HOUSING (ENGLAND AND WALES)

HC Deb 20 June 1977 vol 933 cc900-1021

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

4.28 p.m.

Mr. Michael Heseltine (Henley)

This afternoon we are to discuss the Government's housing policies and their wider housing implications. Every debate on domestic matters must reflect the international economic crisis of 1973, and housing can be no exception. But we on the Conservative Benches believe that there are three specific ways in which the Labour Party, first in Opposition and now in Government, have worsened the effects of the international economic crisis on this country.

First in Opposition and then in their early days in Government, between the two General Elections, Labour Members misrepresented to the people the gravity of that crisis, whereas the Conservative Government had begun to take the necessary steps and had put the issues to the country as fairly as we could. It was the Labour Party in Opposition that decried every effort we made to introduce a new awareness of the constraints that would be necessary following the quintupling of the price of oil.

Labour having misrepresented the crisis, its early economic policies when in Government undoubtedly stimulated the rate of inflation in this country, and the national economic dimension to the international crisis was a great deal worse than it otherwise might have been. It is impossible for the housing programme to remain immune from those broad economic trends. If that was not enough, this Government then proceeded to introduce a series of specific measures which singled out housing for particularly harsh treatment.

Let us look in greater detail at the three strands to which I have referred. In the days of late 1973 and early 1974. as we have pointed out on many occasions, there was an abundance of promises as to what the housing policies of the Labour Government were likely to be. They had all the ingredients of electioneering and few practical realities. We pointed out frequently the falsity of the claims that there would be cheap land available, that Labour would reverse the decline in the housing programmes and that we would see a stable building industry and a plentiful supply of local authority mortgages. That was the background of the Government's approach to housing in those days.

But when the Government moved on in their general economic policy, their macro-economics created a climate in which there was no conceivable alternative to a decline in the housing programmes of both the public and the private sectors. With the Government committed to high public expenditure, leading to high inflation and high interest rates, it was inevitable that, with building costs outstripping prices, and with high costs of borrowing and mortgages, coupled, for the free-enterprise building industry, with a diminution in the rate of growth either to nil or to a very low rate, there would be a gradual and increasing downturn in society's ability to pay for extra housing.

The figures are clear. In the 12 months to the end of December 1976, prices rose by 15.1 per cent. and average weekly earnings rose by 11.8 per cent. That is the background against which the community is not able to find the vital resources for private sector housing. One also saw the makings of the economic crisis which was to lead to the constraints on the public sector. Therefore, the nil or low-growth economy does not provide a background against which it is possible for any politician to claim that there will be a maintenance of hitherto higher housing programmes. Yet the Government gave the impression that that situation could somehow be avoided.

I am dealing with specific issues applied to housing, and I believe that they and the general economic background, which the Government have worsened, made it obvious where the programmes that the Government introduced must lead. I was re-reading today the remarkable statements which the then Under-Secretary of State for the Environment, the hon. Member for Manchester, Ardwick (Mr. Kaufman), made in going around the country in order, according to his own words, to get the Chancellor into trouble. He was encouraging local authorities dramatically to increase their housing programmes—intentionally, he said, so that the Chancellor of the Exchequer would be faced with a worsening economic problem.

It is not often that I congratulate the hon. Gentleman on success, but without doubt he achieved success in that direction beyond his wildest dreams. The Government pursued policies which, alone, with the exception of France, among equivalent economies, placed reliance on public sector provision of housing. If one looks at the chart showing the contributions of the public and private sectors, one sees that we are second in relying on the public sector for the provision of new houses. That is an unhealthy over-reliance on the public sector, and it provides the least effective deal from the community's point of view.

Secondly, partially for reasons to do with the building industry itself and partially for their own egalitarian concepts, the Government have introduced measures which have had a severe demoralising effect upon companies in the building industry. For example, the capital transfer tax, as in so many other industries, has had the effect of making a significant number of medium-size companies wonder what is the purpose of sweating it out and staying in business.

Then there is the Government's threat of legislation to favour direct labour organisations. Nothing is more revealing of the Government's cynical approach to politics than their method of solving the direct labour problem. We made it clear that, if the Government's words about direct labour measures meant anything, their legislation could find its way through the House, because we are as keen as the words used by the Labour Party in its policy document on finding a solution. If it were a question of improving efficiency and getting an element of accountability in direct labour organisations, as the Government said it was, there would be no difficulty in persuading the House to pass such a measure. We made it abundantly clear that such a Bill would have been acceptable with that express objective. But that was not the true objective.

The true objective was dramatically to extend the powers of direct labour departments of local authorities, and we made it clear that there was no way in which we were prepared to tolerate such a doctrinal extension of Socialist powers. The Government abandoned the opportunity that we would willingly have given in order to improve the efficiency of direct labour organisations, and now the Leader of the House has made it clear that the moment there is a majority—if ever there is—behind a Socialist Government we shall again be faced with the threat of legislation to extend the power of direct labour departments.

Thus, everyone involved in deciding whether to invest in a building company or to remain in the industry knows that it is the express purpose of the Labour Party to give a special and privileged position to direct labour organisations. Why should anyone continue to go through the agony and anguish of maintaining a posture in the building industry if it means that in the future there will be a growing threat from direct labour?

The other side of the coin is the use that it is now widely believed the administrative machinery is making of the 714 certificate. One can argue a narrow administrative point for the introduction of 714 certificates, but many people outside believe that the certificates are being used not to improve the efficiency or administration of the industry but to squeeze out a number of small businesses involved. The important thing is not what Ministers say or believe but what those people engaged in the industrial activity affected by 714 certificates believe—and they believe, widely and sincerely, that they are being discriminated against.

In the circumstances it is not surprising, as the Municipal Review has made clear, that we now have a higher proportion of unemployment in the construction industry even than in the high watermark of unemployment under the Labour Government in 1931. More than 220,000 people in the construction industry are unemployed. The previous record was 154,500, about 18 per cent., when unemployment reached the ultimate record in 1931.

The next area where the Government have specifically, for doctrinal reasons, been prepared to introduce discriminatory concepts in housing is in the withdrawal of tax reliefs. I have heard and can understand the words of the argument that one should not allow mortgage interest deductions on high levels of mortgage The theory, I suppose, is that that would mean that there would be more money to go round and that there would be a more egalitarian use of resources. In practice, however, what happens is that a significant number of people who would like to trade up from their existing level of house to a higher level are prevented by the tax system from doing so, which means that the level of demand for low-priced houses is kept higher than it otherwise would be. The effect is to keep the level at the lower end of the market higher than it would be otherwise, and the people who suffer are not only, to to some extent, those at the top end of the market but, even more dramatically, those at the lower end who cannot get houses from people who would like to sell them but cannot do so because of Government policy.

What is the Government's position on this matter? Labour Party policy is to remove interest relief on mortgages over £25,000. Anyone trying to plot the future clearly understands what the Labour Party would like to do. There is an electoral difficulty because, with the best will in the world and the most optimistic of scenarios, we shall be fighting a General Election in months rather than years. Therefore, the fear is that the issue will be fudged in the election but that after the election, if the Labour Party won, there would be a toughening of the mortgage interest relief provisions. That would be another disincentive to the expansion of the market.

The other matter which was once regarded as the jewel in the crown was the whole paraphernalia of promises which surrounded the Community Land Act and the development land tax. I shall deal with that matter later.

Against that background, it is not surprising that the latest figures for starts are as depressing as they are. According to the 2nd June Press release from the Department of the Environment, public sector starts are down 39 per cent. on a year ago and private sector starts are down 25 per cent. on a year ago. I accept that there has been a tiny flicker of improvement in the private sector in the last month, but the improvement is a percentage increase on such a low base as to mean that we are dealing with very small figures indeed. Overall, the level of decline in starts means that we face a very grim year for new housing in total. The local government figures particularly show dramatic reductions. We have now come virtually full circle from the heady days when the Under-Secretary of State for the Environment was first getting the Chancellor of the Exchequer into trouble.

It was impossible for the Government to sustain the momentum which they had put behind local government housing. It is now recognised everywhere, except in the published words of the Government, that local authority house building is the least effective form of provision of new houses. Every new council house built commits the community to a subsidy of more than £1,000 in the first year. The NEDC report on housing makes the point that it will be into the next century before we see the profit on the council houses being built now.

I understand—I hope that the Secretary of State will take the opportunity to confirm this—that the good news is that after three years of trials and tribulations the housing review is at last on us and that next week, despite all the delays, we shall be allowed to see the conclusions which the Government have reached. After three years of intensive wrangling and bickering, the conclusions had better be impressive.

Mr. Frank Allaun (Salford, East)

Does the Conservative Party, if it should become the Government, intend to cut down the production of council houses on which most working people do and must depend? [HON. MEMBERS: "Nonsense."] Let the Shadow Minister answer. Secondly, does the Conservative Party, if it became the Government, intend to cut down the subsidy on council houses, which would inevitably increase rents for millions of people? May we have a straight answer?

Mr. Heseltine

The White Paper Cmnd. 6393 commits the Government to increase to 50 per cent. rents as a proportion of total housing revenue by the end of this decade—in three years. By making that important judgment the Government are moving in the right direction, and as a bipartisan approach—[Interruption.] I am simply quoting the Government's White Paper and the Chief Secretary's own statements on these matters. I believe that, broadly, that is the direction in which the Government will be forced, and I should support them in the policy outlined in Cmnd. 6393 in general terms, without naming specific figures, because I believe that they were right. Therefore, we can achieve a bipartisan approach to the question of council rents.

The hon. Member's second question was whether the Conservative Party would reduce public authority starts. The problem is that public authority starts are falling so fast that we cannot tell what their level will be at the next General Election. It is therefore impossible for us to answer the question. If the hon. Member will tell me how far they will have dropped by the time of the next General Election, it will be possible for me to make a judgment.

We believe that there is a strong argument for reallocating housing resources because we think that there are ways in which we can achieve a better deal for the community. I shall explain later where we think the money should be spent.

On the question of subsidisation of the council tenant and the owner-occupier, it is incontrovertible that the social benefits per pound spent in subsidies argue strongly in favour of encouraging the private ownership of homes. According to the latest information, the average owner-occupier gets a benefit of about £118 a year. The average council tenant gets a subsidy, including rebates, of well over double that sum—about £273 a year. The average amount of mortgage relief for someone taking out a mortgage today is £300, whereas the average amount of subsidy from which a new council house tenant benefits in the first year is over £1,000. Therefore, it is dramatically more expensive to sustain the public provision of housing than is private provision.

Mr. Bruce Douglas-Mann (Mitcham and Morden)

Does the hon. Gentleman agree that, on average, owner-occupied houses are sold every seven years and that consequently the subsidy starts again at a very much higher level, and that a subsidy is received in respect of an owner-occupied house which is 100 years old, whereas the subsidy on a council house ceases within 10, 15 or 20 years, depending on the rate of inflation?

Mr. Heseltine

It is the people with whom we are concerned. The object is to encourage people to own their houses. After helping the majority of people to own their houses, we are still subsidising them by only £118 a year.

The average mortgage lasts for seven years. It is desirable for people to move up the scale and to acquire more expensive houses as their earnings increase, because it encourages people to save and to move and it enables houses at the lower end of the scale to be released for young couples buying houses for the first time. Therefore, in every way it is a desirable social objective to encourage people to move up the social structure, and I would not wish to do other than to put that firmly at the forefront of the policy.

Therefore, to use resources economically in continuing a massive council house building programme means making the judgment to achieve less in terms of new housing than would be possible if one chose an alternative method of using the money. That is why we argue persistently that there is a need for a new emphasis; and, although there must be a continuation of local authority provision, particularly for the elderly and in stress cases, the emphasis should be put more on modernisation and renovation for the provision of incentive for direct owner-occupation.

It is a sad reflection that in its October 1974 election manifesto the Labour Party should have given the impression that there were easy alternatives available. The party claimed that Local councils' lending will be expanded so that they can play a major part in helping house purchasers". Nothing could have been put before the electorate in starker terms or in more dramatic language. The Labour Party spoke of young people wanting to buy their own homes. After all, that is a party which is obsessed with election manifestos, with people hawking their consciences around and saying that this or that is writ large and that the party has promised to do it. It is frequently said that the party must not deviate by one fraction of a millimetre from the ark of the covenant or the tablets of stone.

When the Labour Party said that it would expand local authority lending, potential young purchasers were entitled to believe that the words meant what they said. Yet the £734 million available from this source of revenue hi 1974–75 is now down to £116 million. That is the scale of the reduction in the provision of local authority mortgages from a Labour Government who had promised young couples that this sort of provision would be increased.

The Government have been forced to introduce tough controls of local authority building programmes, and all over the country a large majority of local authorities, Labour and Conservative, are being forced by the constraints of the Government to reduce the levels of local authority building. [Interruption.] The Secretary of State is tut-tutting and accusing me, therefore, of giving a slightly false impression.

I shall read a letter written to my right hon. Friend the Member for Knutsford (Mr. Davies) from the borough of Trafford, in Greater Manchester. It was discussing the problems faced in that area, where properties had been bought which it had been intended to modernise. This is what the chief executive officer of the borough said: It was intended that the property would be converted during the current year but the Department of the Environment have so cut back the Council's allocation under Section 105 of the Housing Act 1974 for the improvement and conversion of Council dwellings that it will no longer be possible to continue with the conversion of this property this year. In fact the allocation is so low that it is unlikely that the Council will be able to continue with all schemes commenced in 1976–77 let alone commence any new schemes…. In the circumstances, the only thing the Council can do with the above property is to keep it as secure as possible from vandals in the hope that the DOE will allow an increase in the 'Section 105' allocation or give an allocation in 1978–79 sufficient to enable conversion work to proceed during that year. If the Secretary of State is suggesting that there is no constraint on local authorities, that is out of accord with the evidence flowing in to hon. Members on both sides of the House. I say to the Secretary of State and to the House that I would not underestimate the difficulties of stimulating the private sector in the economic climate that the Government have to a great extent created, but I believe that the private sector now offers the only alternative for stimulating housing supply in the foreseeable future.

With the constraints on public expenditure which the country now faces, the alternative must be to look to the private sector. But there are other arguments. The fact is that private ownership is what the community at large, to an overwhelming degree, sees as a prime political objective. Ownership is what the people want, whether they be in rented private accommodation or in local authority rented accommodation.

Given that the public sector has not the resources to increase its commitment to housing, and given that there is, therefore, no method by which the Government can prime the housing pump on a large scale, how are people to be persuaded to part voluntarily with a higher proportion of their savings, which they are now using for a range of other things, and to put this into better housing? The only way in which to do that in a nil-growth or low-growth economy is by giving an infusion to their commitment, and that can be done only by making possible an increase in ownership.

The policies which seem to me to be needed are those which place special reliance on the incentives to the private housing provision sector. Without listing them in order of priority, there are sx suggestions that I put to the Secretary of State, not altogether with total optimism.

I believe that the whole charade of the Community Land Act must now be scrapped. In reality, if one can say so in the privacy of these four walls, the Secretary of State knows that the Community Land Act is a major Socialist disaster. The Secretary of State knows as well as I do that his GNLA 12—for the benefit of any hon. Members who have not kept abreast with the latest terminology, these are General Notes to Local Authorities—has destroyed the Community Land Act.

The whole concept was to have fastrolling programmes building up in the future so that local communities could know that there was an ongoing pro- gramme constantly onstream, regardless of intervention one way or another. But all that has gone, because local authorities, under the Secretary of State's circular, now have to get approval from the Secretary of State. To get this approval, they have to show that any land they acquire under the Community Land Act is not only to be sold off within two years but also sold at a price which reflects the cost price. There is, therefore, no opportunity for the local community to stockpile, to have a rolling programme or to have any massive future plan. It has been made perfectly clear that with these great constraints, local authorities no longer have the ability to finance such a programme, even if they wish to do so.

In support of my general contention, I refer the House to a statement from the Association of Metropolitan Authorities, reported in Building Design of 17th June. The House will know that this is a Labour-controlled local government organisation. The chairman of the AMA, Jack Smart, is reported as saying that controls are causing frustration, disillusionment and, worst of all, loss of opportunities. Various examples of the problems are given. The chairman points out that the restrictions have resulted in a catalogue of potential developments lost, delayed or diverted to privately owned land. That organisation represents 77 authorities. As I have already indicated, it is a Labour-controlled local authority association talking about a Labour Government.

The concept of the Community Land Act, therefore, is as dead as the dodo in regard to its positive commitments. But that is not the end of it, because it hangs like a spectre and is always being referred to. Long speeches are made by local Labour members saying that the time has come to resurrect it or that more money can be obtained for the purpose. It is, in fact, an illusion that will not come about. Given that the Community Land Act process of compulsion cannot come about, because of the financial constraints, what, then, is the only alternative? The only alternative is the private sector.

The first issue is the provision of land. Here we run straight into the barrier of the development land tax. Given that one is dependent upon private owners of land to bring forward land voluntarily for development, what conceivable incentive is there for doing so if they know that they will have to pay about 66⅔ per cent. or 80 per cent. tax, and by the end of the decade perhaps 100 per cent., because that is the levy imposed by a Labour Government? There is no way in which land will be made available when we have tax rates of that order. The fact that we have that barrier is a direct consequence of the intervention of a Labour Government. We say clearly that the Community Land Act and the development land tax are barriers to wider ownership of homes.

Mr. Frank Allaun

I am listening carefully to the hon. Gentleman, and I should like to put to him a question about his party's policy. Do his words mean that the Conservative Party, if in power, would remove the development land tax, when previously the Conservative Party has taken the view that it would maintain that tax? Since vast fortunes can be made overnight once planning permission is given to build on potato fields, does it also mean that the Conservative Party will allow such resources to be taken away from the community?

Mr. Heseltine

No, that is not the policy of the Conservative Party, as the hon. Gentleman knows. We are saying that a balance has to be struck. There has to be a form of capital taxation, as we have made clear. There is no issue of principle between the hon. Member for Salford, East (Mr. Allaun) and the Opposition. The difference lies in our practical approach to the supply of land. If one is totally dependent on the voluntary provision of land, one must pitch tax rates at a level at which supply of land will flow forward. That is our position, as we have made abundantly clear.

Mr. Douglas-Mann

Is the hon. Gentleman suggesting that the present reduction in private house-building is caused by a shortage of land, or by a shortage of investment, or a lack of willingness to invest? I do not think the hon. Gentleman is seriously suggesting that there is now a shortage of land, but I should like him to clarify that point.

Mr. Heseltine

Undoubtedly the view of the experts is that the shortage of land is a growing feature as money from the banks dries up. A large amount of land was available to house builders in the early 1970s and previously. Those builders are beginning to work through that land, and the evidence is that as time passes the supply of land will become more and more a relevant factor. There is a growing anxiety in the industry, and if the industry is to revive we must cope with this problem.

Mr. Michael Latham (Melton)

Is my hon. Friend aware that a survey conducted by the House-Builders Federation dated 19th May illustrated that 85 per cent. of house builders considered that the lack of building land was likely to restrain their output to some extent?

Mr. Heseltine

That is the kind of comment that is made to me by constituents. I am grateful to my hon. Friend for reminding me of that survey.

A further step which the Government should now take is to give specific incentives to first-time buyers in the form of help with their deposits. The Government should use some of the funds available and should divert them to that desirable social end.

Furthermore, the Government should commit themselves wholeheartedly to the sale of council houses and flats. The Greater London Council is to be congratulated on its total commitment to this principle in the recent election campaigns. There has been a considerable response. I understand that 800 people have asked to be put on the list of those wishing to buy council houses. Such people should be positively encouraged with every incentive, and the GLC obviously is taking that line.

I should like to mention one area of confusion, which I hope the Secretary of State will clarify. There is a dual situation whereby, with the right hon. Gentleman's permission, a 30 per cent. discount can be granted off market value—and without such permission there is a 20 per cent. discount. It would help the situation if the right hon. Gentleman would announce that he will make a general disclaimer in regard to requests for approval. He should announce that it will be in the gift of local authorities to move to a 30 per cent. disclaimer without further permission being required. This is a significant way to encourage sales. I believe that the facility of council house sales to tenants is the single most dramatic method by which to extend home ownership in the short term.

Such a policy would also have the effect on the part of those who become home owners to commit an increasing proportion of their income to improving and repairing those homes since they will have a direct personal involvement in them. It also means that local authorities and communities make a profit. [HON. MEMBERS: "Oh."] I know that it does not come easy to Labour Members to hear such things, but the figures of loss advanced by Mr. Bernard Kilroy have been said by Mr. Peter Sparling, the Chairman of the Leeds City Council Housing Committee, to be fallacious. The reason that Mr. Bernard Kilroy is wrong is that his assessments of the relative rates of increase in terms of rent and repairs are not based on actual historical calculations.

If Labour Members are saying that a profit will be earned more quickly if the council house is let to tenants, they are suggesting that the rents will go up faster than will the repair and management costs. One has only to look at the record of the Labour Party and at what has happened since they have been in power. A high rent policy is implicit in Mr. Kilroy's assumptions. The Labour Party will not be able to resist intervention in rate and rent policies. Therefore, Mr. Kilroy's suggestions do not stand examination.

Mr. Douglas-Mann

I am sorry to intervene yet again, but the hon. Gentleman referred to Mr. Kilroy's assumptions. Mr. Kilroy in his calculations worked out an assumption of about 10 per cent. annual increase in rents. If one examines the figures over a number of years in Leeds, one sees increases of 15 per cent., 12 per cent., 6 per cent., and 13 per cent. This can be seen from Table 6. That shows an increase substantially in excess of the assumptions made by Mr. Kilroy. Therefore, the hon. Gentleman's figures are totally misleading, because Leeds bases its figures on projections of figures which have not been realised. It is Mr. Kilroy's figures that are realistic.

Mr. Heseltine

The figures put out by Mr. Kilroy do not accord with the figures put out by Mr. Peter Sparling, Chairman of the Leeds City Council Housing Committee. This is not a subject for discussion across the Floor of the House. The fact is that for there to be a profit on a council house letting—which cannot take place in the first year because we understand that the subsidies are over £1,000—there has to be a relative change in the balance between rents and repairs. Rents must rise faster than repairs. As the repair bills have been rising at a rate of 15 per cent to 20 per cent. in the current year, rents will have to increase in order to improve the position of the State investment. It is an unlikely situation to put by way of hypothesis.

The next area which the Secretary of State should take as a target relates to the sale of new town assets. In case the Labour Party says that it is not prepared to consider a half-way house, I wish to say how pleased I was to see the Housing Corporation Press Release of 15th June because it showed that the City of London raised £35 million to make good the cuts in public expenditure imposed by this Government on housing associations.

I was delighted to hear that news. I have always believed that the savings of the British people, managed by the City of London, should be made available for housing. That is precisely what has happened. I remember in the last housing debate asking the Secretary of State for the Environment to encourage these moves, and I believe that the right hon. Gentleman has committed himself in principle. I hope that we shall hear no more from Labour Members against the concept of encouraging private sector investment in this way.

Why not go further, and encourage as many of the new towns as wish to do so to sell their freehold assets and thus raise substantial sums of money for a variety of purposes that it would be profitable to discuss? An obvious but important point contained in the Housing Corporation Press release is that it says that devices can be reached whereby a flow of private funds to the development and housing funds can be produced. I hope that the Secretary of State will deal with that in his housing review. The right hon. Gentleman should bring a more dynamic approach to the planning procedures which, in terms of time taken, are making substantial contributions to the cost of new housing.

I should like the Secretary of State also to consider the statistics in the Housing and Construction Statistics, volume 20, for the fourth quarter of 1976. These show that it now takes between 19 and 26 months to complete a new house or flat in this country. That seems to be an inordinate period of time, and the Secretary of State should look into the matter. It means that resources are being committed over a long time and, because of the time taken, the cost of building new homes is rising dramatically.

I now wish to turn to the renting side of the problem. There are some 5 million tenants in local authority housing and that means that there must be a great deal of political concern. As has been established in earlier interventions, the Government are committed to increasing the proportion of rent to 50 per cent. of the housing cost by the end of the decade. We all want to know the Government's latest view on the matter. I believe that the Government will want to await publication of the housing review which is due next Tuesday. In these circumstances we shall look carefully to see whether the Government have, for electoral reasons, abandoned the pledge spelled out in Command Paper 6393. Certainly this or any Government will be forced by the circumstances of financial restraint to move in that direction and it would be intolerable to do that unless there were a number of other incentives surrounding that movement. There would have to be a determined attempt to sell—and I mean really sell—council houses to council tenants.

We should also expect to see increased publicity for rent rebate schemes that were introduced under the last Tory Administration, because it is a sadness to many hon. Members to find while doing their constituency casework that many people do not know their entitlements in this matter.

There would also have to be a move forward with the concept of a tenants' charter. There are a whole range of areas in which bureaucracy denies to tenants a proper rôle in the management of their estates. The management side of the tenants' charter is probably the most important, because it should be possible to devolve a degree of responsibility and thus eliminate a certain amount of bureaucratic influence if tenants played a greater rôle. The Secretary of State should also encourage the experiments that are now being conducted by the GLC, where "homesteading" is becoming a new word in the domestic housing vocabulary. It is an admirable concept of self-help that should certainly be encouraged across the country.

