to the Secretary of State when he said that there is to be an increase in council house rents next year. I hope that it will be so modulated that those people at the top of the income bracket will once again be in the position where they will find it better to purchase a home of their own.

I do not believe that we can continue along the present lines. We are all waiting with anticipation, and possibly some trepidation, for the economic cuts that the Government are to announce in the near future. When they are announced, undoubtedly the housing sector will suffer along with every other facet of our national life. It is for the Government to decide how they will operate the cuts in the housing sector, but today it is for us to give our advice and to try to help, even though it may be in a very small way. That is what I want to try to do in this debate. I am looking at the matter in a strictly parochial sense, but I am certain that the point that I am about to put forward could be extended to many other areas, and particularly rural areas.

In west Dorset we have a camp in an area called Piddlehinton. It lies four miles from Dorchester. The camp was built during the war to house 1,500 troops. It was used to house Asian refugees from Uganda some two years ago. At that time some £50,000 was expended on it. The camp comprises some 85 brick-built units of accommodation with cavity walls and damp coursing. Not all the units have main services laid on but there are some 40 wooden huts on good, solid concrete bases with all the servicing that one would expect to go into such a camp. The camp has its own septic tank disposal unit. There is main drainage lying in straight lines all the way through the camp.

When the camp was vacated by the Asians some two years ago the first proposal was that it should be bulldozed down and put back to agricultural use. At the time the cost of doing that was about £68,000. The camp comprises an area of 91 acres. We moved on a little, and the second proposal was that the local district council should take over 18 of the brick-built units to house 22 homeless families and that in the fullness of time the rest of the brick and wooden huts should be bulldozed down leaving the bases in situ because the cost of removing them was too high. That would mean that on the rest of the 91 acres the weeds and the grass would grow up all round the 22 homeless families who moved there.

I have written to the Department about this in the hope that we shall be able to consider an alternative scheme for this camp and for others which exist in Bridgwater and in many other parts of the country. When the need is there we must make use of what we have.

My proposal is as follows. There are 85 individual brick-built units in the camp. They could first be offered as they stand to council house tenants in the area for purchase at about £1,000 or £1,500 for each unit. A clerk of works could be installed to act as guide and mentor to the people who would buy the properties so as to enable them to build their own houses. There are many people who are capable of doing that. I welcome the suggestion, made again this afternoon, that there should be a grant to first-time buyers. That would make it possible for young married couples and people who had been looking for a home for many years to purchase these properties.

The 40 wooden huts should be bulldozed off the concrete bases, and instead of just leaving the concrete bases we should put on them mobile homes. The Department has been conducting an investigation into the rôle of mobile homes and considering what better use can be made of them. As a result of that investigation I hope that the Department will propose ways in which better use can be made of mobile homes.

There are many other buildings in the camp, a gymnasium, various messes, workshops and so on, all of which lie derelict but all of which could be used to serve the newly built village lived in by people who had themselves done a large part of the work. That sounds perhaps a little too much like a dream, but I think that it could be done and it would provide homes for people who had not had them before.

In dealing with problems of this sort it is necessary to look at the list of the other people who are involved. That list includes the Department of the Environment, which has been acting for the Ministry of Defence in selling the site to the county council. The county council is giving a 10-year lease to the district council which wants to put up 22 units of accommodation, but is not too sure about it. It is not beyond the bounds of possibility for the Minister to bring all those people together and to listen to the views of the planners—who originally wanted to bulldoze the camp—of the county council, the district council and the many homeless people who would be only too ready and willing to move in.

I hope that the newly-appointed Under-Secretary of State, the hon. Member for Durham, North-West (Mr. Armstrong), who played a large part in helping one village in my constituency to get the school it so desperately needed, might be involved in this exercise. We should welcome him in west Dorset. This camp, and many others in a similar condition, could provide homes for many thousands of people who would otherwise be on the homeless list for many years to come.

6.55 p.m.

Mr. Julius Silverman (Birmingham, Erdington)

I shall follow the speech of the hon Member for Dorset, West (Mr. Spicer) in one comment only—his reference to the admittedly high cost of financing public sector housing. The private sector costs the Government no less. Indeed, it costs more. If one adds up the total benefits to the private sector in mortgage relief, improvement grants to the owner-occupier and exemption from Schedule A, one finds that a higher benefit is given to the private sector than to the public sector. Mortgage relief is a subsidy. In this I declare an interest as a mortgagor. I have a mortgage with a building society and I derive these benefits. I am not asked to declare my means before I get these benefits or subsidies and I see no reason why a council house tenant should be treated less well.

Mr. Eyre

I am sure the hon. Gentleman appreciates that the tax relief received by the average mortgagor is nowhere near as great as is the subsidy which has to be paid on a new council house.

Mr. Silverman

The hon. Gentleman is referring only to new council houses not to the average council house. I do not accept some of the extravagant figures which have been mentioned, but it is true that a high level of public expenditure is involved in building new council houses. The council house sector caters for a housing demand which cannot be catered for in any other way. It is no good telling would-be council house tenants to buy a house because it is entirely beyond their pockets. That is the justification for building council houses, although I admit that the cost is very high.

Talking generally the public sector and the private sector, the private sector gets more benefits than does the public sector. I hope that hon. Members will not concentrate upon the high cost of this public service. The high cost of building council houses has largely been caused by the cost of private sector houses sold in the free market almost doubling within about three years. That has resulted in hardship in the private sector and has also caused the cost of housing in the public sector to rise.

The Opposition attack on the Government in the debate has proved to be a fiasco. I am amazed that when the Government have been in office for just over one year the Conservatives, with their record, should venture to introduce a debate on housing. I cannot understand their tactics. Naturally, the debate has resulted in comments on their past misdeeds and has shown up their bankrupt policies. Nothing has shown up that bankruptcy more than has the speech of the hon. Member for Aylesbury (Mr. Raison).

They have no alternative policy. Any legitimate criticism, therefore, must come from the Government side of the House, and I have one or two things to say to the Government. I should like to deal with the point mentioned by the Secretary of State concerning the reduction in improvement grants for council houses. I hope we shall hear more about this when my hon. Friend the Minister replies to the debate. From 1964, and certainly under the Housing Finance Act 1969 under a previous Labour Government, a new strategy was introduced into housing. It was the strategy of conservation of the existing stock. It seemed then to make sense and it makes sense today.

This policy is necessary not only in the private sector where there is bad housing requiring the provision of amenities, but in the public sector where hundreds of thousands of council houses lack amenities, some of them the basic amenities. Even in Birmingham, which is a progressive housing authority, many thousands of houses have outside toilets and many others are deficient, if not in the basic amenities, then in some desirable amenities.

It is therefore necessary if we are to preserve and improve our housing stock that these houses should be given attention. I would have thought that was an elementary aspect of the Government's strategy. In order to pursue that policy local authorities have recruited staff, developed their labour forces and entered into arrangements with contractors. My right hon. Friend's announcement of the reduction has come as a considerable shock to them. If the figures that my hon. Friend gave today—I believe the reduction is from £310 million to £255 million—are correct I fail to see what all the fuss is about. I do not know why the Government ventured upon this reduction, especially since some of it hits the areas of greatest housing stress.

I understand that in Camden, for instance, the amount asked was £13.7 million. The figure accepted by the Government was £6 million. The respective figures in Lewisham were £10 million and £2 million and in Islington £19 million and £8 million. These are the reported figures and they could be incorrect. In Birmingham, which is certainly an area of housing stress, £10 million was asked for, and taking account of inflation that should by now be £13 million. The figure accepted by the Government was £5 million. I am happy to say that after the Minister's statement and the arrangements he made in Birmingham the figure was increased to £7.1 million, although that is still little more than half what was originally sought.

The consequence of all this is that staff must be laid aside or transferred, the overall policy is put entirely out of joint, and it will obviously be extremely difficult to resume the programme at the same pace as hitherto. Basically this is a policy of stop-go in housing. One of our greatest economic disasters under all Governments in the last 20 years has been the adoption of stop-go policies, and I can think of no worse way of seeking to introduce economies than by the stop-go method.

These short-term shock economies always prove to be uneconomic. They do not make economic sense. We have been told of the resources which are available. In view of the number of unemployed building workers there is even less reason for pursuing such a policy.

Perhaps I am addressing my remarks to the wrong Minister when I direct them to my hon. Friend the Minister for Housing and Construction. I should be talking to the Treasury, for without the slightest doubt it is from the Treasury that the instruction comes, and the timetable proves that to be the case. I hope that the Treasury will listen to what I have to say because what is proposed makes both housing and economic nonsense.

I understand, although I believe the Minister might disagree on this score, that in London this may result, according to reports in the Local Government Chronicle and The Guardian, in large areas of estates in Haggerston, Hackney, being vacant because of the lack of improvements. The same will apply to the St. Katharines area at Tower Bridge. I know a little about that matter because I am a member of the environment subcommittee of the Expenditure Committee which has been looking into the development of dockland. It would be a tragedy if this sort of development were delayed by the denial of what in economic terms is not a very large sum of money. I hope that the Minister will look into this and make a more determined approach to the Treasury, telling it that these proposals are nonsense and unjustified.

There is this point about the reduction of funds for council mortgages. The main function of a council mortgage in the past has been to cater for the type of housing which building societies will not provide mortgages for. This generally means older housing and sometimes leasehold housing. The reduction will leave a serious gap in the mortgage system. I do not wish to be dogmatic on this point and I say only that the Government must find some method of filling that gap. I leave them in consultation with the building societies to decide what it should be.

There is the question of systems building. This method makes sense at a time of shortage of building labour, and I am sure that my hon. Friend the Member for Leeds, West (Mr. Dean) would agree with me on that point. When there was a shortage of site labour it made sense to construct as much as possible in a factory with the components being assembled on site in a short time. However, the system does not make sense when there is a huge reservoir of unemployed building labour in almost every category. I know of no systems building method which is significantly cheaper, or even cheaper at all, or better than the traditional method. I am always prepared to consider new systems but they do not make sense unless site labour is scarce, which it is not at the present time.

I agree entirely with what many of my colleagues have said about the sale of council houses, because we have experienced this in Birmingham. People come to my weekly or fortnightly surgery and say, "We do not want to live in a flat. We want to live in a house." It appears that they would prefer to have the older pre-war type of house which, whilst it may have certain deficiencies, is a comparatively low-rent house. I have to tell them that I am sorry, but there are not sufficient houses and that the number has been significantly reduced by the sale of council houses.

Bearing in mind all these facts certainly the sale of council houses does not produce a single additional house. It is simply a gimmick that undoubtedly results in increased hardship to those people who at present desire a council tenancy and especially a council house.

I hope that the Minister will not follow the seductive Opposition voices calling for a large increase in council rents and a reduction in the amount of money spent on council houses.

I am not suggesting that there is no case for an increase in council rents. If costs rise, the council tenant must pay his contribution towards those costs. If I tell a council tenant that the cost of repairs, management and interest has increased, I can reasonably go on to say that therefore he must pay more. He will object—and in my view quite reasonably—that if new houses are built at very high cost he should not have to pay any significant contribution towards them except as an ordinary ratepayer. This is one of the major items in the increasing cost of the housing programme at present.

Therefore, I hope that although there may have to be increases in rent, those increases will be reasonable and not excessively onerous to council tenants. Beyond that, I congratulate the Government on what they have already achieved, in the short time they have been in office. I hope that my short speech will act as an encouragement and an incentive to them to improve their ways in certain respects.

7.13 p.m.

Sir Brandon Rhys Williams (Kensington)

It is proper to declare that I have an interest in the relationship between landlord and tenant.

The housing problem is one of our most acute social difficulties. It is only partly a physical problem. It is much more a legal and cash problem which we have created for ourselves. There may be a physical shortage in some areas where there is an absolute shortage of accommodation of all kinds or where the housing stock has seriously deteriorated or is incapable of improvement because it is too old. But to take the example of Kensington, which is often regarded as the most acute example of housing stress, there is no shortage of housing: there is a shortage of availability of the houses for the people seeking them. The real shortage is of Government ideas for solving the cash and the legal difficulties.

Let us examine the legal side. The Minister must surely soon be ready to admit that the Rent Act 1974 has created difficulties. The evidence of that is so obvious both inside and outside London that it is fruitless to deny it. It would be much better if we could go on together to try to solve the problems.

The Rent Act aggravates the legal obstacles, because owner-occupiers are not clear what their rights are. Unless a person has access to expert legal advice it is extremely difficult to ascertain exactly what the position is. Then one can take the example of widows who are afraid to let their property—even though they are obviously owner-occupiers—because they know that when they die their relatives will not want to move into the same house and if they bequeath their house with a tenant in it the house will have a much lower value than if they bequeath it with vacant possession. So they come under pressure from relatives not to let although they would willingly do so and often need to do so.

I have often pointed to the difficulties of people who have semi-commercial properties, such as a shop on the ground floor with empty accommodation above, which they dare not let because they will eventually need to sell the shop to obtain a reasonable asset for their retirement.

Another difficulty is that rents are unattractive. The trouble of letting and the inconvenience caused of having someone in to ones own house is not necessarily compensated for by the rent which is obtainable.

Another aspect of the same problem is that conversions are often not worth while. There are hundreds or perhaps thousands of basements which could be made into attractive small flats, but only at quite considerable outlay. They are left rotting and vacant all over London. Grants are available but the trouble, and the anxiety about what they might run into if they embarked on the expense of conversion makes many owners timid. There are also legitimate fears about the interminable difficulties and the unpleasantness of obtaining possession even if one is entitled to claim it.

I believe that local authorities in one or two areas are pioneering a new idea—or perhaps they are reviving an old idea—of moving in as intermediaries. I would welcome this development if I were convinced that it would be a real solution, but I doubt if it will prove to be a popular idea. However, it may have a part to play.

I have sought to make a specific recommendation to solve the legal difficulties in my Housing (Shorthold Tenacies) Bill. I recognise that it may only provide a partial solution, but it would take us a long way in an area where the parties concerned—the landlord and the tenant—are in need of a new legal framework and are entitled to look to the Government to provide it. I have made it clear that there have to be precautions. I suggest that property should only be let on short-hold subject to planning consent, with the prior establishment of a fair rent and only where the properties conform to the standards which would make them eligible for grants. Naturally I have chosen to set the criteria precisely where the grants would be available. And the tenant must know his rights and be sure exactly where he stands from the start.

The point I want to emphasise to the Minister, who does not seem to have understood the position, is that these provisions would deprive no one of their existing security of tenure. Everyone would gain, no one would lose. I believe the Minister will be judged by the time he takes to get round to this idea. I am handing it to him and to his advisers; of course, with his considerable knowledge of housing, he could improve on the suggestions I have made; but I implore him not to reject the idea out of hand, considering the amount of misery that the present situation is causing—and quite unnecessarily. We have got ourselves into a legal tangle. We could easily cut ourselves out of it.

