§ Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)
I cannot recall when last, as a Back Bencher, I spoke on the Consolidated Fund Bill. I suspect that it was during the 1960s. I had forgotten the hour of the day at which one is called upon to speak, and, despite the lateness of the time, I rise because of the intense interest, concern and growing resentment that is felt in my constituency — and the areas represented by some of my hon. Friends who are in the House — about the situation affecting home improvement grants.
I have the privilege of serving a community in which the majority of people are proud to be home-owners, and many of their homes are old and in need of considerable improvement. Hence their enthusiasm when the Conservative Government offered, some months before the last election, the prospect of 90 per cent. home improvement grants. That enthusiasm was heightened almost to a frantic point by the artificial deadlines that were imposed on applications for those grants.
We have had previous experience of such artificial deadlines, so I do not want to go into the argument over that. Such deadlines were tried over a decade ago. As I say, I will not go into the nonsense involved in treating home improvement grants as a sort of supermarket special offer that must be taken up by a certain date. I cannot see how it makes much sense — in housing, personal or family affairs—to force people to make such decisions. I leave that argument aside. Suffice it to say that the Government imposed a deadline and offered generous grants. Now they must face up to the financial consequences of the demand that they created and the deadline that was imposed.
Inevitably, the offer of 90 per cent. grants raised hopes and demands. If the offer was seen as an act of generosity, for the Government now to frustrate those demands and dash those hopes—in other words, to delay in any longterm way turning the applications that were made into improvements—would be an act of callous unfeeling and would lead to considerable resentment. Indeed, there would be as much resentment as there was enthusiasm about the announcement of 90 per cent. grants. However, it appears that the Government are likely to do that. In other words, thousands of home-owners who were offered the prospect of improving their homes with 90 per cent. grants—turning them into the little palaces for which they had plans drawn up—may have their hopes dashed.
Last Monday, in answer to the first of the parliamentary questions, the Under-Secretary of State had to admit that 26 of the 36 local authorities had suspended approvals of discretionary grants. That number has now risen to 33. The Minister admitted last Monday that the 26 authorities represented about 90,000 applications. Now that some further authorities have put their system of discretionary approvals into suspense, the local authorities' action must have caused the suspension of applications from over 100,000 householders.
The Under-Secretary of State did not remind the House that a week earlier he, through the Welsh Office, had issued a request to every local authority to shut down all forms of capital expenditure where there was no contractual obligation attached. In doing so, and by the nature of such a request, he was requesting the suspension 149 of discretionary payments of this kind. This is exactly the sort of capital expenditure that would be subject to such a request. It is a little wonder that nearly all the local authorities have now suspended discretionary approvals. The Government raised people's hopes and then cynically told local authorities not to spend money in that way. There will be a violent reaction to such behaviour.
After last week's answer, and the request of the week before, we have today some information about capital allocations to local authorities. It is buried away in another written answer issued in a Welsh Office press report issued today to tell us what the capital expenditure allocations are for 1984–85.
I hope that the Minister can confirm that, although the press release issued by his office refers to capital expenditure allocations for 1983–84, it should refer to 1984–85. Unless that is so, the tables do not make much sense. I assume that the document put out on 19 December on local authority capital expenditure 1984–85, and the table which is included therein, refer to capital expenditure allocations for 1984–85. Presumably there has been an error in transcription.
In addition to the problems of the revelations of the past week about the suspension of the discretionary approvals by almost every local authority, we now have the actual capital expenditure for the next financial year, given in a written answer to the hon. Member for Cardiff, West (Mr. Terlezki). Let us take Merthyr. Merthyr's total capital expenditure for the coming financial year is given as £3,348,000. I hope that the Minister can confirm that that is the figure for 1984–85, and that it can be compared with last year's figure, published on 23 November 1982 in a full-scale statement subject to questioning, of £4,400,000. If those figures are correct, the total capital expenditure in the borough of Merthyr is to be cut by £1 million. Is that an accurate reading of the figures, comparing the figure published today with that published at roughly this time last year?
Those figures spell hopelessness, disaster and an eternal wait for thousands of people in the borough of Merthyr, and I suspect — if I had the opportunity to analyse the expenditure figures for other local authorities announced today — thousands of people in other local authority areas who have applied for the 90 per cent. grant. Local authorities will be in no position to make those discretionary payments.
I shall illustrate that hopelessness and eternal wait by examples from the communities that I represent. Merthyr is contractually committed to making grants to 1,609 home-owners. The total value of those grants is £2.25 million. Within present limits, the borough can meet only £500,000 of that between now and 31 March. It will have to carry £1.75 million into the next financial year.
In addition, 500 applications are receiving detailed consideration. They amount to about £1.25 million. One borough will therefore carry forward about £3 million into the next financial year for approved grants and those receiving detailed consideration.
If the figures in the press report are correct, that is almost as much as the Government are offering Merthyr Tydfil for all purposes in the next financial year. It may receive a small percentage of the amount held back to ensure that we are all good boys.
That is only a beginning, because it is estimated that by the 31 March deadline another 3,500 people in the borough will have applied for the 90 per cent. grant. If one takes 150 average expenditure, we are talking about a further £8.5 million demand in the pipeline created and encouraged by the Government. That is now to be throttled by the Government's unwillingness to endorse, underline or provide finance to meet those applications. Under the local authority's capital expenditure programme other considerations arise such as the case of council tenants whose homes need improvement. The Government should not disregard that side of the equation. There is also a percentage of area houses in the community that must be taken into account. This is a major and significant problem.
