SALE OF COUNCIL HOUSES

HC Deb 30 June 1976 vol 914 cc405-16

4.7 p.m.

Mr. Ian Gow (Eastbourne)

I beg to move, That leave be given to bring in a Bill to facilitate the sale of council houses. There are about 6 million council houses in Britain. Given the chance, the majority of those who live in them would prefer to be owners rather than tenants of the council.

Mr. Bob Cryer (Keighley)

How does the hon. Gentleman know?

Mr. Gow

I say "given the chance", because for many of those tenants the opportunity to buy does not exist, owing to the refusal of most Socialist-controlled councils—dwindling in number though they are—to sell council houses to their tenants.

The Bill would give every council and new town tenant who has been in his home for two years the legal right to buy it at two-thirds of the market value as fixed by the district valuer. For tenants who have been in occupation for more than 10 years, where the historic cost of building is lower, there would be a onceand-for-all option operating on a sliding scale so that there would be a maximum discount of 50 per cent. for those who had been in occupation for 20 years or more. In either case, if the tenant wished to resell within five years of becoming an owner, he would be obliged first to offer to sell his flat or house back to the council at the same price as that at which he bought it.

There are three main advantages to the Bill. First, there would be a massive redistribution of wealth in our community. Secondly, it would extend new dimensions of individual freedom to a large number of people—freedom from the petty rules and restrictions imposed by bureaucracy and freedom in ability to move around the country. Thirdly, this approach would be a direct attack on the cycle of poverty in that for the first time we should be giving many poor people that crucial facility that they lack—namely, access to wealth. [HON. MEMBERS: "Oh."] The House will have noticed the cries of derision from Labour Members below the Gangway.

Those are three purposes that would be achieved by the Bill and the words I have used are not mine, although I agree with them. They come verbatim from the penultimate paragraph of a pamphlet entitled "Do we need Council Houses?", published by the Catholic Housing Aid Society and written by that well-known Socialist, Mr. Frank Field.

Mr. Kevin McNamara (Kingston upon Hull, Central)

He is not infallible.

Mr. Gow

In the pamphlet that eminent Socialist wrote: There is a growing sourness on the housing estates themselves as tenants become more and more aware of the extent of the serfdom imposed upon them by their council tenancies Now even the Labour Front Bench is beginning to laugh at those remarks by Mr. Frank Field, but they should pay more attention to them.

The Minister for Planning and Local Government, addressing the House on 18th June—and I commend his remarks to hon. Gentlemen below the Gangway—said: Let me start by saying what this debate is not about. Whatever the Opposition may say, it is not about the principle of owner-occupation. Most people dream of having a home of their own, and why should they not?"—[Official Report, 18th June 1976; Vol. 911, c. 1244.] Those are the Minister's words, not mine.

The answer to the Minister's own question is that at present people's dream of owing a house of their own cannot be fulfilled as the law now stands for those unfortunate enough to be living under a Labour-controlled council Hence the need for the Bill.

The sale of council houses would lead to a significant reduction in under-occupation as the new owners would be freed from existing restrictions on taking in tenants. In their retirement council house owners would be able to sell their home and move to something smaller, freeing comparatively cheap accommodation that a young family could buy.

I want to examine some of the financial consequences of these proposals. A new council house today costs about £12,000 to provide, including the land. The local council has first to borrow this money, adding to the total of public borrowing. Interest on £12,000 works out at £1,620 a year. If a further £50 a year—a modest sum—is added for maintenance and management, the total cost is £1,670 a year.

The income that the council would receive by way of rent for this house would be about £7 a week, or £360 a year. Thus, the annual cost to public funds works out at around £1,300.

If that same house were sold subsequently by the council at a 20 per cent. reduction, the tenant would have to pay £9,600. Tax relief on mortgage interest would work out at £450 a year, or just about a third of the cost to public funds of subsidising a family in a new council house. The cost of housing subsidies is now running at £1,400 million a year. An acceleration of the council house sales programme would reduce that sum substantially.

The sale of council houses is beneficial to local authorities and ratepayers alike. Where the council makes the loan, mortgage repayments will be higher than the previous rent paid and the council is relieved of the cost of maintenance and repairs. Where a building society provides the mortgage, the council receives an immediate lump sum, which could be used to provide an extra home for the elderly or the handicapped.

The Building Societies Association in its memorandum of evidence to the Government's Housing Finance Review recognised the need for building societies to provide loans for the purchase of council houses. The ownership of a home makes a family independent of the State and helps to guarantee individual freedom. Indeed, 53 per cent. of the houses in this country are now owned by the families who live in them, but that proportion is significantly less than the figure in Canada, Australia and New Zealand. If we are to make a reality of a nation-wide property-owning democracy—a view which I am sure is shared by Labour Members—we need to have a new radical proposal aimed at increasing home ownership.

