Council House Rents (Birmingham) (Hansard, 21 October 1982)

§ Mr. J. W. Rooker (Birmingham, Perry Barr)

I had not intended to be here at this late hour, though I make no apology for raising the issue of Birmingham council house rents. As is apparen: from the Order Paper, my hon. Friend the Member for Birmingham. Erdington (Mr. Silverman) was due to initiate the debate, but he was taken ill during the day and is now in Westminster hospital. I know that hon. Members and his constituents, of whom I am one, will wish him a very speedy return to full performance.

Fortunately, my hon. Friend had made preparations for the debate and a copy of his speaking notes came into my possession and will assist me in making the case. There are about 135,000 council tenancies in Birmingham. That represents a substantial proportion of the dwellings in the city and the tenants have recently suffered a rent increase averaging about 13 per cent. That represents an average of £1.75 a week, but in some cases it can amount to £3 a week.

It is the second rent increase in 1982. For the lower-paid workers in the National Health Service—and, contrary to current Government propaganda, there are many such workers in the NHS—the rent increase would more than wipe out the pay increase offered by the Government. Rent increases in the past three years have totalled about 130 per cent. I do not know whether that is a Birmingham figure or a national figure, but I know that rents in Birmingham have gone through the roof and I have had many complaints from my constituents.

Figures provided by the city housing department show that there are about 50,000 pre-war council houses. The gross rent and rates for a three-bedroomed, pre-war house, which is unimproved and not even modernised, are 34p short of £20 a week. It does not take much effort to calculate that it is possible for house-owners to be paying less than that in mortgage payments for similar properties.

My hon. Friend the Member for Erdington has been an hon. Member since 1945 and he reminded me that he recollected that when he was a member of the city council 37 years ago the gross rents of those pre-war houses in Birmingham was 9s 6d a week—47½p. The increase has been 4,000 per cent., which is well above the rate of inflation over the years. The houses are the same bricks and mortar. Interest rates were 2½ per cent. when the rents were 9s 6d a week, but even at present rates of interest it is difficult to justify the current rents.

As I have argued on behalf of my constituents, the latest rent increase does not seem to be justified by the accounts of the housing department. There was no deficit which called for a further increase this year, and interest rates are falling rapidly because of the recession—as they did in the 1930s.

The average rent increase is alleged to be £1.75 a week. I do not know how accurate that is over the whole city, but I have three examples that I have managed to check with a constituent who raised the issue with me recently. A woman told me at a surgery that the rent of a four bedroomed house with two toilets and central heating, built about 10 years ago, was going up by £3 a week, while the rent of her three-bedroomed house, which is about a quarter of a mile away and has no central heating and only 639 an outside toilet, is going up by £2.40 a week—a difference of only 60p. That is in the Great Barr and Perry Beeches area. In Perry Common, the rent of a similar three-bedroomed, pre-war house, with an outside toilet and no central heating, is going up by £1.90 a week. So the same house has a substantial difference in rent increase of 50p, and for one of the houses the difference is 60p a week in increase, without the extra bedroom, without the privacy of one indoor toilet, let alone two, and without central heating. I asked the city housing officer for an explanation, but as yet I have heard nothing.

In addition to the greatly increased rents, there has been a decline in the amount and standard of repairs. Previous Conservative-controlled local authorities in Birmingham attempted to privatise, and that was before we even knew what the word meant. The result of that in my constituency was scaffolding falling down around four houses. It was a miracle that no one was killed. Subsequently, the Health and Safety Executive prosecuted. So there has been a decline in the amount and standard of repairs, notwithstanding the massive rent increases. My hon. Friend says that sometimes it has been difficult in his constituency to get any repairs at all done, and there are long waiting lists.

Moreover, there is the wholesale depreciation of many council houses in Birmingham, as a result of lack of repairs over the years, following various cutbacks. In the case of void houses—of which there are many in Birmingham—the depreciation is disastrous. No one is getting anything out of them in rent or accommodation. It is a ridiculous waste of public expenditure.

