§ 4.7 p.m.
§ Debate resumed.
My Lords, I hope your Lordships will agree to give a Second Reading to what has been described as "this small Bill". It is a small Bill, but I would suggest that if a small Bill does good it should not be condemned for its smallness. The noble Lord who has just sat down poured cold water in all directions on practically all the provisions of this Bill. No doubt he had views as to how the matter should be dealt with. He ventured to say that he did not decry the principle of home ownership or house ownership. I am sure we were all grateful to hear that fall from his lips. It seems to us on this side of the House that any provisions which facilitate the purchase of houses by private people are for the good of the country. We on this side of the House believe in a property-owning democracy. We should not willingly see the municipalisation of all the rented houses in this country. But that is by the way.
This Bill, which is quite simple. does two things. It extends two principles which have long been acknowledged as good ones from Benches on this side of the House: the principle of facilitating house purchase, and the principle of simplifying and extending the provisions of the existing improvement grants. The noble Lord. Lord Latham, described the 40,000 improvement grants in any one year as almost puerile. I 176 believe that the improvement of the homes of 40,000 families in any one year is not to be laughed at in that way. They are 40,000 families of English people. If this Bill, by introducing a new standard grant, increases the number of improvement grants made during any one year, then I believe that the majority of people in this country will say that it is a good thing brought about by this Bill. I shall not follow the noble Lord in his argument about the discrimination between the building societies and local government authorities, because I feel convinced that the noble Earl who moved this Bill will deal with it in his reply.
I should like to say something about Part II of the Bill, which is a subject of which, as an owner of houses, I have had some experience and in which I must, of course, declare an interest. The Minister, who has been frequently quoted this afternoon, gave in another place some interesting figures on improvement grants. He said that in the first five years after 1949 only 10,000 improvement grants were made. Since the machinery of improvement grants was greatly improved by the 1956 Housing Act those grants have been running at the rate of 35,000 a year, which is an enormous increase. I myself should like to see the number of annual grants doubled. There are in this country a very large number of houses that are over 100 years old. The number is estimated to be more than one million. If even 50,000 can be dealt with in one year, either by improvement grants or by standard grants, then a very great improvement will have been made. I do not want to suggest reasons why improvement grants were not made in earlier years owing to the policy of another Government, but very little could be done in improving old houses between the years 1939 and 1956.
I ventured, I think in 1954, in a debate on the Housing Repairs and Rents Bill, to say that the success of improvement grants depended absolutely on the cooperation of the local housing authorities; that that had not been forthcoming under the 1949 Act. and that, unless it was forthcoming under the new Bill, these clauses on improvement grants would be non-effective and improvements would not be made. That, my Lords, remains true to-day. Unless the 177 local housing authorities make grants, then these improvements are unlikely to take place; and it is not the case that all local authorities are making grants, or are making them at the 50 per cent. rate laid down in the Act. Many of them make grants of 33 per cent., some of 25 per cent., and others make no grants whatsoever. That is, to my mind. a distressing feature of the attitude of some local authorities to the intention of Parliament when these Acts authorising improvement grants were made.
I could quote one case to your Lordships. Quite recently, a body well known in this House, the Church of England Commissioners, carried out all the work necessary to qualify for an improvement grant, and the value of that grant was assessed at £400. After the matter had been debated by the local authority concerned they came to the conclusion that they would pay half the grant of £400, and therefore a grant of £200 was made. One of the reasons given was that the Commissioners were the owners of a considerable amount of old house property within the town, and that if a full grant were paid on this application, which had passed all the officials and had passed the housing committee, a full grant might have to he paid on the other property owned by the Commissioners. So it would appear that there was no burning desire to improve or to see that these unmodernised properties were improved. There was rather a desire to make the grant as small as possible because there might have been a financial demand in future years on this particular authority. I believe that that attitude by housing authorities, who, after all, are responsible for establishing and maintaining a proper standard of housing throughout the district for which they are responsible, is rather deplorable.
I should like to refer just for one moment to the qualifying conditions for the standard grants. Very properly, the standard grants can be given by a local authority only if the house is fit for human habitation. No one would wish to see a grant made for a house not fit for human habitation, but the definition of fitness for human habitation, which appears in Clause 29 (2) of the Bill, is governed by Section 4 of the Housing Act, 1957; and that gives a list of matters which must be taken into account in 178 determining whether the house is fit. The house must be, very properly, in good repair and of good stability and free from damp and so on. Two of the conditions to be taken into account are the state of the natural lighting and the state of ventilation. I would ask the Minister, when he is advising local authorities or issuing circulars on this matters, to urge that where houses are in rural areas, not in urban areas, there should be some flexibility in the interpretation of lighting and ventilation. Your Lordships well know that many of these houses in the country are surrounded by unlimited air and light, so that there is not the same necessity for the urban Standard in either of these two matters.
