§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]2.31 pm
§ Mr. John Fraser (Norwood)
There is a sick joke about the non-addict who thought that LSD was money. The Government are a sick joke in that they think that not spending public LSD somehow has something to do with the country's economic success. For the Government, it is all right for the bank that likes to say yes, and it is all right to have a listening bank, provided that the customer is not a local authority, in which case the Government pleads that it is economic virtue for the bank to be deaf and mute.
There is not a jot of evidence that the dramatic reductions in housing expenditure that have taken place have had anything to do with the country's economic or social health. If they had, we would reach a Tory paradise at a time when there was so little spending on those in the lower income group for housing that much of Britain would have been reduced to one vast slum.
All the evidence from the country, my constituency and my borough is that unemployment has risen as spending cuts have taken place. The cuts in housing expenditure which come through HIP have been a sick joke for 2,500 private house owners in Lambeth, many of them on low incomes. It has nothing to do with rate capping or revenue.
Those people applied for improvement or repair grants before 26 December 1983. They have now all been told that those applications have been cancelled as a result of the cuts in HIP—the amount of money local authorities are allowed to spend — which were announced in December 1984. Like the homeless, like those on waiting lists, and like those public sector tenants whose homes need repairs, the 2,500 owners, mostly owner-occupiers, have become victims of a cruel Tory economic voodoo. For them, the only evidence that the Conservative economic rain dance works in their favour is the water that is coming through their roofs.
Let me give an example of what has happened to my constituents as a result of the ending of grants in Lambeth because of the cut in HIP. I shall read part of my letter to the local authority about Mr. and Mrs. Daly, who live in West Norwood:Mr. & Mrs. Daly own the above property and applied for a Repair Grant in 1982. Mr. Daly is a double amputee"—his wife receives a constant attendance allowance—and permanently in a wheel chair. They have now had a letter dated the 29th January 1985 terminating their grant. They set out to carry out the work in conjunction with Social Services who provided some of the improvements which were then to be followed by repairs under the Repairs Grant Scheme. You can imagine the distress of a man without legs who now finds that the consequential repairs cannot be carried out.Another family, in the same road as it happens, received a letter from the local authority as a result of the Department of the Environment's guidance about houses in multiple occupation. The letter said, in effect, "Your house is technically a house in multiple occupation." It stated:I regret that we are still awaiting legal Counsel's opinion as to whether repairs grants can be given in respect of works to common parts".630 Subsequently, because of the delay and the guidance given by the Department of the Environment, that application for a grant was also cancelled.
Somebody else in Upper Norwood made his application for a grant in July 1983. He was told that, because of staff shortages, there was a vast backlog of applications. If Lambeth had recruited any more staff, it would have been condemned by the Government and suffered penalties for the extra wages paid to the staff, under the penalty system that operates in Lambeth. In consequence of the delays in that application because of staff shortages, that person may have lost his grant.
Last Sunday morning I went to see one of my West Indian constituents who is a pensioner and had suffered a stroke. He cannot get about or do things as quickly as others. Purely because of the lapse of time, he finds that people around him have had their roofs repaired, but his grant application has been cancelled. I went to see another person, who also suffered a stroke. His house had been enveloped, but now because of the cuts in Government expenditure in Lambeth, his grant has been cancelled as well.
It is difficult to describe the distress and despair of people who waited for years to have their grants approved and were told properly—because it is the law—that they should not undertake the major repair works before the grant was approved because otherwise their expenditure would not rank for grant. Many of those people took that advice in good faith, and the conditions of their premises, as well as their economic circumstances, have in many cases worsened. There has been more difficulty because people in aging blocks of flats have lost their grant not because of cuts in HIP but because the Department of the Environment gave guidance that common parts expenditure would not rank for grant. Those people suffered some distress, too.
