§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]10.56 pm
§ Mr. Michael Welsh (Don Valley)
I wish to draw the attention of the House to the problem associated with Airey houses, especially those that are owned by local councils.
British architecture has had more than its fair share of problems in the post-war years. Airey houses are an example of the consequences of building in non-traditional materials or to non-traditional methods. These nontraditional houses take their name from Sir Edwin Airey, who came up with the ⅔ design in the 1940s. They are quick-built, pre-cast concrete semi-detached houses. About 26,000 Airey houses were built, about 22,500 of which went to local authorities and the balance to Government establishments.
Because of the demands of the early post-war years for housing, especially for workers in essential industries, Airey houses are to be found predominantly in rural areas and mining villages.
According to my information, the design was ingenious and designed for structural economy and fast erection. I gather that Airey houses are a pre-cast concrete version of the typical North American timber building, with a multiplicity of light vertical studs carrying, and braced by, shiplap siding. The problems of the Airey houses have been well publicised by the Department of the Environment. Indeed, the Secretary of State for the Environment has announced measures that are aimed at assisting with the repair of Airey houses that have been bought by former council house tenants under the Government's right-to-buy legislation.
I gather that the problems with the houses are mainly to do with the deterioration of the tube-reinforced stanchions. Apparently, the technology of the 1940s was insufficient to recognise that the concrete cover over the tubular steel reinforcement would be regarded today as little more than nominal at the very best. I also gather that the water:cement ratio that was used during manufacture has proved to be wrong. I am also told that the lack of adequate moisture sealing between the cladding planks, and between them and the stanchions, is yet another reason for the deterioration. I shall not labour the House with more of the technical problems that can be found by referring to the Department of the Environment's publications. The Department is so worried about the houses that it has strongly urged detailed inspections of them at regular intervals.
Furthermore, the Government have for once demonstrated that on occasions they have a conscience, particularly when those at risk are the owner-occupiers who are said to owe a debt of gratitude to the Government as a consequence of their public asset-stripping programme for forcing the sale of council houses at prices that can be represented only as the bargain of the century.
I remind the House that on 7 September the Minister for Housing and Construction issued a statement announcing the Government's decision to give special assistance to those who purchased Airey houses at valuations that did not reflect the structural defects discovered subsequently. That announcement was 119 supplemented at a later date by another that extended those benefits to people who had bought in the period since the first announcement was made.
Therefore, the 197 owner-occupiers of Airey houses in my constituency will be able to apply to Doncaster borough council for repair grants, subject to their satisfying the test specified by the Minister for Housing and Construction. Those good people bought their houses from the National Coal Board. Had they bought them from the Doncaster borough council, in addition to the option of a repair grant, they would have had the option of requiring the council to repurchase the dwelling. However, Doncaster borough council is likely to be urged by the Government to be willing to purchase Airey houses sold by the NCB if the owners wish it to do so.
The owner-occupiers of Airey houses bought from their local authorities can either apply for the repair grants or require the council to repurchase. The Government will reimburse the local council for the cost of any repairs, but it seems that the cost of the repairs made by the local authority can be obtained only for owner-occupiers. It seems strange that for the ones that the local authority owns the cost of repairs will not be obtained.
§ Dr. Edmund Marshall (Goole)
May I assist my hon. Friend, with whom I share a common concern, as we represent constituents who are tenants of Doncaster borough council? Because the Department has deliberately discriminated between the different owners of Airey houses—the owner-occupiers and the local authorities—I have today sent a request to the Parliamentary Commissioner for Administration that he investigate whether there has been maladministration.
§ Mr. Welsh
I thank my hon. Friend for those comments. I am sure that the ombudsman will take everything into account and will come to a decision that he thinks is right and just.
The Government will generously meet the cost of any ex gratia payment when the purchase option is exercised, subject to the option on repurchase being exercised in the period that will end in September 1985.
The Government are to be congratulated on their acceptance of their obligation to ensure that the owner-occupiers are not left with a pig in a poke. Similar quite generous terms will apply where the owner-occupier bought from a Government Department. I hope that the NCB will go one better and top up the statutory entitlement to repair grants so that employees and former tenants are fully compensated. I know that the Minister cannot do anything about that, but I hope that the NCB will take note of it.