I now wish to talk about private rented accommodation in which 2 million or 3 million people—often of the lowest income groups in society—find their homes. Everybody understands that this is the area in which the most acute problems are to be found. We have a number of suggestions that could be of help.

Whether one likes it or not, there are many empty properties, and while the present paraphernalia of the law remains as it is those houses will remain empty. The objective of those politicians who have a detached view of the matter must be to find solutions to the grave problems that must be overcome and to help that large number of people who do not live in the sort of housing for which we all wish. [Interruption.] The problem of the hon. Member for Salford, East is that he has a parrot cry for every sensible debate on any subject. One has only to mention a major national crisis affecting the lower end of the housing market and the hon. Member for Salford, East produces his parrot cry. We do not advocate conditions that would permit such a fringe of abuse as causes concern and does harm to an otherwise perfectly reasonable industry. We should not tolerate the reintroduction of the techniques that allowed such people as Rachman to earn such discredit.

This is a problem that concerns people on both sides and I should like to look now at what we can do to deal with it. The concept of a shorthold should be tried. We shall try it when we are in Government and I hope that the party opposite will not immediately indulge in yah-boo techniques of party politics to try to discredit the scheme before it has had a chance to work. We shall certainly introduce it, because it would be better for people to be allowed to enter into fixed period leases on the clear understanding that at the end of the time fixed there would be no further commitment to letting. It would be a clear understanding between landlord and tenant. We should want to see duties imposed as much upon on the landlord as on the tenant but it should be a contract freely entered into by both sides. It should be given a chance to work.

The Secretary of State should also consider an extension of the Bromley scheme, whereby private institutions could be encouraged to build, for example, on local authority land—where the local authority produced the land—for open market rent. There should be a contract that all parties concerned should accept. It would not prejudice the political freedom of local authorities. The private provider of capital would, in fact, be using the savings of the life insurance companies and pension funds and should be allowed to charge an open market rent for the properties. If local or national Government intervened to prevent that open market rent there should be a right of compensation for those people who had invested. Nothing could be fairer than that. It means that there would be an opportunity to encourage home building together with an assurance that if the experiment did not work those savings that had been invested would not be put at risk.

The concept of the North Wiltshire scheme offers a real opportunity of partnership between the public and private sector and the Secretary of State should encourage it.

I also wish to put a personal point of view. We all understand that there is a real difficulty with private rented accommodation. There are good and bad landlords and good and bad tenants. With 2 million people involved there will always be that mixture of human beings. The question is how we shall deal with the situation. We should move to the sort of experiments that I have put forward and to which my party has been committed for some time. Other similar experiments have been put forward. I believe that we should set up a Select Committee of the House to monitor what is happening on the ground, to judge the facts and to help up to make future judgments. We cannot lightly allow 2 million to 3 million houses to continue declining as they are now doing because we cannot solve the differences between two political parties in trying to judge the issue.

The severity of the national economic crisis that now besets the country has been gravely worsened by the Government, and not only in national economic terms, because the Government have introduced specific measures that have harmed the house building and home owning industries. The Government's total reliance on the public sector has proved to be illusory, and they are doctrinally unsuited to changing direction and to putting their faith in the direction that we advocate—that is, home ownership and encouragement of the private market. That is the only option left and the sooner that we move in that direction the better.

5.19 p.m.

The Secretary of State for the Environment (Mr. Peter Shore)

The last Supply Day debate on housing was just two months ago, on 21st April. I am therefore puzzled that the Opposition wish to return to this subject so soon. Before I heard the speech of the Opposition spokesman, the right hon. Member for Henley (Mr. Heseltine), I had, perhaps optimistically, assumed that he was returning to the subject in order to withdraw some of the more extravagant claims that he made on the last occasion about the total collapse of our housing policy, and that he wanted to take the opportunity of expressing some little satisfaction about the improvements in the housing prospect that are now opening up.

However, having listened to the hon. Gentleman's speech, I find that he has not brought anything before us on this occasion that he has not said before. I do not altogether complain of that because we must go over much of the same ground. The hon. Member for Henley went over rather familiar ground and made one or two points on which I shall comment shortly, but the most conspicuous point in his speech, bearing in mind that our last debate on housing was only two months ago, was the absence of any mention of the great improvement in housing prospects as a result of the further and most welcome reduction in the mortgage interest rate from 1st July. This is the one major improvement since our last debate on housing and the hon. Gentleman said not a word about it. That gives some indication of his approach to housing.

Mr. Heseltine

Let me say how pleased I am that, after three years, the Government have got back to where they were when they took office.

Mr. Shore

It was rather grudging and a little late, but we got it in the end, and I thank the hon. Gentleman.

May I ask the hon. Gentleman that, when he is making strictures about the Community Land Act, he should think much harder about his future policy on land. It must be welcomed on both sides of the House that there has been a reduction and stabilisation in the price of land for housing in the past three years. When the Conservatives came to power in 1970, the price of a typical housing plot was about £908. By following reckless financial policies and through a lack of land control policies, that Government ensured that, by the second half of 1973, the cost of a typical plot of land had risen to £2,741—an increase of 200 per cent. in three years. By the end of last year, the average price had fallen to £1,879—a reduction of about a third in three years. Before closing his mind to the prospects and possibilities that have opened up most beneficially as a result of the Community Land Act, the hon. Gentleman should reflect in detail on what went wrong last time and see that it does not happen again.

The hon. Gentleman's remarks about the building industry were either sheer humbug or were based on misconceptions. No one could seriously argue that the imposition of a capital transfer tax and the possibility of a modest increase in direct labour organisation powers could have had a serious effect on the building industry. The reduction in overall demand has had an effect and there was a strange anomaly in the hon. Gentleman's speech. Whatever his enthusiasm for owner-occupation, the past three years, in which, as he properly recognised, there have been major economic problems, have seen a substantial increase in the level of public sector building. Without that, demand in the building industry would have been noticeably lower and, with that lower demand, there would have been unemployment even higher than the unacceptable levels of today.

I wish to turn to some of the changes and some of the future possibilities in housing. The biggest single change since we last discussed the subject has been the fall in the mortgage interest rate. The reduction on 1st July will follow the 1 per cent. reduction on 1st May, and this reflects general decline in interest rates that has occurred since the December measures. This, in turn, is directly assisting private builders.

Looking back over the past three years, one of our most important successes has been our relative stabilisation of the flow of mortgage funds—in marked contrast to the chaos of feast and famine that we had under the last Conservative Government.

Mr. Nick Budgen (Wolverhampton, South-West)

Is the right hon. Gentleman serious in saying that he has stabilised the money going into the building societies? They are wholly independent organisations.

Mr. Shore

I am not saying that we have a command relationship with the building societies, but during the difficulties of 1974—a period of total collapse in the private house building programme—when there was no mortgage money available, we offered £500 million to get things going again and entered into talks and an agreement on a continuing basis with the building societies to encourage them to build up reserves against inflows and outflows of money so that the situation that occurred in 1973 would not recur.

In the past year, during which there have been great upheavals in the money markets and a substantial outflow of funds, the stabilisation arrangements have turned out to be pretty satisfactory. Indeed, they have enabled the building socities to lend at a rate of £500 million a month in the second half of 1976—a period of great difficulty—compared with an average of £520 million a month in the first half of the year. That was quite remarkable when one considers that the inflow of funds dropped appallingly in the second half of the year.

Despite the fact that the societies have reduced their share rate to savers, there is a good flow of new receipts and they were able to offer loans of £666 million in May compared with £509 million in March.

The average annual rate of starts in the private sector is, because of the measures that we have taken, holding fairly steady. It was 150,000 in 1975 and 155,000 in 1976. The builders' own forecast for this year is 145,000. There is growing confidence about the prospects for this year and even more about the prospects for next year. Certainly we are a long way from the collapse that hon. Members opposite were ghoulishly predicting in our November debate.

Turning to the prospects for building in the public rented sector, we made provision at the end of last year for 150,000 starts this year. Since then, we have been able substantially to restore the £57 million cut in the Housing Corporation's programme which I was pleased to hear the hon. Member for Henley welcome. The Corporation has been able to borrow £35 million from the financial institutions, and I hope that a further £15 million can be arranged later this year.

However, I am the first to admit that progress in public sector new housing so far this year has been disappointing and a little puzzling. It would appear that the moratorium we had to impose for a month last summer and the working out of an agreed programme for the stress and non-stress areas may have checked some of the momentum of local authority programmes. The wet spring may have played some part too. However, it is the local authorities and not the Department of the Environment that are responsible for erecting houses. As both I and my right hon. Friend the Minister for Housing and Construction mentioned in the last housing debate, we are becoming increasingly concerned that some Conservative district councils may be unnecessarily cutting back their programmes to figures well below those we had agreed for their areas.

Mr. Heseltine

Does the right hon. Gentleman agree that it is scandalous that, having imposed the most stringent public expenditure cuts we have seen, he now tries to pretend that it is Conservative authorities that bear responsibility for cutbacks? He will find when the figures appear that the cutbacks are spread between Conservative and Labour coun- cils, unless he has deliberately distorted the flow of funds to ensure otherwise.

Mr. Shore

The hon. Gentleman is wrong about these cuts being the most stringent ever. We had to reduce planned new starts from 170,000, as being roughly, the figure at which they were running, to 150,000. I thought that the best way of handling that reduction was to cut back on the non-stress areas and to allow the stress areas, the areas of obvious housing shortage, especially rented housing, not to cut back their programmes. I deliberately arranged matters so that they would not have to cut their programmes. Having come to an agreement with those areas, we now find that a number of them are beginning to cut back upon the programmes that we had allotted and agreed with them.

It is no good the hon. Gentleman blinking this off. It is an important matter. I believe that we have to maintain a programme of the size that I have indicated. Leicester and Nottingham were two cases mentioned on the previous occasion. We have now the example of the GLC, which has announced that it is about to cut its programme by nearly a half by stopping all new building contracts in outer London, and outside London, too.

Mr. Heseltine

The Secretary of State is clearly aware that the GLC was elected to reduce that form of total commitment. Secondly, it was elected to concentrate resources on the inner city problem. That is the policy to which he has been paying lip service. Now that the GLC is doing it, he criticises it.

Mr. Shore

I shall return to the inner city problem, have no fear about that. I assure the House that we are determined to do all that we can to maintain the momentum of the housebuilding programme. I have already asked for reports from my Department's regional offices on the take-up of housebuilding allocations. I am ready to reallocate to willing authorities allocations not taken up elsewhere. We have already done this in the East Midlands region. Secondly, I have considered carefully reports about difficulties that some authorities have had in meeting the cost yardstick. I am pleased to tell the House that later this week I shall be announcing an increase in the yardstick, which will take especial account of the difficulties that have been experienced in the Northern, North-West and Yorkshire and Humberside Regions.

Mr. Frank Allaun

Clearly I cannot support the Opposition in their criticism. They were foremost in demanding public expenditure cuts. Nevertheless, does my right hon. Friend agree that there have been serious cuts in the past year in council house building, improvements, mortgages and acquisition? Are there not grounds for restoring those cuts and going further than he has just announced?

Does my right hon. Friend agree that the Government have benefited in three ways? First, there has been the reduction in interest rates that has benefited the Treasury by millions. Secondly, there are a quarter of a million building workers who could be taken off the dole if this programme were embarked upon. Thirdly, there is the £2½ billion miscalculation that the Treasury made in estimating the public spending deficit. I put it to my right hon. Friend that he now has an opportunity to restore the serious cuts that were made last year.

Mr. Shore

I have indicated that I am anxious to sustain the housebuilding and expenditure programmes at the levels that have already been indicated. If I have to reallocate resources between authorities to achieve that, that is the first thing that I shall do. Secondly, my hon. Friend makes the point that as and when the economic situation eases, resources should be made available for increasing housing expenditure. That is something that I cannot anticipate, but I assure my hon. Friend that if resources become available the Department of the Environment, which I hope has some voice in these matters, will be doing its best to get a proper share.

I turn to a matter that is strictly relevant to what my hon. Friend has said—namely, the progress made in improving existing houses. As the House knows, we were able to increase the allocation under this programme by about £30 million only two months ago. It was that £30 million that was made available through the change in the financial situation that occurred along the lines that my hon. Friend indicated.

Mr. Arthur Jones (Daventry)

Is the right hon. Gentleman saying that capital resources for housing are now available to the extent that he is prepared to allocate resources regardless of housing need to be established by the local authority?

Mr. Shore

I should not like to say that that is so regardless of housing need. On the contrary, I believe that there are considerable needs. I am saying that if authorities that have recently agreed to have substantial programmes do not take them up, I am prepared to reallocate—this is because we have made provision for such expenditure—to other authorities that have equal needs and are prepared to make greater progress in tackling them.

Opposition hon. Members have been making play of comparing improvement figures before the 1974 Act with those that came afterwards. They know that there were bound to be changes following the 1974 Act. That is because so much of the activity between 1969 and 1974 was the result of time-limited schemes. They were specifically designed as a fillip.

Opposition Members must also accept that the 1974 Act tightened conditions and followed closely the White Paper that they produced in June 1973. That White Paper was a notable exercise in self-criticism of the indulgence of the earlier scheme for housing improvement grants.

I have said on many occasions that the separate compartments for new building, rehabilitation and improvement in the public sector have not been satisfactory and may have led to distortions in local authority programmes. I have followed through that concern this year by permitting a much greater degree of virement, or switching, between budgets, than was allowed in the past.

I am pleased to tell the House that for 1978–79 we intend to put both new housebuilding and public sector improvement into one block allocation to give authorities greater freedom over how they meet their priorities in this important sector. A circular has already been discussed in detail with the local authority associations and it will be published at the end of the month.

Mr. Hugh Rossi (Hornsey)

I am grateful to the right hon. Gentleman for the important advance that he has made. On the assumption that local authorities take up the invitation that he has given them in this new way of allocating money and concentrating on improvement rather than new building, is he likely to go back on such authorities later and chide them for doing just that, because new house building figures in their areas have not been as attractive as they would have been if they had not availed themselves of the opportunity that is being given to them?

Mr. Shore

We shall have dialogue with the authorities concerned. We shall have considerable time for that dialogue. We are talking about 1978–79 and we have the greater part of a year to engage local authorities on the balance of their programmes. In our discussions we shall try to work out with them some generally agreed assessment of need and how it can best be met. Having made that general assessment, I shall not be chiding them. As the hon. Gentleman realises, I shall be giving them considerable freedom of movement within the blocks that we establish.

There is one last matter that I wish to draw to the attention of the House in making an up-to-date review of what has happened since our last housing debate. I wish to comment upon the first results that have come from the 1976 housing conditions survey. I hope that we shall have a full report before very long.

The first results indicate a welcome reduction in both the number of houses which are unfit and those which lack the basic amenities. In England and Wales there are now estimated to be about 900,000 unfit houses compared with 1¼ million five years ago. That is moderate progress. A further 1 million houses which are fit lack one or more of the basic amenities. In 1971 the comparable figure was 1.8 million. Therefore, we have reduced from 1.8 million to 1 million in five years.

Mr. Wyn Roberts (Conway)

Can the right hon. Gentleman give the separate figure for unfit houses in Wales according to the 1976 survey?

Mr. Shore

I am sure that I could, but I shall leave it to my hon. Friend the Under-Secretary of State for Wales to mention that later.

Mr. Stephen Ross (Isle of Wight)

Does the right hon. Gentleman intend to deal with improvement grants and the increase in rateable value limits?

Mr. Shore

I do not intend to pursue that matter further now. The House will understand my reticence on some matters. I am about to turn to a subject which has been in the wings of our discussion for a considerable time.

As the House knows, we have undertaken a major review of housing. This started as a review of housing finance and was extended to cover housing policy more generally. The issues covered have been complex, and it has taken longer than we expected. I make no apologies for the fact that I felt it more important to try to get the review right than to get the document out in a hurry. No initiatives have been held up pending the review. Where I thought that progress could be made in advance of publication, I have made separate announcements—for example, in respect of the new housing investment programmes of local authorities. But I am now pleased to tell the House that the review will definitely be published next week. I hesitate about the particular day next week on which we shall release it. [HON. MEMBERS: "Friday night."] I assure hon. Members that that will not be so. The House would not expect me to reveal its contents now, but I wish to refer to the general approach in the report.

As I have steeped myself more and more in the arguments of the review, the more I have found myself convinced that there was more to be learned from the common sense, actual experience and preferences of our people than from the theoreticians and ideologists of housing policy. In particular, I have been influenced by three main considerations.

First, in the past 25 years we have progressively achieved an immense improvement in our housing situation This improvement is evidenced not only in the much higher quality of our housing stock but in its quantity. Although we still have a major problem to overcome, the housing situation is not worse, as many people are eager to suggest, but clearly and measurably better.

Governments of both parties have, in the last 25 years, built 7 million new houses and improved another 4.5 million. It is true that the average family in Britain is today better housed than it has ever been and is better housed than the average family in many, if not most, countries in Western Europe.

The second consideration is that there is and will continue to be a substantial need to provide houses for rent, most of which can be provided only by local authorities and housing associations. Equally, there is a growing and natural demand for owner-occupation, which we fully support. Already 53 per cent. of households are owner-occupied. It is our task to help to meet both of these requirements.

Thirdly, there is a growing desire, wherever the choice is possible, to improve existing areas and homes rather than to engage in massive clearance programmes with all that they involve in terms of community disruption and dispersal.

Our housing policy is already firmly set along these lines and, provided that we can sustain our efforts, we can expect increasing success in the years ahead. While, therefore, we should seek to improve existing arrangements in every possible way—there are many suggestions as to how this can be achieved—it would be a great folly to embark upon a root and branch upheaval of policy to meet theoretical or ideological goals.

Mr. Frank Hooley (Sheffield, Heeley)

I have a great deal of sympathy with what my right hon. Friend has just said. But is not a new critical factor in the next 10 years the demographic factor of the sharp decline in the birth rate and, as we all know, the increasing numbers of elderly, retired people who may need special provision?

Mr. Shore

Those are exactly the kinds of consideration which should be in the forefront of the Government's mind and, indeed, in the minds of the authorities which provide housing.

The House will recognise from what I have said that I am strongly opposed to the doctrines and dogmas of many housing economists. Their basic viewpoint is that the great evil of Britain's post-war housing is the support given to the finance of housing through both subsidies to council tenants and tax relief to owner-occupiers. Their belief is that financial support in both sectors leads to waste and the misallocation of housing resources. Therefore, they urge that rents should be increased and that mortgage tax relief should be reduced. I suspect that some of them are basically more upset about council subsidies than owner-occupiers' tax reliefs. Nevertheless, they believe that it is politically practical to punish the tenants only if at the same time they are ready to harm the owner-occupier.

My view is that they are entirely wrong to treat housing as though it was just another commercial service. They fail to recognise the social significance of housing both to the community and to the individual. Further, they fail to recognise the real connection between the price of housing and its supply. If we were to abandon general support for both tenants and owner-occupiers, I have no doubt that the progress that we have made and can continue to make in dealing with housing need would suffer an immense setback.

Certainly some changes are required in housing finance, but, on the basic doctrine of withdrawing support from both main sectors, I am totally unconvinced and shall not countenance any major change.

Mr. Douglas-Mann

I do not think that my right hon. Friend would suggest that I was more enthusiastic about increasing council rents than reducing mortgage tax relief. Does he agree that one effect of our system over recent years has been towards investment in both housing and industry? Has he had regard to the fact that over the last 16 years, while house prices have increased by five times, the Financial Times Ordinary Share Price Index has increased by only 11 per cent.? Does he therefore agree that this factor has caused investment to be channelled into an area which, desirable though it may be, has affected the viability of our economy because we are distorting the investment pattern in that way?

Mr. Shore

No, I do not agree at all. I know the argument and I have seen what has been said about it. I consider it to be a totally unproven assertion that, by providing reasonable housing through the medium of owner-occupation or, indeed, through local authority provision, we have somehow starved our industry of the resources necessary for it to perform more satisfactorily. I believe that to be an illusion.

Certainly, as I said, some changes are required in housing finance, but, on the basic doctrine of withdrawing support from both main sectors, I am totally unconvinced and shall not countenance any major change. From this, the House will recognise that I am equally opposed to the dogmatic approach of the Conservative Party. Its great and continuing errors are, first, to suppose that it is only the need for owner-occupation that needs to be met and, secondly, its continuing belief that the shortage of rented accommodation can somehow be dealt with by allowing market forces to dictate the price.

This was the error that the Conservatives committed in their 1957 Rent Act and it was the same basic error that they committed again in the Housing Finance Act 1972. There is, of course, a clear inconsistency in their approach to the two sectors. For while they hanker after market pricing as a solution to the problems of the rented sector, they are prepared to intervene in the owner-occupied sector with all kinds of additional subsidies.

Mr. Heseltine

Can the Secretary of State explain why we introduced rent rebates in both the public and the private sectors?

Mr. Shore

Easily. The rent rebate system is one of economic assistance which bases support on income. I am talking about the systems of general support which have the effect of making housing in both the private and public sectors cheaper and more obtainable than they would be otherwise. That is the point.

Mr. Heseltine

Surely the Secretary of State will agree that what one is doing is making housing, either rented or for sale, available to a larger number of people. For purchase, one subsidises the price and for rent one subsidies the rent. We did both.

Mr. Shore

The result of the hon. Member's policy was to bring up the level of council house rents to the level in the private sector. The alleged fair rent approach and the compulsory means test system was introduced to assist those tenants outside the particular income parameters. I understand that.

Mr. Rossi

The Secretary of State has just criticised the Housing Finance Act 1972. Does he agree that when he abolished some provisions and allowed local authorities to charge at their dis-? cretion, they went back to the levels suggested to them by the panels?

Mr. Shore

I would not necessarily accept that without checking.

Let me examine some aspects of the Conservative approach in more detail. It is a fundamentally lopsided approach. We have all read "The Right Approach", which contained many allusions to the need to increase rents in the public sector. There were also such allusions in the speeches by the hon. Members for Henley and for Hornsey (Mr. Rossi) in our last debate. But the House and the country still wait to hear firm details from the Opposition about their precise intentions.

I want to put only two questions to them. Do they intend to return to the formula of the 1972 Housing Finance Act and try to establish so-called fair rents in the public sector? We have not had an answer to that. If not, do they intend to fix rents by reference to total expenditure on housing revenue accounts? This seems to be what the hon. Member for Hornsey was suggesting when he spoke last time and referred to the leaked EDC report.

Mr. Heseltine

Before the Opposition can answer that the Government must say how far down the road they have gone towards implementing their own policy as outlined in the public expenditure White Paper.

Mr. Shore

A year ago when the hon. Member's predecessor sat on the Front Bench he told me to be bold and admit that in the coming year the general guidance and instruction of the Government to local housing authorities was that rents should go up by £1 a week. That was the assumption made from certain documents. I said that it was too early to judge these things. I was not disposed to accept such a conclusion. As the House knows, the increase for the year 1977–78 is not £1, as his predecessor predicted. A recommendation for an increase of 60p. was made. We judged that that was right under the circumstances, including the finance of housing and the general counter-inflation policy. I do not intend to say more about that at this stage, although I shall say more in about a week's time.

Mr. Peter Hordern (Horsham and Crawley)

Does the Secretary of State accept that in the public expenditure White Paper last year, the Government accepted a target of 50 per cent. on the cost of outgoings by 1978? Do the Government expect to achieve that which was described last November as a modest target?

Mr. Shore

I do not accept that that was a target; it was an indication. The crucial factor is what will happen to the level of interest rates and what will happen in the general context with the counter-inflation policy, the cost of living and so on. The hon. Member will have to accept that the situation is not as definite and formal as he chooses to judge it.

I now turn to another matter which has been raised in the House—the Conservative approach to new building in the public sector. I am very anxious to see authorities embarking—as so many have done—upon programmes of renewal as an alternative to wholesale demolition. Such an approach cannot be a complete alternative to new house building because some of the existing stock has to come down and the continuing upward trend in household formation. I do not know what the Opposition's approach is to new public sector house building. On the last occasion I challenged the hon. Member for Henley to say whether he intended to wind up new house building by local authorities on any substantial scale. There was no answer. My right hon. Friend the Minister for Housing and Construction has not received an answer to that question, either.

Although we do not have a clear policy from the Opposition we have the evidence from their colleagues at County Hall. There, the Tory leadership appears to be embarking upon policies which would represent a severe weakening of the GLC's rôle as a strategic housing authority for London. Its decision to stop all new building in London and outside London is very dangerous.

We all wish to see the inner areas of London and other cities rejuvenated—none more than I. Of course I am glad to see what I believe would have happened in any event—a proper emphasis on London. I have repeatedly acknowledged that there are some parts of inner London that are sufficiently overcrowded that their housing problems can be solved only if houses are made available outside the inner areas. This was the view taken by the consultants who studied an area of Lambeth in great depth over a period of three years. Incidentally, the consultants were appointed by the right hon. Member for Worcester (Mr. Walker) when he was Secretary of State for the Environment.