I know that shorthold is a concept that cuts across the Department's policy of the euthanasia of the private landlord. It cuts across the Minister's own obses- sion with giving security of tenure even to people who do not want it or need it. The idea of the euthanasia of the private landlord does not apply in all cases. It brings misery and hardship to landlords. Of course, it is no good pleading to Labour Members to consider the landlords. But they should consider the wretched and unnecessary conditions of deprivation in which the tenants are having to live if they have to move; and they must also consider the continuing problem of the homeless.

We have the housing, but we are not making use of it because of our prejudices and lack of willingness to adopt radical solutions. There is an urgent need for greater mobility which is all the more urgent now because of the problems of employment. Those seeking to move for the sake of their career or to look for jobs must have an opportunity to get themselves fixed up, if only on a short-term basis, while they are settling into their new job or waiting for a council house.

Shorthold would be ideally suitable for such people. It would be ideal for people getting married and without many resources, wanting to make a fresh start outside the existing home of one or other of the families; those wanting temporary accommodation for professional or family reasons; and those looking for a smaller place. Not everyone needs to live in the family house after the children have grown up. Many would be willing to move into something smaller.

So much for the legal side. On the cash side, I am much afraid that the fair rent system has become no longer fair, mainly because of inflation. We cannot pretend that it is fair any more. It has become an imposition on landlords. I think that many rent officers and tribunals recognise that the structure of rents that they built up by perhaps rather artificial concepts a few years ago has now been left behind.

The Secretary of State recognised in his speech that rents must rise, and it is obvious that they must if we are to get housing improvements going again. But higher rents will certainly mean hardship for some. They will not mean hardship for everybody, partly because of rises in wages and other circumstances which go along with inflation. However there will certainly be hard cases if rents rise, and we need to apply our minds to them, to look for fresh solutions. We need to ask ourselves "Are we using the existing housing subsidies to best effect?"

Let us look at the whole range of housing subsidies—rent allowances, rent rebates, option mortgage schemes, tax concessions for freeholders through building societies and other means, and local authority subsidies of all kinds. The national insurance scheme contains a subsidy within the structure of benefits for pensioners and those with industrial injuries and for the unemployed and the sick, although it is not called a household allowance. Anybody who studies the structure of the benefits sees that it is undeniable that a housing subsidy is included in the national insurance scheme. It is also included in supplementary benefit, because the element for housing must be identified.

All this money pouring into subsidies constitutes a large sum. All too little is going to the people in real need, and too much is going to the people who could well afford to pay higher rents without hardship.

We must end the housing subsidy chaos by a wholesale reorganisation. The time has passed when we would tinker with a little here, make adjustments there or switch subsidies between one sector and another or between local authorities of different characters. All that thinking must end. We must produce something which really reaches those who need help. We must determine the level of income of the recipients to decide how much in the way of housing subsidy they should qualify for.

Local authorities are not the right people to carry out inquests into personal income and circumstances in order to decide on eligibility for housing subsidies. Those determinations in the end can be done only through income tax. Therefore, I again recommend a housing allowance as part of an overall tax credit scheme.

We must also go forward quickly to the reform of rating, particularly to help freeholders on small fixed incomes. I am sure that it is not only in Kensington that we have many of such people suffer- ing acute hardship during the present inflation.

Taxes and subsidies on housing are capricious, unfair and ineffective aspects of public policy. The Secretary of State and the Minister have it in their power to lose the Government the next election, and they are going a long way along the road to doing so, as I am sure Labour Members are aware. The Secretary of State has the opportunity to show himself a doer and not just a brilliant polemicist, but he and his hon. Friend must escape from the Labour Party's dogmas. I am glad that the Minister is listening to me, because he does not generally do so.

We must look at housing policy as a matter of legal and cash problems which are unnecessary and soluble. This is a challenge for the Minister, and I hope that he will prove equal to it. I shall be the first to congratulate him if he improves on ideas that I have put forward. He could and should. I trust that he will admit that we are not getting anywhere as we are.

It is within our society's ability to solve the legal and cash problems of housing, but a fresh mind, unprejudiced by party dogma, is needed. We shall not solve the problems while we have a Government bent on keeping Britain as two nations. But the mood of the hour is to move forward to something new, more harmonious and less retrospective, no longer concerned with the problems of the past.

7.26 p.m.

Mr. Maurice Orbach (Stockport, South)

I have listened to most of the debate, and I have been enlightened in many ways. I thank Conservative Members for having made housing the topic for this Supply Day debate. They have given me an opportunity for which I have been waiting a long time—not to discuss the general national housing problem but to discuss the problem in my constituency, and perhaps to relate it to some other constituencies.

My hon. Friend the Member for Battersea, South (Mr. Perry) stressed the difficulties in London, where we all spend a great deal of our time. We are aware of the difficulties that arise not only from the peculiar housing situation but from transport problems—the great size of the metropolis, and the difficulty of obtaining work in the centre of the city, except for certain skills. To that extent, London is a little different from the other big cities or even smaller cities that most of us represent.

Representing part of the town of Stockport, I am grateful to the Opposition for raising the subject, because for the past two years, since the reorganisation of local government, I have been placed in a most invidious position. Like every other hon. Member who runs a surgery, I have 20 or 30 people coming to see me every weekend, the vast majority of them concerned about their housing problems. Time and time again I write to the local authority or see the housing manager, who is now Director of the Environment and Housing Department of the Metropolitan Borough of Stockport. He has been upgraded.

I hope that none of my colleagues suffers from the disadvantage that I have had for the past two years. After we were returned last October, my secretary told me in November "During the election I have been going through your correspondence, and I find that 24 different cases you submitted last March to the housing authority have not been answered." She produced the letters. I had copies Xeroxed and sent a further letter to the Stockport Department of the Environment and Housing. I have had replies to most of them. The last came, I think, a month ago. That is well over a year to receive replies to simple housing inquiries.

Last week my secretary told me of 14 letters that had not been answered since last November. So this goes on and on. People ask me week after week or fortnight after fortnight "What about the replies?" The delays are a matter of great annoyance to me, and they are costly, particularly in view of the allowance we receive for secretarial purposes, because I have to ask my secretary to write two or three letters on the same subject without receiving a reply.

I complained to the chief executive officer, who acknowledged my letter, with someone else signing the acknowledgment. I did not get a reply from him, but I was told in a letter that no housing case would be accepted from a Member of Parliament unless it was submitted by a local councillor. I wrote back what I hope he thought was an impertinent and rude letter. I said that I was not prepared to follow the advice of the chairman and chief officer of the department. Again, I got no reply.

I followed it up after two weeks with a threat that I would raise the matter in the House on the ground of deprivation of some of my rights as a Member of Parliament in approaching local authorities. Since then, the chairman of the housing committee has declared at a public meeting that he will not be badgered by one of the Members of Parliament for Stockport who wants a house. I have had to threaten him with legal action, because I have not asked for a house for myself. I have merely asked for a house on behalf of a constituent.

They must have been aware in Stockport that this matter was being brought up today by the Conservative Party because the Conservative council there has now come out with the information that 9,250 pre-1920 homes in its area are below standard and that it has little money to put any of them right. Of this figure, 5,700 have only outside toilets. I could go on to describe the number which have no bath and no central heating whatever, but I shall not weary the House with more figures because I know that Members representing Scotland, the North-East and the North-West of England have similar problems.

At my request, my hon. Friend the Minister for Housing and Construction and the then Under-Secretary of State for the Environment—now moved to the Department of Industry—went to Stockport last year. They were rather scathing in dealing with the local authority, and they demanded that something be done to increase the size of the labour force responsible for the rehabilitation of old houses. The council has received £1,250,000 for that purpose, which it has declared to be paltry, yet it cannot even use that sum because it has bought so many non-municipal houses and in any case it has got rid of most of its labour force.

In the meantime, to add insult to injury, in the seven years, with one short interruption, that Stockport has had a Conservative council, not a single municipal housing unit has been built. The council has used housing associations, which in turn employed private builders, who in turn went broke and have left houses, built about a year ago, derelict, with broken windows, sashes torn out and floorboards taken up. Perhaps as a result of publicity which may be given to this speech, something will be done to pull Stockport Metropolitan Borough Council and its officers into line.

I want now to discuss a question which has been brought up by a number of hon. Members. Some of my hon. Friends have referred to it as a "gimmick", while hon. Members opposite have referred to it as the necessity for standardisation. I take the middle view. Certain things could be standardised and should be. My son, an alderman of Islington Borough Council, travels 20 times a year as a professor to the United States. I have been appalled by what he has told me about the cost of fittings. He says that their cost in the United States is one-third of the price here. He can bring such things as hinges, door locks and electrical fittings back with him and, including freight charges and whatever duties have to be paid, still make them available at a price lower than they are being offered to the local council.

That brings me to a personal matter. I live in a flat in London. The bath is rather scarred. I have been living there for 34 years. My wife insisted upon a new bath. The landlord refused to put one in and said that I would have to pay for it myself. My wife insisted on a new white 5 ft 6 in bath—the size we had before. The old bath had got grubby because of the water. I set out for an estimate. This is what I got: To shut down the supplies, disconnect and take out old bath and clear away. To supply a 5'6" white…bath complete with new trap, bath taps and a hardboard panel. Fit new bath in position, make all necessary connections and test and fit panel.—£190.08. But I am a hard-headed business man and a landlord, so I asked for an estimate from someone else. That produced one of £138. I thought that that was still rather dear since I could buy a bath for £25 as an ordinary customer. The trouble was I could not carry it or fit it.

I got a third estimate. This one was for £75. We took it. The man and his mate brought the new bath, took away the old one and finished the job in five and a half hours, including time for food. They did not do badly out of it. I wish that hon. Members were paid as well as they were paid that day.

This sort of incident illustrates the situation I found as chairman of hospitals in the London area—that many firms give a price and hope for the best. If a firm does not really want a job, it will ask £200; if it does want the job, it will ask £138; if it is really serious about the work, it will ask £75, still making anything up to £40 as a result. It illustrates that our architects and clerks of works are not pulled up sufficiently when they do municipal jobs, as I have tried to pull them up as an individual.

While I have said nothing about the national problem—which I concede to be extremely serious—I emphasise once more that I must be concerned as a Member of Parliament in raising the problem we face in Stockport. It has become not only aggravating, annoying and tedious, but it gives one a weekend that is no respite from the House of Commons. It is bad enough being here for four and a half days a week without the necessity of tackling problems that one finds insoluble as an individual and in which one gets no assistance from the local authority.

I have not yet approached the Minister on any of these problems except to ask him, "Please come to Stockport and shake these blighters up." My hon. Friend has tried and now gets blamed in the local Press for not giving enough money. Yet the local authority has not even spent the money it has already been given. I hope that Stockport will look up and I hope that the Minister will be prepared to listen to some of my hon. Friends who have talked such very good sense in the debate.

7.40 p.m.

Mr. Dafydd Wigley (Caernarvon)

I will not follow the hon. Member for Stockport, South (Mr. Orbach) into his bath, if he will forgive me, although I must say that I, too, have problems with local authority housing. I am not sure whether I feel more sympathy than animosity for the local authority, because in my area, as in his, it is in an invidious position. In my area, a rural area, there are serious housing problems.

I have very little sympathy with the Conservative Party for initiating this debate today. Although we have some criticism of the present Government's failure to reach their targets, the record of the Conservatives when in office between 1970 and 1974 was dismal, particularly in Wales. It is nothing short of hypocrisy for them to have made some of the comments that have been made today.

Despite the Government's denial, the housing situation in Wales remains chronic, and it is chronic in rural as well as urban areas. In 1974, completions amounted to 11,800, the lowest number since 1959 and 1960, when they were about the same level. Public authority completions in the year were 3,674 for the whole of Wales. In my constituency alone there are upwards of 2,000 families on the local authority waiting list and yet only 3,000 houses are available for the whole of Wales. That shows the size of the problem. That number of completions compares with 3,400 in the previous year, the lowest levels since 1946.

This situation is scandalous. When we talk about housing it is not just a matter of figures and percentages. Many hon. Members have mentioned their surgeries on Saturday mornings when we meet the individual families and the individual situations resulting from a lack of adequate housing—husbands and wives living apart because there is no room under one roof, children separated from parents, people living in circumstances totally inadequate in the twentieth century. The problems of housing today are the problems of the social services tomorrow, because we are building problems for ourselves if we allow the housing situation to get out of hand.

The 2,000 families on the waiting list in my area represent 9 per cent. of the equivalent housing stock, and this is a rural area. This surpasses the problems of many urban areas such as Cardiff and Newport where the absolute numbers are higher, but where the percentages are lower. There has been little change in the local situation since last year.

Yet last year the Secretary of State for Wales assured the Welsh Grand Com- mittee that no administrative problem would be allowed to hold up the crash programmes that the Government wished local authorities to undertake. He said that there would be no red tape and added: I have instructed my officials and technical officers to bring every problem that may get in the way of the programme to the attention of my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) the Under-Secretary of State. For this purpose I would hope that he is 'Mr. Housing' in Wales to ensure that this crash programme really does get under way, as I have already stated."—[Official Report, Welsh Grand Committee, 8th May 1974; c. 7.] The crash programme has crashed and it is not only because the Under-Secretary has been swapped to the Foreign Office, which may be a suitable office in the circumstances. I have every sympathy with him for having left his job. Last year he went around Wales urging every local authority to go ahead with its housing programme at the maximum speed, and yet in the financial environment of this year he is not in a position to deliver the goods. In the circumstances one sympathises with his move.

The problem of new housing in absolute terms is one aspect. The problem in my area is that of second homes, to which I have referred previously. It is a problem that persists. The Government have taken some steps to a solution in that they have done away with grants towards improvement for second and holiday homes, but that in itself is not enough.

In Gwynedd there are villages where many families are waiting for housing and yet where 20 or 30 or even 40 per cent. of the houses are owned as second or holiday homes. They are empty for ten months of the year. That makes one's blood boil. There is need for further action, and planning sanctions are needed so that houses that would normally be fully residential all the year round are not acquired as holiday homes without planning permission.

Local authorities need more specific powers of acquisition to take over second and holiday homes. More flexibility is needed in the standards that local authorities apply to houses bought from the private sector. After all, it is much better for a family to have a home that is 90 per cent. of the required standard than to be without a home if the standards are rigorously applied.

There is also a need to take over many old rural houses. Some houses in my constituency are let for only £20 a year, but the owners refuse to do any remedial work, refuse to introduce water or sewerage, but simply wait until the occupants die so that the houses may be sold as second homes. Local authorities need greater powers of intervention in such a situation.

