HC Deb 14 June 1989 vol 154 cc1029-47

Part V of the Housing Act 1985 (the Right to Buy) shall be amended by the inclusion of the following section after Section 153: 153A—(1) A secure tenant shall not be entitled to exercise the Right to Buy under this Part in respect of a dwelling house in a rural area if he enters into a shared ownership lease of that dwelling house after the 30th June 1989 unless he was a tenant of such house before the shared ownership lease was entered into. (2) No condition shall be attached by the Secretary of State to the payment of subsidy to a housing association or local housing authority, or to the disposal of land by a local housing authority, which would require such association or authority to grant shared owners a right to acquire the freehold. (3) For the purposes of this section a rural area means—

  1. (a) a national park;
  2. (b) an area designated under section 87 of the National Parks and Access to the Countryside Act 1949 as an area of outstanding natural beauty; or
  3. (c) an area designated by order of the Secretary of State as a rural area under section 157.".'.—[Mr. Jopling.]

Brought up, and read the First time.

Mr. Michael Jopling (Westmorland and Lonsdale)

I beg to move, That the clause be read a Second time.

Madam Deputy Speaker (Miss Betty Boothroyd)

With this we shall discuss the following amendments to the new clause: (a), in line 1, leave out 'Part V' and insert 'Part II'.

(b), in line 1, leave out `(the Right to Buy)' and insert `(Provision of Housing Accommodation)'. (c), in line 2, leave out 'Section 153' and insert 'Section 32'.

(d), in line 3, leave out '153A' and insert '32A'.

(e), in line 3, leave out subsection (1).

(f), in line 7, leave out '(2)' and insert `(1) In a rural area'. (g), in line 9, after 'land', insert `by a housing association or'. (h), in line 10, leave out 'the freehold' and insert 'more than a 62½ per cent. share'.

Mr. Jopling

For a long time many hon. Members, especially those who represent rural areas, have felt that more needed to be done to provide greater opportunities for local people to continue to live and work in the rural areas where they were born and brought up. I am not alone in hearing the pleas of my constituents and people throughout Britain's rural areas who are much too frequently priced out by those seeking second or holiday homes. That prevents people from staying in the areas where they have been born and brought up. The House will not be surprised to hear that that is a particular problem in the Lake district, which falls within my constituency, and the same problem can be found in all rural areas.

It is necessary to take new initiatives to make housing in rural areas more easily available to local people.

Dame Elaine Kellett-Bowman

Is there not a substantial effect on schools in rural areas? If properties are purchased for second or holiday homes, there are fewer children to attend those schools, and they might have to close.

Mr. Jopling

My hon. Friend, as usual, is right, but I should get into trouble with you, Madam Deputy Speaker, if I allowed myself to be diverted by her understandable anxieties, which I share, about rural schools.

Last year, I moved a new clause to the Housing Bill, which the Government, in their wisdom, accepted. I believe that it has gone some way to helping local people in rural areas to live where they were born and brought up. This year, I moved new clause 22 on the advice, partly, of the Association of District Councils and the National Federation of Housing Associations. Both bodies strongly feel that it is necessary to change the Bill to embrace the provisions of new clause 22.

I am extremely grateful to the many Conservative Members who have been kind enough to sign my new clause—seven new names were added to it this morning—and a number of others, who have told me that they support it although they have not signed it. I have a wad of copy letters that have been written by various district councils throughout the country to me or my hon. Friends asking us to support the new clause.

Mr. Battle

If the Government do not concede the points that the right hon. Gentleman is making, will he confirm that he will be prepared to press the new clause to a vote?

Mr. Jopling

The hon. Gentleman must allow me to make my own speech. I fully expect the Government to see the sense of my argument. If he had looked at the Order Paper over the past few weeks, he would be aware that enough Conservative Members have supported the new clause to put the fear of God into the Government Chief Whip.

The purpose of the new clause is to create, and, much more important, to maintain, a permanent stock of houses in rural areas for those who are not sufficiently well off to buy more than a share in a house as a first step towards full house ownership. All hon. Members are aware of constituents to whom we have said, "Why don't you buy a house?" only for them to say, "We can't afford to do so." However, they could afford to buy a half share. At present, the law says that people can buy a share in a house—say, 50 per cent.—and then staircase their way up to 100 per cent. Of course that is good, but the downside is that the house is lost for future part owners to take the first step on the lower rungs of the ladder, which is so important in the move to full ownership.

I received a letter within the past few days from an organisation called North Housing, which is signed by Mr. John Sutcliffe, whom many of my colleagues will recall as an hon. Member in the early 1970s. It is interesting to note that the address of North Housing is Ridley house in Newcastle, and I understand that the organisation North Housing was set up by the family of the Secretary of State for the Environment years ago. The letter says: It clearly shows that over time, the ethos of shared ownership is being seriously undermined if second and subsequent purchasers are unable to be helped in the same way as first purchasers. That is a familiar theme that I have heard from the organisations which are so keen on new clause 22.

New clause 22 allows part ownership to rise to a maximum of 62.5 per cent., which is the figure proposed in the amendments tabled by my hon. Friend the Member for Devizes (Sir C. Morrison). I have collaborated with him in those amendments, which I fully support and accept. They were drawn up on the recommendation of the organisations which have proposed these measures. The figure of 62.5 per cent. is not sacrosanct, because it is open to discussion. It means that, once the part owner has reached 62.5 per cent. of ownership of the house, he then has two options. He can sit pat and accept that he will never own 100 per cent. of the house. If he is content to continue to own only 62.5 per cent., as we propose, he could do so for as long as he wanted.

The second option is that he could move out of the house, and put the 62.5 per cent. of the value of the house, which is his nest egg, enhanced as it probably would be by the increased value of the house during the time that he had been paying it off, into another house, thus setting off again to move towards 100 per cent. ownership of that second house. The advantage of that arrangement under new clause 22 is that the first house would revert to the ownership of either the local authority or the housing association and it would soon be available for another family to embark on the same process of part ownership, moving eventually to full ownership of a different house.

The Government have recognised already the need to manage the housing market to take account of the problem of rural housing. I very much welcome the Government's announcement in February of their assistance for local people in rural areas. The Government have said that they intend to get over the problem I have explained by allowing part owners of houses to staircase up to 100 per cent. ownership, but then the Government propose to apply an artificial constraint by allowing those owners who have staircased up to 100 per cent. to sell back only to the local authority or housing association from which they originally bought the house.