The consultants stated: We therefore propose a set of policies for 'balanced dispersal' out of Inner London. The objective is to help more low-income families who want to move out to do so. Since they cannot afford to buy, they need rented public housing. As most potential migrants do not want to move far, the bulk of this housing should, as far as possible, be in Outer London or in areas immediately beyond. I fear that the policies emerging from County Hall will continue what the consultants called "the housing trap". Many people living in Lambeth and other inner city areas are anxious to move out to better conditions in outer London but, if they cannot afford owner-occupation, it is difficult for them to do so.

This is the last of perhaps a series of debates before the publication of the Green Paper. In our future debates, we shall all be helped by the wealth of material and analysis that the Green Paper and its supporting material contain. We shall be all the better for it. It is not that I believe that we shall not have great controversies in housing policy between the two sides of the House, but that we shall all do far better if we conduct that debate on the basis of far more information, and objective information, than has perhaps been available to us in the past.

Housing is a serious matter. More than perhaps any other aspect of social policy, it involves the welfare of the people of this country. I hope that that will be a consideration very much in our minds and that it will help to guide our future discussions.

6.1 p.m.

Mr. Wyn Roberts (Conway)

I shall leave the bulk of the Secretary of State's remarks to the tender mercies of my hon. Friend the Member for Hornsey (Mr. Rossi). The right hon. Gentleman's speech seemed to have a detached, academic air, hardly reflecting the feelings expressed about housing in most of our surgeries. I think all hon. Members will agree that about 60 per cent. of the cases we handle relate to housing.

The House will not be surprised if I confine myself to the housing situation in Wales, which is very grave and shows every sign of deteriorating still further. If our people are to be adequately housed, vigorous and sustained action will be required. I emphasise, as did my hon. Friend the Member for Henley (Mr. Heseltine), the word "sustained". It is difficult for us to estimate the number waiting for council houses, but I know that none of the 36 authorities in Wales has fewer than 1,000 applicants on its waiting list and that many have twice and three times that number.

Length of waiting lists is not a perfect guide, but it is the best indication pending a proper survey by the Government and local authorities, which is long overdue. On a conservative estimate, therefore, there are about 50,000 to 60,000 people in Wales waiting for houses.

Our housing stock in Wales is older than that of the rest of Great Britain. Nearly 25 per cent. of it was built before 1891, compared with 18 per cent. in Britain as a whole. Similarly, 20 per cent. was built between 1891 and 1918, as compared with 15 per cent. in Britain as a whole.

The age of the housing stock is reflected in the lack of amenity. There is a higher proportion of houses in Wales without fixed bath or shower, indoor toilet or hot water than in England or Scotland. The social survey report on the handicapped and impaired in Great Britain showed far higher percentages in Wales without access to amenities. For example, 35 per cent. were without exclusive use of hot water, fixed bath and toilet, compared with 26 per cent. in Great Britain as a whole.

All this clearly implies that the rate of new building should have been higher in Wales, but it has been consistently lower than in the rest of the country, with the solitary exception of building in 1975, which was an exceptional year, due to exceptional reasons. Also, the Welsh share of United Kingdow housing expenditure should be increasing, but it is decreasing alarmingly, as my hon. Friend the Member for Pembroke (Mr. Edwards) pointed out in the Welsh Grand Committee on 10th March last year. The Secretary of State for Wales seems to have lost out badly somewhere and will eventually have to answer to the electorate.

New housing is desirable but it is expensive and we in Wales question whether the Government are absolutely right in present circumstances to give it as high a priority as they seem to do. It is certainly questionable whether they should be giving the present high priority to the acquisition of land by the Land Authority for Wales, to be used at some future time. Many argue that a higher priority should be given to rehabilitation, simply because Wales has so many older properties. About one Welsh home in six was declared unfit by the survey published in 1973. I hope that the results of the 1976 survey will show an improvement. If so, as the Secretary of State has led us to expect, that will help to show that the last Conservative Government were right to concentrate on improvement grants.

I have recently been impressed by the report on housing and land use in Cardiff entitled "Lost Property", produced by the Friends of the Earth, and by the report on homelessness in South Wales entitled "Insult to Injury", produced by Shelter and kindred organisations. I need hardly say that I do not agree with all the conclusions in those documents, but valuable work has been done.

As my hon. Friend the Member for Henley has said, many empty houses could be restored. Many more have been converted to offices but are not used as such at present and there is a great deal of vacant land in our towns and cities, much of it belonging to the authorities, which could be used to help to provide accommodation. We have in Wales more than 1,000 people in temporary accommodation. The figure has been growing throughout this decade.

I believe that it will grow still more if and when the Housing (Homeless Persons) Bill becomes law, because there is a great deal of hidden homelessness in the waiting lists. Many of us on this side are worried because that Bill lays extra duties on the housing authorities without giving them additional resources. Representatives of the authorities I meet and of the authorities which have written to us have all expressed grave anxiety.

That Bill also threatens to create two tiers of council tenants, one more privileged than the other. If we are not careful, there is a strong possibility that these homeless families will become institutionalised in communal establishments financed by local housing authorities. That is surely not the kind of development that we wish to see, yet it appears to be inevitable unless we make more effective use of our resources.

All kinds of drastic legislative solutions are being offered. The National Empty Homes Campaign has been urging that houses should be requisitioned along the lines of the Bill that was introduced by the hon. Member for Salford, East (Mr. Allaun). I regret that he is not in the Chamber now, although he was present earlier. The campaign has recommended also that more money should be provided for municipalisation. Curiously, it has set its heart against reform of the Rent Acts to make it worth while for property owners to let their accommodation to those who are prepared to pay an economic rent for it. Such reform would be cheaper for the Government, more immediately effective in alleviating the pressures on local authorities, and more beneficial in that authorities could then concentrate more on needier families with low incomes. These are the people who appear to me to be going to lose out.

In housing, as elsewhere, we find that this Government's Socialist policies are failing. There is not enough money to maintain the council houses that we have or to build enough to meet the demand. I admit that the demand is incredible. In the 20 years to 1971 the population of Wales increased by just over 5 per cent. The number of households increased by 20 per cent. and the number of new houses increased by no less than 35 per cent., but housing waiting lists remain as long as ever.

I agree with my hon. Friend the Member for Henley that it looks as if the Government must turn for salvation in this area of policy, as in many others, to the private sector. Only by freeing the private sector to provide housing for rent, as well as for purchase, on economic terms can the Government possibly provide enough accommodation to enable local authorities to care for those in genuine need who do not have adequate resources to provide for themselves. More Socialism in housing is not the answer. We cannot afford it, and neither can the Government. Neither will it work satisfactorily in practice.

There is no advantage in more Socialism to the people of Wales who have clearly expressed their preference for owner-occupation. We have 58 per cent. of homes owner-occupied compared with England's 53 per cent.

The provision of adequate housing is basically a practical problem. In Wales we need improvement grants on a generous scale if we are to maintain and improve our ageing housing stock. Also, we need a crash building programme that will last until the problem is solved. Maybe we shall have to depart from the Parker Morris standards, or perhaps build cheaper homes of the prefabricated variety or its modern equivalent.

The alternative is very unpleasant to say the least. The resentment of those on the waiting lists will grow, and so will the tension in homes that were intended for one family but are actually occupied by two. Such tension often leads to mothers ending up in mental hospitals and menfolk taking to violence. This is not an exaggeration, as those of us who hold surgeries know only too well. These are the harsh facts facing us in Wales. Something must be done, and done quickly. The home is rightly regarded as a basic right, but the way things are going it is being denied increasingly to an increasing number of people in Wales.

6.15 p.m.

Mr. Bruce Douglas-Mann (Mitcham and Morden)

I agree with a great deal of what the hon. Member for Conway (Mr. Roberts) said about stress in Wales. This exists in a large number of parts of the country—perhaps nearly all. It is not confined to the inner cities.

I listened with great disappointment to the speeches from both Front Benches. I listened with greater disappointment to the speech of the Secretary of State than to that of the hon. Member for Henley (Mr. Heseltine), because I expect more from my right hon. Friend. If the outcome of the housing finance review is to be as my right hon. Friend foreshadowed it this afternoon, we shall be left with what the late Anthony Crosland once called "the dog's breakfast of housing finance". The stress will be with us for many years to come, and we shall not succeed in solving our problems, because we shall have failed to tackle the problem of housing finance.

My right hon. Friend has taken a number of points against the Opposition this afternoon, and of course I accept that undoubtedly the position would have been a great deal worse had the Conservatives been in power. However, the actual achievements of this Labour Government in housing have been very disappointing.

If we project the 1977 figures for the first four months of this year, we find that we shall have about 120,000 starts in the public sector and about 124,000 in the private sector, making a total of about 244,000. In 1968 we had 394,000 starts. Not for a very long time have we had as low a combined total as we are likely to achieve in the current financial year. There are all sorts of reasons for this, but the fundamental reason is finance and the fact that 60 per cent. of the population is getting ill-directed subsidies. Because of this, we cannot afford to provide houses for those who really need them.

The figures for need provide scope for a great deal of argument. We all know that within our own areas there is a very acute need for substantial new building and house improvement. My own assessment is that the country needs about 5 million additional houses in the next 10 years. This means that we shall need to build 500,000 houses a year to get a reasonable standard of housing provision within that period. If we do not build at that rate, we shall perpetuate the hardship of which we are all aware.

We are not likely to achieve that figure with the present system of distribution of housing finance. In 1968, when we achieved nearly 400,000 houses a year, the pattern of distribution of housing finance was that we spent—at 1975 constant prices—£477 million on rent subsidies and £411 million on mortgage relief. At the same time we spent £2,473 million on bricks and mortar. Therefore, we were spending nearly three times as much on bricks and mortar as we were on subsidies.

By 1976 the situation had changed completely. We spent £1,083 million on subsidising rents, £1,020 million on mortgage relief and £2,043 million on bricks and mortar. We were spending more on subsidies and mortgage relief than on building houses, whereas in 1968 we spent nearly three times as much on building as on subsidies and mortgage relief. This subsidy is so badly distributedߞ—

Mr. Ronald Atkins (Preston, North)

Will my hon. Friend tell us to what extent this is dependent on differing interest charges?

Mr. Douglas-Mann

My hon. Friend is quite right to point out that the high level of interest rates involves a high rate of subsidy on local authority rents and in subsidising mortgages. Nevertheless, whatever the level of interest, the change of interest rates is only one cause of the maldistribution of these figures. As long as we continue to pay to someone with a large income, a large mortgage and a high marginal tax rate the tax relief for his mortgage, and hold down to totally uneconomic levels the rents of some local authority houses, we make the cost of building new houses so great that we cannot do the job.

If my right hon. Friend believes that he will do the job with the present system, I do not share his confidence. I do not believe that he will be able to manage the job with the present system. Unless he takes the opportunity provided by the housing finance review to review the whole system fundamentally, we shall continue with this decline in meeting the housing need which we are seeing in the present year.

I do not like to say such a thing about my Government, but if we do not take the opportunity provided by the housing finance review to make these changes we shall not be solving the problems of the homeless or of those who are in need, such as the families who come to my surgery saying "We are now expecting our second baby. We are still sharing the sitting room in my parents' house." A lady who came to me last week in Merton has been on the council waiting list for 20 years. She now feels that she should have priority because she has great difficulty in getting up the stairs to her first-floor flat. People such as these should be given priority in the allocation of public money for housing.

The fact that these matters have not been adequately dealt with arises because 60 per cent. of us—most Members of the House, most of the population—are receiving from public funds assistance which many do not need. One of the effects of this system has been to distort the pattern of house prices and to make the solution of our housing difficulties so much more difficult.

Since 1960 house prices have increased by five and a half times. The retail price index has increased by three times. The Financial Times industrial ordinary share index increased from 319 in 1960 to 368 in 1976 to about 450 today. That is an increase of about 50 per cent., whereas all the other indices have increased by 300 per cent. or 500 per cent.

The hon. Member for Henley mentioned the effect of the withdrawal of tax relief for interest on mortgages over £25,000. He was correct in saying that there was a falling off in demand for houses in excess of £25,000. Those houses are being sold, but at a generally lower price level than prevailed previously. At present, with the existing mortgage structure, there is a fairly steady market up to £25,000. Above £25,000, the value for money is very much better. For £30,000, in many areas, it is possible to purchase a mansion. As it is not possible to get tax relief on the mortgage in excess of £25,000, the rate at which house prices increase above £25,000, depending on the standard of amenity, is much lower than it is below £25,000.

Of course, changes must be gradual. I do not know whether any evidence to the contrary effect has been submitted to the housing finance review. There may have been some from a few extremists, but I do not think that anybody is seriously suggesting that there should be a sudden withdrawal of mortgage tax relief or a sudden dramatic increase in the level of council rent. What is proposed is that we acknowledge that, by subsidising all mortgages irrespective of the length of time someone has had a house, irrespective of the rate of tax to which the mortgagor is subject, irrespective of the value of money or of the amount of mortgage up to £25,000, we are subsidising an increase in house prices artificialy and stimulating demand beyond the level to which it would have risen without the subsidy. The evidence is there in the figures for house prices and in the pattern of investment over the past few years.

During the course of the past 15 years, the average proportion of personal wealth held in dwellings has doubled whereas holdings in company securities, on which we depend for a flourishing and healthy economy, has halved. At the same time, there has been a steadily increasing absorption of the annual flow of funds from financial institutions going in loans for house purchase, which have increased from 25 per cent. of loans in 1963 to 36 per cent. in 1973.

We are channelling far too much of our investment not into house construction or building but into house purchase. Only one out of every five house transactions is for a new house. We are subsidising the price of old houses so that everybody who owns a house, everybody who has got on to the escalator, is going steadily up and up. It is lovely for those of us who are on the escalator—we have our houses. Our houses are becoming more valuable each year that we live in them.

What we are really doing is benefiting our heirs. It will not help us. Each of us must go on having a house for the rest of his life. Sooner or later we shall die and then our children will inherit a capital sum the building up of which has been subsidised at public expense and which will have put the cost of housing out of the range of the minority.

Thirty per cent. of occupiers are council tenants, 53 per cent. are owner-occupiers. We are still leaving out of account the minority—the 17 per cent.—who are not assisted in any way. We are ensuring that they never will be effectively assisted in this way, because we are channelling so much public money to the assistance of those who do not really need it that it becomes uneconomic to deal with the problem of those who really need assistance.

I come now to more controversial ground for my hon. Friends. I accept that, taking the country as a whole, local authority tenants are to a considerable extent paying too small a proportion of their income in rent. We are all, in general, paying too small a proportion of our income for the provision of housing. This is one of the few points on which I agreed with the hon. Member for Henley.

The proportion of income has been declining in recent years. In 1973, local authority rents in the South-East represented 97 per cent. of average manual earnings. They are now down to 7.9 per cent. The figure for the country as a whole was 8.4 per cent. It is now down to 7 per cent. Although that pattern may be desirable from the standpoint of achieving an incomes policy, from the point of view of a housing policy it will in the long term make it much more difficult to solve the problems.

Taking the simplest example, a family has no incentive to move from accommodation which is too large for them—accommodation which is nice but which is more needed by a young family than by a family whose children have grown up and left home. There should be an economic incentive to encourage a couple whose children have left home to move from their house with garden into a tower-block flat. Unfortunately, there are not enough houses with gardens to go round. Unless an economic incentive is provided, the only way to get people to move when they no longer need that type of accommodation is by compulsion. We all reject compulsion.

A system of economic incentives—a system of rent allowances making it possible for families to afford a house with garden when their children are young and with an incentive to move to a flat when their children leave home—would provide a much greater degree of housing satisfaction for local authority tenants than the present system.

Mr. Ronald Atkins

I am grateful to my hon. Friend for giving way to me a second time. I agree with him that there is a need for rented accommodation to which people who are occupying accommodation too big for them can move.

I do not follow my hon. Friend's point about the diminishing proportion of family income being spent on housing. He will acknowledge that this will vary greatly from family to family. Usually, the lower the income the greater the amount spent on housing. Is not the general figure an improvement that he would expect to see with a developing society? It could equally be argued that the proportion of family income spent on food is diminishing.

Mr. Douglas-Mann

I agree that it is diminishing. It is desirable that the amount spent on necessities should diminish in a society which is getting wealthier. But we have not got much wealthier as a society since 1973. The proportion which we are spending is not sufficient. I do not know that there is any specific, desirable figure to say "That is the appropriate proportion to be spent on housing", but it is self-evident that we are not spending enough, though there is room for argument as to whether what is spent should come from public funds, from the rates or from increased rents, or mortgages.

But, while we believe in providing such a high proportion of the cost of every new house from public funds or rates, we shall not get the provision of enough houses to meet the needs of those who are in acute need. We are, in fact, subsidising those who have housing, whether from a local authority or on mortgage, and we are failing to do the job of meeting the needs of those who really need housing.

Of course, I accept that the changes which I believe are desirable must be gradual. Certainly, that is so as regards the mortgagor. Somebody who has undertaken the commitment of an existing mortgage should not have the tax relief taken away. What we should be doing is approaching it first of all on the basis of new mortgages. The initial relief should probably be the same, certainly for a first-time buyer—we should continue to assist people to buy their houses in the first place—but once someone has got over the initial burden of first-time purchase his housing costs as a proportion of his income gradually diminish as, and the extent to which he should continue to receive help from public funds should likewise diminish. This would enable us, if we were reducing the level of tax relief now given indiscriminately to everybody, to give greater help to the first-time buyer.

It would also enable us to give greater help to the person who at the present time is receiving no assistance at all, the elderly owner-occupier without a mortgage who, according to the Family Expenditure Survey figures, has in general a lower income than those who have mortgages and who badly needs assistance for repairs to maintain his property. We could give greater assistance to such people and to first-time buyers, and by some increase in local authority rents we could ensure that we were meeting the problems of a greater number of people. But it seems that these are not to be the solutions which my right hon. Friend will be proffering when the housing finance review comes out next week.

I fear that, in consequence, we shall not be getting an adequate solution and we shall not be tackling the problem as we should. However, although I criticise my right hon. Friend, after listening to the panaceas offered by the Opposition I can only thank God that it is my right hon. Friend who is in office and not the hon. Member for Henley and his hon. Friends. But there was one thing that I was glad to hear from the hon. Member for Henley. Although he spoke about the revival of the private sector and about various things which could be done to encourage the private landlord to come back into this field, I was very glad that he did not suggest that his party would withdraw security of tenure from furnished tenants. I hope that this will be made even clearer by Opposition spokesmen. The hon. Member for Hornsey (Mr. Rossi) made it clear in a television broadcast in which we both took part. I hope that it will be put beyond doubt that, whatever changes are made, the Opposition will not be taking that particular step.

The strategy of dealing with the private sector depends on landlords coming to accept that unless a property is capable of being sold—if it is capable of being sold, they will sell it—it can only be used for letting within the private sector. That is why I disagree with the arguments of the hon. Member for Kensington (Sir B. Rhys Williams) about shorthold, to which the hon. Member for Henley referred. As soon as there is one loophole—it does not matter what it is—as soon as there are opportunities for letting free of the Rent Act, any landlord who is proposing to let at all will go for the market where he can let free from control.

But the confusion of the Opposition is that they seem to believe that in the absence of the Rent Act there would be a return to private investment in property for private renting. That cannot be the case, as is clear if we do the sums. Let us take a house which could be sold, say, for £10,000. The landlord invests that money, and it will bring him in £1,200 per annum gross. The cost to the purchaser of that house would be £10,000 which on mortgage at 11½ per cent. would be £1,150 a year, less tax relief of £380, which means that the actual cost to the purchaser of what would provide theland with £1,200 per annum is £770 a year—that is, about £15 a week. If, on the other hand, a tenant is paying about £15 a week to the landlord, the landlord receives £770 a year. After certain expenses of management, he will be left with £735 per annum, against the £1,200 that he could have by selling.

Quite apart from the Rent Act, and quite apart from any other factor, the economics—as a consequence of the tax relief on mortgages, and I am not arguing against tax relief—are that it is always more profitable to sell if somebody owns property which is capable of being either let or sold. He will gain more return by selling than by letting.

Mr. Heseltine

The hon. Gentleman will be aware of the very substantial funds flowing into investment in commercial lettings at well below the rates of interest to which he refers, even at high rates of interest on today's market price, simply because the institutions look to the inflation-proofing of their investments. If one could introduce into the residential market the sort of returns that one has in the commercial market, the figures would look dramatically different from the ones that the hon Gentleman is quoting.

Mr. Douglas-Mann

I accept what the hon. Gentleman says about commercial lettings, but in the commercial field there is not the differential of 35 per cent. tax relief on the cost. Consequently, no matter what is done in the field of the Rent Acts, it will be preferable from the standpoint of the owner of property to sell it rather than to let it, irrespective of rent controls. I do not think that any changes that the hon. Member might introduce if he were in control could possibly change that pattern.

Mr. Heseltine

I think that we are not quite at one here. The fact is that the 35 per cent. differential to which the hon. Member refers exists today. Commercial investment by the institutions in commercal properties is taking place at very different rates of interest, through the normal open market, because, with rent reviews in seven years, they see an inflation-proofing of their investment.

Mr. Douglas-Mann

I accept that if the landlord retains the property, instead of having £1,200 a year coming in, it will provide increased rents for the future. But because of the tax differential a tenant cannot compete with a purchaser in the residential field. This does not apply in any other field—neither does the opportunity for the purchaser to borrow at 11½ per cent. If the commercial tenant wishes to borrow to purchase, he will have to borrow at 17 per cent. or 18 per cent. In general, any person renting commercial property who wishes to borrow money to purchase the freehold will have to borrow at a very much higher rate of interest than is available from a building society.

Mr. Heseltine

The commercial investor to whom I am referring does not have to borrow. I am speaking of the institutions, which have a massive inflow of funds to invest. There is no question of paying a high rate of interest. They have the money. They have to invest it. At the moment, they invest it in commercial property at lower rates of interest than the prevailing market rate. They will not do that in the residential market because there is no long-term inflation-proofing because of the Rent Act.

Mr. Douglas-Mann

Yes, I think that we have been talking at cross-purposes. The financial institution investing in commercial property for letting receives the rent from the tenant of that property. The tenant does not really face a choice of buying, because if he were to buy he would have to borrow in the market at a higher rate of interest than would the house purchaser buying residential property. The tenant of commercial property, if he wished to buy as an alternative, would have to borrow at a far higher rate of interest, and, as both rent and interest would be tax-deductible, there would be no tax differential there. But there is a tax differential in the case of residential property as between sale and letting.

I hope that the hon. Gentleman will take this point into account since it is of fundamental importance. Irrespective of the changes which might be made in the Rent Act, he will not find the private investor coming back into this housing sector. There is not an analogy with commercial property because of the two factors which I have mentioned—the lower rate of interest at which the house purchaser can borrow and the tax relief which is available against mortgage interest but not against rent. In commercial property, tax relief is available also against rent.

The hon. Gentleman's other panacea was the sale of council houses, and here I come back to the article in Roof to which I referred in an intervention, the article by Mr. Bernard Kilroy. It was a well-argued article, soundly based upon the facts. [Interruption.] The hon. Gentleman can intervene later if he wishes to contradict me. Mr. Kilroy based his article on an analysis of figures in Leeds, and he contended that the effect of council house sales, although it gave a nice bargain to anyone who bought a public asset at 30 per cent. discount—that is all very fine for the happy individual who gets it—involves a loss to the local authority in a relatively short time, and it entails a substantial and increasing burden to the Exchequer because every time a house is sold on a mortgage and is then resold the tax relief on the mortgage interest runs again at a higher figure.

Mr. Kilroy's calculations were based on an assumed rent increase of only 10 per cent. If his assumed rent increases had been higher, the loss would have been even greater. In fact, the rent increases in Leeds during the periods prior to the effecting of the sales had ranged as follows: 18 per cent., 14 per cent., 11 per cent. and 14 per cent. However, as I say, Mr. Kilroy worked on the assumption of 10 per cent., which should have shown a much lower loss to Leeds.

However, according to Mr. Kilroy's calculations on the basis of 10 per cent., rent increases, the loss to Leeds City Council was £1,785 on a post-war house and £7,905 on a modern house. Those were the losses to the local authority, and in addition we have the loss to the Exchequer.

The Opposition should realise that if they come to power and make the sale of council houses a matter of policy, they will find a backlash from the council estates and from the ratepayers. The rest of council house tenants will have to pay higher rents, the ratepayers will have to pay higher rates and the taxpayer will have to pay more taxes in order to provide a bonanza for those who buy council houses, who will be the better-off council tenants buying the nicer houses, leaving to the council only the poorest in the poorer houses. That is what will result from Tory philosophy if it is put into effect, and plainly that policy would be even more disastrous.

However, I conclude by saying to my right hon. Friend that I am extremely disappointed that it seems from what he said that the opportunities presented by the housing finance review are not to be taken and we shall continue to subsidise those who have houses at the expense of those who need them.

