RIGHT TO INFORMATION (Hansard, 14 June 1993)

§ Mr. Battle
The amendment deals with the right to information. It concerns, in particular, the public sector and the Government's intentions in providing such information.
The proposed new subsection refers to section 104 of the Housing Act 1985, which deals with the provision of information about a tenancy. Does that mean that that information will simply be limited to the right to buy, or will it include information about the Government's proposed rents-to-mortgage scheme, which also forms part of the Bill? The relevant section of the 1985 Act 685 provides that when a tenancy is created, a local authority should give tenants information about changes to the tenancy. I hope that the information provided under the proposed subsection is not just confined to that about right to buy, but includes information about the Government's rents-to-mortgage scheme.
The Government have tried recently to boost the flagging right-to-buy programme by publishing another booklet that, set out that programme in fine detail. I understand that, this year, the Government have already spent £1. 4 million on publicity. The latest publicity stunt will not help council leaseholders who exercised the right to buy but were not properly informed at the time of how they would have to manage and pay the lease. I remind the Minister that some 70,000 council leaseholders in London alone face massive repair bills. They are unable to sell their flats and now feel that they were not properly informed by the Government when they pushed the right-to-buy programme.
Ministers' energies would be better spent tackling the huge need for homes to rent rather than simply trying to create a demand where one virtually does not exist.
It might be helpful if, under the terms of right to information, Ministers gave an undertaking to the House that the relevant costs of providing such information would be fully met and that the provisions would be reviewed if, in the future, authorities could prove that meeting them was more onerous than the Government expected.
Many believe that the rents-to-mortgage scheme is not relevant to current circumstances. In Committee, the Minister often quoted me as saying that the scheme was irrelevant. I cannot claim ownership of that description; it should be claimed by Mr. Steve Wilcox, who wrote in Roof magazine in the September-October 1992 edition that the scheme will appeal to a limited number of tenants who cannot afford right to buy but are not in receipt of housing benefit. In other words, the proposals for rents to mortgages, announced in July and based on pilot schemes in Scotland, new town Basildon and Milton Keynes, have not achieved anything near what the Government suggested. There is no real market for the scheme because rents are already at levels where many tenants could, if they so wished, buy under the right-to-buy scheme, with mortgage repayments no higher than their current rents. The scheme is still being sold by the Government, however, as a means of avoiding "future rent increases".
All that the rents-to-mortgage scheme will do is highlight the financial squeeze on local authorities by claiming projected large increases as if they were an inevitable consequence of continued council ownership. It will not spell out the lack of resources to invest in the necessary repair and improvement of local authority stock.
Inside Housing magazine of 30 October 1992 described the scheme in an article entitled, "Rents to mortgage too obscure", which stateds: Difficulty in understanding rent to mortgage has been one of the main reasons for tenants not taking up the scheme, the Scottish Office has conceded. That was conceded in the Scottish Office publication, "The Rent to Mortgage Scheme in Scotland". The article continued: 686 An Official Report into local authority and Scottish Homes rent to mortgage pilots claims success for the scheme … in attracting purchasers who otherwise would not have been able to purchase their homes. But the report says the main reasons why tenants did not continue with a rent to mortgage purchase after expressing interest included fear of unemployment and difficulty understanding the scheme. I can understand why people's fear of unemployment makes them unwilling to be pushed any further to purchase property.
Perhaps provocatively—although this is an expression that has been echoed by most people with experience and knowledge in the housing field—I have to say that in 69 per cent. of the housing stock in Britain, owner-occupation is proving untenable. Twenty-one per cent. of the stock is still with local authorities. The private rented sector still stagnates, despite the Government's efforts to revivify it, at 7 per cent. Housing associations, of which the Government demand so much, represent a mere 3 per cent. of the housing stock.
I put it to the Minister that housing associations, with only 3 per cent. of the stock, can go hardly any way towards meeting the needs of people for housing to rent. The Institute of Housing suggests that there need to be 100,000 new dwellings a year provided in Britain. The Government are providing 53,000 dwellings at best—that is just over half, and the figure is projected to go down next year, and down again the following year.
When it comes to providing information, why are the Government obsessed by a single track? Why do they not recognise people's need to rent? The Minister claims to speak of rights. Why could he not recognise the right to rent, and include that in the information to which this clause and the amendment refer?
I suggest, as we did in the Standing Committee on the Bill, that, instead of a rents-to-mortgage scheme, what is most needed in the present context is a scheme that takes people from mortgages to rents. That way perhaps we would not be in the ludicrous position whereby people faced with repossession lose their home and may go into a hostel or other housing accommodation. Then along comes a housing association with a housing market package, buys the property and suggests to the local authority that it can put a homeless person into it.
The difficulty is that people might nor get back into the home which belonged to them and which they built up. Why not leave the family in their home and convert their mortgage into rent? That could be done with a bit of arithmetic, and would make far more sense than the Government's proposals for turning rent into mortgages.
There are great difficulties in understanding the rents-to-mortgage scheme. I will not take the House through them now, but the arithmetic and the exclusion of people on housing benefit—to mention but two points—mean that the scheme is not only little understood but creates real dangers. Private lenders have first charge on the property and, if those low-income owners fall behind on what will then be described as their rent—that is, their mortgage—they will find that the property can be repossessed. That ought to be spelt out plainly in the information to tenants.
I suggest to the Minister that, in the booklets or information passed back to tenants, he should spell out that shared ownership, which the rents-to-mortgage scheme is effectively now to replace, offered tenants a better and a more secure deal.
687 The Institute of Housing, in its response to the Department of the Environment consultation paper on the rents-to-mortgage scheme said that it was the wrong scheme at the wrong time, that it was ill conceived and inappropriate, and that the eventual take-up would be minimal. We concur with that view and urge the Government, when it gives information to tenants, not to keep pressing its single-tenure obsession. We need flexible tenure in Britain so that people can move within their lifetimes from renting to owning and back to renting, perhaps part-sharing or part-owning. They should not be locked into a form of tenure. Over the past 14 years, by pushing owner-occupation, the Government have developed, not a two-way flow and a flexible tenure, but a one-way street to owner-occupation, which is proving to be a cul-de-sac of repossession for far too many people.
I suggest that, as we set out in our document only last Friday, flexible tenure is what is needed in Britain, not a lock-in to owner-occupation. If the Government were to give tenants fair information on their real rights, they would include the right to rent, set out all the options, and, as it were, open up flexibility of tenures in Britain. They should not continue—as I believe that the Minister does not really want to, because he does occasionally make comments to the effect that we need to develop the rented sector as well—on the present course, in which the system is clogged up and homes are empty while people are homeless.