Lambeth is often the bete noire, if not of the Department of the Environment, at any rate of that Department's Ministers. Lambeth has acted with greater conscience and honour than the Tory boroughs of Croydon, Bromley and Wandsworth which, when they saw the clouds gathering for housing finance, gave up the struggle to keep the grants system going and cancelled grants long before Lambeth borough did. Lambeth soldiered on until the death blow of the HIP announcement in December 1984. As nobody outside the House understands what HIP is, I should explain that it is the amount of capital that a local authority is allowed to spend.
When Lambeth got that allocation of funds, it found that the amount for which it had bid had been cut by £77 million to an allowance of £34 million. In case people say that the amount that it bid for was exaggerated, I should say that that also constituted a cut from £40 million, which Lambeth had been allowed to spend in the current year, to £34 million, which it is allowed to spend next year. I am quoting those figures in constant 1985–86 prices.
With 1985–86 housing investment allowances, the Secretary of State has stamped on the fingers of the people who have clung on in hope to the promise that grant applications that were made before April 1984 would be honoured. In fact, Lambeth stopped taking applications on Boxing Day 1983. The Government knew of the need and distress that would be caused if the amount that Lambeth could spend was cut so severely. I personally got hold of Department of the Environment officials whenever I saw them in Lambeth. I talked to one at the opening of a 631 neighbourhood centre on the Angel Town estate, and told him clearly of the distress that would occur in Lambeth if the grant programme that was in the pipeline could not be maintained. I asked him to convey those things to the Minister.
The Government knew of the scale of the problem because they got the information from the HIP returns that are sent in by each local authority. I shall give the figures for Lambeth. There are 10,740 unfit homes in the private sector and 2,470 homes which, while not being unfit, are not provided with the basic amenities. Some 11,450 homes, while not being substandard, need renovation. The Government knew from those figures and from what I told officials what the scale of the problem was. They knew because I wrote to the Minister for Housing and Construction when he was considering the housing investment programme for the current year and told him of the acute distress that would be felt by many poorer owner-occupiers if the money allowed to Lambeth was not sufficient to sustain the programme. The Government also knew it from letters from the acting housing director of Lambeth borough council, Mr. Alex Docherty, who wrote on 28 November 1984, giving the views of the housing committee. He said:'the council makes a supplementary bid for Housing Investment resources in order that the Council can continue to meet both the moral'"—moral obligations ought to mean something to the Government—'and statutory obligations of improvement grant applicants'. The purpose of this letter is to request both an additional HIP allocation for 1984/85 and 1985/86 in order to meet the demand from renovation grant applicants. As you are aware, the government initiated a most successful national campaign in order to stimulate the number of renovation grant applications, and Lambeth as a direct consequence had a four fold increase in the number of applications. The Council will spend approximately £9 million on Renovation Grants in 1984/85 despite the Council limiting discretionary grants to those applicants in Housing Action Areas … If the Council were to continue with even this modest policy, meeting the 4,800 case backlog (excluding insulation grants) then it would cost the Council some £20 million in 1985/86 for renovation grants alone. The level of expenditure on grants without a substantial increase in HIP allocation for 1985/86 would jeopardise seriously the Council's ability to undertake renewal works to its existing stock of dwellings and to provide for the shortage of dwellings from which this borough suffers.What was needed was put on the record by Members of Parliament and officials, and yet it was announced as near as possible to Christmas, to minimise criticism—it was a pretty poor Christmas present for Lambeth and its citizens — that the council would be allowed £34 million. The Government knew that Lambeth's existing legal commitments, including between £8 million and £9 million in grants that had been approved but not paid out, required about £33 million and that therefore only about £1 million would be left for any other housing expenditure during the year. The Government knew that and disregarded the warnings.
The grants arrangements had been a beacon of success — almost the only one in the Government's housing policy. Ministers have constantly told us how the level of grants has risen from relatively small figures in 1978–79 when there was a big construction programme to about £900 million last year. What was a beacon of success has 632 become, to use Macbeth's words, a case of, "Out, out, brief candle". That is certainly the case for many of my poorer constituents.