6.43 p.m.

Mr. Stephen Rass (Isle of Wight)

I followed the speech of the hon. Member for Mitcham and Morden (Mr. Douglas-Mann) with great interest because he faced up to a number of rather unpalatable facts which hon. Members who have so far spoken have not recognised. I, too, am concerned about whether the housing finance review Green Paper which is to come out next week will go to the root of our problems.

I must take up with the hon. Gentleman the question of institutional finance. I ask him to look at what is happening today concerning agricultural land. I am certain that many institutions are investing money in land for which they will receive a very low return after paying £1,000 an acre or more. They may not receive more than 1 or 2 per cent. I have discovered over recent years that certain fashions come and go among the institutions.

Suddenly, the Prudential or the Pearl decides that it will go into agricultural land and everyone else follows suit. Then it is discovered that this is not producing a very good return and farmers cannot pay rents to cover money invested at the current rates. We saw this in 1974, when there were many sad circumstances, with people like Mr. Lyon coming down to Hampshire and paying £1,500 or £2,000 an acre for farmland. A year or so after, the whole thing went bust and many suffered.

However, the institutions have this money and they want to put it somewhere. They could put it into housing development, though not at present rates of interest. If we could bring the rate down to about 6 per cent., it could be shown that there was a return. I recall that my first mortgage was taken out at a rate of 3¾ per cent. Now, although we are talking about mortgage interest rates having come down, the rate is still over 10 per cent., which is a usury rate even today. Any rate over 7 per cent. is far too high.

I refer next to the figures that the hon. Member for Mitcham and Morden gave about the proportion of average income spent on rent. I think that he said that it was roughly 7 per cent. That is a very low figure in comparison with what is spent in other countries of the Western world, where it is far more like 20 per cent. I believe that it is 25 per cent. in New York. I understand that that is the figure insisted on for local authority housing in that city. Therefore, if we compare ourselves with what is paid for housing in the rest of the Western world we must conclude that our is still a very low figure. This is a matter on which we must educate the public and not dodge it all the time. People will have to recognise that they must contribute more and they will have to get their priorities right.

Young people are already having to do that. This is one of our great problems. When my children, or, I am sure, the children of other hon. Members, try to go off on their own and find accommodation, they have to pay anything from £20 to £30 a week, often for only a shared home. Yet apparently that is acceptable, although it represents a very high proportion of their income. As they get on in life and earn more and manage to buy or rent a home, the proportion they spend on housing goes down. In my view, this is the wrong way round.

Already some building societies are discriminating against those who have higher mortgages. I gather that one building society—I have not checked whether it is mine, but I suspect that it is—has not reduced the rate for mortgages of over £11,000 but has reduced the rate for those with smaller mortgages. There is, therefore, some discrimination going on in the upper range of mortgages.

I listened with some sympathy to what the Secretary of State had to say because, in company with many others, I am deluged with the voluminous outpourings of many housing experts and, like the right hon. Gentleman, I am sure, when I read one argument going in one direction and another argument going in another, all from recognised experts, I should like to know who is right. I can only hope that the facts that come out in the housing finance review will help us there.

The right hon. Gentleman was right to point out that we are not so badly housed in this country as is often suggested. In company with other hon. Members I visited Japan in April, and I found that the Japanese think that we are extremely well-housed. They have a great problem coming upon them. They have not yet dealt with their land speculation problems, and farmers there, whose holdings usually run to only an acre or two, are having a field day. In Tokyo, people are having to pay £32,000 for 100 square metres of land and a one-room apartment costs anything up to £18,000, even with shared facilities. Admittedly, wages are higher in Japan—perhaps one and a half times or twice ours—but these are still large sums for people who want to buy. Municipal building is now essential for those who are retiring at age 55 or 60 because, when giving up their company house, and although in receipt of a lump sum payment, they do not have sufficient to buy a home for their old age. The Japanese, therefore, are watching with considerable interest what we are doing.

The point that the Secretary of State has ignored is that although we apparently have more habitable rooms per head of population than any other country in Europe we have the highest number of homeless families. Therefore, something must be badly wrong. The hon. Member for Conway (Mr. Roberts) mentioned my Housing (Homeless Persons) Bill. He is a member of the Committee considering that Bill. It is an open secret that I believe that the Bill would have had a much easier passage if I had been able to incorporate provisions whereby more property would be brought on to the market. In my view the repeal of certain aspects of the Rent Act would help deal with homelessness. That is the conclusion to which one must come if we have so many habitable rooms and yet increasing numbers of homeless families.

I found little with which to disagree in the speech of the hon. Member for Henley (Mr. Heseltine), which contained nothing particularly new. However, when the hon. Gentleman talks about scrapping the Community Land Act I repeat what I have always said, that there is a great need for legislation to enable local authorities to play a rôle in land assembly. I wish to draw the hon. Gentleman's attention to the comments of the Royal Institute of Chartered Surveyers in a report on the question of inner cities. In paragraph 27, dealing with land assembly and renewal, it said: Local authorities should be encouraged to use the appropriate legislation"— —it might well be said that there is other legislation that could be used, and I would accept that, but the Community Land Act has been used and could be used in the future— to assemble vacant land and to acquire obsolescent areas, where this is necessary to bring about renewal, and the current restrictions should be eased in those areas of stress where action is most urgent. Whilst profitability should be sought whenever possible, many of the areas concerned will produce little or no financial gain at least in the early years. A share in the ultimate profit from the development of such areas may best be obtained by authorities retaining a share of equity, or by one of the many variants of town centre partnerships. It is worth noting that the chartered surveyors, the main operators in this field, see a rôle for the Community Land Act in land assembly.

I ask the hon. Gentleman to take care over the development land tax. I do not think that the Government have got it so far wrong. Any indication that the rates of DLT would be lowered by very much would be a movement in the wrong direction. Perhaps the rates could go down a little to encourage sales, but if the Conservatives do away with the Community Land Act they must have some weapon to try to get land on to the market. When we sat through the debates on the Community Land Act we were told that it was to bring about positive planning.

Lord Barber, when Chancellor of the Exchequer, got near to the answer when he talked about introducing a land hoarding tax, and he was mistaken not to bring it in. A form of land value taxation should be imposed by local authorities when planning permission is given and when it is obvious that the development should go ahead. It would then be possible to cut out the middle person, whom most builders and developers very much dislike. The tax could be on a sliding scale, and in that way we could make sure that the land was developed. The Opposition should give attention to this matter.

Mr. Rossi

Does not the hon. Gentleman agree that there are thousands of acres of unused land in the hands of public authorities? If we are talking of bringing that land into use, perhaps we should divert our attention to shaking it out of public authorities.

Mr. Ross

I agree. We have had many debates on housing and the construction industry in which we have agreed that that is one of the matters to which local authorities should now be devoting their attention. They should have joint partnership schemes with local developers. The more we can do to encourage such schemes, the better.

We have gone through the whole question of what is the right policy on the sale of council houses, and I do not want to go through it again. However, I must warn that we could have a surplus of owner-occupation if we are not careful. In our deliberations on the Housing (Homeless Persons) Bill, we have learned that the number of repossessions for failure to keep up mortgage payments have continued to increase. With the rate of interest at 10½ per cent., owner-occupiers still have large sums of money to find.

I can remember the housing slump in 1951, when, particularly in my con- stituency, and particularly for guest houses, many house-owners found that their mortgage was more than the property was worth. It took me nine months to sell the property that I had then, and I had to take a substantial loss, which took a long time to get over. Therefore, owner-occupation is not a panacea. People may again find themselves faced with difficulty in selling property. Nothing is worse than for a person to be unable to rent when he moves to a new district and to be committed to buying a property while owning another that he cannot sell. That can lead to desperation. I am happy to see local authorities selling houses where the essential conditions are met, and at a discount, but the matter should be left, if possible, to local authorities to decide.

I wish to deal shortly with some matters that I believe would help in the present situation, though I think that it is unlikely that I shall succeed in persuading the Government to examine them. First, I should like them to go for short, fixed-term leasing. I see nothing wrong in my agreeing to lease from someone who may wish to go abroad for a time or who, perhaps, has two houses and wishes temporarily to let one. Why should I not agree with him the rent and the term of years of the lease, perhaps with three years as the maximum? We could then go to a person who is recognised in housing matters—perhaps a rent officer—who could explain to me what I was letting myself in for as the tenant and that at the end of the agreed period I should have to leave. If such an agreement is registered with the rent officer or someone else, it should be clearly seen to be a short fixed-term lease. I see no reason why that should not be permitted.

Secondly, I should like to see long-term leases entered into in both public and private sectors. I am not trying to move away from security of tenure, which I wish to maintain, except for the short-term lease. I should like local authorities to lease council houses to their tenants at fixed rents for fixed terms of 10 years or more, with the tenants taking over considerable responsibilities for maintenance. I see no reason why we should not have such provisions, similar to those in the Landlord and Tenant Act 1954 applying to business tenancies. The land- lord could repossess only for redevelopment or to let to a member of his own family, or for his own occupation. If a new lease could not be agreed, a court could fix the terms and the rent.

Thirdly, I am sorry to disagree with the hon. Member for Mitcham and Morden, but I should amend the Rent Act 1974 to release furnished accommodation outside London and other particular stress areas that the Secretary of State may from time to time wish to include in its provisions. I have never thought that there were grounds for bringing furnished accommodation in the provinces within the Act. It was a great mistake. I accept that there was good reason in London, but why not allow people freely to let furnished accommodation in the provinces? High rents were not being charged, and such letting was helping to meet housing problems and was helping the social services, amongst others. I also ask the Secretary of State urgently to raise the existing rateable value limits for improvement grants.

Mr. Rossi

Is the hon. Gentleman aware that during the passage of the Rent Act 1974 the Conservatives sought to make an amendment whereby the Secretary of State would have had the power to exclude from the operation of the Act areas depending upon supply and demand? Unfortunately, the Liberal Member on that Committee would not support us, and therefore the amendment was lost and we could not do the things that the hon. Gentleman is now advocating.

Mr. Ross

I realise that the hon. Gentleman wished to get that on the record. He has mentioned it to me many times and I have told him that I did not agree with the action of my colleague on that particular occasion.

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

Before the advent of the present Labour Government I saw the previous Minister responsible for housing, when there was no Rent Act on the statute book, to propose such limited action in designated stress areas. The proposal was rejected by Ministers then in the Department of the Environment.

Mr. Ross

That comes back to the point made by the hon. Member for Henley in talking about a Select Committee for housing. The right hon. Gentleman has now reinforced the case. I am sure that if we could establish such a Select Committee we could get a lot of agreement across the Floor of the House on subjects such as furnished accommodation in the provinces.

I welcome the forthcoming circular on the better use of vacant and under-occupied housing. If we are prepared to give greater freedom to the private owner or landlord to let, we can be tough with him if he does not take full advantage of the opportunities available to him. I could not go along with compulsory requisition or double rating unless landlords first had the opportunity to use their property to the best advantage. If we gave them that opportunity and they did not take advantage of it, we would then be entitled to hit them hard.

I would like to see far more activity by local authorities in the provision of housing advice and of accommodation agencies where appropriate. I believe that they could do a great deal in that direction. Some authorities already set a good example, but many do not follow.

In the longer term we must try to bring back institutional finance into private housing, without disturbing security of tenure. To do so will mean allowing rents to rise to sensible levels so as to ensure a reasonable return on finance invested. That problem must be faced, and the sooner the better. It is time that we got our priorities right and moved forward to ways in which we restrict subsidies to those who really need help and not simply apply them to bricks and mortar.

7.02 p.m.

The Under Secretary of State for Wales (Mr. Alec Jones)

I intervene briefly because the subject of the debate is housing in Wales as well as in England, and I believe that some of the information I have to give may help other hon. Members who may wish to contribute later.

Many hon. Members on previous occasions have complained to us about the inadequacy of the provision for housing in Wales in the public expenditure White Paper. I must confess that I have not always been happy with it myself. What worries me more at this time is that the returns now received indicate that in 1976–77 authorities were unable to spend the provision which was made for them. The exact amount is not yet known, but all the evidence shows that it will be very substantial in relation to the total provision.

That is paradoxical at this time, because there is no doubt that we have a housing need in Wales. Even the local authorities themselves are constantly stressing that fact. Yet they did not spend their allocations for last year. When, in the middle of last year, I was able to offer additional allocations for improvements and acquisitions—and we all know the importance of improvements in Welsh housing—11 authorities declined the offer and 14 authorities similarly declined the offer of an additional allocation for lending for house purchase.

The total capital investment in local authority housing programmes in 1976–77 was over £113 million. For 1977–78, because of the general economic constraints, we were able to allocate only £96.7 million, representing a further decline in the capital investment capability of our local authorities. Naturally, I was disappointed at the reduction, especially as I am still sure that Welsh authorities have the ability to expand their programmes from the levels to which circumstances have depressed them.

In the circumstances, I am pleased to be able to announce that an extra £11½2 million is now available for allocation for housing in Wales in 1977–78. This has been made possible partly because a fall in interest rates has permitted reduced provision to be made for housing subsidies in 1977–78, partly because slum clearance and other small items of housing expenditure are to be brought within local authorities' block allocations for 1977–78, and partly because certain contingency reserves are now to be released.

Of the total, my right hon. and learned Friend the Secretary of State for Wales proposes to allocate £3.9 million to local authority lending for house purchase—an area in which I have received particularly strong representations—while £2.7 million will be for slum clearance. The remaining £4.6 million will be applied to new building, improvement and rehabili- tation schemes, acquisitions and other housing investment. Local authorities will be informed of their individual allocations this week.

Mr. Nicholas Edwards (Pembroke)

The hon. Gentleman has told us about local authorities not taking up their allocations, and he has made the point before at Question Time. Presumably he has made inquiries. Can he tell us the reasons given by the majority of local authorities for this situation and give an indication whether there is any particular geographical distribution of the authorities, or of other factors which might be common to them?

Mr. Jones

I am coming to that point and to what we are proposing to do about it. The situation in which we found ourselves at the end of 1976–77, with this considerable underspend, clearly needs investigating before we can talk with a degree of certainty about the adequacy or otherwise of provision for future years. We have had preliminary reports from local authorities, all involving a variety of different reasons. Some of the reasons given by authority contradict those given by authority. That is not making my task any easier.

Because we are trying to get down to the root causes of the underspend in order to prevent it from occurring again, and to ensure that if there is an underspend of money allocated to local authority A we can transfer it to other authorities with perhaps even greater need, my right hon. and learned Friend has invited the Council for the Principality to join with the Welsh Office in a working party to investigate and report on the reasons why the housing provision for Wales in 1976–77 was underspent and to make recommendations for future arrangements to ensure the most effective use of the available provisions.

Some local authorities have indicated that the extremely wet weather of last autumn was a factor, but I would have thought that if it was a factor it would have affected all local authorities since the rain fell fairly generously on sinners and innocents alike. One cannot say that it applied to North, East, South or West Wales or to the valleys as opposed to the towns. The underspend seems to have been fairly general in almost all the local authorities. It is because of that factor and the need to get down to the underlying roots of the problem that we have set up the working group. We want it to report as early as possible with a view to realiocations being made if that proves necessary or desirable at the end of the day.

Mr. Wyn Roberts

The hon. Gentleman will recall that the Secretary of State announced on 10th March last year in the Welsh Grand Committee that an extra £20 million to £30 million would be available for housing in Wales. Could it be that one of the reasons why the money was not all taken up was that the right hon. and learned Gentleman was rather late in announcing its availability?

Mr. Jones

I cannot accept or believe that as a possible explanation, since the announcement was made before the beginning of the financial year and before the time at which local authorities have on many occasions been given their allocations for the following year. We are trying to find the causes of the under-spend.

Mr. D. E. Thomas (Merioneth)

In drawing up with the Council for the Principality the terms of reference for the working party, will the hon. Gentleman consider the effect of his Department's stop-go policies on the take-up by local authorities of available funds—for example, on mortgage lending, where the moratorium which he placed had an effect on take-up later when suddenly, under the carpet, he found an extra £2 million to allocate for mortgage lending?

Mr. Jones

I do not exclude the examination of anything. If local authorities feel that there is something which the Welsh Office has done but should not have done, I shall seek to correct the situation.

The terms of reference of the working party are to examine and report on the reasons why the housing provision for Wales in 1976–77 was underspent, and to make recommendations for further arrangements to ensure the most effective use of the available provisions. I intend that the working party shall, if possible, tell us the reasons for the underspend and how we can prevent it in future and ensure that all the money allocated for housing is used to meet the need.

Mr. Heseltine

Can the hon. Gentleman say whether the under-spend is taking place in Labour-controlled authorities and non-Labour-controlled authorities?

Mr. Jones

The evidence is that the underspend is like the rain: it is falling all over the Principality. I am sure that that pleases the hon. Gentleman.

Mr. Heseltine

That shows what absolute nonsense was the Secretary of State's statement that the cut-back was in Conservative authorities in England.

Mr. Jones

All I am defending and all I am answering for is the situation in Wales. The hon. Gentleman cannot draw the conclusion that what automatically applies in Wales applies in England. I should not have supported some of the behaviour of the newly-appointed authorities in London had in occurred in the Principality.

The hon. Member for Conway (Mr. Roberts) asked particularly about the housing condition survey.

Mr. Leo Abse (Pontypool)

Will my hon. Friend note that, whatever blemishes there may be on local authorities throughout Wales for not spending available money, they do not apply to the Cwmbran New Town Development Corporation? All the money available is being spent. I trust, therefore, that very shortly we shall hear about the designated area so that the corporation may continue with its work. No working committee needs to be set up for the Cwmbran New Town Development Corporation.

Mr. Jones

I do not quite know how that comes into this discussion, but, as I know that my hon. Friend is pressed on matters concerning Cwmbran, may I say that we are actively discussing the report of the inspector and expect to make an announcement in the immediate future. My hon. Friend knows that it is now being worked on. Perhaps I had better skip over the question of blemishes on local authorities before I criticise some bodies about which I do not know much, namely, the English local authorities.

The housing condition survey commenced in 1976 and it is now virtually complete. Some last-minute analyses have to be carried out. We propose to publish the details as soon as possible. However, may I give the hon. Member for Conway the general picture—and genuinely I have no further information to give him. The number of unfit houses in Wales in 1973 was 147,000. The survey seems to indicate that the number is down to 100,000. I am sure that everyone is grateful for that.

It may be of advantage to hon. Members to know that 15 per cent, of the new block allocation intended for new house building could be used for improvement works, but if local authorities wish to spend more they can make representations to the Welsh Office. Ten local authorities have requested permission to spend more than 15 per cent, on improvement. Eight of the requests have been granted, and two are still under consideration. We are therefore trying to devise a housing policy in accordance with the needs of Wales as expressed to us by the local authorities in Wales.

The hon. Member said that new housing was desirable. I was pleased that the sinner had repented on the road to Damascus, or wherever he has been in the last few years, because he said that the rate of house building should have been higher. I remind him that in the last year during which his Government had responsibility in Wales 3,247 houses were completed in the public sector. If we had continued with that rate of house building in the public sector, 12,000 families in Wales now living in new houses would, but for our action, have remained on the waiting list.

7.16 p.m.

Mr. Nick Budgen (Wolverhampton, South-West)

I suppose that throughout our recent history one of the great appeals of the Labour Party as been that it is thought to be more concerned than any other party about high unemployment. Therefore, the Labour Party must be appalled at the fact that nearly 250,000 housing industry workers are now unemployed.

It must be the Government's overriding objective, in relation to housing and construction generally, to reduce that level of unemployment without reflation. I underline the words "without reflation". For the Labour Party, above all else, should realise that those people represent the weakest sec- tions of the community. It is as a bricklayer's mate, plumber's mate, or general labourer on a housing site that a man with no skills customarily gets a job; or when a man comes out of prison it is often to a building site that he goes; or when a man comes from, say, Jamaica to join his family in Wolverhampton he may well find that he is, at least temporarily, employed on a building site. Therefore, it is those sections of the community, to whom the Labour Party customarily has directed its compassion, who most of all are being disadvantaged by the situation in the housing industry.

The housing industry has always been a cyclical industry. It has always been subject to political changes which are reflected in the social composition of the majorities in the House and in the way in which the economy works. Since 1971 the housing industry has been hit harder than any other. I shall not name, as I have often done in the House, the Acts which have had a disadvantageous effect on the housing industry.

The consequence of these frequent changes of policy is that the entrepreneur who builds houses, particularly spec houses, to survive knows that the only capacity in which he dare employ a man is as a labour only sub-contractor. Directly to employ sombody is to run the risk that when the cycle turns against him he may, unhappily, have to lay off the man and, under current legislation, pay a great deal of compensation, apart from running the risk of involving himself in labour troubles because the work force must contract.

Therefore, the only way in which the necessary flexibility may be retained in this inevitably cyclical industry is to employ labour only sub-contractors. That is the way in which the weakest people traditionally have found work. They are being driven in great hordes by the 714 certificate procedure to be dependent not, as they would wish, on their own endeavour but on the taxpayer. The practical compassion of the Labour Party in attempting to reduce unemployment without reflation should be directed towards finding some honourable way by which the 714 certificate procedure may be forgotten.

I do not want the certificates to be abolished. I am, I hope, enough of a practical politician to realise that the 714 certificates are vital to the present alliance between the Labour Party and the Trades Union Congress. Let us call them 214 certificates, but let us have no conditions attached. Perhaps in a roundabout way we can thereby abolish them.

I join my hon. Friend the Member for Henley (Mr. Heseltine) in supporting the Government's proclaimed policy of higher rents in the council sector. It is a most courageous reversal of the Labour Party's previous policy, and we on the Conservative Benches much applaud it. But it is also consistent with what I believe ought to be the Government's central objective of reducing unemployment, because one of the causes of unemployment in this country is the immobility of labour.

If we charge council tenants something slowly approachng a more economic rent—subject to generous rent rebates—we shall encourage some people to buy their council houses. As my hon. Friend said——

Mr. D. E. Thomas

The major problem with rent rebates is the low take-up. The official figures indicate a take-up of 70 per cent. Other surveys in specific areas indicate a take-up as low as 30 per cent. If we rely on a high rent input, we have to improve the take-up position of rent rebates.

Mr. Budgen

It is not for the Government to improve the take-up position. Application for a rent rebate is a voluntary matter for the tenant. I agree that it is right that the information should be made available and, indeed, that a proper advertising scheme should be undertaken by the Government of the day, but the crucial decision has to be taken by the tenant. He is the person who decides whether to apply. I agree, however, with the hon. Member for Merioneth (Mr. Thomas) that it is important that all the proper administrative steps should be taken by whatever Government introduce any form of movement towards economic rents in the council sector.

The consequence of such a move will be to encourage the better-off tenants sometimes to buy their own council houses, but sometimes also to buy new homes. Here I reintroduce the terrible indictment of the Government that a quarter of a million construction workers are unemployed. Some of them might now have been employed in building homes for the richer people who leave the council sector. But it will also mean that houses will become vacant for those who are in real need. It will mean that houses will be vacant for those whose jobs take them around the country. The man who has to go to Dundee temporarily to work on an oil rig will find that there is a vacant council house for him to occupy.

Mr. Ronald Atkins

How will the selling of council houses, as the hon. Member is recommending, help the supply of rented accommodation?

Mr. Budgen

It depends on how many people buy the council houses. What I am saying is that, if rents are increased, some people will wish to buy their own council house. Others will wish to move and buy in the private sector. When people move and buy in the private sector, a vast number of council houses, I contend, will be released. I contend that those released houses could then be used in part by peripatetic workers and in part also by those in real need.

The increase in council rents, which I applaud as a change in Government policy, will also have a useful effect in further reducing the public sector borrowing requirement, which is the single most important factor in deciding interest rates. As the Secretary of State was indicating in the earlier part of the debate, interest rates have a crucial effect upon mortgage rates. A reduction in public expenditure might also lead to a reduction in taxation, which again would lead to an increase in demand for houses by private purchasers.

The Secretary of State proclaimed the fact that mortgage interest rates had come down from their all-time high of last winter, but he did not sketch in the general economic climate within which these slightly reduced interest rates obtain. Since last autumn the Government have pursued a policy of very tight money. The money supply, with the sole exception of the month of April this year, has increased at a very slow rate. The Government are also to be congratulated in having cut public expenditure very hard in the last six months. These two factors have allowed interest rates to fall back. But other parts of the Government's general economic strategy are wholly unfriendly to the provision of housing.

The Government's first priority is to give every advantage to exporting, particularly to the exporting of industrial goods. And so it is that the Government, through their agent the Bank of England, are intervening in the foreign exchange markets to hold down the value of the sterling exchange rate. The strategy, of course, is well known. It is so that, as North Sea oil comes in in great quantities this year and next year, and as we move towards its high point in 1981, the balance of payments will be seen to be in massive surplus. We remember the old days when a deficit on the balance of payments was a symptom of inflation. Next the Government will say "We have masked the symptom; we must have cured the disease." There will then be an excuse for a massive reflation, which the Government hope will help them to bribe the electorate at the next General Election.