Let the Under-Secretary of State for Wales admit, whatever argument we may have—and we will discuss the causes of the situation in a minute—that on the local authority capital expenditure figures issued to date, on the growing demand and on the applications that are pouring in, there will be tens of thousands of householders applying for but with no chance of getting grants for home improvements not only in 1983, but also in 1984, 1985 and 1986. Thousands of householders in many communities—those who have already made applications and those who will make applications by 31 March next year—will be condemned to wait not just for months but possibly for years for their grants to come through unless special and specific financial arrangements are made to meet the demand.
This is an argument not just about global sums of money. I do not know how many hon. Members have met this growing problem in their Saturday morning surgeries. A group of individuals came to see me last Saturday, each in his different way illustrating the points I make in the debate. Improvement is more than the collection of some money from an authority. It concerns a whole set of personal decisions that people make about the way they want to live and what they want to do with their homes. At my surgery last Saturday I saw a young couple who were making decisions about when to get married based on when they were likely to get an improvement grant. Young married couples make decisions about starting a family based on when they are likely to be able to carry out improvements to their homes. A classic case at my surgery last Saturday was that of the elderly couple who were trying to decide whether to apply for sheltered accomodation or, if they were able to get a grant, to improve their property and stay in what had been their home and, indeed the home of their parents before them. A host of personal decisions are often attached to when and how people will be able to improve their homes.
If people are encouraged to apply for grant but are offered no certainty about the time scale for receipt of the grant payment, not only will their hopes be dashed but their expectations will be suspended, and often the property in which they live will be blighted.
The Government offered the right to 90 per cent. grant. Let me remind the Under-Secretary of State for Wales of the terms that he set out:The hon. Gentleman is well aware that all that has to happen is that the applications must be made by 31 March. It does not necessarily have to be processed, approved or paid for. We have had great sucess with the policy, as an enormous number of applications have been made. Indeed, the policy is just as successful as our council house sales policy." — Official Report, 12 December 1983; Vol. 50, c.664.]I wonder what the hon. Gentleman would say if people were waiting to purchase council houses years after they 151 had applied for them just as it is likely home owners will have to wait for years after having applied for improvement grants?
§ The Under-Secretary of State for Wales (Mr. Wyn Roberts)
Will the hon. Gentleman explain why those good people had to wait so long to purchase their homes?
§ Mr. Rowlands
In Merthyr the applications were processed as quickly as could be expected. I make a simple challenge to the Minister. Will he help the local authority to process the grant applications with at least the same speed as it used to process the applications to buy council homes? Will he ensure that the money is available in at least the same timescale? More than 800 houses have been sold, or are in the process of being sold, in Merthyr, and I have received few complaints about delays. There may have been delays in other areas, but I am willing to accept the challenge. Will he ensure that local authorities receive the finance necessary to process grant applications? He certainly goaded them into selling their homes.
However, the Minister must also say how the system will be financed. The Government introduced the 90 per cent. grant, and people responded quickly and enthusiastically to the offer. I hope that at least tonight we will not hear lame excuses, and the shuffling off of the blame for the problems on to the capacity of local authorities to process applications. The hon. Gentleman had better not repeat the criticisms that he made in Adjournment debates and in correspondence with myself and other hon. Members. He cannot say that only a few local authorities have not organised themselves properly, because 33 out of 36 authorities have been unable to implement the policy as handed down in such a hopelessly ill-organised way by his Department. He and his Department must accept responsibility for the problems.
Had the Minister listened to what the local authorities were telling him about what would happen if the policy were implemented in the way that he has chosen to implement it, he would have heard the reasons why such problems would arise. There was no problem in applying for grants. Although there were initial problems in approving them, because of inadequate staffing, Merthyr, Rhymney and other authorities hired extra temporary staff to carry out the job, and the rate of approvals increased.
The real problem in financing the system was that the major factor was outside the control of local authorities—the capacity of local builders to complete the work in the time allowed. Unlike the large-scale renovation of local authority housing, where a local contractor works on a row of houses, these were inevitably one-off jobs carried out by small-time builders. Some were reputable builders, but, alas, some cowboys got in on the rush. The authority had no control over the capacity of the local builders to cope with the demand, and therefore had no control over the payments.There is no point in the Minister repeating the statement that the local authorities should have approved the applications more quickly or should have employed more people. He need not say that they employed only I per cent. of their administrators or technical officers to do the job. That caused the initial bottleneck, but the authorities grappled with that. The financing and the payments were dependent upon the work being done. With the volume of work started by the 90 per cent. applications and the fear of the deadlines, many of 152 the payments and the financing of the arrangement are way behind the applications and approvals. The real problem is how to unravel the financing of demand on that scale.
In his letter to me on 30 November, the Minister said:We made special arrangements. Special financial arrangements were introduced for 1982–83 and 1983–84 to enable authorities to meet the demand from the public, but there has never been a suggestion that these special arrangements would be extended into next year.Those special arrangements are the very ones that will be needed in the next financial year. The applications will pour in before 31 March next year. The additional cost of the 90 per cent. application will be carried on into the financial year 1984–85, and, I fear, beyond that into the following year, and possibly the year after that, as a result of the demand that has been created and the non-existent financial arrangement.
The Minister wants to stop the special financial arrangement, which he recognised and acknowledged was necessary to meet the demand. The demand that has been created will now run, in financial terms, well into the next 18 months to two years. I shall take the most absurd example. Under the Minister's diktat, a householder can apply for a grant on 28 February next year. The financial consequences will not be borne within the two years 1982–83 and 1983–84 suggested in his letter to me. There will be thousands of such cases in every one of the local authorities. The financial consequences will be carried over into 1984–85. It is not the failure of the local authority, but the failure of the building industry to get on with the work.
If special financial arrangements were necessary, as the Minister admits in his letter of 30 November, to deal with the demand created by the 90 per cent. grant in 1982–83 and 1983–84, in the name of Heaven, they will be even more necessary in 1984–85, and the following year, as we start to pick up all the financial consequences of that huge demand and the backlog of applications at the end of this financial year. I hope that I carry Conservative Members with me on that basic and fundamental point.
