§ 8.32 p.m.
§ THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET)
My Lords, this has been a long debate. It is late, and of set purpose I will not detain your Lordships long. It is amazing—is it not?—that when we all agree what is to be done, namely, to build the largest possible number of houses of the highest possible standard at the most appropriate places as soon as possible, what wide differences of opinion there are about how it should be done. A great many points have been made in this debate, many of which seem to me to be valid, some of them invalid and all of them interesting, but I cannot possibly take them all up. I will write in due course to those noble Lords whose points I am unable to answer, where I think they are of such a nature as to call for a reply, and if I seem to pass over any noble Lords' points to-night which they think I should answer now, I hope they will not take it that that is the end of the matter. We have had a great mass of interesting material and I could not possibly answer it all. I cannot carry that much in my mind and we should be here for two hours.
I would start by thanking those noble Lords who supported the Government in their housing policy, because in the nature 886 of events I should like to address most of my remarks to the criticisms levelled against it from the other side of the House. I am grateful to the noble Lord, Lord Hawke, for initiating this debate, but I must take him up on one point in his speech when he said that no Labour Government could ever understand the workings of the minds of people who have to risk their livelihood to make a profit, and that the Government were thus incapable of doing anything to help the building and development industry. I do not think this is quite fair. Citizens in all walks of life have to make decisions which risk their livelihoods and may or may not increase their profits, and not only those normally known as capitalists—and many capitalists have been known to support Labour Governments. I think that any strictures which might be levelled against our policy towards the private sector of the construction industry ought not to be based on the belief that we are incapable of understanding how their minds work and what they want.
There is another small point, almost a verbal point, in the noble Lord's speech which I want to answer. He spoke of the difficulties and complications of builders in buying land. Builders as such do not have to buy land. They may live very satisfactorily for many years and make a reasonable profit by building for the local authorities without ever having to make a contract for the sale of land one way or another. A builder who chooses to buy land and go in for that form of economic activity does it by choice, and it is not strictly as a builder that he is doing it but as a developer—one can use any word one likes.
The noble Lord, Lord Wade, asked whether it was the intention to cut office building. It is indeed the broad intention of the Government to control office building. It will not have escaped his attention that the level of control has been reduced from £100,000 to £50,000, and that the area of control has been expanded from London and Birmingham to the whole of the South-East and the Midlands. The noble Lord invited the Government to scrap the selective employment tax and to exempt the surpluses of building societies from corporation tax, and exempt bridging finance from the credit squeeze. I regret that I cannot meet him immediately and that 887 I cannot undertake that the Government will do so. I do not think he expected that I should be able to.
Turning to the speech of the noble Earl, Lord Jellicoe, I would say that he made the point that in every month between November and now the completions of new houses had been lower than in the corresponding months of last year. I am glad to be able to tell him that in May this was not so. Completions were higher than in last May, and there is no reason to suppose that the upward trend will not be continued. I was surprised when the noble Earl asked me whether I could confirm what the Prime Minister had couched in unusually strong terms about the pledge for the construction of500,000 houses a year by 1970. I cannot imagine that my word will add much to the weight of the word already given by the Prime Minister, but, for what it is worth, I give it to the noble Earl most gladly.
The noble Earl also raised the point, in passing, about the increase in the time-lag in planning decisions from 33 to 44 weeks, and he suggested that this might be the tip of a hitherto unrevealed iceberg of incompetence in the Department or possibly in the local planning authorities—I was not clear which. I would assure him it is not so bad as he thinks. What is happening is that more and more planning business is coming before the Department every year. People are building more. Development is proceeding at an increasing rate, and the present planning machinery, which is extremely complex—it was devised by my noble friend Lord Silkin nearly twenty years ago—is in large part groaning under the weight. There are very severe delays. We are considering how to cut down these delays. We know that the only way is by new legislation which we have in hand.