I believe that that proposal is a move forward. However, it means that the time scale between houses becoming available the second time for part ownership by low-income families will be much more extended than it would be if the new clause was accepted. If we move towards my suggestion of 62.5 per cent., those houses will become available again more quickly for another family to embark on that process. If the new clause is not accepted, the Government's proposal would mean that the pool of houses owned by a local authority or a housing association would be a far less effective means of getting low-income families into the business of home ownership and on to the home ownership ladder.

I hope that the Government will accept the large volume of opinion both inside and outside the House in support of this new clause. I accept that its drafting could be deficient, and I am not prepared to go to the wall on the exact wording of its provisions. However, what I want to hear tonight and what I am determined to hear tonight from the Government is that they accept the principle and are prepared to introduce a professionally drafted amendment in another place to encourage the availability for part ownership of the pool of houses about which I have spoken. In any case, I assure the Government that they will hear a great deal more about this issue when the Bill reaches another place.

11.15 pm

Finally, I am not in the business of creating a device through this new clause whereby local authorities could use the provisions that I am proposing to escape from their responsibilities over the right to buy. I am perfectly content to see a ceiling in the new clause to ensure that the number of houses that can be made available for part ownership is kept under control, so that local authorities cannot totally escape their responsibilities under the right-to-buy legislation.

I hope that, having heard the argument and having heard the large volume of support for the new clause both inside and outside the House, the Government will now be prepared to say that they will move along these lines.

Sir Charles Morrison (Devizes)

I wish to take only a few moments of the House's time to speak to my amendments (a) to (h) to new clause 22 and to support wholeheartedly everything that my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) has said. As he has already said, my amendments have been tabled in agreement with him and amount simply to improvements on the first proposals in new clause 22. Those improvements have been suggested by the Association of District Councils and by the housing associations. I hope that they and the new clause will be accepted.

In face of the support for my right hon. Friend's new clause, his determination and the excellent way in which he moved it, I can only believe that the Government will, with great alacrity, decide to accept the principles. If the new clause were accepted, it would strike a considerable blow for the campaign to improve housing in rural areas.

We know that the National Association of Local Councils supports the new clause, together with the Association of District Councils. The Country Landowners Association has stated: It is generally acknowledged that there is an acute shortage of affordable homes for low paid workers in rural areas. Those of us who represent rural areas echo the words of the Country Landowners Association. However, I sometimes have to admit that I am not yet convinced that the Department of the Environment has fully taken on board the shortage of affordable homes for low-paid workers in rural areas. Tonight the Government have an opportunity not only to allay my doubts but to demonstrate clearly that they are aware of the problem and that they are prepared to take a step forward to do something about it by supporting my right hon. Friend's new clause.

Mr. Ridley

I intervene at this stage to, I hope, reassure my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) and my hon. Friend the Member for Devizes (Sir C. Morrison) that the arguments that they have been putting are not only shared on this Bench, but have already been dealt with in a way that I hope to convince them they will find more satisfactory than what they have themselves proposed.

I accept the argument of my right hon. Friend the Member for Westmorland and Lonsdale that we should allow shared ownership housing in certain rural areas to be retained as low-cost housing for future generations of local people. At present, local authorities need my consent to dispose of housing, and consent is given for a disposal on shared ownership terms only if the lease entitles the shared owner to staircase to full ownership. Similarly, the Housing Corporation will pay grant on a housing association shared ownership scheme only if the lease provides for full staircasing.

I should mention that the new clause is technically defective. It rests on a misconception. Shared owners will be long leaseholders and long leaseholders are not secure tenants; they therefore do not currently have the right to buy. A shared owner who staircases to full ownership does so under the provisions of the lease, not by exercising the statutory right to buy. Thus, the new clause is wrong.

I am grateful to my hon. Friend the Member for Devizes for his speech. He tried to improve the drafting, but it is still defective. To achieve the objective of my right hon. Friend the Member for Westmorland and Lonsdale and my hon. Friend the Member for Devizes, it is not an amendment that would be needed, but a change of policy. I do not, however, rest my case on that.

My right hon. Friend the Member for Westmorland and Lonsdale explained why some local authorities and housing associations wish to be able to grant shared ownership leases under which there is no right to staircase to full ownership. Their concern is to ensure that, in areas where there is only a limited amount of housing, property continues to be available to people who cannot afford to buy outright. I share that concern.

I am aware of the difficulties facing young people who cannot compete with the prices paid by incomers. I have therefore already done something about it with the local needs planning circular, which should give local authorities a great opportunity to increase the supply of low-cost housing in rural areas. I also agree that we need a way to retain shared ownership housing as low-cost housing once the first beneficiary has moved on. Therefore, we decided, and announced on 7 February, that in rural areas where there could be a real problem—such as those to which my right hon. Friend the Member for Westmorland and Lonsdale referred—in replacing a shared ownership property once the shared owner has moved on, having sold, we will allow a housing association to take a pre-emptive right to buy back the property that it has provided at market prices. We will give the same right where a private landowner in a rural area has originally given land on condition that it is used for low-cost housing.

The proposal meets all the objectives of my right hon. Friend the Member for Westmorland and Lonsdale, but it meets a further objective, too. It not only allows the property to he recycled as low-cost housing to a new shared owner, who might at that stage be ready to ascend the housing ladder, but, importantly, it allows the shared owner to become a full owner—as my right hon. Friend said he would like him to be—and it does not deny him the right to 100 per cent. of the value of his home.

I cannot accept the thinking of my right hon. Friend that 62.5 per cent. of the value of a home is sufficient. I do not know why he should believe that those who engage in the staircasing route, whereby they receive very little, if any, subsidy at all, to home ownership should be put in the position where they can achieve only 62.5 per cent., whereas the council tenant not only receives discount, which can be up to 55 or 60 per cent. in some cases—a huge advantage—but is allowed to progress to 100 per cent. by exercising his right to buy.

The discrimination that my right hon. Friend is suggesting against people who happen to be a little better off and undertake shared ownership as opposed to renting, followed by the right to buy from a council or a housing association, does not appear to me to be worthy of his concern for the welfare of local people of low means in the rural areas. I do not believe that the House would like to take a step that disadvantages people to this extent. I sincerely commend to the House the proposal that I have put forward, which offers the best of both worlds, in that the tenant or shared owner can become a 100 per cent. owner—and the house can be used a second time for local needs for low-cost ownership.