In my area there is also a problem about maintaining houses. In one district in my constituency there are 600 council houses in sub-standard condition and in some of them the conditions are appalling. One person came to see me two weeks ago to complain that for months he had had to keep five buckets in his attic to hold the water that dripped through the roof. Bringing more houses into public ownership is not a full solution if conditions are allowed to deteriorate in this way.

Arfon Borough Council, the council concerned, had a meeting on this subject last week with the Welsh Office and was told that the outlook was "very depressing and gloomy". In a small village in Snowdonia, Deiniolen, 100 council houses are in severe need of repair. The cost would be £180,000 for that small estate alone, and there are many similar estates in the villages around.

This morning I had a very sad letter from a constituent whose mother came to see me a few months ago about getting repairs to her house, which was damp and in need of major renovation. The letter said that his mother had died from bronchitis and he had no doubt that her living conditions in a publicly owned house had contributed to her death. He is following that up in his own way, but that must be on the conscience of anyone who has anything to do with public authority housing.

I have referred earlier in the debate to the cut-back in the money available for repairs in Wales from £29 million in 1974–75 to £9 million in 1975–76. The Secretary of State suggested that the differences in Wales were because of the different proportions of owner-occupiers. The proportion in Wales has not changed much in the two years and certainly that cannot be the sole reason for this tremendous decrease.

The change must be reversed. In Wales 15,000 houses were approved for repairs in 1974 compared with 30,000 in 1973. That is the first setback since the figures were first compiled in 1961. A chronic part of the problem in my area is that repairs cannot be done because local authorities do not have sufficient manpower—and this in an area where there is 14 per cent. male unemployment. That is the size of the problem.

We do not have the ability as Parliament and as a system of Government to bring the manpower resources to solve the problems that are staring us in the face. We have combined with a housing shortage a situation of derelict houses in Caernarvon, a situation caused by a road scheme which the Welsh Office insisted should go ahead, against local opposition, and which has now been put on ice, leaving a source of local blight, empty houses in which people could be living,— a disgraceful situation likely to last for several years.

The total number of unfit houses in Wales increased from 92,000 in 1968 to 150,000 in 1973. The problem is getting progressively worse year by year. We were promised a Welsh housing condition survey last year. It still has not appeared. I urge the Government, if there are no figures which they are trying to hide, to publish this survey so that we may see the magnitude of the problem.

I turn now to a problem which has been touched on by several hon. Members, namely the economics of building houses in the public sector at present. I understand that at the Public Works Loan Board rate of 14⅞ per cent. interest the capital and repayment costs over 60 years on a £10,000 house would be about £89,300—a staggering figure. When we compare that with the cost of a £10,000 mortgage with income tax relief at 35 per cent. over 25 years which amounts to £9,625 we can see that at the present going rate it would be more economical for the Government to consider making a substantial grant to first-time home buyers.

This is something which the Government should examine seriously, not from a dogmatic point of view but from a practical point of view. In 1973–74 the subsidy to council houses was about £105 per annum per household in Wales. The comparable subsidy to the owner-occupier was £101 per annum per house. By now there is a much greater disparity. It would be economically worth while making a fairly significant grant to help people buying homes for the first time. If this can be done we can take some of the pressure off the public housing sector, which is already under enough financial pressure.

Each of these statistics is a personal case. It can be a personal tragedy. If there have to be cuts in public expenditure I urge the Government in all seriousness to put housing at the end of their list of cuts. Every cut in housing means that there will be additional expenditure in some other sector in future.

7.53 p.m.

Mr. Frank Hatton (Manchester, Moss Side)

I welcome the opportunity to make some comments in this debate. I have every sympathy with the Minister because he inherited some large housing problems. As the hon. Member for Caernarvon (Mr. Wigley) has said, these are pressing social problems. I have spent a lifetime in local government with education as my premier interest. I am more convinced than ever that all of our social resources must be channelled into methods of dealing with the housing problem because of the widespread social difficulties that we still face as a result of the number of families living in intolerable conditions.

I have no major complaints about the determination of my local authority in tackling the housing problems of a major provincial city. It is some time ago that the last houses considered unfit for human habitation were put into the slum clearance pipeline. The city of Manchester is now moving slowly towards the end of its slum clearance problem. At the end of the last war there were about 100,000 unfit properties. This is a major achievement and I am proud to pay my tribute to my city for the way in which it has tackled this task.

We are still left with many extremely difficult housing conditions. I hope that that the Minister will lend a sympathetic ear to some of them which I will put before him. I firmly believe that even though we have built different types of new accommodation, what ultimately matters is the quality of life. Unfortunately we have not always improved this. I great regret much of the multistorey development that now defaces many of our major cities. People are herded together in a most inhuman way in what we term "deck access" dwellings. When we have cleared our slums some of the major provincial cities, my own included, will have to look at many of the social problems that remain as a result of this unsatisfactory development.

I am especially concerned about two problems. When I return to my constituency at weekends I hear heartrending stories from people who are unable to obtain satisfactory accommodation. The most frequent complaints come from those who are trying to buy their own homes in view of the great length of the council waiting list. I speak mostly of those who wish to buy houses in the lower price bracket. I had a letter last Friday from a constituent who said that he had obtained promotion in his employment and was now able to think of buying a home. He said that he had found a house costing £8,500 in one of the suburbs of Manchester but that no one would give him a mortgage. This is one of the difficulties.

The local authorities used to be able to assist and were more helpful than the building societies. Now no one wants to know such people. I hope that when he discusses the problem with the building societies my right hon. Friend will look closely at the possibility of channelling available funds through local authorities so that people such as my constituent may be assisted.

There are also those people living in what are known as housing improvement areas in the big cities. I know that my right hon. Friend is sympathetic towards this type of development. Many local authorities are looking at such schemes because of the unsatisfactory nature of multi-storey development. There are, however, problems in obtaining land. Many housing improvement areas were making good progress but are now meeting difficulties in obtaining a loan to meet the cost of improvements. I hope that my right hon. Friend will look carefully at ways of getting building society funds into the hands of local authorities so that this important aspect of housing improvement can be accelerated and so that we can improve the whole quality of life in these run-down areas of the cities.

This is one of the major areas of our social life for which resources must still be found, even in these difficult times. We must raise the quality of life.

8.0 p.m.

Mr. Reginald Eyre (Birmingham, Hall Green)

It is a pleasure to follow the hon. Member for Manchester, Moss Side (Mr. Hatton) who spoke of the housing problems in the city areas. Many of the points he raised apply with equal strength and accuracy to the city of Birmingham, my own city, and to a number of other large centres of population throughout the country. Against today's economic background the speech of the Secretary of State this afternoon was somewhat unreal. Perhaps all of our debates suffer from this fault at present.

It is due to the fact that the Government still have not put forward measures to deal with the imminent crisis of undeniably enormously serious proportions. The Secretary of State, to his credit, has used ominous words about discarding the present situation. For example, he has said to local authorities that the party is over and, referring to increases in incomes, that the country is on a suicide course. The Chancellor of the Exchequer is calling for the halving of the rate of inflation within a year, and, as hon. Members appreciate the great difficulty of achieving this, it is clear that the severe economic measures must be brought into operation very soon, probably before the House rises for the Summer Recess.

Against this enormously threatening economic background, we must realise that the brunt of the measures to correct the Government's mistakes will be borne in the heavily populated urban areas, because it is in those areas that the most serious problems, including housing, exist. We should, therefore, discuss the steps most likely to minimise the harm which is bound to follow in the difficult years ahead.

I refer to a number of heads of policy. The Government should hold on to as much of the improvement grant or renovation policy as possible because it is a wise spending policy in that it prevents older housing that is structurally sound from deteriorating into slums. I strongly support the points made by the hon. Member for Birmingham, Erdington (Mr. Silverman). The policy of renovation, when sensibly administered, is cheaper than having to provide entirely new housing in its place. As my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) has said, the improvement grant or renovation programme is socially of considerable importance to families in the inner wards of large towns and cities. I therefore hope that the Government will do everything possible to maintain that programme at as high a level as possible.

There is good value, in public spending terms, in keeping local authority mortgage lending at as high a level as possible because, concentrating as it does on the older villa-type house, it is particularly helpful to first-time purchasers who can afford only this type of property and of whom it can be said on their behalf that they are making determined efforts to help themselves. They therefore deserve encouragement. Economically, it means that prudent use is being made of public funds.

Having mentioned two important though by no means major spending areas for public money in housing terms I want to refer to the area of vast housing expenditure in which, I believe, the Government will be compelled to review and cut their disastrously tangled spending policy, and that is in the provision of what are as a consequence of inflation extremely expensive new house building programmes in the public sector.

Despite the increase in council rents that will have to be made throughout the country—and the Secretary of State was admirably frank today in saying that council house rents will have to rise even more next year—the cost of new building is now so high and the rents charged so relatively low that the general body of ratepayers, including council tenants, who sometimes mistakenly think that they do not make rate payments, will not countenance the continuation of the huge additional burdens being thrust upon them. The Government will be in no condition to maintain their present subsidies. The cut of £65 million in housing subsidies which has been announced is, in my view, only the beginning of a policy under which further severe cuts will have to be made. Therefore, despite the fact that increased interest charges affecting the whole public sector financing system are already likely to have to be introduced, the ratepayers and taxpayers will undoubtedly be calling for a halt as this year proceeds. Certainly there are strong signs in Birmingham that that will be so.

It follows that we must realistically seek better value in housing for less public expenditure. Because of the seriousness of the crisis we must do this most vigorously in the next two or three years, otherwise there will be a danger of any housing programme collapsing.

I come to a disappointing and ominous omission from the Secretary of State's speech of a subject which could be of great help in cities such as Birmingham and other large urban areas. The Secretary of State made no reference to the contribution which sponsored low-cost housing schemes could make to providing good accommodation for many thousands of people on the housing lists. The lists include people with a wide range of incomes since there is no qualification for going on the list other than that of residence or employment. Therefore, local authorities should be making available thousands of sites to small builders for the erection of low-priced houses so that people can embark with confidence on their first purchase of a new home.

It is very disappointing that so little development of this kind is going on in Birmingham. Many thousands of young couples wishing to buy their first new house are driven out of the city to distant places such as Brownhills, Tamworth and Aldridge where small private builders provide them with what they want—small modern attractive houses at prices they can afford. Unfortunately, they are not helped in their journey to independence and self help because they have to pay high travelling costs to and from their jobs in Birmingham. It is shameful that Birmingham Council, which owns more than 17,000 housing sites and has more in the pipeline, makes practically no provision for schemes of this kind.

Mr. Crosland

I hope that I can reassure the hon. Gentleman. We are strongly in favour of sponsored low-cost housing of the kind that he has in mind. Whether the building is done by private builders or occasionally by the local authority itself, as long as the result is the low-cost housing, we are strongly in favour of it. This plays a prominent part in the circular that we recently issued, "Housing Needs and Action".

Mr. Eyre

I am grateful for what the Secretary of State has said. I realise that a circular has gone around, but as a result of my own experience I feel that not enough notice is taken of some of the good circulars which sometimes emanate from his Department. Sponsored low-cost housing is very important in cities like Birmingham and the large urban areas, and I feel that local authorities are not taking enough notice and not pursuing vigorous enough policies.

No provision is made in Birmingham for older owner-occupiers who wish to sell their own semi-detached or detached houses on retirement and move to small units near their old neighbourhood. In a situation like that in Birmingham, where the local autority has a near monopoly—under Socialist control the city has pursued that policy—it is essential that the local authorities should sensitively and imaginately cater for such needs. In solving those problems they contribute towards solving the total housing problem in the city.

The present situation in Birmingham and so many Socialist-controlled large towns gives an ominous warning of what the position will be when the Community Land Bill strengthens the monopoly power of local authorities in the allocation of land. They have not shown that they recognise these other needs and are sensitive enough in developing policies and actions to meet them.

I should like to know why we heard nothing from the Secretary of State about the Housing Corporation, which is supposed to be assisting in these policies in all the industrial areas. It would be worrying if, for doctrinaire reasons, the Socialist councils in those areas were not co-operating with the Housing Corporation in providing sites. I believe that the corporation could play a useful part in bringing along development of small low-cost houses of this kind.

Mr. Crosland

Birmingham is co-operating.

Mr. Eyre

Yes, it is beginning to, now.

As the standards of construction of the National House-Builders Registration Council are good enough for the owner-occupiers and the need for economy in housing will be so great it cannot be justifiable to maintain the expensive Parker Morris standards for all public sector housing. I do not believe that we shall be able to afford them in the years immediately ahead. I hope that the Minister will say what thought has been given to this possible adjustment, which could help enormously to save costs at this difficult time.

The Secretary of State today lost an opportunity to explain how the Government would realistically amend their policies in these circumstances to lessen the damage through housing problems which could occur in what will be desperately difficult times ahead.

8.14 p.m.

Mr. George Cunningham (Islington, South and Finsbury)

A number of hon. Members have referred to the under-occupation of houses. Looking around the Chamber tonight I am tempted to think that there are few houses in the country more under-occupied than this one. I mean that both in the sense of being under-used and in the sense of there being few people in the Chamber.

I am undoubtedly in order, since we are debating the Adjournment, and might not have been if we were technically debating housing, in adding that some people feel that for this kind of House to debate such an important subject is a terrible reflection on Members of Parliament. I think it shows very good sense that they do not come in for a debate like this to talk about the subject, because they know that it will not make a bit of difference what they say on one side of the issue or the other. They prefer to use their efforts for something more practical elsewhere.

There is a moral and a lesson to be drawn—namely, that instead of sticking to the anachronism of debate, as if no one had invented writing and reading and committees, the House should conduct more of its affairs in its working Committees. We should, of course, have a Select Committee on housing—and not just some hotchpotch sub-committee of the Enpenditure Committee which, with due respect to those who are members of it, covers housing among many other things. All the points which a small band of us—it is always the same small band—make in this Chamber could be made to more effect and in an up-to-date manner in a Committee discussion—

Mr. Crosland

Hear, hear.

Mr. Cunningham

I am glad to hear the Secretary of State agreeing. He once confessed to me that he had never served on a Select Committee. I hope that, in future, that will be regarded as a terrible confession by a Front Bench spokesman.

To move on from that non-irrelevance, the hon. Member for Aylesbury (Mr. Raison) did an injustice to those of us who are present by indulging in a bit of "yah-boo" politics and putting forward no serious proposals, as it is his responsibility to do when the Opposition are not challenging the Government but moving their own motion.

I want to address myself to some small detailed points and then come to what I regard as the essential principle which should guide our housing policy at a time when everyone should recognise that there is nothing like enough money to do all the things that we want to do. First, in the private rented sector, I regard it as very unwise that we have chosen to freeze the decontrol of the lowest controlled rents, those of the lowest rateable value. There is great resentment, and I think justified resentment, among landlords who are receiving derisory rents even for the bad accommodation that they are frequently providing. But they alone, only the last tranche, are frozen still in controlled rents. It is illogical to freeze the rent but then say to the landlord, as we do now under the legislation, "We recognise that this rent will not even let you do repairs which you are obliged by law to do. Therefore, if you do the repairs, we will let you recover their cost, in addition to the controlled rent, over a period of years." It would have been much more straightforward and sensible to provide that decontrol should continue and conclude and allow the landlord to pay for the repairs out of his normal rent.