The noble Earl raised the point about the selective employment tax in respect of the differential between maintenance workers in direct labour departments of local authorities and those in private building firms. Construction workers engaged on maintenance by direct labour departments will be treated in the same way as other local authority employees, but an exemption from the privileged 888 position will be made for direct labour staffs engaged in new construction. They will be treated in the same way as employees of private contractors and will not rank for reimbursement. The reason for the different treatment is that it is mostly in new building that direct labour departments are in competition with private builders, and they are not to any marked extent in competition on maintenance.
The noble Earl also asked about the repeal of the one-in-three rule. This repeal was decided on for a variety of reasons, including improving the continuity of work in the direct labour departments, which is a fairly obvious benefit. Also—and this is a crucial point—the rule itself was a stumbling block to efficient organization in direct labour departments because some of the less praiseworthy local authorities were deliberately padding two projects in order to be able to put in an artificially low tender in competition with private enterprise tenders on the third, which had to go out for competitive tender. It seemed to us that this abuse was most easily rectified by the repeal of the one-in-three rule.
I turn now to the remarks of the noble Lord, Lord Cohen of Brighton. He said, broadly speaking, that building societies should raise Exchequer money on deeds; that is, by the transfer of the deeds they have in their possession. During the debate any such notion has been opposed by more than one noble Lord—the noble Lords, Lord Wade and Lord Gridley—on the ground that it might in time amount to a sort of creeping nationalisation, which would be unwelcome to some building societies, if not to others.
The noble Lord, Lord Wells-Pestell, introduced an interesting link between the inability under the present law of building societies to grant mortgages to under 21s and the size of their reserves. These points are noted, as is, indeed, the difference of view between noble Lords who are directors of building societies. The noble Lord, Lord Cohen of Brighton, asked whether we could not immediately rate at full value empty property in order to fill it up and so reduce the number of empty houses. We have considered this idea, but there are difficulties. In the meantime, I would remind your Lordships that we have proposals coming up 889 to rate empty houses at half value, which is the first time this has been done, and it should bring them into the market more quickly.
My noble friend Lord Silkin told me that he would be surprised if I got up and agreed with him. I am afraid that he will miss his surprise, because I agree with much of what he said about the number of housing authorities and planning authorities in the country. It is among other things precisely this apparently excessive number and the difficulties of co-ordination between them that has led my right honourable friend the Minister to refer the whole structure of local government—including housing authorities, planning authorities and everything else—to a Royal Commission, which is very much charged with this question of how many authorities there should be, and what should be the size of housing units and planning units. In the meantime, local authorities have been given a greater freedom than they have ever had before to set up joint consultative committees, and even joint executive committees, when their problems bridge local authority boundaries.
The noble Viscount, Lord Stone haven, released a quick fire of practical points and proposals. I think almost all of them I knew too well already. They are all familiar headaches which present immediate attractions to a Government to carry them out. But they all have disadvantages. I assure the noble Viscount that every point he mentioned with the exception of electro-osmosis, which I shall look into at once, is well known to me personally. None of these suggestions will be easy to put into effect. None is being neglected in the Department at the moment, and some are already fairly far forward or are in the process of study, which, of course, will proceed.
The noble Earl, Lord Knoll, returned to a point which is now familiar between us, concerning one of the complications of the Land Commission. I noticed that he has shown a Written Answer I gave to an answer to a question that I invited him to put, to various builders, and he described my reply as "deceptive and misleading". If he would care to send me concrete examples of the difficulties which he alleges the builders of his acquaintance have found—without 890 the four-letter words—we might increase our common understanding of this matter. In the meantime, I note his charge that it is a deceptive and misleading reply, and I note, also, the absence of any evidence for this charge in his speech. The Land Commission Bill is in another place at the moment, and will, I imagine, be here before the end of this year, when we shall be able to thresh out this matter in detail.
§ LORD WOLVERTON
My Lords, could the noble Lord say (he was out of the Chamber when I made my speech) a little about the financial aspect? This is important, and I tried to concentrate on it in my speech. Can he say whether there will be any help in bridging operations and so on? If you are going to exclude housing from the credit squeeze—and I agree with this—then something should be done on this cardinal point of finance.