Mr. W. Benyon (Milton Keynes)


Mr. Ridley

Let me anticipate what I think my hon. Friend was going to ask.

If the housing association has to buy back at market value, is not the original shared owner being given a windfall at the community's or generous landowner's expense? The answer is emphatically no. This is a common misconception. The only element of subsidy to the shared owner is in the rent charged, which will decrease as he buys more of the equity. If the shared owner has staircased up to 100 per cent., he will have paid the full market value to the housing association, albeit in stages. That means, for instance, that the benefit of any cheap or free land or initial grant provided by the Housing Corporation remains with the property and is available for the benefit of the next occupier as well.

I have here a sheet of calculations showing all this in a typical case. By coincidence, I think that my hon. Friend the Member for Fylde (Mr. Jack), who is sitting behind me, has a number of copies. Any hon. Member who wishes to see one will find that the figures in the case I have mentioned prove my point. The subsidy is available for the next shared owner.

My right hon. Friend suggested that there would be a quicker turnover if, at 62.5 per cent., the shared owner had to get out if he wished to progress to 100 per cent. The house would indeed be vacated more quickly if he did that; but what a way to achieve—

Mr. Hardy

On a point of order, Madam Deputy Speaker. I am sorry to interrupt the Secretary of State, but it seems that Conservative Members have been supplied with copies of this document, yet the Secretary of State has passed one only to my hon. Friend the Member for Hammersmith (Mr. Soley). Some of us would like to see the document, and believe that we are as entitled as other Members to see it.

Mr. Ridley

I shall make sure that the hon. Gentleman gets a copy as soon as possible.

I reinforce the point that, if a shared owner cannot get past 62.5 per cent., he does not have the resources to go and buy elsewhere. So he will stay in the house at 62.5 per cent. and will not free it for a new occupant.

The related question is: will the housing association be able to afford to buy back? The answer is yes. In the first place, the money paid over in stages by the shared owner will be available. If that is not enough because of the vagaries of changes in house values or inflation, provided there is value for money, the Housing Corporation will top it up. What my right hon. Friend is assured by this scheme, with the added and priceless advantage that the local person is not deprived of the chance to become a full owner and is not discriminated against in the way in which he would be by my right hon. Friend's new clause—

Sir Peter Emery (Honiton)

I have been listening closely, and I hope that my right hon. Friend will not have to make a speech to reply to my question. I do not understand how, when a house has been disposed of after staircasing to 100 per cent., it will return to being cheap housing once it is at market value. The house will no longer provide cheap housing in an agricultural area: it will remain at market value.

Mr. Ridley

I shall have to give a few illustrative figures to answer my hon. Friend. Let us suppose the subsidy was originally £20,000, through cheap land or a grant, that the house has a market value of £100,000 and that the shared owner has staircased to full ownership. Before he gets there, he will have paid £100,000 for the house. It cost the housing association £80,000 to build the house. It received a grant of £20,000 and will receive back the £100,000 plus the cheap land. The original benefit of the cheap land or the original grant reverts to the housing association when it pre-empts and buys. The figures, which I hope my hon. Friends will study, prove that to be the case.

The new clause is not as good a way of meeting my right hon. Friend's objective as the way that I have outlined. Our way has the advantage of helping the very people we are trying to help—local people in rural areas who find it hard to acquire a house.

11.30 pm
Mr. A. J. Beith (Berwick-upon-Tweed)

I want to deal with some of the arguments that the Secretary of State has advanced. However, I cannot do so without first commending the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) for bringing this matter before the House and for taking the trouble to make sure that many other hon. Members were aware of it. He has done rural areas a service by doing so.

The Secretary of State said that the main counter-argument with which he had to deal was that there was a windfall gain. That is not the main counter-argument with which he has to deal, and it is certainly not an argument that I advance as an objection to the way that the Secretary of State proposes to proceed. It would be a long and fruitless occupation to try to wipe windfall gains out of the housing market. The argument is about whether there will continue to be available housing of various kinds and, in this instance, housing which people on relatively low incomes can use as a means to get on to the housing ladder.

It is part of the Secretary of State's argument that 65 or 67 per cent. was not a sufficient objective for people to seek to attain as they went up the staircase. As the right hon. Member for Westmorland and Lonsdale said, people do not stick at 65 or 67 per cent. Indeed, Northumberland community council has suggested that 90 per cent. is appropriate.

All we are trying to do is safeguard the future availability of the house for this particular purpose. At 90 per cent. shared equity, a person's opportunity of buying on the open market is obviously much greater than at 67 per cent.

Mr. Ridley

What about 100 per cent.? That is better still.

Mr. Beith

It is precisely because we wish to get the house back into availability for the purpose of allowing—

Mr. Ridley


Mr. Beith

If the Secretary of State will allow me to finish the sentence, I will allow him to intervene.

It is to allow the house to come back into availability so that people in rural areas can become owners of houses.

Mr. Ridley

If the housing association has the right to buy it back, whether at 62, 90 or 100 per cent., it can come back into use as low-cost housing. Why does the hon. Gentleman want to stop at 90 per cent., when the same result is achieved at 100 per cent.—or did he not listen to what I said?

Mr. Beith

It must be obvious that I listened very carefully to the Secretary of State. If he will listen carefully to me, he will understand why I do not accept that argument. I do not accept it because it will mean that there will be no turnover of houses in areas where there are very few. The Secretary of State must realise, because he has been to my constituency and has seen the scale of the project that we are talking about, that in many communities there may be only two or four such houses. One of the ways in which those houses can come back into availability is if someone goes up the staircase and is able to buy a house on the open market. When that happens, that house can come back to the housing association, not at the end of the tenant's life but at a much earlier stage, and be available to someone at the bottom of the ladder. That person can then start to work his way up.

The key to the argument is the few houses that are available. The Secretary of State's answer to that is, "It is all right because I have devised new planning and tax relief procedures which will allow more such houses to be built". That fails to address the central problem in many of the areas that we are talking about which is that additional building is either precluded or difficult. It may be difficult because we are talking about beauty spots, outstanding places and villages in national parks and areas of outstanding natural beauty. In such areas, the cost of new building, taking into account the overwhelming demand that it should be wholly in character with the existing village, can be astronomical.

