§ Mr. Fred Silvester (Manchester, Withington)
Buried in the Supplementary Estimates is a new sub-heading which is interesting in itself—sub-heading C7 of Class VIII, 5 relating to expenditure incurred by the Department of the Environment under section 23 of the Housing Act 1980. That money has been incurred by the Department because it has been necessary for it to intervene, in the case of one authority, to enforce the right of council tenants to buy their own houses. It is worth marking its first appearance. It is also an occasion on which we can take stock of the existing situation. The £30, 000 in the estimate is the tip of the iceberg. It has important social ramifications for the country.
The sale of council houses represents extremely good value both to the purchaser and to the council concerned. In the case of the purchaser, evidence is accumulating that, as the number of people buying their own houses increases, what was expected is happening. There is a great deal of personal satisfaction among families, and the improvement of the housing is marked. It is possible now to walk along a street and detect those houses that have been sold. They are different from the unsold houses not simply because their upkeep is improved but also because they display greater individuality. That is good not only for the person who owns the house but for the estate.
I do not doubt that, as the number of examples of private ownership in an estate grows, the effect will gather momentum, the advantage will be seen, and the number of properties for sale will increase. I understand that the number of houses being sold currently, nationally, is about 250, 000.
The value of council house sales to the council causes apoplexy in some quarters. Many council houses have static populations. The turnover in tenants is small. The fact of the sale is valuable to the council. In Manchester, for example, about 1, 000 houses have been sold. I am told that the average discounted value, nationally, is about £4, 000 per house. That produces more than £4 million in Manchester from the houses that have been sold.
The cost of external repairs to council houses is about the same. The cost of the modernisation programme for council estates is between £11 and £12 million. Substantial sums of money therefore become available to councils for carrying out much-needed activity in the remainder of their estates. The importance of the money from sales should not be under-estimated.
We have carried out many surveys. One of them revealed an interesting point. If people are asked what concerns them most, poor maintenance of council houses almost always comes fourth on the list—after rates, crime and, now, unemployment, the third varying between unemployment and the cost of living. The poor maintenance of council houses is always fourth on the list and accounts for an eighth or a tenth of replies.
One has only to hear some of the endless stories that come from council estates to know why that is. House maintenance, delays and bureaucracy are poor. I do not necessarily blame the people involved. Where there are over 100, 000 houses, as in Manchester, a particular kind of management structure is required. Special skills are needed to manage the complexities of such an estate efficiently.
229 It is of value to councils if the houses are sold. I was glad that the Secretary of State recently drew attention to the fact that capital sums from the sale of council houses are available for other local authority capital expenditure. It is important that we press on with this.
It is sad that the Secretary of State should have such an estimate. In a sense, it is an estimate of the local council's failure to undertake the duties that have been laid upon it in the interests of its ratepayers. It has nothing to do with lack of money or staff; it is a matter of attitude.
I have a leaflet which the Manchester city council sent to its council tenants to try to put them off the idea of buying their houses. It is full of gloom concerning interest rates and the fact that many home owners find it difficult to afford to keep their property in good repair. It says:Sooner or later, you will probably want to sell the council home which you bought … are you sure that your home … will be attractive to buyers?What it does not say is that those who undertake to buy their homes almost certainly find that it is the most important financial transaction in their life, and their only chance to obtain an asset that will appreciate during their working lives.
The Supply Estimate is for a defaulting council. As I say, it is all a matter of attitude. Can the Minister confirm that the £30, 000 in this estimate can be claimed back by the Government? It is important for ratepayers to understand that if a council defaults on this obligation, and the Government have to act for them, the cost should be borne by the council. It raises the question whether a council which deliberately evades responsibilities that have been upheld by the Court of Appeal, will be subject to surcharge. It would be interesting to pursue that. If that situation was multiplied across the country the charges would be considerable. I should be grateful if the Minister would clarify whether or not the Government can recoup such costs.
The Secretary of State gave the following reason for his decision to act in the case of Norwich. He said that itsprojected future performance, on which it has declined to give any assurance of further improvement, appears to me worse than that of any other authority".—[Official Report, 3 December 1981; Vol. 14, c. 399.]I take his word for that, but there must be a number of other authorities which run Norwich pretty close. Although within the rules of order I do not think that I am allowed to ask for it, perhaps a larger Supply should be sought in order that we should move into other areas.
In February, a solicitor in my constituency wrote to the Secretary of State about the situation in Tameside with information that he had received from the deputy director of administration for that borough. In Tameside, there were 1, 300 applications, but the council employed only seven staff to deal with them. Each person had five cases on his desk. That meant that at any one time 35 cases were being dealt with. Those dealing with them were not permitted to take on another case until the cases that they were dealing with had been concluded. As one case fell off the list, another came on. Cases were being completed at the rate of 96 per year. On that basis, those seeking to buy their houses in Tameside would have to wait 13½ years to complete the list. That is clearly preposterous, and the situation cannot be allowed to continue.
I understand from the figures deposited in the Library that the city of Manchester had, at 31 December 1981, received 6, 841 claims—the figure is no doubt higher now—and has admitted 6, 451. At that date, it had 230 processed 1, 028—about one-sixth of the total. I congratulate my hon. Friend the Minister on the way in which he has chivvied councils into better performances. As we all know, that is a tricky operation. However, it is noteworthy that my hon. Friend has had several successes, including the city of Manchester. As I have said before, Manchester is not averse to spending money and its staffing ratios are unequalled by any other part of the country. Yet, so far, it has refused to divert sufficient people to deal with this matter.
Yesterday, I received a letter telling me that the town clerk has appointed four people, with greater experience, to the right-to-buy section. That increases the comparatively inexperienced force from seven to 11. Matters may be speeded up; and I am grateful for that. That step was taken after a considerable number of complaints had been forwarded to the Minister. Nevertheless, we must go on, because the four new staff have a tremendous way to go.