The housing industry is paying a price for this, because what is good for exporters is bad for importers—and the housing industry is a massive importer, in particular of wood. Wood is being held at a figure which is far more expensive than it ought to be. Food also is being held at a more expensive figure, for this reason and for others, than it ought to be, as a consequence of the Government making sterling cheaper than it ought to be.

The Secretary of State said nothing about wage control. Many of the people who would wish either to buy a house or to buy a better house—thereby trading up and thus releasing another house—cannot do so because of wage control. Wage control has been particularly slanted against those who traditionally move up the private housing ladder.

While the Secretary of State is right to point to the important effect that reduced mortgage interest rates have upon the housing market, he does not fairly point to those other ways in which the Government are rigging the economy for political reasons and adversely affecting the housing market, particularly the private housing market. The fact is that the basic problem in private housing today is that the builder cannot build homes at a price that the purchaser can afford to pay.

7.29 p.m.

Mr. John Ovenden (Gravesend)

It is not my intention to follow the points made by the hon. Member for Wolver-hampton, South-West (Mr. Budgen), but I think that his remark concerning the sale of council houses, and encouraging people to leave the public housing sector, revealed the sort of confusion that has remained on the Conservative Benches on this issue. I fail entirely to see how offering people council houses at 20 per cent, or 30 per cent, discount, as his hon. Friend the Member for Henley (Mr. Heseltine) advocates, can possibly free houses in the public sector. I shall be returning later to the subject of the sale of council houses, and perhaps we can try to throw some light on it at that stage.

The speech of the hon. Member for Wolverhampton, South-West was somewhat more imaginative than that of the hon. Member for Henley, who trotted out another dose of Tory housing doctrine. He went back on the usual treadmill and tried to drive another wedge between the council tenant and the home-owner by seeking to simplify the argument between the public and private sectors.

No Labour Member wishes to discourage anybody from purchasing his own home. Indeed, many Labour Members have pushed for policies to encourage people to buy their own homes. It is naïve of Conservatives to try to protend that we can solve our housing problem solely through the private sector. I recommend those hon. Gentlemen to read the evidence produced by Shelter, which shows that there is an acute shortage of rented housing not in the stress areas but throughout the country. Evidence has been produced to show that those who are in most serious housing difficulties can be helped only in the public sector. The cut-backs of which the Conservative Government were guilty in their last period of office—and they have committed themselves to similar cuts in their next period of office—were a disaster, because they hit the people who suffer most.

Labour Governments have recognised that both sectors of the housing market have a rôle to play. Our record in either sector bears comparison with the record of the Conservative Government. There has certainly been equality of treatment between the two sectors under recent Conservative Governments, namely, equality in sharing out disaster. The record of the Tories between 1970 and 1974 is a bad one whether one takes the public or the private sector. In the public sector, in the period 1970–73 there was a decline in the number of starts from 153,000 to 112,000—a complete collapse. In the private sector in the heyday of Toryism in 1973, the Conservatives managed to build or make starts on 215,000 houses. What a great pity they could not sell them. The young owner-occupier was hit hard at that time by Tory policies. He was virtually priced out of the market by the then Government, who in a period of two years allowed house prices to double and let mortgage rates shoot up. It is little use building houses at that level if people cannot afford to buy them. The Labour Government had to step in to buy up those houses and to take them into the public sector. That was the record of disaster of the last Tory Government.

I do not want to dwell too long on that sorry story, but that is the record. We have not heard one word from Conservatives in this debate that implies any change of direction in the policies pursued in 1970–74. If they are ever -re-elected and seek to adopt similar policies, we shall witness the same disasters again.

We heard little new from the hon. Member for Henley, apart from some talk about reform of the Rent Acts and a few make-weight suggestions, including the abandonment of the Community Land Act. However, when challenged the hon. Gentleman backtracked and said that there would still be a development land tax in some form or other. Therefore, that tax will still exist, although the Tories intend to remove the powers held by local authorities under the Community Land Act. I fail to see how that idea will build one new house or will make any contribution to a solution of housing problems.

The other Tory ploy involves the sale of council houses. That, too, makes no contribution to solving our housing problem, and it will certainly not help those who are in the most desperate housing need. Indeed, it will make their plight worse than ever.

The hon. Member for Henley committed himself to the fact that the next Conservative Government will reduce the level of public sector house building. I am glad that the hon. Gentleman was so forthcoming. In an earlier housing debate in this Chamber he was not so forthcoming. He was very much more shy and reticent. I am glad that he has now come clean and said that the Tory Party wants to reduce that figure. Perhaps before the debate concludes he will give the House an idea of the figure that the Tories have in mind. Does he envisage a figure of 100,000 or one as low as 50,000? Perhaps he does not wish to be precise, but he should give us a general outlines of Tory policy in that regard.

I believe that public sector house building has declined much too greatly already. Since the middle of last year, we have witnessed a serious decline in public sector starts. I was pleased to see a small recent upsurge in the figure, which is a chink of light, and is welcome, but I am not as optimistic as are my Front Bench colleagues about general prospects. In the last housing debate, the Secretary of State for the Environment spoke optimistically of 150,000 starts in the public sector. I find it difficult to go along with that figure when we see that in the first four months of this year the total starts were only 37,500. That gives no cause for optimism about a figure of 150,000 public sector starts for the year as a whole.

The present situation is that the starts in those first four months have been about 60 per cent, below last year's figure. A reduction has been imposed at the behest of the Treasury. It can be fairly claimed that there was a decline in housing starts in progress in the public sector before those Treasury controls were imposed, and indeed that those controls have had the effect of overkill. We have succeeded in forcing public sector housing down to a dangerous level. We must bring about a reversal of that policy.

I see no economic justification for cutbacks in the public housing sector. No sensible economic argument can be advanced for a cut-back in an area in which there is capacity not only in terms of requirements but also manpower. We have all heard the appalling news that 250,000 construction workers are now out of work. It makes no economic sense that so much unused labour should be available in housing terms.

I hope that we shall soon see evidence from the Government that restraints will be eased and that local authorities will be encouraged to play their part. The Secretary of State should take action in areas where local authorities are not fulfilling their proper rôle in carrying out house building programmes. My right hon. Friend has said that he will do what he can to redistribute their share of the public housing sector market to other authorities who want to build. I hope that that was not just an empty gesture and that he intends to take action. I know that there are many local authorities who would like the opportunities to take up that uncommitted part of the building programme which other authorities have turned down.

I believe that the policy of selling council houses is short-sighted, populist and highly irresponsible. It may provide good Conservative electioneering slogans at local and general elections, but as a policy it makes no sense at all in economic or financial terms. It damages the housing prospects of those in most desperate need. It is ludicrous to try to pretend that one can reduce the level of local authority housing stock without affecting people's chances on housing waiting lists. Most people know that local authority housing usually becomes available as a result of voids produced by people moving of dying. Those houses are then vacated and occupied by another family.

I am afraid that the sale of local authority houses will reduce the total stock available. It will certainly reduce the number of voids that are available and will reduce the chances of people being housed. It is hypocritical of hon. Members to claim that they wish to help people towards home ownership and that this will not damage the interests of every-body else. They are severely damaging to the interests to those in housing.

We used to be told by Tory spokesmen—although we have not yet heard it today—that the idea of selling council houses was to make available finance for new houses, and that we would not have had the use of those houses that were sold anyway, because they were already occupied. However, the Tory Party has abandoned that idea. We have not heard it today and it does not fit in with the general policy of reducing council house building anyway, so no doubt, that idea has now been thrown out of the window.

The housing stock has now been reduced and undermined by a cheap popular gesture to buy a few votes. The policy is based on a simplistic and fallacious economic argument. Its financial implications are obvious. In the first few years the local authority makes a gain and receives a slightly higher return in terms of repayments than it would have received as a result of rent income. Neither does the authority have to spend money on rent repairs, so it is slightly better off. However, it does not take long before the scales are tipped and the local authority becomes worse off, because it has lost its rent income, which was virtually inflation-proof, and receives only the same monthly amount.

The studies that have been carried out by Shelter and published in Roof have made clear that that is what has happened in Leeds. I have also come across evidence about a small local authority which was Tory-controlled between 1972 and 1974. It sold 451 houses. In 1974–75 the net effect on its housing revenue account was just under £17,000 surplus. In 1975–76 the surplus was only about £26,000, because more houses had been sold. However, as early as 1976–77 the surplus had turned into a deficit of almost £14,000, because of the lost additional rent income that would have accrued to the local authority from rent increases.

It is clear that every authority that has indulged in council house selling has discovered that there is a great financial loss to be made and we must consider upon whom that loss falls. Is it the taxpayer or the ratepayer? In most cases the answer is neither. The loss falls on the remaining tenants, who are generally unable to afford to buy their own houses. It falls on the poorest tenants and they tend to take the burden of increased rents as a result of the privileges that have been made available to wealthier tenants, who have been able to buy their own houses at 20 to 30 per cent, less than the market price.

This is a socially undesirable policy, because it redistributes income from the poorest to the wealthiest tenants—from those who cannot afford to buy to those who can and also because of the pattern of sales that take place when local authorities embark on this procedure.

In every area in which sales have taken place it is the more attractive houses that have been sold—the newest, post-war houses on the smartest estates. Pre-war houses, those on rundown estates and high-rise flats have not been sold. As a result, local authorities have been left with a disproportionate share of older, more run-down houses, and flats in high-rise blocks, making it impossible to transfer tenants with children into better accommodation. It is such people who pay the price—those living in substandard accommodation or high-rise blocks who do not have the opportunity to move into decent housing conditions because the Tory Party has made some cheap publicity and gained political advantage out of giving away a publicly-owned asset.

One of the other arguments that we have heard today centres around the Rent Act and its workings. We have heard yet again the solution that is always trotted out by Tories for solving the problems in the private rented sector by reducing tenants' rights. We have been told again and again that the only way in which the private sector can work is by removing tenants' rights. There is no evidence—and I have never seen any produced—that there is any connection between the decline of the private rented sector and the housing legislation that has been passed over the years. The decline in the private rented sector has gone on virtually unabated since the war irrespective of whether there has been a free for all—as in the Rachmann period—or the controls of the 1974 Rent Act. The hon. Member for Blaby (Mr. Lawson) can shake his head, but if there is any evidence I hope that we shall hear it from him. The only evidence that I have heard put forward is that the London Evening News or Evening Standard contain fewer advertisements for flats to rent than there were before the 1974 Act. Of course there are fewer advertisements, because tenants cannot be thrown out, but that does not mean that there is less property available. We are talking here about the global stock of housing, and that has not been affected.

We have heard a lot about easing the Rent Act so that there can be freely-negotiated agreements between landlords and tenants. I have always thought that one can have such an agreement only if each side has more or less the same bargaining position. I do not believe that a young couple with a desperate housing need is in the same bargaining position as a landlord who can let his property to anyone he likes. That is not putting people on an equal footing, because they are not free to negotiate on those terms.

It is often maintained that a healthy private rented sector cannot coexist with rent control and security of tenure. If that is true, there is no place in a civilised and humane society for a private rented sector, because we cannot run the housing system on the basis of pushing people for every penny that they have without any protection from high rents or eviction from their homes at the behest of the landlord. I do not see any future in that. If that is the only way in which the private rented sector can operate, the sooner that we admit to ourselves that it does not have a rôle to play in providing decent housing for our people and, instead, concentrate on making proper provision in the public sector through co-operatives and home ownership—the better it will be. We are deluding ourselves if we believe that that sort of alternative is acceptable to our people as a decent housing policy.

Mr. Deputy Speaker (Sir Myer Galpern)

Order. We ought to begin the winding-up speeches at 9.20 p.m. and there are still several hon. Members who have been sitting patiently throughout the debate and who are anxious to take part. I therefore appeal for brevity in order to enable the Chair to accommodate all the hon. Members who wish to speak in the debate.

7.48 p.m.

Mr. Michael Latham (Melton)

I shall refer presently to the points that have been made by the hon. Member for Gravesend (Mr. Ovenden). However, I first wish to declare my interest as a paid director of a housing company and as an unpaid director of Shelter.

I listened to the Secretary of State's speech with a growing sense of gloom.

It strongly reminded me of what one of the worst of our Poet Laureates said of a dying monarch—I believe it was Edward VII: Across the electric wires the electric message came: 'He is no better, he is much the same'". It is obvious that the three-year housing policy review will produce little change. Once more we shall continue with the policies of controls, subsidies and distortions which have led to the spending of literally tens of thousands of millions of pounds of public money since Addison first introduced direct subsidies for council housing in 1919. There is now a higher level of public sector provision and a lower level of owner-occupation in this country than exists in many Eastern European countries, let alone the market economies of the West. The Secretary of State should look at the record of West Germany since the war where private enterprise has built 500,000 houses a year and hardly any homes are owned by the public sector.

Of course the truth of the matter is that the powers of Housing Ministers are very limited. First thoughts are sometimes best, and I thought it would be salutary for myself to check something that I said in my maiden speech on 12th March 1974 about the fact that When mortgage finance is readily available, housing booms; when it is short, builders cut back on output to avoid having unsold houses on their hands. It is a fact of life. I have yet to be persuaded that any Government can do very much about it.—[Official Report, 12th March 1974; Vol. 870, c. 168.] That remains true today and that is why, when the construction industry representatives meet the Secretary of State or the Prime Minister, as they did last Thursday, they come away disappointed.

There is one area in which Ministers can act—namely, land. The Secretary of State told my hon. Friend the Minister for Henley (Mr. Heseltine) to go away and think out Conservative land policy. He quoted some highly tendentious figures about building plot prices and refused to give way when I sought to test his arguments. Of course, plot prices rose under the Conservative Government—but so did the number of plots coming on to the market. It was three or four times as high as the present figure.

No one really knows what the price of land is now because relatively little is available and even less is being bought. I said in our debate on 21st April that most of the building land on the market with consent was being offered by other builders trying to offload their stocks, or by Receivers. White land—the reserve stock for building in the 1980s—is virtually unobtainable as vendors sit tight, frightened off by the threat of the development land tax and its complexities or by a local authority intervening with a suspension notice under the Community Land Act.

When I want to know what is happening in the land market, I prefer to listen to the builders than to the hon. Member for Mitcham and Morden (Mr. Douglas-Mann), who in an intervention during the speech of my hon. Friend the Member for Henley tried to suggest that there was no real problem. The House-builders Federation said recently: The second most serious constraint on the future supply of housing suggested by housebuilders is the lack of building land at viable prices, with 85 per cent. of the respondents considering this likely to restrict output to at least some extent, and over 60 per cent. suggesting that it could operate as a major impediment. These shortages of land at viable prices have been experienced by builders throughout the country". Of course the chickens are coming home to roost over the Community Land Act, which is providing the utter failure that everyone said it would be, except the present Minister of Agriculture, Fisheries and Food, who thought that it was the "total solution" to the land problem—as if bureaucratic control and State intervention with very limited resources could ever be an effective substance for market forces.

The Minister for Housing and Construction said in reply to the hon. Member for Brigg and Scunthorpe (Mr. Ellis) on 12th May that the land scheme had made a good start. Indeed, it was apparently so good that his Department got its sums wrong. He said that 1,571 acres of land had been acquired, which was about one-third more than the acreage figure incorporated in Cmnd. 6393."—[Official Report. 12th May 1977; Vol. 931, c. 579.] I was never much good at maths, but the table on page 75 of Cmnd. 6393—the 1976 expenditure White Paper—shows a prediction of 1,500 acres to be acquired in 1976–77. How 1,571 acres represents "about one-third more" than 1,500 is not immediately clear, but perhaps all will be explained in due course. In any case, it is one thing for local authorities to buy land. I bet that there were plenty of builders and landowners who were happy to unload some of their abortive white land stocks last year, or even some land with consent that was no longer viable because the market had changed.

But what happens then? After all, under the "total solution" local authorities were expected not to keep the land but to resell it to other builders to get on with building. Indeed, land acquired for council house building and land for resale are in different tables of the 1977 public expenditure White Paper. Who is going to buy it? Who has bought it? And at what price?

After all, the reply of the Minister of Housing and Construction made deafeningly little reference to the total change in circumstances produced in GNLA/12, the departmental letter of last December which rewrote the land scheme by requiring all sales to recoup expenditure within two years in the case of housing. I said in our debate in April: Therefore, the Community Land Act is of no use for acquiring land for housing in practice, except for green field sites. There is no hope of any sites in inner city areas fulfilling the criteria."—[Official Report, 21st April 1977; Vol. 930, c. 469.] The Association of Municipal Authorities has now said the same.

An article in Estates Times refers to the AMA telling the Secretary of State that the Act is causing frustration, disillusionment, and worst of all lost opportunities ". The article goes on: The AMA says it is impossible to guarantee a fast disposal of land under current circumstances. Local authorities, they say, must be in a position to offer the widest possible range of opportunities to would be developers. So what is happening? They are all queueing for the let-out paragraph 14 of the circular dealing with schemes which do not satisfy the criteria but which, nevertheless, have powerful planning and social arguments in favour of early local authority intervention". We know two things about the let-out, both gleaned from parliamentary answers. First, no specific figure has been allocated for it this year, as the Under-Secretary of State for the Environment told me on 15th February, and, secondly, that early action on this matter is unlikely. I asked the Secretary of State for the Environment what loan sanctions have so far been: (a) sought by and (b) granted to local authorities for acquisitions under the Community Land Act 1975 of a planning or social nature, as outlined in paragraph 14 of GNLA/12". The Under-Secretary replied: Loan sanction applications in the financial year 1976–77 were concentrated mainly in the first quarter. First proposals to be considered in the light of GNLA/12 are currently being received. It will be some time before the possibility of a breakdown on the lines requested can usefully be considered."—[Official Report, 15th June 1977; Vol. 933, c. 175.] So the AMA will be disappointed. Why? It is because the Government have never decided what they want the Act to do. If it was to allow local authorities to make a quick buck, it could not work because the market will not stand it at present and such an approach directly conflicts with inner city policy and good planning, let alone the loss of good agricultural land. If it is to be a tool of inner city policy, it could achieve something in partnership with private enterprise, but for the fact that the resources are simply not there and that much of the land is owned by local authorities already, as is admitted in the White Paper on policy for the inner cities.

Land is at the heart of housing policy. This House has never got it right since the war. We have certainly not got it right now, and everyone knows it. The next Government, with which I am sure that my hon. Friend the Member for Henley will be strongly associated, will have to try yet again to equate the law on land with practical reality.

7.58 p.m.

Mr. Ronald Atkins (Preston, North)

In listening to the hon. Member for Melton (Mr. Latham), I understood why my right hon. Friend the Secretary of State denounced so forcibly the economists and Opposition Members who wish to regard housing as a commercial commodity. It may seem surprising that I should be so pleased that this came from a Labour Secretary of State, but many of us were rather worried by reports that his Department was being influenced by such arguments. It is because houses were regarded as commercial commodities until after Addison started giving assistance that we have a housing problem today.

In the great amount of house building of the eighteenth and nineteenth centuries housing responded to market forces, and that was why it was so inadequate. Even the strongest laissez-faire economist of the time agreed that the effects on health, especially through infectious diseases, were such that housing could not be regarded as a commercial commodity.

Mr. Michael Latham

Is the hon. Gentleman aware that in his book on housing conditions in 1850 Engels wrote that we already had sufficient housing stock in this country given proper usage?

Mr. Atkins

How wrong he was. Everyone realises that now. If the hon. Gentleman quotes books like that, I can understand why he holds such views. They are nineteenth century attitudes. Even in Addison's time, as the hon. Gentleman says, the major parties realised that decent housing could not be provided if the provision of housing were left to market forces. That is why every Government after the First World War and for some time after the Second World War—I hope that this has not changed—decided to help housing, Labour Governments doing so more generously in the inter-war period than Conservative Governments. Nevertheless, that was an attitude adopted by both parties in Parliament and at local authority level.

It is sad to find economists and others who want to change that philosophy. The point made by my right hon. Friend is of major importance. If he means it, it is the finest thing in his speech. Some of us were afraid that we might go back on that attitude. I hope that that philosophy will appear next week in the Government's White Paper. It will be sad if that attitude changes, because we must bear in mind that the housing problem is still serious. I know that housing provision is better, but good housing is still beyond the means of many families. It is true that incomes have increased, but so also have housing costs and the price of houses.

It is unfortunate that the cost of a house depends so much on interest charges. The cost depends much more on such charges than on timber and land. The cost of a house is primarily the result of high interest charges. We have seen great increases from the halcyon days of the first Labour Government after the war when interest charges were roughly 2½ per cent. When the Conseravtives took over in the 1950s, they forcibly increased interest charges and made housing more expensive.

Mrs. Elaine Kellett-Bowman (Lancaster)

I suppose that Labour increased them accidentally.

Mr. Atkins

Events that have taken place since have increased interest charges—for example, the economic weakness of the country.

Mrs. Kellett-Bowman

And Labour.

Mr. Atkins

The cost and the bulk of the problem should not be borne by the council tenant. It is a national problem that requires a national solution. That is one of the reasons for my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) referring to the rapid increase of house prices since 1968. My hon. Friend compared mortgage charges with charges for items such as bricks and mortar, the former having increased much more quickly in price than the latter.

Another obvious reason is that supply is not meeting demand. It is clear to anyone who has an active constituency interest that housing problems are the most important issues that a Member of Parliament has to deal with on Saturday mornings. At least half the constituents who come to see me have a housing problem.

Housing problems lie behind so many of the other problems in families and in society. There is a need for many more houses to be built, especially for lent. The need is as great as ever. I share the disappointment of my hon. Friends that the number now being built is not sufficient. We should like the Government to do everything possible to increase the number being built.

We believe the Treasury expenditure cuts have done much to prevent as from realising our original hopes. I am hoping that the trend will be changed as soon as possible. I agree with my right hon. Friend that a great deal of improvement must be made to existing stock. Much more will have to be done in many terraced streets in towns where houses are allowed to remain empty and deteriorate, lowering the whole tone of the street and consequently causing further houses to become and remain empty.

Grants alone are not sufficient. When I have investigated the reason for many terraced houses in the town remaining empty—there are at least one or two in every terraced block in Preston—I find that the house belong not to the corporation but to individuals, very often elderly persons who cannot afford the necessary capital improvements. Often those people cannot sell their house because no mortgages are available. That is what I should like to see the Government make available immediately. Very often terraced houses cost £6,000 or £7,000 or even less. They are good houses, and if they were improved and lived in the tone of the whole district would be improved and people would be encouraged to stay in the streets.

Another factor may have been the Rent Act, but it is more frequently the case that the owner is unable to maintain the house. The Government should require local authorities, with Government financial assistance, to take over and rehouse the many people who are on the local authority waiting lists.

The improvement of older council housing should proceed, but we should not always ride roughshod over the wishes of the tenants. I have seen so much modernisation in Preston, often with disastrous results. For example, some of the older council dwellings have had central heating installed. Very often tenants have said that they do not want it. They want the improvements but not central heating. It seems that they must have it whether they want it or not. The results have been bad in many cases.

It frequently happens that the air circulation is all wrong. Fungus develops for the first time on the kitchen and bathroom walls, as well as on other walls, expensive to heat their houses with central Tenants who are already finding it too heating are told to open the windows to improve the circulation so that the fungus will disappear. Naturally they become incensed that that should be necessary. Eventually in some houses the tenant gives up the central heating and brings in an oil stove because he or she cannot afford to use the central heating system which has been installed at great cost. There are grounds for greater consultation of tenants. There is a need for a tenants' charter. There should be consultation before modernisation takes place.

I urge the Government to increase housing provision rather than to reduce it. Housing is surely the most fundamental part of the social services. All other social services would be less expensive if we had a good basis of housing. As a teacher, I found in nine cases out of ten that if I had a child who could not be properly educated he came from a bad home. Illness, which is an expense on the National Health Service, is frequently caused by bad housing. Delinquency, family problems, the break-up of families, conflict between parents and the consequent effects on the children are frequently the result of bad housing.

I have always regarded housing as the major priority. A strong house building programme, moreover, is the best way to lead the United Kingdom out of the industrial stagnation that we now face, as it was in the 1930s. Economists and economic historians have frequently stated that Britain emerged from the depression of 1931–33 largely because of the increase in house building. As hon. Members have said, with a quarter of a million construction workers unemployed and by using materials that are largely British, with the single exception of timber, an increase in house building would not be inflationary. It would enable us to conquer unemployment and at the same time to provide work without inflation. On both those grounds, I urge the Government to increase their expenditure on housing.

8.10 p.m.

Mr. R. A. McCrindle (Brentwood and Ongar)

I do not for a moment underestimate the need to continue to provide houses for rent, whether through council provision, housing associations or, indeed, private landlords, but I hope that the House will forgive me if in this short contribution I concentrate my remarks wholly on the subject of owner-occupation. I do so because the development of owner-occupation since the end of the war has been little short of a social revolution.

