HC Deb 31 January 1989 vol 146 cc193-4

5.6 pm

Mr. Julian Brazier (Canterbury)

I beg to move, That leave be given to bring in a Bill to establish a house purchase savings scheme for the armed forces enjoying the same tax relief as houses for owner occupiers and the same treatment under the Building Societies Act 1987.

My Bill seeks to tackle an injustice that has affected the armed forces for a generation. The present Government have a good record on armed forces pay. Indeed, they have applied in full the recommendations of the pay review body in every year since they were elected. But the core of the Thatcher revolution, the heart of the new prosperity, is the ownership of a home. In the country as a whole, approximately 64 per cent. of the population live in owner-occupied accommodation. Within the armed forces, among other ranks fewer than a quarter own houses, and even among officers the figure is below the national average. Moreover, those who do own houses have very severe problems in so doing, as I shall explain in a moment.

Let us consider the position of a sergeant major, or even a major, who retires after many years of service with the bulk of his earning capability behind him and without even the first toehold on the property ladder. A number of such people have ended up commuting the bulk of their public service pensions to buy the most modest little dwellings. Some have simply ended up homeless, and I have had a number of them in my surgeries.

A sergeant whom I know, who has served 21 years in the Army, including 11 tours on active service in Ulster, said: I have seen a corporal opposite me with eighteen years service and a sergeant with twenty-two years service round the corner evicted by bailiffs. I have three children at school. I do not understand why I should be joining the back of a queue behind delinquents and squatters for a council house after serving my country for over twenty years. Had he not joined the Army, that man would almost certainly have been an owner-occupier rather than applying for a council tenancy. I have been approached by any number of former and serving Army—officers most of them worried about the men who have served under them rather than about their own position.

The way in which the Ministry of Defence has tried to tackle this difficulty has been to encourage service men to buy their own houses while they are serving. This has achieved much progress in the Navy and Air Force because most of their personnel serve in this country, but unfortunately in the Army just over half the trained strength serve outside mainland Britain. The problems of buying a house in Ulster are every bit as serious as in Germany or elsewhere abroad. The result is that for the soldier, unlike his civilian counterpart or his counterpart in the other two services, buying a house does not mean buying a home—it means becoming an absentee landlord.

Is it really fair to ask a young family to take on the burden of renting their quarters, paying the mortgage on a house of their own and trying desperately to get a tenant to balance the books? Even if they get a tenant, and no scheme can guarantee that, they have to pay tax on the rent from the tenant, but they get no tax relief on the rent that they pay for their quarters and they also have to pay agents' fees. The result, of course, is that the soldier rapidly decides that the best way to escape all the problems that arise, with or without tenants, is to leave the Army, and a growing proportion of soldiers are doing so. Premature voluntary release from the Army is now up 73 per cent. on what was already an unsatisfactory figure five years ago.

The sad thing is that it is going up fastest among the minority who have bought houses. Their wives simply get desperate. For example, Canterbury's own regiment—the Queen's Regiment—has three battalions, one in Germany, one in Leicester, and one in Tidworth. How on earth is a corporal in Germany or Ulster expected to make mortgage payments in one place and pay rent in another? His wife almost certainly cannot get a job as there are no jobs for wives in BAOR. What is happening in the Queen's Regiment, as in so many others, is that, as soon as a couple have managed to buy a house, the pressure is on the soldier to leave the Army.

The way the problem is tackled by every other employer I know who sends people abroad—including the Civil Service, clerks and drivers in the Foreign Office, teachers sent abroad, as well as the whole of the private sector—is that anyone who goes abroad lives free. As that would be unrealistically expensive for the Army, I am asking for a much more modest scheme which would cost the taxpayer very little. I am asking for a housing savings scheme to be established which would attract the same tax benefits that the rest of us get as owner-occupiers but without forcing the soldier to buy and then let a house. The particular scheme that I have put to the Minister—there is no time for me to go into details now—involves allowing the soldier effectively to buy a quarter, but not that physical building—he buys at a fixed national average price on an index, and when he moves out has to sell back at the new index price.

I have been through the scheme in detail with two building societies. They tell me that the index already exists in outline and that in principle they would be willing to lend against this form of security. The scheme would not cost the taxpayer a penny beyond the amount already available from the taxpayer if the man goes out and buys a house, but it has the enormous advantage that he is not under any pressure to leave the Army when tenant-related problems arise.

I do not wish to push the details of any one particular scheme too hard, but if we are to keep a modern Army together, with the lean recruiting years of the 1990s coming, and if we want to keep the best people in the armed forces, it is essential to introduce a scheme which allows service men to accumulate capital while serving so that they can own a house at the end of their service, with the same tax advantages as their civilian counterparts but without having a house hundreds of miles away that they have to try desperately to let. This is a very grave problem, and one which must be tackled soon. It is a grave injustice and also a foolish injustice because it is driving many of the best people out of the Army.

Question put and agreed to.

Bill ordered to be brought in by Mr. Julian Brazier, Sir Geoffrey Johnson Smith, Sir William Clark, Sir Jim Spicer, Sir Marcus Fox, Sir Antony Buck, Sir Charles Morrison, Mr. John Heddle, Mr. David Evans, Mr. Keith Mans, Mr. Ian Taylor and Mr. Jacques Arnold.