HC Deb 13 January 1987 vol 108 cc236-44

Motion made, and Question proposed, That this House do now adjourn,—[Mr. Lennox-Boyd.]

10 pm

Mr. Joseph Ashton (Bassetlaw)

I thank you. Mr. Speaker, for giving me the opportunity of an Adjournment debate to raise the important and pressing problem of the houses that are currently being sold by British Coal.

Since 1976, British Coal has sold 70,000 of its houses to owner-occupiers at advantageous rates, and that has gone satisfactorily. However, nearly 20,000 houses are now left, which, in the main, are inhabited by elderly tenants, widows and so on, many of them pensioners who have served a lifetime in the mines, who are too old to take on a mortgage and who have no wish to be saddled with a mortgage at their time of life.

In addition, many of the houses are unfit and would not obtain a mortgage from a building society because of structural problems. In Nottinghamshire, where my constituency is, there are 4,200 such houses. In my constituency alone, there are 1,026. Of the two district councils that cover my constituency, Bassetlaw has 723 and Mansfield has 883. About 325 of the Nottinghamshire houses are defective and would have great problems in attracting a mortgage from anywhere.

So far, British Coal has pursued a policy of putting such houses up for auction and it intends to put some put to tender. The way that that policy has been carried out has caused a great deal of discontent. Many of the houses being sold wholesale in that way have fetched prices as low as £3,000. In a recent auction at the Kensington Hilton on 11 December, 149 properties in Wakefield were sold for an average price of £3,600. Fifty-five houses were categorised as having defects under the Housing Defects Act 1984. There were 55 in Staffordshire Moorlands which realised £235,000, and, at the Connaught Rooms, 151 properties fetched £618,000. In other words, an approximate price of less than £4,000 was paid per house.

Obviously, when such prices have been arrived at at auctions, property speculators everywhere have pricked up their ears and descend en masse for what looks like a good bargain. There has been strong criticism of the way in which British Coal has sold those houses, not just from hon. Members but from no less a body than the National Housing and Town Planning Council. In its magazine the council said that tenants are given just three months to make one of the most important and difficult decisions of their lives. Notification of the timetable for disposal within a local authority area was far too short and some British Coal areas are even refusing the common courtesy of telling the local authorities when the houses are coming up for sale.

Some houses were recently sold in my constituency and the local council found out only as a result of a small advert in the local weekly giveaway newspaper three days before the auction took place. There is strong criticism by the National Housing and Town Planning Council to the effect that the assessment of the purchasers' credibility and suitability as a landlord is not being taken into account by British Coal when literally anyone, no matter what his track record as a landlord, can buy them. Because British Coal insists on selling many houses at auction, controls over who buys them are impossible.

There is also strong criticism about the availability of the names of the landlords. British Coal claims that the purchasers' names is a matter of commercial confidentiality. But surely it should not be selling to people unwilling to register their name publicly. The new landlord and tenant legislation which will go through Parliament this Session with all-party support is trying to stop such practices. British Coal should at least be made to operate to those standards.

It is in the interests of former British Coal tenants that the House and the Department should find some ways and means to help them. Speculators who are suspected of living in Athens have bought the houses. One firm called the Rare Carpet Company in Chelsea has put in bids for them. In places such as Creswell, houses were bought by a speculator for £3,000. Within six months, he had doubled the price and sold them to another speculator for £6,000. In many cases, it is impossible for tenants to have repairs done. Some houses were bought in Aston, in the constituency of the hon. Member for Rother Valley (Mr. Barron), and no rents were collected for 10 weeks. It is a Greek solicitor who collects the rent.

It appears that, in many areas, speculators are simply moving in to set up a modern form of Rachmanism. They buy these houses wholesale. They know that they are tenanted by elderly people and expect them to be empty within two or three years, in which case they will get as much as £18,000 for them. Of course, if the houses have to be pulled down because they are defective, the new buyers will have the land, and they will easily get planning permission to build on it.

