§ The Minister for Housing and Construction (Mr. Ian Gow)
With permission, Mr. Speaker, I shall make a statement about defective housing.
On 7 September 1982 my hon. Friend the Member for Tonbridge and Mailing (Mr. Stanley) announced a scheme for financial assistance in the form of repairs grants or repurchase to owners of Airey houses which had been sold by public bodies and which had subsequently been discovered to be subject to serious or potential defects. On 8 February he told the House that he had asked the Building Research Establishment to study possible deterioration in other types of prefabricated reinforced concrete houses built before 1960. The establishment is publishing today an information paper summarising the findings of separate reports on six of the most common types—the Boot, Cornish Unit, Orlit, Unity, Wates and Woolaway designs. A copy of the information paper has been placed in the Library.
The Building Research Establishment has found that the reinforced concrete components in all six types are gradually deteriorating as a result of carbonation of the concrete and, in some cases, the presence of high levels of chloride, leading to corrosion of the steel reinforcement and consequent cracking of the concrete. The great majority of the houses studied were found to be.in a structurally sound condition. There were significant differences in the rate of deterioration both between and within types. Some cracking was found in all the types and the nature of the process is such that deterioration will continue, although in some cases very slowly. All houses of these types will eventually be affected by cracking. Cracking in a proportion of houses will not occur for some years and a few houses may not display any evidence of deterioration for the next 30 years or more.
No conditions were found which were structurally unsafe. Risk to stability would be preceded by visible serious cracking in Boot, Cornish Unit, Wates and Woolaway houses. In Orlit houses, concealed main and secondary beams should be inspected now, if this has not been done already following the Department's letter to local authorities of 2 September 1982. Concealed columns and steel bracing in those Unity houses that have plasterboard or other dry lining should be inspected within the next year. Where serious cracking is present, professional advice should be sought.
The processes of carbonation and attack by chlorides are likely to affect all prefabricated reinforced concrete houses built before 1960. There are about 170,000 of these houses in the United Kingdom which were built by public bodies. Approximately 16,500 have been sold, mostly to sitting tenants.
I stress that the Building Research Establishment's studies are only of prefabricated reinforced concrete houses. The conclusions carry no implications for houses of non-traditional design which use other load-bearing materials.
Private owners will find themselves in a difficult position as a result of the effect of these findings on the value of their houses. The Government have decided to introduce early legislation to provide a scheme of assistance to private owners of houses sold by the public sector and since found to be defective or potentially 421 defective. It will be on lines that are broadly similar to those of the scheme for owners of Airey houses, which is already in existence.
The essential feature of the proposals will be a right of assistance. This will arise where the Secretary of State determines that houses of a particular category built by a public body should fall within the scheme because he is satisfied that, as a result of their design or construction, they suffer from, or can be expected to suffer from, structural defects not discoverable by normal survey at the time they were sold and which have resulted in a substantial loss of value in real terms as compared with the value at purchase. In respect of these houses local authorities will be under a statutory duty to assist either by way of a repairs grant or repurchase.
A grant of 90 per cent. of eligible expenses on repairs is intended to be the main form of assistance. But there will be cases in which repair will be uneconomic, or will not give the house a further useful life of at least 30 years, or will still not make the house mortgageable in the private sector. There will be other cases in which there would be hardship for the owner if repair were the only form of assistance possible. In these cases we propose to lay a duty on local authorities to acquire the dwellings if the owner wishes. Owners will receive 95 per cent. of the defect-free value of the house.
We have it in mind that the scheme should apply to all types of prefabricated reinforced concrete houses built before 1960. However, no final decisions have been taken on the initial coverage of the scheme and the BRE is studying six further types to supplement its findings.
In addition to the mandatory scheme, local authorities will be given a discretionary power to assist owners of defective houses which meet these criteria but in respect of which the Secretary of State has made no order requiring the local authority to give assistance. This power will enable local authorities to assist where there are local problems.
The local authority associations will now be consulted about these proposals. I shall be asking them to comment before 16 December on a consultation document which is being sent to them today; a copy of which is being placed in the Library. A Bill to give effect to these proposals in Great Britain will be introduced as soon as possible thereafter. Separate legislation will be introduced for Northern Ireland.
The need for expenditure by individual local authorities on this scheme, and on defective houses remaining in their own stock, will be taken into account in determining their housing investment programme allocations.