The matter affects these rural houses in this way: that in order, perhaps, to comply with the requirements of the local authority on a question of lighting, all the window frames and sashes have to be taken off and the whole elevation of the house has to be altered so as to gain the additional light which might be necessary in an urban setting. With the unlimited light in the country, I question whether the same necessity arises there, and what happens is that, in providing new windows and so on, the elevation and attractive appearance of many old houses in the country are irretrievably lost. One sees constantly in the Press appeals from various public bodies, such as that concerned with the preservation of rural England, who are crying out against the destruction of the appearance of well-known village streets in the country. Much of this could be avoided if the housing authorities used a little more flexibility in their approach to these two questions.
There is only one other question that arises on standard grants—namely, what will be the position where no main sewers are available. That is often the case in the country when one is dealing with isolated houses and many small hamlets. The local authority have not provided a sewerage system, and perhaps will not do so for many years; and in some cases never. How can a standard grant be given unless there is some provision for the inclusion of the expenditure arising from the provision of separate tanks? It seems to me that it is most important that this additional provision should be made in this connection. It is 179 perfectly clear—indeed, it is obvious to a child—that one cannot have a water closet without proper water disposal; and if there is no sewer there is only one way of disposing of the effluent, and that is by means of a separate tank, to which there is no reference in the Bill. Finally, I would say that I believe that all owners of houses are only too anxious to increase the comfort of those living in them. If this Bill does anything to facilitate that process then it is well worth passing.
§ 4.24 p.m.
§ LORD GRANVILLE-WEST
My Lords, my noble friend Lord Latham described this Bill as a modest one; the noble Lord, Lord Hylton, who has just resumed his seat, described it as small. I must say that, listening to the most agreeable speech of the noble Earl, Lord Dundee, I found nothing there which dissented from the descriptions given by the two noble Lords who followed him. At any rate, one thing is quite clear: that nobody who has taken part in the debate so far has found it necessary to indulge in the extravagant language which the Minister of Housing and Local Government indulged in when he moved the Second Reading in another place. He described this Bill as [OFFICIAL REPORT, Commons, Vol. 597 (No. 35), col. 787]:… the greatest measure for assisting home ownership that has ever been introduced by any Government.That is a description which has not been applied in your Lordships House, probably for good reason.
The right honourable gentleman the Minister of Housing and Local Government will undoubtedly soon have to face a General Election. The statement that he made reminded me very much of other pre-Election declarations, such as. "No cutting of the food subsidies" and "No removal of the Rent Restrictions Act". At any rate, it is clear, as has already been said, that there are large numbers of people in this country who desire to own their own homes—many because it is a desirable thing in itself, many others because they are under the great anxiety and sense of insecurity created by the decontrol of rent-restricted property and by the ever-increasing rents which are being imposed upon them. Therefore, it is right that people should desire to acquire their 180 own homes, to give them that socially desirable sense of security which home ownership gives.
But what does this Bill do towards the attainment of that necessary and desirable object? In my submission, it does nothing more than make available to building societies a fund not to exceed £100 million and the Minister hopes that they will not draw upon it. That is what the Minister said when moving the Second Reading in another place. Building societies have in the past provided funds for the purchase of pre-1919 houses—houses which comply with the conditions which are laid down in this Bill. There has never been any difficulty in past years, except during the past three years when building societies and others in this country found exceeding difficulty because of the credit squeeze and the high interest rates which were imposed upon them. It has been only during the past three years that building societies have found any difficulty in advancing money for the acquisition of pre-1919 houses. But during that period they invested £50 million, most of it upon these houses for people who desired to purchase them for their own occupation. Prior to that, building societies were always willing to lend money on pre-1919 houses which reached the standards of good quality, and providing the borrower was creditworthy. Indeed, there were often times when building societies were prepared to advance more than the basic allowance of 75 per cent. which is provided by this Bill, provided the borrower could offer additional security which was acceptable to the building society.