§ Sir George Young
I will begin by answering a question that the hon. Gentleman posed at the outset of his speech.
Yes, the amendment will require local authority landlords to reissue annually the information, not just about the right to buy, but about other statutory rights. Local authority tenants already have the right to rent; they are secure tenants, and when they take out a lease from their local authority their rights are set out quite clearly.
The hon. Gentleman touched on two groups of people, the first being leaseholders in high-rise flats, who sometimes find it difficult to sell because the incoming purchaser finds it difficult to get a mortgage.
My hon. Friend and I are continuing to have discussions with the Council of Mortgage Lenders to see whether we can find a way through this problem, which, although not widespread, is a real problem for the people concerned.

§ Mr. Battle
I am grateful for the Minister's response on that point. It is the response which he gave us some five months ago. I appreciate that he is meeting the Council of Mortgage Lenders, but can he assure me that he is also meeting local authorities, many of whom feel that, at the end of the day, it will be up to them, particularly in tower blocks, to take back the properties and turn people's mortgages into rent, in order to solve that problem?

§ Sir George Young
The answer is yes, because the local authorities are the freeholders of these blocks of flats and have an interest in any difficulties that may face the leaseholders living in them. Those discussions are continuing.
The bulk of the hon. Gentleman's remarks were about the rent-to-mortgage scheme. Once again, we saw the hon.
688 Gentleman sitting very firmly on the fence. He does not want to condemn the rent-to-mortgage scheme in case it turns out to be a wild success, like the right-to-buy scheme, but he finds it impossible to endorse it. I find that slightly strange, because only last week the Labour party put out a document entitled "Labour's charter for flexible tenure", and one of the things it says is: We want to see the end to the old division between rented and owner-occupied housing. There should be circumstances where people can change tenure without having to change their home. That is exactly what the rent-to-mortgage scheme ensures. I cannot understand why someone who is in favour of flexibility of tenure finds it impossible to endorse the rent-to-mortgage scheme.
The hon. Gentleman knows that we have made no forecasts of the take-up of this scheme. We are in the business of extending choice and opportunity to local authority tenants. It is then up to them to decide whether they want to take the opportunity that we have made available to them under the rent-to-mortgage scheme.
I take it from what the hon. Gentleman says that he has no particular objection to amendment No. 170, which simply requires local authorities to set out annually to tenants their statutory rights, so I hope that the House can now approve the amendment.