The Labour Party in its last two election manifestos called for a fundamental and irreversible shift in the balance of power and wealth in favour of working people and their families. This Bill seeks to provide exactly that fundamental and irreversible transfer of power and wealth from the State to the people. It will be fascinating to see whether Labour Members will now repudiate the commitment in their own party's manifesto and vote against the introduction of the Bill.

4.17 p.m.

Mr. Frank Allaun (Salford, East)

I wish to oppose the Bill. I accuse many Conservative Members of hostility towards council housing on which 6 million families are dependent—

Mr. Eldon Griffiths (Bury St. Edmunds)

Absolute rubbish.

Mr. Allaun

Labour in contrast believes—[Interruption.]

Mr. Deputy Speaker (Mr. Oscar Murton)

The Chair is finding it almost impossible to hear the argument when there are so many interruptions from sedentary positions. May I appeal for order?

Mr. Allaun

I repeat that I accuse many Conservative Members of hostility towards council housing and the 6 million families who are dependent upon it. Labour, in contrast, believes both in owner-occupation and in council housing and believes that both systems are infinitely preferable to private landlordism, which has been declining since the turn of the century. We weep no tears for that. I repeat that most Conservative Members, on doctrinaire grounds, are antagonistic to council housing, whereas we want to see more public and private housing.

Mr. Eldon Griffiths

More serfdom.

Mr. Allaun

This sympathetic and less restrictive attitude is shared by many impartial bodies, such as Shelter and the Housing Centre Trust. The majority of those who work for their living by hand or brain cannot buy their own houses because they cannot afford to do so, even through a building society. If it were not for council housing, many of them would be homeless.

What are the objections to selling council houses? First, it would not add a single new home to the stock of housing in this country. Secondly, in many areas most families—three out of five to be exact—who need a council house do not secure one that has just been built. Instead they get re-lets, that is to say, council houses that have been vacated because the previous tenant has died, removed to another area, or bought a private home. If we reduce the total pool of council houses, we reduce the number of available re-lets and thereby the chances of thousands of families on the waiting list of obtaining a council house.

Thirdly, I ask which council houses would be bought by the tenant. Clearly, they would be the best, the most attractive. Few, if any, multi-storey flats would be purchased. While some tenants like those flats, most do not, particularly those with young children. Such families are desperately anxious to transfer to a council house with a bit of garden so that their children are not kept indoors all the time. Tenants have the chance to transfer to such homes. However, if these more attractive houses are bought up by the tenants, there is a reduced chance of transfer.

Fourthly, the money received by councils from selling houses would be far less than the price of building new council houses at today's prices.

Council housing is based on the principle of providing homes for those in the greatest need. The hon. Member for Eastbourne (Mr. Gow) and other Conservative Members would provide homes for those with the biggest purse. In contrast, some Labour Members have tried to help would-be occupiers through building society or local authority mortgages. We have strongly opposed cuts in the amounts local authorities can lend to house purchasers, particularly those unable to secure building society mortgages. If tenants wish to buy themselves houses, good luck to them, but there are plenty of private houses for sale without diminishing the stock of council houses.

I do not believe that this matter should be left entirely to the local authorities, if councils are determined to sell their houses for ideological reasons. Since Conservatives control many councils following last month's elections, this is increasingly the case. Just as a former Conservative Government compelled Labour councils to raise their rents when the councils did not want or need to do so, so should the Government today tell councils that they must not sell their stock of council houses.

I would permit council houses to be sold in two cases only: first, when there is no housing shortage in an area—and there are precious few such areas—secondly, on condition that the selling price should not be at a discount of the degree proposed by the hon. Member on today's market prices, but instead at today's replacement—not market—value. There would hardly be any council houses sold on that basis. I know that for council house tenants purchasing their homes is often a "good buy", a good deal, but it is a rotten deal for the community, a bad deal for councils and other families on the waiting list.

Are Conservative Members equally anxious to see the tenants of private landlords becoming owner-occupiers of those houses?

Mr. Tony Durant (Reading, North)

Yes.

Mr. Cryer

At a discount?

Mr. Allaun

I seem to have touched a delicate spot. The exceptionally high rents to which the hon. Member for Eastbourne has referred are not charged, because they are pooled with low-rented council houses. This Bill would make that less easy.