Then there is the question of fair rents being charged by housing associations. There is some confusion on this subject, at least in my mind, and I think among a number of housing associations. Housing associations are not obliged to charge fair rents but they are pressed to do so by circulars by the Department. What is still, so far as I can discover, unclear, is this. If a housing association is receiving housing association grant in respect of any dwellings it is, in practice, required to charge fair rents for those dwellings. Many associations, and more particularly many of the old-fashioned housing trusts, have a large number of dwellings in respect of only a few of which do they receive grant. Some of them seem to feel that they are obliged to charge fair rents for all their dwellings as a consequence.

The circular was unclear on one point. In so far as people infer a meaning from it they seem to think that it means what I have just said. There is another difficulty. The Department said that if a housing association gets into trouble in future and looks to the Department for the emergency deficit assistance which was built into the Housing Act 1974, against the wishes initially of the Government, the Government would not be prepared to give that assistance unless the housing association had charged fair rents. If that is so—and that formulation of the position is taken, according to a letter to me from the former Under-Secretary—I invite the Secretary of State to reconsider the matter. If housing associations have no need otherwise to charge fair rents it would be foolish for them to do so and to build up a surplus, just to guard against the possibility that at some time in the future they might have to run to the Department of the Environment for emergency deficit assistance.

It has been suggested, at least by the hon. Member for Aylesbury that Labour Members of Parliament are stuck ideologically on the proposal that a large proportion of the population should live in council accommodation. I wish that the Opposition would stop repeating that nonsense. Over the past 10 years only one step had any practical effect towards introducing more people to owneroccupation—which was the option mortgage scheme. That scheme was introduced by the Labour Government. That was the only practical step in this matter. It was the only step which led those people who could not otherwise afford to be owner-occupiers to buy houses. It is no good increasing the tax relief for people who would buy their own houses anyway. That does not enable more people to own houses. We must operate at the margin. The Labour Government have done that, but the Conservative Government did not do so.

Those of us who have spent our lives in council housing accommodation have more reason than the Opposition to know the disadvantages of doing so. It is usually hell, because normally a local authority is inefficient in dealing with its tenants, whose repairs are not carried out and who are treated like dirt at the counter. When we retire we continue to pay for the accommodation which most people who own their houses have paid off long before.

It was also said that the subsidy provided to each unit of council accommodation is far in excess of the subsidy provided to an owner-occupier by means of tax relief.

Mr. Raison

If the hon. Gentleman is referring to me, I was talking about the subsidy for new council housing against that for new private housing.

Mr. Cunningham

The hon. Gentleman put a qualification in his presentation of this point. He compared the subsidy for a new unit of council accommodation with the subsidy for an owner-occupier purchasing a house. He overlooked—the presentation of the statistics normally overlooks this—that in the case of the owner-occupied house the tax relief is provided every 15 years. As one would-be owner after another buys the house he obtains full tax relief, starting afresh, whereas the assistance to the council accommodation is spread over 60 years and then stops. The whole process is then finished and the council house is entirely paid for. The result is that the present generation of council tenants are paying for the final total acquisition of the bricks and mortar and the land, whereas the Government repeatedly, and with no ending, have an obligation in respect of tax relief.

Mr. Raison

Once the purchaser has completed buying his house he ceases receiving tax relief—in other words, when he reaches the stage when tax relief does not apply. The same is true of housing in the council sector.

Mr. Cunningham

There is a fundamental difference. In the case of council property the subsidy exists for 60 years and attaches to the property. In the case of the owner-occupied house it attaches to the owner and to its successive occupiers, who will attract tax relief time after time. There is a difficulty in comparing the two, as one subsidy attaches to the bricks and mortar while the other attaches to the person. It is not reasonable to compare the two as if only one lot of tax relief were directed at the owner-occupied house.

In these difficult circumstances I should like to see the Department of the Environment draw up an action list of a number of practical points, each of which may be small but which in combination would achieve over the next two or three years a great deal. First it must do more to prune housing revenue accounts. This is an old story. The maintenance of estate streets is paid for from the housing revenue account, whereas streets outside council housing states are maintained on the normal rate fund. Some pruning has been done, but there is still room for a good deal more. This is not only a financial matter. It is important socially that there should not be council estates. There should be council houses and council blocks on normal streets. There is no reason why the streets which pass between and amongst council blocks should not be public streets, publicly financed and open to the public. That is financially and socially desirable.

It is high time that the Department of the Environment carried out some research—as local authorities will never get round to doing this—into central heating in council accommodation. Many council tenants in modern accommodation pay an enormous proportion of their rent for bad central heating. The architects who have exercised their diseased imaginations on a variety of inefficient methods, putting the heating units in the ceilings, in the floor, by electricity, or by other undesirable methods, should be advised and guided from the centre on the cheapest and most efficient ways of providing central heating in modern conditions.

The Department might also sponsor research into vandal-proof lifts. There is nothing more irritating than to live at the top of a tower block the lifts in which do not go out of order once in a blue moon but do so frequently. One needs to devise lifts which can resist the vandals.

It is also time that the Department thought of pressing councils in the direction of a policy whereby minor repairs would be the responsibility of council tenants and not of councils. The story which one of my hon. Friends told about his bath is quite significant. The cost of doing minor repairs, especially to houses which are currently occupied—where on the first time of calling nobody is in, and one has to call a second time, only to find that again nobody is in—is enormous. Council tenants have to pay for that. They ask for the service because they know that they are paying for it and they think they might as well get it. If the system were changed they would realise that, although they would never be able to quantify the profit to themselves, they would be able to have lower rents than they would otherwise have if they were made responsible for minor repairs, with the provision that those who are unable to pay for the repairs would have them done by the council.

I should like the Department to have a second look at home loss payments. I dare say that in many constituencies the home loss payments do the job that they are designed to do. A person loses his home as a result of the construction of a road, for example, and he receives a proper and due payment for the inconvenience of having to move, but I should like to refer to the way in which these home loss payments sometimes operate in an area like mine. A person may be living in damp, rat-infested accommodation. He may have been plaguing the life out of his councillors, quite rightly, for years to get him out of that accommodation. When finally he gets out of it and is moved to a modern flat he is astonished to find that he gets not only a modern flat but £200 or £300 as home loss payment. Human nature being what it is, he does not hand it back. When he hears that his neighbour has got it, first he is incredulous, and then he checks up and finds that he is entitled to it and he gets it.

This is an appalling waste of public money. The system is too unsophisticated. If the case to which I am referring is very rare in relation to the total, let us overlook it, because it is an important payment for those who deserve it, but I have found it impossible to get from the other half of the Department information on the amount of money spent on home loss payments. Let us remember that the burden of the home loss payments is borne by council tenants in the end, in the accommodation built on the land which is acquired.

Finally in this series of many improvements which could be made, I should like the Department to do a bit more than it is doing in giving assistance to the local authorities in housing management. As I said before, most of them are colossally inefficient in the way in which they deal with tenants, and I have treated the House on past occasions—and do not intend to do so again tonight—to the particular failures of the Greater London Council in that respect. The way in which council tenants are dealt with at the counter and the way in which their notifications of repairs and so on are dealt with are a proper subject for investigation—into the improvement of procedures. I am delighted at one change made by the Government, namely the reappointment of an adviser on housing management, an office which had been terminated by the previous Government. I hope the Minister does a bit of bottom-spanking during his tenure in office.

The watchword which must characterise the Government's policy is discrimination. It is because policy has lacked discrimination in the past year that I have found myself so much in disagreement with it. We have had the improvement fiasco, in which every local authority applying for money to rehabilitate old accommodation had its bid cut down by an amount which bore no relation to the needs of different areas. I think the policy will become more discriminating now. It will certainly have to be.

One cannot just assume that a rural municipality has the same degree of need as part of one of the inner cities. I understand the difficulty which the Department of the Environment has in discriminating. Each Member of this House would want the Department to discriminate in favour of his own constituency, and he would, no doubt, make a good case for that, but not all of them would be as good. The Department also has the difficulty that if it gets into this business of saying "So many millions for Manchester and so many other millions for Birmingham" the Department will be popular in at least one of those two places, and probably in both.

However, at a time when we certainly do not have enough money to do all we need in the housing sector, we shall have to discriminate or else fail badly in the areas of highest housing stress.

There have been some alternatives to discrimination. The Department seeks them as an easier way out. One of these is the obsession with areas—housing action areas, priority neighbourhoods, and general improvement areas. It is as if the Department were saying to local authorities "You decide for us where we should spend money and then we shall concentrate the money on those areas". Circular 64 /75, which the Department issued last week, sets out new categories where approval of expenditure will not be specifically required. I note that in paragraph 18(b) there is particular reference to housing action areas, priority neighbourhoods and general improvement areas.

My local authority cannot be the only one which does not intend to have many—perhaps not any—housing action areas. It is not that my authority is being overly difficult towards the Department; it is just that it does not feel that this is a solution to any problems that we have in Islington. My authority wants, and it is right to want, to exercise a flexible policy to take action in respect of one house, one street or five streets, according to the nature of the problem and its extent. It does not see any point in drawing lines on the map and calling these areas housing action areas only in order to attract the greater priority that the Department of the Environment wants to accord to some areas as against others.

Therefore, I hope that when the Minister replies he can assure me that if a local authority declines, for its reasons and with its knowledge of local circumstances, to declare many or any housing action areas, its application for funds and for CPOs will not be prejudiced by that decision. If we are allowed to exercise our authority more flexibly in an area such as Islington we shall do a great deal more good than we shall if we feel constrained to delineate these areas only because we feel this will please the Department of the Environment and lead to our getting more money for our essential purposes.

8.38 p.m.

Mr. Arthur Jones (Daventry)

I followed with considerable interest what the hon. Member for Islington, South and Finsbury (Mr. Cunningham) described as minor improvement proposals. I am sure that hon. Members of all parties would agree with many of the points that he made and many of the suggestions that follow from them. I also noticed that he both opened and closed his speech by saying that we have not enough money to do all that we need. Certainly that comment has been echoed in most of the speeches which have been made during the debate. Many of the hon. Members who have made that reference have also made the assumption that it is taxpayers' money that should meet the bill of increased resources in housing. This is a view which I shall try to contest.

Certainly there is increasing concern over the level of housing subsidies. This has been admitted by the Secretary of State. Although he did not refer to it this afternoon, his comments today were quite out of line with the remarks that he has made in the past about the great economic and financial difficultes with which the country is faced. What the Secretary of State said last week in answer to a supplementary question from my hon. Friend the Member for Aylesbury (Mr. Raison), was very much nearer the great issue of resources in housing. The Secretary of State, referring to my hon. Friend the Member for Aylesbury, said: …the hon. Member is right in saying that over the last few years rents have covered a substantially decreasing proportion of total housing costs, and we are likely to reach a situation in which the taxpayer and ratepayer combined will simply say 'we cannot go on indefinitely footing the bill'."—[Official Report, 11th June 1975; Vol. 893, c. 398.] I entirely agree with the Secretary of State. One is entitled to ask, however, where the view that he expresses carries in terms of the Government's housing policy.

We all recognise that it is in part the escalation of the cost of building that has led to an intolerably high housing subsidy situation. Certainly this is adding to the burden of housing subsidies that cannot be described as running other than at an alarming rate.

The House Builders Federation tells us in a recent memorandum: Moreover the full public spending and public borrowing implications of these figures should also be noted. For if it is assumed that 150,000 local authority houses are built in each of the next five years and if it is assumed that the cost of building each of these houses is £10,000 and that the annual subsidy cost of £1,000, then by the end of the fifth year the recurrent annual subsidy on these houses alone would be running at about £750 million while the total public borrowing needed to finance their construction over the five-year period would be some £7,500 million. That is the magnitude of the requirement of capital availability and housing subsidies if—as the Secretary of State and other spokesmen for the Government and hon. Members on the Government side of the House are anxious to see—there is this continued high level of provision of public housing.

An escalating situation such as this surely cannot be acceptable to the Government. We are entitled to ask how long they are prepared to let housing subsidy figures rise at this rate unchecked.

What does the Secretary of State mean by saying The taxpayer and the ratepayer combined will simply say 'We cannot go on indefinitely footing the bill'"? It is his duty to speak up for himself in this context. Does he not agree that the Government cannot go on indefinitely with a policy of this description, looking to the ratepayer and the taxpayer to foot the bill? When will the Government do something about this escalating problem?

Mr. William Molloy (Ealing, North)

I have been interested in the figures given by the hon. Gentleman. I am sure that he would want to be fair to the House and to a large proportion of his fellow British subjects who live with their families in council houses. It might have been fair to mention among all these figures the fact that they pay rates and rent and that this contributes to the cost of the houses, and that the major cost of such houses is borrowing the cash. What the hon. Gentleman has just related—I am sure that the figures are correct—is the massive continuing victory for the principle of the three brass balls.

Mr. Jones

The cost of borrowing is high, of course, and has a tremendous effect on the housing subsidy situation. This is an important factor to which we must have regard when considering the sort of housing policy which the country wants and, essentially, what it can afford. This is the dilemma with which the Government and all of us who have this matter close at heart are concerned.

What of Government expenditure as a whole and the continuing cries for its curtailment from the right hon. Gentleman and some of his more responsible colleagues? He has said that central Government and local government expenditure must be contained, yet on the housing front very little regard is had to this advocacy. What the right hon. Gentleman and other Government spokesmen are continually referring to is the containment of local government expenditure. He is continually advocating that. It ill becomes them when they allow—indeed, encourage—the misdirection of resources, as we see in housing subsidies made available with almost complete disregard of need. I am in agreement with the hon. Member for Islington, South and Finsbury (Mr. Cunningham) when he says that housing should be selective. I have always maintained that much larger resources should be directed to the cities than are directed generally in the countryside. It is in the cities and great urban areas that the great deprivation of housing is to be found and where essentially our problem lies. I speak as someone who represents a country constituency, but that is the view I have always maintained.

The escalation of rising subsidies is to be seen in the context of the Government's legislation against the fair rent policy of the previous Conservative administration, the Government leaving the question of rent levels and demands upon central Government funds entirely in the hands of local authorities. They in turn are caning their ratepayers, as the figures for rate contributions to the housing revenue accounts demonstrate. I will give the rate fund contributions for the current and the two previous years. In 1972–73, £73 million was put into the housing account from rate funds. For last year, 1974–75, the figure was £165 million. It is expected that the figure for the current year will be £200 million. Therefore, we have increments from the rate fund in addition to what is provided by central Government.

