THE HOUSING SITUATION

HL Deb 15 November 1972 vol 336 cc714-804

2.53 p.m.

LORD LEATHERLAND rose to draw attention to the housing situation; and to move for Papers. The noble Lord said: As your Lordships know, this is the time-honoured and rather charming formula by which we introduce Private Members' debates. I do not know what Papers I can expect to receive, but I do know that millions of people have been receiving papers of a most unpleasant kind during the last few months: papers from the Town Hall saying, "Your rent is increased by £1 a week with a further 50p to come"; papers from the estate agent saying, "The house you are buying for £10,000 is now £12,000"; papers from the building society saying, "Your mortgage payments are to be increased."

My Lords, I was rather sorry to find two significant omissions from the Government's freeze: the selling price of houses and the selling price of land. My first thought was that probably there was some close association between the Conservative Ministers and the landowners, but I soon dismissed that from my mind and took the generous view that it was probably simply an oversight. There were two further omissions from the Government's freeze: general interest rates, which we know are destined to rise; and house mortgage rates, which we know are already rising. These rates affect millions of people. In addition, there are millions of council tenants who wonder how the freeze is going to affect them. Will the 50 per cent. additional rent rise due in April be frozen, or will it be imposed? I am quite sure they want to know, I myself would like to believe that now that Mr. Walker and Mr. Amery have been removed from housing, the curse they put on house purchasers and tenants will also be removed with them. Perhaps I am being optimistic but there is the consolation that Mr. Walker will not once again have to say, when questioned about soaring house prices, "What can I do?" Probably his successor will say it for him.

This is early in the Session, before passions have been really aroused, and I think I ought to make a non-political speech. When all is said and done, the provision of houses is a great humanitarian problem. There are large numbers of our people without proper homes of their own. I do not mean only the people who sleep rough in our cities at night, or the homeless families in council hostels, or the thousands of workers who have to live in caravans, but also the more than 1 million families living in slum homes, the 2 million families living in unfit homes and the hundreds of thousands—I put the figure modestly—of people who are on our council housing lists.

This is not a question that concerns only the submerged one-tenth of our population. There are large numbers of people who are eager to buy houses but who see that the house prices have shot up under the present Government to a level which they cannot afford to pay. We know that millions of houses have been built since the end of the war, but have we adequately visualised the size of the problem? We are a growing population. Our people are living longer and old people still need houses. Our young folk are marrying at an earlier age. We need houses for immigrants and refugees and also for the people whose homes are being knocked down to provide motorways, ringways, offices and shops. If we lull ourselves into the belief that a solution can be found merely by a routine policy, then I fear that instead of getting better, the position may get worse. We really do want a vigorous and sustained housing policy. The situation at this moment is getting worse in one way because of the migration of our population. Old areas and old industries are dying and large numbers of our people are having to move from one part of the country to another to find work and they then find it impossible to get houses.

My Lords, I have very great admiration for the people who want to buy their own houses and for the building societies that help them. But I fear that these people have been punished by the present Government. During the last two and a half years the price of new houses has risen by 37 per cent, and the price of secondhand houses has risen by 45 per cent. It may be agreed that some part of the increased price of new houses is due to the fact that wages in the building trade have risen, but only to a relatively small extent compared with the price increase. But that argument cannot apply to the secondhand houses which have had no wages spent on them at all. I feel that if we could control the price of new houses then the secondhand houses would have to line up in due course. But what do we find at present? We find in the South-East sector of the country that two- and three-bedroomed houses are selling at £10.000 to £15,000 and the value of the house is rising to the extent of nearly £7 a day. Just imagine that we are sitting by the fireside comfortably looking at Malcolm Muggeridge on the television when we suddenly realise that during that hour the value of our house has increased by more than five shillings. That almost makes up for the programme.

I wish to give some evidence in support of my suggestion that houses are selling at these enormous prices. I was looking round the South-East of the country the other day. I saw a three-bedroom house built a few years ago for £7,000 now going at £21,000; a three-bedroom semidetached at Walthamstow only £5 off £15,000; a two-bedroom terrace house at Sidcup for £10,850; a ground floor maisonette at Walthamstow for £12,000, and only leasehold at that; a two-bedroom house at Croydon at £13,500; a two-bedroom flat at Tooting for £10,000, again leasehold; and finally, a two-bed- room bungalow at Ruislip for £21,000, but I must add that that had a parquet floor.

What is the burden that these fantastic house prices are inflicting upon potential house purchasers? The Nationwide Building Society only a week or so ago said that to-day's borrowers are having to pay one-quarter of their whole income on their mortgage; one borrower in three is paying more than £10 a week: and of the people who earn up to £30 a week only 10 per cent. are able to get loans. There was, in addition, an average deposit needed of £3,000. So. you see, the avenue of house ownership, house purchasing, is closed to a very large number of our people. They have to fall back on attempting to rent a council house.

We know that the Conservative Party—I would exempt your Lordships individually—is not exactly enthusiastic about council housing. For instance, Mr. Peter Walker in 1969, the year before the Election, said this: I hope Conservative councils will take great care to resist the temptation to go on building council houses for all sorts of seemingly good purposes …"— like finding homes for people, for example?— Under the next Conservative Government there will be a shift in the other direction. That was the year when the Conservatives won control of a large number of local councils; and one of the first things that many of them did was to slash the house building programmes that had been prepared by their predecessors, and to slash the programmes which they sent forward to the then Labour Minister. The result was that council house completions fell by 23,000 from 1970 to 1971, and council house starts fell by 14,000 from the first three-quarters of 1970 to the same period in 1971, and by a further 10,000 to the same period this year; and this year's figure is lower than the worst year in the 1960s.

On top of that, we had the rent increase Act, which has imposed increases of £1 a week, with a further 50p increase next April. I know that there are entitlements to some rebates and some reductions; but we must get this question of rebates and reductions into perspective. The rebate is not granted from the normal rent being charged at the end of September; it is being granted on that rent plus the £1 imposed at the beginning of October. Let us see the effect of that in a number of (shall I say?) specially selected cases. Take a single woman, for instance—I do not mean that literally!—with an income of £20 a week. Her rent went up last month by £1, from £2 to £3. She gets no rebate this year, so she pays the full £1 increase. Next year the rent goes up by 50p to £3.50: but she gets 48p rebate, so the rent in the second year is £3.02, which is £1.02 more than she was paying in September, six weeks ago. Take a couple with one child, with an income of £24. The rent went up last month by £1, from £2 to £3;they get a rebate of 69p, so the rent is now £2.31, an increase of 31p over September. Next year the rent will go up in April by 50p, to £3.50; they will get 99p rebate, so the rent in the second year will be £2.51, an increase of 51p over September. So in talking about rebates and reductions, we may be talking about rebates but we are not talking about actual reductions. I am not making Party propaganda, but just trying to impart objective information. In any case, rebate or no rebate, the people who pay increases far outnumber those who will get rebates or reductions.

One effect of these rent rises is to drive more and more people on to the free market for privately-owned houses. That, again, is helping to push up the price of those houses on the market. If the Government had deliberately set out to inflate the private house market they could not have done it better than by driving people away from the council estates. It is not only increased rents that these people are having to pay. They are having to pay increased rates (up 25 per cent. in the last two years) and increased fares. and to pay for dearer clothing, dearer bread, dearer meat, dearer fish, dearer milk, dearer gas, dearer electricity, dearer water, dearer beer, dearer school meals—dearer nearly everything and Mr. Heath tells them that there are still further increases in prices to come. The pound in your pocket to-day does not buy anything near as much as it did in the days of Mr. Harold Wilson's famous broadcast.

It is no use shutting our eyes to the fact that land speculation has been largely responsible for forcing up the price of houses. When the Land Commission were abolished that gave the green light to the speculators and the manipulators. In the last six months of the Labour Government, when the Land Commission were in operation, land prices came down by 4 per cent. As soon as the Commission were abolished the free market went mad; and it was helped to go mad by the Government, which granted tax relief on the interest on the speculative loans which gamblers had in order to indulge in land speculation. And what has been the consequence of that? Less than three acres in an Essex village fetching £250,000; councils being compelled to pay £25,000 an acre for scruffy, neglected farm land; bungalows built for £6,000 fetching £80,000 because the developer wants the land—and I know that is a fact because the estate agent is a friend of mine; and land near a Hertfordshire town going up from £12,000 an acre to £50,000 an acre in a few years. Then, in the last few weeks, less than an acre of land with planning permission for 17 terraced houses on the outskirts of an Essex town fetched £123,000; two-thirds of an acre with permission for seven bungalows in another Essex town fetched £64,000, that is £100,000 per acre. Another two-thirds of an acre in Sussex with permission for eight terraced houses also fetched £64.000. That is £8,000 per house for the land alone before a single brick is laid.

LORD BARNBY

My Lords, would the noble Lord give way for a minute? I always enjoy his presentations, and I have listened with great attention to the development of his argument. However, when he is lambasting the Government for increased prices of both land and houses, does there not seem some degree of hypocrisy and double standards, when inevitably the increased money supply, initiated so lavishly by the former Government—and followed up now, for that matter—together with the great encouragement from the Opposition over the last five years of a very liberal inflow of non-white immigrants into this country, must inevitably increase both the competition for jobs and the competition for houses?

LORD LEATHERLAND

My Lords, the noble Lord is quite mistaken when he says that I am lambasting the Government. I said that I was making a nonpolitical speech, and I am contenting myself with projecting objective facts.

Now let us move on to the question of planning. The Government are excusing themselves by saying that the increased land prices are due to a shortage of land. Of course that could have some effect in some places in some cases, but the hoarding of land that has already received planning permission is having a much greater effect. Developers are finding that by hoarding the land they can make more money than by building houses on it. Let us see the facts about this. The South East Regional Planning Organisation recently said this: At the end of 1971 the pool of outstanding planning permissions was for over 150,000 private houses in the South East (excluding Greater London) of which 118,000 have not been started. That is hoarded; they have not been started. The Planning Organisation then went on: The high prices for building land were not attributable to the failure of Planning Authorities to approve sufficient land for house building. Then, if corroboration is needed, the Chief Planning Officer for Essex said a few weeks ago: We are still issuing planning permissions in excess of the rate at which building is going on. The theory that these high house prices are just caused by a shortage of land is absolutely mad. There are similar statements, though perhaps not in such vivid language, from the planning authorities of many of the counties in the South Eastern sector of this country.

I know a field which the developer has been hoarding for over two years. The boards are up that houses are to be built, but not a brick has been laid. He is making more money by keeping the land idle than by building on it. I also know builders who have suddenly slowed down, or stopped, the work on their building sites, in the full knowledge that when they start up again in six months' time they will be able to put £1,000 or £2,000 on the price of the house. I know a farm which the housing authority had to buy. It was worth £300 an acre, and when the planning committee had just put a little tick on a schedule it became worth over £20,000 an acre overnight. I know that it will be said that the farmer may have to pay capital gains tax. The operative word is "may". There are many dodges, and accountants and lawyers know them all. A simple way is for him to reinvest the money in farmland within the next 12 months and he is free of capital gains tax.

I feel that where a public authority takes the action which creates the added value, then that public authority should get the bulk of the profit that accrues. It is that public authority which has created the "surplus value", if I may use a Marxist expression while not being a Marxist. I now see that the Government, without changing the tax law in this respect, are telling local authorities to release a lot more land for housing. That only means that a lot more £300's are going to be converted into £20,000's. It is giving the speculators a chance to get out while the going is good before a Labour Government sees justice done. I have just had an idea. Why does not the Prime Minister invite the land owners round to No. 10, fill them up with roast chicken and hock, and then get them to agree to a freeze on their prices like he imposed a freeze on the wage earning classes?

Now let us look objectively at the way the housing shortage is being tackled. I must give the exact figures. In the first three-quarters of this year completions of all kinds of houses were more than 14,000 down compared with those for last year. Completions of all kinds of houses in the first two quarters were about a thousand down on 1970. Last year's completions of all kinds of houses were 33,000 below the average of the last four Labour years. This of course was running true to type, because in the last five years of the Labour Government over 400,000 more houses were built than in the last five years of the preceding Tory Government. Slum houses demolished in the first three quarters of this year were a thousand fewer than in the three quarters of last year. I make no great point about that, but I do say that the Government must not claim that they are building fewer council houses because they are undertaking more slum clearance. A chart that was issued by the Ministry a few days ago shows that the trend of all classes of completed houses this year is downwards. The reduction in the public sector is particularly noticeable. Here is a copy of the chart: there is 1970; there is 1971, 13,000 down; here is 1972, and the dotted line sloping downwards—almost like the way down Ben Nevis—is what the Ministry's chart itself describes as the estimated trend". My Lords, it is no good blaming that steep downward trend on the strike, because the downward trend began some months before the strike began. By a coincidence, I found the other day some cuttings from this year's Financial Times. I will not read the articles; I will just content myself with the headings, because they are quite eloquent. The first is: Housing starts in January lowest for nearly a year. Then: February house building still lags. Thirdly: Building orders fall again in August. I suppose that while I have been speaking another one or two houses have actually been built, so I will come to a close with a few suggestions. I feel that far more houses need to be built, both private and public, but I would put the greater emphasis on public, the sector which is suffering very considerably under the present Government's policy. Land and house prices should be frozen, and council rents should be frozen at their present levels. Tenants should be excused the extra 50p which is due to come on in April. There should be lower interest rates for council house building. My noble friend Lord Greenwood of Rossendale showed how they could be restricted to 4 per cent. The Government should cancel Mr. Walker's statement about reducing the building of council houses. If the new Minister does not know how to eat those words, I am quite sure that the Prime Minister would show him. The sale of council houses should be restricted while the waiting lists are so long. These sales of council houses do not add one single home to the number of houses that are available. Land prices must be brought down by restoring to the community a large part of the value which the community itself, and the community alone, has created. The income tax relief on interest on loans for land speculation should be abolished. Tax relief on mortgages for second homes should also be abolished. House building in the new towns should be speeded up. The land is already available there, but the starts last year were 3,000 fewer than in 1970.

I praise the Government for continuing the Act of my noble friend Lord Greenwood of Rossendale for subsidising the improvement of old houses, but developers must be stopped from taking public money, getting tenants out and then letting the houses, converted into flats, at exorbitant profits. This practice is not universal and I shall not exaggerate my case, but it is happening in far too many cases. In short, the Government should give more thought to building houses, should pay more attention to people and should have less sympathy for profiteers. We know that there is "no place like home"; we all sing about it. The great tragedy is that there are large numbers of people who do not have worthwhile homes which they can call their own. My Lords, I beg to move for Papers.

3.21 p.m.

THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD)

My Lords, I am glad to have this opportunity of debating housing and I am grateful to the noble Lord, Lord Leatherland, whose speech we have all admired, for providing it. We are proud of our record and I welcome the chance to give an account of our stewardship. If we are to join issue on any points—and it is clear that we shall—I could wish for no more spirited opponent (though non-political, of course) than the noble Lord. As a prelude to my remarks on housing policy proper, I should like to say a word or two about inflation. Inflation casts its shadow over everything and its baleful effect is particularly serious on land and on houses. Nothing can escape its effects, least of all real estate, as indeed the noble Lord, Lord Leatherland, has so clearly shown, and I am glad he introduced this point right at the outset.

