§ Motion made, and Question proposed, That this House do now adjourn—[Mr. Garel-Jones.2.30 pm
§ Mr. Neil Thorne (Ilford, South)
I am delighted to have the opportunity to draw attention to one of the most significant achievements of the previous Parliament—the right-to-buy provision in the Housing Act 1980. Home ownership is one of the greatest opportunities open to free man. It helps to stabilise family life, with advantages to family structure, mobility and the care of the elderly. When people have a stake in property or mortgages to repay they spend much of their leisure time improving that property, which normally involves the whole family.
These family enterprises help to cement the family. Moreover, the private individual has a greater opportunity to determine his own mobility. If he wishes to move from one job to another, or from one house to another, the matter is in his hands. He is not at the mercy of the housing department of his, or another local authority, which frequently give scant attention to tenants' wishes.
I find frequently that those elderly people who .have an asset to leave to their descendants attract more care and attention from their families than those who have nothing to leave. That is also a significant factor in the ownership of property which should be encouraged.
With increasing pride I visit the council estates and the properties in my constituency which used to be owned by housing associations. Vandalism is receding and pride in ownership is blossoming. That is especially significant on council estates such as Becontree, where many people connected with the building industry live. They use every leisure moment to construct additional storage space, to add porches or to half-timber their houses and they make the whole area more interesting. Parents make sure that their children no longer vandalise the area. We no longer see hopscotch chalk markings, which were prevalent on council estates only a few years ago, because parents are keen to ensure that their children do not spoil the general appearance of the neighbourhood. That is an important reason why the Government believe strongly that home ownership is an aspect of life that should be encouraged.
The attention of my hon. Friend the Under-Secretary of State may have been drawn to a letter in The Daily Telegraph this week from the director of Shelter, who takes the Government to task for granting discounts to council tenants. He states that young people whom he has met very much resent the fact that because they have no family and have not been allocated a council house they have to pay the full price. He sees no reason why substantial discounts should be made. However, undoubtedly there is a need for substantial discounts, to help break up some of the vast council and housing association estates that have been built up over the years.
If there is any criticism, it would be more appropriate to direct it at the level of council rents. The purchase price that is asked for council houses must be directly related to the rent that is paid. In the private sector, for a property which is let with some security of tenure, where the rent is assessed by the fair rent officer and a so-called fair rent is determined—I say "so-called" because many people do not believe that the rent determined by the fair rent officer is anywhere near fair—no account is taken of the cost of constructing such a property. If the property is then 1166 offered on the open market subject to that tenancy, normally it will be worth only one third of what it would have been worth had it been sold with vacant possession.
The same rule more or less applies to the sale of council housing and housing association property. The Government had to take that fact into consideration in assessing what they could charge the tenants of council and housing association properties. We could ask whether young people should continue to be allowed to have tenancies of council properties at low rentals, which will give them a preferential way of acquiring property. Perhaps we should look more at the possibility of the district valuer taking over the responsibility for assessing the fair rent and in dispute for an eventual appeal to the lands tribunal.
If we allowed that to happen, however, organisations such as pension funds, the life assurance offices and even the trade unions, which have substantial assets to invest, would be pleased to invest their funds in that way. The Department of Health and Social Security is the right and proper body to deal with subsidies and the payment of rent when the tenants cannot afford to pay what I would call a proper rent as opposed to an artificially fair rent.
I refer now to those who are unfortunate enough not to benefit from the Government's present legislation. I refer particularly to housing associations that operate under the charitable rules. That means, not that all those housing associations are sponsored by a well-known charity, but that they operate under charitable rules, so they receive special protection. Although under the Housing Act 1980 they are allowed to sell their property if they wish, there is no compulsion. Many people occupied property owned by housing associations when they were recommended to do so by local authorities which could not house them themselves. Their names came off the housing waiting list and the local authorities considered their needs to be adequately covered. They are now in the unpleasant situation that they cannot acquire their property because, by a quirk of fate, the property is owned by a housing association operating under the charitable rules.
The Government tried to correct that anomaly last Session. They did what I believe the electorate wished and tried to allow people to buy properties which had been built largely out of public funds, so that the property-owning sector of the community could substantially increase. The Government's intentions were frustrated by the action of another place. That was a retrograde step. Those who took that decision did not have the benefit of pressure from constituents who suffer there day-to-day tribulations.
Our colleagues in another place may have been lobbied only by those who run the organisations, whose view would be entirely different. Members of the other place are often invited to be patrons or presidents of such organisations so that they can be called upon by the managers and directors when the need arises. I cannot believe that in reaching their decision they acquainted themselves with the views of the grass root beneficiaries. Had they done so, their decision would have been different.
Sadly, the charities have been able, with the assistance of the public Exchequer, to finance acquisition of a substantial amount of property. They have enormously enlarged their empires and have had the privilege of choosing their own tenants. If they were to take a charitable view of the situation, they would be happy for 1167 the same tenants to take over those premises as owner-occupiers. They are not being charitable if they do their best to thwart the real aims and desires of their tenants.