The Minister has created a demand, which was responded to enthusiastically. He can claim to be a victim of his success, but, as a result of his mismanagement and miscalculation, he must not make thousands of houseowners the victims of those miscalculations. When the Minister decided on the special arrangements and on the 90 per cent. figure, what was the estimate that was made on the financing of the new demand? How could the hon. Gentleman write me that letter on 30 November unless those assumptions and the financing of the scheme were hopelessly, inadequately miscalculated? Thousands of homeowners in my area, and varying numbers of people up and down the Principality, in many local authorities, certainly in the valley communities of south Wales, wanted to take advantage of the scheme, believing in a dream that they were invited by the Government to pursue. Now, unless the Minister comes up with a new special financial arrangement, those dreams will turn into nightmares and those hopes will be dashed.
§ Mr. Peter Hubbard-Miles (Bridgend)
Thank you, Mr. Deputy Speaker, for allowing me this opportunity to address the House for the first time.
When, on Thursday, I read the list of subjects for debate today I decided to seek an opportunity to make my maiden 153 speech. At the time I thought that as we would be at the beginning of the festival of peace and good will it might be appropriate to include some humorous observations, but bearing in mind the events of the weekend and our feelings and thoughts for the victims and their families, I am sure that all hon. Members will agree that a light heart does not belong in the House.
My political life was rooted, until recently, in local government, where the traditions are somewhat different from the parliamentary scene. If, Mr. Deputy Speaker, I should in any way breach the courtesies of the House, I pray that I may be rebuked with the gentleness and understanding which I have seen demonstrated by the Chair when hon. Members have appeared to be wayward.
I am proud to represent, in this great palace, the people of Bridgend, one of the two new Welsh constituences created by the recent constituency reorganisation. I am also proud to be the first Conservative Member ever to represent a constituency in Mid-Glamorgan, which is situated midway between the two great cities of Wales—Cardiff and Swansea—and straddles the M4 and the 125 inter-city rail link from London to west Wales.
Bridgend comprises parts of the two old constituencies of Ogmore and Aberavon. I pay tribute to the right hon. and learned Member for Aberavon (Mr. Morris) and the hon. Member for Ogmore (Mr. Powell) for the exemplary way in which they have served, and continue to serve, their constituents. I thank them and congratulate them on having surrendered, albeit at the behest of the boundary commissioners, those parts of their constituencies which enabled me to make my way to the House.
Bridgend is a constituency of the future but with a past which contributes much to its attraction, stretching from the Roman city of Kenfig in the west to the lovely vale of Glamorgan in the east, and from historic Coity in the north through the pulsating heart of industry and commerce in Bridgend to the gem of the south Wales coast—Porthcawl, my home for part of my life and my love for all of my life; a resort where the sea is silver, the sands golden and the golf royal, and where the health-giving properties are so famed that no fewer than nine right hon. and hon. Members of the Government Front Bench in the previous Administration were tempted to visit it in late May and early early June. The sceptics were heard to say that the visits were intended more to promote the political well-being of the visited than the physical and spiritual well-being of the visitors. I shall not quarrel with that.
Several Opposition Members, including the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), have been known to make regular visits, for their physical and spritual well-being—
§ Mr. Hubbard-Miles
—as they see their political sustenance in other pastures. They are all welcome at Porthcawl. My right hon. Friend the Prime Minister had arranged a visit in mid-June, but for her own good reasons she chose to engage in far more wide-ranging activities, the success of which is demonstrated by my presence in the House and the fact that no fewer than 13 of my hon. Friends represent the Principality.
I am well aware of the deep interest of the hon. Member for Merthyr Tydfil and Rhymney in housing in Wales. Indeed, it was because of that interest that I first came to know him when, as the Under-Secretary of State for Wales 154 responsible for housing in Wales, he visited my local authority, Ogwr borough council, and urged it to embark on the biggest ever housing capital programme. "Spend, spend, spend," he urged, "Go out and try to break the bank," he exhorted. I can imagine how he felt a few short weeks later when he announced a message partly of failure and partly of success — no, the houses had not been built, but yes, the bank was broke. The hon. Gentleman left shortly afterwards for a spell in the colonies.
I have been a member of a housing authority for many years. I have witnessed the highs and the lows in capital investment programmes, new house building, improvement and renovation grants and there have never been sufficient resources. Too often there have been only scarce resources, but I am bound to say that the Government have good cause to be proud of their record on capital housing allocations, which was at its peak of £185 million when the Conservative Government left office in 1974 and declined to a record low of £81 million when the Labour Government left office in 1979. It has now climbed back to £103 million in 1982–83. Those figures are all based on 1978 constant prices.
The Government's record on improvement and renovation grants is even more impressive. Following the record figures of the Conservative Government in 1972–73, when, respectively, 21,337 and 23,694 grants were paid, there was a dramatic fall during the Labour Government of 1974 to 1979, and a record low was hit in 1976 and 1977 when the hon. Gentleman was responsible for housing in Wales. In 1976 only 6,810 grants were paid, and in 1977 only 6,428. Contrast those figures with those for 1982, when 20,966 grants were paid, and those for the first half of 1983, when a staggering 21,966 renovation and improvement grants were approved and paid. The Government have a record which the Opposition must envy.
The hon. Member for Merthyr Tydfil and Rhymney referred to the scheme introduced as a special offer. He knows that it was introduced because there had been an underspending in the previous two years of £85 million by local authorities in Wales. Of course I am disappointed with the backlog of grants awaiting approval. In my local authority 1,000 applications await processing. The responsibility must lie with the local authority.
