HC Deb 25 June 1984 vol 62 cc781-8

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]

10.28 pm
Mr. David Winnick (Walsall, North)

The background to this Adjournment debate is the substantial overall reduction in housing public expenditure since 1979. In real terms the national expenditure on housing will fall during the current financial year to about 39 per cent. of its 1979–80 level. In round figures that means a reduction from £5,455 million in 1979–80 to £2,118 million in 1984–85.

That will obviously cause great housing hardship. The Select Committee on the Environment, on which I served during the last Parliament, warned the Government in its first report of the likely consequences of the reduction in housing expenditure which the Government had decided to make. It warned of a shortfall in housing which would arise.

That is the national position, which we have debated and which I hope we shall debate again in the near future. But if one considers the position at local level and takes, as I intend to, since it is the subject of tonight's debate, the borough of Walsall, one can see what happens as a result of the cuts made nationally and their impact on a local community. Almost exactly three years ago I drew attention in an Adjournment debate to the borough's pressing housing needs and referred to the serious problems faced by Walsall as a result of a continuing refusal to allow the council a housing investment programme allocation anywhere near to what it had requested year after year.

During the past few years the HIP allocation has been less than one third of the money that the council requested. Earlier this year I received a letter from the town clerk informing me of the deliberations of the housing committee that had considered the HIP allocation for 1984–85. The council had asked for £36,850,000, which, in the view of the director of housing, was capable of practical implementation. The amount allocated to the council was just more than £10 million, which, allowing for inflation, represented a lower allocation than for the previous year.

The housing committee said that the allocation fell far short of the sum required to enable the committee to produce a realistic housing programme in both the public and private sectors. It also said that it would affect the council's ability to modernise and repair the existing substandard public housing stock within a realistic period.

I wrote to the Secretary of State for the Environment after receiving that letter from the town clerk and explained the position. I received from the Parliamentary Under-Secretary of State who will reply to this debate a disappointing, although predictable reply.

Since the 1984–85 allocation, the council has received a supplementary sum of £400,000, but even taken together those sums in no way represent what is urgently needed in the borough and are not even half of what the council requested. The HIP allocation plus the capital receipts cannot meet the housing requirements. I should say that during the past three years the council has spent everything that has been allocated, so it cannot be argued that money has been allocated but that the council has not spent it.

This year representatives of the west midlands regional office of the Department of the Environment visited the borough, and the formidable housing problems of Walsall were clearly explained to them. In another letter the Under-Secretary of State told me that the officials had found the visit helpful and instructive. Tonight I should like to know more about the conclusions of that visit. Did the officials come to the view that the sum allocated for the HIP programme in the current and previous financial years was insufficient to deal with the borough's housing problems, which have been explained to me on several occasions, and by me to the Minister?

The Minister for Housing and Construction informed me last month that he would visit my constituency to see some projects undertaken by the authority. Immediately I received his letter I wrote back to remind him of the correspondence between his colleagues and me, and I said that I hoped that when the Minister visited Walsall he would more clearly understand the problems and the need for a reassessment of its HIP allocation.

I received the Minister's reply towards the latter part of last week. Again it referred to what the Government see as the need to control the overall level of public expenditure. I was told that no further resources were available for the current year. I was told: We will take into account what has been learnt about Walsall's housing problems when allocations for the 1985–86 financial year are being made in the autumn. I am not quite sure what "we" means. Does it mean the Minister, junior Ministers, or the officials at regional level? The council's 1985–86 HIP submission is for £37.5 million.

I want to deal briefly in the time left to me with some of the problems which I know and understand, not only from the correspondence which I receive from my authority but because people regularly write to me and come to my surgeries to tell me about them. It is all very well to deal in overall terms of national expenditure, HIP allocations, and so on, but what do they mean in human terms? What does it mean when the Government embark, as they did in 1979, on a deliberate policy of drastically cutting housing public expenditure?

Since 1979 in my borough no contracts for new council housing have been entered into at all. That is bound to mean that with the Government's sales policy and no new build there has been a substantial reduction in the amount of rented accommodation. As I have explained on other occasions in national housing debates, to the best of my knowledge this is the first time, apart from the war years, that there has been a reduction, be it national or local, in the amount of rented accommodation available.

Without now going into the pros and cons of the Government's policy on selling accommodation, surely it is reasonable to argue that if their policy is to be pursued there should at least be some encouragement for local authorities to be in a position to replace the rented accommodaion which is being sold. That, however, is the opposite of the policy which has been pursued by the Government since taking office.