As the value of money falls, the price of land and of houses rises automatically. But secondly, in addition to that, the demand for land and for houses rises as people move to hedge against inflation. On top of both of those factors, and reinforcing both of those influences, in the last two years in particular, there has been the release of a further pent-up demand for home ownership. I say this by way of a prelude, to make the point that the remedy for the worst effects of inflation lies outside the field of housing policy. It lies instead in the fields that we were discussing on the last two days of the debate on the Queen's Speech and in the field which the other place is at this moment discussing. The rise in land and house prices is indeed deplorable, and in some cases scandalous, but in so far as it has been caused by inflation it will be remedied, in the main, by the control of inflation.

LORD BALOGH

My Lords, does the noble Lord realise what he is. saying? Yesterday we heard that the Government's deficit is £3,000 million, and that monetary circulation measured in M3 is increasing at the rate of 20 per cent. per annum; and he now says that this will be dealt with by measures concerned with incomes. This has nothing to do with incomes. It has something to do with liquidity.

LORD SANDFORD

My Lords, no doubt the noble Lord is right. What I am saying is that, whatever one does in the housing field, with inflation at its present level one cannot totally, or even to more than a small extent, avoid its effects. I want to concentrate to-day, as I believe the noble Lord, Lord Leather-land, and other noble Lords want to do, upon housing policy and not upon policies to do with the control of inflation. We have had in recent weeks a two-day debate on inflation and we shall be having a further debate when legislation reaches us. I am anxious that this afternoon we should concentrate—and I believe that this is the wish of all noble Lords—upon housing policy and not upon economic policy. But that is not to say that in housing we must not do all we can to mitigate the worst effects of inflation and overcome the problems that it causes; and to those I want to turn.

Incidentally, it is as well that we do not have to rely upon the Land Commission, which the noble Lord, Lord Leatherland, mentioned as though they might be able to help at this stage. In the three years that that Commission existed, they acquired 3,000 acres of land and disposed of 300 acres over the country as a whole. In contrast to that, in London alone, under our policies and our encouragement, the docks and British Rail together look like being able to make 300 acres available for housing—as much as the Land Commission were able to release over the whole country during the whole of their life of three years. In a shorter period of two and a half years since the Election, nearly 27,000 acres of land have been released by the Ministry of Defence, by the hospital boards and by British Rail, much of it for housing. More recent measures will make available 5,000 acres, just for the new towns in the South-East, to say nothing of the other land for housing which local authorities will be able to acquire with the extra allocation of £80 million-worth of loan sanction announced last April, and to say nothing, also, of the extra land coming forward with planning permission for housing in the growth areas of the South-East at a rate 70 per cent, higher than two years ago. In the West Midlands, since April alone, a further 700 acres of land have received planning clearance for housing. and a special exercise there with the National Coal Board has identified a further 1,000 acres for residential development. All this is to be compared with the 300 acres released by the Land Commission in the three years of its life. How would that have helped to meet the demand which we face to-day?

LORD POPPLEWELL

My Lords, before the noble Lord leaves that point, will he also cover prices? Will he mention the price of land released by the Land Commission and the price of land released in the way he has indicated?

LORD SANDFORD

Of course prices are higher, my Lords, as I said at the beginning. Under present conditions of inflation, there is very little—alas! too little—that one can do in the field of housing policy alone to control prices. The remedy for that lies in the control of inflation. What one can do is to mitigate its effects by increasing the supply as fast as one can to meet the demand, and the figures I have given illustrate our success in doing that. Furthermore, in passing, I would stress that all of this—and these are only examples—has been achieved without infringement of the Green Belts. In fact, as your Lordships know, my right honourable friend has recently very much extended the Green Belts in a number of areas.

But in addition to encouraging and securing the release of land to meet the demand, one of the Government's main concerns—and this is the concern of everybody who has to do with this problem—is to ensure that the lower paid can afford a decent home and that they are shielded from the worst effects of inflation. That is why we have brought in, as a necessary accompaniment to the extension of the fair rents system introduced by the Party opposite to almost the whole of the rented housing market, a national system of rent rebates and rent allowances. It is indeed as well that, under these conditions, the lower paid are so shielded from inflation of housing prices. For the first time, every local authority must now run for all their tenants a rent rebate scheme which is at least as generous as the model scheme provided for in the Act. These rent rebate schemes are now in operation, and every council tenant who needs help with his rent can get it.

Furthermore, from January 1 every local authority must also bring into operation a parallel scheme of rent allowances for those in unfurnished tenancies in the private sector, and I am glad to say that some authorities have already taken advantage of the Act to introduce their rent allowance schemes. This is another step forward. When the Party opposite first began to bring rents into regulation there was no provision to help those private tenants who might have difficulty with increases in their rents. Until January 1, the only private tenants who had help with their rents were those in the City of Birmingham, but from the New Year onwards that help will be universally available, backed by a 100 per cent. grant from the Exchequer.

My Lords, in addition we are bringing forward legislation this Session to extend the availability of rent allowances to the tenants of furnished accommodation—again, another complete innovation. It is among these tenants that some of the poorest and worst-housed people are to be found, and I am sure that this extension will be particularly welcome. It has been argued that, so far as furnished tenants are concerned, what is really needed is greater security. If this could have been secured without further disadvantages, it would have been done; but this is a matter which has been carefully examined by the Francis Committee, who have advised that such a step would have very undesirable consequences in cutting back on the supply of this important commodity of furnished accommodation in the market, and it is for that reason that we have not felt able to move in this direction. But the Government are fully aware of the difficulties that can arise when tenanted accommodation, both furnished and unfurnished, is converted or modernised. A circular is to be sent out within a matter of days to local authorities asking that when they approve improvement grants for tenanted property—and this deals with a particular point which the noble Lord, Lord Leatherland, mentioned—they should take steps to inform the tenants of their basic rights, particularly their security of tenure, in relation to the improvement. The circular will also remind local authorities that they should at all times make full use of their powers to act if they have reason to believe that tenants are being harrassed or illegally evicted.

My Lords, so much for our measures to shield the lower income groups from the worst effects of inflation and to provide for their needs in particular. I turn now to the elimination of unfit homes. This takes two forms: first, slum clearance—the clearance of the slums that need to be cleared—and, secondly, the improving of houses that can be improved. On slum clearance, considerable progress has been made. The rate of slum clearance achieved during the second and third quarters of this year—36,900 dwellings—is the highest postwar figure for any similar period. In May, we asked local authorities, by circular, to assess the overall situation as regards substandard housing in their areas and, taking advantage of the 75 per cent. slum clearance subsidy now available to them under the Housing Finance Act, to draw up strategies for dealing with the problem within a decade. We now have their returns, and the results are encouraging. Birmingham and Liverpool plan to clear their remaining slums by 1980; Leicester and Stoke by 1977; Manchester by 1975.

But more heartening and more encouraging is the progress in housing improvement. Approvals for the first nine months of this year were 226,500—an increase of 100 per cent., double that achieved in the same period in 1970. It should be noted, my Lords, that during the first six months of 1972 owner-occupiers received 41 per cent. of the grants, that local authorities received 35 per cent. of the grants and that other owners, predominantly landlords, received 21 per cent.—and the landlords' share fell. I mention these particular figures because there has been criticism—and the noble Lord, Lord Leatherland, repeated it—of the improvement grants system, in that it is allowing landlords and developers to benefit and to speculate in this field. From what I have said already, noble Lords will see that this cannot apply to more than 20 per cent. of the sector—that is the size of the landlords' sector—and that it can apply to any large extent only in London because this is where the landlord element of the tenanted houses is present to any great extent. What we are in fact concerned with is a little under 5 per cent. of the property to which grants are applied. This is a problem which, where any abuse does occur, a local authority ought to be capable of handling. They have total discretion as to whether or not a grant should be given in relation to any particular application, and the local authority's main concern should be to ensure that the grant produces an amelioration of the housing conditions within its district; and, as I have said, we propose to take steps within the next few days, by circular, to ensure that when any improvement grant is given the tenant is made aware of his full rights, and particularly his security.

My Lords, if we turn from the London situation and look elsewhere in the country we see a very welcome attitude towards improvement grants, and certainly in the assisted areas there is very little doubt about the benefits which they bring to all concerned—and the 1971 Act has greatly stimulated progress in housing within these areas. In the six months following the extension of the development and intermediate areas in March of this year, 58 per cent. of the grant approvals have been given in these areas, and this is very much what we want to see. In the Northern Region, the whole of which has been subject to the 1971 Act provisions from the start, the number of grants approved in the first half of 1972 has increased by no less than 159 per cent. over the same period in 1971.

LORD POPPLEWELL

My Lords, could the noble Lord break those figures down a little? How many of these improvement grants to which he is referring are being expended on council houses and how many on private houses?

LORD SANDFORD

My Lords, I should like to be able to do that straight away in respect of the regions, but I did mention the national figures just now; that is, 41 per cent. to owner-occupiers and 35 per cent. to local authorities. Whether it will be exactly the same in the Northern Region or the North-West Region, I cannot say without notice, but I can let the noble Lord know.

So much, my Lords, for action being taken to deal with our substandard and our unfit houses. The third aspect to which I should like to turn is that of building to meet the worst shortages, and here I should like to remind your Lordships that the policy which we have now to adopt and have adopted in the Housing Finance Act is to concentrate attention, subsidies and effort on the worst areas, there no longer being an overall national shortage; that is to say, the stock of houses corresponds to the number of people needing them. That is not to say that there are not serious shortages and housing stress in particular areas. But I start first of all with building for the individual home owner, because that is where the greatest demand now is—and it is now the largest tenure group. This is something that the Government are determined to encourage, and it means that henceforward the private sector of new house building will be growing in importance in relation to the public sector. The results of our policies can be seen in the substantial increase in private house building which has taken place since we took office. At that time the trend was downwards: we have reversed it. The private sector starts in 1971 were 26 per cent. up on 1970; and in the first nine months of this year they were 14 per cent. up on the same period in 1971 and 38 per cent. up on the same period in 1970.

I think private sector building is needed in all parts of the country because the demand for home ownership is universal. In the public sector there is a different situation because the demand varies very considerably from place to place. It is clear that the solutions to local housing problems have to be found in the local context, and I think I would disagree with the noble Lord, Lord Leatherland, if he is saying that we still need to concentrate on building for the public sector all over the country. I do not believe that that is what is now needed.

LORD LEATHERLAND

My Lords, I am a well disciplined person who does not interrupt, but when I said that I did not say "all over the country".

LORD SANDFORD

My Lords, it was my mistake for not listening more closely to what the noble Lord was saying. It is, as he will already have said, rather more a serious local problem to be dealt with according to local housing authorities' own assessment of local needs. Our form of housing finance enables those local needs to be met where they exist and provides greater concentration of subsidies upon them.

This can be seen clearly by looking at two contrasting major cities: London and Manchester. The London housing problem is still enormous, and new building, on a massive scale, by all London authorities is essential. The figures show that in the first nine months of 1972, the public sector starts were over 9 per cent. up on the same period of 1970, and there was no reduction in public starts there. A similar comparison of tender approvals in terms of dwellings shows a rise of nearly 13 per cent. These local figures are henceforward going to be of more significance in the public sector than the national ones. Manchester City Council, on the other hand, in contrast to London, have recently considered a report on the housing situation there, and I believe that the report was unanimously approved by the council. It envisages a housing surplus in the city in as short a term as five years and the abolition of all limitations upon getting on to the housing waiting lists. The rate at which Manchester continues to build is a matter for their council, but this illustrates the point that we need to get away from our preoccupation with national figures. I hope that all authorities like Manchester are reappraising their local situation in that way.

There is the question of public authority building for sale. Generally speaking, as your Lordships know, it is our view that the private builder is best equipped to provide housing cheaply and efficiently for the full range of demand. Where, for any reason, private enterprise cannot or will not build houses, particularly for the lower-paid income groups, then we are ready to authorise local authorities to employ contractors and to build for sale. We have done so in some cases. Local authorities are also in a position to help tenants who want to buy their homes by being prepared to sell council houses to certain tenants. Noble Lords will be aware that we issued a circular on this subject in June. I know that the Party opposite are not all wedded to this idea; but we are encouraging a trend which is already there—and not without some success. In 1970, 6,000 council houses were sold by 230 local authorities. In 1971, 17,000 houses were sold by 430 authorities. In the first nine months of this year alone, over 30,000 houses have been sold by some 550 local authorities. That is an annual rate of 40,000. We hope that this trend will continue. If it does, it will certainly help stabilise the market at the point where stabilisation is most needed. Many more council tenants have these aspirations and I see no reason why they should be forced to leave the homes they live in if they are to realise their housing wishes.

My Lords, we must put the increase in house prices in perspective. Despite inflation, Government policies for the private housing market have permitted a continuing rise in the number of people who can afford to become owner-occupiers. The young and the less well off have not been losing ground in relation to borrowers generally. It is surprising, but a cause for satisfaction, that, in contrast to what the noble Lord feared, and to what many people feared, these are the facts of the matter. In the first half of 1972 185,000 loans were issued by building societies to first-time purchasers, as against 140,000 in the same period of 1970, two years earlier—a substantial increase. The number of loans to borrowers under the age of 25 rose in the same period from 57,000 to 74,000. Comparison for people having incomes up to the earnings of the average industrial manual worker shows an increase from 71,000 to 100,000. During the period concerned, the total number of loans issued by building societies rose from 244,000 to 340,000. This general rise is broadly comparable, pro rata, to the particular increases I have noted above. These are national figures, and the picture is much the same regionally. In other words, despite inflation, the prospect of home ownership—and this is important—has widened, as we hoped that it would, and has not narrowed as we feared that it might.

My Lords, I am afraid that this has been too long a speech already, but I can now move to my conclusion. I have sought to explain our policies in the context of the housing situation as it is to-day and in a climate of serious inflation. It involves all of us: Parliament, voluntary bodies, organisations and the public generally, for nothing is more important to the quality of life (which is very much what the Department of the Environment is all about) than the home. It also perhaps mainly involves the local authorities, for they are the bodies who are closest to the people; and a great deal of what has to be done can be done only by them. I am not thinking here of housing in the narrow sense. We need now to think of housing in a much wider sense than we have done in the past because we are beyond the simple business of just providing homes all over the place to meet a universal demand. There is still a pure housing policy of building homes to meet basic needs, to see that people have decent homes within their means, and many local authorities will need to continue concentrating on that. But housing in many other places, an increasing number of places as the years go by, has a much wider facet. It is just one component among many in the whole field of urban renewal and development. There are, I am sure, many large problems lying ahead but they are of a different kind from those that we have faced in the past.