Council houses in Birmingham are not evenly distributed throughout the city. My constituency is not unique: about 35 per cent. are council dwellings, 63 per cent. are owner-occupied, and there is a small percentage of privately-rented property. I have a large proportion of owner-occupied property in my area which is in the north part of the city. In the south part, in a constituency such as Northfield which, as we all know, has no hon. Member to represent it because of the tragedy which took place, the percentage of council dwellings is 62 per cent. So people there who have had massive rent increases twice this year are suffering disproportionately to the rest of Birmingham.

I know that the Government are planning to remove housing subsidies next year. The housing benefit and rent rebate system is about to undergo a fundamental change, the significance of which I am sure neither the Government nor local authorities yet appreciate. Nevertheless, the council tenant in Birmingham will be paying not just an economic rent but in many cases one that is substantially more than can be justified as an economic rent. I know that the owner-occupier gets relief on the interest that he pays on his mortgage, and that the interest depends on the kind of mortgage. I make no criticism of that, although I believe that it should be limited to the fiat rate of tax. However, the council tenant is still paying his interest, via his rent. The council tenant pays his interest to the council and does not get the relief. There is no system such as the mortgage option scheme, brought in by a former Labour Government for low-paid people not paying income tax who could not get relief. It is true that in this respect the position of the council tenant is no different from that of the private tenant, who also gets no relief on his rent. However, the private tenant gets a compensating benefit of rent regulation which 640 at least stops his rent from continually going through the roof. I know that people complain about private rent increases, but there is rent regulation. In the case of the council tenant, the rent regulation is in reverse. During the past three years the Secretary of State has increased rent to levels which the Government consider desirable, no matter what the political complexion of the local authorities. It so happens that, at this moment, the present controlling group in Birmingham has taken an extra bite at the cherry. The Secretary of State forced even the last Labour-controlled council in Birmingham to increase rents to a greater extent than was justified by the figures in the books.

I want the Minister to explain to me, to my hon. Friend the Member for Erdington, who will read the debate, and to the citizens of Birmingham, particularly the 60 per cent. or more council tenants in Birmingham, Northfield, exactly how he can justify what is an unjust anomaly.

At the Conservative Party conference the Prime Minister said that we are one Britain. Yet at the same time the Government are treating millions of council tenants as second class citizens.

§ The Under-Secretary of State for the Environment (Sir George Young)

May I endorse what the hon. Member for Birmingham, Perry Barr (Mr. Rooker) said at the beginning of his speech when he recorded his regret at the fact that the hon. Member for Birmingham, Erdington (Mr. Silverman) was unwell? We wish him every speedy recovery from his ailment.

It was fortunate for the hon. Member for Perry Barr that the speech of the hon. Member for Erdington was so well written in advance and that he was able to use it. It is equally fortunate that there is apparently one subject on which Labour Members are prepared to agree. We welcome that rare degree of unanimity.

I am glad that we are debating the position of council house tenants in Birmingham tonight. However, I must say that the picture that the hon. Member painted was a partial one and highly misleading. If we look at the way that Birmingham is tackling its housing problems, we must recognise that the energy, drive and commitment of the city council is impressive. Its achievement over the past six months is commendable. It represents a far better deal for Birmingham tenants than could remotely have been hoped for, say, a year ago. In the spring of this year we saw the arrival of a new vigorous Conservative council, determined to sweep away the inefficiencies, restrictions and obstructions of its Labour predecessors. The proofs of its success are clear—startlingly so after such a short period of control.

I understand from the chairman of the housing committee that this financial year the council has completed 1,000 more repair jobs than the Labour council had managed to do by the same time last year. That by itself is excellent news for the tenants who have benefited directly. For each and every tenant it is a clear signal that past delays have been slashed in getting done essential jobs like re-roofing and re-wiring.