The BRE has also studied the Smith house, which uses a different system of construction. A detailed report will be published next month. I shall be considering whether local authorities should be under a duty to give assistance to private owners of that type of house.
The Department is writing to local authorities to inform them of the BRE's findings and of the proposals for legislation. Copies of the letter to local authorities and a table giving figures of prefabricated reinforced concrete houses in each local authority area have been placed in the Library.
The Scottish Development Department and the Welsh Office will be writing in similar terms to local authorities there. The Scottish Development Department will also be 422 writing to the Scottish Special Housing Association and will be holding consultations with the Convention of Scottish Local Authorities.
I apologise to the House for the length of this statement and for the fact that the texts of the seven separate reports which have only just been finalised are not yet available for publication, but I wanted to make a statement just as soon as possible. The reports will be published very early next month, and will be sent to local authorities with a request that they be passed on to private owners of these houses in their areas.
Mr. Eric S. Heifer (Liverpool, Walton)
I am sure the Minister is aware that we are not particularly worried about the length of the statement. It is the content that matters, and this is a disgraceful statement. The Opposition had hoped that the Government would be more helpful to those who live in such houses that are defective homes because of the system used to build them. The 16,500 people who have bought their homes will get the support of a 90 per cent. grant, but those who are tenants of local authorities will receive no support.
The Minister's statement means that, under the housing investment programme, local authorities must choose between dealing with the 153,000 defective homes for which they are responsible — the Association of Metropolitan Authorities' report of July 1983 said that the defects would cost £5 billion to correct—and dealing with those that were built by traditional methods. Does that mean that the Minister will punish tenants who have not bought their defective homes, by refusing to give additional aid to the local authorities? Have not the HIP allocations been cut in real terms by 60 per cent. since the Government came to office? Not a shred of hope is offered to the tenants who remain in the projects.
System-built houses were constructed at the request of the Government of the day. I was a member of a local authority at that time and we were urged to encourage system building to deal with the housing problems. The local authorities agreed to do that and subsidies were granted. The Government forced local authorities to build this type of housing. I believe that the Government have a responsibility to all such tenants, but the Minister's statement shows that the Government do not believe that to be so.
§ Mr. Gow
I do not believe that those who will benefit from what I have said will consider that the Government are behaving unreasonably towards them. I have made it clear that the needs of those who have not bought their homes and therefore will remain as tenants in the public sector will be considered along with other needs when the housing investment programme allocations are made. As my right hon. Friend the Leader of the House has said, my right hon. Friend the Chancellor of the Exchequer will make a statement about that programme in due course.
§ Mr. Merlyn Rees (Morley and Leeds, South)
Will the Minister re-examine the way in which he proposes to deal with public sector houses? The Opposition approve of the Minister's suggestions for those who have bought their houses. Leeds has experience of system-built flats which have had to be knocked down. They were built at the request of successive Governments and the ratepayers of Leeds have had to bear the cost. The Minister seems to be suggesting that we repeat that experience. The public sector will suffer, and it should not.
§ Mr. John Heddle (Mid-Staffordshire)
I hope my right hon. Friend will accept that his announcement, like the statement in September 1982, will be widely welcomed by those who have bought properties in my constituency and elsewhere throughout the west midlands. Will he confirm that those who have not bought their homes but who qualify under the right-to-buy provisions will have their rights transferred to other structually sound properties? Will he also confirm that where such properties have become blighted the owner can apply to the district valuer to ensure that he receives suitable compensation?
§ Mr. Gow
It would not normally be possible for a tenant of one of the houses to which I referred in my statement to qualify for the right to buy another house, in which he was not living. Any houses of the type mentioned in my statement which are sold by local authorities will reflect the reduced value of the house as a result of the known defects revealed in the report. The powers of the district valuer are set out in the Housing Act 1980.
§ Mr. Terry Davis (Birmingham, Hodge Hill)
Has the Minister forgotten that one of his hon. Friends told the House at the end of March that he had asked the Building Research Establishment to add Smith houses to the list and that we could expect a report by May? Why will that report be eight months late? Will the owners and tenants of Smith houses in the city of Birmingham be treated in exactly the same way as the owners and tenants of the other houses to which the Minister has referred?