My Department has just celebrated its second birthday. I would remind noble Lords of what we said about its creation in the White Paper of October, 1970: It is increasingly accepted that maintaining a decent environment, improving people's living conditions and providing for adequate transport facilities all come together in the planning of development. These are among the main functions of local authorities and are having an ever increasing impact on ordinary people, in town and country and especially in and around the larger urban areas. Because these functions interact, and because they give rise to acute and conflicting requirements, a new form of organisation is needed at the centre of the administrative system. This is what we now have. This is the thinking which led to the new organisation also of local government. We have now provided for that in the recently enacted Local Government Act. There was a need to do away with obsolete local government boundaries and to replace them with others reflecting the pattern of how people actually live in each particular area. To ensure that we attain the quality of life we want in our cities and towns and in the countryside about them, we must increasingly adopt a wholly integrated and total approach to the problems of the environment, both rural and urban, and the relationship between the two. This total approach involves housing in all its aspects. It involves also urban renewal, transport, recreation and indeed all elements of living. In all this the new style local authorities have a vital part to play. It will mean a re-thinking and a re-building on traditional roles; and in all fields, not least housing.

LORD CHORLEY

My Lords, before the noble Lord resumes his scat, I wonder whether he will say something about this non-use of permits which formed a great part of my noble friend's speech and which he has completely ignored. I am referring to people who receive permits to build but deliberately hold off in order that prices may rise.

LORD SANDFORD

My Lords, if I may I will leave that point to my noble friend Lord Gowrie, who will be winding up. He will deal with the points raised by the noble Lord. Lord Leatherland, and with general points that other noble Lords may raise.

LORD CHORLEY

My Lords, I think we ought to have an assurance that that will be so.

LORD SANDFORD

My Lords, I can give that assurance. My noble friend will deal with it.

3.50 p.m.

BARONESS SEROTA

My Lords, my noble friend Lord Leatherland opened this debate on the housing situation in such powerful, informed comprehensive terms, although I would hardly regard them as non-political, that there is scarcely need to deploy further arguments to support the overwhelming case which he made against the Government's housing record in the last two and a half years. The speech we have just heard from the noble Lord, Lord Sandford, on behalf of the Government, was, to my mind, not only defensive, but also failed to answer the many questions and issues of policy which my noble friend Lord Leatherland raised. I am sorely tempted, moreover, to contest the thesis in the initial part of the noble Lord's speech, that house and land prices will be controlled when we have controlled inflation. He would not go so far, presumably, as to say that they will actually drop. But as my noble friend Lord Garnsworthy will be speaking towards the end of the debate on the general issues affecting Government policy in the field of housing, I must restrain myself from repeating the same arguments over and over again.

I have no doubt, too, that noble Lords who are contributing to this important debate will add their own experience and knowledge of the real hardship, distress and inequality that the wild inflation in house and land values during these last two years, coupled with the abuse of improvement grants by ruthless speculators—particularly in London—to which the noble Lord, Lord Sandford, has just referred is inflicting on particular groups in the community, especially young married couples, families with children, the elderly, and certain groups of individual homeless people, particularly people recently discharged from mental hospitals. All I shall seek briefly to do, therefore, is to focus the attention of the House on some of the social aspects of the tragic and complex problem of temporary or chronic homelessness which represent a long-term threat to the general health and well-being of this country.

My noble friend Lord Leatherland pointed out that if the costs of houses and land are allowed to soar at their present rate, the living standards of this country overall will inevitably be affected for many years to come. The housing and land crisis we are now facing is already creating new patterns of social deprivation, particularly for future generations of children and families which simply cannot compete in the present housing market, and who never will be able to unless the Government take positive steps now to halt this ever rising spiral. One of the difficulties which faces us all in considering this very complex question of homelessness is in assessing the true scale of the problem and agreeing an exact legal definition; although, of course, we all really know what it means. The actual number, in the official figures. of people living in local authority temporary accommodation hostels in 1971 was 25,969, which represented some 4,459 families who are actually without a roof and is an increase of 2.520 people. or 699 families, compared with the 1970 figures. The largest increase, unfortunately, occurred once again in the Greater London area. But this, my Lords, as we all know, is by no means the whole story. Indeed, it is only the tip of the iceberg, and if we accept, for example, the Shelter definition of homelessness, which includes people living in grossly unsatisfactory housing in the sense of it already being condemned, there are probably as many as 3 million families who are homeless to-day.

Noble Lords may remember that it was only last month, during our discussions on the Local Government Bill, that I drew the attention of the House to the latest published figures setting out the number of children received into care in England and Wales in the twelve months ending 1971. I make no apology for repeating those figures to-day because they reveal such a serious situation. The stark position is that in the space of only one year 1,441 children were received into care by already hard-pressed local authority social services departments because their families had been evicted; another 1,555 were received into care because their families were made homeless through other causes, and a further 3,176 because of unsatisfactory home conditions. That is a total of some 6,000 children who, in the space of only one year, were parted suddenly, and often traumatically at an early age, from their parents, their homes, their schools—indeed, from everything that was familiar to them.

My Lords, I know of and share the concern of the Secretary of State for Social Services and his Ministerial colleagues to discover the causes and to break "the cycle of deprivation". There is now ample evidence that the basic need of every family and every child is for a stable and secure home, especially in the early, formative years, rather than to live in children's homes or temporary accommodation hostels or in grossly inadequate housing. We know that children who are received into care and lose their families and their homes are potentially in danger of becoming children at risk or in trouble, as they grow into adult life, and in danger of becoming inadequate parents of future generations of children.

Most recently the National Children's Bureau's Child Development Study From Birth to Seven", which studied a group of some 17,000 children born during a week in March, 1958, showed beyond doubt the vital importance of social and environmental factors in determining children's physical and mental health, education and indeed their life chances of all kinds. Some 15 per cent. of the group of children studied were found to be living in their own homes in conditions recognised as inadequate even by the standards set for the 1966 Census and the regional differences within those figures revealed even higher percentages. Of these the children in working-class homes were the most overcrowded, 37 per cent., compared with 1 per cent. for children from professional families. The more overcrowded the home the more likely it was to lack the basic amenities of a hot water supply, bathroom or even an indoor lavatory. No wonder they were found to have fallen far behind their middle-class contemporaries in terms of social adjustment and educational attainment by the age of seven. However many playgroups we provide for under-fives; however many summer play projects or remedial classes are provided in priority areas of high social need, we can never completely offset the continuing handicaps associated with social class that grossly inadequate housing in an appalling environment or a disturbed home situation exacerbate.

At this time the thoughts of many of your Lordships are with the tragic and lifelong problems of children and families who are suffering from the effects of the thalidomide disaster and with their long drawnout battle for proper compensation. But it is even more difficult to assess and to define the wounds and scars of personal and social tragedies which can equally cripple and maim children for the whole of their adult life. We will continue to produce damaged children and damaged adults unless the findings of the National Children's Bureau are translated into practical policies. I very much hope that the Secretary of State for Social Services and his colleagues, working with the Department of the Environment, will take full cognisance of them.

My Lords, whatever definition we accept for the scale of this problem there is no doubt that the investigation into homelessness in Greater London led by Professor Greve of Southampton University, and commissioned by the Department of Health and Social Security in 1969, and the subsequent Report of the Joint Working Party which was set by Lord Aberdare's Department, and the London Boroughs Association, on problems of homeless families for children, households without children and single homeless persons, as well as the recent reports issued by the Mind campaign and Shelter, all reflect increasing public concern at the degree of homelessness and the treatment of homeless families, which even now, I am afraid, still carry the stigma of the archaic Poor Law doctrine of less eligibility in some areas. One conclusion to all these reports was that the major underlying cause of homelessness, especially in urban areas, was quite clearly to be found in the shortage of reasonable and cheaply rented accommodation, and that homeless families tend to come from extremely poor overcrowded housing with few amenities, many having been evicted by private landlords on previous occasions.

The Glastonbury study of families without homes in South Wales and the West of England heavily underlined the related and inter-acting causes of marital breakdowns, separated wives, unsupported mothers caring for children, unemployment and poverty; but nevertheless, even allowing for these admittedly related causes, there is no doubt now that the inability to remove the prolonged burden of poor housing is the main precipitating factor of complete family breakdown and consequent homelessness. It is in this context that I deeply regret, as do my noble friends, the Government's encouragement to local authorities to sell off council houses, which reduces even further the source of supply of reasonably rented accommodation in accordance with social need.

I do, however, welcome their decision, to which the noble Lord, Lord Sandford, referred this afternoon, to make rent allowances available to tenants in the private sector, and particularly to furnished tenants, which include some of the most impoverished families. But the fact remains, as has already been mentioned in this debate, that many of these families will still face rising rents; and it will need not only the circular which the noble Lord, Lord Sandford, has told us is going out shortly, but a national publicity campaign, combined with sustained local action, to ensure that these newly available rights of subsidies are taken up. It is equally imperative, in the view of this side of the House, that these tenants should have legal security of tenure, as recommended by the minority Report of the Francis Committee, for they are often the lowest paid, the least secure and they pay the highest rents for the worst accommodation.

I also welcome the recommendation in the Report of the Department of Health and Social Security and the London Boroughs Association Joint Working Party, that overriding priority should be given to accommodating families who have lost, or are likely to lose, their homes, and selective priority to vulnerable families in danger of breaking down under severe strain. The Report also recommended that the provision of accommodation for these families should be recognised as the responsibility of housing departments, working in close collaboration with social service departments, to provide any necessary supportive and rehabilitative services. May I therefore ask the noble Lord who is to reply at the end of the debate what action has been taken on these recommendations; and whether the Government now accept the central recommendations of these three Reports, and of the Seebohm Committee before them, that housing the homeless must be fairly and squarely accepted as the responsibility of housing authorities, and that this will be the situation in the new local government system to which the noble Lord, Lord Sandford, referred? I know that the noble Lord, Lord Aberdare, is sympathetic to this view. He knows that the Seebohm Committee were particularly concerned at the lack of co-ordination between housing departments and the predecessors of the new social services departments. Unfortunately, our new two-tier system of local government will continue to divide housing from education and the personal social services in the counties, and perpetuate the present difficulties.

Having ventilated these issues during the passage of the Local Government Bill, and the Government having accepted the need to provide for statutory consultation between the counties and the districts to ensure co-ordinated policies in relation to the elderly and the infirm—a term which I hope will be construed as widely as possible—I am now asking whether the Government are in a position to make a clear and definitive statement on the responsibility of the new housing authorities for housing the homeless. The noble Lord, Lord Sandford, and I are completely at one on the need to develop a broader conception of housing functions—far broader than has been usual in some parts of the country; but surely the new authorities will have to establish permanent machinery to ensure that there are regular and on-going consultations between the two tiers over the whole range of problems involved in developing preventive services and for providing, designing and siting homes for groups of people with special needs, including homeless families, children in care, families under the threat of eviction and families which are inadequately housed.

All our experience in the last twenty-five years of trying to deal with this tragic human problem, of such size and complexity, accentuates the necessity at this time for Government to give a powerful lead, and to stimulate and encourage united and co-ordinated policies for action between local housing and social services departments, if we are to deal constructively with the damaging problems that actual or potential loss of a home give rise to. I agree with the noble Lord that this action is needed at local level; but I am asking the Government to give a lead and not simply to leave it to chance, and particularly to make the proper provision available in the new local government system to which we are now looking forward. If we are to prevent eviction from local authority or private accommodation, if we are to provide the constructive social work and support for homeless families to help them sort out their difficulties, and re-house and rehabilitate them in normal housing accommodation, and if, as I hope, the Government will insist on decent standards of accommodation in temporary hostels in every single local authority in the country, then we must have coordinated policies at national level too. These measures would go some way to alleviate the worst effects of homelessness, but they will also undoubtedly require the allocation of additional resources, both financial and human.

The noble Lord, Lord Sandford, referred to the Government's policy of concentrating resources on the cities with most urgent housing shortage and the pressing need for comprehensive redevelopment. May I ask whether new money is to be available to local authorities for such housing programmes, or is it again merely a question of giving the local authorities the authority to spend their own money? If the latter is the fact, then I am afraid it is too much to expect local authorities, who themselves are facing inflation and the continuing rising costs of providing their existing services, to make effective diversions of existing resources within their present budgets to undertake some of the essential tasks that I have outlined.

This is a national problem as well as a local problem, and we believe that the Government should mount a full-scale operation now to house the homeless. They are the casualties of the national housing situation which my noble friend Lord Leatherland outlined so effectively at the outset of this debate. I would submit that if a society such as ours, which is relatively so affluent and advanced, and which prides itself on being compassionate, fails to provide the resources, the homeless will pay heavily now in misery and unhappiness. They are the casualties of the present housing situation; but the country as a whole will inevitably face far heavier social and economic costs in the future unless we face up to the situation now.

4.10 p.m.

LORD HYLTON

My Lords, I am sure we are all most grateful to the noble Lord, Lord Leatherland, for giving us the opportunity of this debate, and all the more so since housing was not very comprehensively dealt with in the debates on the reply to Her Majesty's gracious Speech. I should like to take this opportunity of welcoming the new leaders in another place of the Department of the Environment. Neither of them is a newcomer to the housing field, and I am sure both of them are old friends to many in this Chamber. The new Secretary of State having been, I believe, Mayor of Surbiton at an early age and having later become a leader of the London County Council, should be more aware than most people of the great help the Outer London boroughs can give at the present time and in future years to Inner London boroughs. If that help is not given, the Inner London boroughs will never be able to solve the problems that face them.

I should like to touch briefly on four housing aspects which concern central Government and then to spend a few minutes looking at the situation from the point of view of local government. The four national points are, first, shortages; secondly, improvement grants; thirdly, the homeless; and fourthly, building society finance. We can, I believe, for a brief moment congratulate ourselves in a rather modest way on the fact that the crude national shortage of housing has at last been overcome. There is a slight surplus of dwellings over households, if you look at the whole country. The result is that we have to look at problems locally. It seems to me that there are certain categories of special need for which there is still a national shortage, in spite of the slight overall surplus. One which springs immediately to mind is the one-parent family; and here I am thinking of widows, divorced or separated wives and unmarried mothers. There are roughly 700,000 families in this category, and they are the people who are most vulnerable in a situation of housing shortage, whenever that happens. I know that the new system of rebates and housing allowances will help in this area to-day, and perhaps in a few years' time the new system of tax credits will also help, but that is still some little way off, and meanwhile we are anxiously awaiting the report of the Finer Committee on the one-parent family. I believe that this Committee has had a laborious time. Perhaps we could at least have an Interim Report from it—all the more so since the Select Committee to be appointed to look at tax credits in another place will need to know what is in the mind of the Finer Committee as it starts its own work.

Then, as a second example of a national shortage of a special commodity, I would instance the very great and very urgent need for four-bedroomed houses and flats to accommodate the larger family. It is true that only 8 per cent. of all households have three children or more and that only 2 per cent. of households have five children or more. One might be tempted to think, therefore, that the problem is not important but, as so often happens, these percentages are not spread evenly over the whole country. Larger families are concentrated in particular areas. For example, I believe that in the London Borough of Hackney there are some 400 larger families who have been on waiting lists for many many years but who have at the present time no hope of being rehoused because those larger units are simply not available. The conclusion I draw from this is that when it comes to planning the size distribution of units in a given building programme, we cannot rely on the rounded national average figures. We must look at the precise figures of the locality where the building is going to be.