That is all that this Bill does. Building societies will lend the basic advance of 75 per cent. upon the purchase price or the valuation of a pre-1919 house, whichever is the lower, and if the borrower desires to have an advance in excess of 75 per cent., then, under this Bill, the building society will make that advance, providing adequate security is forthcoming. There is no great magic in that. In my submission to the House, all that this Bill is doing is giving the opportunity to building societies to draw upon the £100 million fund which it is hoped by the Government they will not utilise at all. As I have mentioned, there was no difficulty in obtaining advances on pre-1919 houses—at any rate pre-1919 houses which were on freehold tenure. There 181 never was an opportunity for a leaseholder of a pre-1919 house to obtain a mortgage on the acquisition of that property; nor will anybody who wishes to buy a leasehold pre-1919 house be able to obtain an advance from a building society even under the provisions of this Bill, for the obvious reason that the term of years that will remain will not give the building society adequate security for the money they advance.
It is clear, therefore, that one of the great problems that we are facing in this country to-day is the large number of leasehold houses which cannot be affected by the provisions of this Bill; and another disadvantage of leasehold houses of that age is that they deteriorate, and have deteriorated, at a more rapid rate than do freehold houses, because a leaseholder has not the same interest as a freeholder in maintaining the property. In fact, the Royal Commission appointed to Inquire into the Housing of the Working Classes at the end of the last century reported with regard to the leasehold system that the prevailing system of building leases is conducive to bad building, to deterioration of the property towards the end of the lease, and to want of interest on the part of the occupier in the house he inhabits, and that legislation to provide for the acquisition on equitable terms of the freehold interest on the part of the leaseholder would conduce greatly to the improvement of the dwellings of the people of this country. This Bill will do nothing to improve the situation of pre-1919 dwelling-houses held under the leasehold system.
My submission to your Lordships' House is that the Bill is but a pale reflection of the proposals which the Labour Party have set out in their policy document Homes for the Future. When the Labour Party are returned to power their policy will much more effectively promote extensive home ownership than anything which this Bill can do. It will be possible for people desirous of acquiring their own homes to obtain 100 per cent. advances at a cheap rate of interest, not at the 6 per cent. rate now being charged by the majority of building societies following direction and action for which Her Majesty's Government are responsible; and it will further improve the standard of hundreds of thousands of the houses of which I have been speaking—leasehold houses—by making provision 182 for the enfranchising and modernising of them. In this scheme local authorities as well as the building societies will have an important part to play in rescuing Britain's housing resources.
I believe that everybody agrees that the improvement grants effect an improvement in the present position, and I think they are welcomed by all concerned. I am glad to see that recognition is at last being given to the building societies by conferring trustee status upon them. Building societies have in the past rendered a great social service to the people of this country and have enabled thousands of people to acquire homes which otherwise it would have been impossible for them to obtain. I must confess to a great affection for building societies. After all, they were originally social and political revolutionary movements inspired by men of courage and vision determined to ameliorate the conditions of the working classes which at that time under the factory system of the Industrial Revolution, were harsh and degrading. Men joined together in trade unions, co-operative associations and political organisations as a means of self-protection; but it was the combining of men one with another to try to build houses for one another which started the great scheme of the building societies which has proved of great value to the people of this country.
It was not only in the field of social endeavour, however, that the building societies rendered great service. They made a great contribution towards the spread of democracy, too, for it was through the medium of the building societies that large numbers of men were able to obtain the vote. Some of the slogans used in the early days, when building societies were in process of formation, were, "Qualify and win counties", and "Votes for the people". It was the means by which the franchise was spread among large numbers of the people of our country, and I must confess that I have a warm affection for the building societies movement. I believe the country owes them a great debt of gratitude. They have enriched the pages of British social history, and I am glad that at this stage trustee status is being conferred upon many of them who qualify under the terms of this Bill.
I am a little intrigued, however, to find that the conferring of trustee status is 183 linked with the mortgage provisions which are contained in the Bill. I wonder if the noble Earl could tell us whether the conferring of trustee status was a condition of their accepting the mortgage provisions under the Bill, or whether they required trustee status as a condition of their co-operating with the Government under the provisions of this Bill. There is the provision of the £100 million on which the building societies can call if it is necessary for them to do so, although Her Majesty's Government hope they never will—and if they do so the Government reserve to themselves the right to serve six months' notice to terminate the operation of the scheme. But, apart from that, I see no greater obligations placed upon the building societies, and I should like to know—and I hope the noble Earl will be able to tell us—whether trustee status was given as an inducement to the building societies to take part in what was in fact, quite unknown to them, a little piece of pre-Election "window-dressing."
§ 4.38 p.m.