I told the House at the beginning of my speech that Airey houses were found predominantly in the rural and mining areas. Don Valley is at the heart of the south Yorkshire mining industry. Furthermore, the constituency contains vast areas of high quality arable land. Therefore, no one listening to me will be surprised when I say that Doncaster borough council is the owner of another 863 Airey houses, some of which were bought from the NCB before the defects became apparent.
The Government do not have a reputation of being a friend to local government or to council house tenants. That is a fact of life which cannot be hidden. Therefore, it came as no surprise to me to hear that the terms on offer 120 from the Government to the owner-occupiers of Airey houses are not to be made available to local authorities for the Airey houses still owned by them and let to their tenants.
All that is offered to local authorities to deal with the problem of their own Airey houses is an Exchequer contribution where the repair costs are eligible for housing subsidy in the normal way. That means that not one penny will be made available from the Exchequer towards Doncaster borough council's problem unless, as a result of tonight's debate, I can persuade the Government to change their mind.
What is the absurd and contradictory outcome of the Government's attitude? They have decided that the taxpayer will meet the owner-occupier's costs in remedying his property's shortcomings, but the council tenant, who as a taxpayer will be helping his next-door neighbour, is expected to meet the whole bill through his rent. In Doncaster that will mean £1.16 per week on the rents of all tenants. The Government's answer to that so far has been to say that the bill should be put on the rates. Do they not know that this would add to the expenditure, which the Secretary of State for the Environment would then penalise under the vicious rate support grant rules for 1983–84? It would be the ultimate insult because, then, instead of giving grant in the form of housing subsidy, which should be done, the Secretary of State would end up by deducting rate support grant. The Government would actually make a profit out of avoiding their moral obligations and responsibilities.
Doncaster borough council is not alone with this problem. Conservative Members represent constituencies with similar problems although the scale is, perhaps, slightly less. I know that those hon. Members are under pressure from their councils to persuade the Government to act equitably. Is it therefore too much to hope that I might have the support of those hon. Members?
Whatever may be said today about Airey houses, let us acknowledge that the idea was conceived at a time of tremendous shortage and the houses were marketed through the Government of the day to help local authorities with the major rehabilitation of our community life following the ravages of the second world war. I stress that the design was approved by the then Ministry of Health. The Government, by recognising the problem of owner-occupiers of these Airey houses, have admitted a moral responsibility based on the fact that the houses were marketed by a Government Department. Why must the Government be narrow-minded and deny Exchequer assistance to the local authorities? Airey houses have given significant service for more than 30 years and, furthermore, the problems can be solved. That cannot be said for some of the other system-built schemes of the 1960s.
I was a member of the local council for many years before my election to my present office. I was in local government when a major problem arose with corrosion in aluminium bungalows. They were known popularly as prefabs and they were generally of two main types. First, there was the one that was regarded as temporary and, secondly, there was the one known as the B2 or the BL8, marketed as being of permanent construction. Those two points are vitally important.
In 1961 local councils with these permanent bungalows were asked to carry out a detailed survey into the problems 121 of corrosion. Last year local councils were told to examine their Airey houses. The results of the 1961 and 1982 surveys both showed that there was a major problem.
Let us now contrast the attitude of the Government in 1961 with that of the Government in 1982. The attitude of the Ministry of Housing and Local Government then, clearly stated in circular No. 45/61, was to ensure that local authorities received appropriate relief from the financial consequences of the premature deterioration of the bungalows, that is the prefabs. The basic answer to the problem of the prefabs was demolition. The financial relief from the Minister then was the cancellation of the capital debt, but in some cases the Minister gave grants towards the cost of approved works of repair. Where demolition was the only option, the cost of that did not fall on the local authorities either.
We in this parliamentary democracy really do have certain fundamental principles that are acceptable to us all. One of these is our desire to achieve fair play. I submit that the parsimonious attitude of the Secretary of State for the Environment towards local authorities owning Airey houses is quite unfair. Unless financial help is forthcoming for places such as Doncaster, the only option open to the council is likely to be that of demolition. What happens when the demolition contractors come in and knock down one half of a pair of semi-detached houses when the other half has been bought and is now in owner-occupation? Try telling the owner-occupier of an Airey house at Campsall, Doncaster, about the benefits of owner-occupation when he finds that the council has had to knock down the house next door. What are his prospects of a sale? One of the advantages of owner-occupation is generally that of seeing the value of the investment increase with the passage of time. Who is going to buy one of these Airey houses? No one in his right mind.