§ LORD KENNET
I am sorry, but I cannot to-day say any more than has already been said about bridging finance in the House of Commons.
§ LORD NEWTON
With respect to the noble Lord, we have been listening in this Chamber, and not in the other place.
§ LORD KENNET
This leads on to what I was going to say in answer to the noble Lord, Lord Newton, and if I may, I will continue. He said that the future of the housing programme is anybody's guess. Well, really, it is not. I think the main characteristic of the Prime Minister's announcement of new measures last week was the exclusion from cuts in Government spending of what we judge to be the essential priority sectors of housing, hospitals and schools. Public sector housing is not cut. It is not anybody's guess whether it will be cut. It is not cut. It stands out from the very severe cuts which have been made in Government spending in many other fields by the fact that it is not cut.
My Lords, before the noble Lord leaves this point, that concerns only the public sector. The private sector is vitally dependent on the question of the banks once again lending money to builders and to house purchasers.
§ LORD KENNET
I appreciate the noble Lord's point, and I must repeat that I have nothing to say on it at the moment.
§ The noble Lord, Lord Newton, asked what is wrong in the public sector.
§ LORD KENNET
Yes. I would say, in general, that nothing is wrong, for reasons which already have been well aired in this debate.
§ LORD NEWTON
What is wrong is simply this. For the first five months of this year the local authority sector has been down on last year. I think that is wrong and that the figures should be greater this year.
§ LORD KENNET
I said that, in general, in the public sector housing programme nothing was wrong. I now turn to the particular question of fact that starts in the first months of this year have been lower than in the corresponding months of last year. The reason for this is that local authorities held back on approvals during the second half of last year in order to qualify for the more generous new subsidies announced at the end of November. This was followed by a flood of approvals which will become starts in the second half of this year. It is an apparent deficit for purely local reasons which does not reflect anything really wrong in the public sector at all.
The noble Lord hinged most of his remarks on the phrase "lack of confidence". "Lack of confidence" has rung around this Chamber in all stages of the debate. It is a difficult matter to talk about, and I find myself much perplexed. As I said the last time we discused this topic, during the debate on the Queen's Speech at the beginning of this Session, it was at that time, and I think probably still is, partly true that small builders are held back by lack of confidence. It was not then, and is not now, true of the big builders. I think that there should be a limit to the theory that a Government have to create confidence—and I quote the noble Lord, Lord Newton's words.
In this case we are dealing with the small builders, who probably have the greatest difficulty in expressing their views; they do not have time to send someone to lobby the Minister. Their 892 organisations do not have paid staff, such as they have in some other organisations. But it is up to those who feel that they are held back by lack of funds, and even up to those who think that others are held back by lack of funds, to tell us frankly and in detail what is wrong. It is right to debate this in Parliament, but they should also come and tell us privately what is wrong. When small builders come and do that, I assure your Lordships that in the Ministry we drop everything and listen to them; and we learn a great deal. When they come and tell us in detail what is wrong, we do, within the limitations of the present economic difficulties, seek to find out what we can do to rectify it. I should like to repeat, with all solemnity, what has been said by my right honourable friend the Minister of Housing and Local Government, and by me before, I think, and by many others, that we are not discriminating against the private building sector. We know that it has its difficulties. We know that the whole of the economy has its difficulties at the moment. We do not control the private building sector, and we are not seeking to discriminate against it.
Let me turn now to the question of housing associations, which has been raised by many noble Lords in this debate. The housing association movement—if we may call it that—owns probably rather fewer than 150,000 dwellings at the moment, which is a smallish proportion of the country's stock of housing. To say that it is small at present is not to belittle the importance of this movement, or the contribution which it can make, or is already making, to the solution of our housing problems. The Government do not regard it as unimportant because it is small—quite the contrary. Sometimes small things are better able to set examples, and the Government intend to do all they can to develop and encourage this movement.