I return to the case of Norwich and to the subject of the Supplementary Estimate. The Secretary of State has set up his own operation. In a written answer to my hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) on 23 February, my right hon. Friend said that he hoped that all the cases would be dealt with by 30 June 1982. That was his objective. In the city of Manchester, we are nowhere near that standard. I have written to my hon. Friend the Minister about several cases; and I shall refer to two such cases now. On 11 January, a Mr. Burrows was informed that the town clerk would be able to reply to him in 21 weeks' time. On a similar date, a Mrs. Pluples was told that he would be in a position to reply in 31 weeks' time. A glance at my diary tells me that Mr. Burrows will not receive his reply before 1 June and that Mrs. Pluples will not receive hers before 1 August.
I am particularly concerned about the nature of the response. I hope that my hon. Friend the Minister will bear in mind the apparent compliance with the desire for greater speed which masks something rather slower. For example, there are six people on a list of eight which I have—Mr. Cegla, Mr. Garvey, Mr. Carey, Mr. Myers, Mr. King and Mr. Callaghan—who all applied to buy their houses and who had an acceptance between July and October; in most cases-, they received the acceptance in July but in one case it was as late as October. In two cases there has been a response from the town clerk but neither of them has been accompanied by plans. So it is impossible for the conveyance to proceed because it is not clear what is being conveyed.
It is important that we should not get into the position where there is an apparent response to the Minister's desire to speed things up in the sense that something is sent out, but since not sufficient is sent out for the conveyance to continue, the whole thing is still snarled up. The solicitor to whom I was speaking has said that on numerous occasions recently—he had 25 sets of papers yesterday—the bundle of documents is incomplete and the city estates and valuation officer is not providing the necessary material. That is the kind of delay that is not acceptable. Going beyond that, in two other cases, those of Mr. Small and Mr. Power, the acceptances of the offer were sent in, one in August and the other in October, but no response at all has yet been received.
I have indicated by referring to two authorities, but mainly my own, that there are still authorities where there is a less than enthusiastic response to the right-to-buy 231 procedure. It may be that the Supplementary Estimate which we are discussing will be insufficient and that other Supplementary Estimates may be brought before us. This is one Supplementary Estimate that the Minister should not fear to bring before us because it is likely that he will be able to recoup the amount from the council concerned. He has played a major part in producing the slow, steady spread of home ownership, a social revolution of great importance, and he must not under any account let the momentum flag.
§ Mr. David Stoddart (Swindon)
I, of course, would prefer that there was nothing in the Supply Estimates under this heading, since I believe, and have said a number of times in the House, that it is an imposition on local authorities that a Government should tell them that they must sell their houses, whether they like it or not and whether there is a real need in the area or not, and furthermore that they must sell them at a discount fixed by the Government and Parliament. I have never thought that to be a reasonable way to conduct our housing business.
§ Mr. Stoddart
I am perfectly well aware that it is the law. I had some part in opposing the passage of the 1980 Housing Act through the House. I am still entitled to disagree with a law that has been passed by Parliament, and I shall continue to disagree with the Housing Act until it is repealed by the next Labour Government.
It is not my purpose today to attack the general provisions of the 1980 Housing Act. I wish to refer to an anomaly in the Act which has relevance within the Supply Estimates. The Minister has given notice to my local authority, Thamesdown borough council, that he intends to make an order under Section 23 of the Act to enforce the sale of part of Swindon's heritage, the Swindon railway village, which was built by the Great Western Railway Company between 1830 and 1840, having been designed by the architect of Paddington railway station, Matthew Digby Wyatt. The railway village represents the beginning of modern Swindon.
Undoubtedly, part of the money in the Estimates will be used to enforce the sale of these delightful restored houses to the sitting tenants. Many people in my constituency who would support the 1980 Housing Act and the right of tenants to buy are opposed to the enforced sale of individual houses in the railway village. My correspondence tells me so, as do my meetings with people from all walks of life in Swindon and the surrounding area, who are not in favour of selling off part of Swindon's heritage.
This was a unique development by the Great Western Railway Company, which not only built these houses to house its workers but also had the sort of arrangements for its work people that we did not achieve countrywide until the Beveridge Act. The Great Western Railway Company built all sorts of cottages for the lowliest of its workers and for the highest of its management. They all lived together in this community. The railway company also provided a theatre, a health centre, a mechanics institute where people could be educated and a church. In other words, the Great Western Railway Company provided a model village.
232 The village got into a state of disrepair. Because the Swindon people and the council realised its unique architectural and historic value, they decided to buy it lock, stock and barrel and restore it. That has been done magnificently. Everyone who goes there, even Ministers of the Crown, agrees that it is unique and that the local authority has restored it with loving care. The council has been enlightened enough to spend some £3 million on the restoration of the village. Therefore, there was a unanimous decision by all councillors and not just the Labour members that the unity of the village should be preserved and that individual houses should not be sold off. It therefore opposes the Government on that aspect, although it has agreed to sell houses under the provisions of the 1980 Act, and is doing so.
My colleagues—colleagues not in a political sense but in a parliamentary sense—the Members for Devizes (Mr. Morrison) and Chippenham (Mr. Needham) have joined me, the council and the people in opposing the sale of the houses. They have written to the Secretary of State and the Minister, as I have. I promoted a Bill, which was sponsored by the hon. Gentleman. Unfortunately, there was an objection to it, so it did not obtain a Second Reading.
We still believe, in spite of the Government's intransigence, that it would be an act of environmental vandalism to allow individual houses in the railway village to be sold off. I cannot believe that Ministers are so philistine that they would allow the selling off of individual houses in the village and so risk its future as a beautiful entity which is Swindon's heritage. I had thought that the present Government believed in the nation's heritage and wanted to preserve it, but risks are being taken with a delightful development which was saved by the people of Swindon. The village has won a number of awards, includng a Civic Trust award. I do not believe that the Government, and the Minister for Housing and Construction in particular, can use their powers to risk the destruction of the development as an entity. We have shown, by photographs and by reference to other areas, what can happen to such a development if it is allowed to go into individual ownership.
We are not asking for a great breach in the Act. We are asking for a simple amendment which would preserve our great railway village in Swindon and other such developments—there are not many of them—throughout the country. I believe that even at this late stage, after his threatened use of section 23, the Minister should have second, third, fourth, fifth, sixth, even tenth thoughts, if necessary, so that he can satisfy the people of Swindon, preserve our heritage and save the railway village as a unique historical entity.