Again, it is notorious—and has been for years—that there is a grave shortage of suitable accommodation for the elderly, whether it is in completely independent housing units or in sheltered housing, or whether it is for those elderly persons who are becoming frail, who easily fall over and easily break limbs. There is a gap, it seems, between sheltered housing and the nursing home or Part III accommodation. One or two small voluntary bodies have begun to fill that gap and I hope that the Government will have a glance at what has been and will be done in cities such as Bath and Cheltenham on this front. Certainly more is needed: very much more. Again, my Lords, there are the physically and mentally handicapped. I will not say too much on this subject because I know that the noble Baroness. Lady Masham of Ilion, is to speak next and she will do so with a great volume of experience, but it is well known that there are many people at present within various types of institutions who could perfectly well come out if there were appropriate housing units for them to go into. There is also very often a shortage of places for single people. Many of these single people are in some way or other socially handicapped.

That brings me to the question of hostels for those who need some degree or other of communal living. During the course of the debates on the Housing Finance Act, we were promised that there would be a comprehensive Government review of the whole hostel question. I hope that that has now been started and that it really will be comprehensive, taking in not only the Department of the Environment but also the Home Office, the Department of Social Security and no doubt also the Treasury and various other Government Departments who may have an interest in the matter. To my mind, the review should start by looking at the question of loans for the capital cost of hostels. It should also look at the gap between the economic rent for a room in a hostel and what might be called the fair rent for that room, on the analogy of fair rents in the rest of the housing market. On this point, may I put a question to the Government? Is a person living in a hostel entitled to a housing allowance and, if not, why not? The review should also deal with the staffing and welfare costs of hostels. Obviously this will vary very much according to the type of person being accommodated. I feel that various hostels have grown up with a wide variety of financial arrangements. Now is the time for those arrangements to begin to be harmonised.

May I now go on to the question of improvement grants? We have to congratulate the last Government on bringing in the 1969 Act, which was a helpful one; we have also to congratulate the present Government on the strength and drive they put into the improvement campaign. What needs emphasis when we are talking about improvement is the discretionary nature of grants. In May of this year I received a Parliamentary reply which said, roughly speaking, that local authorities already knew that these grants were dis- cretionary, so that at that time no circular or advice was necessary. I am glad that a circular is at last to be sent out emphasising the rights of tenants where improvements are started. But in view of the evidence of abuse which has been collected and published by such bodies as the Notting Hill Housing Trust, Shelter, and others, would the Government consider strengthening their circular? In particular, when improvements are to be carried out in housing stress areas, would they point out to local authorities the desirability of confining improvement grants to existing owner-occupiers, to landlords who undertake in writing to keep their present tenants, and also to housing associations? The housing stress areas—in London, at any rate—are the very areas where low paid workers have to live in order to be reasonably close to their places of work. A White Paper came out recently on the question of compensation. It was headed, "Putting, People First". This is exactly what we need to do when it is a question of improving property. We have to look very carefully indeed at the social effects on the local community of a move for improving buildings.

I listened with very great interest, and much sympathy, to the remarks of the noble Baroness, Lady Serota, with regard to homelessness, in particular to what she had to say about the number of children in care because of homelessness and the number of families split in this way. I join with her in welcoming the Working Parties which have reported since the Greve Report. I welcome the fact that it is now beginning to be generally accepted that the rehousing of homeless people is a housing responsibility, and that whoever receives and deals with homeless people in the first place, those people should always be humanely handled. Very large sums of money are at the moment being spent by certain local authorities in providing bed and breakfast in hotels and boarding houses for the casualties of homelessness. I believe it is true that in the past year the borough of Haringey spent £120,000, and the London borough of Ealing, £37,000. Could not a fraction, a proportion, of these I sums of money be diverted to a system of prevention and early warning? I feel that this would be a more constructive way of tackling the problem.

My fourth point, which has national implications, concerns building society finance for house purchase. I believe that in the past five years building society total assets have doubled. They now exceed £14,000 million and are therefore greater than the assets of the joint stock banks, or the National Savings media in their various forms. Ninety per cent. of all advances for housing purchase are provided by building societies, and this gives one some idea of their importance in this particular field. The trouble seems to be that we get an alternation of years of feast and years of famine. At one time almost anybody can get a mortgage; they simply have to walk in and ask for one. At another time mortgages are severely rationed. At one moment bridging finance is readily available to builders constructing new houses. At other times it is virtually cut off. This has a serious effect on housing starts; it leads to violent fluctuations. What we need is a much smoother inflow of money into building societies and, consequently, a smoother outflow from them to house purchasers. Mr. Alex Henney in a recent interesting paper put forward some suggestions for voluntary means whereby the building society movement could itself smooth the flow.

If these methods are not tried, or if they are tried and they fail, I hope that the Government will themselves take some steps for smoothing and regulating. These might take the form of special deposits, on the analogy of the banks, so that when funds are flowing in rapidly the building societies are obliged to have high liquidity ratios. At other times, when funds are not readily available to building societies, the Government might consider injecting some of their own money, and also permitting building societies to run down their liquidity ratios. No doubt other measures could be devised, but these appear to be points where a start can be made.

I should like now to turn to the sphere of the local authority in housing. I would start from paragraphs 390 to 394 of the Seebohm Report. These are the paragraphs that have become almost classic, which urged local authorities to take a comprehensive and extended view of their responsibilities in housing; to look at the needs of the whole community and every section of the community, and to use every possible method to meet those needs. If a local authority is to follow that advice it will first be necessary for it to have information at its fingertips. It will need research and intelligence departments; it will not be enough simply to look at waiting list figures. While Census figures, broken down by wards, are fairly fresh and new from the printers, these will yield valuable data. Specially commissioned surveys will be another means, and so will data extracted from the clients of the local authority, particularly through the method of housing aid to which I hope to refer later.

Having obtained the information, the local authority will have a very large number of strings to its bow. It should for a start be in close touch with the private enterprise sector so that that sector can meet the needs of as many people as possible in a given place. Land will have to be made available and it will have to be serviced land. On occasion, compulsory powers will have to be used to secure access to development land and to deal with cases where development land is very fragmented in its ownership. Local authorities are being rightly encouraged to give a place to private enterprise in the redevelopment of inner city areas, something which is rather new to us but which could lead to a more balanced community. Then again, as has been mentioned already in this debate, local authorities have power to build for sale. This will be appropriate in some places but not of course in all places. I know that local authority mortgages affect only a small part of the house-purchase market, but they can extend in a very important way the activities of building societies, particularly where older properties are concerned. Recently a study was carried out of the mortgage facilities available from all the London boroughs and this seemed to show a most chaotic picture, with radically differing rules from one borough to another, with the situation being made tolerable only by the excellent scheme operated for many years by the Greater London Council which covers the whole area and is available to all people in London. But surely there could be some rationalisation there. If the borough schemes were improved there would be less burden on the G.L.C. and it is possible even that the delays in processing mortgage applications could be thereby reduced.

Housing associations will also be an asset to local authorities. I myself feel that local authorities should seek out the housing association where it is a competent one, rather than just waiting until it comes and makes its request. A model scheme of assistance in the improvement conversion modernisation field has been worked out by the National Federation of Housing Societies, and I think approved by the Government. Nevertheless, there is still some way to go because authorities in great cities such as Birmingham, Leicester and Nottingham have schemes which are noticeably less good, very considerably less good, than that provided by the Greater London Council in London. One very much hopes that that situation will ameliorate. Then, a local authority must, if it is going to do the job at all, be closely in touch with the private rental market even though private renting is declining year by year. It will be in touch through the rent officers, through referring of new rents to rent officers; through prosecutions for harassment; through the appointment of tenancy-relations officers, who can do a great deal to take the heat out of the landlord-and-tenant situation. Local authorities will be in touch further through repair notices and through their powers on multiple occupation; and perhaps even more so in future through the administration of rent allowances to private tenants. I do not think it necessary to say very much about local authority new building or about slum clearance. Improvement has already been touched on in the debate.

I should like Ito say something about housing aid. Because this is such a new factor it would be perhaps helpful to attempt to define it. I would say that it is an art, an art which starts from the individual with housing problems. It begins therefore with the interview. It can provide information, advice, guidance, material help and advocacy. It can be provided by a statutory body, as for example in Lambeth borough, one of the first in the field. It can be provided by a voluntary body. But both of these methods have certain weaknesses. If you are a statutory body your client may come in and simply demand a flat and not be satisfied with anything else that is offered. If you are a voluntary body you have not access to all the powers of the local authority, most of which I have endeavoured to touch on already. Surely, ways and means could and should be found of developing hybrid housing aids centres, where you have an independent set-up, an independent organisation, largely financed by local authority money and with access to the corridors of power. Would the Government consider fostering such an experiment? Would they also consider what might be done to create an Institute of Housing where training for housing aid might be one of the most important points on the programme?

My Lords, some very valuable guidance, particularly for the new local authorities, has recently come out from the Institute of Housing Managers, entitled The Comprehensive Housing Service. It draws on the experience of local authority reorganisation in London and sets out models for new authorities of varying size. What it does not deal with, however, is the interrelationship that must exist between the housing authority and the planning authority and between the housing authority and the social service department. These different authorities and departments will find themselves over a large part of Britain on different levels of local government in future. As the noble Baroness, Lady Serota, mentioned, this will call for all kinds of new arrangements—no doubt joint working parties between officers; no doubt also joint subcommittees between members of local authorities. I must agree that a strong lead from central Government on this interrelationship between one level of government and another would be most helpful.

My Lords, I feel that the message that should go out from this debate is that local authorities should consider all the housing needs of their people and that they should pull out all the stops to meet them. I end with just one small suggestion to Her Majesty's Government. Would they consider the creation of a new service of housing inspectors, something perhaps parallel to the H.M.I.s who have flourished for so long in the education field? An inspector of schools is not an enemy, but on the contrary is very much of a friend, of headmasters and boards of governors. I feel that in a similar way inspectors of housing could be the friends and allies of local authorities. They could ensure that the very best practice is applied all over the country to the benefit, particularly, of those who are homeless.

4.39 p.m.

BARONESS GAITSKELL

My Lords, I am grateful to my noble friend Lord Leatherland for introducing this timely debate in his customary lively style and in a speech which was full of facts and figures. I must congratulate, too, my noble friend Lady Scrota on her brilliant speech, which exposed the tragic social results of bad and inadequate housing—and the connection between the two is not always recognised in the public mind. I am afraid I cannot match the knowledge of my two noble friends and the noble Lord, Lord Hylton. I have not the knowledge and that will ensure that I shall be brief.

I listen to Government speeches and try to make out where their policies are leading us, so I read the speech of the Secretary of State for the Environment in the other place, in the debate on the Queen's Speech, dealing with land and housing, with particular interest because it was his swan song. It was a softly glowing account of the Government record and left the impression that more houses had been built during the time when he was Secretary of State—an unspecified number hidden in a cloud of percentages. The recent Secretary of State for the Environment is one of those politicians, of which there are many in all Parties, who, when he speaks, reminds me of the title of a book by the American writer, Norman Mailer, called Advertisement for Myself. I was interested in the speech made by Mr. Walker more for what he left out of it. than for what he included in it. After all, the sales talk was neither necessary nor desirable. No Government so far has been particularly successful in solving our housing needs or difficulties. Housing is a serious problem which has a dark side, because it exists in affluent societies—in our affluent society—where homelessness and dire poverty should be on the way out.

We know that during the time of a Labour Government many local authorities are controlled by Conservatives and that during a Conservative Government many are controlled by Labour councillors. These county councils inaugurate long-term plans, good and bad, which bear results after the change of Government. Therefore praise or blame allocated by Party politicians is not constructive, and I felt this when the noble Lord, Lord Sandford, gave us the details of the amount of land acquired by the Labour Government for development. Why deny that Conservative-controlled councils have always shown a distaste for, and a decline in, council-house building? That has always been so. When I used to go round the country when my husband was alive we knew it then; and he has been dead nearly ten years. This Government would have shown great wisdom if they had introduced, for instance, safeguards into Mr. Richard Crossman's excellent idea of improvement grants and stopped the unleashing of all the abuses—and it is no good denying that there are very grave abuses of these improvement grants.

Mr. Walker blamed the parlous state of the building industry on the policies of the Labour Government, attributing it to a lack of confidence. But was it a lack of confidence, or is it perhaps that the building industry is not very efficient, suffering from a great lack of skilled labour? Surely that is one of the main reasons. From the pride with which Conservative speakers often refer to the large increase in the number of mortgages (and we have seen the same pride shown by the noble Lord, Lord Sandford, this afternoon) one might assume that every time a mortgage is granted a new house is built. As for the selling of council houses, this is a less reputable business because it implies that we, in the Labour Party, are against home ownership. But the fact remains that to sell council houses at a time of building shortage is merely to shrink the pool of houses which provide the vacancies which help to deal with those long council waiting lists.

I have sometimes wondered what effect this has on the mobility of labour that we all so anxiously advocate. I could not help smiling when I read in one of the speeches in the other place, that if tenants bought their council houses they would not have to pay the rent increases under the Housing Finance Act. I wonder what noble Lords think of that one. No one can deny in a property-owning democracy that there remains a dire need for more houses and flats to rent. Not all young couples can sustain the burden of the high interest rates on a mortgage, and large numbers cannot afford to buy a house at all. I wish I knew more about the particular problem of housing and land because there seem to be many baffling anomalies about planning in our big cities.

Why is there a continuing pressure for office building at a time of shortage of houses in London? Why, when these offices are built, are they allowed to remain empty for years? And, speaking of empty office blocks, what has happened to Mr. Peter Walker's brave noises about Centre Point, so picturesquely described by my noble friend Lady Phillips as "the most expensive dogs' home in Britain"? Or are the Government just going to let sleeping dogs lie? Why are investors so eager to put their money into property development and so reluctant to invest in the development of industry? These are rhetorical questions, and we all know the answers. It is because the profits from houses and land have spiralled and rocketed as never before in our history, but during Mr. Peter Walker's last long speech in the other place as Secretary or State for the Environment, this was hardly referred to. He did not dwell on it; he merely threw a little dust in our eyes when he said that income tax and surtax took care of profits by land speculators when planning permission was granted, and I am afraid the noble Lord, Lord Sandford, was equally unsatisfactory in his comments on this really outrageous thing that is going on in our cities.

To read the debate in the House of Commons Hansard brings out and sharpens the differences between the political Parties. Probing the problems whin exist in the field of land and housing is like taking an X-ray picture of the underlying inequalities and injustices which continue to exist in our society to-day. These problems have not diminished under this Government. There is a greater sense of insecurity among many people to-day. With the introduction of the "freeze", many councillors to whom I have spoken are fearful of what will happen after the "freeze" is over, when the increase in rents starts again.