Young married couples, and also single people who urgently, and in many cases desperately, want somewhere to live in my borough but who cannot become owner-occupiers, require to be rehoused by the local authority. I wish that the Government would recognise that there remains a large number of people in Britain, as in my constituency and borough, who are not in a position to take out a mortgage, certainly not with the high levels of unemployment. In so many cases unmarried people live with their parents and in-laws. They are not in a position to be helped by the council for a considerable time. It is a problem which will obviously apply if a policy is being pursued which substantially reduces rented accommodation.

Married couples with children, who live in multi-storey blocks of flats in my constituency and who have been on the waiting lists some time understandably want to be rehoused. If they have one child, thy stand hardly any chance at all. They could wait years and years now without being given the opportunity of a house. Even with two children, and in some cases three, they have to wait a pretty long time. They can live on the fifth, eighth, ninth or twelth floor. In vain, they come to see me, a councillor or I go to the neighbourhood office. What can the council do? It is all very well to talk about accommodation being sold, but, as the Select Committee warned, and as I and my hon. Friends warned, the places being sold are not the flats on the fifth or the twelth floor of the multi-storey blocks of flats. I do not know how many have been sold in my constituency or borough, but very few indeed. Those sold are obviously houses with gardens. In other words, they are the very places to which those with children who live in multi-storey blocks would like to transfer as quickly as possible.

There is an acute shortage of accommodation for the elderly in OAP flats. Bacause of the situation in the borough, only those with medical recommendations are being considered for such housing. I am informed by the director of housing that someone with a medical recommendation may still have to wait three or four years before being offered a place. Those are the people who urgently need accommodation of this sort. I do not know what sort of brief the Minister has in his hand, but does he not consider it a serious matter—given the problems that his officials and his brief tell him exist in the borough—that the council has been unable to enter into any contracts for new council housing for five years precisely because of the Government's policy? Even with the capital receipts and the HIP allocation there have been nowhere near sufficient funds available.

Difficulties also arise with tenants living in older council property. The council is clearly anxious that such dwellings should be modernised as quickly as possible, but it cannot modernise nearly as many dwellings as it would like to, because it just does not have the funds. Constituents of mine who live, for example, on Rosehill estate in Withenhall have been waiting for some years, and continue to wait. Would it not be far better if those places were modernised as quickly as possible? Does not common sense tell us that the longer the delays, the more money that will have to be spent? Ultimately those places will have to be modernised, and the longer it takes, the more it will cost.

Another problem, which is not confined of course to my borough, concerns the position of Orlits and other prefabricated reinforced concrete houses. The Government have rightly taken measures to assist owner-occupiers of such properties, but what about council tenants? The entire financial responsiblity will fall on the local council. In effect, the Government say that the money will come out of the HIP allocation. But boroughs like mine are already much in need of funds to carry out the programmes, as I have been explaining, so where on earth will they find additional funds unless they receive Government assistance? There are, after all, quite a few Orlit properties in the borough. The Minister may say, "Well what about vacant properties?", but, as I said in a debate three years ago, the number of vacant properties in the borough is just over half the national average for the metropolitan boroughs.

There is another matter that I am justified in mentioning—improvement grants. Prior to the election, the Government allowed quite a lot of money to be spent on those grants for owner-occupiers, but now the position is quite different. Quite a few of the owner-occupiers in the borough are not in a position to carry out work without assistance, but they find that there is a long queue for it. Again, as with the other issues, they come to see me. Obviously, I write to the director of housing and he explains that with the limited amount of cash available it is impossible to assist there. That is rather different from the situation prior to the 1983 general election.

Those are some of the problems that I have felt it necessary and justifiable to raise again tonight. I have no illusions. I certainly do not believe that any words of mine—eloquent or otherwise—will change Cabinet policy. However, I have a duty as a Member of Parliament to explain on the Floor of the House what the impact of the Government's housing cuts mean in human terms in one borough.

I believe that I have a duty to my constituents, who are so urgently in need of housing, re-housing, having their places modernised or for a grant, not only to deal with the problems in corespondence, but to raise these matters on the Floor of the House of Commons. I hope that the Minister will give some ray of hope so that the 1985–86 HIP allocation will involve a realistic sum to meet the housing needs of the borough.

10.45 pm
The Parliamentary Under-Secretary of State for the Environment (Sir George Young)

The hon. Member for Walsall, North (Mr. Winnick) has explained his perception of the housing needs in his constituency. Nobody can doubt the genuine concern that he has expressed about the problems that his constituents and local housing authority face. The Government recognise fully the importance of the issues and I have no wish to underestimate the severity of the housing problems that confront our inner urban area authorities.