Mr. Geoffrey Lofthouse (Pontefract and Castleford)

Is my hon. Friend aware that, at the 11 December auction at the Kensington Hilton, some houses were sold for £2,600? Previously, the occupiers, aged miners, had been offered them for £3,600. Within days of the auction, the new owners knocked on those people's doors and offered them at £3,600, with a £1,000 profit in two to three days.

Mr. Ashton

My hon. Friend is right. I went to a meeting of the Tenants Federation in Mansfield last Saturday. It is trying to form a nationwide federation of tenants of British Coal houses because of what is happening. People go around knocking on doors of elderly people at 10.30 pm. They ask who lives in the house, how old they are, what their state of health is and what repairs need to be done. Forms have been sent. The Overseas Commodities Group attaches a £1 coin with a piece of sellotape to the bottom of the form. The form asks: Why was the freehold not bought when it was offered by the Coal Board? Is the house in good repair? Does it need electric wiring? How many people live there? Obviously, those questions are asked with the intention of making a quick profit and a quick killing.

Not all the houses are defective. In Meden Vale, in my constituency, some were built in 1963. Because of the pressure applied by Members of Parliament, the auctions that were due to take place next week of 400 houses in Thurnscoe in Yorkshire and about 25 houses in Warsop in my constituency have been postponed by the Coal Board, but only for a month, so that we may have this debate. Because the House was in recess, we managed to apply some pressure to postpone the auctions.

Because British Coal must dispose of all these houses, the remaining 20,000 must go by September 1988. Many think that this is a prelude to possible privatisation if the Tories win the next election. When we met the British Coal board leaders Sir Robert Haslam and Mr. Kenneth Cousins, the reaction we received was unsympathetic. They simply said that they are in the business of selling coal, not renting houses. Frankly, their attitude to many of their employees, who worked 30 or 40 years in the pits, who coughed up their lungs, and who travelled down from Newcastle and Durham and Scotland when the pits shut, to work in Nottingham, was deplorable.

Tenants federations have been formed. As my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) said, when he went to that auction, the sellers were scared of demonstrations outside the auctions, driving down the prices. In many cases, the Coal Board was worried about demonstrations.

There is a simple answer to the problem of absentee landlords not doing repairs and of tenants not being properly looked after. It is to allow councils to buy the houses. For instance, in my constituency, both Bassetlaw and Mansfield councils wish to buy these houses. It is not just a matter of doing repairs on the houses. Many of them are next to slag heaps. The environments are poor and need to be landscaped. Weeds are growing out of the gutters. The pavements need proper attention. They are derelict areas. They are beginning to decline into a state of decay and disrepair. When an absentee landlord owns many houses in a street, it is difficult to get this sort of work done.

Bassetlaw and Mansfield councils have said that they are willing to buy these houses at a fair price. It is much cheaper to buy a house at £6,000 than to build a new council house at £20,000. It is common sense for the councils to buy the houses, because they will get their money back in rent in two or three years. That is why the speculators want these houses. Fair rents of £17.40 a week have beeen set on some. The tenants are being charged £15, so the speculators will immediately increase the rent by £2.40. My hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) has said that, in Elsecar in his constituency, the speculators' first action was to knock on the door and ask for £100 before starting on any improvements.

This serious problem affects nearly 20,000 houses. What stops councils from buying these British Coal houses? It is not cash. Bassetlaw council gained £6 million from selling off council houses, as the Government forced it to do. Mansfield council gained £5 million from receipts of council house sales. Those councils are willing to use that money, but the Government will not let them do so. The Government's arbitrary, dogmatic attitude is not to allow councils to use the cash from council house sales.