Before the 1983 general election, the Prime Minister told housing authorities to spend, spend, spend on capital, and accused them of underspending. They were encouraged to take grant applications at a subsidy of 90 per cent., the owner-occupier having to find only 10 per cent. The Government must have known that the numbers of applications would explode. In 1981–82, we had 804 applications. In 1982–83, we had 3,277 and in 1983–84 there were 3,875 applications until they were stopped except in special categories. That increase resulted from Tory policy which was applied in good faith by a Labour-controlled council in Lambeth. The Government have shattered the hopes and, in some cases, the lives of 2,500 people in Lambeth who have waited for grants to come through.
Lambeth does not pretend that it is alone in this catalogue of disaster as about 250,000 people throughout Britain are faced with similar circumstances, as is recorded in a letter from the National Home Improvement Council dated 26 February which states:the early indications are that many local authorities will find themselves in a similar position to Lambeth regarding the termination of repairs and improvement grants. I know you will want to concentrate on the issue of Lambeth's problems but you might like to know that many of these problems are reflected throughout the country and you may feel free to quote the National Home Improvement Council's concern with the national situation.I come to what I am pleading for this afternoon. I should like the Government, by creative accounting, by compassion or by any route that they think fit, to find a supplementary allocation of money to deal with the moral commitments for the granting of repair and improvement grants in Lambeth. That supplementary provision should be restricted to the poor, the pensioners, the disabled and to those in lower income groups. These are some of the impoverished people in the community, who in all good faith have waited, sometimes for two years, for essential money for essential repairs to their property.
It should not be impossible to find some way to provide this money by unlocking, perhaps, part of the £5 billion of capital receipts hi-jacked by the Treasury, perhaps by allowing the local authority to deal with its outstanding mortgage debt and exchange it with the banks for money, with which they are awash, to provide for grants. The Government are more skilled than I in manipulating finances. I plead with them to grant Lambeth permission to borrow so that it is able to honour its legal and moral commitments, which were undertaken as a result of the Government's programme of increasing grants and encouraging applications before 1984.
I have one final plea to the Government. Please do not let them tell either England or Lambeth that we are better off for what they have done.
§ The Parliamentary Under-Secretary of State for the Environment (Sir George Young)
The hon. Member for Norwood (Mr. Fraser) has raised, in a moving speech, the problems of a number of his constituents who would like to apply for improvement grants but find that Lambeth council has been unable to process them. I hope to be able to put in a slightly broader perspective some of the remarks that he has made, because he has glossed over some of the 633 achievements of this Administration in developing the home improvement grants policy. It is perhaps appropriate that this matter should be debated by two former councillors of the London borough of Lambeth, who have first-hand experience of some of the problems facing the local authority.
I shall begin by outlining what our policy has been on improvement grants in recent years. In 1982, the Government introduced some special measures in the Budget that increased local authority spending on home improvement grants. In April of that year, we raised the maximum rate for repair and intermediate grants to 90 per cent. and we made additional capital allocations available to help local authorities to meet the increased demand for grants. As the hon. Member is probably aware, intermediate grants are for the provision of missing standard amenities such as baths, sinks, inside toilets, together with any necessary repairs, while repairs grants on the other hand are for substantial and structural repairs to houses built before 1919.
These special measures were introduced to boost grant spending and to increase the amount spent generally on renovating substandard housing stock. The figures show that that intention was fully realised, with spending on grants increasing from £200 million in 1981–82 to £425 million in 1982–83, and to over £900 million in 1983–84. That £900 million figure compares with £90 million spent in the last years of the Administration in which the hon. Member served. The fact that the amount going on improvement grants has increased tenfold under the present Government did not come out in the hon. Gentleman's speech. The hon. Gentleman talked about the brief candle, but this year, even after the ending of the special measures, spending on improvement grants is still expected to exceed £700 million as against £90 million in 1979.
The total resources available have risen to unprecedented levels and, as a result, an enormous amount of worthwhile improvement and repair work has been carried out. We did that to enable both local authorities and householders to give priority to and to realise the importance of renovating one of our greatest assets—our housing stock. However, we made it clear that there was no way in which resources on such a vast scale could continue to be made available indefinitely, and we never claimed that that would be the case.