§ Mr. Gow
Smith houses are constructed not of structural pre-cast reinforced concrete, but of foamed slag concrete blocks. The Building Research Establishment will publish a detailed report of its study of Smith houses. I shall consider whether local authorities should be under a duty to assist private owners of such houses. If the statutory criteria were met, local authorities could use the proposed discretionary power which I have announced.
§ Mr. Churchill (Davyhulme)
Is my hon. Friend aware that his statement on this important subject is very welcome and that he is especially to be congratulated on the provisions to ensure that people who have bought council homes which have subsequently 'moved defective will not be penalised? Is it not a sad commentary on Labour Members that, in contrast with the former Home Secretary, the right hon. Member for Morley and Leeds, South (Mr. Rees), most of them seem to feel that those people should be penalised in some way rather than provided for?
§ Mr. Greville Janner (Leicester, West)
Does the Minister recall that when he visited Leicester he was presented with a brick from a Boot house, of which there are about 1,500—500 of them in my constituency—nearly all of which are occupied by tenants? Will he undertake to provide extra cash to meet the £29 million 424 that the council will need to put those houses into order over and above the grossly depleted grants that it will otherwise receive?
§ Mrs. Edwina Currie (Derbyshire, South)
Does my hon. Friend realise how very great the welcome will be for his statement about the mandatory right to assistance and the information from the Building Research Establishment that most of the properties are in good condition? Where there are problems, what steps does he recommend to the occupiers, whether the properties are privately or publicly owned, to prevent further deterioration?
§ Mr. Gow
The advice of the Building Research Establishment is set out briefly in the summary to which I referred in my statement. The reports themselves will be published early next month and will give detailed advice on steps that can be taken by owners in the private and public sectors to diminish the rate of deterioration. There are no practical techniques to halt deterioration completely, but steps can be taken to diminish the rate of deterioration.
§ Mr. John Cartwright (Woolwich)
Will the Minister show similar concern for the hundreds of thousands of tenants in medium and high rise council flats built by industrialised building methods in the 1960s which are now suffering from major defects such as dampness and condensation? As that type of building technique was pressed on local authorities by Governments of both parties, is there not a Government responsibility to help put the problems right?
§ Mr. Nigel Forman (Carshalton and Wallington)
Is my hon. Friend aware that constituents of mine who have bought Orlit houses will welcome his statement and the speed with which the Department has responded? Does he agree that it is vital that the compensation to local authorities through housing improvement allocations in the rate support grant should be sufficient, as otherwise this will merely turn the screw on local authorities already in a difficult position?
§ Mr. John Evans (St. Helens, North)
Does the Minister acknowledge that there are defective house types other than those that he mentioned today? Is he aware that I first brought the problem of Parkinson frame houses to the attention of his hon. Friend the Under-Secretary of State two years ago? Does he accept that owners of such houses desperately need Government assistance to put their properties in order? Finally, where does he expect St. Helens council to find improvement grant finance for owners of such houses when it already has no funds to give improvement grants to anyone else?
§ Mr. Gow
I acknowledge the special interest that the hon. Gentleman has taken in the Parkinson type of house and I have had a meeting with him to discuss the problems in his constituency. It may help the House and people outside if I list the other six types of house that I have 425 asked the Building Research Establishment to investigate. They are Parkinson, Reema, Stent, Tarran, including the Dorran Myton and Newland variants, Winget and Whitson-Fairhurst, including the Lindsay (Ayrshire) variant.
§ Mr. Sydney Chapman (Chipping Barnet)
Like other hon. Members, I have not had time to study the BRE report. Will my hon. Friend confirm what he seemed to imply in his statement—that the problem to which the statement relates was caused by a defect in a material or one material interacting with another and in no way by a defect in building design?
§ Mr. William O'Brien (Normanton)
Given the importance of his statement, will the Minister assure the House that the cost of grants and allocations to be made by local authorities will be met in addition to the HIP allocations and not included in those allocations?
§ Mr. Robert B. Jones (Hertfordshire, West)
Why was 1960 chosen as the cut-off date? Why is no assistance available for dwellings built subsequently, and why was the BRE not asked to investigate such houses? Does the Minister agree that if all local authorities were to do as mine has done and sell 3,000 council houses financed almost entirely through building society mortgages they would have plenty of money for this and other worthy projects?
§ Mr. Gow
Prefabricated reinforced concrete houses of this type were not built in significant numbers in the public sector after 1960. I made it clear in my statement that no final decisions about the coverage of the scheme had been taken. It would be possible for my right hon. Friend the Secretary of State to widen the coverage if, as I hope will not be the case, any general problem arose with another specific type of house.