THE DUKE OF ATHOLL
My Lords, before the noble Earl replies, I should like to say a few words about Part III of the Bill. I am sure that it is particularly welcome in Scotland, as it brings the provisions with regard to voluntary alienation in line with the position in England. I must here declare an interest. I know that many people in Scotland have found these voluntary alienation provisions to be much less favourable in our part of the world than they are South of the Border; and I am delighted to see that Her Majesty's Government are to rectify that. I would endorse the plea made by the noble Lord, Lord Hylton, that local authorities should have to make standard grants and should not be allowed to refuse them for reasons which, as far as I can make out—as Clause 9 does not apply to Scotland—they need not specify in writing. In England, where the clause applies, a local authority who refuse a grant can, at the request of the person applying for the grant, be made to give their reasons for refusal in writing. I believe that this does not apply in Scotland, and, as the noble Earl has said that this Bill brings Scotland into line with England, perhaps he can tell us why it is that Clause 9 has not been inserted in the Scottish section.
§ 4.40 p.m.
§ THE EARL OF DUNDEE
My Lords, I should like to thank your Lordships for the general support which has been given to this Bill. Whether it has been warm, cool or lukewarm, it is, anyhow, support. We are not accustomed in this House to using exaggerated language; at least not always. The most general criticism. I thought, which seemed to be directed against the Bill was that the Minister in another place had described the probable effects of this Bill in terms which, in the opinion of some noble Lords, were slightly exaggerated. I should be very glad to think that no Bills of which I am in charge will ever have to meet more serious criticism than that.
I had intended, in my opening remarks, to answer one question asked by the noble Lord, Lord Latham. Indeed, it was a question which he asked me before the debate began, and which I should have answered if I had not been obliged to hurry into the House in order to answer a Question. It was whether these loans authorised by the Bill would be limited to owner-occupiers, because, as the noble Lord rightly pointed out, there is nothing in Clause 2 of the Bill to suggest they should be so limited. But they are, in fact, to be limited to owner-occupiers under the agreement made between the Government and the building societies, which is described in the White Paper, to which I think the noble Lord, Lord Latham, has already referred. I think he mentioned that in the middle of page 6 of the White Paper it is stated that a grant will be made to any borrower who in the opinion of the Society is creditworthy for a mortgage "for the purchase. for owner-occupation, of a private house". That phrase "for owner-occupation" is intended to exclude loans for other purposes under this agreement made with the building societies.
I am also very grateful to the noble Lord, Lord Latham, for raising the question of the £100 million limit which is in Clause 2 of the Bill. On page 3, in subsection (4). it is stated that:Advances made to building societies under this Act shall not together exceed the sum of one hundred million pounds.That provision is simply put in for the salutary purpose of maintaining Parliamentary control, a principle which I think is always observed in our legislation. But 185 that does not imply by any means that we contemplate that we are going to advance only £100 million under this Bill. We cannot anticipate the rate at which money will be asked for. The noble Lord thought it possible that we might spend £100 million in two years. I do not know whether that will be the approximate rate of expenditure or not—it may be faster than that. But when the limit of £100 million is exhausted, or is approaching exhaustion, the Government will certainly ask Parliament to authorise more. We by no means intend that the increased funds made available for house purchase under this Bill should, in the long run, be limited to so small a sum.
§ LORD LATHAM
My Lords, may I ask the noble Earl whether it is the case that this is not a calculated figure but just a spot figure?
§ THE EARL OF DUNDEE
My Lords, that is quite right. We have not tried, because we do not think it would be practicable, to make any estimate, either of the sum of money that should be spent or of the period of time in which any hypothetical sum of money might be used up, because we do not know how fast the process is going to be. The £100 million is simply, as the noble Lord suggests, a convenient round sum which has been inserted in the Bill for the purpose of maintaining the principle of Parliamentary control over our public expenditure.
The noble Lord, Lord Latham, also asked whether the general financial policy of the Government, which has been aimed for some time at restraining inflation, had had the effect of causing the shortage of money which has prevented applicants for building society loans from getting the loans which they want. I think that in the case of local authorities that may quite possibly be true to some extent. If we look at the figures we see that in the year ended March, 1956, local authority loans for house purchase amounted to £69 million; in the next year, 1956–57, to £64 million; and in the following year, 1957–58, it had been reduced to £50 million. We do not get the same impression from the building society figures, which were £394 million in 1955 and in 1956, £334 million; and in 1957 they went up again to £370 million. In fact, 186 I think your Lordships are aware that, because of the measures which had been taken to prevent too much borrowing and too much thoughtless expenditure which might lead to inflation, the amount of savings in the last two years has increased to a very satisfactory extent; and, of course, one of the ways in which small savers of money are often most inclined to invest their savings is by putting them into building societies. There has been for some time a shortage of funds in the possession of building societies because the demand for loans for house ownership has been increasing; not, I think, because the building societies have been getting less money from their depositors than they did before.