As for the subsidy, the total for council house tenants last year in Great Britain was £1,014 million. The total subsidy for owner-occupiers is almost exactly the same. For England and Wales—the figures for Scotland are not yet available—the subsidy in the form of income tax relief on mortgage interest totalled £865 million. I conclude by asking hon. Members to throw this Bill into oblivion.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):

The House divided: Ayes 212, Noes 220.

Division No. 205.]	AYES	[4.20 p.m.
Adley, Robert	Gilmour, Rt Hon Ian (Chesham)	MacGregor, John
Amery, Rt Hon Julian	Gilmour, Sir John (East Fife)	Macmillan, Rt Hon M. (Farnham)
Arnold, Tom	Glyn, Dr Alan	Mates, Michael
Atkins, Rt Hon H. (Spelthorne)	Goodhart, Philip	Mather, Carol
Awdry, Daniel	Goodhew, Victor	Maude, Angus
Bain, Mrs Margaret	Goodlad, Alastair	Maudling, Rt Hon Reginald
Baker, Kenneth	Gorst, John	Mawby, Ray
Banks, Robert	Grant, Anthony (Harrow C)	Maxwell-Hyslop, Robin
Bell, Ronald	Gray, Hamish	Mayhew, Patrick
Berry, Hon Anthony	Griffiths, Eldon	Meyer, Sir Anthony
Biggs-Davison, John	Grist, Ian	Miller, Hal (Bromsgrove)
Blaker, Peter	Grylls, Michael	Mitchell, David (Basingstoke)
Body, Richard	Hall, Sir John	Moate, Roger
Boscawen, Hon Robert	Hall-Davis, A. G. F.	Molyneaux, James
Bottomley, Peter	Hamilton, Michael (Salisbury)	Montgomery, Fergus
Bowden, A. (Brighton, Kemptown)	Hampson, Dr Keith	More, Jasper (Ludlow)
Boyson, Dr Rhodes (Brent)	Hannam, John	Morgan, Geraint
Braine, Sir Bernard	Harrison, Col Sir Harwood (Eye)	Morris, Michael (Northampton S)
Braine, Sir Bernard	Harvie Anderson, Rt Hon Miss	Morrison, Charles (Devizes)
Brocklebank-Fowler, C.	Hayhoe, Barney	Morrison, Hon Peter (Chester)
Buchanan-Smith, Alick	Hicks, Robert	Mudd, David
Buck, Antony	Higgins, Terence L.	Neave, Airey
Budgen, Nick	Holland, Philip	Nelson, Anthony
Bulmer, Esmond	Hordern, Peter	Neubert, Michael
Burden, F. A.	Howe, Rt Hon Sir Geoffrey	Newton, Tony
Butler, Adam (Bosworth)	Howell, David (Guildford)	Nott, John
Chalker, Mrs Lynda	Hunt, John	Onslow, Cranley
Channon, Paul	Hurd, Douglas	Oppenheim, Mrs Sally
Clark, William (Croydon S)	Hutchison, Michael Clark	Page, John (Harrow West)
Clegg, Walter	Irving, Charles (Cheltenham)
Cooke, Robert (Bristol W)	James, David	Page, Rt Hon R. Graham (Crosby)
Cope, John	Jenkin Rt Hon P (Wanst'd & W'df'd)	Paisley, Rev Ian
Costain, A. P.	Johnson Smith, G. (E Grinstead)	Parkinson, Cecil
Craig, Rt Hon W. (Belfast E)	Jones, Arthur (Daventry)	Pattie, Geoffrey
Crawford, Douglas	Jopling Michael	Peyton, Rt Hon John
Crouch, David	Kaberry, Sir Donald	Pink, R. Bonner
Douglas-Hamilton, Lord James	Kellett-Bowman, Mrs Elaine	Prior, Rt Hon James
Drayson, Burnaby	Kershaw, Anthony	Pym, Rt Hon Francis
du Cann, Rt Hon Edward	Kimball, Marcus	Raison, Timothy
Durant, Tony	King, Evelyn (South Dorset)	Rees, Peter (Dover & Deal)
Eden, Rt Hon Sir John	King, Tom (Bridgwater)	Reid, George
Edwards, Nicholas (Pembroke)	Kitson, Sir Timothy	Renton, Rt Hon Sir D. (Hunts)
Elliott, Sir William	Knight, Mrs Jill	Rhys Williams, Sir Brandon