Grants made by local authorities for repairs and for the installation of basic amenities are, nevertheless, still available at grant rates of up to 75 per cent. and up to 90 per cent. in the case of hardship. It is still a generous system. Even what is likely to be spent next year, in 1985–86, is well beyond the figure of £90 million that we inherited.
The priorities of local authorities and of householders have now been changed and there is a greater realisation of the importance of the stock. The local authority also benefits from the new regime because of the generous Exchequer contributions towards improvement grants. Exchequer contributions are paid at the rate of 90 per cent. for intermediate grants and repair grants for substantial and structural repairs to pre-1919 houses. For improvement grants the contribution is 75 per cent., or 90 per cent. towards those grants given in priority cases.
In Lambeth — obviously the priority for the hon. Member — spending on improvement grants has risen substantially since 1981–82, but rather more slowly than 634 the national rate of spending. In 1981–82 it was £1.2 million. It went up to £1.8 million in 1982–83, and up to £4.2 million in 1983–84. Expenditure in 1984–85, as the hon. Gentleman said, is likely to be about £9 million, and in 1985–86 it could be just under £9 million.
If Lambeth had avoided building up such a large backlog of grant applications, much of the expenditure now being faced in the current year and next year could have fallen in 1983–84, when local authorities were, in effect, able to spend without limit on improvement grants. Compared with the performance of other London boroughs, Lambeth was slightly slow in using the advantage of the special regime introduced in the 1982 Budget. If Lambeth had been able to use that advantage, it would have avoided not only the frustration of the long waits and the disappointment that the hon. Gentleman mentioned in his speech; it would have eased much of the present pressure on the borough's housing capital resources.
The hon. Gentleman has raised, as the subject of his debate, the termination of repair and improvement grants in Lambeth. As I am sure he knows, for mandatory grants for things such as missing standard amenities or essential repairs, where statutory repair notices have been served, the grants are available as of right, provided that the qualifying conditions are met, and there is no question of termination of those grants.
I think that the hon. Gentleman was speaking about the discretionary grants, where local authorities have the widest possible discretion whether to approve applications and, if so, at what rate. That enables them to adjust their policies according to local housing needs and priorities. The repair and improvement grants form part of their HIP allocations, and they are in direct competition for funds with other parts of the local authorities' housing programme, new build schemes, repair and improvement of existing stock, local authority mortgage schemes, and lending to housing associations. It is for each authority to decide how much of its available resources to use for such grants. I recognise that authorities are faced with difficult decisions on establishing priorities. The initial HIP allocation for Lambeth for next year is £34.32 million, and the hon. Gentleman developed in his speech the case that that figure was inadequate.
We advised local authorities in November 1983 that they could plan their 1985–86 programmes on the basis that their allocations in that year would be at least 80 per cent. of their 1984–85 allocations, and the allocation that we have made to Lambeth meets that assurance fully. We have honoured that commitment. The allocation made is 88.5 per cent. of the initial allocation made for 1984–85, and 85.4 per cent. of the final allocation made for 1984–85.
For many years now we have recognised Lambeth's special housing problems, which I do not deny for a moment. The London borough of Lambeth has received the largest allocation made to any of the London boroughs. We have done that despite a very poor spending performance in 1981–82 and 1982–83, when Lambeth did not even manage to spend anything like the allocation we made available to it, let alone make use of its capital receipts. For 1984–85 the allocation made was almost £40.2 million. For next year the allocation is £4 million more than to any other London borough. So we have given Lambeth substantial allocations in the current and in the coming financial years.
635 Next year the initial allocation could be supplemented by an additional 5 per cent. in due course. All authorities which have complied with our request last year for voluntary restraint on capital expenditure will be eligible for such supplementary allocations. On top of that it would be open to the local authority to supplement its programme through the use of the prescribed proportion of capital receipts.