Sir Geoffrey Johnson Smith (Wealden)

The hon. Gentleman need not concern himself only with beauty spots. There are many areas of the south-east which are attractive but would not be described as beauty spots, which suffer considerably from a shortage of land. The people who live there would not want to see more building indiscriminately dotted around the countryside.

Mr. Beith

I accept that, but I wanted to focus the Secretary of State's mind on the problem we face, for example, in some of the beauty spots of the north-east of England, whether in the Lake District, the hon. Gentleman's constituency, or in Northumberland. There is the added problem of high land costs in the south of England.

There is the general planning argument that we will destroy the beauty and attraction of an area if we build more houses there. Hon. Members will be aware of places in the Lake District, or coastal fishing villages tucked into a cleft of rock, in which there is no more room and to which it would be impossible to add by building more houses without destroying the attractions which have led to them being designated areas of natural beauty. Because the Secretary of State has failed to address that problem, he fails to recognise that his solution, although it may help in some areas, will not help in all the places about which we are concerned.

The Secretary of State took the trouble to come to my constituency to open a small housing scheme, where he discovered how high rents can he in such areas. In doing so, he exposed himself to a barrage of advice about rural housing matters. [Interruption.] I hope the right hon. Gentleman will listen to what I am saying. He seems to be preoccupied in briefing his junior Minister, the hon. Member for Rossendale and Darwen (Mr. Trippier), on some other matter. I hope he will listen now, as he listened when he came to my area to people of all political persuasions who wanted to ensure that there were adequate opportunities for housing in rural areas for those on low incomes. I do not think that he listened sufficiently to that advice. He must now reconsider the reply that he gave to the right hon. Member for Westmorland and Lonsdale in the light of what I have said and in view of what many hon. Members feel on this issue.

Sir Peter Emery

I intervene again because the point I made earlier was not answered by the Secretary of State. There are many examples to prove that every time a house in an agricultural area becomes available, it is snapped up to become a second home or a place where people spend their vacations. Hence there is a real need to require, where we can, by legislation, a pool of low-cost housing to be kept for first-time buyers and their families.

I will give an example which may show whether we or my right hon. Friend is correct. In my local authority area of east Devon the land for a house is valued at, say, £20,000. The building may cost about £30,000. Thus, the cost of the house into which a person moves is £50,000. Over the period during which that person purchases the house—10 or 12 years—the value of the house will have risen from the original cost of £50,000 to £100,000, an increase in value of 100 per cent. over that period, and that is quite a possibility.

When the housing authority or association repurchases for £100,000, it has had to find £50,000 above the amount it has received in rents over the period. So when it comes back on to the market, it sells at the market value. Or, perhaps one wishes to take the figure of £100,000 less the original £20,000 for the land, costing £80,000. That is no longer cheap housing for first-time buyers.

If that is the case, my right hon. Friend's argument falls to the ground, and for that reason the amendment makes more sense. Even if it is deficient, it might be better to insert it in the Bill and clarify it in another place. That would ensure that the Government accepted the principle of what we want to achieve, and later the drafting could be made perfect. I hope that course will commend itself to the Secretary of State, for those of us who support the amendment fear that the way he is proceeding will not achieve what we wish to achieve.

Mr. Soley

This debate clearly demonstrates the growing concern amongst Tory Members about the drying up of low-cost housing in rural areas. We have been warning them for many years about the crisis in this sector, which is beginning to match the problem in the cities. The blame lies with them. What are we doing even discussing this when the Government cut funding to local authorities and housing associations so massively in the early 1980s that they brought on this crisis?

The hon. Member for Honiton (Sir P. Emery) has done much of my job for me, because he is right. The figures that the Secretary of State has just handed out show what he means by low-cost housing. Tory Members will be interested in this, because it affects them deeply. The first example is of 1 June 1989, and shows a resident buying a 40 per cent. share at £40,000. Two years later, in June 1991, the resident has to buy the remaining share with a new mortgage of £60,000. Who is talking about low-cost housing? Will houses at £100,000 each help to keep the village communities together? Is that how the nurses, the teachers and the postmen will get their houses? Above all, is that how the sons and daughters of those who work in rural areas will be enabled to buy? As we all know only too well, the sons and daughters of people who have been brought up in these areas are unable to rent or buy because of the Government's policies.

The Secretary of State rested his objections to the new clause moved by the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) on the argument that 62 per cent. would be unfair when a council tenant would get more. That argument is an absurdity because it is based on the false assumption that this is a fair subsidy system. What does a tenant in the private sector get if he buys? He does not get anything until he begins to get mortgage income tax relief, which goes to other house owners. A tenant who tries to buy in the private sector will get none of the subsidy that goes to a housing association tenant or to a public tenant, in the council sector.

As we have said before, the Government have introduced a right to buy based on a subsidy system that is unfair within the rented sector. They have then fallen into the deadly trap of not doing what we said they should do, which is to make sure that, in housing stress areas, there is a duty to replace the houses that are sold. Had they done that, they would not have these problems.

The right hon. Member for Westmorland and Lonsdale made a powerful case. He brought forward evidence from housing associations and letters from people to support his case. I have had the same sort of letters, and I am sure that hon. Members who represent rural areas have had them. I noticed the right hon. Gentleman say that he expected the Secretary of State to move towards him and to give him what he wanted. I saw the expression on the Secretary of State's face, and I do not think that the right hon. Gentleman will get everything he wants.

Towards the end of the right hon. Gentleman's speech, I got the distinct impression that his conviction about the needs of the people whom he was trying to help was being drowned out by the knocking of his knees as he thought about going into the Division Lobby. The right hon. Gentleman will not push this to a vote, but we will, because he is being bamboozled by the Secretary of State, who, as the hon. Member for Honiton pointed out, is not talking about low-cost housing or about any significant additional provision for rural areas. We know that there is a real and growing crises in the availability of low-cost housing in rural areas, which is not just hurting individuals but destroying and undermining village communities.

11.45 pm

The problems that emerged in inner cities were largely the consequence of housing difficulties, with some people having the ability to escape from inner cities, whereas others did not, because of the way that housing is financed and wealth is distributed generally. That inner-city problem is now moving into the rural areas, and it reflects the classic face of Conservatism—private affluence and public squalor. The Government are now paying the price.