I should like to put into perspective some of the figures that the hon. Gentleman produced. He quoted the figures for public sector investment in housing from 1979 to date. My figures show a decrease of 23 per cent., although the decrease is likely to be less, since expenditure in. 1983–84 is likely to be slightly higher than we expected.

The decrease between 1975–76 and 1978–79 was 46 per cent. When the hon. Gentleman talks about a policy of deliberately cutting housing expenditure, he should also address with equal vigour what happened under the Labour Government from 1974 to 1979. The hon. Gentleman also mentioned those waiting for improvement grants. In the last year of the Labour Government £90 million was spent on improvement grants. The figure for last year is likely to be £900 million. That puts in perspective some of the hon. Gentleman's remarks.

I found it astonishing that in a debate on housing needs in Walsall, the hon. Gentleman hardly mentioned resources in the private sector. He mentioned that matter at 10.37 pm, in passing, only to dismiss it. One must take issue with the hon. Gentleman's apparent conviction that the solution to the problems can lie only in making more public sector resources available to local authorities. The hon. Gentleman did not mention the initiatives that we have taken to encourage low-cost home ownership and other initiatives that have a bearing on housing in Walsall.

The Government's view is that we must continue to strive for a balance between the demand for services financed by public expenditure and the need for a healthy national economy in which private investment and individual initiative can flourish. Our firm intention is to secure a low rate of inflation for the long term. That means that we must continue to contain public expenditure at reasonable levels.

The hon. Member's own constituents have suffered more than most in the west midlands region from the recession. We cannot afford to jeopardise economic revival by excessive public expenditure now. I have referred to the dramatic cuts in public sector expenditure which followed the IMF intervention.

The hon. Member rightly mentioned Walsall's level of HIP allocation in 1984–85. The district received an initial allocation of £10.185 million which represented 5.7 per cent. of the west midland region's allocation. Compared with the 1983–84 allocation there was a modest cash increase in 1984–85. Only about one-quarter of the region's authorities benefited from such an increase and on the indication given by the generalised needs index we have no reason to think that Walsall is not getting a fair share of the region's resources.

The size of the annual HIP allocation no longer represents the whole picture on housing resources. Capital receipts make a very substantial input to the totality of resources available. One of my Department's tasks is to strike a balance between the distribution of resources through HIP allocations according to need and the desirability of allowing local authorities to benefit directly from the generation of capital receipts. Overall, the level of capital receipts has been growing steadily since 1981 and so we came to the conclusion that for 1984–85 it would be appropriate to adjust this balance to a limited extent.

Therefore, we reduced the prescribed proportion of housing capital receipts from the sale of council houses available directly to authorities to use from 50 to 40 per cent. In making that change, we recognised that those authorities that were planning to spend the full 50 per cent. of their capital receipts would lose. We therefore held back £50 million from the overall settlement in November specifically to help authorities in difficulty because of the change. Walsall demonstrated that a shortfall of £0.4 million would be created by the change and, as the hon. Gentleman said, that was met in full by the supplementary allocation that my hon. Friend announced on 2 March.

We also recognise the need for local authorities to be able to plan their housing expenditure for more than one year ahead if they are to use limited resources sensibly. With that in mind, for the last two years we have given assurances about the levels of allocations in later years. In November last year, on issuing the 1984–85 allocations to authorities, we gave an assurance that for 1985–86 and 1986–87, authorities could plan on the basis of allocations of at least 80 per cent. and 70 per cent. respectively of the current year's allocation where they could demonstrate the need for such expenditure.

I come to some specific areas of housing need which have been identified as requiring public sector investment both by the hon. Gentleman tonight and by others of his hon. Friends in earlier debates. It has been suggested that local authorities need to continue to make provision for new build accommodation for general needs. But there is ample evidence to support the Government's view that the key issue is to ensure that there is available an adequate supply of houses for sale at prices that people can afford.

The 1978 general household survey carried out by the then Labour Government established that the preferred form of tenure of 90 per cent. of those under the age of 45 was home ownership. For those over 45, the figure was 61 per cent. A Building Societies Association review in 1983 confirmed this.

It is our clear duty to give every encouragement and assistance to the preferred choice of the people, and that preferred choice is clearly for owner-occupation, and the level of the take-up of the right to buy tells its own story. As I think the hon. Gentleman will concede, there is widespread aspiration for home ownership among tenants, many of whom could never have hoped to realise their ambition unless the right to buy had been conferred on them by Parliament. The Housing Defects Bill at present before Parliament will extend this right to buy in significant new ways.