Mr. Anthony Crosland, in an article in the Guardian, put forward an interesting suggestion which I believe the noble Lord, Lord Hylton, also touched on in his speech, concerning the municipalisation of private rented property. I do not wish to preach, but in Denmark there is a very simple law which says that no person shall profit from the shortage of land. This is a simple law which I suggest to democratic countries—please copy.

4.50 p.m.

BARONESS MASHAM OF ILTON

My Lords, because I have received many letters from disabled people bringing co my notice some heartrending conditions due to the housing problem, I thought I should take part in the debate to-day, and I thank the noble Lord, Lord Leatherland, for giving us this opportunity. Some time ago a survey on living conditions was made among some ex-patients from spinal units throughout the country and it was found that disabled people who lived in their own poor and inadequate homes lived longer and were happier than those who lived in institutional care. It is because this is a general debate on the housing situation that I wish to bring the disabled to the notice of your Lordships and I am certain that every housing authority in the country ought to look at the problems of the handicapped in terms of their general need.

Recently, I have had more letters from disabled people or parents with disabled children living in the areas that come under the Greater London Council than I have received from any other part of the country. Perhaps the pressure of housing is greater in these areas, but to me London seems richer than some of the more deprived parts of the North. I have been told that the Borough of Kensington and Chelsea has only two specially adapted flats for the disabled. I hope that this information is wrong.

There is no doubt that great improvements in housing for the disabled have been made in some areas recently and I have had the pleasure of officially opening some excellent purpose-built bungalow schemes in different parts of the country. Whenever I have attended these ceremonies I have heard expressions of great gratitude from the tenants, who said that their lives had been transformed from that of prisoners into ordinary human beings. They have also told me that they are the lucky ones and that there are many more disabled people on waiting lists. I always leave with the hope that the excellent houses which I have seen will be the start of more to come and not simply one project to satisfy the consciences of the members of the local housing authority who might then sit hack and say, "That will keep the disabled in our area satisfied for a time." I have also seen similar schemes for the elderly, with a few bungalows suitable for the disabled incorporated. This sort of thing is excellent, and should there be no disabled person to take up the bungalows it does not mean that able-bodied elderly people cannot use them. They are just the same as ordinary bungalows except that they have wider doors and no steps.

With the advance of techniques in the medical profession, as well as more and more accidents occurring as a result of the tempo of our modern living, and with more leisure activities such as diving, riding and climbing, we find to-day that many more severely disabled people who formerly would have died are living and are therefore coming into our community. This means that there will have to be an increase in housing provision for them. I ask noble Lords to think for a moment of the many spina bifida children who are now living. They will soon be adults and will need somewhere suitable to live. Surely if they are kept alive in the initial stages, it is an ethical duty of our society to give them a life worth living, and providing the right sort of house is an important priority to fulfil this end.

If only I had had the help from the Housing Minister that I have had from the Minister of Health in your Lordships' House I might be more satisfied. When desperate disabled people write to me, having had no success with their local authorities, I ask for advice for them from central Government. When it is a housing matter the only reply I get is, "This must be dealt with locally." I may sound cynical, my Lords, but perhaps I have cause. A Northern social worker told me that he was in his office one day when he overheard a conversation between two people responsible for installing ramps for the disabled. He heard one of them say, "We'd better get the bloody ramps installed, otherwise we'll have Lady Masham after us." It is a pity they do not have a little more grace and follow the good example set them by your Lordships' House and the other place. This is the reason why I feel that central Government must keep encouraging local authorities to keep up with changing needs.

May I ask the noble Earl who is to reply a question about what will happen when reorganisation of counties takes place? At the moment, county boroughs have housing and social service functions. So far as I can gather, the social services will not be under district authorities, but housing will. They seem now to have a fairly good working relationship. Will it be possible for this contact to be reestablished? The noble Baroness, Lady Serota, has already asked this question, and I want to endorse it. Does the noble Earl think that the harmony will be as good if the district authorities and the county authorities are of different political Parties?

I am certain that the housing authorities and the health and social service departments must work in very close co-operation for their disabled people. If there is a breakdown in housing, the disabled person and the family are often thrown on to the departments of health or social services. For example, last year a paraplegic man of 30 with a wife and three children had to move from their home area of Liverpool to take up employment somewhere in Lancashire. He had a good job in open employment but could get only a house with a bath room upstairs. After some time, with the help of his wife, he pulled himself upstairs on his behind to have a bath. On the journey downstairs he lost control and hurtled down, fracturing a leg. He lost his job and was so demoralised that he made a serious attempt at committing suicide. He spent months in a psychiatric hospital, but is now united with his family. After a great deal of difficulty he has been re-housed, but not before a great deal of stress and strain had been caused to all the family, as well as to the medical staff in sorting out the problems which could have been avoided if the family had been given a suitable house at the beginning.

Another case about which I have just heard is of a man who has multiple sclerosis. He has a wife and two children. Again, the bathroom is upstairs. Now that his condition has reached the stage of when he has to use a wheelchair, the only room he can use is the living room. To add to his frustration, he has just had to give up his job. He asked his local authority to give a grant so that the garage could be made into a bedroom and bathroom. His request was turned down. My Lords, is not the dignity of man a very important thing? This man must rely on his wife and daughters to do everything for him in the sitting room. Is it not the Government's view that every effort should be made to keep the family united as long as possible? I have sent the details of this case to the Minister, but no doubt the usual answer will be received.

Only yesterday I met a young policeman in the other place who is extremely worried about a badly disabled elderly lady whom he takes out once a week from her ninth floor flat. This woman has to depend on an electric wheelchair for movement round her flat and this sometimes breaks down at the weekends when there is no emergency service. The policeman told me that as she had a little money of her own she had adapted her flat; the social service department just did not want to know her. This brings up the problem of those who have nothing, who have never saved and who get more help and are less isolated than the people who have saved a little money and who, because of this, are considered not to need any help at all. Surely, we should make sure that any severely disabled person who needs vital assistance somehow receives it.

My Lords, there are some disabled people who cannot remain in their families because their relations have died or because they are too old or too frail to cope, or they may want to live independently. Some young, single men and girls have an intense desire to get away from home. It is not generally realised that this is as common with the disabled as with the able-bodied. Also, they may be getting married.

There is great scope for such schemes as the St. Giles' Housing Association, and I was delighted to hear the noble Lord. Lord Hylton, mention this. St. Giles provides three groups of flats each with a garage space for every tenant. Access to the entrance hall and ground floor flats is by ramp, and lifts are provided to reach the upper floors. Each flat has an "answerphone" service to the front door and means of calling able-bodied tenants. There is a telephone call box in each block and tenants can have their own telephones installed if they wish. All flats have adequate floor space throughout for the free movement of wheelchairs. The kitchen equipment is modern and the height of working surfaces can be altered. The bathroom and lavatory can have additional equipment installed if needed. Each block contains a flat which is let at a reduced rent to an able-bodied couple known as "responsible tenants". They normally have whole- or part-time jobs. They keep the communal part of the building clean, know how to hand-wind the lifts when they break down and know how to call emergency services. These responsible tenants are vital to the successful running of the flats and contribute much to the happiness of the tenants. They are not required to provide any personal services to the tenants but by keeping an unobtrusive eye upon them, particularly those living alone, they can help solve minor problems when they arise. They keep the secretary informed of any difficulties the tenants are experiencing.

My Lords, there is a desperate need for more houses or flats similar to those I have mentioned, but with more help for those who need it. The St. Giles' Housing Association is hoping to provide this. The Cheshire Foundation is also beginning to appreciate the need. But to get these schemes off the ground capital is needed which the voluntary organisations sometimes cannot muster. I hope that the Government can give some encouragement towards this end. Severely handicapped people seem to have many needs. but I am sure that housing, after correct medical attention, heads the priorities.

5.3 p.m.

LORD SANDYS

My Lords, I. too. should like to thank the noble Lord, Lord Leatherland, for giving us this opportunity to discuss housing, and the particular aspect I wish to concentrate on this afternoon is building conservation and the restoration of our older homes. Here, I would declare an interest, both as the chairman of the Worcestershire Building Preservation Trust and also as the owner of a number of properties which range in age between 400 and 100 years old. It was with the greatest satisfaction that I heard of, have seen and produce now the publication of the present Government entitled New Life for Old Buildings. I am more than ready to acknowledge the fact that the previous Administration devoted a lot of time to the question of old houses and the need for action. I am more than ready to acknowledge the fact that the policy begun about 1968 had been greatly accelerated over the last two to three years, and it is largely thanks to the present Government's establishment of the Department of the Environment (the first in the world, I believe) that it has been possible to treat whole areas of cities in a way which has been impossible hitherto. It must be a source of great satisfaction to this country that it was possible to send a delegation to Stockholm and give currency to the fact that there are over 1,850 designated conservation areas in the United Kingdom. That, in itself, is good, but of course it is not enough, and the tide of destruction still goes on, despite the fact that protective legislation exists.

When I heard previous speakers this afternoon, and I believe my noble friend Lord Hylton referred to the phrase "redevelopment of city central areas", I shuddered. It is a part of the housing problem to which the greatest architectural sensitivity and thought must be given. We can see around us, not only in London but all over the United Kingdom, examples where a city centre has been redeveloped in an unsatisfactory way, possibly following bombing during the Second World War, or possibly due to decay and other factors subsequently. In my view, it should be a cause of great concern that the designation of the central area of a city for redevelopment should be made; and when, as it has in the case of Eastbourne, provided a most imaginative scheme which has been hailed by Sir Hugh Casson, I think we can say that we can share a sense of pride.

The noble Baroness, Lady Masham, referred to the dignity of man, and here is an area in which we can take great pride—civic pride and national pride—in what is being done and what has been achieved by the policies of the present Government, allied to the policies previously carried out in this field. The year 1975 has been designated as European Architectural Heritage Year. It is only two years and six weeks away, a very short time in which to prepare plans for the promotion of this great adventure. In my view, every local authority and society concerned with conservation in its widest aspect will have great interest in that project, since there is an opportunity in 1975 to show what can be achieved in spite of a background which we know all too well.

My noble friend, Lord Sandford, referred to the shadow cast by inflation upon the whole housing field, and in the area to which I am specifically referring—the question of listed buildings and the conservation of listed buildings—there are special problems to which I will refer in a moment. But other countries in Europe have much to teach us, and when we join them very shortly in this adventure we should take note of how they treat the subject. Perhaps my noble friend will be aware that in Amsterdam, which has a population of approximately 850,000 people, there are over 7,000 listed buildings. Surely we can make use of our own machinery in this country which has been promoted by the Civic Amenities Act and by later legislation to enable the listing of buildings and their protection to form part of the housing stock, to the great benefit of the country at large. My noble friend Lord Sandford referred to the fact that local housing needs should be solved in the local context; and how much I agree with him there! There are the specific problems I mentioned. As the chairman of a building preservation trust, may I be permitted to direct your Lordships' attention to the problems which we suffer in the conservation field? Inflation has been mentioned, and its shadow is obvious, but there are four other matters to which I could refer which are perhaps less obvious.

The noble Baroness, Lady Gaitskell, referred to the perplexing difficulties which there are in the question of city centres and city redevelopment. This is especially true when one is concerned with the difficulties which building pre- servation groups have in regard to planning permissions for conversions. This subject can be seen in two ways. It can be viewed as it was viewed by the noble Lord, Lord Leatherland, as an activity carried out by a group of speculators—I think he referred to them as ruthless speculators. But one must remember that as well as those who are intending to make a profit—and surely there is no bad thing concerned with profits in the housing field—there are those who are working for non-profit-making organisations, housing associations, trusts and the like, who are anxious to obtain planning permission to do a conversion. I would ask Her Majesty's Government to consider one specific problem in this area: the question of the relaxation of the 1965 building regulations. These, as well as giving protection to the consumer, provide an obstacle for the undertaker.

If an architect or surveyor is set the problem of the conversion of a house or property built anything from 100 to several hundred years ago, he has an inconceivably difficult task to fit that building within the ambit of those regulations, while still retaining its character. There are times when I think even the most enthusiastic building conservationist is apt to throw up his hands in horror. But we are, think I could say without blushing, an enthusiatic and hardy group who are not put off lightly. However, this problem exists. We know that there is machinery to relax the building regulations, but local authorities are not always willing to use their powers to do so. Very often buildings can be severely damaged by the insistence of a local authority on having certain ceiling heights, certain sizes of windows, particular problems relating to landings and lobbies. Here is an area where a little imagination, a little understanding of the problems of building construction, can be of the greatest value. And may I commend to Her Majesty's Government the easing of building regulations just a little, in anticipation of the Architectural Heritage Year.

The third problem relates to the question of district valuers and their notional ideas of site value for redevelopment purposes. Here we come to the conflict between the conservationist and the property developer. This is too familiar a field to need further exposition, but again I ask Her Majesty's Government to review the question of the role of the district valuer in a conservation area. Should the district valuer apply maximum values on sites of buildings to be redeveloped prior to their sale by the local authority to some unfortunate building preservation trust, or should they regard this matter in a more favourable light and appreciate the problems with which conservationists are attempting to deal? I sincerely believe that once again the Treasury's role in this particular field can engage machinery which will enable building conservation to be carried out at lower cost, and hence houses to be provided where they are needed at lower rates.

I draw my remarks to a close after ten minutes because I have always regarded that as the legal maximum for those on the Back-Benches unless they have some very urgent and particular problem to lay before your Lordships. I should like to ask one final question. Would it be possible during the months approaching the European Architectural Heritage Year to give a special survey to the question of the redeveloping of areas along riversides throughout the United Kingdom? This is naturally a cause in the current redevelopment of certain parts of the dockland area in London. But London is not the only place where conservation can be carried out with great benefit. Architects there are in plenty who are more than capable of designing most useful and imaginative schemes, and dockland areas which will shortly become redundant in certain respects will form a most useful and fruitful path for examination.

5.16 p.m.

LORD DAVIES OF LEEK

My Lords, it is always a pleasure to listen to the noble Lord who has just sat down, and somewhere in my speech, if I am lucky. I hope to dovetail a concrete point I intended to make which I think fits in with the noble Lord's appeal. I have enjoyed all the speeches that I have listened to: that of the noble Baroness, Lady Masham of Ilton; of my noble friend Lady Gaitskell, and the speech of the noble Lord, Lord Sandford. Although he spoke for 29 or 30 minutes quite a lot of the speech was worth listening to. I am going to try to discipline myself and omit what everybody else has said and put in a couple of new points of view en passant.

In this property-owning democracy the greatest achievement of this Government to date has been to preside over the most sensational rise in the prices of houses and land ever in the history of Britain. Mr. Peter Walker himself stated that in 1971 land prices for housing purposes rose by 23 per cent. over those of April, 1970. This was a conservative estimate, naturally, because the East Anglia Building Society had been making a review and they said that perhaps the most spectacular price increases in the year occurred in the land market. They said: All land, for whatever purpose, has met an active demand, and price increases have varied between 25 per cent. and 100 per cent. I can mention some more than that. So that is accepted all round the House, and—let us be fair—we do not seem to know how to answer this problem. But in the name of humanity we have to find an answer.