My right hon. and hon. Friends want to press the matter to a Division. If the right hon. Member for Westmorland and Lonsdale joins us in the Lobby, he will show those people who wrote to him that his position is that which he claimed in his speech. If he does not join us in the Lobby, what he will get from the other place will be peanuts, and those about whom the hon. Gentleman is worried will not be helped. Above all, the local work force and their sons and daughters will not get the houses they need at prices they can afford.

Mr. John Greenway (Ryedale)

I do not for one moment believe that forcing the new clause to a Division will help those people looking for low-cost housing in rural areas or in inner cities. The issues are complex, and balance is required. Over the past two or three decades, and particularly over the 10 years of the present Government, demand for home ownership has been at a level never seen before—but home ownership is meaningless unless it means 100 per cent. ownership. That is what people want.

I have great sympathy for my right hon. Friend's new clause, which I have discussed with him in detail. It is welcome if only because it has produced a packed House of Commons at midnight to debate a matter of considerable interest to the whole country. It is apparent that two separate issues are being confused. My right hon. Friend the Secretary of State took a worthwhile initiative in the planning oppportunities he allowed for the development of low-cost housing in rural areas, by suggesting that the provision of such housing could be a material benefit that planning authorities should take into account when considering planning applications.

However, that measure itself creates a difficulty. My understanding is that planning is concerned with the use of land and not with its occupation. The argument for low-cost ownership as the first step on the ladder to full home ownership is just as valid in inner cities and towns as in rural areas. A framework must be established whereby local authorities, housing associations or the private sector can develop opportunities to best effect.

Two fundamental principles must first be balanced. Anyone who purchases a property—whether at 40, 60 or 80 per cent. of its perceived market value initially—ought to have the opportunity to acquire 100 per cent. ownership in due course. In that, I agree entirely with my right hon. Friend the Secretary of State. If such a home owner has to pay for that benefit, the subsidy is not lost to the community because the local authority or housing association will have the funds available to reinvest in social housing.

Secondly, the local authority or housing association must have the right of pre-emption. I urge my right hon. Friend to give the House the assurance that it requires today, that local authorities as well as housing associations can both staircase and have a right of pre-emption within the same scheme. If that is permitted, we can provide social housing for first-time buyers, whether they be young couples in rural areas or 55-year-old couples looking for a retirement home in rural areas, inner cities or market towns.

The key is that we must have a right to staircase for the purchaser and a right of pre-emption for the local authority or housing association. If my right hon. Friend will assure the House today that he will take the Bill away and find a solution to fit those two conflicting objectives, there will be no point in going through the charade of a Division. Instead, we should allow the matter to progress to the other place and bring it back to this House when we consider their Lordships amendments

Mr. Gerald Bermingham (St. Helens, South)

I shall be extremely brief. Having listened to the right hon, Gentleman, it occurred to me that £100,000 would buy a nice flat in north London, three semi-detached houses in a good area of Sheffield, or four or five houses in a reasonable suburb of St. Helens. Is that low-cost housing? Is that what the Secretary of State is saying? I looked at his figures and decided that they were those of a cowboy, not of a sensible Department.

Low-cost housing should be a multiple of annual income. For example, if an agricultural worker earns £8,000 or £9,000 a year, low-cost housing should cost two or three times his annual income—about £30,000. The Secretary of State does not seem to live in the world of reality. It is all very nice for those who live in Sussex and Surrey, but an awful lot of people do not live in such places. Many people want to be housed and own their own houses but do not have the income to sustain the Mickey Mouse figures given by the Secretary of State in this first fly leaflet in the House tonight.

In his new clause, the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) is trying to show that people in rural areas have a right to a home and a roof over their heads. I hope that he will have the guts to press the matter to a Division and that the House will have the courage to support him.

Mr. Robert Key (Salisbury)

This has been a partial debate on a subject which is close to the hearts of many of my right hon. and hon. Friends. My right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) was at his most understanding and my right hon. Friend the Secretary of State at his most logical.

The hon. Member for Hammersmith (Mr. Soley), however, was spine-chilling—for the 30 seconds or so before one stopped to think about what he was saying. I, for one, will not be lectured about how we in the countryside live by people who dwell in towns and pop out every now and again at weekends. The debate has shown a profound lack of understanding on the part of Opposition Members, who have done nothing but barrack us tonight, about what the countryside is all about. I would take on the chin, however, some of the criticism that my hon. Friends and I will have received in that notable and august publication, The Field, which for the past six months has been running a campaign saying that we do not understand the countryside any more. By the same token, it illustrates the appalling lack of understanding of the Opposition.

The debate has been partial because it has only scratched the surface of the problems of rural housing. It has touched on only one point to do with rural housing—a particular aspect of the way in which housing associations are beginning to help. I wish to draw my right hon. and hon. Friends' attention to the remarkable change that has occurred in the past year or two.

Planning policy guidance circulars Nos. 3 and 7, issued by the Department of the Environment, reflect a complete change of tone in the Government's approach to rural development and a change in their approach to planning matters in the countryside. We have been told by the Department—if only people would listen to it—that the days of crowding the countryside with inappropriate, unattractive, badly designed, high-density housing are over. I have taken councillors in my constituency to task because they have not even read the Department's planning circulars.

I congratulate my right hon. Friend the Secretary of State on his policy on rural housing, which allows land to be made available for development which would not be released unless it was to be used for social housing. That is a great step forward. We have only to read the figures relating to the housing associations and the Housing Corporation's budget to realise that my right hon. Friend understands countryside problems. There has been a change of attitude by so many developers. I represent a beautiful constituency which I often describe as being between the devil and the deep blue sea—the devil of Swindon, which is the fastest growing conurbation in Europe, and the deep blue sea of Poole, a beautiful place which is also growing rapidly. My constituency is pincered between those two towns and as a result there are enormous pressures.

The way in which developers view the possibilities of making huge profits has changed, especially in the past six or seven months. There is plenty of evidence to support that statement. I have been approached by builders, who I have put in touch with the district council. They have produced many schemes for low-cost housing, including do-it-yourself housing and bare minimum housing, where the developer buys up the old unprofitable plots such as railway sidings and "Gas lane", for example—the House will know that I mean—and then produces first-time housing. That is a reality. It is a long time since the hon. Member for Hammersmith trotted off into the country. That must be so, or he would understand that what I am saying is the truth.