Ewing, Mrs Winifred (Moray)	Knox, David	Ridley, Hon Nicholas
Eyre, Reginald	Lamont, Norman	Rifkind, Malcolm
Fairgrieve, Russell	Langford-Holt, Sir John	Rippon, Rt. Hon Geoffrey
Fletcher, Alex (Edinburgh N)	Latham, Michael (Melton)	Roberts, Michael (Cardiff NW)
Fletcher-Cooke, Charles	Lawrence, Ivan	Roberts, Wyn (Conway)
Fookes, Miss Janet	Lawson, Nigel	Rodgers, Sir John (Sevenoaks)
Forman, Nigel	Le Marchant, Spencer	Ross, William (Londonderry)
Fowler, Norman (Sutton C'f'd)	Lester, Jim (Beeston)	Rossi, Hugh (Hornsey)
Fox, Marcus	Lewis Kenneth (Rutland)	Rost, Peter (SE Derbyshire)
Fraser, Rt Hon H. (Stafford & St)	Loveridge, John	Royle, Sir Anthony
Fry, Peter	Luce, Richard	Sainsbury, Tim
Gardiner, George (Reigate)	McCrindle, Robert	St. John-Stevas, Norman
Gardner, Edward (S Fylde)	Macfarlane, Neil	Shaw, Giles (Pudsey)
Shelton, William (Streatham)	Stewart, Ian (Hitchin)	Watt, Hamish
Shepherd, Colin	Stokes, John	Weatherill, Bernard
Shersby, Michael	Stradling Thomas, J.	Wells, John
Silvester, Fred	Taylor, R. (Croydon NW)	Welsh, Andrew
Sims, Roger	Taylor, Teddy (Cathcart)	Whitelaw, Rt Hon William
Sinclair, Sir George	Tebbit, Norman	Wiggin, Jerry
Skeet, T. H. H.	Thatcher, Rt Hon Margaret	Wilson, Gordon (Dundee E)
Smith, Dudley (Warwick)	Thompson, George	Winterton, Nicholas
Speed, Keith	Townsend, Cyril D.	Wood, Rt Hon Richard
Spence, John	Trotter, Neville	Young, Sir G. (Ealing, Acton)
Spicer, Michael (S Worcester)	Tugendhat, Christopher	Younger, Hon George
Sproat, Iain	Vaughan, Dr Gerard
Stainton, Keith	Wakeham, John	TELLERS FOR THE AYES:
Stanbrook, Ivor	Walker, Rt Hon P. (Worcester)	Mr, Ian Gow and
Stanley, John	Wall, Patrick	Mr. Michael Marshall.
Steen, Anthony (Wavertree)	Walters, Dennis
Stewart, Donald (Western Isles)	Warren, Kenneth
NOES
Abse, Leo	Fowler, Gerald (The Wrekin)	Marks, Kenneth
Allaun, Frank	Fraser, John (Lambeth, N'w'd)	Marshall, Dr Edmund (Goole)
Anderson, Donald	Freud, Clement	Maynard, Miss Joan
Archer, Peter	Garrett, John (Norwich S)	Mellish, Rt Hon Robert
Ashton, Joe	Garrett, W. E. (Wallsend)	Mendelson, John
Atkinson, Norman	George, Bruce	Mikardo, Ian
Bagier, Gordon A. T.	Gilbert, Dr John	Miller, Dr M. S. (E Kilbride)
Bates, Alf	Ginsburg, David	Miller, Mrs Millie (Ilford N)
Beith, A. J.	Golding, John	Morris, Alfred (Wylhenshawe)
Benn, Rt Hon Anthony Wedgwood	Graham, Ted	Morris, Charles R. (Openshaw)
Bidwell, Sydney	Grant, George (Morpeth)	Moyle, Roland
Bishop, E. S.	Grant, John (Islington C)	Mulley, Rt Hon Frederick
Blenkinsop, Arthur	Grocott, Bruce	Murray, Rt Hon Ronald King
Boardman, H.	Hamilton, James (Bothwell)	Newens, Stanley
Booth, Rt Hon Albert	Hardy, Peter	Noble, Mike
Bottomley, Rt Hon Arthur	Harper, Joseph	Oakes, Gordon
Boyden, James (Bish Auck)	Harrison, Walter (Wakefield)	O'Halloran, Michael
Bradley, Tom	Hart, Rt Hon Judith	Orbach, Maurice
Brown, Hugh D. (Provan)	Hattersley, Rt Hon Roy	Orme, Rt Hon Stanley
Brown, Robert C. (Newcastle W)	Hatton, Frank	Ovenden, John
Brown, Ronald (Hackney S)	Hayman, Mrs Helene	Padley, Walter
Buchan, Norman	Heffer, Eric S.	Palmer, Arthur
Campbell, Ian	Hooley, Frank	Parker, John