§ Mr. Michael McNair-Wilson (Newbury)
I congratulate my hon. Friend the Member for Manchester, Withington (Mr. Silvester) on initiating this debate.
I support the Estimate, for I support the Housing Act 1980 and therefore necessarily I support the concept of the tenant's right to buy the dwelling in which he lives. I am delighted that the Estimate empowers my right hon. Friend Secretary of Stateto intervene to enable secure tenants of certain dwellings to exercise their right to buy under that Act".The point that I wish to raise concerns a very local matter. In my view it is a matter of natural justice, a 233 concept which is perhaps not easy to define but which for the purposes of my speech I shall define as the concept of fairness between one tenant and another. I suspect that my hon. Friend the Minister will know the point that I wish to elaborate on. I hope that he will forgive me for raising it on the Floor of the House. I do so because I cannot satisfy myself that those of my constituents who are suffering as a result of the anomaly to which I shall refer deserve to continue to suffer without their complaint being voiced to my hon. Friend in this most public way.
There are in my constituency many houses that at one time or another have belonged to the Ministry of Defence, because in west Berkshire we have a large number of defence establishments. Many of the tenants of those houses have lived in them for up to 20 years, and some for even longer. In 1950 the Ministry gave the tenants the opportunity to buy their houses, but at that time most of them did not have sufficient funds, so they continued to live in them as tenants.
In 1977–78 the tenants were informed that their houses had been transferred to the Property Services Agency. They were also told that the agency's task was to offer the houses to the Newbury district council, not to the tenants. The agency duly did so, and the houses were bought by the district council.
When the Housing Act 1980 was implemented, the tenants, some of whom had lived in Ministry of Defence property for more than 20 years, who had seen it become Property Services Agency property and then Newbury district council property, were told that as council tenants they could buy the houses as if they had newly entered into them. In other words, they were to be given a discount of 30 per cent. which is available to any council tenant who has lived in a council house for three years or more.
Not unnaturally, the tenants felt that that was a hard decision, and some of them came to see me. I have seen between 12 and 20, each of whom has said "Surely after all the years that we were tenants of the Ministry of Defence we should have been allowed an increased discount for that period."
I have written to my hon. Friend the Minister, and he has replied most courteously, but he has made it quite clear that there can be no change in the tenants' position. However, perhaps my words or my letters had a slight effect on him, as last year my hon. Friend the Under-Secretary of State for the Environment wrote to me to say that a variation would he introduced—that those who had not entered into the purchase of their houses from the district council and who had been tenants of the Ministry of Defence could claim from the council a discount in line with their total period of tenancy. I was overjoyed to receive that letter, but on first reading I missed the bit saying that the decision applied only to those who had not completed the purchase of their house from the district council.
That is anomalous. If my right hon. Friend the Secretary of State and my hon. Friend the Minister are pressing councils to sell their houses to tenants, it seems to me unfair that they should then, having put on that pressure, tell a group of tenants who seize the opportunity to buy from a willing council, "Although you are on all fours with this other group of tenants, the fact that they have been slow in coming forward to buy their houses means that they will receive a considerable financial advantage." Therefore, I ask my hon. Friend to reconsider that decision.
234 I do not know how many houses are affected. Between 12 and 20 tenants have been to see me and many more have written, but I doubt whether more than 100 tenants are affected overall. There is a strong sense of grievance among those who have bought their council houses and a feeling that they are being treated less than equally with those who have been much slower in coming forward.
Council tenants bought their houses with a controlled freehold and if they choose to sell in under five years from the original purchase date they must, in the first instance, offer the house back to the district council. Am I right in thinking that perhaps their purchase is not entirely complete and that there is a loophole which would allow them to claim a discount compatible with the period in which they lived, first, in Ministry of Defence houses, secondly, in PSA houses and now in district council houses? Mr. Speaker, I am grateful for your tolerance in letting me raise a point which has caused a great sense of grievance.
§ Mr. George Cunningham (Islington, South and Finsbury)
The last words spoken by the hon. Member for Newbury (Mr. McNair-Wilson) puzzled me. I am not sure whether he was talking about the conditions applying generally under the Housing Act 1980 or to the particular operation in his area. He seemed to suggest that there is a limitation on the purchaser during the first five years who has to offer the house back to the local authority. Perhaps I missed something, but I believe that the only repercussion upon the purchaser who sold within five years was that he lost the discount—one fifth per year for five years—and that the arrangement whereby a local authority had a right to pre-emption during a certain period did not apply. Perhaps I misunderstood the provisions of the Housing Act 1980.
§ Mr. Michael McNair-Wilson
I quoted facts given to me by the tenants, and perhaps those particular houses come within the five-year rule which does not apply generally. There is a controlled element in the freehold of those houses.
§ Mr. Cunningham
I am sure that the Minister will be able to confirm the point. At the close of his speech the hon. Member for Manchester, Withington (Mr. Silvester) congratulated the Government on making giant strides towards home ownership. May I get across to him, and hopefully other members of the Government, that whatever they may or may not have done towards spreading home ownership they are about—without knowing it, and I doubt whether many Ministers are aware of it—to impose in the Finance Bill a considerable disadvantage on initial home purchasers by the alteration in the administrative arrangements for giving tax relief on mortgage interest. I will not go into detail because it is not the main subject of the debate, but it bears upon it because anyone who buys his house from the local authority under the terms of the Housing Act 1980 will normally buy it under a mortgage. He will be as affected by that particular arrangement as anyone else.
During the past week or two home purchasers have been the beneficiaries of a 1½ per cent. drop in the rate of interest. When the change which the Government propose to make in the Finance Bill becomes law and the building societies implement it in the manner in which at the 235 moment they are minded, the effect will be as if the interest rate rose again by about 1½ per cent. The Government have their heads stuck in the sand about that. They say that they are only changing the law and that the manner of implementing it will be entirely up to the building societies. They are absolutely right.