The Housing Corporation was set up under the 1964 Act with the express purpose of encouraging cost-rent and co-ownership schemes. It obtained its powers only eighteen months ago and, of course, it takes time for new associations, when they are set up, to find their land, to prepare plans, to get planning permission—as we all know to our cost—to arrange finance and to do all the work 893 necessary before they can start to lay bricks. It is too early therefore to judge how the new Corporation will do. The work of the Corporation is, however, gathering momentum, and schemes are coming forward now in increasing numbers; and the Government hope that they will continue to come forward in ever-increasing numbers. Up to now, the emphasis in this field has tended to be on cost-rent associations, but a number of co-ownership societies have recently submitted proposals which have been approved and we hope that many more of them will be coming along.
But new building by cost-rent and co-ownership societies is only one of the fields in which we hope to see the contribution of the housing association movement increase. The traditional housing associations, the big charitable trusts, the associations building for special purposes like old people, are all making a useful contribution which we hope to see increase, not only in that field but also in that of improvements and conversion of existing property. We hope that local authorities—especially those taken un with new building—will recognise this and will give housing associations every encouragement and co-operation in their power in these circumstances. Many of them feel, only too reasonably, that their strained resources ought to he going principally on new building, but there is a big place here for housing associations to get on with improvements in the "twilight" areas. A number of trusts and associations are already doing extremely well in this field, particularly in London.
More than one noble Lord, including the right reverend Prelate, complained in broad terms about the "red tape", and about the complication of the allowances and the complication of the legislation which governs the activities of housing associations. This is a point which was brought out forcibly, as the noble Viscount, Lord Gage, has reminded us, in the Milner Holland Report. The trouble is that it is the varied nature of the housing associations themselves which makes some of this complication inevitable. The noble Viscount quoted Sir Milner Holland about the arrangements governing their operations—"their", referring to the housing associations. The point here is that it is their operations 894 which are so different in type one from another. Some of them build with Government subsidy and some without. Some are charitable, and some are not. Some are in business as landlords; some are building new buildings, and some improving old ones. Associations which want to go in for a variety of different types of work, perhaps in a number of different places under different local authorities, are bound to find their operations complicated.
There is a lot to be said—and I put this especially to the noble Viscount, Lord Gage, and the noble Earl, Lord Jellicoe, who have spoken on behalf of housing associations—for housing associations, particularly the smaller ones, concentrating on one sort of work and concentrating their activities in a relatively coherent area. The progress of the housing association movement is under continuous review in the Ministry. At the moment we are not convinced that there is a need for a special inquiry, for the simple reason that we do not think it likely that a special inquiry would find out more than we already know or would be able to increase the amount of active thought that is being given to this matter.
My Lords, may I interrupt the noble Lord for a moment? I am grateful to him for what he has said about the housing association and housing society movement. I should like to ask him whether he could give us any specific information on the particular point which I put to him about the housing societies: that is, whether cost-rent schemes, on the one hand, and the co-ownership schemes, on the other, would be eligible for participation in the differential interest rate and the mortgage option scheme, as and when they come forward.
§ LORD KENNET
My Lords, I am afraid I cannot give the noble Earl any information about that at the moment. I will keep my eye on it and let him know as soon as I can. Indeed, if he wishes I will communicate with him immediately with a more detailed account of how things stand at the moment.
My Lords, we think there are about 2 million sound old houses which lack the basic amenities. Unless they are improved, many of these houses will turn into slums and have to be knocked 895 down. I would remind the noble Earl of the general picture—I am quoting off the cuff, so the figures I give are not precise. About ten years ago there were about 800,000 slums in the country. Over the next eight years the Conservative Government, very properly, knocked down about 500,000. Two years ago there were about 800,000 slums in the country once again. The pool just fills itself up. It is like the Red Queen—you are running to keep up with yourself all the time. The principal way you can turn off the tap filling up the slum pool is by improvements. For this reason we are going to attend more closely in the future to the improvement grant procedure which has—not to put too fine a point on it—not been doing too well recently. We pay a great deal of attention to slum clearance and new town planning—and so we should—but we are convinced that this matter of propping up the viable old houses and putting plumbing, baths and electricity into them should be jogged up a bit, if we possibly can do it, from now on.