Canavan, Dennis	Hooson, Emlyn	Parry, Robert
Cant, R. B.	Howells, Geraint (Cardigan)	Pavitt, Laurie
Carmichael, Neil	Hoyle, Doug (Nelson)	Peart, Rt Hon Fred
Carter, Ray	Huckfield, Les	Penhaligon, David
Carter-Jones, Lewis	Hughes, Rt Hon C. (Anglesey)	Perry, Ernest
Castle, Rt Hon Barbara	Hughes, Robert (Aberdeen N)	Phipps, Dr Colin
Clemitson, Ivor	Hughes, Roy (Newport)	Price, C. (Lewisham W)
Coleman, Donald	Hunter, Adam	Price, William (Rugby)
Cocks, Michael (Bristol S)	Irving, Rt Hon S. (Dartford)	Radice, Giles
Cohen, Stanley	Jaskson, Colin (Brighouse)	Rees, Rt Hon Merlyn (Leeds S)
Concannon, J. D.	Jackson, Miss Margaret (Lincoln)	Richardson, Miss Jo
Conlan, Bernard	Jay, Rt Hon Douglas	Robinson, Geoffrey
Cox, Thomas (Tooting)	John, Brynmor	Roderick, Caerwyn
Craigen, J. M. (Maryhill)	Johnson, James (Hull West)	Rodgers, George (Chorley)
Cronin, John	Jones, Dan (Burnley)	Rose, Paul B.
Crowther, Stan (Rotherham)	Judd, Frank	Ross, Stephen (Isle of Wight)
Cryer, Bob	Kaufman, Gerald	Rowlands, Ted
Cunningham, Dr J. (Whiteh)	Kelley, Richard	Sandelson, Neville
Davidson, Arthur	Kerr, Russell	Sedgemore, Brian
Davies, Bryan (Enfield N)	Kilroy-Silk, Robert	Selby, Harry
Davies, Denzil (Llanelli)	Kinnock, Neil	Shaw, Arnold (Ilford South)
Davis, Clinton (Hackney C)	Lambie, David	Sheldon, Robert (Ashton-u-Lyne)
Deakins, Eric	Lamborn, Harry	Shore, Rt Hon Peter
Dempsey, James	Lamond, James	Short, Rt Hon E. (Newcastle C)
Dormand, J. D.	Latham, Arthur (Paddington)	Short, Mrs Renée (Wolv NE)
Douglas-Mann, Bruce	Leadbitter, Ted	Silkin, Rt Hon S. C. (Dulwich)
Dunn, James A.	Lee, John	Skinner, Dennis
Dunnett, Jack	Lewis, Arthur (Newham N)	Small, William
Eadie, Alex	Lewis, Ron (Carlisle)	Smith, Cyril (Rochdale)
Edge, Geoff	Litterick, Tom	Smith, John (N Lanarkshire)
Edwards, Robert (Wolv SE)	Lomas, Kenneth	Snape, Peter
Ellis, John (Brigg & Scun)	Loyden, Eddie	Spearing, Nigel
Ennals, David	Luard, Evan	Steward, A. W.
Evans, Fred (Caerphilly)	Mabon, Dr J. Dickson	Steel, David (Roxburgh)
Evans, loan (Aberdare)	McCartney, Hugh	Stoddart, David
Fernyhough, Rt Hon E.	MacFarquhar, Roderick	Stott, Roger
Fitt, Gerard (Belfast W)	Mackenzie, Gregor	Strauss, Rt Hon G. R.
Flannery, Martin	McNamara, Kevin	Summerskill, Hon Dr Shirley
Fletcher, Raymond (Ilkeston)	Madden, Max	Taylor, Mrs Ann (Bolton W)
Fletcher, Ted (Darlington)	Magee, Bryan	Thomas, Ron (Bristol NW)
Foot, Rt Hon Michael	Mahon, Simon	Thorne, Stan (Preston South)
Forrester, John	Mallalleu, J. P. W.	Tierney, Sydney

Tinn, James	Weitzman, David	Wise, Mrs Audrey
Tomlinson, John	White, Frank R. (Bury)	Woodall, Alec
Tuck, Raphael	White, James (Pollok)	Woof, Robert
Urwin, T. W.	Whitehead, Phillip	Wrigglesworth, Ian
Wainwright, Edwin (Dearne V)	Willey, Rt Hon Frederick	Young, David (Bolton E)
Walker, Harold (Doncaster)	Williams, Alan (Swansea W)
Walker, Terry (Kingswood)	Williams, Alan Lee (Hornch'ch)	TELLERS FOR THE NOES:
Ward, Michael	Williams, Sir Thomas	Mr. Andrew F. Bennett and
Watkins, David	Wilson, Alexander (Hamilton)	Mr. Joseph Dean.
Watkinson, John	Wilson, William (Coventry SE)

Question accordingly negatived.