HC Deb 24 October 1979 vol 972 cc395-7
2. Mr. Cook

asked the Secretary of State for Scotland if he can now make a statement on the manner by which he proposes to finance the sale of council houses.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind)

It is up to the prospective purchaser to arrange the funding of his purchase. If funds are not available from private sources, for example building societies, a local authority mortgage will be available to him.

Mr. Cook

Whatever the Minister's deeply held views on the matter may be, will he concede that the majority of local authorities are appalled at the prospect of having to sell newly constructed council houses at half price? Is he aware that when the Orkney housing committee considered his circular it had before it an estimate for eight council houses at £30,000 each? Does he seriously propose that when constructed these houses should be made available for sale at a loss of £15,000 each?

Mr. Rifkind

The hon. Gentleman will be aware that when a local authority decides what rent to charge for any individual house the building cost is not taken into account. I have yet to hear any intelligent argument why the principles which are relevant for rent purposes should not also be relevant for sale purposes.

Mr. Ancram

As the incentive to purchase a council house depends largely upon the person wishing to buy in an area where he has respectably behaved neighbours, will my hon. Friend assure us that, in spite of anything else he does, especially in the tenants' charter, he will do nothing which will make it more difficult for local governments to deal with antisocial tenants?

Mr. Rifkind

I am grateful to my hon. Friend for that important question. Last week we made it clear that local authority tenants in Scotland would for the first time receive security of tenure. We also indicated that there would be provision to enable the local authorities to deal reasonably with any special problem causing great concern to neighbours resulting from the conduct of one tenant living nearby.

Dr. Bray

The Minister must be aware that over the lifetime of a council house the rent paid by council tenants vastly exceeds the price paid by the purchaser of a private house. Surely he is being absurd in suggesting that by giving away council houses the councils are acting economically.

Mr. Rifkind

The hon. Gentleman misleads himself. He is looking at the capital burden on a house. He must not simply look at the original cost of constructing it. He must also take into account the cost of rehabilitation which, for example, in the case of Glasgow, is estimated to be £7,000 per house. The Opposition never take that important consideration into account.

Mr. Sproat

Will my hon. Friend confirm that, in spite of the miserable approach by the Labour Party, there has been an extremely enthusiastic response from council house tenants in Scotland to his proposals and that it has come from the so-called bad areas just as much as the so-called good areas?

Mr. Rifkind

My hon. Friend is correct. Not only have many thousands of ordinary Scottish tenants sought to exercise this right, but at least 29 Scottish local authorities are providing for the right to buy. Only nine have refused to do so. That indicates that it is the local authorities as well as the tenants who support the principle of what the Government are doing and reject the rather Neanderthal view of the Opposition.

Mr. Millan

What does the Minister mean by saying that a local authority mortgage will be available? Is he saying that, apart from forcing local authorities to sell houses against their will, thereby making it impossible for them to carry out a sensible housing or housing management policy, he will also force them to finance sales?

Mr. Rifkind

If the right hon. Gentleman will consider the details of the question he asked he will realise that, if a local authority provides a mortgage for a house that is already owned by that local authority, there are no public expenditure implications. That is why no local authority sought to object to the proposal that local authorities would be required to provide a local authority mortgage if no other means of finance were available to the prospective tenant.

Mr. Millan

If I may clarify that, is the Minister saying that local authorities will be forced to supply local authority mortgages even if they do not wish to do so?

Mr. Rifkind

Yes.