Prices are most spectacular in London; and the borrowing and interest rates, too. Fred Willey, in another place, gave two concrete examples—I will not quote in detail, but will merely paraphrase. He quoted two single plots of land in Hampstead, one selling for £28,000 and one for £29,000; and the consequence of the price of those plots was this. The £28,000 plot was to have a seven-roomed house built on it—so that each room in that house was costing £4,000 for the land upon which it was built. This is a sin against the Holy Ghost. The old Liberals used to cry "The land for the people!" I do not know why they do not do it these days. All owneship in land above a certain point is robbery", said Henry George and other people. I believe that a scientific following and understanding should be applied, as in other parts of the world, and that we should get down to the brass tacks of taxation of land values. I consider that when you add the value of labour, brickwork, woodwork, painting and decorating, modern houses are beyond the ken of the average man; never mind this horrible term, "working-class"—the honest to God worker by hand or brain.

I know students who are working for their Ph.D., postgraduate, some working in medicine, some in biochemistry, who will not be able to afford to put a deposit on a house until they have done three or four years' work; and they have spent six or seven years at work in a university getting a higher degree. And I have known good colliers, friends of mine, who are in the same position. For example, in the village that I have mentioned at other times, where the great explosion happened in Senghenydd in 1913, you could buy a house in 1926 for £25 because the village was derelict and there was no work. Demand to-day is such that those houses go for thousands of pounds. I have one house that I bought that cost £360 in 1908, and two doors or so away from it in Golders Green a similar house was sold for £14,000 not so long ago. No civilisation and no economy can justify that. I did not pay £360 for it, I paid £3,000 odd; but now if you wanted to sell it you would get £14,000.

What can we do? I believe that we should once again see whether we should apply taxation of land values. The Nationwide Building Society's facts I accept. A new word has become popular under Toryism, "gazurnping" Is this noble House going to tell me that we cannot stop "gazumping" by law? It could be stopped. I have seen a couple in tears because the house they had set their hearts on, and on which they had paid a deposit, had gone up three times in a period of three to five weeks when other offers had been made. This is evil. It is political grift. It could be stopped by law.

The Sunday Times Insight Consumers Unit on April 16 last year said: Less ethical gazumping occurs, of course, where a seller, or his estate agent, deliberately seeks higher bids, perhaps even from fictitious bidders in an attempt to force up the price to an existing buyer who has already paid a deposit, raised a loan, surveyed the house and perhaps sold his previous house. I have come across that in my own experience. I do not want to make a political point against the Conservatives because this was happening as Labour was coming out of office, but it is something that we should prevent by law. I am quite sure that the majority of this House would agree that gazumping—which means that the owner of a house agrees to sell to a customer who pays a deposit, and then some other buyer steps in and offers say a thousand pounds more and the first buyer is left and the deal is off—should be prevented.

I am old enough to remember the speeches and the houses and conditions that were promised to the patriots when the fight against Germany took place in World War I. There were promises on houses, homes, and limitation on land speculation, and here I have a document from my old lecturing days when I did Oxford University extra-mural classes. It comprises topics for discussion after the war. This is a brief summary for our classes in those days. There were the Barlow Report, the Scott Report and the Uthwatt Report. The Report by Sir Montague Barlow was presented to Parliament in January, 1940. My document reads: Its terms of reference were: To inquire into the causes which have influenced the present geographical distribution of the industrial population of Great Britain … We have been talking about that for 40 years and have done nothing about it, and vet we are asking for more commissions to look into it. The evidence is there.

The next document was the Report of the Committee on Land Utilisation in Rural Areas, under the chairmanship of Lord Justice Scott. That was presented to Parliament in August, 1942, and published by His Majesty's Stationery Office for 2s. Its terms of reference were: To consider the conditions which should govern building and other constructional development in country areas consistently with the maintenance of agriculture, and in particular the factors affecting the location of industry, … We have been talking about that for 30 or 40 years.

The last Report was by the Expert Committee on Compensation and Betterment, under the Chairmanship of Mr. Justice Uthwatt, presented to Parliament in September, 1942, and published by His Majesty's Stationery Office, 2s. 6d. The terms of reference were: To make an objective analysis of the subject of the payment of compensation and recovery of betterment in respect of public control of the use of land". How much longer are we going to fool about? How much longer are we going to play this political trickery on the British public at every General Election? If we pride ourselves upon the standard of our civilisation and on our religion and not religiosity, we should be doing something about this. We have the evidence, and we know the facts. We do not want more people looking into the matter.

Now we have another piece of Tory mythology. Sir Keith Joseph said on September 27, 1971: I have to tell you that jobs in this country depend on us joining Europe. That is a new factor. So we are supposed not to get full employment unless we join Europe. We were told in the same month in the local newspapers, in advertisements that cost hundreds and hundreds of pounds a page, that if we had joined the Common Market years ago we would have had an extra £10 a week in pay. That was mendacious. Now we are in the Common Market, and I noticed on the tape yesterday that there is no allowance now for regional development and the regional areas. There is £1,800 million for social services, but no policy being worked out for the poorer areas of Europe. Now houses depend on all this, for jobs and full employment affect housing.

The contribution of the Common Market so far has been that ten and twelve-wheeled lorries, intercontinental T.I.R. lorries, are shaking hell out of Britain, shaking hell out of our old houses. The noble Lord spoke about historical buildings. I have come through villages that are reverberating as rapidly as the British House of Commons now that we are pile-driving in the Yard. The rate of obsolescence of little British homes increases as the rumble and vibration of transport crashes past the mudbesplashed roses round these horrible, draughty cottage doors of England to-day. Everything to-day must be subjected to the motor car. Lord Sandys' area is suffering the same kind of destruction, and needs the same kind of protection. Conservation more than ever is the need. The crumbling facades of old London buildings and the shuddering Houses of Parliament are a testimony to all this.

The weight of traffic on our roads to-day is having the same effect upon rural Britain as mining subsidence used to have in our coalfields. I know what I am talking about here, because I served on a Royal Commission for two years examining mining subsidence in Great Britain. We are doing nothing about it, and it is costing what? It is costing 35,000 houses a year in the pool of houses. Only now, after generations, are we at last tackling with some success this problem of soot and grime which destroys houses. Robert Sinclair, in a marvellous book which I would recommend your Lordships to read, told us about this cleaning of soot in London, and in 1925 at Paddington Station alone they got 4½ tons of soot off 6,000 panes of glass. All this has very much to do with housing, because the sulphur, the soot, and the grime cost paint, cost woodwork, and cost the humble purchaser of a house, or the dweller, a lot of money.

Can we do anything about it? The Monday Club and Mr. Powell tell us. "Let the market have full play". We are letting the market have full play, and England seems to be shuddering in its streets to its doom, and in some parts getting more grimy day by day. I want to pay a tribute to the Minister for the Environment for the great efforts that he has made in regard to river pollution, and in London concerning the limitation of soot. I will not go into the new rent scheme. All I will point out there is that the new rent scheme means that we shall be paying out an extra £100 million in rent in 1972–73, and rising another £100 million a year from thereon.

I would make one other point, although it has been made many times. Owner-occupiers, or some of them, have clamoured for years that they were subsidising council house properties, but owner-occupiers have received for many years about £300 million a year tax relief, compared with £160 million a year to council house dwellers. The sad fact is that this Government have encouraged councils not to build council houses. The Seebohm Report states that local authorities should look at social amenities when they are dealing with house building, and should not be concerned only with building. I think we should take out of the housing revenue account slum clearance, housing old people, community centres, cost of rebates, debt charges on land and development costs, all of which are met by council house dwellers from the housing revenue account. The Government should look at that, in order to make rents cheaper for those who will never be able to afford to buy their own house.

How do the Government propose to meet the housing shortage? According to this Report, which is forty years old, between the years 1919 and 1939 we built 3,998,000 houses, including 1,112,000 which were built by local authorities, and the average annual production of houses between 1934 and 1939 was 334,000. Despite all our modern technology, all our modern machinery, all the wonderful labour-saving devices, we are hardly beating the house building record of 1925. Why is this? Somebody should look into this. Hackney Council said the other day that they were cutting their council house building by 70 per cent. In reply to a Parliamentary Question Jim MacColl said that there were a number of councils who had cut their house building. I shall not list them all, but the biggest one of all has cut out 70 per cent. When he was asked to give a list of councils which had discontinued or curtailed house building, Mr. MacColl gave a list of about 20 major Conservative councils which had stopped building council houses. The Minister is proud of the fact that 35,000 council houses have been sold, but every house sold means one less in the pool to rent and a bigger struggle for the underprivileged. Every year 115,000 houses are needed for newly married couples—

LORD BURTON

My Lords, I do not want to interrupt—

LORD DAVIES OF LEEK

I do not want to be long. I have been 16 minutes up to now.

LORD BURTON

I just want to say that some local authorities, including my own, have stopped house building because they have satisfied the housing need. That is certainly the case in many areas.

LORD DAVIES OF LEEK

They have satisfied the housing need? I will guarantee a pig's trotter to a sausage and a pork pie that they have not satisfied the need for rented council houses. I should like to know anywhere in Britain where the need to rent council houses has been satisfied. People are having to make sacrifices in order to buy their houses, because they have no alternative. It is no good pretending that the need has been met and I diametrically oppose anybody who stands tin in this Chamber and says that the need for council houses to rent has been met. It is worth remembering that when Labour was in office we achieved an all-time record of 500,000 houses.

In 1970, 111,000 houses were demolished, not only for slum clearance but for road widening. I do not know how all these roads are being planned, but I believe we should use our computers to find out how the new roads should go through England in a way that necessitates the least destruction of people's houses. The total number of houses built in 1970 was 350,000, which was quite good. But take away from that the 111,000 demolished for roads and new slums, and then subtract 150,000, because roughly 150,000 young couples get married every year and want a home, and how many houses have you gained? You have gained less than 100,000 houses. In other words the way we are going, fifty years from now we shall not have met the present demand for houses. The cost of all this in misery is something which we cannot compute.

My final point is about these unidentified flying objects. In 1928 in London there was drain trouble, sewer trouble, electricity cable explosions, water pipes bursting, gas pipes bursting and telephone cables on fire. The streets in Holborn were closed for five weeks and we were menaced by flying manhole covers and no one knew what caused it. Of course what had happened was that all these services had gone underground. So is it not time, in the age of technology, for water supplies, electricity supplies, drains, telephones and cables to be co-ordinated? In 1929, the Surveyors' Institute produced a document asking for the co-ordination of all of these services in a modem world, but it has not yet been done. Let us stop pretending. The most important thing for us to do is to supply food and shelter, and if you want to lower the amount of "yobbo-ism" and "mugging" in the streets, give people decent places to live in. This should be our contribution to a civilised British society.

5.37 p.m.

LORD O'HAGAN

My Lords, I am afraid that I shall not be able to follow the speech of the noble Lord, Lord Davies of Leek, neither in his reminiscences about flying manhole covers nor in his fluency; nor, I hope, in its length—

LORD DAVIES OF LEEK

I am sorry about that.

LORD O'HAGAN

I do not have his power of memory and all of my points have been made, and I do not have his natural fluency. So I shall restrain myself and keep to a few narrow points about which I have already alerted the noble Earl, Lord Gowrie.

I have no ability to discuss the underlying causes of our housing problems, but I think the housing association movement, about which the noble Viscount, Lord Gage, knows so much more than I do, is a valuable one and one which could be helped rather than impeded. The housing associations have found themselves in grave difficulties because of the rocketing price of land and houses. One of the principal causes of their troubles, perhaps soon to be removed, is the slowness of the machinery of local government. For example, under Sections 119 to 121 of the Housing Act 1957, local authorities have to provide housing associations with loans up to 100 per cent. of the approved cost of conversion. The housing association is in the market with all the other people who are chasing after houses. They have to get the money, which is one problem, but they then have to get the place valued and the conversion valued by the district valuer, about whose functions the noble Lord, Lord Sandys, was inquiring. By the time the district valuer has made his valuation and it has gone through the machinery, the price has gone up even more and the district valuer's valuation of the cost of conversion may be well below what is in fact the selling price. So the housing association is unable to meet the cost of the property that it needs, because of the machinery of local government which has taken too long to come to a conclusion, and it has been left behind by the rising prices.

The same thing happens with the mortgage applications which the housing associations put in. Through no fault of their own, the local authorities have to process these with great thoroughness, but by the time an application has been dealt with and the final document is issued the value of the property has gone up. Also, improvement grants—whatever their original intention and whatever benefits they have brought to various areas—encourage others to compete with the housing associations for whom many of the run-down properties are the natural target, and these are now priced out of the reach of the housing associations.

I am not intending to criticise local government when I make these comments, my Lords: I am merely using the dealings that the housing associations have with local government to illustrate the need for strengthening the powers that the housing associations have to keep up with the increased pace of the rise in the price of houses. I should like to ask the Government whether they have given thought to speeding up this machinery for housing associations, particularly with regard to valuations under Sections 119 and 121 of the Housing Act; and whether they would also look again at the support that they give to building societies in the housing association field. The building societies, as I understand it, would be quite willing to be much more adventurous (or some of them would) in lending money to, say, universities for buildings for students, or to housing associations for varied types of accommodation. But there is a drawback: the building societies are worried about the security, although they have the massive amount of money about which the noble Lord, Lord Hylton, told us. Would it he possible for the Department to be slightly more helpful when prominent people in the building society world try to pioneer initiatives, through them, to help universities? I shall leave it like that.

On the other point of building societies—to my astonishment nobody has mentioned it, so I will do so very briefly—would there not be a very small loss of revenue and a very warm public reception to a Government who tapered tax relief on mortgages? I should have declared several interests at the beginning of my speech, being not only a landlord but having a mortgage; and, in view of the presence we had earlier in the afternoon, perhaps I should mention that I am also a tenant of the Crown Estates. But it would be social justice to taper tax relief on mortgages, and I am sure that many people would welcome this move towards stabilising house prices, even if the Government felt able to do nothing else before the Budget, when we all look forward to such wonders.

My Lords, I hope that when we are talking about housing we are not thinking only of a property-owning democracy. It is rather hypocritical for someone like myself to say that, but there is a terrific movement, with various manifestations, against property owning and towards some sort of communal living. It works I have seen it working. I hope that the Government will be imaginative, and will encourage it; but before they get there I hope that they will help the housing association movement and the building societies, when the building societies are starting to do something a little more positive, perhaps, than they have done previously.

5.44 p.m.

LORD WOLVERTON

My Lords, I am very pleased to take part in this most important housing debate to-night because one of the cardinal things in a good Christian life is that everybody should be decently housed. In the debate on May 18, when we were discussing the Second Reading of the Housing Finance Bill, I said that, taking England and Wales, between 1970 and 1971 2,500 more houses had been built. I said that this was not very good and that we must try to do better. My Lords, we have done better. I do not want to bore your Lordships with a lot of figures, but I think that figures are better than percentages, and I have taken a little trouble to try to discover a few of the relevant ones.