In November 1982 a backlog had already built up and certain members of Ogwr borough council urged the Labour-controlled authority to redeploy existing staff or take on additional temporary staff to take maximum advantage of what we called the housing offer of the century. But the Labour majority refused to do so. There is no doubt that, had the authority accepted that advice and redeployed only a small percentage of the staff, many of the 1,000 applications now awaiting approval would already have been paid. I understand that a similar pattern is repeated in many of the Welsh authorities.
There is always much that remains to be done for housing. I hope that the pause in approved grants which we are experiencing will not be long-lived. The Government have given a high priority to improving Welsh housing stock, and I believe that they will continue to do so. I believe that if the Member for Merthyr Tyclfil and Rhymney is ever a Member of a Government of any party he will as a gesture of good will, do his best to emulate the success of my right hon. Friend the Secretary of State for Wales and my hon. Friend the Under-Secretary of State for Wales.
§ Mr. Alex Carlile (Montgomery)
We have just heard a most enjoyable maiden speech from the hon. Member for Bridgend (Mr. Hubbard-Miles). Not only did he survive well into the night—it is nearly 2 am—but he managed to show a feel for his constituency and to present it with a lyricism and poesy that does him proud; and which would also do the Wales Tourist Board proud on any occasion when it wanted to advertise his constituency. The hon. Member showed an aptitude for argument that raises the enjoyable prospect of his having many long discussions with the mother of the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). It would be enjoyable to be present at some of those discussions.
We are talking about home improvement grants in Wales. It seems to me that the starting point in any discussion about home improvement grants in Wales should be an examination of the Welsh housing stock, because its state is a pertinent factor in any discussion on that subject.
The Welsh Housing Condition Survey of 1981 showed that during the previous five years there had been a significant deterioration in the standard of Welsh housing. In the five years to 1981, 41 per cent. of Welsh housing had deteriorated in condition. In 1981, 63 per cent. of the houses needing repairs in Wales were occupied by the unemployed, the elderly and the disabled — in other words, by those who through no fault of their own were economically inactive.
Furthermore—the hon. Member for Merthyr Tydfil and Rhymney adverted to this point — Wales has a higher proportion of owner-occupiers than the United Kingdom in general. What I have said about the economically inactive shows this—that many of those owner-occupiers have means that are far more limited than those of the average owner-occupier in the United Kingdom. Added to that is the fact that the average house in Wales is older than the average house in Great Britain generally.
Therefore, many older houses are owner-occupied or occupied by people who cannot afford their upkeep. We might think that the nettle would have been grasped by producing a reasonable stock of new housing. Unfortunately, within the period 1976–81 with which the Welsh Housing Condition Survey dealt, the creation of new housing in Wales was not showing any real upturn. Further, since 1979 — a date which is significant for obvious reasons — there has been a considerable reduction in house starts in Wales. There has been a reduction of 27 per cent. in new house starts in Wales from the 1979 figure of 11,426 houses to the 1982 figure of 8,108 houses. The 1983 figure looks as though it will be similar to the 1982 figure. Our houses have thus been deteriorating and we have not been building new houses to replace them.
In March 1982 there came what seemed to be a real shaft of light when the Chancellor announced that the maximum rate of grant was to be increased from 75 per cent. to 90 per cent. and that local authorities would have unlimited power to make grants. In effect, this meant that improvement grants in Wales were excluded from the expenditure ceilings imposed by the House Investment Programme. That seemed marvellous at the time and the Government launched the programme in a blaze of self-congratulatory publicity — it would be interesting to 156 know how much they spent on the publicity campaign—but in view of what has happened since one wonders whether they were not indulging in some rather cynical bread and circus politics with a general election looming on the horizon. We heard nothing from them during the election campaign about the cuts that were subsequently to be imposed.
The Government deliberately increased people's expectations, creating a vastly increased demand for grants. It is absurd to blame local authorities for slowness in processing the applications. Many authorities, including my own Montgomery district council, took on extra staff to administer the demand. The staff worked hard, but, as the hon. Member for Merthyr Tydfil and Rhymney made clear, administrative staff cannot conjure up improvements without enough builders, artisans, architects and surveyors to deal with the demand.
Opposition Members present for this debate represent a cross-section of the constituencies of Wales. I represent a rural constituency. Other hon. Members represent industrial constituencies and the hon. Member for Alyn and Deeside (Mr. Jones) represents a mixed residential and industrial constituency. All our local authorities, try as they may, have been unable to conjure up success in dealng with all the applications to date because the building trade cannot be expected to gear up and change the habits of a lifetime, to bring all the schemes to fruition in the unreasonable time scale suggested.
Now, conveniently after the general election, which was preceded by a kind of Keynesian mini-boom partially engineered through the housing investment proposals, the scheme has been cut. The 90 per cent. rate has been reduced to 75 per cent. and we are back firmly under the aegis of the housing investment programme. Expectations were built up and then dashed.
I spent part of this afternoon with the people who actually have to administer the applications, in the environmental health department of Montgomery district council. They now receive as many applications for grants as ever before. They have to deal with the refusals, but they know that they cannot give any acceptances because the prospect of being able to pay out any money before 1986 on the new applications is remote and who knows what will happen afterwards? It is time that the Government told local authorities where they are, not just for the coming financial year but so that they can plan for three and four years ahead, and not be faced with a bottleneck of applications (which are brought on their shoulders by Government policies) which they are powerless to stop or grant.
The consequence of the Government's change of policy on home improvement grants in Wales could be serious. The Government will have to face up to the responsibility for those consequences. The poorest tend to live in the worst housing as the house condition survey made clear in 1981. We all know that poor housing is one of a complex of factors which lead to poverty. The responsibility for poor housing will lie squarely with the Government—partly as a result of their present policy on improvment grants.