On average, the pace at which repairs are now being done is up to 20 per cent. higher than in the days of the Labour council, and that is in autumn weather. During the summer, I understand that the difference in output was over 25 per cent. I learn also that entry-phones are being put into tower blocks in the city. That is the sort of 641 initiative which every person living in tower blocks can welcome without reserve and which demonstrates a dedication to making the best of the housing stock and refusing to be overwhelmed by the problem.

Birmingham is also paying particular attention to installing wardens where staff on the spot are called for. It recognises that people with special needs deserve special measures. It is an impressive achievement, for instance, to have wired up flats which are under the care of wardens, not only to the warden's own flat but as a 24-hour emergency service to the housing department. That is the record which the city council displays after six months, and which the hon. Member did not refer to in his speech.

So far, I have concentrated on what is now being done for those Birmingham tenants who wish to remain so. However, there are many others who want to take advantage of their right, their unambiguous legal right, to buy their own homes. For far too long they were prevented from exercising their right by the deliberate obstructive-ness of the last Labour council.

The facts speak for themselves. Our Housing Act reached the statute book in the summer of 1980. The right to buy took effect from October 1980. Between then and May of this year, almost 5,000 tenants were accepted by the city council as having a right to buy. However, the remainder of the story is not hard to guess. There were delays, difficulties and dilatoriness. Over 100 tenants actually went as far as to complain to my Department about the frustrations they were suffering. At the end of the Labour period, a mere 300 dwellings had been sold. It required constant Government pressure to achieve even that miserable total out of the 5,000 admitted cases.

By contrast, over the past three months alone, the Conservative council has succeeded in getting more than 1,200 houses sold. The new applications have been flooding in. Over the past three months there have been 5,000 of them. They are still, I understand, coming in at the rate of 100 a day. In other words, the number of cases which the city council is prepared to accept as a result of tenants' action over the past three months is already the same as the number of cases admitted over a 19-month period by the Labour council. It hardly needs to be added that this is cast-iron evidence of the suppressed demand that was damped down during the go-slow period. At last, the right to buy in Birmingham is on the move. Both present and former tenants can see only too well who has their real interests at heart.

I should like to think that Government action will, wherever possible, reinforce Birmingham's own determination to increase efficiency and provide a better deal for its tenants. One contribution, which the hon. Gentleman touched on, will be the partial start of the new housing benefit scheme next month. This will enable rent assistance for tenants formerly on supplementary benefit to be paid direct to the city council. This step cuts down a transfer of cash via the tenant and thus eases his life as well as making for improved efficiency in the housing department.

I now turn to some of the points raised by the hon. Gentleman. Perhaps I ought to make it clear first that the central Government do not—as might have been inferred from the hon. Gentleman's remarks—control or carry responsibility for the level of council house rents in Birmingham—or, for that matter, anywhere else. Local authorities themselves have statutory discretion over the rents which they set for their tenants. Under section 111 642 of the Housing Act 1957, they are empowered to make such charges as they think fit for the particular circumstances of their area—as long as these charges are reasonable.

Against that background, it was rather invidious of the hon. Gentleman to direct his strictures at Birmingham in particular. There are in the West Midlands authorities whose average rent this year is likely to be at a similar, or even higher, level—examples are Nuneaton, the Wrekin, and—topping them all—Sandwell. Then again, Birmingham is not the only authority in the West Midlands to have gone for an autumn rent increase. This autumn Wolverhampton is reported to be making a rent increase of broadly comparable dimensions. Now all the authorities I have mentioned are perfectly entitled, like Birmingham, to exercise their statutory discretion as they choose. But each and every one of them is Labour-controlled. And the hon. Gentleman did not direct so much as a whisper of criticism in their direction. In attacking council house rent levels and rent increases he was somewhat selective.

We must, however, go further into the question of Birmingham rents even if they are not a direct Government responsibility. I have already outlined the improvements and achievements of the new Birmingham city council. It would be nonsense to claim that the improvements it has set its hand to can be achieved for nothing. There is a cost; it emerges in the mid-year because the new council only came into office and got things moving in May, and it is not unreasonable that it should be reflected in higher rents—especially given that the rents of the neighbouring Labour authorities that I have mentioned are either comparable or visibly higher.

