HL Deb 13 June 1972 vol 331 cc718-25

1. I am directed by the Secretary of State for the Environment to express his concern at the response of local authorities to Ministry of Housing and Local Government Circular No. 54/70. That Circular emphasised the Government's intention to encourage the spread of home ownership and removed the restrictions imposed in 1968 on the sale of council houses in certain areas.

2. The Secretary of State appreciates that many local authorities share the Government's wish that council tenants should have the opportunity of buying the house in which they live, that the number of local authorities who sold houses increased significantly in 1971, and that there has been a substantial increase in the number of individual sales. But he notes with regret that many authorities continue to adopt policies which frustrates their tenants' desire to own their home. In recent months he has received numerous representations on this score from tenants and other persons.

3. The Secretary of State accordingly urges all local authorities who are reluctant to sell council houses to those tenants who wish to buy them to reconsider their policies. In his view, unless the local circumstances are quite exceptional, a local authority who deny their tenants the opportunity to own the house which they have made their home would be failing to exercise their powers under section 104 of the Housing Act 1957 in a manner which is appropriate to present circumstances. The housing duties of a local authority extend to the consideration of all the housing needs of their area. In the opinion of the Secretary of State these needs include those of the tenants of the authority who aspire to home ownership. He is convinced that it is possible for an authority to meet those needs in a way which is compatible with their responsibilities for meeting their area's requirements for dwellings to let. Many council tenants who are anxious to buy their home would not wish to move if they were denied this opportunity. Sales to such tenants would not therefore affect the supply of accommodation which the authority could let to prospective tenants. Sales to other tenants could normally be offset without difficulty by further building. The Government does not propose to restrict the numbers of further dwellings which authorities can provide to meet local needs.

4. It is often argued that council tenants aspiring to home ownership ought to be content to buy a house in the private sector. In the Government's view, this argument fails to do justice to the legitimate desire of many council tenants to remain in a house which they have made their home and not to sever their ties with a congenial neighbourhood. Moreover if council tenants can buy a house only in the private sector, their council needlessly creates additional demand for houses in that sector which can only aggravate the present pressure on house prices, particularly for houses in the lower price ranges.

5. The effect on the Housing Revenue Account of selling council houses will depend on the circumstances of the case. Should the transaction give rise to a deficit, i.e. if the authority found it necessary to provide additional new dwellings to replace sold houses which would otherwise have been available for letting to prospective tenants, the subsidies proposed under the Housing Finance Bill will, if the Bill is enacted, meet the major part of such a deficit. In addition, as was announced in Circular No. 51/72, contributions payable under the Housing Act 1969 for improved or converted council houses which are sold on or after 1 April 1972 will continue to be payable for the normal 20 year period.

6. Accordingly the Secretary of State urges those authorities who have not so far felt able to give those of their tenants who wish to buy their home the opportunity of so doing, to review their policies on this issue in the light of this circular and to have regard to the wishes of their tenants. In his view, the great majority of authorities will fully discharge their housing responsibilities only if they pursue thy; policies recommended in this circular. Authorities are reminded that, as was explained in Circular No. 54/70, they may sell at up to 20 per cent. below unrestricted market value where resale conditions are imposed.

I am, Sir, your obedient Servant,

W. P. D. SKILLINGTON, Deputy Secretary.

The Clerk of the Authority

Housing Authorities

County Councils

(for information)


(DOE H7/237/23)

4.18 p.m.


My Lords, I am very grateful to the noble Lord for repeating that Statement. I will not enter into a discussion on home ownership—the Labour Party encourages home ownership—but surely in this field the policy must be considered against the background of the local situation. May I ask the noble Lord whether he would not agree that the local authority is in a better position to judge the local situation than the central Government? May I ask him exactly what he means about urging local authorities to adopt the policy of the central Government? Does he mean that he is limiting still further the rights and the discretion of the local authority? May I ask him further whether this proposed new effort to sell council houses will increase the total supply of houses? May I also ask the noble Lord to say whether the demand for houses to rent is, relatively speaking, any less urgent to-day than the demand for houses for sale? Finally, may I ask the noble Lord this question? Is the swingeing increase in rents of council houses that we are discussing in the Housing Finance Bill designed to put pressure upon the tenants to seek to buy their own houses? If so, would not the noble Lord agree that there is merit in the point made by my honourable friend Mr. Frank Allaun in a letter to The Times to-day, when he said that this enthused demand for house purchasers to-day is helping to put up house prices and thereby helping the general pressures of inflation?