Of course, local authorities have responsibility for the proper management of houses in their ownership, both council built and those acquired. This is another of the mini-improvements suggested by the hon. Member for Islington, South and Finsbury which I find entirely acceptable. But we must bear in mind the vacancies in council-owned property and the existence of voids.

We had the disturbing information in the Daily Telegraph of 9th June that the total rent debt for every council in the country was nearly £26 million. That information was contained in a report by Mr. Gerald Bartlett which I have not seen contested in the past week. Responsibility for that debt must fall on local authority management. I know that there are some authorities which have greater problems than others. Those authorities should acquire the extra skills which are available and the extra determination to solve the problem. A little intelligent anticipation would be bound to reveal the solution. This must be a matter of serious concern for Government and for local authorities, the responsibility clearly resting on the authorities.

In the circumstances, one wonders what sort of excuses are being given to the Department of the Environment and whether the Secretary of State and his colleagues have raised any questions with the local authorities concerned. It would be interesting to know the Government's policy or attitude as regards rapidly escalating rent arrears. From the Government spokesmen there is a complete denial of the growing inadequacy of Government policy, but the facts speak clearly for themselves.

Today the Secretary of State gave the impression that he was almost entirely satisfied with his policy. I accept that he recognised the problems, but it seems that there is no new thinking and that Government policy is merely an adjunct to the pride and prejudice which is attached to their thinking. There is growing homelessness and an escalation of building costs. There is the lack of a rent policy to meet the rapidly deteriorating position. One inescapable conclusion is that political objectives are being given priority over the reality of our economic position and the wholesale mess into which our housing policy is drifting.

We have seen evidence of the Government's approach in their legislation to protect tenants of furnished accommodation. That legislation has had the effect of a denial of tens of thousands of units of accommodation being available. The Government are now proposing to interfere with the perfectly satisfactory arrangement of tied houses for agriculture. When will they learn?

Clearly, in the whole of the post-war period insufficient financial resources have gone into housing. When was it sensible to make available substantial subsidies to council tenants regardless of their ability to pay? It is nonsense for any Government to pursue a policy of that character. It has meant that many less well-placed have had partially to foot the bill of subsidised rents. As a social priority, the main responsibility for providing himself with shelter and a roof over his head should lie with the individual. Indeed, the wish to ensure this is fundamental to the character of man and his heritage and is essentially denied by the Government's housing policies.

Mr. George Cunningham

Will the hon. Gentleman face the logic of what he has just said and say that tax relief for people who borrow money to buy a house should also take account of the needs of the beneficiary of that tax relief? The hon. Gentleman knows perfectly well that tax relief is worth more to a rich man than it is to a poor man, and more to the man who owns two houses than to the man who owns one—until the Government corrected that recently. That is directly contrary to the principle enunciated by the hon. Gentleman. Will he be consistent?

Mr. Jones

I shall not follow that course. I shall continue my advocacy for the position I wish to see adopted and that is to ensure additional resources—

Mr. Cunningham

Face up to it.

Mr. Jones

The inadequate resources which have gone into housing lie at the root of a situation which, although it has significantly improved over the past 25 years, has led to widespread need for help. That help is a charge to public funds—that is, to the taxpayer and the ratepayer. Despite prohibitive costs, no solution to our housing problem is in sight. That is a fact of life which both sides of the House must face. None of the advocacy we have heard leads to a solution. The Secretary of State recognises this. When I asked what the Government intended to do about it, his colleague the Under-Secretary of State replied: My right hon. Friend has instituted the most far-reaching housing finance review which has ever been conducted. The results will be available within the next year."—[Official Report, 11th June 1975; Vol. 893, c. 402.] So presumably nothing to alter the present policy will be done in the foreseeable future.

A prerequisite to any positive steps in the right direction is a fair rent policy, and subsidy arrangements which direct help to those in genuine need. We need not waste a year in seeking justification for this or delaying its implementation—a delay which I suspect is, again, on political grounds.

To look at the figures for housing subsidies is to recognise the enormity of the public expenditure involved. At 1969–70 prices, and during that year, United Kingdom subsidies totalled £281 million. At that time there were no rent rebates or allowances, but that figure included a rate fund contribution of £103 million. Cmnd. 5897 gives the figures at 1974 survey prices for the curent financial year: housing subsidies, including rate fund contributions and rent rebates and allowances £1221.2 million, improvement and renovation grants £124 million, local authority improvement investment £297.9 million, a total of £1643.1 million. I found it difficult to isolate the figures.

The Under-Secretary of State has been moved elsewhere, but I give a warm welcome to his successor. I am sorry that he is not to join in the debate today, but I suppose that he has first to do his homework, although as a one-time teacher he knows much about housing problems in the urban area from which he comes.

For England only, these figures include for housing subsidies and so on £1014.5 million, improvement and renovation grants £102.3 million and local authority improvement investment £210.8 million—that is, for England only, £1327.6 million. If one converts those to current prices—because all the figures are given at 1974 constant survey prices—the figures for England alone, are, respectively, £1218.4 million, £116.6 million and £290 million, a total of no less than £1625 million. This shows that inflation from last year to this has increased the bill for housing subsidies by about £247.7 million.

With inflation for the last 12 months running at 25 per cent., clearly housing subsidies will continue to rise and, with increased local government expenditure by way of additional contributions to housing revenue accounts, including substantial rent arrears, housing subsidies are likely to be running at £2000 million per annum at the end of this current financial year.

We have seen this tremendous escalation of housing subsidies. When I intervened in the Secretary of State's speech he said that they would cost over £2,000 million for 1973–74 and over £3,000 million for 1974–75.

Mr. Freeson rose——

Mr. Jones

I know that the right hon. Gentleman suggested that the Minister would be correcting those figures if necessary when he replied.

Mr. Freeson

I need not wait until I make my speech to state that the figures quoted by my right hon. Friend were not subsidy figures but were amounts of total expenditure.

Mr. Jones

Am I right in thinking that they include capital sums as well?

Mr. Freeson indicated assent.

Mr. Jones

It will be interesting to know the source of those figures, and I look forward to having the information from the Minister.

At Question Time last week the Secretary of State said that total subsidies to local authority housing had roughly doubled in the last two or three years. He has now said that they have gone up by three times in the last five years.

We have had repeated assurances from Socialist spokesmen that they wish to see an expansion of owner occupation. The Government are essentially committed to council housing, whatever lip service they may pay to the contrary. I call in aid a statement prepared by the conference of the chairmen of new towns on the consultation document "New Towns in England and Wales" of December of last year. In dealing with the sale of houses in new towns it reveals in stark terms the political content of the Government's recommendation.

Referring to housing in new towns the Government make plain in their document at paragraph 4.13 that there will be no further sales. In their document the chairmen of the new towns say in paragraph 2.16, The facts remain that most people would prefer to own their own homes. They go on to say in paragraph 2.18, We strongly hope, therefore, that development corporations and the Commission will be allowed in the near future once again to offer tenants the opportunity to buy the homes they occupy. In referring to the escalation that must come in rents the Secretary of State said that they had risen 12 per cent. in the current year. He would not say how much they would go up next year, but on this score perhaps I could quote from a piece in this evening's Evening Standard by Mr. David Wilcox. In it he refers to Mr. John Mills, who is chairman of Camden Council and is widely recognised as an authority on housing difficulties. He is a member of the advisory group working on the subject at the Department of the Environment. Referring to rents in Camden Mr. Mills says: In Camden total housing costs are about £30 million a year, of which some £7,000,000 is management, maintenance and repairs. Taxpayers provide £20 million subsidy, ratepayers £5,000,000 and rents about £5,000,000". In the article Mr. Mills is reported as saying that rents will need to go up very significantly in Camden which is considering putting up rents by £1.81 per week in October. This is an indication of the tremendous increase there will be in housing rents.

The Government can never succeed in a housing policy in which political objectives so blatantly determine their policy. It is only by ensuring that substantial additional private resources go into housing that a solution will be found. This should, and if housing conditions are to be improved, must mean fairer rent policies, improved management by local authorities and encouragement to owner-occupation, including sales of council houses on a significant scale to existing tenants. Without the positive pursuit of these objectives progress cannot be made with regard to adequate housing for British people and early accommodation for the homeless.

9.1 p.m.

Mr. Geoffrey Finsberg (Hampstead)

The debate has been useful in clarifying several issues. Opposition Members have tried to examine various solutions free from hard political preconceptions. Certainly the Government and their supporters appear to be bound by the dogmas and self-delusions that have marked the Labour Party ever since the war.

When opening the case for the Government the Secretary of State was at pains to take credit for having held the mortgage rate at 11 per cent. He did not remind the House that this is not so in respect of local authority mortgages. We have had many promises that something will be done about this, but no results. I can only conclude that too much thought has paralysed action.

Opposition Members welcome Circular 24/75 and its change of emphasis. It was necessary that the emphasis should be changed from the odd strategy upon which the Government originally embarked. A further circular is now needed from the Government to local authorities telling them to concentrate more priority and more sympathy on exchanges and transfers instead of leaving that area as the Cinderella section of all local authorities. I do not believe that there is any hon. Member, on either side of the House, who has not, week after week, had the frustrating experience of trying to persuade a local authority that a mere transfer or exchange between existing tenancies did not in any way prevent a further programme of decanting. Unfortunately, one gets a lesser grade of official in charge of transfers and exchanges. Much unhappiness in local authorities could be avoided by giving more priority to this area.

The Secretary of State did not know what the Conservative policy was on housing. He must know, as one of the leading intellectuals of the Labour Party, that Oppositions can only formulate policies over a period of years. This is what we are now doing. He admitted that in one and a quarter years his Government had not solved the housing problem, but he had had four years to prepare for office. So it is five and a quarter wasted years. I can assure the right hon. Gentleman that long before that period has elapsed, if this Government should survive, there will be a detailed housing policy available.

When opening the debate my hon. Friend the Member for Aylesbury (Mr. Raison) outlined some of the ideas which had to be examined. The Secretary of State then talked about the subsidy cuts suggested by my right hon. Friend the Leader of the Opposition. He asked how they would be carried out. One method by which housing subsidies will be cut is by higher rents, as the Secretary of State himself advocated today. That will be a major contribution towards reducing subsidies. I say "reducing", because I do not believe that it is possible to eliminate all housing subsidies in the foreseeable future, and no one on the Opposition benches has ever suggested it.

We next had a warm and human speech from the hon. Member for Battersea, South (Mr. Perry), who spoke of acres of land lying vacant, land owned by private developers which could provide homes and be swiftly built on. It is fair to point out that the Greater London Council has a land bank equivalent to more than 10 years' building at its present rate, but it is still grubbing around to obtain more land. There is no possible apportionment of blame in which one can join the hon. Gentleman, except to say that anyone who possesses land should build on it. Certainly the Community Land Bill will not help in that direction.

The hon. Gentleman appealed to the Secretary of State to ask building societies to lend more to would-be buyers in London, and he thanked the Secretary of State for his intervention. I think that the hon. Gentleman was rather misled by his right hon. Friend, because all that has happened is that the Secretary of State has cut the amount of money available for local authorities to make home loans, in order to make up some of the cuts made in improvement grant requests from local authorities. The right hon. Gentleman is now to ask building societies to try to help out. He has cut the amount of money that local authorities themselves can lend. Twenty-three London boroughs have already stopped lending, yet the only benefit from the slight reallocation of money will be that the municipalisation programme may be allowed to continue in some ways unchecked. Certainly there will be no benefit to home buyers. This is a great pity.

My hon. Friend the Member for Wellingborough (Mr. Fry) spelt out the stark reality of the situation, and called for honesty. He asked for a statement by the Government and local authorities that they could never rehouse all those who want to go on council housing lists. That is a self-evident truth. I assure my hon. Friend that that sort of honesty does no harm. I made that statement in Hampstead one year after first being elected to the council in 1949. I said that it would be impossible for everyone then on the list to be rehoused. It apparently did me no harm, because it did not stop me being being re-elected on seven subsequent occasions. Sometimes people like to hear the truth, however unpalatable. That is why the Secretary of State might have told us in more detail of the measures he knows he will have to introduce in the not-to-distant future at the dictate of the Treasury.

The hon. Member for Salford, East (Mr. Allaun), who always has a large heart in these matters of housing, but rather too little understanding of our grave economic position, told us why he was unhappy about a letter he had received from the Prime Minister. We should all like to see that interesting exchange of correspondence. But in the end all that the hon. Gentleman could do was to say that the extra money for housing could be found by further defence cuts. Let him be quite certain that there is a substantial majority of opinion in this country that does not want a defenceless Britain. Some of the people who would suffer most from the hon. Gentleman's defence cuts are those who would he added to the growing list of unemployed under this Government.

The Liberal spokesman, the hon. Member for the Isle of Wight (Mr. Ross), described our suggestions for building for letting as unrealistic. I am not willing to accept that any proposals for helping this essential arm of our housing strategy are unrealistic. They want examination.

The hon. Member for Leeds, West (Mr. Dean), one of the practical hon. Members who understand local government housing, was right to attack the gimmickry in building that is all too prevalent today, the idea that system building is necessarily all that much better than traditional building.

My hon. Friend the Member for Dorset, West (Mr. Spicer) made a valid point about high council rents which in themselves ought to make purchase by council tenants attractive. After all, the late Richard Crossman made it clear that he did not wish to subsidise the well-off council tenant. Yet the rent freeze and the abolition of the Housing Finance Act have contributed to helping far more the wealthy tenants than those in the greatest need.

The hon. Member for Stockport, South (Mr. Orbach) made a fascinating speech on his constituency. He is one of the two dozen or so Labour Members I have to represent in this House. I have an attractive constituency otherwise. I shall look with interest to see what is said in Stockport about his attack on one letter he received from his local authority.

My hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) forewarned of the economic storm ahead and urged the Government to be ready to buttress two vital parts of their housing strategy—renovation projects and first-time house purchase.

The hon. Member for Islington, South and Finsbury (Mr. Cunningham) gave some fascinating ideas. He always contributes to housing debates some gems of information. All of us were hoping for further instalments of the saga of his properties. Instead, he talked to us about Select Committees and the like. I wish that the Prime Minister would put him in the Department of the Environment, perhaps with a limited term—a shorthold. One year in the Department would produce a very interesting result and some very shaken-up civil servants.

My hon. Friend the Member for Daventry (Mr. Jones) stressed the dangerous imbalance of subsidies, which is growing, between tenants on the one hand and ratepayers and taxpayers on the other.

Certain points require reiteration. I will leave the devastating statistics quoted by my hon. Friend the Member for Aylesbury because they speak for themselves. In my judgment they are incontrovertible and the Government would do well to look at them again.