That is pretty stupid, but even more stupid is the fact that the law in Scotland is different. Scottish councils can use and are using that cash to buy the British Coal's houses. East Lothian council is actively negotiating to buy 130 British Coal houses. The funding comes from the authority's capital allocation. The negotiations are not subject to Scottish Office approval. I do not want to bore the House, but the facts and figures which the Library has given me should be put on the record. The Library's letter states: local authorities…cannot contain general borrowing approval for the Municipalisation. Circular 9/85 Capital programmes—Annex A issued in March 1985—gives the types of activity which receive block borrowing approval; municipalisation is excluded without the consent of the Secretary of State". That is what the Adjournment debate is all about. We are asking the Under-Secretary of State to bring English local authorities into line with Scottish local authorities. That can be done. The letter states: A large number of housing authorities in England therefore could buy NCB houses since most authorities are no longer receiving housing subsidy. These houses could be bought by using the capital allowance. The Library's letter continues: This presupposes, of course, that the local authorities have sufficient capital receipts to meet the cost of purchase, and that they have not already allocated the prescribed proportion (generally 20 per cent.) which they arc allowed to spend in addition to their HIP allocation. We are asking for the other 80 per cent. to be spent. We want English local authorities to have the same financial allocation that exists in Scotland to give them a chance to buy these housing estates.

I do not know whether the Under-Secretary of State has ever been in a mining area in the north of England. I do not wish to be derogatory, but this shows one of the problems that we have with Conservative Ministers. If the hon. Gentleman has been to that region, he would know that in many areas the metal struts of many houses have rotted and need massive attention. These houses are fetching about £2,500 at auction. The councils admit that in some cases £14,000 is needed to repair them. The Government have made such sums available where tenants have bought houses from the Coal Board. In the past, when councils have bought houses which have been found to be defective, the Government have come up with grants to rectify the problems. The councils are not asking for those grants; they are asking only to be allowed to use their money, just as councils in East Lothian and other parts of Scotland can. I hope that the Under-Secretary of State will say that the Secretary of State will allow that to happen.

10.13 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey)

I am grateful to the hon. Member for Bassetlaw (Mr. Ashton) for raising this important subject. It is good to see the number of hon. Members on both sides of the House who are showing a keen interest in it. I fully appreciate the anxieties felt in coalfield communities. He has described them, but I can also tell him, and his hon. Friends will confirm, that I went to look at these houese some time ago with members of the Coalfield Communities Campaign, who conducted me on a very full tour. I am grateful to my hon. Friend the Parliamentary Under-Secretary of State for Energy for his presence this evening. I know that he shares my interest and wishes to see the best possible outcome for all parties in this matter.

Before I go on to discuss the problems mentioned by the hon. Gentleman and by hon. Members on previous occasions, and the scope that there is for action on these issues, it is necessary for me to sketch in the historical background to the sale of British Coal housing so that we can get a better perspective of what is happening. The National Coal Board became a landlord on vesting day, 1 January 1947. It inherited a stock of 140,000 houses from the Coal Owners whose assets were taken into public ownership. Much of that housing was old and not in a good state of repair. Some of it was subsequently cleared. In the 1950s and the 1960s the National Coal Board, now known as British Coal, built 24,000 more houses under the aegis of the Coal Industry Housing Association, which was subsequently wound up. Some of the total stock of housing was sold to local authorities and some to the sitting tenants at a discount of 25 per cent. progressively over this period. By 1976 the board had disposed of 78,000 houses and a further 86,000 remained in its ownership.

The board decided to withdraw from the provision of housing in 1976, and thought that the disposal of its houses would take 10 years. Tenants were offered 50 per cent. discounts, 100 per cent mortgages and help with legal fees. By 1985 the board had 27,000 houses left, and it decided to complete the sale of these houses in three years. The terms were that tenants be given three months in which to decide whether they were interested in buying. We must remember that the option had been open to them since 1976. If they decided not to buy, the properties were to be sold to local authorities and housing associations. Failing that, they would be released on the open market.