§ Mr. Wyn Roberts
I am sure that the hon. Gentleman understands that one of the main purposes of the 90 per cent. rate of improvement grants was precisely to help the poorer owner-occupier.
§ Mr. Carlile
If the Minister and the Government really want to help the poor owner-occupier, why are they taking the money away? The Minister's question, with which I am delighted to deal, highlights the cynicism of the Government's policy. Those who are involved in the administration of justice know that one of the factors in the increasing crime rate, quite apart from anything else—is poor housing. Attacking bad housing helps to reduce poverty, crime and social as well as economic deprivation. Preserving bad housing is simply a cruel and unacceptable policy.
The improvements that have occurred, and which ought to be possible if the home improvement grants scheme were allowed to run its logical and economic course, would also maintain communities. Rural Wales has witnessed enough communities being broken up for political and non-political reasons in the past 150 years. The improvement grant scheme promised, by the improvement of housing in some rural communities—there are many in my constituency—to enhance and strengthen community life. It discouraged people from leaving their own community for better housing in the towns, because they were given the opportunity to make their house in the village or hamlet better. That opportunity is also being removed.
Another consequence of the Government's decision affects employment. There is no better way in which to create jobs — cost-effective jobs — than investing in housing. It has been calculated that housing investment can create a job for about £4,000. In what other industry can that be done? It costs £40,000 to create new jobs in some industrial sectors. We also have the necessary skills for housing improvement. There are skilled building workers on the dole. There would be no skill bottlenecks. Moreover, housing has the advantage of creating work for unskilled labour. Building work also has a low import value. That is another reason why we must ensure that building work continues on as high a scale as possible.
Unfortunately for the Government, their policy has been perceived by people in Wales to be nonsense. We all experience a quite simple reaction to the Government's policy in our constituency surgeries. People are coming to tell us that the Government's policy on home improvement grants simply does not make sense. The more that people talk about this, the clearer it is that the policy does not make sense. One despairs as to whether this message will ever penetrate the Government.
§ Sir Anthony Meyer (Clwyd, North-West)
It is my extremely pleasant duty to congratulate my hon. Friend the Member for Bridgend (Mr. Hubbard-Miles) on an excellent maiden speech. It is not often that maiden speeches are made at this hour, and it is particularly unfortunate that so fine a maiden speech should have been made to such a comparatively empty House.
§ Sir Anthony Meyer
I hope that the few who listened to the speech will be supplemented by the many thousands who will read it. It was a memorable occasion, marked by his great knowledge of the subject. My hon. Friend will know that I have a special fellow feeling for him. He and I both had difficulties in getting into the House, and he and I attribute a special meaning to that much-used phrase "the 158 rule of law". I am particularly glad to see him here and I am sure that the House will listen often and attentively to his well-informed contributions to our debates.
There was one missing dimension to the debate this evening. Here we are at 2.10 am debating one aspect of Welsh housing, and once again, there is no Plaid Cymru representative present. I am particularly sorry about that because, on this issue, Plaid Cymru is on the horns of a dilemna. On this occasion, I rather sympathise with its rather uncomfortable posture on those horns. Although it would wish to see greater expenditure on Welsh housing, it is concerned that a liberal application of this policy of generous housing improvement grants would have the side effect of encouraging large numbers of people to buy weekend or country homes in Wales and develop them at the public expense, thereby destroying the Welsh character of certain communities.
I do not agree with Plaid Cymru on that, but it has always seemed to me a little odd that the policy of housing improvement grants should be applied with so little discrimination. I accept the need for such a policy in areas of urban decay and even in rural communities where there is bad housing. However, if this policy is applied indiscriminately, it provides a bonanza for people to provide themselves with excellent accommodation largely at public expense when there is no housing need. Therefore, it was legitimate for the Government to look keenly at the public expenditure involved and to reconsider it.
The language employed both by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) and, to a lesser extent, the hon. Member for Montgomery (Mr. Carlile) becomes rather exaggerated when they start talking about the expectations that have been aroused and so cruelly dashed. It is always unpleasant to have one's expectations dashed, but I can think of expectations more vital and no better founded chat have had to be dashed by the horrible force of circumstances. Although I am sad to see people get less than they hoped to get, I am even more sad to see the building industry deprived of badly needed opportunities. However, I have to accept that these sacrifices are rather more bearable than are some of the sacrifices that people are called upon to make.
My next point is somewhat peripheral to the debate, but it is none the less directly connected to it. One consequence of the inevitable tightening up of the funds available for housing renovation has been to plunge sorne of the organisations that provide sheltered housing, or housing for elderly people, into an uncertain state. I have two examples in my constituency, of one of which I am sure that the Minister is already aware because I have written to him about it. It concerns the activities of the Abbeyfield housing trust, which provides housing for elderly people who are enabled thereby to live more or less independently within a single building, where they have their own furniture, do much of their own cooking, and have certain facilities in common. It is an admirable institution, and enables old people to retain their independence to the end of their days.
However, the movement has encountered certain difficulties and has been plunged into some uncertainty because of the drying up of funds. There is an example in Abergele, about which I have already written to my hon. Friend the Minister. The movement needs to know its prospects for next year before it can embark on a much needed conversion. A somewhat more urgent problem has 159 arisen at Rhyl, where an Abbeyfield house already exists, but in an area which is becoming almost uninhabitable because of the development of Rhyl town centre. More appropriate premises are available and have been purchased in another part of the town, but they urgently need reconversion—no just conversion, but repairs to prevent damage from damp. The work cannot go ahead, urgent though it is, because of uncertainty about the availability of funds.