I am happy that there is to be a closer examination of housing finance. There was such a close examination for some 15 months before the 1970 General Election. We did not see results from it, and I seem to remember one or two unhappy gentlemen at the time of the election. I hope that this new examination will produce somewhat quicker results than the last one.

One facet which needs urgent examination throughout the country is the mounting scandal of rent arrears—and I say bluntly that it is a scandal. I shall merely quote one of the larger authorities, the GLC. In April 1973 its rent arrears totalled £970,000. By September 1973 this had risen to £1,888,000. That was six months after the change of control at County Hall. In September 1974, when Mrs. Jenkins—a name not unknown in this House—had become chairman of the Housing Committee, she said that the arrears had risen to £1,960,000 and that they would now be reduced. By May 1975 the total had risen to £2,412,000, and that excluded £578,000 owed by former tenants who had disappeared and other sums which had been written off.

It cannot be a question of staff shortage because about 1,200 extra staff have been engaged by the GLC housing department since 1973. The situation reflects scandalous mismanagement, and it is the ratepayers, both private and council tenants, who are having to meet the cost.

I hope that the Government will take drastic action against those authorities which are allowing rent arrears to amount to such appalling levels. It may well be that attachment of earnings orders is the way to deal with these tenants who are behaving so anti-socially towards their fellow tenants. Eviction is not the answer, because that throws an even heavier burden on the rates. Anti-social behaviour deserves something; what it does not deserve is no action by the majority of local authorities.

The Labour Party took office with some grand ideas of social ownership, municipalisation and the end of the private landlord. The trouble, as in so many Labour policies, is that they were not thought through. Labour Members had not appreciated the vast costs, but these are now coming home to them Many authorities were encouraged by the Government to buy property virtually regardless of condition and virtually regardless of whether vacancies were purchased. I recently quoted at length some decisions of the Department of the Environment refusing consent to the GLC for buying even more properties when it was getting virtually no vacant accommodation. At least the Government have at last realised that municipalisation for its own sake is not worth the candle at this stage.

The evil of a massive municipalisation programme ill-thought through is that the properties stand empty and become occupied by squatters. There are two categories of squatters, the genuine homeless and the parasites, and the majority of people on council waiting lists resent the fact that many of these parasites are jumping ahead of them in the waiting lists.

We need the Government to realise that it is not necessary to go on even with a reduced level of municipalisation. That is not the answer. Whether or not it is true, as some Labour Members have said it is, that the sale of council houses does not help the total stock, equally the purchase of houses does not add to the total housing stock. It is the Government's job to concentrate on adding to the council housing stock, not to go on building new schemes regardless of cost.

There are two schemes at present under way in the London borough of Camden where costs will produce figures in excess of £100 per week per unit, possibly as high as £130 per unit, and the rents may well be producing only £10 a week. Those two schemes had loan sanction refused by my own Government and yet the present Government have given the green light to such monstrously expensive schemes. They are indulging in what I can only call profligate expenditure. The right hon. Gentleman does himself no credit to give that sort of approval to that sort of authority.

We contend that owner-occupation is a better bargain for the council tenant and a better bargain for the taxpayer. I go along and my party goes along with saying that there should be no objection to the sale of council flats to their tenants. The Scots are years ahead of us ignorant Sassenachs in the sale of flats in the private sector, and there is no reason why it cannot be done in the public sector on a co-ownership basis, the local authority of necessity keeping the freehold or letting it go to a committee of tenants. This is a better way. Why should the council tenant alone, after paying rent for 40 years, be deprived of having something to pass on to his children? This is unfair discrimination by the Labour Party.

Mr. George Cunningham rose——

Mr. Finsberg

The hon. Gentleman had 24 minutes in which to develop his argument. I have about the same time and I have to comment on observations.

The February 1975 figures show that the average three-bedroomed council house in 1974 cost £10,000 to build. Loan charges, management and repairs cost about £1,000 a year. With an unrebated rent of approximately £300 a year, that leaves a subsidy of £700 a year. The tax relief—and I shall not be pushed away from this factual argument—for the first-time purchaser amounts to £241. Therefore the private owner buying his house does not get such a good deal as a council tenant.

I turn to the problem of the private tenant. In Committee on the Housing Bill 1974 much was made by Government Ministers of the need to produce a comprehensive charter for tenants. The Minister for Housing and Construction made many passionate and eloquent speeches saying that he was considering this and that something would evolve. What he said was enough to prevent at least two of his hon. Friends, having spoken in favour of an amendment I tabled. [Interruption.] The Minister says that it was a stupid amendment. It may have been, but, as he knows, this was something that was wanted by tenants. He did nothing about it. Two of his hon. Friends who had supported the idea in their speeches in the Committee were dissuaded from voting by his siren voice. The amendment was made in another place and when the Bill came back to this House the Government had to accept it, although they said that it was not perfect. It was imperfect only because the Government had not produced something much greater, much more grandiose.

The Minister has produced nothing. Now he has a duty to put this and other amendments into working order. If he does not do so he stands condemned as being more cynical than some of us think he is about the rights of private tenants.

The Minister knows that the private tenants' associations and distinguished people like Muir Hunter want him to make regulations dealing with tenants' associations. They want him to clarify such points as how to deal with estimates for jobs costing £2,000. The Minister has a duty and he cannot just sit back smiling and expect to get away with it.

We believe that owner-occupation deserves encouragement, even if only on the grounds of cost effectiveness, which we have proved to the satisfaction of fair-minded people. We have heard about the Birmingham 50–50 scheme. I noticed that when that was mentioned there were Labour Members who said that the idea came from a Labour council. So what? If it is a good idea, jolly good luck to it. We are not so hidebound as to reject good ideas coming from Labour local councillors. Incidentally, it is now only a Labour council because of the fiddling over the casting vote of the Lord Mayor—[Interruption.]—as the Minister of State, the hon. Member for Birmingham, Small Heath (Mr. Howell) knows fully well. I am happy to pay tribute to those in Birmingham who thought up this idea. I hope many more local authorities will adopt it.

Equally we need to accept ideas which other people have been floating, such as that put forward by my hon. Friend the Member for Tonbridge and Mailing (Mr. Stanley) about equity sharing. That cannot be dismissed. It deserves close examination. It should not be laughed at.

I turn now to direct encouragement tor the private sector. I do not say that the Opposition have worked out schemes in detail here. What we say is that there are ideas which have to be examined. The Government, backed up by the Civil Service, ought to be able to say whether some of the ideas are workable. When we were in Government we did not dismiss any ideas in such a cavalier fashion, no matter what quarter they came from.

My hon. Friend the Member for Kensington (Sir B. Rhys Williams), in an excellent speech, mentioned his Bill dealing with shorthold. This concept would produce thousands of new lettings. It would not deny security of tenure to anyone who now enjoys it. New tenants obtaining shorthold leases would be in the same position as anyone who takes out a contract with London Transport to buy a fourpenny bus ride. They know the limit of the journey and that is the end of it. If they want to go on they pay more. There can be nothing wrong in this unless the Labour Party says that it is wrong for people to honour agreements.

What can we do to encourage fresh money to come into the private rented sector? Provided the will is on the Government benches and that sheer dogma will not say "No more private rented accommodation", private developers could be told "If you will put up blocks of flats, make them available in the private rented sector, let the rents be fixed by the rent officer and guarantee that they will be left in the private sector for a minimum of 20 years, the Government will consider making, as the Labour Government of the 1960s did in respect of hotels, a capital once-and-for-all grant towards the cost of providing the accommodation". That would be far cheaper than many of the grandiose schemes being put forward by local authorities. That suggestion deserves close examination.

Our first indictment of the Government and of Socialist councils is that they talk big to win elections and then forget that elections are about people. It is all very well for their study groups to say "We have all the ideas. We shall introduce a rent freeze. We shall make cer- tain that there will be no reduction in the amount of money available to local authorities to lend." The Government's manifesto went further and said "We shall make available an increasing amount of money to local authorities to lend." Within the last couple of weeks, they have cut it. I do not notice any screams from the guardians at Transport House of Labour's election manifesto. Perhaps they are selective guardians and, having been beaten as a result of the referendum are shy about saying what else should remain sacrosanct. [Interruption.] If the hon. Member for Ealing, North (Mr. Molloy) had been present at the beginning of the debate and had listened to my hon. Friend the Member for Aylesbury he would have heard some ideas. I cannot help him further.

Our second indictment is that the Government have deceived those most in need—the homeless.

Our third indictment is that they cannot think through a coherent and fair housing policy. Whenever ideas are put to them they look to see what the catch is. They ask, "Will it help somebody and not everyone?" They take grave exception to ideas which do not help everybody. In housing it is necessary to have priorities, and this is what the Government have failed to do. They have told local authorities to buy houses and are now letting them stand empty.

No amount of juggling the figures will disprove the fact that most local authorities feel cheated by having been asked to put in bids for money to put property right and then having those bids substantially reduced. Therefore, those properties still lie empty. Many of them were not the best of properties, but if the private owners had had some encouragement to get a better return they would not have been allowed to drift into the condition they were in.

The more hon. Members opposite put forward the view that there is to be an end of all private rented accommodation, the more difficult it will be to persuade anyone in the private sector to keep his property in good repair because he knows that it will be taken from him. That is not the way to proceed.

Let me give a word of caution to the homeless and council tenants: put on the armour of doubt against the missionary spirit in Labour policy; remember that meddle and muddle, even under the banner of Socialist idealism, are still meddle and muddle. If I had to sum up 1¼ years of the Labour Government's housing policy, I should say that it was a question of meddling with the private sector and muddling the local authorities. One has only to talk to the officers in local government or the leaders of local authorities to know that they despair of ever getting through to the Ministry in Marsham Street the needs of local government.

We offer what we believe to be an alternative free from dogma. We offer an alternative which is fair to all sections of society, and, without hesitation, we ask the House to support us in the Lobby tonight.

9.30 p.m.

The Minister for Housing and Construction (Mr. Reginald Freeson)

I congratulate the hon. Member for Hampstead (Mr. Finsberg) on the vigour of his speech, but its content was rather sad.

I should like to come down to specifics in housing policy. If I cannot deal with all the detailed points raised, I undertake to correspond with the hon. Members concerned. Although there has been some sloganising and the parading of shibboleths in the debate, it has to be accepted on both sides that an attempt to censure Government policy and action in housing has fallen flat, to say the least.

Our objectives are clear even if the methods to fulfil them may have to be complex and an intertwining of many policies, and even if the attempts to get those policies applied are made even more difficult and complex by our difficult economic situation. Those objectives can be stated as the provision of the right kind and quantity of new houses, the achievement of social justice in housing, the renewal of the fabric of our towns and cities and building for the community not simply to achieve statistics but to provide environments worth living in.

To achieve all this, we must organise to use our resources much more effectively, in good times as well as bad, we must seek and apply much more knowledge of the housing markets and social situations at local as well as national level than hitherto, and, above all, we must concentrate on the customer and the community we are supposed to be serving.

The housing and urban problems with which we are confronted today and have been for many years are a complex of interrelated issues in our conurbations and in the countryside. We shall never tackle the problems of homelessness, squatting, insufficient building, under-occupation, lack of choice, substandard dwellings, environmental messes and the host of other symptoms of housing stress unless we understand that they are all interlinked and cannot effectively be treated in isolation, and that underlying them all are economic factors which have to be changed.

What is needed from Government is a combination of policies to interact with one another, a comprehensive social and economic approach to the symptoms of housing stress and urban decay. At local as well as national level what is needed is corporate executive action, by various departments, using a wide range of agencies now acting separately—for example, and only for example, the Housing Corporation and the National Building Agency. Whatever the economic constraints which slow down the movement towards the development of such a policy, or inter-relationship of policies, this remains the underlying need.

I will return to developments at the local level in a moment but I should like to spend some time outlining what, even in our short time in office and in a time of economic trial unprecedented since the Second World War, we have achieved so far in our attempt to create a comprehensive strategy for housing.

First, the Housing Act 1974. I would have preferred and still would prefer a much more radical urban renewal measure and in due time we must come to this, but urgent action was needed when we came into office—to reform the Housing Corporation and housing association movement and to step up action in areas of severe housing stress, to avoid the bulldozers always having to be brought in as a solution to housing decline.

The Housing Act 1974 provided the immediate mechanisms for these ends. Our aim is to transform the run-down residential areas of our towns and cities into decent civilised neighbourhoods by a careful mixture and phasing of redevelopment and rehabilitation which will result in gradual and continuous urban renewal over the years rather than excessive bulldozing and rebuilding. Disturbance and disclocation of resident communities which is both socially and economically damaging must be minimised.

The new code for house renovation grants was geared to this new approach. Housing associations were provided with a new charter in that Act. They now receive much more support and more efficient management. Their resources and special experience with particular housing needs—for example, the elderly or the handicapped—and their experiments in varied forms of tenure can now be extended, bringing a useful flexibility into housing provision. The Act created the concept of the priority neighourhood and the housing action area to add to that of the general improvement area in the Housing Act 1969.

I know of, and I appreciate considerably, the feeling in some quarters, which I largely share, that this kind of approach is still too small in dealing with run-down neighbourhoods. But we are working on other aspects of this policy. I hope that the time will come—I expect that the time will come—when further measures will develop in tackling, on a broader and more integral basis, the intermixture of housing and social and economic problems in our city areas.

However, for the present these moves towards priority neighbourhoods and housing action areas, together with general improvement areas, provide the starting basis for comprehensive action based on overall assessments of needs, priorities and resources for the gradual renewal of decayed urban areas. Naturally the period since the 1974 Act, in these past seven months or so, has been one of reassessment for local authorities as they formulate their renewal strategies. But already up to the end of last month 26 housing action areas had been declared in England, seven of them in one authority and six in Wales.

Although I deal briefly with this background it is not done in any way so as to understate the situation. To me the problem of urban renewal lies at the centre of any developing Government strategy in housing, whatever else needs to be done in the housing sphere. No one should understate the scale of obsolescence in private rented property, especially in our inner urban areas.

The hard facts, as shown by the 1971 house condition survey, are that while the private rented sector constitutes only 16 per cent. of the total housing stock, 40 per cent. of the dwellings involved lacked at least one standard amenity, and were in that sector, while 23 per cent. of all the private rented sector stock was unfit. Of the national total of unfit dwellings 60 per cent. was in the private rented sector.

That, briefly stated, is the justification for Labour's programme of designating stress areas within which local authorities should socialise rented property, with financial aid from the Government. When resources, both financial and organisational, allow, this policy will be extended. But already we have made a vigorous start by direct municipalisation, by expanding housing association action, by sponsoring already the tenants' co-operatives—which were put forward as if they were the result of a new idea sprung on us by the Tory Front Bench. We have legislated for them already, and by sponsoring them under our Housing Rents and Subsidies Act 1975 have provided for the shared equity or tenant ownership schemes now being mooted in Birmingham and elsewhere.