To date, 69 per cent. of British Coal's stock of houses, the vast majority, have been sold to the tenants and a further 20 per cent. to local authorities and housing associations. The expectation is that the majority of the remaining 15,700 houses will be sold to sitting tenants, local authorities and housing associations—not necessarily in the same proportions. Therefore, the number of houses that will remain to be sold to private landlords will be very small, particularly when seen in relation to the enormous numbers of houses that were once owned by the board. The vast majority of the sales have been successful and untroubled by complications.

Mr. William O'Brien (Normanton)

I am grateful to the Minister for allowing me to intervene on this point about the sale of houses, because in my constituency, in Alton in Leeds, there is an estate of 210 houses that were owned by British Coal. These were sold last year. I should like to quote from a letter that I received from the chairman of the housing committee in Leeds, Councillor Bill Kilgallon. The letter says: The Airey form of construction, and likely long-term remedial costs associated with these, appears to have frightened off some of the speculators, although it now seems that a London property firm, Manchester Square Associates, are the purchasers… Officers have met managing agents for this organisation but their long-term intentions are not known, apart from the site having been offered for sale, by them, in recent weeks. In other words, there is a knock-on effect for the tenants of the houses. The estate is deteriorating and there is no specified programme for what is to happen to it. That is the situation that confronts the tenants on the estates in these areas. Would the Minister take that on hoard and try to do something to stop this kind of Rachmanism that we find in the sale of British Coal houses?

Mr. Tracey

The hon. Member will know that I always take careful note of points like that which are made to me, and I certainly undertake to look into what he has said. I repeat that the vast majority of the sales have been successful and untroubled by complications. This evening we are talking about a small minority of houses. Nevertheless the points raised by the hon. Member and by his hon. Friend the Member for Bassetlaw (Mr. Ashton) will be taken into account by us.

I understand that the board built over 6,000 of the prefabricated reinforced concrete houses, known as PRC houses for short. They are now designated under the housing defects legislation. Over two thirds were sold to sitting tenants before it was known that they were of a defective type, and many of these will be entitled to assistance from their local authority under those provisions, provided that they bought before the cut-off date for their type of house. British Coal has been given no financial assistance to deal with its remaining PRC houses and does not believe that its tenants should take on the potentially heavy liability of defective housing.

Mr. Andy Stewart (Sherwood)

I am delighted to hear the Minister undertaking to look at all the points raised by Opposition Members. I can only speak as I find. I have been dealing with this problem for 12 months. British Coal has been co-operative, has given me a moratorium on any PRC houses, has allowed my tenants time to explore all the avenues for buying.

Two years ago, if a local authority or a housing association were to buy, British Coal allowed a 30 per cent. discount. That has gone. I would like the Minister to look into this to see whether his Department can reintroduce it. We have to have a policy on PRC houses because some day they will have to be repaired. It is no good bucking the issue now when we know for certain that the taxpayer will have to pick up the bill later on.

Mr. Tracey

I can certainly confirm what my hon. Friend the Member for Sherwood (Mr. Stewart) said. I can confirm that he has been in touch with British Coal on behalf of his constituents, and has had considerable success. British Coal has said that it will not sell these PRC houses to its tenants and it has for the moment suspended auctions on this sort of house, but I shall be saying later that my hon. Friend the Parliamentary Under-Secretary of State for Energy and colleagues from that Department and from the Department of the Environment will be seeing British Coal and will take these further points to it. I would point out that only 700 PRC houses remain to be sold. That is all. That is a very small proportion of the total of 15,000 houses from the British Coal estates which remain to be sold.

Although it is a public body, British Coal has, of course, been a very large private landlord. Its tenants are protected by the Rent Acts. It has decided it does not wish to be a landlord any longer, and this is consistent with the Government's policy generally on the disposal of public sector houses and land. This decision, and decisions on the way it chooses to withdraw from the rental market, have been entirely the responsibility of British Coal's management.