I am glad to see a Treasury Minister, the Economic Secretary to the Treasury, the hon. Member for Knutsford (Mr. Bruce-Gardyne) walking in. He will be familiar with the consequences of changing the arrangements for mortgage relief in the Finance Bill. If things go ahead as planned, a disadvantage, equivalent to 1½ per cent. on the mortgage rate, will happen in April 1983. That is a significant year if one wants to clobber the home-owner. It will clobber the new purchaser particularly seriously, but it will also hit every other home-owner who has a mortgage loan except those within 12 months of repaying it. It will increase the net monthly payment and burden by something which will vary considerably but which on average will be about 5 or 6 per cent. I see the Economic Secretary to the Treasury shaking his head. That is why I say that the Ministers have not looked into that point. They have their heads stuck in the sand, but they will wake up when they realise that the political consequences are indeed serious.
§ The Economic Secretary to the Treasury (Mr. Jock Bruce-Gardyne)
I must say to the hon. Gentleman that I believe he is slightly misleading the House. The point, which has been discussed before in an Adjournment debate, is that what happens to the mortgagee depends entirely on the form of mortgage. If it is a fixed price mortgage, the position will be unchanged. What happens will depend entirely on competition between building societies and other lenders. We cannot predict what the market will dictate. We shall have to see.
§ Mr. Speaker
I believe that the hon. Member for Islington, South and Finsbury (Mr. George Cunningham) is straying on to the Finance Bill rather than the Estimate that is before us.
§ Mr. Cunningham
I will not pursue the matter further except to say that when the Economic Secretary to the Treasury refers to a fixed-price mortgage I take it that he is referring to an endowment mortgage. I accept that an endowment mortgage will not be affected but that a repayment mortgage will. Three-quarters of mortgages are repayment mortgages and I invite members of the Government to look at that point and read the Adjournment debate because he has it wrong. Whether he is right or wrong, the political consequences will be significant.
The hon. Members for Swindon (Mr. Stoddart) and for Newbury (Mr. McNair-Wilson) drew attention to consequences of the legislation which have a bad effect in their particular localities. It is one of the consequences of imposing obligations on local authorities and entirely removing their discretion. They cannot reflect local circumstances, and the example quoted by the hon. Member for Swindon is particularly poignant. Only the local authority knows the local situation and can take it into account when deciding whether to sell. It is that consideration which makes it wrong to remove the discretion of local authorities. When one says something 236 like that, the Government normally fling back the subject of education and say that people who want to remove local authority discretion in regard to education should not ask for local authority discretion with regard to housing. There is a difference. People have different policy attitudes to issues such as comprehensive education. But the desirability or not of it does not depend particularly upon local circumstances. The desirability of selling, or not selling, council houses depends very much on local circumstances, whether involving a local feature such as that to which my hon. Friend the Member for Swindon has referred or the local considerations that apply in my area.
In the foothills of the Barbican, there is a large estate that belongs to the City of London corporation. The corporation likes to build banks within the territory of the City and also new Barbican centres and the like that raise large rate revenue. It does not want to have its own housing within its own boundaries. It therefore has about half its extra territorial housing within the Islington borough council boundaries. While the City gets the rates from the banks, we in Islington get only the much lower rate revenue from housing. We do not even have the right to nominate to the City for a single one of the places there. I worked out, at one time, that the City should pay Islington £14 million a year to compensate for this loss, but the idea did not find favour even with the previous Labour Government.
The consequences of this legislation for such an estate as I have mentioned in the foothills of the Barbican—I refer to the Golden Lane estate—is that, as it is gradually sold, it will become a sort of mini-Barbican. People who cannot afford the very high prices of a place in the Barbican will be able to afford a place in Golden Lane from one of the tenants who has managed to buy it as a sitting tenant. It is a rather desirable housing estate within Islington.
Gradually, the Islington borough council—the same goes for the City corporation—will be left with the bad accommodation and none of the good accommodation. This means that housing in an inner city area such as that which I represent will become welfare housing and not council housing of the quality and nature that has existed up to now. It was for that kind of reason that the City corporation was against being obliged to sell off its accommodation. The corporation, as I think most people will agree, is not dominated by Socialist members.
I wish particularly to intervene in the debate to raise with the Minister a matter that has been brought to his attention in correspondence by Islington borough council. It points out the folly of the unbending nature of the legislation. A council tenant in Islington, who has the right to buy the place where she is living with a considerable discount, gave notice that she wanted to buy. Without any further stage having taken place, she put the place, which still belonged to Islington borough council, on the market. She advertised it for sale at a price that was not only well above what that person was going to have to pay for it after receiving the benefit of the disount but also considerably above the undiscounted price.
The asking price for the place would, no doubt, not be achieved. It is, however, normal for the market to produce a price that is higher than the estimated market value put upon the place. Here, we have a person who is buying a place in order to sell it and who advertises it for sale before she actually owns it. Islington borough council has 237 suggested to the Minister that this is not an arrangement that should be tolerated or allowed to continue. But the Minister does not agree.
I suggest that the matter brings out the disadvantages of legislation that removes entirely discretion from local authorities. Even if the Minister does not accept what I say, I put it to him that the representations made by Islington borough council are valid and that some amendment of the law should be made in order to prevent that kind of thing from happening. A reversion to the practice whereby, for a period of years, the seller was obliged to offer first to the local authority would be one means by which the abuse—it must surely be called an "abuse"—could be terminated.
§ Mr. Allen McKay (Penistone)
The hon. Member for Manchester, Withington (Mr. Silvester), who has raised this subject, said that he welcomed the amount of money in the fund. I cannot accept what he says in the same spirit. It means once again that central Government are interferring with the affairs of local government. I have always believed in the freedom of local government to determine exactly what the electorate wants. It is the electorate that puts the council into power on the basis of certain policies.
The electorate in the area that I represent has voted overwhelmingly and consistently against the sale of council houses. I accept, however, that a number of people wish to purchase their own homes. This is one of the bargains of the century. Houses are brought within the reach of people who probably would not have been able otherwise to afford to buy a house, but it is also a means of selling the seed corn of the housing of the local authority.
Housing can probably be placed within three bands. In the worst band, there are properties that probably need modernising or, in some cases, pulling down. The middle band consists probably of houses built pre-war that have been fully modernised and represent an exceptional bargain. The third band consists of newly built houses that are probably too expensive for many people to buy. This is shown by the large number of people who ask to buy their houses only to decline the purchase later when they realise that the price, combined with rates, will be too high.