Some £180 million was spent last year on municipalising 23,000 dwellings, large numbers of which were empty and were needed to be brought into use as quickly as possible. This impetus will be maintained in 1975–76—no matter what has appeared in the media recently. These purchases are mainly directed to housing stress areas so as to turn obsolescent houses into modern homes, but also to prevent a runaway situation in the rented market. This has been declining at the rate of about 100,000 dwellings a year for the past 15 years, whatever the Government, and possibly for even longer than that. It is estimated that in the three years before the Labour Government came back into office the loss was about 120,000 a year. However, the figure has varied from year to year. Some 100,000 a year is a rough average over the past 15 years.

With the growth of owner-occupation, this has been largely inevitable, and to some extent it has been made good by local authority building. But in recent years the rate of its decline in relation to a decreasing base figure, along with a sharp cut-back of local authority building, has added much to stress, while conditions of shortage are being exacerbated by the growing number of small households, partcularly single young people, in these same areas.

So the need for social intervention is two-fold. Extending security of tenure to most furnished tenants was an essential stop-gap until the programme of social ownership has been carried out. This situation points also to the need, set out in our policy circulars on "Housing Needs and Action" and "Housing the Single", for a much greater variety of provision for smaller households by local authorities, and indeed by private builders. [HON. MEMBERS: "Rents."] I said, "The provision of additional smaller accommodation by local authorities and by private builders"—and that has not to do with any attempts to break through the Rent Act 1974.

Municipalisation is not simply a method to bring houses into direct ownership by local authorities. It is a means by which a greater variety of social ownership and tenures may be provided, and also a means by which housing can be treated as a means of improving the increasingly alienating conditions in the community for today's urban residents.

The Housing Act 1974 stimulated the provision of dwellings by housing associations, and the higher level of direct municipalisation and repair recently achieved will be maintained. But there are other ways to extend social ownership which hopefully would add to housing resources and stimulate the creation of community and neighbourhood in our vast and growing conurbations, by involving more and more people at the grass roots within municipal and national housing strategies.

I believe strongly in a pluralistic, rather than a monopolistic approach to social ownership, and I wish to apply this in housing policy. This is why the Housing Rents and Subsidies Act 1975 gives scope for financing and aiding tenant co-operative management and co- operative ownership schemes. The same Act also enables tenant/owner-occupier schemes such as those which the Housing Corporation and Birmingham City Council are now proposing. But there are other ways.

Even were there no public expenditure constraints under present economic conditions, simply using the present methods of purchase by local authorities would be well below the rate of contraction and decay of the private rented sector, which are the main grounds for the Government's policy of social ownership.

I am, therefore, considering the feasibility of local authority and housing association leasing, joint management arrangements between local authorities and owners, the equivalent of "producer-co-operatives" for small owners, landlord-tenant "co-ownership" schemes, community purchase by local authorities' associations and co-operatives and other forms of social tenure. These are being examined in the Department and they will be applied as soon as we can work out the details, which will take time, but this is the policy which we are embarking upon and we intend to pursue it.

There is a need to retain and to bring fresh resources—both financial and managerial—into housing, and they would probably be beyond the capacity of any single institution to provide on the necessary scale, with the necessary flexibility, in the time required to get the job done—and we cannot talk in terms of decades. The job, in our inner city areas particularly, is too serious and urgent for that.

Mr. Eyre

I should be grateful if the Minister would say what the Government propose to do to increase the degree of participation by tenants in the existing large council estates.

Mr. Freeson

We already have legislation in the Housing Rents and Subsidies Act, as I explained to the House on Report, for sponsoring co-operative management schemes in local authority estates, as well as purchase and new building schemes, and also for sponsoring co-operative ownership schemes on a leasehold basis. We appointed the working party last autumn under the chairmanship of Harold Campbell to look into various forms of tenants' co-operatives. Part I of the draft report has been submitted. The report will be completed in about a month or so from now. The working party will be going out for consultation as a basis for future policy development. Work is being done. We do not leave it to sloganising exchanges across the Front Benches.

From what I have said, it will be clear that improvement of dwellings, particularly those occupied by owner-occupiers and tenants lower down the earnings scale, has high priority. We have introduced rateable value limits, about which one or two hon. Members and others around the country have complained, on the issue of improvement grants to owners, the object being to get the money spread down the scale and not applied, as it has been increasingly applied in recent years and until now, for the better properties at the upper end of the scale.

Apart from the £180 million being spent by local authorities and the £80 million being spent by housing associations on social ownership and repair of houses this year, about £255 million will be spent on capital improvements. This is an area which has caused considerable controversy and argument in recent times.

First, I must make it clear that the figure we have provided is a good deal higher—despite the strictures of the hon. Member for Hampstead (Mr. Finsberg)— than the figure which was originally intended by the last Conservative Government in their White Paper on Public Expenditure. What is more, the method of control, about which the hon. Member complained, is based upon the very method of control that was in the draft Bill that the previous Conservative Government left behind when they lost office. Therefore, there is no distinction between us about procedures. However, there is a distinction about the levels of resources that we are prepared to put into this work.

In a circular that was issued recently we made it clear that the municipalisation fund that local authorities will be spending can cover initial work on the repair of properties, including the provision of standard amenities and work carried out on properties that they purchased before the introduction of this control. The £255 million applies simply to improvement schemes and capitalised repairs. I wish to see more—make no mistake about that. As soon as economic conditions permit, that is what our Department will be aiming at. However, we cannot spend more than is provided at present.

It is, therefore, my task—and I make no apology for this—to make sure, as far as it is within my power, that improvement capital expenditure is spent on the properties that are most in need. We have to recognise that in recent years a high proportion of the £250 million to £300 million a year that has been spent by local authorities has been spent on purpose-built estates which, although it was desirable for them to be improved and refurbished, were not priority cases. They were largely properties that already had the basic amenities, while millions of properties—both those in local authority ownership, and those which are now coming forward for municipalisation and other forms of social ownership—remain without the basic amenities. The least amount of money has been spent on the property that is in the worst condition. Within the limited resources, we have to get that application switched around so that more money is spent on the worst properties, if necessary deferring expenditure on the somewhat better properties until such time as more resources are available.

It is our policy to continue the level of social ownership and repair of out-of-date properties. The recent policy circular that has been issued underlines this. It has not cut back the total expenditure. It seeks to establish that that expenditure, which will be running at the same level in real terms as last year—the increased level—will be spent on modernising the properties more urgently requiring it.

Our aim, as I hope I have made clear in threading through all these policies, is to obtain a variety of tenure and the enhancement of social actions and values in the housing situation—a blend and balance where now there is increasing dominance of one or two kinds of tenure in far too many localities. It is against this background that the Government set their objection—and I make this clear—to the indiscriminate sale of council rented dwellings, which is a panacea trotted out by the Opposition for our housing problems.

We are neither for all sales or for no sales. It is the job of a local authority—and of Government and Parliament—to look at the facts and to decide what action should be taken. If, for example, it was objectively shown that the rate of re-lets available to a council was cut by a given rate of sale of dwellings at a time when new lets were down and demand up, then clearly it would be wrong to continue such sales notwithstanding what is put forward by Opposition Members here or in town halls around the country. Clearly the reverse is true. Where it is possible to achieve a variety of provision by local authorities without harm to the ability to meet urgent needs in the rented sector, so be it—let us provide that variety of tenure. Indeed we shall see it undertaken.

I have asked my officials in the Department to do some objective analysis of this question which could be of help to local authorities, as well as the Government, in future action. Meanwhile, I am considering how local authorities may help to meet the need for more houses to be built for sale to lower-income owner-occupiers, in addition to building for rent, and I am considering how housing associations might also contribute in this direction.

As well as measures and proposals on tenure and ownership, the Government believe that it is essential to make the fullest use of our housing investment and housing stock. In March this year my Department issued the Circular "Housing: Needs and Action". It made specific recommendations for action to make fuller use of the existing stock of houses, to build more dwellings for small households where the need, through demographic change, is increasing, and to streamline costly and lengthy procedures in the development and planning process.

Increasing attention will be paid to the better use of housing stock—often in conjunction with the advance of social ownership—to ensure that the waste caused by unused and underused properties, especially in stress areas, is minimised. I expect to come forward in the near future with practical proposals designed to enable speedy and effective action to be taken to bring such properties into full and appropriate use.

Such action, together with our new building programme and the gathering momentum of urban renewal, offers the best scope for eliminating the phenomena of squatting and homelessness—at least to the extent that they are functions of a housing problem. In the coming months my Department will place a new emphasis on housing management, which grows ever more important as the size of municipal holdings and responsibilities grows. We shall aim to offer a higher level of professional guidance in this sphere to local authorities.

We shall certainly take on board the several points strongly and rightly put to the House by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham). But we must go beyond these kinds of initiative in building, improvement and management, important though these may be.

One of the central tasks confronting anyone seeking to enhance the quality of life in our towns and cities is that of improving the wider physical and social environment, a point rightly commented on by my hon. Friend the Member for Manchester, Moss Side (Mr. Hatton). Of course, there are certain design solutions which can be prepared readily—tree planting, play areas, traffic management schemes and those rather fussier schemes that I recently saw described as "environmental diddy-patches". But in reality we are only just beginning to learn about what features of their surroundings people really regard as important, and what aspects positively reinforce the health and stability of a community and a neigh bourhood.

Some improved knowledge will flow from the public involvement in housing action areas and general improvement areas. But we are also now engaged on a nationwide study of people's attitudes towards the areas in which they live so that we shall be in a much better position to decide what types of housing are likely to be regarded by people as socially unacceptable, and what policies are needed to bring about the necessary changes.

We should remember that the existing definition of "unfitness" in the Housing Acts has been virtually unchanged for 50 years. It is high time we began seriously to consider what minimum environmental standards should be adopted, what the views of ordinary families up and down the land are on this subject—and they are the people whose views really matter—and what effect any change in minimum standards would have upon expectations, upon the pattern of housing demand and upon the kind of legislation needed to bring about sensible changes and more sensitive urban renewal. These are the kinds of issue we are acting upon and studying for future action.

I have outlined the beginnings of a policy which in themselves are worthwhile and which in the long term will lead to efficiency and social justice. None the less, they are only beginnings. As my right hon. Friend the Secretary of State has said, the Department is engaged—

Mr. Frank Allaun

This is a very interesting brief, Mr. Deputy Speaker, but I put it to my hon. Friend that he is winding up a debate and that he has not dealt with the arguments that have been put to him. I do not think that my hon. Friend is playing fair with the House. He is capable of much better than this.

Mr. Freeson

So, with respect, is my hon. Friend. I hope that I have been dealing with some important matters of housing policy that have been raised today in various ways by hon. Members on both sides of the House. If my hon. Friend is dissatisfied, I can only hope that he will show an interest in some of these aspects of housing policy in future.

My right hon. Friend has referred to a review of housing finance upon which the Department has embarked. During the course of the review we shall not stop at undertaking the most challenging investigation of all—[Interruption.] I suggest that Conservative Members who have just entered the Chamber should go back

to the dining-room. We shall not hesitate in challenging the most basic concepts and assumptions that we have accepted over many years when dealing with housing. There are a number of fundamental questions which the review will need to answer and we shall not fall short of tackling the questions. We shall have to consider many important financial questions concerning the use of resources which have been put forward today by hon. Members from both sides of the House.

Mr. Charles Irving (Cheltenham) rose—

Mr. Freeson

At the end of the day I have to say as a Minister in a Labour Government that, given the measure of resources available to us, our first objective must be to get more houses built, more houses modernised and municipalised and a greater extension of social ownership. Those are the first priorities and others must fall in behind them. I stand by such a view of our priorities, given our resources. That is a view that I took when I was in local government before coming to this place. It is a view which I held throughout my years of membership of the party and it is a view that I shall put forward as a Labour Minister when dealing with housing policy.

Mr. Michael Brotherton (Louth)

The Minister has said that he stood by the view that the Government would municipalise more houses. Does that mean that the Government are firmly committed to a policy of bringing into the public sector all houses that are available for rent? One of the great problems at the moment is—in fact, I fear, it is that I must sit down because of the time.

Question put, That this House do now adjourn:—

The House divided: Ayes 266, Noes 294.