At the same time it, and any body to whom it may sell its properties are bound by the Rent Acts and the Landlord and Tenants Acts with certain inescapable obligations prescribed by that legislation. My right hon. Friend the Secretary of State for the Environment can no more dictate British Coal's policies than he can any other landlord's. He can offer assistance or advice if it is wanted; it would not be proper for him to intervene. Hon. Members of course fully realise that.

Mr. Dennis Skinner (Bolsover)

Why can they not do that in Scotland?

Mr. Tracey

I shall deal with Scotland in a moment.

My hon. Friend the Parliamentary Under-Secretary of State for Energy and I are indeed alive to the problems that are alleged to have been occurring and are preparing to discuss them with the management of British Coal. Our two Departments are in contact on the issues and share a common concern that we should reach the best solution for the tenants compatible with the Government's objectives that British Coal should reach break-even by 1988–89.

I think it would be helpful if I say a few words about some of the problems raised this evening by the hon. Member for Bassetlaw. It has been alleged that some of the houses sold at auction have then been resold quickly, and that the tenants do not know who their new landlord is. I must say quite clearly that tenants have a legal right to know who their landlord is. [HON. MEMBERS: "Tell them."] I am telling the House that now. That is a fact. A new landlord must inform tenants of his name and address when he acquires the property. The tenant may ask for if from the agent or person who collects the rent, and the agent must supply it within 21 days. The agent or landlord may be fined up to £2,000 for failing to meet these requirements. I am prepared to tell the House that I believe that it is deplorable if landlords or their agents are breaking the law in this respect.

It has also been alleged that the new landlords are failing to tell tenants what their rent is when they take over the property, demanding large arrears payments and then initiating possession proceedings against tenants who fail to pay. The tenants, I make it quite clear, are protected by the Rent Acts under their new landlords as they were under British Coal. They are entitled to have fair rents registered for their property. They are entitled to a rent book if they pay their rent weekly. They do not have to pay anything more than the fair rent, and a new landlord cannot charge them an additional sum on top or take them to court for failing to pay it. A landlord cannot evict a tenant without going through the proper processes of the law. A tenant in arrears may be taken to court, but the court will award possession to the landlord only if it thinks it is reasonable to do so. If landlords are breaking the law, I deplore it. I cannot say this too strongly. I hope this debate will bring the tenants' rights to the attention of such landlords and, if any have failed in their statutory duties, that they set about complying with the law as soon as possible.

I believe the hon. Member's own authority has bought some British Coal houses at auction out of its capital receipts. I do not feel in general that this is the best use of resources, but it may have made sense to the authority in this particular case. There are restrictions on the amount of capital receipts that local authorities can use in any one year because the use of those receipts for capital spending does affect the public sector borrowing requirement. Capital receipts which are not spent immediately are mostly used to reduce borrowing; they diminish public borrowing in the year in which they arise, but must be replaced by fresh borrowings when they come to be used for capital spending. I remind the House that the external debt of English local authorities is already about £30 billion. We are not depriving authorities of their receipts, but simply requiring their use to be spread over time.

On the point made by the hon. Member about Scottish authorities, they are buying British Coal houses with their capital receipts. I must say that the Scottish capital control system in important respects is different from the English system. Although Scottish authorities are free to use the full amount of capital receipts arising in a year they cannot carry forward unused capital receipts to future years. To change to this system would disadvantage English authorities who can of course carry forward unused capital receipts. I do not think English authorities would want the Scottish system.

I sympathise with the view that the solution might be in some cases for registered housing associations to take over these properties. The Housing Corporation has particular priorities within its approved development programme, and was given a £20 million increase specifically for new schemes mixing 30 per cent. grant with private finance. Within its priorities it is for the corporation to decide on the allocation of its resources. It will need to see specific costed proposals from registered housing associations on these properties and it is for it to decide on each scheme on its merits.

May I say that 89 per cent. of the 158,000 houses disposed of to date by British Coal have been successfully sold—

The Question having been proposed at Ten o'clock and the debate having continued for half an hour, MR. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.

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