I accept that when charities receive bequests or make collections themselves the money so acquired is not intended to line the pockets of the tenants, but that is no longer so in the majority of cases. It might be true of properties built 30 years ago, but it is certainly not true of those built or acquired in the past 10 to 20 years. In the latter case, almost everywhere the funds were provided mainly or wholly by the public Exchequer and there is no doubt that the electorate wishes the tenants to have the right to buy the properties because it is aware of the advantages to the community of occupiers owning property.
What plans have the Government to deal with this problem? I appreciate that my suggestions go further than the Government's proposals last Session. I believe that the benefit of the right to buy, which the electorate wants, should extend not just to properties built or acquired under the most recent housing legislation but to all property built wholly or mainly with public funds.
§ Mr. Jeremy Hanley (Richmond and Barnes)
Does my hon. Friend agree, however, that, as with many of my constituents who have been long-term residents in charitable housing, they are sorely distressed that, whatever the reason for raising the money, anyone living in a home which has not been used for charitable purposes for the past 20 or 30 years has not the same rights as a council tenant?
§ Mr. Thorne
I accept that where the funds are not being used for charitable purposes, such a tenant has a case. However, I should not wish the Government's attention in this matter to be deflected by that argument if the effect was likely to be to stymie any legislation that they had in mind. But I accept readily that people who have been occupying premises for many years may now be in a position which was not envisaged by those who originated the charity, and it would be right to consider what the people concerned at the time had in mind. If they were anxious that less advantaged people in the community should be given every encouragement and support to occupy decent living accommodation, I am sure that their charitable aims would extend to supporting the Government's scheme.
My hon. Friend has made a very good point, and it is one that I commend to my hon. Friend the Under-Secretary. However, I should not wish it to be used to hold back what is a fundamental right in my present proposals. A housing association tenant living in accommodation which was acquired wholly or mainly with public funds should not be prevented from owning his property.
I hope that my hon. Friend will give these matters further consideration. Whether the Government like it or not, it is a battle which will be fought until justice is achieved. It is what the tenants of housing associations run under charitable status want, it is what the electorate want, and it is what they deserve to see implemented.
§ The Under-Secretary of State for the Environment (Sir George Young)
It is entirely appropriate that in my first Adjournment debate in this Parliament I should be replying to my hon. Friend the Member for Ilford, South 1168 (Mr. Thorne), with whom I spent many a half-hour towards the end of our daily proceedings in the last Parliament. It is a further tribute to my hon. Friend's persistence and determination on behalf of his constituents that he should have raised an issue similar to that which he aired in April last year. My only regret is that there will be a certain similarity in my reply today.
I endorse entirely what my hon. Friend said about the beneficial social effects of our policies to encourage home ownership, though it would be sad if one of the consequences of our right-to-buy policy was the total elimination of the traditional sport of hopscotch on the streets of the London borough of Redbridge.
My hon. Friend has raised an important subject about the operation of the right-to-buy provisions of the Housing Act 1980 as they affect the charitable housing associations. I was interested to see earlier this week that one of the contenders for the leadership of the Labour party had urged his party to reconsider its posture on home ownership. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) reinforced that during an interview on "The World at One" on Wednesday because of the evident unpopularity of the traditional stance of the Labour party on this issue.
Since April 1982, when my hon. Friend last raised the subject on the Adjournment, the question of the right to buy for the tenants of charitable housing associations has received a good deal of attention and discussion both in this House and in another place.
Like my hon. Friend, I am of course disappointed that it was seen fit in another place to defeat the clause in the previous Housing and Building Control Bill containing our proposals to give the right to buy to certain tenants of charitable housing associations. I also recognise that those proposals in themselves were disappointing to my hon. Friend, because they would have given the right to buy only dwellings provided with housing association grant since 1974, and would not therefore have given the right to buy to tenants such as his constituents Mr. and Mrs. Reed, who had been tenants of a housing association since 1971.
As my hon. Friends will have noticed, there is no such clause in the present Housing and Building Control Bill, but I think that it would be helpful if I explained the reason for the way the old clause 2 would have operated. The Government took the view that it was not right to give the right to buy where there had been—or might have been —a material input of charitable funds. I think that my hon. Friend conceded that point, in part, by directing his plea to buildings that had been built mainly or exclusively with public funds.
We defined our objective as the provision of parity of right for all secure tenants of dwellings which had been provided from public funds. There was an element of rough justice in that. People such as Mr. and Mrs. Reed might just as easily have received a local authority tenancy or a non-charitable housing association tenancy in 1971. I understand that they were in fact on the GLC's waiting list when they were offered a charitable housing association tenancy.
As I said, the present Bill contains no provisions to give the right to buy to any tenants of charitable housing associations, but, as my hon. Friend the Minister for Housing and Construction said in the Second Reading debate on 5 July, we have received representations about extending the opportunities for home ownership from such 1169 tenants and from hon. Members—including some who spoke on Second Reading — and we are considering those representations very carefully and seeing what further steps might be taken to assist them in their aspirations.