My Lords, what does the phrase in the Circular mean, that in the Government's view local authorities have a duty to use their power? Is this legislation by circular, in which the local authorities are going to be bullied and cajoled into doing something by means of pressure brought to bear on them by the Government, when the Government do not dare to introduce legislation, which is what is normally done when the Government claim to place a duty or responsibility on local authorities? Why do the Government go on mouthing platitudes about giving local authorities regular freedom, when in all their actions they are undermining that freedom and preventing properly elected councils from giving effect to the views of the people in the areas that they govern? Have the Government also taken into account in this further step what is going to be the effect later on this year of the pressure on borrowing? Have they consulted the Building Societies' Association and asked them whether there will be enough money in the kitty to go round, or whether the likely effect of this measure will not be to cause mortgages to become more expensive and money shorter to come by?


My Lords, perhaps I can deal with those questions first. I am glad to have confirmation from the noble Lord, Lord Beswick, that his Party are as keen as we are on advancing home ownership. There is no question of the Government's preventing local authorities from doing anything they want to do. We are rather, in this circular, encouraging them to do more; we are not curbing them or containing them in any way. The necessity in many cases is that local authorities should attempt to meet both demands; namely, the very brisk demand, which both Parties welcome, for home ownership, and the undoubted continuing demand for houses to rent. The legislation that we have before the House I think we can leave to the discussion on that legislation. There is no question of this reducing the stocks of houses to rent, because local authorities themselves are perfectly free to build. The noble Lord asked me about mortgages. There is no indication that the supply of mortgages is drying up. In fact, the figures for the last three years, 1969, 1970 and 1971, are 472,000, 544,000 and 659,000; and the figure is increasing.


My Lords, I am not quite clear about this circular. Does it contain a request or an order? Are there to be any sanctions against local authorities who do not accede to what is set out in the circular? Do I take it that the need for this circular arises from the results of the local elections last month?


No, my Lords; I do not think so. There are, regrettably, a number of Conservative-controlled councils who are not selling houses, and we hope that they can be encouraged to do so. We note with pleasure that there are a number of local authorities who were controlled by Conservatives, but are now controlled by Labour, who are continuing the policy of selling houses. I confirm that there is no order in this circular, and there are no sanctions: it is an encouragement to adopt a policy which we believe is both timely and socially desirable.


My Lords, may I ask one simple question on the Statement? What does "adequate" mean in the context of local councils supplying houses for sale? Is it a percentage of the houses they own, or what?


My Lords, of course we are not prescribing anything like that. We are merely encouraging them to sell houses to tenants who wish to buy them at 20 per cent. discount.


My Lords, will the noble Lord now be good enough to answer the question that I put to him? Can he say whether the action proposed in this circular will increase the total supply of houses for both rent and ownership? Will he further answer the question about the phrasing here: that local authorities have a duty"; that "they will be urged to adopt a policy"? Does this mean that they are being asked to do something which in their judgment they do not feel otherwise ought to be done?


My Lords, we are encouraging a trend which is already there. In 1970, there were 227 councils who reported actual sales of houses; in 1971, there were 400. In 1970, 6,000 council houses were sold; in 1971, 16,000 council houses were sold; and the present rate is running at 29,000. The trend is already there. It is very desirable that we should encourage it.


My Lords, arising out of that reply, I wonder whether my noble friend is able to tell us in what way young people are mentioned in this circular, and whether this encouraging news can be applied to young couples desiring houses?


Not for £20,000, certainly.