I do not expect my hon. Friend to answer my questions tonight, but I want to put the matter on the record, because I hope that the Abbeyfield housing trust and other concerns which do the same work will have the uncertainty taken away. They accept that they will not get all the funds that at one stage they hoped they might get, but they want to know exactly where they stand.
§ Mr. Wyn Roberts
Perhaps my hon. Friend will allow me to say that I have read his letter with great care and have replied to it. He should get the reply before the House rises.
§ Sir Anthnoy Meyer
I am extremely grateful to my hon. Friend for what he said, and I am sure that the people who work so valiantly to promote this housing will be equally pleased to hear that.
That is all that I have to say. We have had a valuable little debate, even at this early hour of the morning, and it is a pity that there are so few here to listen to it.
§ Mr. Barry Jones (Alyn and Deeside)
I must be brief in view of the miserable hour of the day at which we are holding this debate. I agree with the hon. Member for Clwyd, North-West (Sir A. Meyer) that it is a valuable debate.
I congratulate the hon. Member for Bridgend (Mr. Hubbard-Miles) on his maiden speech, but I do not agree with his strictures on my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). I hope the hon. Member for Bridgend will agree that the Ogwr borough council has a distinguished record on housing.
My hon. Friend the Member for Merthyr Tydfil and Rhymney made a speech which was full of expertise and insight. He has a distinguished record in housing, and he spoke with compassion and concern. I, for one, learnt much from his speech. It is true that 40 per cent. of the total housing stock in Wales predates 1919. The comparable figure for Great Britain is only 29 per cent. Wales has immense and continuing housing defects. Sadly, as the hon. Member for Montgomery (Mr. Carlile) implied, the number of unfit houses and properties in bad repair is not decreasing significantly. A total of 83,000 dwellings in Wales still lack one or more of the basic amenities. In the Rhondda, approximately 26 per cent. of the dwellings lack the exclusive use of one basic amenity.
The position of various local authorities on home improvement grants is extraordinary. In Cardiff, 6,487 grants are outstanding. According to local councillors, the public are utterly confused by the Government's stop-go policy on improvements.
Anomalies have arisen from the interpretation of discretionary and mandatory grants. For example, a family of seven seeking to add an indoor lavatory and bathroom to their home were told that such improvements would be 160 mandatory if they used one of their three bedrooms for the conversion, but discretionary, and therefore no longer allowable, if the bathroom was built as an extension.
Chronic overcrowding exists in Cathays, Canton and Riverside. In the Rhondda, 5,000 grants are outstanding. No more discretionary grants are available. In Swansea, 2,000 applications are outstanding and there is a real problem because of the extreme old age of many properties. My county, which certainly does not have the problems of south-east Wales, faces a considerable challenge with 6,300 unfit dwellings which are not reasonably suited for occupation. About 3,400 have outside lavatories. North Wales overall has the distinctive problem of holiday or second homes. About 3,000 homes are involved and they increasingly prevent home ownership for many young families.
In my district of Alyn and Deeside a queue of 1,150 people await about £3 million worth of grants. The local authority estimates that it will take three and a half years to clear the list. Some of the houses involved have leaking roofs through which water pours; some have no damp courses and this creates wretched and uncomfortable conditions. Some are without inside lavatories, and families are demoralised.
Many applicants for grant are elderly living in pre-1919 homes. Frankly, some applicants will die before the grant is approved. They live their twilight years in growing discomfort. Some are cold, uncomfortable and bitter. Sometimes there is a spectacular decline in property. That is harmful to the resident and shaming to any Government who attempt to cope with the problem. It is unjust of the Government to blame any local authority.
The Welsh office of the Association of District Councils has made some strong comments. It appears to be correct in its stricture of the Government. Recently, it said that it hadexpressed continuing concern with the totally unsatisfactory position created by the demand for house renovation grants".It calculatedthat the 37 District Councils will receive some 197,000 applications for grant between April 1982 and March 1985, valued at approximately £610 million".Despite vigorous efforts by the local authorities to process the huge increase in applications, notwithstanding Government strictures to keep staff levels to a minimum, it is estimated that some 60 per cent. of applications could be outstanding at April 1985. In the view of District Councils these grants may not be able to be approved and work done until the end of the decade or beyond.
The Welsh office of the Association of District Councils advocates a housing plan for Wales to identify the needs and examine ways of meeting the needs over a long period. Perhaps the Minister can respond to that proposal. As the hon. Member for Montgomery said in his cogent speech, the home improvement industry is labour-intensive.
The Minister should not seek to damp down development. The home improvement industry creates jobs, it reduces unemployment, it reduces expenditure by the DHSS on benefits to the unemployed, it boosts the Government's receipts thereby from taxes, it creates demand for building materials and, in effect, it benefits the economy in a positive manner. I think the Minister will agree that it creates happiness, security and contentment.
It is generally believed that the Government are hopelessly wrong on this issue. The Association of District 161 Councils is right to say that the delays in providing improvement grants will be titanic and that this will have a major impact on housing authorities seeking to tackle long waiting lists, to tackle homelessness, to get on with major repair programmes to council dwellings, and to improve provision for the elderly. The morale of the professionals seeking to alleviate these problems has taken a major blow.
The attitude of councillors dedicated to improving the housing of their electors is one of growing indignation and anger, as my hon. Friend the Member for Merthyr Tydfil and Rhymney pointed out at the beginning of his speech. Both laymen and professionals in the local authorities feel that their reputations have been traduced by a Government seeking alibis.
The parliamentary performances of the Under-Secretary of State on this subject have not engendered confidence. He has tended to wash his hands of the problems and to put the blame unjustly on to the local authorities. We have observed a ministerial approach which at times has been unconvincing, sometimes insensitive, apparently slapdash and always short-term in its approach. Above all, the House should not forget that the people were not told by the Government at the general election that these miserable and niggardly cuts would take place. Our people have been cheated.