The Secretary of State confirmed that 53 per cent. of houses in this country are now in owner-occupation. It is evident that many more people wish to own their own homes. I believe that housing policy should be substantially—obviously not wholly—aimed in that direction. Therefore, I was pleased to hear the Secretary of State seemingly confirm that the provision for tax relief on mortgage interest is unlikely to be changed. I hope that is so, because it has been a major contribution towards the development of owner-occupation since the end of the war.

The question may be asked: if 53 per cent. already own their own homes, why should greater assistance be given to those who do not yet own their own homes? The answer is to be found in the fact that to encourage people into owner-occupation is substantially more economical than to continue to prop up council tenants by subsidies. That point was fairly dealt with by my hon. Friend the Member for Henley (Mr. Heseltine) in opening the debate.

Owner-occupation is very much desired by those who have the slightest chance of being able to afford to buy houses, but I do not overlook the fact that there will always be a number of people who will not be able to afford to buy houses. Those who pretend that we can ever reach 100 per cent. owner-occupation are, frankly, chasing a will-o'-the-wisp. However, we can substantially increase owner-occupation beyond 53 per cent.

I want to concentrate my remarks on helping the first-time buyer with both interest rates and the deposit. I shall take further the points made by my hon. Friend the Member for Henley, and I hope to be a little more specific in the process.

The best help that any Government can give to a prospective owner-occupier with regard to interest rates is a stable economy, but beyond that there is the argument that building societies could perhaps more quickly respond to changing interest rates. Building societies have rightly been criticised in the past for the cumbersome process that they employ, which seems to allow a long time to elapse before a fall in interest rates is reflected by a fall in building society lending rates. The impression given—no doubt unfairly—is that interest rates are nearly all ups and not many downs.

The Secretary of State reminded us that in the last two or three months there have been two decreases in interest rates. I hope that that will give us the opportunity to move towards greater stability in lending rates. Recently, I caused something of a stir by suggesting that instead of reducing the lending rate by the full amount possible we should reduce it by slightly less, in return for an undertaking that it would not again be increased unless and until the minimum lending rate had gone up by a full 2 per cent. or 3 per cent. The Minister for Housing and Construction did not respond as warmly as I had hoped, and the building societies did not respond at all, but I shall continue to press the matter, because I believe that stability in interest rates is one of the best ways in which to encourage young first-time buyers.

I want to concentrate on three schemes to assist young people who want to buy homes but who have difficulty in raising deposits, and to urge the Minister, when he replies, to comment on the practicality of any one of them.

The first is that, up to a certain limit of income and house price, for every £2 saved through a building society a grant of £1 should be made by a Government Department. I believe that if young people are prepared to extert themselves to the point of raising two-thirds of the required deposit it is a good investment for the country to assist them with the remaining third.

Secondly, I draw attention to the prospect of what is called share purchase. Such a scheme would allow a buyer to acquire less than 100 per cent. of the house at the outset, the financial institutions taking the balance and selling progressively, if that is a fair way to describe it, to the buyer, the interest rate on the difference being met in the early stages by the Exchequer.

The third, infinitely simpler scheme, would involve the Government undertaking a maximum mortgage interest rate by the simple device of altering the rate of tax paid by the building society so as to achieve a continuing stable rate of lending.

I believe that all, any one, or even a combination of two of these schemes might be justified. The whole idea of owner-occupation is still immensely attractive to many people who find house purchase beyond their reach. Owner-occupation gives a family independence and—this point is frequently stressed by the Opposition—buttresses individual freedom.

It is important to encourage owner-occupation. My observation of those who have been successful in buying their own homes shows them to be happier as owners than their contemporaries appear to be as tenants.

Owner-occupation is an excellent bargain for the taxpayer, because the average subsidy on a council house—certainly in the first year—is substantially greater than the average tax relief given to a mortgagee—equally in the first year.

Financial realism indicates that the Government should be thinking hard how they are to implement the undertaking that they gave to first-time buyers in their two election manifestos in 1974. I was disappointed to hear the Secretary of State gloss over any attempt to predict the date on which the Government would start to implement that important aspect of their housing policy, I repeat, with regard to first-time buyers. This is an enormously important area. I believe that there is a feeling of betrayal among many young people who had hoped that by this time they would be on the path towards owner-occupation but who find that they are not.

I wish to be fair. I concede that there have been and, indeed, still are economic difficulties in introducing such a policy, but the House will be disappointed if, when the Minister replies, he does not indicate his current policy for the encouragement of owner-occupation, particularly among first-time house buyers. I hope that he will state whether he agrees with any of the three schemes that I have mentioned, or, if not, what encouragement he intends to give to the many people who are waiting for encouragement.

8.19 p.m.

Mr. Frank Hooley (Sheffield, Heeley)

I entirely agree with my hon. Friend the Member for Preston, North (Mr. Atkins) that housing should have the highest social priority. Good housing underpins health and education; bad housing undermines both. I have never had any doubt in my mind that if forced to choose between social priorities I should put housing at the top of the list.

I also agree with my hon. Friend that the cases that come to me as a Member of Parliament are more often concerned with housing, despite the real achievements that have been made over the past 10 years, than any other single problem.

The hon. Member for Henley (Mr. Heseltine) put forward some interesting arguments. He was cagey about council house rents. He did not commit his party to do anything radical about them. He launched a slightly veiled attack on the Community Land Act and the Development Land Act. But even he was not prepared to praise the disastrous free-for-all of 1972–73, when we had initially a free market in land.

Another part of the hon. Member's policy was to sell off public assets. He wanted to sell off council houses and the assets of new towns—these great social assets that have been built up by successive Governments, at the expense of the public, over 20 or 30 years. The hon. Member also wanted a free market for rents in the private sector. If that is the Conservative Party's policy, I hope that the day comes when the electorate firmly rejects it.

The Secretary of State dropped a heavy hint that the forthcoming Green Paper or White Paper on housing finance will be fairly conservative in its presentation of the problem and in its solutions. I agree with him that it is fundamental to housing policy to have public support in both the private sector and the public sector. It is a social need of overriding and overwhelming importance. It is essential that the Government should be committed to provide public finance to meet that need.

Neverthless, there are one or two points that need to be explored. We should not take for granted that the existing system is all that there is. The basic problem is to bring down high interest rates. They are the curse of housing in both sectors. We must get away from the lunatic rates that have prevailed over the past few years.

Why is it impossible to devise a two-tier interest rate system so that housing can benefit from a lower rate? We already have a two-tier system for export credit to benefit the economy of this country. Why cannot we devise a two-tier system for housing? Within such a system there could be variable interest rates to help first-time buyers. Surely it is not necessary to pay the same level of interest over the entire 20 or 25 years of a mortgage. Surely it is not beyond the wit of building societies, with the help of Government, to devise a system that would enable young people in the 22–30 years of age bracket, when they have children and the wife's earning capacity is limited, to enjoy a lower mortgage rate than at a later stage when they are in a better position to pay.

One of the problems that have not been much discussed in the debate is that of repair and maintenance. No one has devoted much time to the question of more sensibly maintaining our present housing stock. It is a problem that needs to be examined further. In the private sector there is a potential army of labour. About 3 million owner-occupiers are capable and willing to do a lot of work on their own properties, to keep them in good order and repair. They reduce the market labour charge in terms of maintaining and decorating that property.

Within the public sector, we should examine whether there is any possibility of providing an incentive for people to carry out certain repair, maintenance and decoration work on their properties. Most tenants make a great effort to keep their homes in good order, both decoratively and in terms of repair. I wonder whether, in view of the immense cost of repair and maintainance and the problems of labour recruitment—although that does not apply at present—tenants should be given financial or other help if they are prepared and able to carry out certain tasks on their own properties. We should examine that possibility.

I see no reason why local authorities should not be encouraged to build houses for sale if there is a reasonable balance in their area between demand for houses for sale and demand for houses for rent. A modest experiment carried out in Sheffield has been amazingly successful. The houses that the local authority built for sales were snapped up immediately by people on the housing waiting list who were glad of the opportunity to buy those homes. That experiment needs further examination.

Obviously, the speculative builder is more vulnerable to fluctuations in the economy than are public corporations, such as local authorities. If local authorities were given wider powers to build for sale it could influence house prices and the availability of housing stock for owner-occupation.

Demographic factors have not been mentioned much in the debate, nor has the startling reduction in the birth rate and the steady rise in the number of retired people that has been experienced over a long period. The birth rate is the more difficult problem, because it has fluctuated sharply and unexpectedly in recent years. It is bound to have an impact on the demand and type of housing required. It deserves fairly close study, so that we may work out future policy on the type of housing required and on housing finance.

In future, elderly people may wish to switch from owner-occupation to renting accommodation. At the moment, this is not easy to do. It is another problem to which more thought should be given.

The control of land is fundamental to the problems of the inner cities. I hope that the Community Land Act can be used where necessary to acquire and control land that will be needed if we are to have a sensible development of derelict areas. I hope that we shall not become obsessed with the idea that we had in the past, that inner city development must involve high-rise flats. Appalling damage has been done by high-rise developments in places such as Birmingham. There is no reason why we should not get away from this obsession for high-rise flats, which has occurred over the past two decades. When we set about rejuvenating inner city areas there is no reason why we should not use low-rise development.

Mr. Arthur Jones

I am interested in the inner city problem. About 75 per cent. of the land in the inner cities is owned either by local authorities or by public institutions. The hon. Member is saying that the Community Land Act should be used to make further acquisitions.

Mr. Freeson

That is cock-eyed.

Mr. Arthur Jones

It is not cock-eyed. I have gone into this question thoroughly. I am sure that the figure is correct. I know that the Minister's sources are more elaborate than mine. But should not local authorities, which, after all, own vast areas of land in some of the cities, consider disposing of it to private developers?

Mr. Hooley

I am afraid that I cannot argue with the hon. Gentleman on the figures, because I do not know them. Perhaps the Minister will be able to clarify that point. All that I am saying is that the Community Land Act could be a key factor in collecting key portions, if not whole areas, of land where inner city redevelopment is necessary. Certainly the powers under the Act could be of great importance in rejuvenating the inner cities.

I am a little hesitant about the new apparent policy of discouraging the expansion of new towns, at least on the scale originally envisaged. There are still areas, such as the South-East, South Lancashire and West Midlands, which are grotesquely overcrowded, even today. I should not like the idea to get abroad that the new towns do not have a great future rôle. They have played a great rôle in the past and they still have an important service to perform.

I can understand why people feel that it is an insult to them that, in a time of great housing need, houses should stand empty for months and even years. All sorts of complicated legal problems are involved, which the Government are trying to sort out by legislation, but I wonder why it is not possible to grant a local authority the power to make an "administration order". Then, when a property has stood empty for more than six or nine months, say, the local authority should be able to take it over and let it to an approved tenant or family in need of housing but without expropriating it or taking over the owner-Ship. It would administer the property, charge whatever rent was necessary, and pay an appropriate rent to the person with legal title. That would at least ensure that such properties did not stand empty ad infinitum.

Our basic need is to build and improve more homes. It is fantastic that with 250,000 building workers unemployed we should be cutting back on house building and house improvement. The need is still for more and better houses and for greater improvement of our housing stock.

Several Hon. Members rose——

Mr. Deputy Speaker

I think that I should make a further appeal for brevity. If hon. Members will restrict the length of their speeches to about eight minutes every hon. Member who wishes to speak can be accommodated.

8.32 p.m.

Sir Brandon Rhys Williams (Kensington)

I shall try to do as you request, Mr. Deputy Speaker.

It is useful for us to ask ourselves two questions in this debate: are we making the best use of the housing subsidies, and are we making the best use of our stock of housing? On the latter question, I do not want to emphasise again the fact that there is a large amount of altogether empty property, because that is a problem which has often been brought out, but we must also admit that much council property is under-occupied.

Although there is no security of tenure for council tenants, it is clear, as we all know from our surgeries, that in council housing and housing association property people do not like being shunted about by officials and that there is a good deal of resistance when people are moved into other properties, even when discretion exists and a reasonable choice is available. They feel that they are second-rate citizens when they are directed into new accommodation, even when they are obviously not making full use of their existing property.

I should therefore like to find ways of encouraging people to plan their own moves by offering them better opportunities to become freeholders, whether in former public sector properties, in private rented accommodation, in new housing or, particularly, in newly-converted property. That last category is an aspect of the housing market which lately has unfortunately been neglected.

In the private sector we must use the vacant spaces better. I have given this subject a good deal of attention and have tried to make specific recommendations. We have to provide for mobility by an increase in the total supply of suitable accommodation. We have a surplus of houses and an even greater surplus of lettable or potentially saleable rooms. Many houses were designed for the larger families of the old days and have been converted in an inadequate or unsuitable way.

The hon. Member for Sheffield, Heeley (Mr. Hooley) drew attention to the dramatic fall in the birth rate. This has not come into our thinking sufficiently but the effect of it will be seen quite soon in housing.

We need to review the operation of the systems of improvement grants, because it is possible that the same amount of money could achieve more. If there is any candidate for an increase in expenditure in the housing area, it is improvement grants. The money saved in some directions could be applied more fruitfully for everyone's benefit if we reviewed the way in which the grants operate. The Government touched on this in the consultative document on the review of the Rent Acts.

We need a change in direction on housing subsidies and a change in the law on letting owner-occupied accommodation for a short term. My hon. Friend the Member for Henley (Mr. Heseltine) said a few words about the shorthold letting concept. I would like to say more than I have done in the past because obviously I have not succeeded in convincing the Minister. I want to approach this subject in a non-partisan and rational way.

We need some facts on the type of property offered for reletting under the Rent Acts once it becomes vacant. The Department has evidence of the large volume of property which landlords are offering for reletting and thinks that the introduction of shorthold would reduce the supply. I do not agree, because I think that the sort of property offered for reletting at present is either the worst of all and should be taken off the market before it is offered again or, on the other hand, may be the very best, in the stratospheric reaches of rents, and that is not what we want to be legislating for just now.

It is wrong to impede parties from coming to a mutually beneficial agreement simply because of the ideology of security of tenure. There are categories of people and types of premises where short leases under a reasonable legal formula are wanted and open-ended tenancies are inappropriate. For these people the insecurity of renting in the owner-occupied sector is unsatisfactory. Very many people in Kensington—and I am sure it is the same elsewhere—have to resort to taking rooms in the owner-occupied sector because such tenancies are all that are on offer. While that type of accommodation is not ideal for them—they want more security—they do not necessarily desire the total security of a freehold or a controlled tenancy.

An example of this is a young married couple who have not planned the eventual size of their family, where they want to live or the eventual jobs they may have. They are not yet in the market for a freehold, yet they have no claim for priority in the public sector. We need to cater for them. One could point to other areas where shorthold would be appropriate.

It is a pity that the Minister has consistently blocked the Bill that I have introduced and prevented it from getting to Committee stage. I believe that one could find a number of different practical aspects which might not make a big impact on the housing scene in themselves but which would make a start. The Department agrees that some kind of shorthold would be convenient for flats over shops. This is not a large area but it could make a useful contribution if there were suitable legislation for it. Shorthold would also be appropriate where the owner-occupier only has a life interest in the property and is under pressure not to let because of legal entanglements which might delay or prevent the eventual sale of the house when the owner of the life interest has died.

There are also very many cases that I can think of where the tenant actually only wants limited security, longer than when renting under owner-occupation, but not permanent. Instances include people who may be in London undertaking professional studies for a year or two or perhaps longer but who have no intention of staying permanently in London, business visitors with short appointments, and people awaiting retirement.

This is another of the points raised by the hon. Member for Heeley. People who have brought up their families and whose youngest children have married do not necessarily want to go on living in the same house. Perhaps they have a need to realise their asset and put it into something which will produce income rather than simply to have empty accommodation which they feel obliged to offer to their in-laws or their children. After the marriage of the children, it should be possible for people to dispose of their house and to move into decent property where they have a reasonable degree of security and can invest their money, instead of having it standing idle in a house which is far too large.

In Kensington we also have a special housing problem. As Sir Malby Crofton had a very effective letter in The Times about this on 16th June, I want to follow it with a few words tonight. Other inner London constituencies suffer the same problem but not, I think, so badly as Kensington. We have a large presence of people whose general level of earnings tends to be much higher than their British equivalent. They tend to have the benefit of much lower tax rates. Lately they have been able to exploit an exchange advantage that makes central London property seem quite cheap to them. Many of them have Government or business backing and do not mind what they pay.

Therefore the character of inner London is rapidly changing because a large number of the better properties—and not only the very best properties, but average properties too—are going out of the control of Londoners and being taken over increasingly by people who have no continuing interest in the life of the capital. I agree with Sir Malby Crofton that this needs special attention. His letter has attracted a good deal of attention and I hope that hon. Members will also give serious thought to this problem.

I should be trespassing upon your good will, Mr. Deputy Speaker, if I ventured on to the subject of housing subsidies. I would like, however, to close by drawing attention to what I said when the House gave me leave to introduce a Bill to reform the national insurance system. We really have to look at the way in which our housing subsidies are distributed and, I believe, to introduce a housing allowance, like a tax credit, which is related to the actual rent paid and which is also related to family size and need.

We have the embryo of this in the housing allowances brought in by the Housing Finance Act, but all too few people in fact claim their allowances and I believe that the Government ought urgently to be studying the situation which will inevitably arise as the operation of the fair rents system pushes rents up. Otherwise we shall force thousands, if not hundreds of thousands of tenants on to supplementary benefit.

I do not think that the housing situation must be one of total gloom, but it is a subject on which the public will not forgive lightly a party which systematically rejects all new ideas.

8.44 p.m.

Mr. D. E. Thomas (Merioneth)

This debate is taking place amid the continuing grip of the reduction in public expenditure on housing, although naturally we heard very little about that from the Secretary of State in opening.

If my calculations are correct, the cumulative reduction in housing expenditure through both the public expenditure White Papers and the subsequent announcements of rounds of cuts in July and December 1976 amounts to a total loss for the housing programme between 1975 and 1979 of £1,250 million. No doubt, the real loss under the Government's cash limits policy will be even greater than this. It is in that context that we had the announcement earlier in the debate by the Under-Secretary of State for Wales that £11.2 million of the cuts in the Welsh Office housing programme had been restored. He can hardly expect me to shout with glee at that.

Neither can I shout with any joy at seeing that provisional results of the house condition survey indicate that the level of unfit housing in Wales is now down to 100,000. If my quick calculation, comparing the hon. Gentleman's figures with those of the Secretary of State earlier, is right, the number of unfit houses in Wales is still well above the average number of unfit houses throughout Great Britain.

The Under-Secretary told us earlier that he is to have a working party between his Department and the Council for the Principality on the non-take-up of housing allocations. He should also look within that working party at the real housing need of the different districts in Wales to ascertain what their allocation ought to be in the context of a housing policy directed to tackling the basic problems of the older housing in Wales, the high proportion of unfit housing and the higher demand for owner-occupancy.

Mr. Wyn Roberts

Does it not strike the hon. Gentleman as curious that the Government should know about this underspending only at this stage? Does he not think that they could have monitored the progress of spending in the course of the year and discovered it a little earlier?

Mr. Thomas

I am grateful for that intervention. I certainly think that the price of a telephone call from the Welsh Office housing division to all the districts in Wales could have brought the information earlier, and there could have been far more effective monitoring of the position.

Mr. Alec Jones

I assure the hon. Gentleman that the figures on which we based our calculation were the actual returns submitted to us by each local authority in Wales. We are now discovering that these returns were not correct. I do not think that it is fair to attribute the blame to the Welsh Office.

Mr. Thomas

I think that it is a serious attack on the credibility of the treasurers and housing officers of our district councils in Wales to suggest that figures gathered by the Welsh Office are incorrect. I should be the first to deplore it if that were the case. On the other hand, I equally deplore a housing policy operated on a stop-go basis, as it has been over the past three years, so that housing officers and chief executives of districts who wish to plan on a five-year basis the kind of housing programme they want are unable to do so because one circular or one suggestion after another comes out.

I remember the visit paid to all districts in Wales by the Minister's predecessor at the Welsh Office, the hon. Member for Merthyr Tydfil (Mr. Rowlands), when he went on a tour telling district councils in Wales to rob the bank. Those were his very words, said in my presence.

Mr. Alec Jones

"Bust the bank".

Mr. Thomas

Yes, "Bust the bank". Yet subsequently, within nine months, we were having cash limits and expenditure cuts imposed. In that context no local authority can be expected to carry out an effective housing programme.

I stress that as local authorities now look to their housing needs for the next three years they should be thinking of putting in to the Welsh Office not realistic bids related to what they submitted in the last two years but bids for what they really need to tackle their housing problems.

I appeal to local authorities in Wales to undertake a programme not only of new house building for specialised needs but also of improvement. This will take them well beyond their 15 per cent. ceiling for Section 105 allocations which the Welsh Office has laid down. I was glad to hear that the Minister was being flexible on the 15 per cent. The truth is that the balance of a massive rehabilitation programme would take certain district councils well beyond their 15 per cent. The Welsh Office should look again at that ceiling, and, instead of imposing an initial ceiling and then becoming flexible in relation to various districts, it should consider giving more freedom to authorities to choose as between rehabilitation and new building. I say that because the balance of rehabilitation as compared with new building has an immediate impact on the total number of unfit houses.

I stress that we are working within a context of massive reductions in public expenditure on housing, and in a context also where not sufficient attention is paid to the relationship between the various types of housing expenditure. This has been touched on already in the debate, and I shall not go on at length about it because we have been warned about shortage of time. However, I emphasise that we ought to look again at the relationship between spending through the mortgage interest tax relief and spending on subsidy to the council house tenant.

I was very disappointed to have advance warning from the Secretary of State that the housing finance review, or whatever the Green Paper coming out next week is to be called, will not result in a fundamental reassessment of the cost-effectivness of our subsidies. It must be said again that any studies of tax relief to owner-occupiers show that public money is being ploughed in which tends to find its way especially to the upper end of the market, while, on the other hand, there are inadequate total resources going to housing. We should look again at the ways in which our total deployment of housing resources can be improved. If that means taking away tax relief at the upper end of the market even further, it must be done in order that our housing resources may be redistributed effectively.

In this debate, as in every housing debate, the Government have pretended that they give housing a high priority. That is totally at odds with their expenditure policies. I was glad to have from the Under-Secretary of State for Wales the small admission that he himself felt that the figures for housing in Wales given in the expenditure White Papers were inadequate. I was glad to have that admission, but the hon. Gentleman should admit also that his Government's expenditure policies mean that we shall never be able to tackle our housing crisis in Wales as we ought to tackle it.

The three recent rounds of public expenditure cuts have hit housing more heavily than they have hit any other single social wage item. The housing programme is still being severely reduced at a time of unprecedented unemployment in the construction industry. The consequence is that we face a deepening housing crisis, especially in the older regions of England, such as the North-East, and in Wales, where we have a preponderance of housing built at the time of the Industrial Revolution and where, accordingly, a more urgent initiative from the Government is necessary to tackle the problems.

Finally, I turn to the impact of housing cuts and the impact of the Government's housing policy on one area in Wales, namely, our capital city of Cardiff. I am becoming increasingly concerned about what is happening in Cardiff—both about the attitude of the South Glamorgan County Council and the attitude of the Cardiff City Council. This year already homeless families have been thrown out on to the street, families have been split up and families have been thrown out of hotel and short-stay accommodation by the South Glamorgan social services department. Moreover, we have seen an unwillingness on the part of Cardiff City Council to accept the responsibility for homeless persons, and the Welsh Office has not felt able to intervene in the matter because it sees it as an internal dispute within Cardiff between the social services and housing.

The root of the problem in Cardiff is not merely that we have extremely reactionary Conservative councillors running Cardiff. We have, in addition, the failure over the past 10 years to tackle the 3,000-strong waiting list in the city. Cardiff's council house building programme has plummeted down from 1,000 in 1970 to fewer than 500 houses in 1976–77. Demolition in Cardiff has been ahead of new building every year since 1973–74.

I appeal to the Welsh Office to examine the situation in Cardiff as it reaches crisis point, particularly as regards homeless families. I also ask the Welsh Office to be prepared to intervene between the district council and the city council if there are any further evictions and if any more families are split up by the authorities in Cardiff later this year.

8.55 p.m.

Mr. Eric S. Heffer (Liverpool, Walton)

I should like to raise one important aspect of housing that probably affects other cities as it affects mine. I refer to the uncertainty felt by people living in privately rented houses when those houses come up for possible slum clearance. All the time in my constituency an area or a number of streets is being designated as property which must be removed, and then a period of uncertainty begins. The local authority draws up plans, but then there may be a change in the authority's political complexion or in legislation or in the economic situation. The people concerned then do not know where they are.

Because the plans are deferred, property is not properly looked after. The repairs are not done. The people do not know whether to do their decorations. At the same time, the houses are deteriorating. I have people living in rows upon rows of such property. I am sick and tired of getting in touch over the years with Ministers and local councillors of all parties. The people in the houses are fed up with what is happening.

It is very important that we should have a housing policy. We must have more housing, and much more money must be put info providing it. Once people are told that an area is a slum clearance area and that it will be cleared by such and such a date, they must know that it will be done then and that they will be rehoused.