§ Mr. Nigel Spearing (Newham, South)
As the Minister has adopted a formula for the compensation of private owners, will he assure the House that the exact monetary equivalent will be available to public owners and if not, why not? Will he also assure the House that reinforced concrete load-bearing structures built after 1960, especially those in tower blocks, are not subject to the same defects?
§ Dr. Keith Hampson (Leeds, North-West)
Is my hon. Friend aware that many people in Leeds who have bought defective houses have been shattered to discover that they are now being penalised due to VAT being levied on these essential repairs? They never expected VAT to be levied 426 when the 90 per cent. improvement and repairs grant was introduced and they have been pressing their case with the Customs and Excise for some months. Can my hon. Friend now tell the House that essential repairs of this kind will be exempt, as his good intentions will otherwise be consistently frustrated by the Treasury?
§ Mr. Allan Rogers (Rhondda)
I congratulate the Government on introducing these measures—they will certainly protect the interests of the building societies. Will the same conditions apply to the BISF houses, of which there are many in south Wales and if not, why not?
§ Mr. Terry Dicks (Hayes and Harlington)
I welcome the Minister's statement about these properties. However, a much wider problem surrounds the Bison system building developments. My authority of Hillingdon has a major problem with them and is pulling down over 1,000 of these houses. Why is it that successive Governments have not helped with the housing investment programme? Will the Minister reconsider the possibility of a public inquiry into that major national scandal?
§ Mr. Gow
On 6 October I asked local authorities to satisfy themselves, if they had not done so already, that Bison wallframe houses and flats did not present a safety risk, and to report to the Department. About 25 per cent. of the authorities that own such buildings have responded. When all the replies are available I shall consider what further action, if any, to take.
§ Mr. Douglas
Will the Minister assure the House that he is speaking for Scotland, too, and does he realise that he is dealing with tenants' fears? If he is trying to calm the fears of those who bought public sector houses, how will he calm the fears of those who continue to live in Orlit houses? Will the Minister give the House a clear, unequivocal undertaking to compensate local authorities for those houses on a replacement cost basis and not on a historic cost basis as soon as possible? Will he move from those houses all the tenants, who may be living in fear?
§ Mr. Albert McQuarrie (Banff and Buchan)
I welcome the steps which the Minister outlined for the private housing sector. In my constituency a considerable number of Orlit houses were built near the shore, where the decay is more progressive because of the action of the sea air. The local authority has been endeavouring to repair those houses but it is without funds to do so and will have, even fewer funds because of cuts in improvement grants. Will the Minister tell the House when funds will be made available to the local authority to carry out essential repairs, and remove from people's minds the fear to which the hon. Member for Dunfermline, West (Mr. Douglas) referred.
§ Mr. Allan Roberts (Bootle)
The Minister said that local authorities would be required by law to buy back these houses at 95 per cent. of the defect-free value. Is that the defect-free market value or the market value minus the discount given to the tenant in the first place? Will he provide the same requirement for former council tenants who purchased their homes but who can no longer meet their mortgages and default, and from whom local authorities are not allowed to buy back Their houses, thus making them homeless?
§ Mr. Den Dover (Chorley)
Is the Minister aware that some local authorities, including my own of Chorley in Lancashire, have decided to demolish some of their Orlit houses if they do not receive a Government grant? Will the Minister assure the House that he will impress on the Chancellor of the Exchequer the need to make grants to local authorities?
§ Mr. Chris Smith (Islington, South and Finsbury)
Does the Minister agree that he has told the House that he intends to place a statutory duty on local authorities to assist those who purchased their dwellings, but that he cannot give any commitment that resources will be available to local authorities to assist those who remain tenants of their properties? Does he further agree that he has said nothing about what his right hon. Friend the Secretary of State for the Environment intends to do about the rate support grant and the revenue consequences that local authorities will face when they carry out the provisions of the statement?
§ Mr. Mark Fisher (Stoke-on-Trent, Central)
Is the Minister aware that Opposition Members are pleased about the effect of his statement on private owners, but that, unlike the Government, they are concerned with all tenants and all owners, including local authorities? Will the Minister seriously consider increasing the housing investment programme allocations to the full replacement value of the houses? Nothing else will satisfy the House. Will the Minister give an assurance that if he does that he will make sure that the increase in local authority expenditure is not subject to penalty?