The noble Lord, Lord Hylton (who has apologised for not being able to stay until the conclusion of the debate), made two points which we shall certainly bear in mind. One was the general point about lack of uniformity in practice of local authorities. As we all know, some local authorities give only part of the improvement grant; some do not give any at all. There are no fewer than 1,500 local authorities in the country, of many different types, and I do not think we cart expect uniformity of practice among all of them, and I do not think it would he desirable for the Government to interfere too much with local authorities' freedom of action. But I would point out to the noble Lord that under this Bill we do at least make the improvement grants in respect of these new standard improvements payable as of right by Statute, and in that respect we have introduced a measure of uniformity which did not exist before. Beyond that, I think that for more extensive improvement work the existing arrangements observed by local authorities must continue to apply for the time being. The local authorities must be left with the discretion to decide in what circumstances they will take advantage of the improvement grant under the Housing Acts. Personally I should like more of them to do so, and I believe it is usually in their own interests that that should be done. I am sorry that my noble friend Lord Hylton was unavoidably unable to remain, but the other points which he mentioned I will pass on to my right honourable friend, and they will be considered by the Government.
187 The noble Lord, Lord Granville-West, asked why trustee status had been conferred on, or was going to be conferred on, certain building societies; whether it was a result of some bargain, and what the motive was. The reason why we propose that trustee status should be conferred on some building societies is in order to enable them to raise more money. They need more money because more people want to raise loans for house purchase; and giving them trustee status will clearly enable them to do more business than they are doing now. As to the conditions, about which the noble Lord asked, they are all contained in Appendix II to the White Paper, to which I referred in my opening remarks. I think your Lordships all have copies of the Paper and you can easily see the conditions which will have to be fulfilled by a building society in order that the Chief Registrar may approve of its being given trustee status.
My Lords, may I interrupt the noble Earl to make one small point? When he is reporting this debate to his right honourable friend the Chancellor of the Exchequer, would he remind him that some years ago the Exchequer dealt rather a severe blow to the profits of these building societies by altering the basis of the computation of sur-tax? If he is giving these building societies trustee status, he obviously wants to increase the profits, and a rescinding of that particular requirement will go a long way to doing that.
§ THE EARL OF DUNDEE
I will certainly look into the point which my noble friend has raised.
I am very glad that my noble friend the Duke of Atholl intervened to say a word on the subject of improvement grants in Scotland; and I will also carefully examine the question which he asked about Clause 9. My impression was that the conditions governing payment of improvement grants in Scotland had been entirely assimilated to those in England, and certainly voluntary alienation has been excised from the conditions: but I would rather not answer "off the cuff" his question about Clause 9. I am glad that he raised it, and I 188 will certainly send him a reply at the earliest opportunity.
My Lords, I certainly do not want to exaggerate the merits of this Bill, but I cannot agree with some noble Lords in deprecating it. I cannot agree that it is an almost inconsiderable piece of legislation. Nor do I think it fair to say that our present housing policy is not dealing with these problems. In regard to the first Part of the Bill, I have already told your Lordships that we cannot give any estimate either of the amount which we are likely to be called upon to advance, or of the celerity with which it will be spent; but we have reason to expect that it will, in the near future, make a very appreciable difference in the number of people who are able to buy their own homes. As for the second Part, I do not think that 40,000 or 50,000 houses reconditioned every year is an in considerable quantity. I think it is a very valuable contribution towards the solution of the housing problem in this country; and under this Bill we hope and expect to increase very greatly the number of houses which are annually reconditioned.
As for our general policy of housing, with which this Bill is concerned only in certain respects, I do not think that it is a discreditable one. We expect to build in England this year 250,000 houses, of which 50,000 or 60,000 will be for the purpose of slum clearance. For some years since 1952 we have reached the figure of 300,000 houses a year for Great Britain. In Scotland, we achieved a record figure of 38,000 houses in one or two years—and I remind your Lordships that the previous pre-war record in Scotland was only 26.000. Although I certainly hope that I shall never be—and I am sure none of your Lordships will ever want to be—complacent about the housing problem in this country, I do suggest to your Lordships that the record of this present Government is better than the record of any other, and that it is one of which we need not be ashamed.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.