§ The Under-Secretary of State for Wales (Mr. Wyn Roberts)
I must congratulate my hon. Friend the Member for Bridgend (Mr. Hubbard-Miles) on what we would all regard as an eximious maiden speech. We particularly admired his poetic description of his constituency including Porthcawl, and his dry wit drew a smile even from the face of the Opposition.
I have listened with the greatest attention to the points which have been made in the debate. The condition of the Welsh housing stock and the role of the grants system are important matters which merit serious concern. I appreciate that. But I am bound to say that I have not heard any arguments that are substantially different from those that have been put to me on several previous occasions.
Let us go back to basics. The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) would not, I presume, censure us for introducing the higher rates of grant. Nor should he: it is a measure which has proved to be enormously successful. There can be no doubt of the reaction of householders in Wales to the opportunity with which we have presented them. The problem we face in Wales, as the hon. Members for Alyn and Deeside (Mr. Jones) and for Montgomery (Mr. Carlile) have rightly pointed out, is that we have more than 400,000 houses that were built before 1919, many of them in disrepair, and some of them still in need of the basic amenities which are fundamental to achieving a decent standard of housing. In fact, the 1981 Welsh house condition survey found that more than 20 per cent. of our pre-1919 houses were unfit, despite the efforts of successive administrations to rehabilitate the stock. When the new grant rates were introduced, more than 17,000 applications were received in the first three months alone. The grants paid—and the grants which will be paid—will make a substantial impact on the housing stock of Wales and will be reflected in the results of the next house condition survey in 1986. Every repairs grant generated by our initiative represents substantial structural repairs being carried out to one of 162 those 400,000 pre-1919 houses; and every intermediate grant paid represents one or more of the basic amenities being installed in a house which was previously lacking those amenities. I assure my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) that these grants are not available for second or holiday homes.
It is quite clear to everyone that our initiative in raising the rate of grant has had a dramatic effect. It has generated a demand for grants and art interest in improving the stock which has transformed the approach of most local authorities to rehabilitation work. I accept that it will take time for all grant applications to work through the system, but let me once more make it clear that the higher rates are, and always have been, a special temporary measure with a specific cut-off date for applications of 31 March 1984. We have certainly never given any indication that it would extend beyond that date, although it is important for me to emphasise yet again that the deadline is for receipt of applications by local authorities, not for approvals.
As I have said, there is no doubt about the public's response to our initiative. But I am bound to say that there is considerable doubt about the way in which some local authorities have reacted to the opportunity with which they have been presented.
§ Mr. Roberts
My hon. Friend the Member for Bridgend agrees with me. Opposition Members have been critical about the length of time that the measure has been in operation, but I remind them that when the enhanced rates of grant come to an end next March, they will have been available for a full two years. They were introduced in the March 1982 Budget and then extended for a further 15 months, largely to relieve the considerable pressure that local authorities were under. This should have given every authority the time necessary to adjust its priorities and staff resources to respond properly to the demand generated. Some of them — although the hon. Member for Montgomery disagrees—were extra-ordinarily slow to respond.
As for the levels of resources that have been made available, I remind the House that in the first year of the grant rates being introduced — when there was an immediate response from the public—authorities were told that there was no limit whatever on the amount that they could spend on grants; whatever they could spend.. we would underwrite. And in the second year—this current year — we made perfectly adequate arrangements to cover their grant expenditure. Anything that they spent in excess of 50 per cent. of their total housing allocation, we would cover; again, with no ceiling. The signals to authorities were, I should have thought, abundantly clear.
The result of these measures is that some 34,000 repair grants, and well over 3,000 intermediate grants, have been approved so far. But many more could, and should, have been approved. Some authorities responded quickly to the opportunity but others, I am afraid, were not so flexible or willing to take advantage of what was on offer. Only 18 of our 37 authorities sought an extra allocation for grants in the first year. This year, we expect more to be eligible for additional resources, but still 15 authorities 163 —more than one third—look like spending less than half of their allocation on grants this year and so will miss out on the chance of having their allocations increased.
I know that it takes time for grant approval to become a claim for payment. Applicants normally have 12 months, once a grant is approved, to complete the works. However, the time between approval and completion is frequently less than that; and, more importantly, authorities are able to make stage payments of grants. It is just not the case that they are at the mercy of the applicant's decision about when to go ahead with his work. There is much that they can do, if they choose, to front-load their expenditure.
Whenever I point out that we have made perfectly adequate financial arrangements, both last year and this year, for authorities to make a big push on grants, the argument always changes tack. Suddenly it is not the resources that have been the problem; it is the constraints on staffing. The hon. Member for Merthyr Tydfil and Rhymney was true to form in that respect. But I have very little sympathy with that contention.
Somehow it is alleged to be our fault that local authorities do not put more staff to work on processing grants. I cannot imagine what sort of conception of a local authority gives rise to that view. It is as if the deployment of the authorities' work forces was forever fixed, rigid and unalterable. I certainly hope that that is not the case. I have said before that, on figures provided by authorities themselves, only 1 per cent. of their work force earlier this year was engaged on processing grants, and the authorities estmated that only a further 0.3 per cent. would be needed to deal with the backlog. I find it inconceivable that any authority would be so inflexible as to be unable to make the minimal changes necessary to speed up the rate at which they could deal with applications.
The hon. Member for Merthyr Tydfil and Rhymney and the hon. Member for Montgomery have said that the number of staff deployed is not such an important factor as the capacity of the building industry. They cannot have it both ways. The hon. Member for Montgomery also argued in favour of the grants because they provided employment.