We have a genius for destroying communities in big cities. During the Jubilee celebrations there were many street parties in my constituency. People came out into the small streets and had a whale of a time. Most of them vote Labour, so it is not a question whether they are Labour or Conservative. The point is that the community spirit exists.

When people's houses are designated for slum clearance, they ask "Is it possible for us to be rehoused in or near the same area together with our friends?" The authority replies "We shall do our best", but then the people are sent 10 miles away and are separated. They go into the outskirts, into areas some of which they do not know. Sometimes they are prisoners in high-rise blocks. We must be concerned about maintaining the communities.

In my constituency there is a piece of land called the Walton Triangle, which was railway property. We have been on about its use for years. The Liberals, Labour and the Tories have been in office in Liverpool, all of them saying that they would build houses there, but the plan has been put back. Finally, it has been decided that houses will be built there, some for private renting, some for owner-occupation and some for council renting. That is fine. But, again, will the people in the locality, from the slum houses or old houses that are to be pulled down, have the opportunity that they want to move into the new property? I hope so. I am asking the local authority to give them the opportunity, but can it be guaranteed? I am afraid that perhaps it cannot.

We should aim at getting local authorities to ensure that people are moved as a community. When I was on the local authority and served on the housing committee I always wanted to see that when we got rid of one set of houses we built close by and moved the people affected into the new houses. Of course, it was necessary to move the people whose houses were the first to be demolished out of the area and then to move them back again, and one always lost a certain number. But it could be done, and it should be done. That is what we should aim at in any serious housing policy.

I do not agree with those who argue that we should continue to build new towns on a vast scale. I think that such a policy would be quite wrong. In Liverpool, we have acre upon acre of land lying derelict, but new towns outside with no employment. Once we build a new town we have to put industry there, but in an area like Liverpool various industries are declining in the city centre. I do not think that that is a very bright situation. We have to bring people back into the city centres. I do not mean by that that we should destroy the new towns that are already in existence, but we should not develop any more, at least not on a vast scale. We must rebuild and repopulate our city centres and get new industries on a small basis into them for the people living there.

My hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) made a very important point about owner-occupiers who want smaller accommodation once their families have grown up and gone. It is not always easy for them to buy a smaller property, and it would be of some assistance to enable them to go into council property and to help those younger people who find it difficult to raise a deposit to purchase the kind of good artisan dwellings thus vacated. It is important that this should be done.

Above all, we must get the quarter of a million building workers back to work, both in building new homes and in rehabilitating old ones. It is a scandal that in my area for example, where there are thousands of people on the housing list, thousands of building operatives, many of them highly skilled craftsmen, are walking the streets seeking work. It is the economics of madness, and it is about time that we changed policy and did something to get the building workers back to work to build the houses that are so desperately needed.

9.3 p.m.

Mrs. Elaine Kellett-Bowman (Lancaster)

It is not often that I follow the hon. Member for Liverpool, Walton (Mr. Heffer) and agree with everything he has said. How right he was to say that large cities like Manchester, Liverpool and London have been far too good at destroying communities. How much better it would have been if they had sought to save these twilight areas rather than destroy them and build often soulless buildings at rents which people cannot afford, destroying their community spirit in the process.

My local council has not had that bulldozer mentality. Until recently it has had a very good and well-balanced housing programme. It has built steadily to meet the demand, especially for old people's dwellings, which are so vital to us in the North-West with our ageing population. It has had a planned programme of improving older council houses, of which we have many. It has lent extensively to people to buy their own homes. It has encouraged home improvements, which are particularly vital in an area such as ours, which has very many pre-1914 houses. It has cooperated closely with housing associations, and also with private builders to ensure that land has always been available when required and that there should be continuity of building.

On all these counts, I regret to say, the council's policy has been shot to pieces by the present Government's policy. Our council building programme was dealt a savage blow last July when the Government, as part of their economy measures, asked local authorities not to start building work on new schemes even if the contracts had been accepted. This was described by our deputy chief executive as the most serious piece of control ever exercised over housing". But, despite severe Government restrictions and bias against us in the rate support grant to that sort of area, my local council has done all in its power to get on with the job of meeting the housing needs of those on the list, especially the need for old people's dwellings. I have no doubt that it will continue to struggle against the odds, but, unfortunately, they seem to be getting longer every week.

The council's efforts to help people to buy their own homes have been brought to nought by a reduction in the amount of money available for council mortgages from £600,000 in 1976–77 to a mere one-sixth of that amount for 1977–78—only £95,000. We learned of that slashing cut with absolute horror in March because it has set all our plans at naught. This is a disaster in an area such as ours because we have a very high proportion of pre-1914 housing on which building societies are very unwilling to lend. Moreover—and this compounds the problem—we have a large number of relatively low-wage earners who find it difficult to get building society mortgages. In the past three years, 550 such people have been helped. Goodness knows how many we shall be able to help in the next year. The houses that they buy are the very houses which need modernisation and improvement.

We were told that in order to keep control on expenditure the Government had decided to include all mortgage loans in the general allocation for direct lending, lumping it all together with conversion, repairs and improvements—a total for our city of only £249,000 for all these categories of work.

The council also worked closely with the housing associations to help to meet local housing need. I mention three bodies: the British Legion, the North British Housing Association and the Northern Counties Housing Association. To our utter dismay, when a site had been not only bought but landscaped and serviced by the housing associations for a very well-balanced housing development, the Government suddenly, last September, stopped the development stone dead and redirected the money to so-called stress areas. We fought the decision as hard as we could, but we got no change.

The Minister has proudly announced today that part of the £57 million cut has been restored. I wrote to the Minister within five minutes of learning of part restoration of funds, only to be told that the money was not for the likes of us but was for so-called stress areas. If he wants to know about housing stress, he needs only to come to one of my interviews any week and he will get firsthand examples of housing stress, not just housing statistics. Similarly, a housing association-planned development for 24 flats for single people was also abandoned because of Government restriction. This is a sector which gets scant attention—single women and single men who have little provision made for them. This development, too, was knocked on the head.

Lastly, a joint council-private builder project to build 64 houses for sale has had to be scrapped because no money is available locally for house buying, and "house for sale" notices are springing up all over the place.

It is small wonder that the employment situation in our intermediate area has been consistently worse than that of most full development areas and, indeed, of some special development areas. Until the Cabinet gives us a status on a par with that of our neighbours, we shall not be able to remedy the unemployment problem and get house buying going again.

The irony of it is that well over half of our total unemployed are builders. There would be many more were it not for the fact that local builders, in an effort to keep their workers together for when an upturn eventually comes, are taking on jobs at cost price or at below cost, and, indeed, in some cases 10 per cent. below cost. How much better it would be if all our unemployed builders could be employed on building houses instead of eating their hearts out on the dole. In our part of the country, people are loth to be unemployed. They are desperately independent, and it goes very much against the grain to be out of work for any time.

If the Government do not do something very soon to save our house building industry, particularly in the North-West, there will be no builders left when we once more take over and implement an active housing policy tailor-made to meet the needs of the people.

9.9 p.m.

Mr. W. R. Rees-Davies (Thanet, West)

propose to cover ground that has not so far been covered, but before doing so I should like to comment not only on the able speech of my hon. Friend the Member for Henley (Mr. Heseltine) but on that of my hon. Friend the Member for Melton (Mr. Latham) and, strangely enough, the valuable contribution of the hon. Member for Liverpool, Walton (Mr. Heffer). It was like a breath of fresh air to hear the hon. Gentleman bringing forward the idea of keeping the community together, referring to examples in the recent Jubilee celebrations. It is a pleasure to pay the hon. Gentleman a tribute.

My hon. Friend the Member for Henley and my hon. Friend the Member for Kensington (Sir B. Rhys Williams) put the shorthold argument. I support it entirely, for the reasons they have given, but it docs not go far enough. The Minister has absolute power to decontrol from the Rent Acts altogether by region. There are many parts of the country, mainly in the shires—parts of Kent, for example—where the Rent Acts are no longer required.

The basic trouble is that since 1919 the Rent Acts have distorted the housing economy, and we must gradually rid ourselves of this distortion without creating hardships to those who have security of tenure at the present time. Hitherto we have not been able to set about this task, because of the danger of a Socialist Government. It has always been the hard rock philosophy of Socialism that in no circumstances must people be denied absolute rent control and absolute security of tenure. Those hon. Members who had to suffer a 24-hour sitting on the Rent Act in the Standing Committee had the opportunity of seing how very deeply Labour Members believe in that principle.

Now we are to have a report on vacant and under-occupied housing. It will probably be valueless, because it fails to understand the principles of housing. The Government, because they do not understand the principles of housing, have by their actions led to the abuse of housing. We need to introduce a system of new shorthold tenures, both for new housing and for premises that have been converted. At the same time we must in large tracts of the country get rid of rent control and security of tenure.

In order to achieve this without hardship we shall have to give in return what is, in effect, a shorthold for those who have been in occupation for any length of time. If they have been in occupation for five, 10 or 15 years, or even longer, it will be necessary to give them a firm shorthold tenure, with the opportunity then to go on the housing list if they so wish, so that they will have the guarantee of security of tenure in council housing. This opportunity will probably be taken up in a certain number of cases. Where the person concerned may have been in a wholly inadequate position over many years it may be that a modicum of increase in rent and the opportunity for the tenant to carry out repairs will lead to agreement. But without ultimately unwinding security of tenure we cannot hope to have a real market operating.

Nothing is being done by the Government to help the young people who come into our cities or to help the single person who has to try to find accommodation. These categories have not been mentioned in the debate so far. Hostels are desperately needed in London and in all the major cities. Nothing has been done to provide hostels to enable young people to live at cheap rents in a reasonable way. This sort of accommodation, again, does not require security of tenure; that is purposeless. The young people want to stay only from six to 12 months at most, because they are moving about from one job to another.

I have raised these questions with the tourist bodies and with other bodies in London. There have been sympathetic soundings, but the Government have done nothing to assist in this direction. The Greater London Council is simply not interested, because the people involved are not the voters of the present time. I hope that the Government will consider the question of hostels and ensure that accommodation is provided in Liverpool, Birmingham, Manchester, Cardiff and London to enable young people to have somewhere reasonable to live.

Single people do not want security of tenure; they want the proper rebuilding and proper development of large existing blocks of flats. There should be an opportunity for the old people who own these houses to move out into other accommodation and for the younger generation and the single person to move in. They are willing to pay a reasonable rent. They want nothing other than the opportunity to enter into a contract from one to three years, with the guarantee that at the end of that period they will be moving on.

I agree with the suggestion that we need a Select Committee of the House to deal with these matters. It is not until one has heard the whole of a debate that it is possible to see what has been left out, and that there are needs such as those I have mentioned.

These things can be done, but let us on the Conservative side not be afraid that a Labour Government will come back and ditch the measures that have been carried into effect. These measures must be taken if we are to have a really effective housing policy, such as that to be found in Germany today.

9.15 p.m.

Mr. Arthur Latham (Paddington)

I wish to apologise to my right hon. Friend the Minister for Housing and Construction for the fact that although I wish to put two questions to him I shall not find it possible to be in the Chamber when he replies. This is somewhat ironic, because during the last housing debate, when I put a number of points to him, he was not able to reply to them because he was peppered with partisan points by the Opposition Front Bench and was never able to deal with those serious housing questions. I understand that he is still in process of replying to those queries that he was not able to deal with on the previous occasion.

I wish to put these points to the Minister because I do not know what to say to private tenants in my constituency who look to a Labour Government for some protection in facing rent increases of £300 a year over a three-year period. I emphasise that I am referring to increases of that nature and not to total rent. I have given the Minister a number of examples in numerous letters to him, Furthermore, I have written on this subject to the Secretary of State for the Environment and to the Prime Minister. I have now returned to the sort of occasion on which I originally put these questions—namely, in a housing debate. The Government appear to regard rent increases in some parts of London as excessive but exceptional. Therefore, they are not prepared to use their power to fix either a percentage or a cash ceiling.

I repeat that I do not know what to say to tenants who face excessive rent increases and who feel that they can turn to nobody for protection. It will be no comfort to them to say, as has been outlined by the Opposition Front Bench, that if the Conservatives are returned to power they will operate a free market in the private sector. The fact that those tenants might suffer even more will give them no reassurance.

What appears to have been ignored by the Department of the Environment was illustrated by what was said by the hon. Member for Kensington (Sir B. Rhys Williams), who spoke about the letter in The Times from Sir Malby Crofton and the pressure that was being applied. Pressure from those who can pay a good deal for their accommodation is not a new feature in Westminster, Kensington or Chelsea. Recent events may have added an additional dimension, but the effect of the kind of rent increases that I have constantly described to the Minister will change altogether the social character of these parts of central London. In future, it will no longer be possible for a family living on ordinary means to think in terms of making their home in those parts of London. It will be no use pointing to local authority property, because, as the Minister will know from his constituency in Brent, there is a tendency for local authorities, particularly Tory-controlled authorities such as Westminster, to look at the level of private rents and then to examine local authority rents and consider setting them at a new high level.

When I hear my hon. Friend the Member for Salford, East (Mr. Allaun) and others talk of the rent levels obtaining in other parts of the country I emphasise to them that ordinary local authority tenants in my constituency are being asked to pay rents of £14 and £15 per week as the norm. If the Government want to see a reasonable mixture of population in central London, if they want ordinary working people, including higher-earning working people, to take the opportunity to make their homes in central London, they will have to take action soon to stop these excessive rent increases. These people will be driven out of the centre of the Metropolis. That is not good for London and it is not good for my constituents.

I have on numerous occasions sent to the Minister letters from my correspondents, and he has a file corresponding to mine. It is a large one, involving individual cases in my constituency. I have also sent evidence about neighbouring districts that are similarly affected. Action is necessary, and I again appeal to the Minister to offer a glimmer of hope to these people, who are entitled to look to the Government for protection.

I wish to mention another related matter, concerning the National Empty Properties Campaign, which held an exhibition on the Interview Floor of the Palace of Westminster last week. The exhibition was attended by a number of hon. Members. An interesting development of the campaign is that although it started in Westminster—indeed, in Paddington—there is now a countrywide response to the campaign. At the exhibition last week there were representatives from not only London but Cardiff, Bristol, Nottingham, Sheffield and many other parts of the country. They made the point that this is not simply a London problem but a growing one in most urban centres.

During the last housing debate the Government announced that there was to be a pilot survey of empty properties. My hon. Friend the Member for Salford, East has tried to introduce a requisitioning Bill. I was able to present it on his behalf on one occasion—albeit unsuccessfully.

My hon. Friend and I, and other hon. Members, thought that here at last was some indication of Government action. We believed that the problem had been identified, that there would be a pilot survey, and that some useful action could be anticipated. I recently tabled a Question on this point and the reply indicated that the pilot survey would be made at some time in the future, perhaps in July or August. The survey will look at empty properties and return six months later to find out whether they are still empty and, if so, inquire why. I suggest that the approach shows an abysmal unawareness of the urgency of the problem and of the need for Government action. We are speaking about the homeless in London and elsewhere in the country who want a response from the Government that will be much more immediate than a long-term survey and pilot inquiry and, presumably, another long pause before action is contemplated.

I must remind the Government that during the last debate on housing one of the Opposition speakers suggested that a variety of actions might be taken to try to overcome the problem of empty properties. I readily responded to that, and suggested that it might be helpful if, instead of having a pilot survey, a report and a long pause, with heaven knows what action at the end of it, the Government now considered attempting to get through the House—and this might not be impossible—enabling legislation that would permit schemes to be promoted, particularly in stress areas where there is a high incidence of empty property. I offer Westminster and Paddington as ready examples. Such a scheme should be along the lines suggested by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) this evening. He talked not about requisitioning—that raises hackles among hon. Members opposite; they go white at the thought—but about a scheme in which an administrative order could be made by a local authority. The property could be occupied and the rates calculated and paid.

Little more than that was involved in the requisitioning Bill that we attempted to bring before the House. It is merely a system of trying to ensure that the many thousands of empty properties are put to a useful purpose, at least for a limited period. I urge the Government not to tinker further with pilot schemes but to come forward with positive proposals that will help to overcome the problem, at least in some parts of the country.

Has the Department any figures to convince it of the scale of the problem or to confirm various claims that are being made? For example, it is said that there might be between 120,000 and 200,000 empty properties in the London area. If only half of these properties could be occupied it would be a substantial contribution towards dealing with the problem of homelessness. Similarly, if powers could be introduced countrywide it would save much misery and anguish among people who need homes and who see empty houses around them over which no action is being taken.

I still insist that the Rent Act 1974 has done little to contribute to the problem. This problem was here long before the Act. I believe that many landlords keep some properties empty as a hedge against inflation—as part of a deal in a multiple transaction that may take place. If the Government made a sympathetic response to the idea of a system of compulsory, albeit temporary, letting, it would be unnecessary to use that power. The mere fact that there was the possibility of such action would have a salutary effect on landlords who keep properties empty.

I shall not be here for my right hon. Friend's reply, but I hope that he will answer the points that I have raised and that I shall be able to read them in Hansard. There is a need to do something about excessive rent increases in the private sector and a crying urgency to see that empty properties are occupied by homeless families.

9.28 p.m.

Mr. Hugh Rossi (Hornsey)

In view of the lateness of the hour and the limited time left to me and the Minister to reply, I hope that the House will forgive me if I address my remarks mainly to the speech of the Secretary of State and do not refer to the many valuable points made by other hon. Members.

The right hon. Gentleman started by commenting on the Community Land Act and claimed that it had had great success on the basis of its having stabilised land prices. The Secretary of State should not treat the House as if it were completely naive. He knows as well as we do that so little land is now changing hands that there can hardly be said to be a market at all. There are insufficient deals to establish a price.

I am not saying this just for the sake of scoring party points. It is being said by non-political organisations which are desperately concerned with the development and provision of housing. The House-Builders Federation and the National Federation of Building Trades Employers are desperate about the effects that the Act is having and will have on the supply of land for housebuilding if it is allowed to remain on the statute book.

The hon. Member for the Isle of Wight (Mr. Ross) said that there was some merit in the Act and wondered what we would do if we repealed it—as we shall. He indicated that there was a need for local authorities to have some power to marshal land. I accept that local authorities should have that power and should be able to arrange for the development of the land in partnership with private developers.

There is also a need for local authorities to have the power to deal with land in the interests of what is now called positive planning. That can be done readily by simple amendments to the existing town and country planning legislation—for example, by amending the powers of acquisition possessed by authorities. What is not necessary is all the bureaucratic nonsense contained in the Community Land Act—for example, disposal notification areas and the suspension of planning permission for a private developer while the local authority makes up its mind whether it chooses to carry out the development. When that situation is coupled with a rate of development land tax of between 66 per cent. and 80 per cent., what more could one envisage as creating a land shortage? If we wished deliberately to create a land shortage, we could not go about it any better than by introducing the measures that we have in the Act, which is a complete discouragement to anyone to bring forward land for development purposes.

I have mentioned the house building industry and the Secretary of State has made reference to it. The right hon. Gentleman took an extremely complacent view. He tended to brush aside the difficulties that the industry faces. He said that the present taxation measures do not really impinge upon the industry. I wish that he had been there—and I do not recall whether the right hon. Gentleman was—when we debated the construction industry a few weeks ago. If he had been in the Chamber he would have realised that the industry was going through a worse period than in the 1930s. There are about a quarter of a million unemployed in the construction industry. The right hon. Gentleman surely cannot sit back and make the complacent and bland statements that he made this afternoon.

I wonder whether the right hon. Gentleman read the Architects' Journal of 15th June 1977. It states that one in three architects will be unemployed within two years. It continues: Architects are at the mouth of the pipeline which leads from the client to the worker on on the sites. … No one can calculate the figure accurately', but, given the work load of architects at the moment, there will be at least 400,000 unemployed in the construction industry next year unless the Government take action.

Mr. Shore

I know that the hon. Gentleman wants to be fair. What I was saying in the context of the building industry was not to deny the great problems which it faces, which I fully understand, but to put to the hon. Gentleman the question of whether he agrees that the major problem facing the industry is a lack of demand, and whether in the light of that his party's policy of discouraging new local authority building would have the effect of damaging rather than helping the industry.

Mr. Rossi

The Secretary of State cannot slide out of it in that way. He knows that it is patently not true. Demand is a factor, but what creates demand? Who is responsible for the economic climate today? What stimulates or does not stimulate demand? The responsibility lies with the Labour Cabinet for the state in which the nation now finds itself and for the state in which the construction industry finds itself.

The Secretary of State took an equally sanguine view of housing starts and said that in the private sector these were holding steady. There has been a consistent and continual decline since last autumn. At this time last year housing starts were running at about 30,000 a month. Today there are 15,000 a month. That is not something that the right hon. Gentleman can brush aside. Orders, which are the starts of tomorrow, are 25 per cent. down on last year. An even more significant figure is the stock of bricks and cement, which is a sensitive indicator of the amount of activity that is taking place in the house building and construction industry. The brick stocks are mounting month by month and they are in their hundreds of millions. If the Government are not careful, they will soon be at 1,000 million. We shall have a brick mountain.

Mr. Norman Tebbit (Chingford)

Give him a free vote on it and see which way he goes.

Mr. Rossi

The Labour Government invented the brick mountain long before the European Community ever thought of any mountains. We have seen this situation before. It took place in 1964–65.

I turn to the public sector. The right hon. Gentleman is always ready to put the blame on someone else for a disappointing performance. The scapegoats are the Conservative-controlled local authorities which have recently come into office and have inherited a reduction in the rate support grant and high interest rate charges. These problems have been created by the Government. The Undersecretary of State for Wales is a more truthful man than the Secretary of State, because he said that the difficulty was spread equally between Conservative-and Labour-controlled authorities.

Of course, when it is not the local authorities it is the weather. That is the other alibi. The wet weather is now responsible for the lack of building. It is on those feeble excuses that the record of the Secretary of State and the Government will be judged.

The right hon. Gentleman told the House that we must accept that there has been a reduction in applications for improvement grants, but he did not tell us that it was a reduction from 450,000 in 1973 to 150,000 in 1976—a fall in expenditure from £840 million to £470 million. The Secretary of State said that was the fault of the 1974 Act—which, incidentally, the Labour Government brought in. The Conservatives were party to that Act, I agree. But the Act gives the Minister power to adjust rateable values above which improvement grants cannot be claimed. It lies within his power to increase improvement grants. Despite urgings from both sides of the House for several years, he has done nothing to increase the level of improvement grants.

The maximum eligible expense of £3,200 for each improvement is also totally out of date. The average cost of an improvement in London is £7,500, and it is £4,500 elsewhere. In view of the level of grant that is applicable today compared with the actual cost of improvement, few people are prepared to put in applications. What are the Government doing to encourage applications? If they encouraged applications, they would help the house building and construction industry and deal with the housing problem in a way that we would like to see.

The Secretary of State said that, in terms of quality and quantity, Britain is now one of the best-housed countries in Europe. I accept that the problem is no longer the overall shortage of houses. We have about 20 million houses in this country as against 19 million households. Therefore, we have a crude surplus. The right hon. Gentleman said that we had built about 7½ million houses in the last 25 years. The problem is not the quantity, because we are in surplus, but, to an extent, the quality, because within the total of 20 million houses about 2 million are unfit or are lacking in basic amenities.

We have consistently and persistently urged that there should be a redirection of resources in this area, but the Government have consistently failed to take action. Instead, we have seen this tremendous decline in the number of improvement grants and in the supply of money that has been made available for this purpose. That is understandable because the Government entered office on a policy of massive, indiscriminate expansion of local authority building. As a result, they neglected the existing housing stock.

A change of heart has been announced today. I am glad to hear from the Secretary of State that he is now to give local authorities block grants within which they will be able to choose whether they use the money for new council house building or for the improvement of housing stock. Now that they have been given this discretion and flexibility, I hope that we do not hear again the argument against certain authorities that they are not building as many houses as they should, particularly if they are spending money in the way in which I think the House would like them to spend it—on improving the existing housing stock which is in surplus.

We believe that local authorities should concentrate new building on the sectors of the community that are not able to help themselves—the elderly, the disabled and those in need.

Mr. Heffer

Surely the hon. Member must agree that if a local authority is getting out of balance—for example, in certain areas where there is a need to build houses—and it is not building but is concentrating on improvements, we have a right to criticise it.

Mr. Rossi

If that is what authorities are doing, I agree. However, the authorities that are usually criticised are those that tend to concentrate on improvement when they can do so. That has been the picture so far.

It is often said that the housing figures of the Conservative Government were not as good as those of Labour. If one takes a combination of new houses built and improvements and compares the records of the two Governments, one finds that in 1973 the Conservative Government improved or built 747,000 compared with 493,000 built or improved by this Government. The Labour Government have shamefully neglected the need for improvement.

I had intended to deal with other matters, particularly those mentioned by the Secretary of State and the financial review that he will be introducing next week. I wanted to deal with the challenge he made to us about the increase in council rents and the question of a contribution of 7 per cent. of average income towards council rents. I have not the time to go into detail.

