Armed Forces (Housing) (Hansard, 26 April 1988)

§ Mr. Julian Brazier (Canterbury)

I beg to move, That leave be given to bring in a Bill to make provision to facilitate the private housing of members of the armed forces during service and after retirement. This Government have a good record on armed forces' pay. One of their first actions on taking office in 1979 was to implement in full the recommendations of the Armed Forces Pay Review Body. Since then, they have continued to do that in full every successive year. Nevertheless, I believe that a grave injustice exists which does not result from any deliberate policy of this or any previous Government, but arises from the nature of service itself in our armed forces.

The first priority of most married couples today, and, indeed, of many single people, is to find themselves a house to buy. Yet, in the Army, fewer than one quarter of married personnel own their own homes.

In the Air Force, the figure is two fifths, as compared with a national average of two thirds. This causes intense worry to many service men. One can imagine the position of a man in his mid-forties—perhaps a sergeant major, a colonel or a squadron leader—who has given 25 years' service to the Crown and has not yet, as he comes out of the service, made that first step on to the lowest rung of the housing ladder, when people in equivalent professions would probably be on the second or third step.

The difficulty arises because, in the Army and the Royal Air Force, service men move from base to base. The problem does not arise in the third service. Home ownership in the Navy, thanks to an excellent scheme, is not a problem. The sailors move off in their ships leaving their families static. In a nutshell, the problem is that, if a soldier or airman chooses to buy a house and is then posted—as he assuredly will be, unless he is close to the end of his service—he has two unattractive options.

On the one hand, he can leave his family behind. If he does that, it is bad for the family and for the service. One can imagine, for example, the position of a regiment in Osnabrüch or Hamelin. If all the officers' wives were living in houses in England, who would look after the junior ranks' wives—girls in their late teens and early 20s—when their husbands were away for weeks on exercise?

The other option is for the service man to move to a quarter wherever the posting is. Unfortunately, unlike what happens in every other expatriate organisation that I know, including the Foreign Office and most private companies, if a service man is posted abroad, he has to pay rent for his house there. That rent is not tax relievable, but, if he owns a house in England and lets it, he has to pay tax on that rent, if he can find a tenant in the first place. Although there is shortage of rented accommodation at the bottom end of the sector, that is not always the case, as you, Mr. Speaker, may have noticed in the Sunday papers. There is a shortage of tenants in many areas of the rented market.

However, the problems facing the service man are not only financial. If he leaves behind a house and goes to another country, the problems with tenants can be phenomenal. Just this weekend, I heard that two of my closest friends in the armed forces had their house beaten up in the most outrageous fashion by tenants and much of the damage is not insurable.

210 That explains why home ownership in the Army and the Air Force is so low and why it is not in the interests of the service that it should be higher. My Bill puts forward two suggestions that could go some way towards closing the breach by assisting members of the armed forces eventually to own their own homes, without doing so during the bulk of their service.

The first is a change in the Income and Corporation Taxes Act 1970. That would enable insurance companies to offer endowment policies for service men with a view to their eventually buying houses, but on the basis that they would not be subject by law to the normal minimum period—in most cases seven years—before they could withdraw their money.

I suggest that service men should be allowed to borrow and put a capital sum into such a scheme—endowment policies are protected from taxation and grow tax-free:—and be allowed to pay off the loans like a mortgage on a house, subject to the same tax relief that the rest of us enjoy on a house. That would not conceptually be a new tax relief. My right hon. Friend the Prime Minister stressed only last week the importance of the £30,000 tax relief to families. My proposal would bring to our soldiers and airmen the same tax relief that we enjoy, but instead it would apply to a nest egg which eventually, towards the end of service, the service men would use to pay part of the price of their houses. This could lead to a net saving to I he Exchequer. It would, for example, stem the tremendous flow of Royal Air Force pilots—the cost of training is £3 million per pilot—who often cite housing as their principal reason for leaving early.

My other proposal is to do with the right-to-buy legislation. In December 1983, the Government passed a number of excellent measures which gave service men good rights to buy their council houses after a relatively short period, taking account of their time in the armed forces as well as the time that they had occupied their houses. Unfortunately, that legislation is applicable only if the service man has managed to obtain a council house.

I am afraid that some councils do not give service men fair parity. Thirty years ago, Duncan Sandys, Minister of Housing and Local Government and later Minister of Defence, said: That these men should be penalised in this way, solely by reason of the fact that they have been serving their country, is a most grievous injustice, which should not be allowed to continue."—[Official Report, 1 March 1955; Vol. 537, c. 1887.] Brent council's housing policy—this is one of many examples—is: servicemen who enlisted from the Borough who are discharged from the Forces will only be assisted if they fall within a 'priority group' … Those who qualify for consideration will face a very long wait. I do not ask that service men be given special privileges; I ask that they be allowed to join council house waiting lists while they are serving, so by the end of their service most will have reached the point where they are entitled to a dwelling. As well as being justice for our soldiers, sailors and airmen, this would take the strain off those councils with service bases within their areas which ultimately find themselves assisting large numbers of service men who are forced to declare themselves homeless.

In summary, the Government have a good record on armed forces pay, but this one gaping hole exists. Our soldiers and airmen are there to defend us. We must give them similar opportunities to enjoy the same housing as 211 we do, but we must not do it by saying to them, "You should buy a house," in the full knowledge that it is not good for the forces for them to buy a house early in their service. My Bill will go a modest way in two respects towards filling this gap.