My Lords, certainly young couples moving into home ownership for the first time on marriage, or shortly afterwards, and people with low incomes are very much in our minds in this connection. The fact is that 31 per cent. of building society mortgages last year went to people earning £30 a week or less. That is very desirable, and it is something that we very much want to encourage. This development meets that demand particularly well. In spite of the fact that at the moment supply does not match the brisk demand for home ownership, more people under 25 are managing to purchase houses than ever before.


My Lords, may I ask the noble Lord, in view of the fact that the Statement referred, first of all, to England, and then was followed by a reference to a similar circular being issued by the Secretary of State for Wales, whether this means that the Secretary of State for Scotland is acting more wisely in this matter and is not issuing a circular; or has he not caught up with Government policy in this matter.


My Lords, I cannot, arising out of this Statement and this debate, say what the Secretary of State for Scotland is doing about this.


My Lords, I understood that in this House Ministers spoke for the Government. Is the Secretary of State for Scotland therefore not presently a member of the Government?


My Lords, I should be very willing to speak for the Secretary of State for Scotland, or for any other Secretary of State, if I knew what to say.


My Lords, I am grateful for that honest answer.


My Lords, is it not a fact that the Secretary of State for Scotland did exactly this last year?


My Lords, the broad policy of encouraging the sale of council houses is one that applies to the whole of Great Britain.


My Lords, can the noble Lord tell me why, after two attempts on my part to obtain a reply, he has not yet answered my question as to whether this action will increase the total supply of houses available for ownership and tenancy?


My Lords, it will not directly do so. What it will do will be to increase the supply of houses for sale to meet the very brisk demand for such houses. I would remind the noble Lord that side by side with this we are discussing another Bill which facilitates and encourages all local authorities who have to deal with the continuing problems of housing stress.


My Lords, I am obliged to the noble Lord, and venture to ask again the question that I previously put to him and which he has still not answered. Can he say whether the relative demand for houses for rent is less now than the demand for houses for ownership?


My Lords, I do not think it is possible to measure these two things in a precise way. The demand for houses to rent is measured in one way, depending on who wants them and who has the rent to pay for them. The demand for home ownership depends on who has the desire and the necessary finance for that purpose. I do not think I can answer that question more fully off the cuff on this Statement. It is something to which we can perhaps return in the course of the proceedings on the Bill that we are discussing.


My Lords, can the noble Lord tell us whether the Government have any idea of the demand for rented accommodation, because I cannot get this information from the Minister's reply?


My Lords, if the noble Baroness would like to put down a Question asking me about that particular point, which does not arise upon the Statement, I should be happy to give her a considered Answer.


My Lords, has not this discussion shown quite clearly the importance of all Parties to supporting housing associations which build entirely for letting? They have not been mentioned in the discussion.


Hear, hear!


My Lords, the noble Lord gave some figures indicating the trend of house purchase, particularly concerning council houses. Does he agree that the trend amounts to the sale of one council house for every 160,000 tenants? That is my first question. The noble Lord said the circular to local authorities tells them it is their duty to offer these houses for sale. For my second question may I, as an old soldier, ask him, as an old sailor, whether the word "duty permits any possible sliding-scale response?


My Lords, I do not know that our time in the Services has much relevance to this, but I think that if the noble Lord will study the circular in the OFFICIAL REPORT tomorrow he will be able to draw his own conclusions.


My Lords, may I ask the noble Lord, in view of the horrible mess and muddle that the Government find themselves in, whether he can say that there might be another Statement issued shortly, saying when the Government are going to resign?


My Lords, there is one point in this Statement which puzzles me. As I understand it, the circular is intended to encourage local authorities to sell houses to their sitting tenants. If the sale is to be made to the sitting tenant, I do not see how this can be expected to benefit those about to be married. I should like to hear the noble Lord, Lord Sandford, on this particular aspect.


My Lords, I was asked a particular question about young couples and lower-paid people seeking home ownership. It was in response to that question that my answer was given.