What a pig's ear it will all be, and what heart-rending stories will be told to the councillors and the local Members of Parliament by those who have seen their investment so badly eroded. I hope that I have said enough to demonstrate the extent of the problem at Doncaster. It is not unique to Doncaster. Other authorities have similar difficulties.
I implore the Government to release the purse strings and pay subsidy to enable all local authorities to meet the cost of restoring their Airey houses.
§ Mr. Harold Walker (Doncaster)
My hon. Friend the Member for Don Valley (Mr. Welsh) referred to the widespread concern in the constituencies affected by the issue. The deep and serious concern of hon. Members from south Yorkshire is reflected by the fact that at this late hour we have in the Chamber my hon. Friends the Members for Penistone (Mr. McKay), for Goole (Dr. Marshall), for Dearne Valley (Mr. Wainwright) and for Hemsworth (Mr. Woodall).
It may seem odd that I seek to take a minute or two of the time of the House when in my constituency, to my knowledge, I do not have a single Airey house. But my constituency is geographically at the heart of the constituency of my hon. Friend the Member for Don Valley. At least half the housing stock in my constituency is municipal housing—council housing. Unless the Minister is prepared to be more forthcoming, my constituents who are council tenants in Doncaster will be faced with the cost either of the replacement of the Airey 122 houses, if it is necessary to demolish them, or of repairing them. As my hon. Friend said, that means an addition to their rent—on top of what the Government have already imposed since they took office in 1979—of £1.16 a week. For that reason, I add my voice in support of my hon. Friend in urging the Government to treat local authorities as owners of these properties no less generously than they have treated private owners.
I very much hope that the Under-Secretary will be more forthcoming and responsive than he was when my hon. Friend and I met him together with representatives of the local authorities at his Department. My hon. Friend and I persuaded the representatives that he was honourable, generous, sympathetic and understanding, but they went away disbelieving what we had said. I hope that tonight the hon. Gentleman will put right the impression that he created on that occasion and will respond more generously than he has done so far in the debate or in the meeting with the representatives of the Doncaster metropolitan borough.
§ The Under-Secretary of State for the Environment (Sir George Young)
I thank the right hon. Member for Doncaster (Mr. Walker) for seeking to persuade his colleagues that I was a gentleman with all the qualities that he described. I am sorry that doubts were subsequently cast on his judgment.
I commend the persistence of the hon. Member for Don Valley (Mr. Welsh) in harrying the Government on this issue. He has written to me on several occasions, he raised the matter in a debate in the House last week, he brought a heavyweight deputation from his constituency to see me, together with some of his hon. Friends, he has raised it several times in Committee on the Housing and Building Control Bill, there is an early-day motion, and he has secured this Adjournment debate tonight. He has pursued the Government without being given any encouragement by Ministers to believe that there was any light at the end of the tunnel. He said that the Government were no friends of the council tenant. I hope that the 500,000 who will have purchased their homes by the end of this Parliament will look on us sympathetically.
I am grateful for the opportunity to explain to the House the position of Airey houses that are still owned by local authorities. I understand why hon. Members are concerned about the obligations that face their local authorities, which wish to do the right thing for their tenants.
Thus far we are in agreement. Where we part company is on the need for an extension of the measures announced by my hon. Friend the Minister on 7 September 1982. The blunt truth of the matter is that for local authority Airey houses there is already a comprehensive system for ensuring that the resources needed are available and that financial assistance can be given where it is needed—within the limits of the total public expenditure available. That covers all their obligations on their housing stock, not just particular defects in one type of building.
The HIP system handles the allocation of resources. The scheme was introduced by the Labour Government. The housing subsidy system provides financial help where authorities cannot be expected to find all the funds needed to finance their housing programme. That is the broad case for the Government maintaining that, because there is no such comparable system for private individuals, the help introduced for owner-occupiers is justified.
123 The assistance I outlined for local authorities, divides into two—assistance with the capital allocations so that they have the resources to do the work, and the revenue aspect.
For 1982–83, the Government have encouraged local authorities to spend more of the resources available to them for housing investment. We invited bids last October from authorities which could use additional resources for capital projects this year. My hon. Friend the Minister for Housing and Construction announced last week that additional HIP allocations of up to £160 million have so far been approved for 218 local authorities. Some of those authorities have taken advantage of that invitation to obtain resources to begin work this year on repairing Airey houses. We have also told authorities that they are free to spend extra resources this year on improvement grants without limit, and without the need to submit prior bids. Certainly for 1982–83, therefore, lack of resources should not be a problem.