The number of houses completed in England and Wales in the first half of 1971 was 146,297, and the number completed in the first of half of 1972 was 146,533—an increase of only 236 houses. The source of those figures is the housing statistics for the period August, 1971, to August, 1972. But the encouraging thing—and I must put forward these figures—is that in Great Britain during the nine months to September, 1971, there were 254,100 houses started, and in the nine months to the end of September of this year, 1972, 264,900 were started, That is an increase of 10,800 houses started. If we have any luck, a large number of those houses should be completed this year. But, of course, we must realise that there was a brick famine in the summer, and also a most unfortunate building strike which lasted six to seven weeks. But, anyway, the trend is upwards, not downwards; whereas when Her Majesty's Government took office in 1970 the figures were going down rather than up. Prominent members of the Labour Party said after the Election that they were very dissatisfied with their housing policy.

LORD SOMERS

My Lords, may I interrupt the noble Lord for one moment? When he says, "houses completed", does he mean all houses for one family only?

LORD WOLVERTON

All agencies, my Lords. The source of those figures—I am always careful to give the source—is the Department of the Environment. But what I really want to talk about to-night is this terrible problem of inflation as it is affecting the housing policy and mortgages. In the debate on the humble Address in reply to the gracious Speech, my noble friend Lord Drumalbyn said, at column 369 of the OFFICIAL REPORT of November 8, that 30 per cent. more was given to borrowers under the age of 25 and 40 per cent. more to borrowers with incomes up to the average industrial manual worker's earnings". I asked my noble friend Lord Drumalbyn (who said he could not be here to-night) what he considered was the right figure for the average industrial manual worker's earnings, and he told me it was just over £30.

My Lords, £30 a week is £1,500 a year. Building societies have very strict rules, and for the purchase of a house they will not lend more than three times the annual income on mortgage. Three times £1,500 is £4,500. Up to a year or 15 months ago people earning £30 or £35 were able to get a mortgage, and we were delighted that they wanted to become members of a property-owning democracy. But to-day you have to be earning something like £45 to £50 a week to get a mortgage. That is what worries many of us, and I am sure it is worrying Her Majesty's Government very much. I do not know what the answer is. I hope that the freeze (and then, after the freeze, the next step) will bring down somewhat, or will at any rate steady, the price of houses, because there is a very big gap between those people earning £30 a week and others earning £45 to £50. What is to happen to these people if they cannot buy their own houses? They will come on to and swell the housing lists of local authorities. I am not against providing adequate building for local authority purposes. I think we need to have adequate housing for rent in this country, as well as our being a property-owning democracy, which naturally I support.

Under the Housing Finance Act, there are only two ways, of course, in which local authorities can tackle the problem: they get a rising cost grant and they also get a deficiency grant, which is very important, if their housing revenue account goes into the red. I think I am right in saying that at the present time if, through building expensive houses, their housing revenue account goes into the red, they will get a deficiency grant of 90 per cent. in the first year and 75 per cent. in the second year. Something must be done. I spent nine years as a member of a local authority, the Suffolk County Council; and I have been told recently by people in East Anglia that they find it difficult to get planning permission for plots of land. I know that local authorities have great problems and have to hold the balance between agricultural land, Green Belt, ribbon development and so on; but the only way to get down the price of land is to release more land. There is a tremendous demand for building land. The only way to try to solve this problem is to build more houses. That must be done in some way or another. I beg Her Majesty's Government to try to persuade the local authorities to release more land. Like many others, I am shocked at the recent increase in the price of land, but that is a matter of supply and demand: if enough land is not released prices will go up.

A very important point was made by noble Lords opposite, a point with which I agree. It was that there is too much hoarding of land. If you get planning permission you must develop within five years. I believe that that should be altered so that development should take place within two or three years. Creating a sort of land bank does not get houses built. I hope that Her Majesty's Government will look into these points and perhaps tell me to-night whether it is possible for an industrial manual worker, with earnings at around £30 a week, to get a mortgage. I know that this was possible at the time to which I have previously referred. Will it be possible in the future? In East Anglia, houses which 18 months ago cost about £5,000 are now costing £8,500. In the Home Counties it is costing £10,000, £12,000 or £14,000 for a three-bedroomed house. These prices are getting beyond the means of a large number of people. That worries me, and I am sure that it worries Her Majesty's Government whom I support. We must try to solve this great problem.

LORD HYLTON

My Lords, we have had a great deal of talk about releasing land; but this is of no use unless it is serviced land—and fully serviced land at that.

5.55 p.m.

LORD POPPLEWELL

My Lords, this debate reveals the different lines of approach by both great political Parties on how the housing problem—one that is acknowledged by all to exist—should be dealt with. A review of housing needs and housing legislation since 1914 makes very interesting reading. Between 1914 and 1945, 12 Acts affecting housing were placed on the Statute Book. From 1945 to the end of 1971, 50 Acts affecting housing in one way or another were placed on the Statute Book. In my opinion, this indicates that housing is acknowledged, and has been acknowledged, by all as a social need as well as an economic problem. The first batch of housing legislation to which I refer—that prior to 1945—appeared to accept the social nature of this problem; whereas on the whole, with those wonderful exceptions mentioned by my noble friend Lord Greenwood, the 50 Acts which have appeared since the end of the Second World War have seemed to suggest that the economic factor was the deciding factor. Many changes have taken place so far as housing subsidies for council house building are concerned since the Wheatley Act in 1924 and Arthur Greenwood's slums Act in 1931 to which, in my opinion, sufficient credit has never been given for the wonderful way in which it tackled the slums problem at that time.

At that time the acceptance of housing as a social problem meant the general acceptance of subsidies being spread over the general rate of the area concerned. The change that has now taken place has meant that where local authority finance is involved as much emphasis as possible is concentrated on the housing revenue account; so that grants for improvements and grants for the various types of house building that the authorities are entitled to carry has been concentrated largely on the housing revenue account. In this particular connection the local authorities are often placed in very great difficulty. A lot of use has been made of house building statistics for various years. Each political Party tries to claim a credit here or a credit there, but one thing that seems to be overlooked completely by the Conservative Government in this direction is the social need to which I have referred. This is reflected in the type of house building that has been encouraged by them. We find that their concentration is led astray, if I may say so, by that Election cry, "Private ownership of houses". In my opinion, the curtailing of the council house programme has proved to be a very big contributory factor in this great uplift in land and house purchase prices. All factors have a bearing on the problem. In some years under the Labour Government private house building figures were high; in other years council house building was higher. Council house building continued to grow until we ran into that difficult balance-of-payments problem when some changes had to take place.

There has been a very low level of council house building since this Conservative Government took office. It is acknowledged, and has been acknowledged since the 1914 period, that very little can be done to build houses for renting at a reasonable figure. Apart from council house building in the years between the wars, very little house building for private rental took place. It is necessary almost to use a microscope to discover any private house building to let at reasonable rents which has taken place since the end of the last war, apart from what has been done here and there by some housing associations. Therefore the channelling by the Government of building according to their fetish for house ownership has had a serious effect on prices.

We would all encourage house ownership where that is practicable and feasible, but for a large section of the community house ownership is not a practical proposition, and houses must be provided for those people to rent. Difficulties have been increased by the neglect of house building for rent. A favourite theme of the Government is that local authorities should sell as many council houses as is possible. My noble friends have pointed out that this action does not help the housing situation at all but simply conforms with the Conservative Party's philosophy that if there is anything to give away it should be given to private individuals as distinct from public enterprise. Local authorities have been instructed to sell council houses at 10 per cent. to 20 per cent. below the value placed on them by the district auditor, and this is one more indication that money is being poured into private enterprise pockets. Furthermore, my Lords, local authorities are penalised because every house they sell at the figure suggested means that if they want to overtake the arrears of housing in their area new houses must be built at greatly enhanced prices. It is facts of this sort that we must face.

The insistence by the Government in their recent housing legislation that increases in house rents should continue means that additional local authority expenditure will have to be undertaken. Because of the way in which the new housing legislation will operate there will be an increase in rents, and a change in the Government grants made to local authorities will result in the authorities being further penalised through their rateable assessments. Is it any wonder that trade unions object to the wage freeze? Housing rents and rate increases, and additional expenditure by local authorities resulting in more rate increases, all have to be met by people who are subject to the wage freeze. It is the increase in housing expenditure in addition to the increases in food prices that is contributing to the uneasiness which is felt generally.

I do not know how many noble Lords have read the shock report by Shelter. Six large towns were investigated from the point of view of housing needs; and what dismal reading it makes! When I was a Member of Parliament I had the privilege of representing for many years one of the cities referred to in the report. The report deals with Edinburgh, Cardiff, London, Manchester, Bradford and Newcastle-on-Tyne. I refer to Newcastle-on-Tyne where it is stated in the report that half the houses in the West have no separate hot water taps. About half the houses are rented unfurnished and have no fixed bath. In less than one-third is there provision for the separate use of these commodities. Surely, my Lords, in this day and age that is a shocking situation. It is difficult to relate it to the claims of the Government for their slum clearance drive and the standard which they imply.

There is another interesting feature in connection with the report. When the Tories regained control of the local council some five years ago, there were 6,000 names on the housing list and house building was taking place at the rate of 2,000 houses a year. According to the report of Shelter, there is now a waiting list of 9,000. It is estimated that 12,000 houses are needed, and the house building programme is proceeding at the rate of only 800 houses a year. This is real evidence of what is happening where the Tory philosophy is operated by a Tory-controlled local authority which does not believe in the public ownership of houses.

LORD SANDFORD

My Lords, if the noble Lord will permit me to interrupt him while he is referring to Newcastle, may I say that this is the city where the figure for public housing starts is now running at 93 per cent. above the figure for 1970.

LORD POPPLEWELL

The figure referred to by Shelter is the latest available, but I do not know the date when the report was compiled and naturally I accept what the Minister says. But the comparison of the figures in the report makes interesting reading. A lot of propaganda has been put out by the Government about improvement grants. We are all pledged to improvement grants, but it is interesting to see where the expenditure has gone. Noble Lords may recall that I questioned the Minister about the percentages and I hope that I got down the figures correctly. I think he said that they were 41 per cent. for council houses and 35 per cent. for privately-owned houses for rent. That is very interesting. The noble Lord opposite referred to some property that was 100 years old and to property that was 400 years old. Evidently these will be entitled to improvement grant. When the improvement grants have been made who receives the benefit? Naturally, it is the landlord. The immediate benefit is to the people living in the house, but then the landlord is entitled to put up the rent in order to meet that part of the cost that he has had to bear. The National Exchequer will bear about 75 per cent. of the cost, and the landlord pays 25 per cent., and the rent goes up accordingly to meet that cost.

If we take every other commodity—clothing, furniture or whatever it may be—there is a life to it. We purchase our clothing, our furniture, our motor car and they have a certain life. But it seems that housing must go on in perpetuity, and even though rents have been paid over the years, the landlord can say: "These improvements are so great that I cannot meet them", and the Exchequer pays.

The noble Lord said, I think, that 30,000 council houses have been sold in 1972. Why is this? Is this a real desire for home ownership? Probably these people have been living in the houses for many years. Why should they suddenly bestir themselves and want to purchase? It is not hard to find an answer to this. I was a member of my local authority many years ago, and I remember that under the 1924 Wheatley Act we built houses to let at 8s. ld. a week. Those self-same houses to-day have an economic rent in the region of £3 a week. The cost of construction was £340. When the tenants of these houses realised the change in the rental that had taken place under the direction of this Government, they found the rents had become so excessive that, with the aid of a mortgage, it was cheaper to purchase the house rather than pay the rent, for the Government are subsidising them to the extent that they cost about 20 per cent. less than they would if bought on the open market. This is most interesting, and it indicates some difference in our line of approach.

One other question I should like to ask. What further action can be taken? I have here a cutting from the Yorkshire Evening Post of November 6, which refers to a Mr. Davis, who agreed to purchase a house 13 months earlier at a price of £3,650. Some six weeks later he was told that the price had gone up to £3,800. The next news he had was that the completion date had been put forward to August and that the price of the house had risen to £4,070. The last figure he was asked for the house, which is still not complete, was £4,470. This is an increase of over £1,000 in a few weeks. This is what is called "gazumping", which I know is not illegal. I am sure that this type of case can be repeated hundreds of times all over the country. In such a situation the Minister and the legal department should be making earnest inquiries to prevent this complete exploitation of the people in so far as their housing needs are concerned.

We are much indebted to my noble friend Lord Leatherland for giving us this opportunity to express our views on this urgent problem; and I compliment my noble friend on the factual figures that he was able to present to us. Many of us who have followed him felt that all he said from the factual side was sufficient to hammer home the needs, and according to our respective lights our contributions have been merely to express our personal views on this intense human problem. The housing problem is one of the greatest evils in our society and the cause of many of the human tragedies that occur in our towns and cities.

6.17 p.m.

LORD BURTON

My Lords, I apologise for not putting my name on the list of speakers but during the course of the debate one or two small points have occurred to me. First, in my attempt to comply with the request of the noble Lord, Lord Davies of Leek, to be brief, I am afraid that I may have created a slight misapprehension. I said that we had stopped building, but this is not entirely true. We have stopped building in many areas because there is a shortage of applicants for houses, and there is no point in building houses in areas where they are not wanted and where there will be no one to occupy them. We have to a large extent already completed the housing needs in our local authority area.

I should like to refer to security of tenure. I am concerned that in our rural areas a number of houses are lying empty. This is because current security of tenure restrictions are such that the owners of the houses are frightened to let them. I think that this is something that needs looking into, and perhaps some amendment. The final point that I wish to make concerns land. There is a proposal to change the method of land tenure in Scotland and to abolish feuing. I have little doubt that if this is done it will only help to create a further famine of land for houses. It will do away with an excellent method of making land available, as it is at the moment. Having listened to many of your Lordships, I think that England should take a leaf out of Scotland's book. Where we have non-political county councils, we have a much better housing record than apparently exists in England.

6.19 p.m.

LORD GARNSWORTHY

My Lords, I am sure the House is greatly indebted to my noble friend Lord Leatherland for giving us the opportunity to discuss one of the most serious problems that confronts this country. It is without doubt a matter of great concern to many of your Lordships, as has been evidenced by the speeches that have been made this afternoon. No one can doubt that, far from this being a subject for complacency, the concern that has been expressed in many quarters of the House is such that the Government would do well to note the disquiet that is felt. There will be general agreement, I think, that quite apart from the speech delivered by my noble friend Lord Leatherland when he opened the debate, we have had one or two quite outstanding speeches. The contribution of my noble friend Baroness Serota was a quite outstanding one, and I am sure that the House listened with very great sympathy indeed to the speech made by the noble Baroness, Lady Masham. I think, too, that we all feel that points of value deserving consideration were made by a number of other Members of your Lordships' House, including my noble friend Baroness Gaitskell and the noble Lords, Lord Hylton and Lord O'Hagan.

