HC Deb 08 March 1978 vol 945 cc1418-20
19. Mr. Frank Allaun

asked the Secretary of State for the Environment if, following the reduction in interest rates, diminishing the cost of council houses by 60p weekly on average for each 1 per cent. interest rate reduction, he will give the average fall in interest rates for local authorities on their new and total borrowing, respectively, since their peak; what future for average council rents he anticipates; and if he will now revise his guidelines and Green Paper proposals for further rent increases.

Mr. Freeson

Local authority costs have not fallen by 60p a week. The local authority "pool rate" has fallen from 10.5 per cent. in 1976–77 to 10.2 per cent. in 1977–78, a drop of 0.3 per cent. or about 18p a week per dwelling. Expenditure on housing revenue accounts, including that from £2,000 million average investment per year, has increased.

With permission, I will circulate the full figures requested in the Official Report. I see no reason to revise rent guidelines for 1978–79 or the proposals in the Green Paper.

Mr. Allaun

Is the Minister aware that a number of housing directors and treasurers tell me that interest rates have fallen, on average, by 3½ per cent.? In view of this boon, will he reconsider the guidelines for increasing rents by 60p a week and the White Paper proposals to increase rents in line with incomes? I congratulate my right hon. Friend on the vital decision last Friday to remove the condition that 60p should be added to rents if the high-price building subsidy is to remain.

Mr. Freeson

I do not know what consultations my hon. Friend has had with directors and treasurers, but I am not sure that I should accept without further information that even in these cases the "pool rate" of interest—which is what counts—lias gone down by 3 per cent. I doubt that. It might have occurred in areas where there is a reduction in activity, but not in others. I see no reason for reviewing the guidelines in rent policy, either in the Green Paper or for 1978.

Mr. Durant

Does the Minister accept that most tenants would agree to rent increases if they felt that they had more control over their destiny? If the Government have not time to introduce a tenants' charter Bill, will they support the Bill that was introduced by my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre)?

Mr. Freeson

There are serious inadequacies in that Bill. On the general point, I and the Government need no urging to get local authorities and housing associations to do more in democratising their procedures and in involving tenants—[Interruption.] I can tell those who are interrupting and catcalling that it was this Government who, among other things, introduced co-operative housing into the law. There are now 200 schemes in the pipeline, after only 18 months. Nothing was done by the Conservatives. Many other things are being done under this Government on the question of tenant management. I am sure that the hon. Member for Reading, North (Mr. Durant) is interested, even if his hon. Friends who are interrupting are not.

Mr. Spriggs

Many council house rents are far too high. Does my right hon. Friend accept that it would make good sense to make a national reduction in those rents?

Mr. Freeson

I do not accept my hon. Friend's general proposition. There may be individual cases where rents are higher than they should be. I only hope that full information and guidance is given to tenants about the rent rebates that are available to them. I do not accept that council house rents in this country are too high—

Mr. Skinner

They are.

Mr. Freeson

I know as much about this subject as does my hon. Friend the Member for Bolsover (Mr. Skinner).

Following is the information:

Average rates of interest
New local authority borrowing Per cent. Total local authority borrowing ("pool rate") Per cent.
1976–77 … 13.1 10.5
1977–78 … 8.5 10.2