In addition to many buyers who are benefiting from discounts under the right to buy, those seeking to purchase a home for the first time in the private sector should also find a home easier to afford. Rising earnings, in real terms, can bring home ownership within the reach of more people. The private sector is already providing more than three quarters of all new housing, a fact which the hon. Gentleman did not mention.

Private housing starts, which must be relevant to tackling Walsall's housing needs, reached 167,000 in 1983, a figure last exceeded 10 years ago. I hope that the hon. Gentleman will welcome the vigour and enterprise of the private house builders, and the Government look to them to act in partnership with the public sector to meet the housing challenges of the future.

Mr. Winnick

Does the Minister not appreciate how callous his words are for the many thousands of people in my constituency and in the borough as a whole who are not in a position to buy their own homes, even if they were employed, let alone now, with unemployment running at 17 per cent? Is he saying that there is no hope for these people and that it is right and proper that there should be no new contracts for council housing? I said that there had not been any such contracts for five years. Is that to continue for another five years, if this Government remain in office?

Sir George Young

The hon. Gentleman persists with a blinkered view of housing needs. He must understand that if Walsall council or any other local authority, for example, makes land available to the private sector to build low-cost homes for sale, and it has a partnership agreement by which those homes are offered either to sitting council tenants or to people on the waiting list, real progress can be made in tackling the problems which the hon. Gentleman has rightly mentioned.

At no cost to the local authority, it can tackle housing need; not only at no cost, but it gets a receipt from the sale of the land. That is the type of broad approach that we have encouraged local authorities to adopt. Many, including Labour authorities, have adopted it. Not only does it enable progress to be made in meeting housing needs; it meets the aspiration of the hon. Gentleman's constituents who do not want to be local authority tenants. They would prefer to be home owners. The hon. Gentleman heard the figures which I gave a few minutes ago—[Interruption.]—and he is aware of the percentage of those under 45 who want to be home owners. The hon. Gentleman spoke for more than 15 minutes and has taken some of my time already. I must try to make progress and not be diverted by his interjections.

Walsall council has shown an interest in pursuing some of the initiatives that I have mentioned. My hon. Friend the Minister for Housing and Construction saw an example of an improvement for sale project in Walsall when he visited the town only last month. I urge the local authority to examine the scope for developing such initiatives further. Commitment to such projects is a factor of which we shall again be taking particular account in deciding HIP allocations for 1985–86.

We accept, of course, that it is for local authorities to identify the particular balance of need in their own areas, but the clear preference for owner-occupation and the increasing ability of the private sector to meet that need, lead us to expect that authorities will concentrate their future new build programmes on provision for special needs such as the disabled and elderly on low incomes.

Repair and improvement of existing council-owned stock is an important area of investment. We have to ensure that we make the best use we can of the stock that exists. This is an issue which has given rise to concern in Walsall.

The hon. Gentleman mentioned defective houses in the local authority's own stock. I know that Orlit houses are a cause of particular concern in Walsall. The purpose of the Housing Defects Bill currently before Parliament is to give assistance to private owners. There is no need to make special financial arrangements for the costs of repair of defective houses in local authorities' own stock. We have said repeatedly that special needs for expenditure of this kind will be taken into account in deciding the HIP allocations of the authorities concerned. It is for each local authority in its responsible role as landlord to decide in the light of this and its other priorities how it should spend its allocation.

We were aware of the need for spending on prefabricated reinforced concrete houses in arriving at the total provision for housing capital expenditure in the expenditure plans announced last autumn.

I should like finally to say something about the renovation of privately owned dwellings, a sector in which Walsall has shown a growing interest over the past two years. The development of its block repair scheme, which my hon. Friend inspected last month, represents a fresh approach to area improvement which is being studied in some depth within my Department. It is also to the authority's credit that it has promoted an urban development grant scheme with the Abbey National Building Society for the provision of six show houses in Walsall.

The Government remain commited to tackling housing problems in Walsall. We are determined to use all available resources to do so and not only those of the public sector. I offer a final word of reassurance to the hon. Gentleman. We shall take into account, when we decide the HIP allocations for next year, the remarks that he has made this evening and the discussions that are taking place between officials of Walsall council and those of my Department.

Question put and agreed to.

Adjourned accordingly at three minutes to Eleven o' clock.