Further, the hon. Gentleman conveniently ignored the fact that rents charged in Birmingham are not necessarily the same as rents paid by tenants out of their own pockets. Some 55 per cent. of tenants over the country as a whole receive rent assistance in one form or another. I do not have the precise figures for Birmingham, but there is no obvious reason to suppose that the pattern of these differs markedly from that applying nationally. On this basis, some 30 per cent. of tenants at present receive supplementary benefit. For them, the entirety of any rent increase is met in full. A further 25 per cent. of tenants—including, I hope, many of those on low pay whom the hon. Gentleman mentioned—are on rent rebate. This generally meets 60 per cent. of their rent increase. But it is only right to make the point that the rent assistance schemes are intended to, and do, cater for those on very low incomes or dependent on benefit. So in talking of rent increases, we need to take account also of the fact that protection for the least well off exists: and that it is misleading to quote rent increase figures as if they fall in their entirety on all tenants. There can be no question of rent assistance on its present scale being a palliative. It is a fundamental element in any discussion of policy nationally or of the impact on individual tenants locally. I hope that Opposition Members also see it in the same way and will do what they can to encourage the take-up.

I have concentrated on the position of council house tenants in Birmingham because that was the main thrust of the hon. Gentleman's remarks. But, since the hon. Gentleman has commented on the role of the Government, we should get certain facts straight. The Government do indeed, around now, make known their expectations of the average rent increase for the financial year ahead. That is nothing new. It took place under the previous Labour 643 Government as under this Government. But our expectation of what the average rent increase will be does not detract from the responsibility of each individual authority to take its own decision on rent increases, and thus on rent levels. The difference, however, between the last Labour Government and ourselves is that we do not propose, as they did, to offer firm policies, and then take refuge in soft options when the going gets tough. The previous Labour Government, for example, proposed keeping rents broadly in line with movements in money incomes". Instead, they handed over to us a position where rents had been allowed to decline over their period of office to their lowest real post-war level. The Labour Chief Secretary to the Treasury, the right hon. Member for Heywood and Royton (Mr. Barnett), actually said in the House: I believe that we are right to plan in the longer term for the proportion of housing costs to be borne by rents to grow from 43 per cent. in 1976–77 to 50 per cent. by 1980.—[Official Report,10 March 1976, Vol. 907, c. 453.]

He said that on 10 March 1976. By 1980, the proportion had slumped to 38 per cent. Had the Government carried out their policy, the increases which were subsequently introduced under the present Government would have been far less.

The hon. Member mentioned the withdrawal of housing subsidy which has affected Birmingham, among other authorities, since we took office. We have, indeed, introduced a new subsidy system—the same, incidentally, 644 as in the Bill which was introduced shortly before the previous Labour Government left office. We make no apology for cutting subsidies. Within the funds available nationally for housing, our priority had to be to safeguard capital investment, and to get it to increase which is now the position, and thus to curb the indiscriminate revenue support. I hope that these last few points place this debate in a national context. The hon. Member implied that council house rents in Birmingham were now above the fair rent level. I would like to see the evidence for that, as he implied that council house tenants did not receive the protection extended to private tenants afforded by the rent tribunals. He implied that council house rents were now above private rent levels. I should like to see the evidence for that. The hon. Member implied that, when he read the speech that his hon. Friend the Member for Erdington drafted for him. He also touched on subsidies to council tenants and to owner-occupiers. When I last examined the figures—this, I confess, was some months ago before the change in interest rates—the average subsidy per owner-occupier was less than the average subsidy per council tenant. As far as I can see, the new Birmingham council deserves to be congratulated, not least by its own tenants, on the initiatives that it has taken over the past six months. I hope that that is the message that will come through from this debate.