§ Mr. Dennis Skinner (Bolsover)
Is it not true that before the 1960s—and since then for some houses—large private enterprise firms ripped off local authorities and other institutions in the public sector and took taxpayers' money to provide faulty products? Will the Minister tell us precisely what recompense will be made to the local authorities for the replacement cost? What massive profits were made by those companies when they were ripping off the taxpayer, the ratepayer, the tenants and the local authorities? Perhaps the hon. Gentleman can also tell us how much they paid to the Tory party in political donations during all those years.
§ Mr. Gow
The hon. Gentleman asked me a question and I am trying to answer it. The truth is that when those houses were built, our technological knowledge was such that we did not realise that there were inherent defects in them. Now that our knowledge is greater, we have discovered the defects. We shall not make the same mistake again.
§ Mr. Simon Hughes (Southwark and Bermondsey)
Does the Minister accept that the biggest problem in the past decade has been the uncertainty of local authorities. tenants and purchasers about their future? Does he further accept that the weasel wordsThe need for expenditure … will he taken into accountwill do nothing to deal with that uncertainty? Will the Minister take this last opportunity to come clean with the House and say that the Government will provide the money to put right the defects which they caused 10 and 20 years ago through their directions? It is the fault of no one but the Government.
§ Mr. Ian Wrigglesworth (Stockton, South)
Is the Minister aware that many householders are suffering from exactly the same fears and financial problems as the householders whom he mentioned in his statement because of inadequate shale infill beneath their houses? Is he aware that that gives rise to terrible cracking in the foundations, affecting the walls and floors? Is he further aware that many householders, such as some of mine in Thornaby, do not have adequate recourse to aid through the National House Building Council, the local authority or the builder of the house? Will the Minister see whether he can be of assistance in dealing with that problem?
§ Mr. Gow
I am aware of the problems to which the hon. Gentleman has referred. In many houses of the type that he has described it would not have been possible, by a normal survey, to discover the defects that have occurred. My right hon. Friend the Secretary of State may be able to include some houses of the type which the hon. Gentleman has described within the categories that will qualify under the scheme that I have announced. I give no undertaking about that, but it is possible that we w ill be able to include it.
§ Mr. Jim Craigen (Glasgow, Maryhill)
As I am not satisfied with the Minister's statement that the Scottish 429 Development Department is merely sending out letters to Scottish local authorities and the Scottish Special Housing Association, may I ask what provision is being made for Scottish Office Ministers to make a statement in the House about the differences in Scottish law practice, because today's statement drives a coach and four through the traditional understanding of house purchase, not only in England but in Scotland?
§ Mr. Speaker
The hon. Member for Yeovil (Mr. Ashdown) has not previously been rising to ask a question. Mr. Heffer.
§ Mr. Heffer
Is the Minister aware that he and some of his hon. Friends on the Government Benches have been deliberately distorting what has been said by the Labour Front Bench and by my hon. Friends? There is no difference between the view that I expressed and the view expressed by my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees). My hon. Friends and I are pleased that those who have bought their homes will receive a 90 per cent. grant. The argument is that it will go only to those who have bought their homes. We have not heard one word from the Government that council tenants who have not bought their homes through local authorities will get assistance. That is the point that we are making. There is no contradiction between what I said and what my right hon. Friend the Member for Morley and Leeds, South said.
The Minister has said three or four times, I think, that the position of local authorities on housing investment programmes will be taken into account. As it appears from Minister's statements previously that there will be a reduction in HIPs, can the Minister give us an assurance that that will not happen? Can he state that, on the contrary, local authorities will receive extra money either to deal with the defects or to establish a replacement programme for these buildings? Can he give an assurance that that will happen, and not hide behind his right hon. Friend the Chancellor of the Exchequer?
§ Mr. Gow
My answer to the first part of the hon. Gentleman's supplementary question is that we shall look forward to reading the Official Report tomorrow, when we can judge whether his views coincide with those of his right hon. Friend the Member for Leeds, South (Mr. Rees).
The reply to the second part of his supplementary question is that I have told the House already, and I repeat, that the needs of individual local authorities, as a result of the statement I have made, will be taken into account in determining their housing investment programmes. As to the totality of that programme, the hon. Gentleman will understand that I cannot anticipate my right hon. Friend's statement.