The authority in the area that I represent has a pool rented system. Any decision to sell the middle band of housing means selling houses that would be bought completely in a short time. The rent income from houses that would normally have gone into the pool to help pay for new houses and also to keep rents low in the new houses would not exist. The authority has therefore been obliged to sell houses that it did not want to sell in the first place. It also means the loss of financing for future houses. This will cause a number of problems.
Councils know their locality better than anyone. The will of central Government is being imposed. Authorities would have come round to selling council houses. Those in my constituency, while not wishing to sell council houses, were emphatic that once there was a surplus, they would sell council houses. Before 1974, I was a member of a small authority that examined the possibility of selling council houses and decided that by 1975–76 a surplus would permit such sales.
238 Unfortunately, local government reorganisation spoiled those plans of the small authorities as it spoiled the plans of many authorities. It caused something that has been called the "repair problem". The Barnsley authority took under its wing roughly 13 small authorities which all had different housing probems, rent levels and methods of running their housing matters: some had a high rent policy which meant that their council house repairs were of a higher standard than those of authorities with a lower rent policy. The people in those areas decided on that type of council, but the large authority inherited these problems and it has taken considerable time to resolve them.
Another problem with the sale of council houses occurred when the Barnsley authority originally found that when tenants, seeking to acquire houses, wrote in, it did not have sufficient staff to cope. It took it some time to transfer staff from one department to another, but it eventually overcame the problem.
Sheffield has a major housing problem. Selling council houses does not help that authority to resolve housing problems. People live in high-rise flats and unsuitable houses that should not exist. When the Department of Health and Social Security liaises with housing departments, they must consider the problems involved in altering houses to suit handicapped persons. They are experiencing difficulties in that respect.
Another problem that both authoritie have faced concerns old people's bungalows. As I understand it, although that category of housing has been withdrawn from the category for sale, if someone gets a bungalow under retirement age or under the age when he might have a bungalow, it ceases to be one of the bungalows that are not for sale. That has stopped what used to be a very good scheme, allowing people under "bungalow age" to get bungalows that were probably not required for old people because there were too many steps. It gave them time to get rid of furniture and refurnish while working. Because of the sale of council houses, we have now had to do away with that scheme.
Will the Minister tell us what will happen about Airey-type houses? I am sure he knows about them and that they are predominant in my constituency. They must be replaced—they are not presently—because of the enhanced fire risk; not because they catch fire more than any other house, but because the spread of fire is more dangerous. Therefore, they are having to be demolished. Tenants from such buildings must be rehoused. If one adopts the wholesale sale of council houses, there is nowhere to put those people and insufficient money to build new houses because of Government policy. Hon. Gentlemen say that that policy is beneficial to local government, but I cannot understand how it is beneficial to local government to sell a house worth £20, 000 for £10, 000 and have to replace it with a house costing £25, 000. There is no way that one can resolve that problem.
There is a minor subsidence problem in the Barnsley area. About 84 prefabricated houses had to be demolished prematurely in my area and many other council and privately tenanted houses are in danger. The council has had to take responsibility for housing those tenants. If we had adopted the wholesale sale of council houses at that time, it would have created problems in finding places to rehouse those tenants. That policy, fortunately, did not apply at that time.
239 Council houses have not been sold because local authorities have been adamant that they did not want people to own houses; the contrary has applied. Labour Members wanted people to own houses and Labour policy, over many years, tried to encourage and help owner-occupiers and others to purchase their homes. My local authority decided, because it was unable to sell council houses, to encourage building for sale. We built special houses in an area that we could sell to ex-council tenants. Tenants were able to move out of existing council houses to those we built especially for sale. We also bought about 130 acres for mixed development. Part of that land was scheduled to sell at a fairly cheap price to people wanting to build their own houses. As a local authority, we put in sewers and road works free of charge.
The cost of that policy was borne, in general, by the ratepayers. Therefore, if there is to be a wholesale council house sales policy, one stops people moving from an unsuitable to a suitable dwelling, because one sells off the houses they need. One also interferes with the pooling system of rents; houses completely built by an authority were funded by future rents. In addition, people bought houses paid for by their predecessors, who, under a pool rented system, helped to build them and keep rents low.
For those reasons, local authorities decided that they did not want to sell council houses. However, they would have been encouraged to adopt policies for the sale of council houses to suit their localities rather then having them imposed by central Government. Therefore, I cannot welcome this money because it is certainly another imposition of central Government on local government.
All we have done on the sale of council houses is increase the workload of local authorities without giving them sufficient money to carry out their duties. That is another aspect the Minister must consider. When will the Minister make a decision about Airey-type houses? Will he compensate authorities, because they were built at the instigation of Government, to help them renew those houses? Will he consider the problems of these authorities before seeking to interfere with their right to determine their policies in accordance with the mandate from the people?
§ Mr. Peter Bottomley (Woolwich, West)
I apologise for missing the earlier speeches; I was elsewhere in the House.
I pay tribute to the many people who work in council housing departments who carry immense burdens in the administration, allocation and management of properties and in trying to meet the needs and wishes of tenants. Too often, because of the difficulties associated with housing and especially municipal housing, they get all the kicks and none of the thanks. They are exposed to charges of inefficiency, scandal and all the rest. On occasion, such allegations may be true, but my experience has been that, in the main, most officers are dedicated in trying to help tenants and in doing the best they can under the prevailing system.
I regard this topic and debate as an extension of the gains that followed from leasehold reform. I would not presume to suggest, Mr. Speaker, that you have a view one way or the other on this issue, but the battle you fought over the reform of leasehold practice has led to a visible improvement, not only in the homes purchased since the 240 freehold is held by the people living in them, but also an immense change to the lives of people who were previously the leaseholders.
Having got their freedom, those people can now move and, if they wish, leave their homes to members of their family. Therefore, there is no suggestion of their being forced at the whim of a local authority or landlord to move. They have the opportunity of putting spare resources into improving their housing and do not have to rely on the decisions of others. Those matters apply equally to council tenants who have the opportunity by law, who have the money and who take the chance to own their own home.
The London borough of Greenwich owns over 40 per cent. of the homes in that area. In no way will building houses for sale in Greenwich make it possible for the same proportion of people to own their homes as in areas of Britain that were developed later. The growth in home ownership has come from new building and from the transfer of tenanted homes to owner-occupied homes both through the private sector and now even more through the public sector.