The hon. Gentleman mentioned other ways of complementing the allocation by refinancing the mortgage programme. Like him, I have read in the press recently that local authorities, including Liverpool, Southampton and St. Albans, have managed to increase their allocations by refinancing their mortgages, and that is open to Lambeth and to anyone else.
As for improvement grants, the hon. Gentleman mentioned the figures with the knowledge that, of the 48,000 private sector stock in the borough, nearly 11,000 were considered unfit, more than 2,000 lacked basic amenities and more than 11,000 were in need of renovation. Of course, improvement grants should be made a priority, but the Government have rejected the approach of earmarking the allocation and telling the local authority how much it should spend on improvement grants because we believe that these decisions are best taken at local level. It is up to Lambeth to decide how much of its allocation to devote to discretionary grants and how much to allocate to other parts of its programme.
We have drawn to the council's attention the Government's priorities. In the letter that announced the allocations sent on 20 December last year, as well as underlining our main policy of increasing the level of home ownership we drew attention to our priority of encouraging the repair and improvement of the existing housing stock in both the public and the private sectors and concentrating resources in the housing programme on capital provision to those in greatest housing need.
It is important, given the need to contain public expenditure within realistic limits, for authorities to determine clear priorities for housing investment and to develop the most cost-effective solutions available.
Looking at Lambeth and at the number of empty dwellings, we see that in 1982 the council reported 2,072, in 1983 2,280, and in 1984 2,001—a reduction of fewer than 70 over that last period. Of the 2,000 empty in April last year, almost 600 had been empty for more than a year. I hope that Lambeth council will look at that stock. If it cannot bring them into good use itself, it should dispose of them, giving first preference to those who are either on the waiting list or existing council tenants and try to bring those empty dwellings, which represent more than 4 per cent. of the total local authority stock, back into use.
Looking next at rent arrears—resources available to the local council to help do some of the improvements on 636 its estates — we see that in Lambeth they stood at £8 million. In the last three years the council has not increased rents in line with the increases recommended by my Department to take account of inflation. Again, that has denied the council the use of resources for housing.
I was going through next year's estimates for Lambeth council. It proposes to spend £1.5 million next year on architects' fees for new build schemes, some of which may never come to fruition. That money could have been reallocated to improvement grants to meet the needs of Mr. and Mrs. Daly, about whom the hon. Member spoke so movingly. I wonder whether the council has its priorities right in allocating so much in resources to new build schemes which may never get off the ground. That is a matter that might be raised with the local authority.
I have said that I feel that much of the present difficulty could have been avoided if Lambeth had managed to keep up with the volume of grant applications. I am sorry that many people in the borough and in the hon. Gentleman's constituency have missed the opportunity that we gave them through our improvement grant initiative. The council has given the impression that new approvals on discretionary grants have virtually ceased, but I understand that it is still prepared to consider certain special cases, and I hope that it listens to what the hon. Gentleman said about Mr. and Mrs. Daly and the other families. In any event, the council has entered into considerable commitments this year which will still lead to a substantial expenditure next year on improvement grants. I hope that the council will soon be able to clear the backlog of commitments and begin to consider applications on a wider front once again.
As for the wider implications of improvement grants, the Government's view is that it is primarily the responsibility of home owners to keep their own dwellings in repair, using their properties as security for borrowing to finance the improvements. Private expenditure on home improvements greatly exceeds that by the public sector. Even looking at 1983–84, the year when local authority expenditure on grants was at its highest, up to 90 per cent. of the total spent on improvements came not from the public sector or the local authorities but from the private sector. Certainly there are cases where owners need assistance with necessary repairs and improvements, and we are trying to ensure that home improvement grants are focused increasingly on those who really need help with this essential work. Our review of improvement policy generally is coming to its conclusion, and we hope to issue a consultative paper on our proposals next month.
I have to listen to what the hon. Gentleman said within the constraints of the allocations that have already been set. I will do what I can to help Lambeth, perhaps through the urban programme. I am not indifferent to its problems, but I believe that much of the responsibility rests with Lambeth council.
§ Question put and agreed to.
§ Adjourned accordingly at Three o'clock.