Owner-occupiers have always made more use of the provision of these grants than the landlords. Local authorities were given power to compel landlords to improve their properties in the Housing Act 1964. Local authorities can declare compulsory improvement areas in which landlords must install the five standard amenities in their houses. Local authorities have power to improve tenement blocks, and tenants of individual houses can ask the authorities to compel their landlords to improve them.
On paper this is all very fierce and authoritarian, and makes one want to say, "Where is my thunderbolt?", pick it up, hurl it and direct it at this. And that can be done all over the country. In practice it is a very difficult matter to determine up to what point one may properly force someone to have a bath put in his house if he does not want one. The presence in a street of, say, 30 houses, of 20 tenants or owner-occupiers who are only too glad to get the improvements, and 10 who refuse, immensely complicates the calculations of the local authority. Should they do the 20 and come back to the 10 in a few years' time when maybe the inhabitants have changed, or should they do the 20 and 896 forget the other 10, or should they do the 20 and declare the 10 to be slums and knock them down and put a car park there? These are matters to which we are turning an increasing degree of attention.
§ THE EARL OF KINNOULL
My Lords, could the noble Lord say something about compensation under compulsory purchase in regard to slum areas?
§ LORD KENNET
Yes my Lords, but as it is now rather late in the evening, I would ask the noble Earl, Lord Knoll if he will be so good as to allow me to write to him about it.
One of the main complaints about the improvements grant system—and this is something which is partly rectified already—used to be that it was hedged around with red tape from Whitehall. Last year the Minister freed local authorities from all administrative restrictions and assured them that in future Exchequer contributions would be forthcoming if the council were satisfied that it was right to pay grants under the improvements scheme. Incidentally, I would say to the noble Lord, Lord Airedale, in regard to his complaint about the delay in issuing the circular, that when it was held up for five months it was not simply stuck in somebody's "In" tray. A large number of administrative matters were being cleared out of the way, and I would say to your Lordships that the period between a policy announcement and the detailed administrative circular putting that policy into effect is often five months, and I doubt whether, as a general rule, we shall be able to get it much shorter.
My Lords, I have already spoken for too long a time. I will not conceal from you (why should I?: it would be absurd to do so) that this has been a difficult day on which to have a housing debate. Over the whole of our discussions has loomed the economic crisis and the measures which have recently been taken, and which are in process of being taken, to counteract it. To-morrow we shall ourselves be discussing that crisis in general terms at quite considerable length; indeed, during our debate to-day I could see many noble Lords sheering off it. It has been discussed yesterday and to-day in another place. The broad outlines of the remedies which the Government are imposing are known to us; 897 but the detailed applications of those out lines are not yet known to us; and cannot be. What is clear—and I will repeat what I said at the beginning—is that housing, hospitals and schools are totally exempt from the cuts in Government expenditure, and I think this is the point on which the Government, this year at any rate, would like their housing programme to be judged: that we are managing to maintain it in spite of having to cut so much else.
§ 9.2 p.m.
My Lords, forty-odd years ago the Bryce Committee gave as one of the functions of the House of Lords the fact that it was a place where matters of great public interest could be debated without involving the risk of a vote against the Government and their resignation. I think this is one of those days. I thank noble Lords very much for taking part in this debate. I have listened to nearly every speech, many of which were of great expert interest. We even had the noble Lord, Lord Caradon, on the Government Front Bench for a moment or two—doubtless he had come over to discuss Armageddon and the World Cup. But throughout the debate, as the noble Lord, Lord Kennet, has said, we have been overshadowed by the fact that the voice of Callaghan is muted; the voice of Crossman has spoken out loud and clear on plans, but it is the voice of Callaghan which decides whether those plans come to anything or not. With those few words, I beg leave to withdrawn my Motion.
§ Motion for Papers, by leave, withdrawn.