Farmers and country landowners have shown a deep level of understanding of their responsibility to preserve the fabric of our villages. That is why the Country Landowners Association, for example, is so active in trying to persuade its members to have regard to schemes based on low-cost land which can be developed for social housing. Those are the considerations that should be borne in mind. Despite the astonishing barracking from the Opposition, I urge my right hon. Friends not to be bounced into voting against the Government on this. I urge them instead to take a long-term view and to listen my my right hon. Friend the Secretary of State. We must ensure, of course, that he delivers the goods. That is the right way forward.

Mrs. Teresa Gorman (Billericay)

I shall not detain the House because I know that it wishes to make progress. There are two causes of the problem that is outlined in the new clause that have not yet been mentioned in the debate. The first cause is the Rent Acts and the second is planning controls. It is not true that people in rural areas, or anywhere else, all want to buy their own housing. Many people with low incomes would prefer to rent but there is no rented property market to speak of because we have destroyed it through the Rent Acts. The market will not be restored until we repeal that legislation.

It appears that 85 per cent. of land in the south-east of England, the most crowded part of the country, is held out of housing use. It is held instead for farming or it comes within the green belt. In other areas the amount of land that is held out of use for housing is even greater. There is no real shortage of land but a shortage has been created artificially. Ludicrously high prices are fetched for land that is to be built upon, and that is why the housing supply in rural areas for those on low incomes has almost dried up. I ask my right hon. Friend the Secretary of State to address himself to this problem.

Mr. Christopher Hawkins (High Peak)


Mrs. Gorman

Is my hon. Friend on my side?

Mr. Hawkins

I am on my hon. Friend's side of the House. The problem in my constituency, High Peak, and in many others is not a shortage of rented accommodation due to the Rent Acts or to council house sales. The problem is that there is a shortage of housing of all kinds in villages. Houses that are put up for sale are bought as second homes. [Interruption.] I do not object to people having second homes. They are bought by people from outside who want the good life. That is fair enough; why should they not be able to buy second homes? However, the planning controls prevent the construction of new homes for local people. Farm workers and the sons and daughters of people who live in villages cannot therefore acquire their own homes in their own villages.

12 midnight

Mrs. Gorman

I am sorry that my hon. Friend persuaded me to give way because I find that he is not on my side at all. He has, however, aired one of the fallacies. People move out of London because they cannot afford to rent or buy homes in London. They have to move into the country, and that creates the shortage. People have to become commuters, which adds to traffic congestion and all the other problems. I hope that my right hon. Friend will deal with the points I have raised.

Mr. Ridley

With the leave of the House, may I make it clear that the figures that I have circulated are purely illustrative. One can use any figure or fraction of a figure that one likes, but sometimes it is useful to use the decimal system, based on 100.

Many hon. Members have referred to the planning constraints. They include the hon. Member for Berwick-upon-Tweed (Mr. Beith) and my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling). They were quite right to point out that the constraint on low-cost housing in the national parks and other areas is largely a planning constraint because of the beauty of those areas. Planning authorities will not grant planning permission to provide sufficient housing. The hon. Member for Hammersmith (Mr. Soley) is wrong. That is not what we are talking about tonight. We are talking about a very limited stock of houses because the policy has been to stop more houses being built by means of a very restrictive planning policy.

There is a different problem in other parts of the country. We shall not solve the problem in the Lake District, however many houses we can afford to build, because sites will not be made available for them.

As for the example given by my hon. Friend the Member for Honiton (Sir P. Emery), when a resident buys a share of a house he buys a share of the market value of that house. When he pays the last 40 per cent. he pays it at the value of £100,000, the price at which the house was transferred. The housing association that receives the payments at each stage probably puts them into another investment. The improvement in value—my hon. Friend's point—is reflected in the housing association's receipts. Therefore, the problem to which he referred does not arise. If the price of a house goes well above the market price in a particular area, the Housing Corporation will be able to top it up. I do not think that my hon. Friend's arithmetic should deter the House from doing what I have suggested.

The scheme that I have suggested is appropriate where shared ownership is a problem because of the shortage of housing in areas where planning permission cannot come to the rescue. In many rural areas, planning permission through the new low-cost housing needs guidance will come to the rescue and housing associations will be able to come to the rescue, too. We are talking about a limited part of the country where local authorities have the right of pre-emption in national parks, areas of outstanding natural beauty and certain other designated areas. Local authorities or housing associations have the right of pre-emption where planning constraints prevent extra building.

My suggestion has the best of three worlds—it preserves those areas from excessive building; it secures a permanent stock of low-cost housing to enable local people to begin to climb the housing ladder; and it enables people to end up 100 per cent. owners instead of 62.5 per cent. second-class citizens.

Mr. Jopling

I have listened with great care to the arguments of my right hon. Friend the Secretary of State. In his first speech, he sought to shoot down my argument that houses would return more quickly to the housing pool, allowing people to start once more on the first steps of part-ownership, if there were a ceiling of 62.5 per cent. rather than 100 per cent. I am sure that I heard him correctly when he said that a person who reached the stage of owning 62.5 per cent. of a house would not have enough money to buy another one to work up to 100 per cent. I profoundly disagree.

In using figures with many noughts on the end, many hon. Members have been talking about much more valuable houses than those that I envisage in the new clause. They are stratospheric prices compared with prices in some of the villages that I know. Bearing in mind that a person who starts as a part-owner and manages to achieve 62.5 per cent. ownership will take advantage of the general increased value of housing, even with the restrictions of clause 52 arrangements and the insistence that only local people can live in the houses—which would depress prices—he will have more than enough, several tens of thousands of pounds at 62.5 per cent., to move into another house where he is free to achieve 100 per cent. ownership. The original house will be available to start another family from a low-income group, whom all of us wish to help.

My right hon Friend used another invalid argument. He said that there would be an unfair advantage for council house tenants who could take part in right-to-buy schemes that offer various discounts. Many of these houses, especially those under the management of housing associations, will be available at artificially low levels because of the announcement that my right hon. Friend the Secretary of State made in February. I welcome that extremely good statement. This policy, however, will allow certain land to be made available, but only for local occupancy, on the periphery of villages. The limited availability of land will be reflected in house values, to the advantage of the people who have been involved in part-ownership.