If the decision about whether to sell council houses were left to the local councils, it is clear from the actions of the present Greenwich council that it would not have allowed any tenants to buy their homes. That would have continued year after year and would have left the people who live in Greenwich only one option if they wished to buy their own home—to move outside the borough. It would have left Greenwich with a population that became relatively poorer compared with the rest of Britain, because owner-occupation tends over a time to be associated with a higher standard of living. I look forward to a development of the standard of living of council tenants, more of whom should be able to share the advantages of home ownership if they choose to follow that line.
Some special cases have emerged in Greenwich. Before I come to the general issues of Greenwich council's policy and what I hope the Government will require it to do—the Government should take over if the council does not come up to scratch—I wish to talk about four special cases which concern people who have been disadvantaged by Greenwich council's reluctance, and in some cases refusal, to sell homes.
The first case is a family with a mildly handicapped child. The child lives at home and is perfectly capable of living his own life as long as he is in surroundings where he is known. In time, that young person can be expected to live independently as long as he can go on living in his present home. The problem is that his parents are elderly council tenants and when they die the council will have the opportunity to, and under present policies will, require the surviving child to move. For that reason especially, the parents applied to buy their home. The council has delayed and delayed. I regard that as disgraceful in the circumstances, as well as totally wrong even if there was no special element involved.
The case of the second family ties in with the work and interest of the National Council for the Single Woman and her Dependants. It represents the adult who gives up a career of her or his own—it is usually a woman—to care for elderly dependent parents and who then finds herself disadvantaged not only because she is left without job experience when the parents eventually die but is often left at risk as well.
241 The couple of whom I am thinking gave up a home of their own and, with an elderly parent, took a council tenancy. That was a combination of two household units that came together in a council home and, because the elderly mother had been a council tenant previously, the fairly mature couple who were looking after her found themselves not with a joint tenancy but classified as dependants living in her home. For year after year they cared for the old lady. Then the elderly lady died and the council not only refused to take into account the years that the young couple had been paying the rent—they did not wish to apply for rent or rate rebates on the grounds of the mother's income but lived self-sufficiently—and did not allow them to buy the house, but wished them to move out of the home because they were not the official tenants.
The third example is of two brothers who again had lived with an elderly parent for many years. One of the brothers had lived in his father's house all his life. The second brother had moved away and had then come back to help to care for the father. When the father died, Greenwich council required them to move from their family home. I can understand—although I do not always agree with it—that if someone has come to live with a council tenant for a short time the council might say that he must move to another home. But to ask someone in his fifties who has lived for 50 years or even 30 or40 years, and who certainly for the past 10 to 20 years has cared for an elderly dependant, to move from one house to another is despicable and wrong.
The fourth special case is of an elderly lady who applied to buy her house on the first day that she was allowed to do so under the Housing Act 1980. Her children were to provide the money and pay the mortgage. Greenwich council did not within four weeks admit her right to buy. It followed its policy that it would have nothing to do with the Housing Act 1980. It said that, although it had a legal duty to sell homes to those tenants who wished to buy, it would do nothing. Eleven months after the elderly lady put in her application, she died. Her children are now severely disadvantaged compared with their position had Greenwich council carried out its legal duty under the Housing Act. I shall not allow that matter to rest and I should be grateful for advice from my hon. Friend, if not this evening at some other time, as to what action the family can take to put right the disadvantage that the council's actions have caused.
I have argued, in the House and elsewhere, for the Government to step in with Greenwich council. It has been spending much money on legal advice to see how it can keep one jump ahead of the law. It has obviously failed to do that because I have given an example where it clearly fell far behind. It must also keep one jump ahead of the Department of the Environment. I am grateful for the efforts that my right and hon. Friends have made in pursuing Greenwich council, as they have other councils. I am also delighted to see that the Department of the Environment has summoned Greenwich council to see it tomorrow and will require or expect the council to commit itself to a much faster programme of issuing section 10 notices so that it is up to date by the end of next month. Secondly, the Department of the Environment will require Greenwich council to get moving on the sale of flats.
It seems to me disingenuous or naive at the least for anyone to argue against the sale of council homes on the ground that only the most desirable properties will be purchased by tenants, and then to see Greenwich council 242 refuse to sell flats which are generally regarded as less desirable. When I was looking for a home to buy in London, I bought one that my local council wished to knock down because it was in such bad condition that it believed no one should live there.
There is a market price for even the worst accommodation in the worst area of London. Many living in the less desirable flats and homes would be well advised to find out what the market price is and to buy their property from the council. In that way we shall be able to avoid many problems that local authorities are facing in trying to do up or replace bad and deteriorating homes. The only way to rejuvenate many of the less desirable estates or areas of London is to bring in extra resources, and, if that requires a low market valuation, that is what the market will bear. Many young couples come to me to ask where they can get a home. Many of them would like to be able to buy a low-value property and put their efforts and resources into doing it up.
The main issue is the blatant disregard by Greenwich council of its obligations under law to its tenants who want to buy. Even if every tenant who wanted to buy his home this year had done so by the end of the year it would not make a significant difference to the Greenwich housing stock. Nor will all the desirable homes be bought by tenants. Many of the most desirable homes are occupied by elderly people who have no interest in buying. Re-lets will still be available. What matters is that those who put themselves up for election as councillors should recognise their responsibility to uphold the law and their responsibilities to tenants.
I hope that my hon. Friend will be able to tell me, not only this evening but after the meeting tomorrow with Greenwich council, that those tenants who want to exercise their right to buy will be able to do so and to become owner-occupiers and estate holders in their communities, and that many more in years to come will be able to exercise the same option. Obviously, councils have a duty to help in meeting housing needs, but that duty does not extend to maintaining a close grip on all the homes that all their tenants live in.
§ The Minister for Housing and Construction (Mr. John Stanley)
I am sure that the House will be grateful to my hon. Friend the Member for Manchester, Withington (Mr. Silvester) for being so successful in the arrangements for the Consolidated Fund debate and giving us an opportunity to debate an issue that has aroused great interest on both sides of the House. Although the House is relatively thin at the moment there is no question but that the Government's legislation on the right to buy is of the most profound importance to many hundreds of thousands of families up and down the country who are seeking to take advantage of their rights under the legislation.