Division No. 234.]	AYES	9.59 p.m.]
Adley, Robert	Bell, Ronald	Boyson, Dr Rhodes (Brent)
Aitken, Jonathan	Bennett, Dr Reginald (Fareham)	Braine, Sir Bernard
Alison, Michael	Benyon, W.	Brittan, Leon
Amery, Rt Hon Julian	Berry, Hon Anthony	Brotherton, Michael
Arnold, Tom	Biffen, John	Brown, Sir Edward (Bath)
Atkins, Rt Hon H. (Spelthorne)	Biggs-Davison, John	Bryan, Sir Paul
Awdry, Daniel	Blaker, Peter	Buchanan-Smith, Alick
Bain, Mrs Margaret	Body, Richard	Buck, Antony
Baker, Kenneth	Boscawen, Hon Robert	Budgen, Nick
Banks, Robert	Bowden, A. (Brighton, Kemptown)	Bulmer, Esmond
Burden, F. A.	Howe, Rt Hon Sir Geoffrey	Price, David (Eastleigh)
Carlisle, Mark	Howell, David (Guildford)	Prior, Rt Hon James
Carr, Rt Hon Robert	Hunt, John	Pym, Rt Hon Francis
Chalker, Mrs Lynda	Hurd, Douglas	Raison, Timothy
Channon, Paul	Hutchison, Michael Clark	Rathbone, Tim
Churchill, W. S.	Irvine, Bryant Godman (Rye)	Rawlinson, Rt Hon Sir Peter
Clark, Alan (Plymouth, Sutton)	Irving, Charles (Cheltenham)	Rees, Peter (Dover & Deal)
Clark, William (Croydon S)	James, David	Rees-Davies, W. R.
Clarke, Kenneth (Rushcliffe)	Jenkin, Rt Hon P. (Wanst'd & W'df'd)	Held, George
Clegg, Walter	Jessel, Toby	Renton, Rt Hon Sir D. (Hunts)
Cockcroft, John	Johnson Smith, G. (E. Grinstead)	Renton, Tim (Mid-Sussex)
Cooke, Robert (Bristol W)	Jones, Arthur (Daventry)	Rhys Williams, Sir Brandon
Cope, John	Jopling, Michael	Ridley, Hon Nicholas
Cordle, John H.	Joseph, Rt Hon Sir Keith	Ridsdale, Julian
Cormack, Patrick	Kaberry, Sir Donald	Rifkind, Malcolm
Costain, A. P.	Kershaw, Anthony	Rippon, Rt Hon Geoffrey
Crawford, Douglas	Kimball, Marcus	Roberts, Michael (Cardiff NW)
Critchley, Julian	King, Evelyn (South Dorset)	Roberts, Wyn (Conway)
Crouch, David	King, Tom (Bridgwater)	Rodgers, Sir John (Sevenoaks)
Crowder, F. P.	Kitson, Sir Timothy	Rossi, Hugh (Hornsey)
Davies, Rt Hon J. (Knutstord)	Knight, Mrs Jill	Rost, Peter (SE Derbyshire)
Dean, Paul (N Somerset)	Knox, David	Royle, Sir Anthony
Dodsworth, Geoffrey	Lamont, Norman	Sainsbury, Tim
Douglas-Hamilton, Lord James	Lane, David	St. John-Stevas, Norman
Drayson, Burnaby	Langford-Holt, Sir John	Scott, Nicholas
du Cann, Rt Hon Edward	Latham, Michael (Mellon)	Shaw, Giles (Pudsey)
Durant, Tony	Lawrence, Ivan	Shelton, William (Streatham)
Eden, Rt Hon Sir John	Lawson, Nigel	Shepherd, Colin
Edwards, Nicholas (Pembroke)	Le Marchant, Spencer	Shersby, Michael
Elliott, Sir William	Lester, Jim (Beeston)	Silvester, Fred
Evans, Gwynfor (Carmarthen)	Lewis, Kenneth (Rutland)	Skeet, T. H. H.
Eyre, Reginald	Lloyd, Ian	Smith, Dudley (Warwick)
Fairbairn, Nicholas	Loveridge, John	Speed, Keith
Fairgrieve, Russell	Luce, Richard	Spence, John
Farr, John	McAdden, Sir Stephen	Spicer, Jim (W Dorset)
Fell, Anthony	MacCormick, Iain	Spicer, Michael (S Worcester)
Finsberg, Geoffrey	McCrindle, Robert	Sproat, Iain
Fisher, Sir Nigel	Macfarlane, Neil	Stainton, Keith
Fletcher, Alex (Edinburgh N)	MacGregor, John	Stanbrook, Ivor
Fletcher-Cooke, Charles	Macmillan, Rt Hon M. (Farnham)	Stanley, John
Fookes, Miss Janet	McNair-Wilson, M. (Newbury)	Steen, Anthony (Wavertree)
Fowler, Gerald (The Wrekin)	McNair-Wilson, P. (New Forest)	Stewart, Donald (Western Isles)
Fox, Marcus	Madel, David	Stewart, Ian (Hitchin)
Fraser, Rt Hon H. (Stafford & St)	Marshall, Michael (Arundel)	Stokes, John
Fry, Peter	Marten, Neil	Stradling Thomas, J.
Galbraith, Hon. T. G. D.	Mather, Carol	Tapsell, Peter
Gardiner, George (Reigate)	Maude, Angus	Taylor, R. (Croydon NW)
Gardner, Edward (S Fylde)	Maudling, Rt Hon Reginald	Taylor, Teddy (Cathcart)
Gilmour, Rt Hon Ian (Chesham)	Mawby, Ray	Tebbit, Norman
Gilmour, Sir John (East Fife)	Maxwell-Hyslop, Robin	Temple-Morris, Peter
Glyn, Dr Alan	Mayhew, Patrick	Thatcher, Rt Hon Margaret
Godber, Rt Hon Joseph	Meyer, Sir Anthony	Thomas, Dafydd (Merioneth)
Goodhart, Philip	Mills, Peter	Thomas, Rt Hon P. (Hendon S)
Goodhew, Victor	Miscampbell, Norman	Thompson, George
Goodlad, Alastair	Mitchell, David (Basingstoke)	Townsend, Cyril D.
Gorst, John	Moate, Roger	Trotter, Neville
Gow, Ian (Eastbourne)	Monro, Hector	Tugendhat, Christopher
Gower, Sir Raymond (Barry)	Montgomery, Fergus	van Straubenzee, W. R.
Grant, Anthony (Harrow C)	Moore, John (Croydon C)	Vaughan, Dr Gerard
Gray, Hamish	More, Jasper (Ludlow)	Viggers, Peter
Grieve, Percy	Morgan, Geraint	Wakeham, John
Grist, Ian	Morgan-Giles, Rear-Admiral	Walker, Rt Hon P. (Worcester)
Grylls, Michael	Morris, Michael (Northampton S)	Walker-Smith, Rt Hon Sir Derek
Hall, Sir John	Morrison, Charles (Devizes)	Wall, Patrick
Hall-Davis, A. G. F.	Morrison, Hon Peter (Chester)	Walters, Dennis
Hamilton, Michael (Salisbury)	Mudd, David	Warren, Kenneth
Hampson, Dr Keith	Neave, Airey	Watt, Hamish
Hannam, John	Nelson, Anthony	Weatherill, Bernard
Harrison, Col Sir Harwood (Eye)	Neubert, Michael	Wells, John
Harvie Anderson, Rt Hon Miss	Newton, Tony	Welsh, Andrew
Hastings, Stephen	Nott, John	Whitelaw, Rt Hon William
Havers, Sir Michael	Onslow, Cranley	Wiggin, Jerry
Hawkins, Paul	Oppenheim, Mrs Sally	Wigley, Dafydd
Hayhoe, Barney	Osborn, John	Wilson, Gordon (Dundee E)
Henderson, Douglas	Page, John (Harrow West)	Wood, Rt Hon Richard
Heseltine, Michael	Page, Rt Hon R. Graham (Crosby)	Young, Sir G. (Ealing, Acton)
Hicks, Robert	Pattie, Geoffrey
Higgins, Terence L.	Percival, Ian	TELLERS FOR THE AYES:
Holland, Philip	Peyton, Rt Hon John	Mr. Adam Butler and.
Hordern, Peter	Pink, R. Bonner	Mr. Cecil Parkinson
NOES
Abse, Leo	Archer, Peter	Atkins, Ronald (Preston N)
Allaun, Frank	Armstrong, Ernest	Atkinson, Norman
Anderson, Donald	Ashton, Joe	Bagier, Gordon A. T.

Barnett, Guy (Greenwich)	Gilbert, Dr John	Mendelson, John
Barnett, Rt Hon Joel (Heywood)	Ginsburg, David	Mikardo, Ian
Bates, Alf	Golding, John	Millan, Bruce
Bean, R. E.	Gould, Bryan	Miller, Dr M. S. (E Kilbride)
Benn, Rt Hon Anthony Wedgwood	Gourlay, Harry	Mitchell, R. C. (Soton, Itchen)
Bennett, Andrew (Stockport N.)	Graham, Ted	Molloy, William
Bidwell, Sydney	Grant, George (Morpeth)	Morris, Alfred (Wythenshawe)
Bishop, E. S.	Grant, John (Islington C)	Morris, Charles R. (Openshaw)
Blenkinsop, Arthur	Grocott, Bruce	Morris, Rt Hon J. (Aberavon)
Boardman, H.	Hamilton, James (Bothwell)	Moyle, Roland
Booth, Albert	Hamilton, W. W. (Central Fife)	Mulley, Rt Hon Frederick
Boothroyd, Miss Betty	Hardy, Peter	Murray, Rt Hon Ronald King
Bottomley, Rt Hon Arthur	Harper, Joseph	Newens, Stanley
Boyden, James (Bish Auck)	Harrison, Walter (Wakefield)	Noble, Mike
Bradley, Tom	Hart, Rt Hon Judith	Oakes, Gordon
Bray, Dr Jeremy	Hatton, Frank	Ogden, Eric
Brown, Hugh D. (Provan)	Hayman, Mrs Helene	O'Halloran, Michael
Brown, Robert C. (Newcastle W)	Healey, Rt Hon Denis	O'Malley, Rt Hon Brian
Brown, Ronald (Hackney S)	Heffer Eric S.	Orbach, Maurice
Buchan, Norman	Horam, John	Orme, Rt Hon Stanley
Buchanan, Richard	Howell, Denis (B'ham, Sm H)	Ovenden, John
Butler, Mrs Joyce (Wood Green)	Hoyle, Doug (Nelson)	Owen, Dr David
Callaghan, Jim (Middleton & P)	Huckfield, Les	Padley, Walter
Campbell, Ian	Hughes, Rt Hon C. (Anglesey)	Palmer, Arthur
Canavan, Dennis	Hughes, Mark (Durham)	Park, George
Cant, R. B.	Hughes, Robert (Aberdeen N)	Parker, John
Carmichael, Neil	Hughes, Roy (Newport)	Parry, Robert
Carter, Ray	Irvine, Rt Hon Sir A. (Edge Hill)	Pavitt, Laurie
Carter-Jones, Lewis	Irving, Rt Hon S. (Dartford)	Peart, Rt Hon Fred
Cartwright, John	Jackson, Colin (Brighouse)	Pendry, Tom
Clemitson, Ivor	Jackson, Miss Margaret (Lincoln)	Perry, Ernest
Cocks, Michael (Bristol S)	Janner, Greville	Phipps, Dr Colin
Cohen, Stanley	Jay, Rt Hon Douglas	Prentice, Rt Hon Reg
Coleman, Donald	Jeger, Mrs Lena	Prescott, John
Conlan, Bernard	Jenkins. Hugh (Putney)	Price, C. (Lewisham W)
Cook, Robin F. (Edin C)	Jenkins, Rt Hon Roy (Stechford)	Price, William (Rugby)
Corbett, Robin	John, Brynmor	Radice, Giles
Cox, Thomas (Tooting)	Johnson, James (Hull West)	Rees, Rt Hon Merlyn (Leeds S)
Craigen, J. M. (Maryhill)	Johnson, Walter (Derby S)	Richardson, Miss Jo
Crawshaw, Richard	Jones, Alec (Rhondda)	Roberts, Albert (Normanton)
Crosland, Rt Hon Anthony	Jones, Barry (East Flint)	Roberts, Gwilym (Cannock)
Cryer, Bob	Jones, Dan (Burnley)	Robertson, John (Paisley)
Cunningham, G. (Islington S)	Judd, Frank	Roderick, Caerwyn
Dalyell, Tam	Kaufman, Gerald	Rodgers, George (Chorley)
Davidson, Arthur	Kelley, Richard	Rodgers, William (Stockton)
Davies, Bryan (Enfield N)	Kerr, Russell	Rooker, J. W.
Davies, Denzil (Llanelli)	Kilroy-Silk, Robert	Roper, John
Davies, Ifor (Gower)	Kinnock, Nell	Rose, Paul B.
Deakins, Eric	Lambie, David	Ross, Rt Hon W. (Kilmarnock)
Dean, Joseph (Leeds West)	Lamborn, Harry	Rowlands, Ted
de Freitas, Rt Hon Sir Geoffrey	Lamond, James	Ryman, John
Delargy, Hugh	Leadbitter, Ted	Sandelson, Neville
Dell, Rt Hon Edmund	Lee, John	Sedgemore, Brian
Dempsey, James	Lestor, Miss Joan (Eton & Slough)	Selby, Harry
Doig, Peter	Lever, Rt Hon Harold	Shaw, Arnold (Ilford South)
Douglas-Mann, Bruce	Lewis, Arthur (Newham N)	Sheldon, Robert (Ashton-u-Lyne)
Duffy, A. E. P.	Lewis, Ron (Carlisle)	Shore, Rt Hon Peter
Dunn, James A.	Lipton, Marcus	Short, Rt Hon E. (Newcastle C)
Dunnett, Jack	Litterick, Tom	Silkin, Rt Hon John (Deptford)
Eadie, Alex	Lomas, Kenneth	Silkin, Rt Hon S. C. (Dulwich)
Edelman, Maurice	Loyden, Eddie	Sillars, James
Edge, Geoff	Luard, Evan	Silverman, Julius
Edwards, Robert (Wolv SE)	Lyon, Alexander (York)	Skinner, Dennis
Ellis, John (Brigg & Scun)	Lyons, Edward (Bradford W)	Small, William
Ellis, Tom (Wrexham)	Mabon, Dr J. Dickson	Smith, John (N Lanarkshire)
English, Michael	McCartney, Hugh	Snape, Peter
Ennals, David	McElhone, Frank	Spearing, Nigel
Evans, Fred (Caerphilly)	MacFarquhar, Roderick	Spriggs, Leslie
Evans, loan (Aberdare)	McGuire, Michael (Ince)	Stallard, A. W.
Evans, John (Newton)	Mackenzie, Gregor	Stewart, Rt Hon M. (Fulham)
Ewing, Harry (Stirling)	Mackintosh John P.	Stott, Roger
Feulds, Andrew	Maclennan, Robert	Strang, Gavin
Fernyhough, Rt Hon E.	McMillan, Tom (Glasgow C)	Strauss, Rt Hon G. R.
Fitch, Alan (Wigan)	McNamara, Kevin	Summerskill, Hon Dr Shirley
Flannery, Martin	Madden, Max	Swain, Thomas
Fletcher, Raymond (Ilkeston)	Magee, Bryan	Taylor, Mrs Ann (Bolton W)
Fletcher, Ted (Darlington)	Mahon, Simon	Thomas, Jeffrey (Abertillery)
Foot, Rt Hon Michael	Mallalieu, J. P. W.	Thomas, Mike (Newcastle E)
Ford, Ben	Marks, Kenneth	Thomas, Ron (Bristol NW)
Forrester, John	Marquand, David	Thorne, Stan (Preston South)
Fowler, Gerald (The Wrekin)	Marshall, Dr Edmund (Goole)	Tierney, Sydney
Freeson, Reginald	Marshall, Jim (Leicester S)	Tinn, James
Garrett, John (Norwich S)	Maynard, Miss Joan	Tomlinson, John
Garrett, W. E. (Wallsend)	Meacher, Michael	Tomney, Frank
George, Bruce	Mellish, Rt Hon Robert	Torney, Tom

Tuck, Raphael	Weitzman, David	Wilson, Rt Hon H. (Huyton)
Urwin, T. W.	Wellbeloved, James	Wilson, William (Coventry SE)
Varley, Rt Hon Eric G.	White, Frank R. (Bury)	Wise, Mrs Audrey
Wainwright, Edwin (Dearne V)	White, James (Pollock)	Woodall, Alec
Walden, Brian (B'ham, L'dyw'd)	Whitehead, Phillip	Wool, Robert
Walker, Harold (Doncaster)	Whitlock, William	Wrigglesworth, Ian
Walker, Terry (Kingswood)	Willey, Rt Hon Frederick	Young, David (Bolton E)
Ward, Michael	Williams, Alan (Swansea W)
Watkins, David	Williams, Alan Lee (Hornch'ch)	TELLERS FOR THE NOES:
Watkinson, John	Williams, Rt Hon Shirley (Hertford)	Mr. J. D. Dormand and
Weetch, Ken	Williams, W. T. (Warrington)	Mr. David Stoddart.

Question accordingly negatived.