I was also struck by the comments of the hon. Member for Berwick-upon-Tweed (Mr. Beith) about the effect on small villages with a shortage of houses. We cannot continue to keep building new houses. I referred earlier to a letter from John Sutcliffe, who most hon. Members will remember, of North Housing. He is involved with housing associations across the north of England. He referred in his letter to the village of Castleton on the north Yorkshire moors, which many hon. Members will know. He said: You can't go on building without ruining villages like Castleton. You must therefore keep a number of houses for locals without large means either to staircase or rent. Since and so long as we can't, we are failing to meet housing need. That is exactly the excellent point made by the hon. Member for Berwick-upon-Tweed, which I also tried to make earlier.

When I moved an amendment in Committee on the Housing Bill last year, my right hon. Friend the Secretary of State—I hope that he does not mind my saying this—was not terribly keen to accept it. but in the end he did. Since then there has been evidence that, in order to meet the need for better housing opportunities for those on low incomes in rural areas, my right hon. Friend has become much more of an interventionist that I ever thought we could get him to be. I certainly welcome that.

My right hon. Friend's announcements in February were purely interventionism. His suggestion tonight that somebody who staircases from a part ownership up to 100 per cent. ownership can only sell it either to a local authority or a housing association is pure interventionism, which I welcome. I am trying to persuade him to move a little further and deal with a request which, after all, has powerful backing from the Association of District Councils and the National Federation of Housing Associations.

A little earlier the hon. Member for Hammersmith (Mr. Soley) accused me of having knocking knees. I sat in the Whips' seat on the Government Front Bench for far too long to have knocking knees at the prospect of going into one Lobby or another. My knees certainly are not knocking. My concern is that there are not many Opposition Members in the Chamber to support my new clause.

There are few issues in my constituency about which I feel more strongly than the need to provide housing for low-income families in the rural areas where they were born and brought up. My hon. Friend the Member for High Peak (Mr. Hawkins) put his finger on it when he explained that in his constituency local people are more and more being pushed out by people buying second and holiday homes

I did not table the new clause simply to air the problem. If my right hon. Friend the Secretary of State cannot help us, I shall reluctantly go into the Lobby and vote against the Government. I assure them that they will hear a great deal more about this matter in another place.

Question put, That the clause be read a Second time:—

The House divided: Ayes 144, Noes 171.