I shall deal with the specific points made by hon. Members about their individual constituencies, but the House may be interested to know now that approximately a year and a half has passed since the right to buy took legal effect, what the progress has been since that date, and the response to the legislation. Nearly half a million tenants have applied to exercise their right to buy and that is as eloquent a demonstration of the widespread support for the policy as one could have. Already nearly 100, 000 tenants have successfully been able to complete the purchase on their homes. Taking into account the large 243 number of voluntary sales that have taken place, at the end of last year nearly a quarter of a million local authority dwellings have become owner occupied since the Government came into office. I am confident that during the course of the Parliament we shall be making a giant stride in the widening of home ownership.
In the process, we shall be bringing enormous personal benefit, as my hon. Friend mentioned, to many hundreds of thousands of former tenants and their families. We shall also be unlocking capital receipts in respect of the stock that is sold. Local authorities will be able to use and are using that on a large scale for their benefit by ploughing the money back into their housing programmes.
My hon. Friend the Member for Withington asked whether the money voted could be recouped by the Secretary of State from the local authority which eventually spent it. I assure him that there is provision in the legislation for recoupment as described. In principle, the answer to that question is "Yes".
The hon. Member for Swindon (Mr. Stoddart) raised an issue that he had been assiduous in raising both during the gestation, and since the enactment, of the right to buy. I understand that he feels strongly that the houses in the railway village in Swindon should be excluded. The Government consider that those properties should not be excluded. I am not referring to the railway village per se, I am saying that simply because a dwelling has a particular architectural merit, or because it is located in a conservation area, that is not legitimate or reasonable grounds for denying the occupants of those dwellings the right to buy.
The Government's reasons for doing this were set out fully in a letter written by my hon. Friend the Under-Secretary of State for the Environment to the leader of the Thamesdown council on 19 August 1981. He set out in considerable detail all the powers available to local authorities under planning and conservation legislation whereby they are able to take steps to control the changes in the appearance of dwellings in the kind of area encompassed by the railway village houses.
Having said that, the issue that is before the House, and particularly the Secretary of State, is whether those tenants in the railway village, who have the unquestionable legal right to buy their homes—and the hon. Member has never denied that—under the 1980 Act will be able to exercise the right given to them by Parliament, or will not be allowed to do so for some reason. The Government's view is that, without any question, those tenants must be able to have their entitlement to their legal rights as agreed by Parliament. That is why the Thamesdown council was formally warned on 1 February 1982 that the Secretary of State was contemplating the serving of a notice of intervention on that authority in respect of those dwellings. I make it clear that that represents a serious step. The Government are firm in their view that once Parliament has given a clear legal right, that right must be upheld. I trust that the borough of Thamesdown is taking that letter seriously.
My hon. Friend the Member for Newbury (Mr. McNair-Wilson) raised a problem with which I am also familiar. He has been extremely energetic in seeking to uphold and protect the interests of his constituents. He has the difficult problem of seeking some arrangement whereby the statutory discounts provided under the 244 Housing Act 1980 can in some way be altered to benefit those people who bought their homes when those discounts did not apply. We have had to take, although we have much sympathy with my hon. Friend's point, a clear view of this. Many thousands of people have bought their homes over the years, under whatever was the legislation, and in particular under what were the general consent arrangements at that time.
Right through the 1960s, 1970s, the early part of 1980, and up to the time that we issued our new general consent in May 1979, many people bought—some at market value, some at 20 per cent. discount, and a few were fortunate and took advantage of the 30 per cent. discount arrangements which were brought in by the previous Conservative Administration. My hon. Friend made his case in the most compelling manner, but if one accepts the principle that, when a contract has been entered into and a purchase made, notwithstanding that, one should basically re-open the contract to give his constituents the benefit of the greater discounts, I should have no reasonable ground for not doing the same thing for other hon. Members who wished me to do exactly the same thing for their constituents.
We issued our new general consent in May 1979—within a fortnight of our coming into office—and people bought within the first week. Some people had bought in April 1979, a few weeks before we issued our general consent. They had bought at 20 per cent. and 30 per cent. discounts. They said to us "I have only just completed my sale. I have owned my home for only a few weeks. You have now produced new discount arrangements, and I could have had 50 per cent. discount if I had not already bought my house". We had to tell them that, as the contract had been made, there was nothing that we could do. The existing contracts had to stand.
I am sorry to reply to my hon. Friend in this manner, because he could not have argued the case on behalf of his constituents more persuasively. However, he will appreciate that if we made the concession to him we should have to open up every sale that had been made under voluntary arrangements over a long period.
I assure the hon. Member for Islington, South and Finsbury (Mr. Cunningham) on the first technical point that he raised. The Housing Act 1980 did away with the previous pre-emption system. Although there is provision in the 1980 Act for pre-emption to be imposed in certain special cases—for example, in certain rural areas—the general principle that we followed is to move to a discount claw-back system; and as the hon. Gentleman rightly said, that is based on a return of discount of 20 per cent. a year, after each complete year for the first five years after the sale takes place.
I was delighted that my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne), the Economic Secretary to the Treasury, came into the Chamber when the hon. Member made his intervention on the implication of the option mortgage system. I followed what he said in his Adjournment debate, and what he said today, and also what my hon. Friend said. It is a matter for my Treasury colleagues, but the hon. Gentleman took the further opportunity today to raise this matter to which he attaches so much importance. I welcome the spirit in which he raises the issue, in an endeavour to assist people who are buying their homes, particularly people who do not have high incomes.
245 The hon. Member for Islington, South and Finsbury raised the matter of valuation in a particular case. The matter was also raised by representatives of the Islington council, when they came to see me many months ago. There is no need to amend the legislation. The position is clear: people buy at the full open market value of a property, less the amount of discount. They do not get the benefit of that discount—which is the potential profit element—for at least one year after applying to buy their home. That seems to protect fully the position of the public purse.