From the statements by the Secretary of State, it appears that he does not really want to do much at all either with council rents or with mortgage interest rates but that some minor adjustments must be made. One can only conclude that he does not want to offend the 30 per cent. of people who live in council houses by putting up their rents too much or the 53 per cent. of people who live in owner-occupied houses by tinkering around too much with mortgage relief. I can only take that as an indication of a General Election in the near future.

9.44 p.m.

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

I shall try to deal with as many as possible of the points that have been raised in the debate. Most of the general points that were raised by the hon. Member for Hornsey (Mr. Rossi) and other hon. Members were dealt with in the opening speeches. Following the publication of the Green Paper next week we shall begin a major debate and consultations on a whole range of matters which are the subject of today's debate.

A great deal of play has been made of the improvement grant position. I accept that the situation has been accurately described. There has been a major reduction in the number of improvement grants, partly because of the general state of the economy and partly because of the state of the housing market, but also arising from the operation first of all of the 1974 Act and, more particularly, the ending of what was known to be the temporary Act passed by the previous Government. I have before me a summary of that Government's White Paper dealing with this issue particularly. I shall not go into all the details of it, but I shall quote some significant figures.

The Act in question was described as a temporary Act, due to end in June 1974. The number of improvement grants, which had stood at 57,000 in the first quarter of 1974, dropped to 17,500 in the first quarter of 1975, after the ending of the temporary Act. That was the major single cause of the drop in improvement grants. There were two or three areas in which that special Act operated chiefly as a counter-unemployment measure, which had increased the percentage of improvement grants in large parts of the country; but it had also given rise to a whole range of abuses which the then Government themselves described in their own White Paper before they left office and which they made recommendations to deal with in a draft Bill published just before the 1974 election.

Mr. Heseltine

Then why is it that, nearly two years later, the Minister has not introduced legislation to deal with the abuses and to replace the facilities so that the flow of improvement grants can go on?

Mr. Freeson

The hon. Gentleman is wrong. We introduced the Housing Act 1974, which in this respect was based largely on the recommendations in the draft Bill which the previous Government had published. So we have introduced the very legislation which he suggests we should now introduce.

Mr. Michael Morris (Northampton, South) rose——

Mr. Freeson

No, I will not give way. I have very little time and the hon. Gentleman has not been in the Chamber very long. I want to deal with points put to me—[HON. MEMBERS: "Give way."] It would help the House if the Opposition stopped turning housing debates into barnstorming acts every time we had one.

Mr. Michael Morris rose——

Mr. Freeson

1 will not give way. I wish to deal with as many of the individual points—[Interruption.] Does the hon. Member for Henley (Mr. Heseltine) want to intervene again?

Mr. Humphrey Atkins (Spelthorne)

Get on with it.

Mr. Freeson

The Opposition Chief Whip should hold his tongue.

A number of points have been made about this Government's record in both the public and private sectors. Whatever the hon. Member for Hornsey may have said and no matter what is said by those who seek to interrupt me, when this Government came to office there was a total collapse of the house building programme in both sectors. We have since then increased building in the public sector from a little over 100,000 dwellings a year to between 150,000 and 170,000. In the private sector, of which the Conservative Party is so proud, they produced a situation in which a figure of 200,000-odd dwellings collapsed to just over 100,000 when they went out of office. There were 65,000 newly-built houses on the market which had been unsold for more than six months when we came to office.

We have reversed that trend. There have been increases in the private and the public sectors of up to 40 and 50 per cent. taking one year with another. We are holding that course steady, no matter what Conservative Members may say.

There were suggestions that the Community Land Act had something to do with holding back land from the housing market. There is no evidence for this from house builders; none of them has suggested it. Despite their feelings about the Act, they are not arguing that it is responsible for holding back land. In the first year of operation of the Act, more land was purchased by local authorities than was forecast. The forecast was for 1,200 acres, but in the event over 1,500 acres were purchased, half of which was for housing purposes. In 1977–78 we shall see something of the same order of activity on expenditure of resources.

Mr. Heseltinerose——

Mr. Freeson

No, I shall not give way. I offered to give way to the hon. Member a few minutes ago and he did not take the opportunity.

The point has been made about the operation of the Rent Acts. I restate that there is no evidence at all to suggest that the Rent Acts have dried up the supply of private rented accommodation. What is more, I put the question once more to Opposition Members, in particular to the hon. Member for Hornsey: if they were so strongly against the Act—and for three years they have opposed it—why did they not vote against it in 1974 when they had the opportunity to do so? I invite the hon. Member for Hornsey to tell us the reason on some other occasion. He did not vote against the 1974 Rent Act but he has spent the last three years attacking it. Yet he has not told us why he has turned his back on the Rent Act when his own party supported it when they were in office and refused to vote against it when it was introduced. [Interruption.] I wish that the Opposition Chief Whip would maintain silence.

Mr. Rossi rose——

Mr. Freeson

No, I shall not give way. I have not much time.

Mr. Rossi

On a point of order, Mr. Deputy Speaker. The Minister has asked me three times to answer a question, and when I try to do so he will not let me. Will you rule that he should allow me to answer his question?

Mr. Deputy Speaker (Mr. Oscar Murton)

That is entirely within the discretion of the Minister.

Mr. Freeson

The hon. Member for Hornsey can answer the question on any other occasion that he wishes. I find the behaviour of hon. Members on the Opposition Benches very interesting. I voted against the televising of the House, but I think it would be interesting to see this kind of conduct on the screen. Hon. Members opposite must contain themselves. This jack-in-the-box behaviour serves no particular point.

In the limited time that the Opposition interrupters and barnstormers have left me, I shall deal with the few points that were put to me by hon. Members who were in the House throughout the debate. The point was made by the hon. Member for Henley about a review of planning procedures. We have done that and we shall issue very shortly a revision of the General Development Order as a result of that review. I ask the House to await its publication. The hon. Member for Horasey was one who participated in the review——

Mr. Rossi

That was not a review of the planning system.

Mr. Freeson

I ask the hon. Member to await publication, and then he will know.

The hon. Member asked us—others supported him—to undertake arrangements to encourage leasing of empty property by local authorities. We are already doing so. At least two dozen authorities are doing this. We are encouraging them. We will continue to do so.

The hon. Gentleman asks us to support a policy of switching over to gradual renewal and rehabilitation and to stop the bulldozer. We are doing so. It is already policy.

The hon. Gentleman asked us to undertake a review of the operation of the Rent Acts generally—not just the 1974 Act. We are reviewing the operation of the Rent Acts. Specifically in answer to the hon. Member for Isle of Wight (Mr. Ross), I have asked officials to consider any relevance that the Landlord and Tenant Act 1954 might have to that review. I await the advice of my officials on that matter.

It has been suggested that there should be an increase in the activity of local authorities in rehabilitation outside improvement grants. Today we are providing about five times as much capital, in real terms, as was proposed by the Tory Government when they went out of office. In 1977 nearly £600 million is being spent by local authorities and housing associations, or provided for them, for the purposes of conversion, modernisation and rehabilitation, as compared with a figure of little more than £100 million provided by the Tory Government when they were in office and the election was called. We are increasing the provision. We do not have to plan to do the things suggested, because we are already undertaking to do them. Hon. Members should ask the tenants who are occupying the modernised properties whether they notice the difference.

We are already undertaking policies for alternative kinds of tenancy. The fastest growing kind of tenancy in the country is the co-operative tenancy. We are backing housing associations and local authorities in undertaking this.

However, we intend to press ahead with a new building programme. The hon. Member for Hornsey said that if freedom were given to local authorities to switch from one kind of expenditure to another we could not complain if they spent more on rehabilitation than on new buildings. I shall not spend too much time on that argument. There is much more involved in the housing investment programme that we are putting to local authorities than that simple proposition.

On the evidence so far coming to us, there are local authorities which have decided to cut their house building programme without switching their resources to rehabilitation.

Mr. Michael Morris

The Minister does not let them switch.

Mr. Freeson

They are not switching. That is the point. They are cutting.

Mr. Michael Morrisrose—

Mr. Freeson

The point is that local authorities are not switching their expenditure; they are cutting it. We have already undertaken to switch those allocations to other local authorities which are prepared to take up that expenditure. We have started to do so. I urge hon. Members on the Opposition Benches to persuade their stress area authorities now under Conservative control to maintain the building programmes that those authorities put to my Department, in addition to their rehabilitation policy. That is their responsibility. It is not good enough for Opposition Members to talk about the switching of expenditure when in fact what is at risk is a cut in investment in total.

I have to put the question to the hon. Gentleman once more and I shall give way on this one. Does he favour——

Mr. Humphrey Atkins (Spelthorne)rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That this House do now adjourn:—

The House divided: Ayes 255, Noes 271.

Division No. 154]	AYES	[10.00 p.m.
Adley, Robert	Gilmour, Sir John (East Fife)	Maxwell-Hyslop, Robin
Aitken, Jonathan	Glyn, Dr Alan	Mayhew, Patrick
Alison, Michael	Godber, Rt Hon Joseph	Meyer, Sir Anthony
Amery, Rt Hon Julian	Goodhart, Philip	Miller, Hal (Bromsgrove)
Atkins, Rt Hon H. (Spelthorne)	Goodhew, Victor	Mills, Peter
Awdry, Daniel	Goodlad, Alaslair	Miscampbell, Norman
Baker, Kenneth	Gow, Ian (Eastbourne)	Mitchell, David (Baslngstoke)
Bell, Ronald	Gower, Sir Raymond (Barry)	Moate, Roger
Bennett, Dr Reginald (Fareham)	Gray, Hamish	Monro, Hector
Benyon, W.	Griffiths, Eldon	Montgomery, Fergus
Berry, Hon Anthony	Grimond, Rt Hon J.	Moore, John (Croydon C)
Biffen, John	Grist, Ian	More, Jasper (Ludlow)
Biggs-Davison, John	Grylls, Michael	Morgan, Geraint
Blaker, Peter	Hall, Sir John	Morgan-Giles, Rear-Admiral
Body, Richard	Hall-Davis, A. G. F.	Morris, Michael (Northampton S)
Boscawen, Hon Robert	Hamilton, Michael (Salisbury)	Morrison, Charles (Devizes)
Botlomley, Peter	Hampson, Dr Keith	Morrison, Hon Peter (Chester)
Bowden, A. (Brighton, Kemptown)	Hannam, John	Mudd, David
Boyson, Dr Rhodes (Brent)	Harrison, Col Sir Harwood (Eye)	Neave, Airey
Braine, Sir Bernard	Harvie Anderson, Rt Hon Miss	Nelson, Anthony
Brittan, Leon	Hastmfls, Stephen	Neubert, Michael
Brocklebank-Fowler, C.	Havers, Rt Hon Sir Michael	Newton, Tony
Brooke, Peter	Hayhoe, Barney	Nolt, John
Brotherton, Michael	Heath, Rt Hon Edward	Onslow, Cranley
Brown, Sir Edward (Bath)	Heseltine, Michael	Page, Rt Hon R. Graham (Crosby]
Bryan, Sir Paul	Hicks, Robert	Page, Richard (Workington)
Buchanan-Smith, Alick	Higgins, Terence L.	Parkinson, Cecil
Buck, Antony	Hodgson, Robin	Pattie, Geoffrey
Budgen, Nick	Holland, Philip	Penhaligon, David
Bulmer, Esmond	Hooson, Emiyn	Percival, Ian
Burden, F. A.	Hordern, Peter	Peyton, Rt Hon John
Butler, Adam (Bosworth)	Howe, Rt Hon Sir Geoffrey	pink, R. Bonner
Carlisle, Mark	Howell, Ralph (North Norfolk)	Price, David (Eastieigh)
Chalker, Mrs Lynda	Howells, Geraint (Cardigan)	Prior, Rt Hon James
Clark, Alan (Plymouth, Sutton)	Hunt, David (Wirral)	Pym, Rt Hon Francis
Clark, William (Croydon S)	Hunt, John (Bromley)	Raison, Timothy
Clarke, Kenneth (Rushcliffe)	Hutchison, Michael Clark	Rathbone, Tim
Clegg, Waller	Irving, Charles (Cheltenham)	Rawlinson, Rt Hon Sir Peter
Cockcroft, John	James, David	Rees, Peter (Dover & Deal)
Cooke, Robert (Bristol W)	Johnson Smith, G. (E Grinslead)	Rees-Davies, W. R.
Cope, John	Jones, Arthur (Daventry)	Renton, Rt Hon Sir D. (Hunts)
Cormack, Patrick	Jopling, Michael	Renton, Tim (Mid-Sussex)
Corrie, John	Joseph, Rt Hon Sir Keith	Rhodes James, R.
Costain, A. P.	Kaberry, Sir Donald	Rhys Williams, Sir Brandon
Crouch, David	Kellett-Bowman, Mrs Elaine	Ridley, Hon Nicholas
Crowder, F. P.	Kershaw, Anthony	Ridsdale, Julian
Davies, Rt Hon J. (Knutsford)	Klmball, Marcus	Rifkind, Malcolm
Dean, Paul (N Somerset)	King, Evelyn (South Dorset)	Rippon, Rt Hon Geoffrey
Dodsworth, Geoffrey	Kitson, Sir Timothy	Roberts, Wyn (Conway)
Douglas-Hamilton, Lord James	Knox, David	Ross, Stephen (Isle of Wight)
Drayson, Burnaby	Lamont, Norman	Rossi, Hugh (Hornsey)
du Cann, Rt Hon Edward	Langford-Holt, Sir John	Rost, Peter (SE Derbyshire)
Durant, Tony	Latham, Michael (Melton)	Sainsbury, Tim
Dykes, Hugh	Lawrence, Ivan	St. John-Stevas, Norman
Eden, Rt Hon Sir John	Lawson, Nigel	Scott, Nicholas
Edwards, Nicholas (Pembroke)	Lester, Jim (Beeston)	Shaw, Giles (Pudsey)
Elliott, Sir William	Lewis, Kenneth (Rutland)	Shelton, William (Streatham)
Emery, Peter	Lloyd, Ian	Shepherd, Colin
Evans, Gwynfor (Carmarthen)	Loveridge, John	Shersby, Michael
Eyre, Reginald	Luce, Richard	Silvester, Fred
Fairbairn, Nicholas	McAdden, Sir Stephen	Sims, Roger
Falrgrieve, Russell	McCrindle, Robert	Sinclair, Sir George
Fell, Anthony	Macfarlane, Nell	Skeet, T. H. H.
Finsberg, Geoffrey	MacGregor, John	Smith, Dudley (Warwick)
Fisher, Sir Nigel	MacKay, Andrew James	Smith, Timothy John (Ashfleld)
Fletcher, Alex (Edinburgh N)	Macmilian, Rt Hon M. (Farnham)	Spence, John
Fookes, Miss Janet	McNair-Wilson, M. (Newbury)	Spicer, Jim (W Dorset)
Forman, Nigel	McNair-Wilson, P. (New Forest)	Spicer, Michael (S Worcester)
Fowler, Norman (Sutton C'f'd)	Madel, David	Sproat, lain
Fox, Marcus	Marshall, Michael (Arundel)	Stalnton, Keith
Fraser, Rt Hon H. (Stafford & St)	Marten, Neil	Stanbrook, Ivor
Fry, Peter	Mates, Michael	Stanley, John
Galbraith, Hon T. G. D.	Mather, Carol	Steen, Anthony (Wavertree)
Gardiner, George (Reigate)	Maude, Angus	Stewart, Ian (Hitchin)
Gardner, Edward (S Fylde)	Maudllng, Rt Hon Reginald	Stokes, John
Gilmour, Rt Hon Sir Ian (Chesham)	Mawby, Ray	Stradllng Thomas, J.
Tapsell, Peter	Vaughan, Dr Gerard	Wiggin, Jerry
Taylor, R. (Croydon NW)	Vlggers, Pater	Wigley, Dafydd
Taylor, Teddy (Cathcart)	Wainwright, Richard (Colne y)	Winterton, Nicholas
Tebbit, Norman	Wakeham, John	Wood, Rt Hon Richard
Temple-Morris Peter	Walder, David (Clitheroe)	Young, Sir G. (Eallng, Acton)
Thatcher, Rt Hon Margaret	Walker, Rt Hon P. (Worcester)	Younger, Hon George
Thomas, Dafydd (Merioneth)	Walters, Dennis
Thomas, Rt Hon P. (Hendon S)	Weatherlll, Bernard	TELLERS FOR THE AYES:
Townsend, Cyril D.	Wells, John	Mr. Spencer Le Marchant and
Trotter, Neville	Whitelaw, Rt Hon William	Mr. Michael Roberts.
van Straubenzee, W. R.
NOES
Abse, Leo	Edge, Good	Lipton, Marcus
Allaun, Frank	Ellis, John (Brigg & Scun)	Lomas, Kenneth
Anderson, Donald	English, Michael	Loyden, Eddie
Archer, Rt Hon Peter	Ennals, David	Lyon, Alexander (York)
Armstrong, Ernest	Evans, Fred (Caerphilly)	Lyons, Edward (Bradford W)
Ashley, Jack	Evans, loan (Aberdare)	Mabon, Rt Hon Dr J. Dickson
Ashton, Joe	Evans, John (Newton)	McCartney, Hugh
Atkins, Ronald (Preston N)	Ewing, Harry (Stirling)	McDonald, Dr Oonagh
Atkinson Norman	Fernyhough, Rt Hon E.	McElhone, Frank
Barnett, Guy (Greenwich)	Fitch, Alan (Wigan)	MacFarquhar, Roderick
Barnett, Rt Hon Joel (Heywood)	Flannery, Martin	McGuire, Michael (Ince)
Bates, Alf	Fletcher, Ted (Darlington)	MacKenzie, Rt Hon Gregor
Bean, R. E.	Foot, Rt Hon Michael	Mackintosh, John P.
Benn, Rt Hon Anthony Wedgwood	Ford, Ben	Maclennan, Robert
Bennett, Andrew (Stockport N)	Forrester, John	McMillan, Tom (Glasgow C)
Bldwell, Sydney	Fowler, Gerald (The Wrekin)	Madden, Max
Bishop, Rt Hon Edward	Fraser, John (Lambeth, N'w'd)	Magee, Bryan
Blenkinsop Arthur	Freeson, Reginald	Mahon, Simon
Booth, Rt Hon Albert	Garrett, John (Norwich S)	Mallalieu, J. P. W
Boothroyd, Miss Betty	Garrett, W. E. (Wallsend)	Marks, Kenneth
Bottomley, Rt Hon Arthur	George, Bruce	Marshall, Dr Edmund (Goole)
Boyden, James (Bish Auck)	Gilbert, Dr John	Marshall, Jim (Leicester S)
Bradley, Tom	Ginsburg, David	Maynard, Miss Joan
Bray, Dr Jeremy	Golding, John	Meacher, Michael
Brown, Hugh D. (Provan)	Gould, Bryan	Mellish, Rt Hon Robert
Brown, Robert C. (Newcastle W)	Gourlay, Harry	Mendelson, John
Buchan, Norman	Graham, Ted	Mikardo, Ian
Buchanan, Richard	Grant, George (Morpeth)	Millan, Rt Hon Bruce
Butler, Mrs Joyce (Wood Green)	Grocott, Bruce	Miller, Dr M. S. (E Kilbride)
Callaghan, Rt Hon J. (Cardiff SE)	Hamilton, W. W. (Central Fife)	Mitchell, Austin Vernon (Grimsby)
Callaghan, Jim (Middleton & P)	Harrison, Rt Hon Walter	Molloy, William
Campbell, Ian	Hart, Rt Hon Judith	Moonman, Eric
Canavan, Dennis	Hattersley, Rt Hon Roy	Morris, Alfred (Wythenshawe)
Cant, R. B.	Hatton, Frank	Morris, Charles R. (Openshaw)
Carmichael, Nell	Hayman, Mrs Helene	Morris, Rt Hon J. (Aberavon)
Carter, Ray	Heffer, Eric S.	Moyle, Roland
Carter-Jones, Lewis	Hooley, Frank	Mulley, Rt Hon Frederick
Cartwright, John	Horam, John	Murray, Rt Hon Ronald King
Castle, Rt Hon Barbara	Howell, Rt Hon D. (B'ham, Sm H)	Newens, Stanley
Clemitson, Ivor	Hoyle, Doug (Nelson)	Noble, Mike
Cocks, Rt Hon Michael (Bristol S)	Huckfield, Les	Oakes, Gordon
Cohen, Stanley	Hughes, Rt Hon C. (Anglesey)	Ogden, Eric
Coleman, Donald	Hughes, Mark (Durham)	O'Halloran, Michael
Colquhoun, Ms Maureen	Hughes, Robert (Aberdeen N)	Orme, Rt Hon Stanley
Concannon, J. D.	Hughes, Roy (Newport)	Ovenden, John
Conian, Bernard	Hunter, Adam	Padley, Walter
Corbett, Robin	Irving, Rt Hon S. (Dartford)	Palmer, Arthur
Cowans, Harry	Jackson, Colin (Brlghouse)	Park, George
Cox, Thomas (Tooting)	Jackson, Miss Margaret (Lincoln)	Parker, John
Crawshaw, Richard	Janner, Grevllle	Parry, Robert
Cronin, John	Jeger, Mrs Lena	Pavitt, Laurie)
Crowther, Stan (Rotherham)	Jenkins, Hugh (Putney)	Pendry, Tom
Cryer, Bob	John, Brynmor	Perry, Ernest
Cunningham, G. (Islington S)	Johnson, James (Hull West)	Prescott, John
Cunningham, Dr J. (Whiteh)	Johnson, Walter (Derby S)	Price, William (Rugby)
Davidson, Arthur	Jones, Alec (Rhondda)	Radice, Giles
Davies, Bryan (Enfleld N)	Jones, Barry (East Flint)	ROM, Rt Hon Meriyn (Leads S)
Davies, Denzll (LlanelH)	Jones, Dan (Burnley)	Richardson, Miss Jo
Davies, Ifor (Gower)	Kaufman, Gerald	Roberts, Albert (Normanton)
Davis, Clinton (Hackney C)	Kelley, Richard	Roberts, Gwllym (Cannock)
Deakins, Eric	Kerr, Russell	Robinson, Geoffrey
Dean, Joseph (Leeds West)	Kikoy-Silk, Robert	Roderick, Caerwyn
Dell, Rt Hon Edmund	Kinnock, Nell	Rodgers, George (Chorley)
Dempsey, James	Lamble, David	Rodgers, Rt Hon William (Stockton)
Doig, Peter	Lamborn, Harry	Rooker, J. W.
Dormand, J. D.	Lamond, James	Rose, Paul B.
Douglas-Mann, Bruce	Latham, Arthur (Paddinglon)	Ross, Rt Hon W. (Kllmamoek)
Duffy, A. E. P.	Leadbitter, Ted	Rowlands, Ted
Dunn, James A.	Lee, John	Ryman, John
Dunnett, Jack	Lestor, Miss Joan (Eton & Slough)	Sandelson, Neville)
Dunwoody, Mrs Gwyneth	Lever, Rt Hon Harold	Sedgemore, Brian
Eadie, Alex	Lewis, Ron (Carlisle)	Selby, Harry

Shaw, Arnold (llford South)	Taylor, Mrs Ann (Bolton W)	White, James (Pollok)
Sheldon, Rt Hon Robert	Thomas, Jeffrey (Abertillery)	Whitlock, William
Shore, Rt Hon Peter	Thomas, Mike (Newcastle E)	Willey, Rt Hon Frederick
Short, Mrs Renée (Wolv NE)	Thomas, Ron (Bristol NW)	Williams, Rt Hon Alan (Swansea W)
Silkin, Rt Hon S. C. (Dulwich)	Thorne, Stan (Preston South)	Williams, Alan Lee (Hornch'ch)
Sillars, James	Tierney, Sydney	Williams, Rt Hon Shirley (Hertford)
Silverman, Julius	Tinn, James	Williams, Sir Thomas (Warrington)
Skinner, Dennis	Tomlinson, John	Wilson, Alexander (Hamilton)
Small, William	Torney, Tom	Wilson, Rt Hon Sir Harold (Huyton)
Smith, John (N Lanarkshire)	Tuck, Raphael	Wilson, William (Coventry SE)
Snape, Peter	Varley, Rt Hon Eric G.	Wise, Mrs Audrey
Spearing, Nigel	Wainwright, Edwin (Dearne V)	Woodall, Alec
Spriggs, Leslie	Walker, Harold (Doncaster)	Wool, Robert
Stallard, A. W.	Walker, Terry (Kingswood)	Wrigglesworth, Ian
Stewart, Rt Hon M. (Fulham)	Ward, Michael	Young, David (Bolton E)
Stoddart, David	Watkins, David
Stott, Roger	Weetch, Ken	TELLERS FOR THE NOES
Strauss, Rt Hon G. R.	Weitzman, David	Mr. Joseph Harper and
Summerskill, Hon Dr Shirley	Wellbeloved, James	Mr. James Hamilton.
Swain, Thomas	While, Frank R. (Bury)

Question accordingly negatived.