Division No. 243] [12.14 am
Abbott, Ms Diane Griffiths, Win (Bridgend)
Aitken, Jonathan Grocott, Bruce
Alton, David Hague, William
Anderson, Donald Hardy, Peter
Archer, Rt Hon Peter Henderson, Doug
Baker, Nicholas (Dorset N) Hicks, Robert (Cornwall SE)
Banks, Tony (Newham NW) Hinchliffe, David
Barnes, Harry (Derbyshire NE) Howarth, George (Knowsley N)
Barron, Kevin Howells, Dr. Kim (Pontypridd)
Battle, John Hoyle, Doug
Beckett, Margaret Hughes, John (Coventry NE)
Beith, A. J. Hughes, Roy (Newport E)
Benn, Rt Hon Tony Hughes, Simon (Southwark)
Bennett, A. F. (D'nt'n & R'dish) Illsley, Eric
Benyon, W. Janner, Greville
Bermingham, Gerald Jones, Ieuan (Ynys Môn)
Blunkett, David Jopling, Rt Hon Michael
Boateng, Paul Kellett-Bowman, Dame Elaine
Bradley, Keith Kirkwood, Archy
Bruce, Malcolm (Gordon) Leadbitter, Ted
Buckley, George J. Leighton, Ron
Callaghan, Jim Lestor, Joan (Eccles)
Campbell, Ron (Blyth Valley) Lewis, Terry
Campbell-Savours, D. N. Litherland, Robert
Cartwright, John Livingstone, Ken
Clark, Dr David (S Shields) Lloyd, Tony (Stretford)
Clay, Bob Lofthouse, Geoffrey
Clelland, David McAllion, John
Clwyd, Mrs Ann Macdonald, Calum A.
Cohen, Harry McWilliam, John
Coleman, Donald Mahon, Mrs Alice
Cook, Frank (Stockton N) Marek, Dr John
Corbyn, Jeremy Maxwell-Hyslop, Robin
Cousins, Jim Meacher, Michael
Cox, Tom Meale, Alan
Crowther, Stan Michael, Alun
Cryer, Bob Michie, Bill (Sheffield Heeley)
Cummings, John Morgan, Rhodri
Cunliffe, Lawrence Morris, Rt Hon A. (W'shawe)
Cunningham, Dr John Morrison, Sir Charles
Davies, Rt Hon Denzil (Llanelli) Murphy, Paul
Davies, Ron (Caerphilly) Nellist, Dave
Davis, Terry (B'ham Hodge H'l) O'Brien, William
Dixon, Don Patchett, Terry
Dobson, Frank Pike, Peter L.
Dunwoody, Hon Mrs Gwyneth Powell, Ray (Ogmore)
Eastham, Ken Primarolo, Dawn
Emery, Sir Peter Redmond, Martin
Evans, John (St Helens N) Richardson, Jo
Fatchett, Derek Rogers, Allan
Fearn, Ronald Rooker, Jeff
Field, Frank (Birkenhead) Rowlands, Ted
Fields, Terry (L'pool B G'n) Ruddock, Joan
Fisher, Mark Sedgemore, Brian
Flannery, Martin Shaw, Sir Giles (Pudsey)
Flynn, Paul Shaw, Sir Michael (Scarb')
Foot, Rt Hon Michael Sheerman, Barry
Foster, Derek Skinner, Dennis
Fraser, John Smith, C. (Isl'ton & F'bury)
Garrett, John (Norwich South) Smith, J. P. (Vale of Glam)
George, Bruce Soley, Clive
Gill, Christopher Spearing, Nigel
Golding, Mrs Llin Speller, Tony
Gordon, Mildred Steen, Anthony
Gould, Bryan Stradling Thomas, Sir John
Taylor, Mrs Ann (Dewsbury) Williams, Rt Hon Alan
Taylor, Matthew (Truro) Winnick, David
Temple-Morris, Peter Winterton, Mrs Ann
Turner, Dennis Winterton, Nicholas
Wall, Pat Wise, Mrs Audrey
Wallace, James
Walley, Joan Tellers for the Ayes:
Wardell, Gareth (Gower) Mr. Frank Haynes and
Wardle, Charles (Bexhill) Mr. Allen McKay.
Alexander, Richard Gale, Roger
Alison, Rt Hon Michael Garel-Jones, Tristan
Allason, Rupert Glyn, Dr Alan
Amess, David Gorman, Mrs Teresa
Arbuthnot, James Gorst, John
Arnold, Jacques (Gravesham) Gow, Ian
Arnold, Tom (Hazel Grove) Greenway, Harry (Ealing N)
Ashby, David Griffiths, Sir Eldon (Bury St E')
Atkinson, David Griffiths, Peter (Portsmouth N)
Bendall, Vivian Grist, Ian
Bennett, Nicholas (Pembroke) Gummer, Rt Hon John Selwyn
Biffen, Rt Hon John Hamilton, Neil (Tatton)
Blackburn, Dr John G. Hampson, Dr Keith
Blaker, Rt Hon Sir Peter Hanley, Jeremy
Body, Sir Richard Hargreaves, A. (B'ham H'll Gr')
Bonsor, Sir Nicholas Hargreaves, Ken (Hyndburn)
Boscawen, Hon Robert Harris, David
Bottomley, Peter Haselhurst, Alan
Bottomley, Mrs Virginia Hawkins, Christopher
Bowden, A (Brighton K'pto'n) Hayes, Jerry
Bowden, Gerald (Dulwich) Hayward, Robert
Boyson, Rt Hon Dr Sir Rhodes Higgins, Rt Hon Terence L.
Braine, Rt Hon Sir Bernard Hind, Kenneth
Brandon-Bravo, Martin Hogg, Hon Douglas (Gr'th'm)
Bright, Graham Howard, Michael
Brown, Michael (Brigg & Cl't's) Howarth, Alan (Strat'd-on-A)
Budgen, Nicholas Howarth, G. (Cannock & B'wd)
Burns, Simon Hughes, Robert G. (Harrow W)
Burt, Alistair Hunt, David (Wirral W)
Butterfill, John Hunter, Andrew
Carlisle, John, (Luton N) Irvine, Michael
Carlisle, Kenneth (Lincoln) Irving, Charles
Carrington, Matthew Jack, Michael
Carttiss, Michael Janman, Tim
Chapman, Sydney Jones, Gwilym (Cardiff N)
Chope, Christopher Jones, Robert B (Herts W)
Churchill, Mr Key, Robert
Clark, Dr Michael (Rochford) Kirkhope, Timothy
Clark, Sir W. (Croydon S) Knapman, Roger
Clarke, Rt Hon K. (Rushcliffe) Knight, Dame Jill (Edgbaston)
Colvin, Michael Knowles, Michael
Conway, Derek Knox, David
Coombs, Anthony (Wyre F'rest) Lang, Ian
Coombs, Simon (Swindon) Lawrence, Ivan
Couchman, James Lennox-Boyd, Hon Mark
Cran, James Lightbown, David
Currie, Mrs Edwina Lilley, Peter
Davies, Q. (Stamf'd & Spald'g) Lloyd, Peter (Fareham)
Day, Stephen Luce, Rt Hon Richard
Devlin, Tim Macfarlane, Sir Neil
Dorrell, Stephen MacKay, Andrew (E Berkshire)
Douglas-Hamilton, Lord James Maclean, David
Dover, Den McLoughlin, Patrick
Dunn, Bob Mans, Keith
Durant, Tony Marshall, John (Hendon S)
Dykes, Hugh Marshall, Michael (Arundel)
Eggar, Tim Martin, David (Portsmouth S)
Fallon, Michael Mayhew, Rt Hon Sir Patrick
Favell, Tony Mellor, David
Finsberg, Sir Geoffrey Mills, Iain
Fishburn, John Dudley Mitchell, Andrew (Gedling)
Fookes, Dame Janet Morris, M (N'hampton S)
Forman, Nigel Moynihan, Hon Colin
Forsyth, Michael (Stirling) Onslow, Rt Hon Cranley
Forth, Eric Page, Richard
Fowler, Rt Hon Norman Raison, Rt Hon Timothy
Franks, Cecil Riddick, Graham
Freeman, Roger Ridley, Rt Hon Nicholas
Fry, Peter Ryder, Richard
Sainsbury, Hon Tim Townend, John (Bridlington)
Shaw, David (Dover) Townsend, Cyril D. (B'heath)
Shelton, Sir William Trippier, David
Shepherd, Richard (Aldridge) Twinn, Dr Ian
Smith, Sir Dudley (Warwick) Vaughan, Sir Gerard
Spicer, Sir Jim (Dorset W) Waddington, Rt Hon David
Squire, Robin Waller, Gary
Stanley, Rt Hon Sir John Ward, John
Stevens, Lewis Watts, John
Stewart, Andy (Sherwood) Wells, Bowen
Sumberg, David Wheeler, John
Summerson, Hugo Widdecombe, Ann
Taylor, Ian (Esher) Wilkinson, John
Taylor, Teddy (S'end E) Wood, Timothy
Tebbit, Rt Hon Norman
Thompson, D. (Calder Valley) Tellers for the Noes:
Thompson, Patrick (Norwich N) Mr. David Heathcoat-Amory
Thornton, Malcolm and
Thurnham, Peter Mr. Tom Sackville.

Question accordingly negatived.

Mr. Soley

On a point of order, Madam Deputy Speaker. May I say to the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) that I misjudged—

Mr. Tom Sackville (Bolton, West)

That is not a point of order to the Chair.

Mr. Soley

I am making a point of order to the Chair. I misjudged the right hon. Gentleman's character and what I thought—[Interruption.]

Madam Deputy Speaker

Order. The hon. Gentleman is raising a point of order with me, and I must listen to it.

Mr. Soley

I misjudged the character of the right hon. Member for Westmorland and Lonsdale and I should like to withdraw my comments about the knocking of his knees because what I thought was the knocking of his knees were the muted chimes of Big Ben. The right hon. Gentleman had mettle and he carried it through and I should like those comments to go on the record.

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