The hon. Member mentioned a particular case in which someone advertised a property that he did not own. We live in a free society, and no one can prevent anyone from offering for sale property that that person does not own. The important thing is not so much what people do by way of advertising but what happens in reality and the basic equity of legislation. When a full open market value is provided, and that is laid down in legislation, and when the whole discount has to be returned for the first year after the sale takes place, I cannot accept that there is the general scope for abuse to which the hon. Gentleman referred.
The hon. Member for Penistone (Mr. McKay), like the hon. Member for Islington, South and Finsbury, was concerned about the principle of the right-to-buy legislation. He wanted to make a Second Reading speech on the right to buy. Perhaps I should make my Second Reading speech in reply. We take a different view on the pattern of sales that will take place. What my hon. Friend the Member for Woolwich West (Mr. Bottomley) said was right. The general experience of the house market is that every dwelling, however attractive or unattractive, has its price. By definition, the less attractive dwelling will have the lower price, and will be within the range of more people. The most eloquent evidence that the best houses will not be sold is provided by homesteading schemes, which have been carried out successfully in London and by councils throughout the country. They showed dramatically that people are willing to buy derelict and vandalised properties, pay an appropriate price for them, and do them up themselves.
During the past two or three years, I have had the pleasure of visiting a number of estates, new towns and local authorities where homesteading has taken place. I have seen the state of properties before they were put on the market, and I have been inside a number of houses which have been bought by young people in a highly dilapidated state and I have seen what has been done to them. It is a great tribute to people's imagination and willingness to help themselves. Some of the houses and flats, which a year or two previously were vandalised and dilapidated, have been turned into palaces. So there will be a reasonable spread of types of dwellings that are sold.
The hon. Gentleman for Penistone also raised two specific issues. He spoke of the financial effect of the sale of council houses. It looks as though Barnsley will be somewhat underspent this year. Given the substantial weight of sales that have taken place in Barnsley, I am sure that he will do all that he can to make certain that Barnsley council will fully utilise its capital allocation and the substantial capital receipts which are coming in and which will come in when the 5, 000 or so sales applications that it has received are completed.
The hon. Gentleman also mentioned Airey houses. I know what happened in Barnsley, because that is where 246 the initial fire occurred which led to the detailed surveys that were carried out into the condition of that property. We shall consider applications for Airey houses that local authorities make to us in the course of their HIP returns for their 1982–83 HIP bids. It is legitimate for a local authority to say that as part of its capital investment programme it wishes to do the following redevelopment of Airey house estates, and so on. We shall, of course, consider authorities' plans for capital expenditure on Airey houses, in conjunction with our general evaluation of local authority individual bids.
I am familiar with the problems of the constituents in Greenwich of my hon. Friend the Member for Woolwich, West. I am sure that his kind comments about the housing staff of local authorities will be much appreciated by the staff, and I fully endorse what he says. This is one of the more difficult social service areas. Housing staff have difficult problems to wrestle with, and there is a high level of commitment to the work that is done in local authority housing departments.
My hon. Friend the Member for Woolwich, West referred particularly to Greenwich, and I acknowledge the forceful, effective and consistent way in which he has, over the past 18 months, given outstanding support to the tenants in Greenwich who have sought to exercise their right to buy. I was disturbed by the personal cases to which he referred. Knowing in detail the history of that authority in dealing with right-to-buy applications, the personal circumstances he cited did not surprise me. As regards the cases to which he referred where people are experiencing difficulty in exercising their right to buy—particularly the serious delay for an elderly couple with a handicaped child—I am sure that if he has not already done so he will submit details to my Department. He knows that we pursue every case that is taken up.
The general position of the London borough of Greenwich, is causing deep concern. I must express the strong dissatisfaction of Ministers over the way in which Greenwich has so far implemented the right-to-buy legislation. My right hon. Friend the Secretary of State will be meeting officials from the London borough of Greenwich in that connection. As my hon. Friend the Member for Woolwich, West knows, the London borough of Greenwich has been formally warned that the Secretary of State is contemplating the use of his powers of intervention.
Finally, I come to the contribution of my hon. Friend the Member for Withington. He is correct in saying that initially we had some difficulty on the operation of the right to buy in Manchester. He referred to the leaflet distributed by Manchester council that was to some extent designed to dissuade tenants from exercising their right to buy. I am glad to say that the leaflet had singularly little success. Manchester council has received nearly 7, 000 applications from tenants who wish to buy their homes. Following formal representations which my Department made to Manchester in the early part of last year, the council has begun to make better progress and by the end of Februray this year about 95 per cent. of the tenants whose right to buy had been admitted had received their section 10 notices.
However, we are becoming increasingly concerned about the rate of completion of sales in Manchester. Although over 1, 400 tenants had completed the purchase of their homes by the end of February, that represented one-third of the number of tenants who have told the 247 council that they wish to proceed with the purchase of their houses after receiving a section 10 notice. At the end of February, nearly 4, 200 tenants had accepted the council's offer of the purchase price, so there was a large backlog of applications between acceptance and completion stages.
We have received evidence from tenants of serious delays to the completion stage. By the end of February we had received 56 complaints from tenants in Manchester about delays in handling their applications at the completion stage. Of those, 20 were received in February and 14 in January this year. Correspondence received from tenants or their solicitors shows that in some cases tenants are being told that it will be between 21 and 31 weeks before they can expect to hear from the council. That is not acceptable. I can tell my hon. Friend that my Department has taken up the issue of progress with Manchester council. We wrote formally to the council on 4 March asking detailed questions about its resources for completing sales and also about the measures it proposes to take to accelerate the rate of completions. We are awaiting the council's detailed reply. However, the chief executive has told us that he is making progress in reducing the backlog. In fairness, and to give the complete picture, the chief executive also said that over 1, 400 offers had been made for which, so far, no response had been forthcoming from the tenants concerned. In those cases the ball is firmly in the tenants' court.
I am extremely grateful to my hon. Friend the Member for Withington for giving the House the opportunity to debate the question of the right to buy and for bringing a number of cases in Manchester and the general problems there to our attention. I thank him for the excellent work that he has done on behalf of tenants in the city of Manchester in supporting them and giving them all possible assistance in exercising their legal rights. I assure my hon. Friend and the House of the Government's unshakeable commitment to ensure that all tenants, whether in Manchester or in any other authority, who have the legal right to buy their homes and wish to do so, succeed in becoming home owners.