I hope my hon. Friend will understand that I cannot go further than that today, except to say that I note what he and my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) said, and I fully accept that their concern extends not only to tenants of charitable housing associations who would have obtained the right to buy under last Session's Bill, but to cases such as that of Mr. and Mrs. Reed, and the constituents of my hon. Friend the Member for Richmond and Barnes, who would not have benefited from the proposals in the previous Bill.
As one who chaired a housing association for seven years, I have never resisted the selling of housing association property. I always envisaged the role of the housing association that I ran to be that of renovating property that was in poor repair and putting into it people in housing need. If the people later wished to change their status to that of home owner, it was not my job to prevent them. Indeed, I always found the job of managing, collecting the rents and repairing one of the less interesting jobs of a housing association. I think that many in the housing association movement do not resist the right to buy, and many housing associations sell houses voluntarily, as they are entitled to do.
Perhaps I can reassure both my hon. Friends if I say something more generally about the right to buy and about housing associations. The 1980 Act gave the right to buy to all secure tenants of non-charitable housing associations, with the same entitlement to discount as local authority tenants. It means that—taking account of the exclusions from the right to buy of dwellings for elderly persons, or those specially adapted for the disabled—about 100,000 housing association tenants in England and Wales have the right to buy. Over 7,500 tenants have already applied to buy, and nearly 3,000 sales had been completed by the end of March this year.
In addition, over 500 voluntary sales have been made to housing association tenants since 1980. Apart from the tenants of charitable housing associations, and the normal right-to-buy exclusions, the only group of secure housing association tenants who do not have the right to buy are those whose housing association does not own the freehold of the dwelling. The Housing and Building Control Bill will rectify this anomaly: clause 1 will give the right to buy where the landlord does not own the freehold.
In addition to right-to-buy and voluntary sales, the housing association movement has also made an important contribution to encouraging home ownersip through low-cost home ownership initiatives such as shared ownership. Since we were elected in May 1979, nearly 32,000 sales of low-cost homes have been made. Shared ownership is a vital part of the Government's low-cost home ownership initiatives. It enables those who would otherwise be unable —for various reasons—to contemplate buying their own homes outright to buy in stages. Since 1980, the Housing Corporation has approved nearly 4,000 shared ownership sales.
§ Mr. Neil Thorne
I have in mind my constituents, Mr. and Mrs. Reed. They took their flat from a body which 1170 acquired some notoriety in the local press. It would be hard to imagine anything further removed from charitable status. However, that is by the by. Will my hon. Friend consider trying to provide some temporary relief to such people who have spent many thousands of pounds on improving their property, perhaps by giving some instruction to the Housing Corporation to make a special provision to assist them to acquire another property which could be sold to them at a special discount price, if it is not possible in the immediate future to amend the legislation to give them what they desire so much?
§ Sir George Young
Mr. and Mrs. Reed are tenants of a housing association in east London, and there is nothing to stop that housing association building homes for sale and offering one to Mr. and Mrs. Reed. I shall consider what my hon. Friend said about an instruction to the Housing Corporation, but, as I hope I have outlined, we have already earmarked a substantial sum to go to the Housing Corporation for low-cost home ownership initiatives. I am happy to say that it is making good progress in getting many off the ground. Often, the people who buy the low-cost homes built under that arrangement are sitting tenants of existing housing associations or people on their waiting lists. As I said, the Housing Corporation has approved nearly 4,000 shared ownership sales and the Bill that I mentioned gives a statutory right to shared ownership to local authority, housing associations and new town tenants. That will increase the opportunity for home ownership.
The possibility of east London, or any other housing association, developing such a scheme is a solution to the problems facing Mr. and Mrs. Reed. However, if Mr. and Mrs. Reed did that, they would hit the cost floor of the cost of a new home, whereas if they bought their present accommodation they would be entitled to a discount which would reduce the cost. I shall look at what my hon. Friend said and see whether there is anything that we can do to help.
The Government have shown their strong commitment to the work of housing associations by increasing the allocation to the Housing Corporation. As I have already said, there have been nearly 3,000 right-to-buy sales and over 500 voluntary sales of housing association property since 1980. Since the Government were elected, the increase in the rented stock of housing associations has been 120,000 houses and flats.
It is wrong to suggest that we have in any way undermined the housing association movement by giving some tenants the right to buy. Our policy recognises the fact—highlighted in the Building Societies Association's recent report "Housing Tenure"—that the vast majority of people would prefer to own their own homes. The housing association movement has done much to extend home ownership. This Government believe, as does my hon. Friend, that the extension of home ownership is one of our most significant achievements in social policy.
I am grateful to both of my hon. Friends for bringing this matter to the attention of the House again today. I have listened carefully to what both have said about the 1171 aspirations of the tenants of charitable housing associations to enjoy the same opportunities for home ownership as other public sector tenants do.
Many similar representations have been made by other hon. Members. We sympathise with those aspirations and, as we said in the debate on 5 July, we are further 1172 considering how we can respond to the representations that have been made to us. We shall bear in mind the suggestions that have been made this afternoon.
§ Question put and agreed to.
§ Adjourned accordingly at two minutes to Three o'clock.