A great deal of concern has been expressed about the numbers of applications which are stockpiled with local authorities, waiting to be approved. It is a matter of great concern to me, too. I have every sympathy with owners who are being told that they will have to wait a long time—years in some cases—before their applications have been dealt with. [Interruption.] But, as I have tried to make clear, the difficulty would not have arisen on such a scale if many authorities had been quicker to react to the opportunity set before them.
In many cases the authorities have simply failed to respond quickly enough, or have preferred to spend their resources on something else.
§ Mr. Roberts
I shall not give way. I have very little time left.
Now these authorities are expecting us to bail them out, but let me make it quite clear that my Department has given no local authority any grounds for supposing that the special arrangements would be continued. As far back as last February, authorities were told that they could assume that their allocations would be not less than 80 per cent. 164 of this year's allocation. This was given to them to aid their forward planning, but there was no suggestion that there would also be special arrangements for grants.
It has been argued very forcibly that we should be devoting more resources in the future to renovation grants and, indeed, to housing as a whole. But, frankly, this is an unrealistic approach. [Interruption.] If the hon. Member for Merthyr Tydfil and Rhymney wants answers to his questions, and wants me to talk about the future, he would do well to allow me to continue.
I understand the propensity of Labour Members to overcommit the nation's resources. We have already seen the result of such policies. I for one do not want to return to the days of rampant inflation such as we saw in the mid-1970s when the hon. Gentleman was in Government. What he must understand is that restraining public expenditure is a cornerstone of our economic strategy. There can be no doubt that this strategy is proving highly effective. Inflation is now less than 5 per cent.—one of the lowest rates in the world.
On current estimates, the local authority overspend in Wales this year could be about £60 million. Of this, housing will account for some £50 million within which, incidentally, grants account for only £30 million. That is in marked contrast to the past two years, when local authorities underspent by £85 million. Even for grants there is not a bottomless purse: we cannot, and will not, simply print pound notes to pay for them. We must pay for them from within our resources. While we have allotted some £50 million extra to cover this year's expenditure—a fact that must surely be welcomed by all the Welsh authorities, whether they are prepared to admit it or not—future expenditure must be covered by the resources available.
Local authorities have had an unlimited bonanza for two years: now the normal rules must apply. The outlook for next year is not bleak. Local authorities have been told today that the 1984–85 provision for Welsh local authority housing is £127 million. This, together with the prescribed portion of capital receipts means that housing authorities will have a total spending power of about £152 million.
We recognise that some councils have had particular problems in dealing with their grant applications and, within the individual allocations, we have sought to help 11 authorities in this category. They are those who are expected to spend more than 50 per cent. of this year's allocation on renovation grants and whose 1984–85 housing investment programme bids for grants exceed 50 per cent. of their total bids. In other words, those who have tried hard to deal with their grant problems and who perceive grants to be the greater part of their need for next year.
Every authority which is planning an enveloping scheme—15 in all—has received specific help. May I remind the hon. Member for Merthyr Tydfil and Rhymney that this year expenditure on renovation grants will not much exceed £100 million? This would seem to be the most that local authorities find they can cope with and I am not sure whether they could sustain that effort for a further year. Even if they do—and I hope they can—about £50 million could still be available for other housing requirements. Frankly, I cannot share the hon. Member's pessimism about the prospects for Welsh housing.
Finally, I ask the House to look realistically at housing expenditure. In 1981–82 authorities spent £96 million: in 1982–83 they spent £138 million. With the aid of our 165 exceptional overspend facility, expenditure this year will be about £206 million: and if the authorities wish to use all of their spending power next year, as they should if the hon. Member's assessment of need is right, then about £150 million will be spent.
That is a good share for housing, and, in addition, a significant part of the urban development programme is likely to be devoted to housing projects. Details of individual housing authority allocations for next year are now being sent to the authorities and these will be placed in the Library in the next day or so. Our policy on grants remains unchanged. Even after 31 March next year grants will, as matters stand, continue to be available at the rates which applied before the 1982 Budget.
As my hon. Friend the Under-Secretary of State for the Environment said in the debate on 16 November last:It is difficult to find a less promising subject than improvement grants for the Labour party to choose for its attack on the Government."—[Official Report, 16 November 1983; Vol. 48, c. 895.]The Opposition have been fully aware of the poor condition of Welsh—
§ Mr. Rowlands
On a point of order, Mr. Deputy Speaker. I initiated the debate and asked the Minister to confirm whether the figures I have were for 1984–85. He has not answered one question.
§ Mr. Roberts
The figures about which the hon. Gentleman speaks are capital allocation figures. The House is discussing improvement grants.
The hon. Member for Merthyr Tydfil and Rhymney experienced all that I was talking about in 1974. On 8 Mayof that year he told the Welsh Grand Committee that—
"despite the 75 per cent. grant and despite the fantastic rate of house improvement during the past few years, we have not yet been able to arrest a decline in the deterioration of housing stock in the Principality." — [Official Report, Welsh Grand Committee, 8 May 1974; c. 96.] —[Interruption.] The hon. Member cannot even listen to a quotation from his own speech.
The Labour Government's own subsequent record was dismal by comparison with the achievement of the previous Conservative Government. The rate of approvals fell from 23,694 in 1973 to 10,954 in the following year and sank even lower in the later years, as my hon. Friend the Member for Bridgend said. It was not until 1982 that improvement grant approvals reached the 20,000 mark again.
On 16 November last the Labour party attacked us for not making sufficient resources available in the year ahead, and we have had a repetition of the attack in the debate. What a hypocritical charge that is when one looks at the last Labour Government's own record on improvement grants, including the record of the hon. Member for Merthyr Tydfil and Rhymney.
Of course there is now a backlog of applications, of course the grants are discretionary, and it is up to the local authorities to decide how they will deal with the backlog. The Government's position is absolutely clear, and I stand firmly behind it.