For 1983–84, gross provision for housing investment by local authorities is nearly £2.5 billion. That will allow authorities to increase their capital spending on housing by 15 per cent. over the likely outturn this year. The allocations were announced on 25 November 1982. In addition to those allocations, authorities will have a further £684 million of housing capital receipts generated next year, which is available to increase their allocations, plus, of course, accumulated unspent receipts carried forward from previous years. There should be resources available to carry out the work.
The hon. Member for Don Valley mentioned revenue consequences. At the risk of going into technical detail, it may by helpful to outline how the present housing subsidy system works. Subsidy entitlement is calculated afresh for every financial year. Each authority's starting point is its subsidy entitlement for the previous year. That is then altered by changes in these forms of its expenditure allowable for subsidy, including increases arising from new loan charges, and by changes in its local contribution on a basis set by the Secretary of State. So the normal 75 per cent. proportion of loan charges arising from repairs to Airey houses can be expected to feature in the subsidy calculation. Whether an authority actually receives Exchequer subsidy and the amount of its entitlement depends, however, on the result of the entire subsidy calculation, not on one ingredient taken in isolation. No Exchequer assistance is available, because the local contribution, rent or rates in lieu, is reasonably expected to be sufficient to enable the authority to meet its housing revenue expenditure.
As to rents, I can well understand an individual council tenant fearing that the cost of repairs to his home might be reflected directly in increased rent. Such a fear seems to be misplaced. Local authorities raise their housing income—whether from rents, rates or any other available source, including subsidy—to meet the whole of their housing expenditure, so there should by no question of recharging the cost of repairing an Airey house to the tenant whose home it happens to be. An authority that is no longer entitled to subsidy might, of course, choose to meet its housing expenditure, including that on Airey houses, almost entirely from rental income, or it could do it out of rates. The choice is for the authority.
124 The crucial point, which I do not think hon. Members have understood, is that whatever the decision it should not result in an unfair burden. Provided that an authority, out of subsidy, continues to raise local housing income in line with the annual increase in local contribution prescribed for the subsidy calculation, the authority should have sufficient, or more than sufficient, funds to call on.
Doncaster has 863 Airey houses that were built about 30 years ago. The council does not know the overall condition of all the dwellings. It is fair to assume that there will be considerable variation. The council estimates the cost of repairs at about £14.7 million, and maintains that the revenue impact of this expenditure would amount to £1.8 million per annum. That would represent an increase in rent for all council house tenants in the borough of £1.16 per week. The hon. Gentleman said—I understand why he said it—that the local authority consider this to be unacceptable. The alternative of meeting the cost out of the rates is not possible without incurring grant penalties under the rate support grant system. The cost has been overstated by Doncaster.
The houses are probably on average about 30 years old. The council should already have made some provision for the repair and improvement of those houses as part of its forward programme. The total cost for repair, at £14.7 million, includes some improvement as well as repair work.
The council could not repair all the houses in one year. Indeed, it proposes to spread the repair programme over 10 years. The annual revenue consequences will be much lower, beginning at about £150,000 to £200,000 per annum. The rent implications are lower than the volume described, certainly for the initial year.
Doncaster's average rents are still below the national average, as about £12 a week compared with £13.55 a week for England as a whole. It could be argued that there was scope to meet some of the revenue cost of repairs to Airey houses from the rents. If the local authority does not want to use the rents—I quite understand why—it should be able to use the capital receipts. In the first six months of 1982–83 they generated receipts of £6.2 million. From April 1980 they have generated receipts of more than £10 million. Outturn figures show that these receipts are not being spent. It is against that background that the HIP allocation of £9.7 million for 1983–84 should be judged.
I have gone into this case several times as a result of the strenuous representations that have been made. The existing system of giving help to local authorities is adequate to deal with this problem. It must be examined in perspective. The percentage of Doncaster's stock represented by Airey houses is a small figure.
It would be wrong to alter the system of giving Government help to local authorities solely to reflect the problem of Airey houses. If we conceded this case, I know that other local authorities with comparable problem estates, which for other reasons have had to be demolished prematurely, would demand similar assistance.
The existing system fairly reflects the needs of local authorities, on the one hand, and the resources available, on the other. It is not out of lack of sympathy that I must say to the hon. Gentleman that I cannot accede to his request. We have considered the request, but we believe that the existing system is adequate to deal with it.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-four minutes past Eleven o'clock.