When I was dwelling on what I might say this afternoon I thought that it would be as well if I had a look at the pamphlet A Better To-morrow, and refreshed my mind as to what was said in regard to the housing situation. There are two full pages devoted to "homes for all." There is nothing in that programme which indicates that the people of this country could expect and anticipate the explosive rise that has taken place in the price of land and houses such as has occurred in the last two years. A look at any estate agent's window, or indeed at advertisements of properties in the Press, offers the most telling commentary on the housing situation as it exists today. Instance after instance has been given of phenomenal increases that have taken place in the last two years.

Before I come to the question of increase, may I say that last week I was sitting on an appointments committee at the County Hall in Kingston. We were considering the appointment of one of our most senior officers in the salary range of between £8,000 and almost £10,000 a year. The officer was asked, since his appointment would involve moving, what thought he had given to securing a house in Kingston. He said, "Well, on the way from the station to this building I have been looking in estate agents' windows, and I am absolutely appalled." I think, my Lords, the word "appalled" is one that is fully justified. After the meeting I walked down the street to the nearest estate agent's office and saw there advertised a number of properties. There was one with a rateable value of £98—and I may say that in Kingston a property with a rateable value of £98 must indeed have been a not very good property. It was being offered for sale at £13,995. I like that very nice touch: £5 below £14,000. £14,000 for a house with a rateable value of £98—what are we coming to!

At lunchtime to-day I was talking with a number of people owning houses in Surrey, bought quite recently. One of them had bought a house in Woking two years ago, for which he paid £12,000. The house adjoining that has just this last week been sold for £24,000. I was talking to another man who bought a house at Guildford not very much earlier than two years ago for £18,000. He told me that its value to-day is over £30,000. As I have said, a number of instances have been given. I have no doubt that everybody sitting in this Chamber is aware of the fact that in no instance has there been any exaggeration in regard to the meteoric increase that has taken place in the last two years.

It seems to me, listening this after-noon to the speeches that have been made, that there is general agreement that one of the main causes of high prices for newly-built houses is the un-controlled explosion that has taken place in the cost of living. Grave disquiet has been expressed, not merely this afternoon, but also by many speakers from the Benches opposite as well as from those behind me when we were discussing the gracious Speech. Nationwide Building Society figures indicate a rise of 60 per cent. in average site values between the second quarter of 1970 and the second quarter of 1972 for Great Britain as a whole—114 per cent. for the South of England and 132 per cent. for London and the South-East. That is to say, so far as London and the South-East is concerned, a site worth £1,731 in 1970 is now worth £4,022 in 1972—almost enough to buy the house that my noble friend Lord Popplewell was talking about that is not yet finished.

I want to ask Her Majesty's Government what proposals they have for bringing land prices under control. They say that they will increase the supply of land—and indeed the noble Lord, Lord Sandford, referred to the increases in land supply that have taken place. I want to ask the noble Lord, Lord Sandford, whether he can tell us what effect the release of this land has had on the cost of land; also whether the price of land anywhere has been reduced because of the release, or whether in point of fact the release has had the least effect at all in holding the price of land. For quite doctrinaire reasons, the Conservative Party have opposed all the efforts that have been made this century to secure for the community the benefits of increases in land values brought about by community enterprise and social need. They have preferred to leave the matter to the play of the market; and at the same time they recognise the need to plan land use. If the supply of land for development is controlled—that is to say, limited—then surely prices also ought to be controlled if land is going to be sold. Perhaps we ought now to give our minds seriously to bringing land that is ripe for development under public ownership. At any rate, I think we are entitled to ask what the Government intend to do.

The important thing is not what we have to suggest—because we are not contesting an Election; when the Election comes we shall say what we propose—but what the Government in power are going to do to hold land prices. Dare I ask what proposals they envisage and what thoughts they have given to reducing the price of land?—because, surely, there is nobody in this House who will dare to say that the price of land ripe for development is not unduly high.

We are constantly reminded, as we have been again this afternoon, that we face the problem of inflation. Nowhere are its consequences more obvious than in the case of land and house prices. They are alarming and, if I may say so, at the present time they are, many of them, quite immoral. On more than one occasion when I have raised this matter the noble Lord, Lord Robbins, has made the point that rising property prices are a consequence of inflation since, in inflationary situations, investment in property is much favoured. There would seem to be a great deal of merit in looking into this since what is happening in the property market is, I venture to suggest, also exerting considerable inflationary pressures. What is happening in the property market is reducing the value of every pound that we have in our pockets. We are all entitled to resent this devaluation of the money that we have in our pockets. This is taking place as a consequence of an uncontrolled property situation.

I want to touch on a point that was also touched upon by my noble friend Lord O'Hagan. Is it not time that tax relief on mortgage interest was restricted to one house, and a ceiling placed on price? That is, no more tax relief on interest on additional houses, or on very expensive first houses. If this restriction was introduced I suggest that there would be some reduction in the artificial demand for properties, because one understands that a considerable number of people are buying not one house but two and three houses. The prospect for young married couples is pretty bleak. The Financial Times of October 25 this year carried a leading article pointing out that between the second quarter of 1970 and 1972 the average price of a new house had risen by 37 per cent., and that of a secondhand one by 45 per cent. That was taking the country as a whole. They pointed out that with an average price of £7,300, on which an average deposit was paid of just under £2,000—that is a very substantial deposit—the average weekly income of the borrower was £43. The borrower spent nearly a quarter of that on mortgage repayments.

In some quarters there has been talk about 100 per cent. loans. I think that for people on low incomes, people of modest means, this is pretty meaningless in terms of helping them. They cannot afford to pay interest and repayments on 75 per cent. loans, never mind on 100 per cent. loans. The proposal, which I think emanated from the National Economic Development Office, to tailor the pattern of repayments to that of interest only in the early years of the loan just puts off the frightening day when capital has to be repaid. It is frightening if one suddenly is called upon, or at any given time is called upon, to increase repayments, because if interest only is paid the capital outstanding remains the same. I hope that nobody is going to come up with the suggestion that if inflation continues the capital that is left owing will not be as valuable and should not cause us much concern. It is frightening to people who face that situation.

The suggestion of granting loans up to 35 years can only have very limited effect, because who will want to make a loan extending over 35 years to anyone over 30 years of age? Or, in many cases, over the age of 25 years? It cannot be said that the Housing Finance Act has helped in any way at all. That point has been made by a number of speakers, my noble friend Lord Leather-land, and others. If it brings, as we said it would—and it was never denied—more people into the market to buy, the consequence will be to encourage even further price increases. It was a measure that was misconceived, unjust, inflationary, and it was, and remains, untimely.

I want to turn now to the modernisation of older houses. Without doubt this was—and it has been acknowledged by a number of speakers—an imaginative conception by the last Labour Government. The 1969 Act reflects great credit on my noble friend Lord Greenwood of Rossendale. I give this Government full credit for exploiting it. But, having regard to what is said in A Better Tomorrow, on page 17: We seek a big increase in the programme of modernisation of our older houses in co-operation with movements such as 'Shelter' … I should like to ask what Her Majesty's Government have to say about the proposals of Philip Pearson and Alex Henney in the Shelter pamphlet No. 4, Home Improvement—People or Profit? I will not take up time in reading out the proposals that they made; but I read carefully what was said in the other place on November 2. I am unable to find anything approaching satisfactory answers to questions that were asked about this matter. I am aware that the noble Lord. Lord Sandford, referred to improvement grants this afternoon, and the manner in which these grants are disposed of throughout the country. I should like to know what the Government have to say in reply to what is set out in the Shelter pamphlet. Further—it is a small point, but it is of interest—I wonder what can be said about the £1,500 improvement grant made by Neston Urban District Council towards the £33,000 improvements planned by the owners of Hinderton Hall in Neston, Wirral, Cheshire. I should have thought that there was a sufficient need to spend this kind of money on much more modest properties.

I want to touch on the role of the building societies. I am frankly voicing my own thoughts—although other people may share them—when I say that the building society movement could have done a great deal to control the housing situation. I do not think that they have acted with that sense of responsibility that we are entitled to expect from them. They are over-concerned with the creditworthiness of the individual. I have seen properties on which purchasers have obtained mortgages that nobody who knew anything about house property could have regarded as good buys. It may well be said that it is up to people to use their common sense, they ought to know what they are doing, and they ought to get a valuation. Young people who have never bought a house in their lives before have very often all the urgencies of wanting to get married or, if they are married, of wanting to get a home. They do not use the wisdom of those of us who made our mistakes and had our fingers burnt and learned our lessons. My right honourable friend Mr. Anthony Crosland has raised this matter, and it has been touched upon by one or two speakers—I think the noble Lord, Lord Hylton, touched upon it. My right honourable friend drew atention to the manner in which building societies have advanced money for investment in the housing market, money which does not of itself produce more houses, but simply finances inflated prices of existing houses. He has advocated a Government-backed building society stabilisation fund which will provide investment for society money when societies are over funded, and for a source of money to lend when times are tight. My noble friend Lord O'Hagan went on further to suggest that when times are tight probably the Government could advance money to the building societies with profit so far as the public interest is concerned.

I want briefly just to touch on the prices and incomes freeze. It is extremely disturbing that the Government have excluded furnished tenancies from their 90-day freeze. With 700,000 furnished tenancies across the country, and an estimated 95,000 families in furnished accommodation in London alone, the abrogation of responsibility for this sector penalises the tenants of the most expensive and insecure sector. If the Government are prepared to exercise control over fruit and vegetables, surely it is possible to do the same for furnished accommodation. The present position so far as the housing situation is concerned is one from which I am sure no one will gather or attempt to gather any comfort. It has been suggested once or twice this afternoon that now, or perhaps in 1975, we shall have enough houses throughout the country to match the national need. I hope the noble Earl, Lord Gowrie, will give a little attention to this point. I think I am entitled to have his attention as he is going to reply. That is a claim that is pretty valueless when many of the houses are in the wrong place. It is no use having empty houses at Haverhill, Ipswich or anywhere else in East Anglia, or anwhere else in the country, when we have the pressure of the housing situation that exists in London and the South-East and other centres of population.

Really, to introduce this note, that we need not be too worried—I am not suggesting that this has been done from the Front Bench but I have detected an implication of this in one or two remarks that have been made—is an indication of a sense of complacency just around the corner. It is going to be a long time, a very long time, before we have built enough houses to provide for every family what they ought to have. They ought to have a secure home—and here I would say that it is time, in my view, that the tenant of the local authority house had the same degree of protection that the tenant of the privately-owned house has enjoyed for a long time in terms of security of tenure. It is the one criticism I have had to make about local authority housing. Generally, one can trust a local authority; there is the odd occasion where they cannot be trusted.

LORD SANDFORD

My Lords, may I interrupt the noble Lord to remind him that this was one of the aspects which was improved in the Housing Finance Act?

LORD GARNSWORTHY

My Lords, I do not question the improvement. I am asking for the same, the complete, coverage so far as the council tenant is concerned as applies to the other one.

I do not want to take more than another minute or two, but before I sit down I want to say this. When one looks back at the accomplishments of the last Government in the field of housing construction—and they have been criticised because the programme tailed off—when one regards all their years of office, when one takes an average of their achievements in the field of house building, one finds that it still remains a record. When the Government have been in office as long as the previous Government were in office—and I hope they will not be—that will be the time to compare their achievement with the achievement of the Labour Government. I am hopeful that they will not be in office so long, because the longer they are in, the more scared I become about what we can expect; the more I feel we are becoming divided as a nation. I am not impressed by the fact that it takes two years for the Government to discover their mistakes and then to try to begin to do something about it. It ought to go out from this debate that local authorities should be encouraged to build, and build on a scale that we have not yet achieved in those areas of great housing need. Whatever has been accomplished in the past, still more must be done.

My Lords, I believe that the time has come when all privately rented properties—that is to say, moderate properties—ought to be municipalised. I do not think we can leave the care of old properties to the private owner. There are a number of other positive proposals I should have liked to put forward, but I have mentioned one or two so that your Lordships will know that we on these Benches are not without constructive proposals, without positive ideas. Houses are for people. Houses are things that people turn into homes. There is too much homelessness; the lists of people who want to rent houses at municipal offices are far too long. The price that many people are being called upon to pay for houses is exorbitant. The price of land on which people might build for themselves is excessive. This debate will serve a purpose if the noble Earl, Lord Gowrie, is able, when he is replying, to tell us what the Government are going to do really to remedy this situation, not only to the extent that present prices will be held but that prices will be reduced—and, my Lords, if that happens a lot of people are going to lose a lot of money.

6.48 p.m.

THE EARL OF GOWRIE

My Lords, because this has been a very well-informed and detailed debate I shall, I am afraid, have to get rid of the elegance of dealing with things thematically and deal with them in turn, and I shall deal with each speaker as best I can in turn. But before I make my preliminary remarks I want to say to the noble Lord, Lord Garnsworthy, while his vigorous and fighting speech is fresh in our minds, that we are not complacent at all about the ferocious rise in the price of land, especially in the South-East, and the increase in the prices of all housing. Nevertheless, it must be said, it should be said loud and clear right away, that over 50 per cent. of our population now has an average capital stake—and I emphasise the word "stake"; I am not talking about liquid money—in our total economy of some-where between £8,000 and £10,000; and I would say that that is unprecedented in our recorded social history. We are not waving any flags; we are not complacent about this. And we are, as noble Lords know, tackling inflation which is the context of the problem we are talking about to-night. We are tackling it as from now. There is a debate on the subject next week and I, for one, am certainly looking forward to it.

My memories of the Back Benches are recent enough to make me acutely aware of the agonies of lengthy winding-up speeches, when one wishes the Minister to hive off his philosophising to another place or to another occasion, deal with the points one has raised oneself and then bring the proceedings to a close. I assure the House that I am aware that big brother's electronic eye is upon me and I shall try to give as succinct satisfaction as I can to the many useful, critical, but in all, I believe, constructive questions which noble Lords on all sides of the House have brought to the attention of the House and of the country and, of course, of the Government.

LORD DAVIES OF LEEK

My Lords, I would ask the noble Lord not to spoil his speech on account of the time.

THE EARL OF GOWRIE

My Lords, that advice from the noble Lord, Lord Davies of Leek, comes, I think, from the appropriate quarter, and I certainly enjoyed all 29 minutes of his speech. I refuse, however, to enter into a competition with him on this question.

Remarks have been made and, as I have said, the context was set by my noble friend Lord Sandford as to the role of the Housing Finance Act in the subject we are discussing to-night. I shall not go into it in great detail. Certainly it was politically contentious enough even to satisfy the noble Lord, Lord Leatherland, the noble Baroness, Lady Gaitskell, and the noble Lord, Lord Garnsworthy. The noble Lord, Lord Garnsworthy, said that that Act has not helped in any way at all, but I should have thought, even granting the political contentiousness, that it would be hard to deny that a major reform is the introduction for the first time of a system of rent allowances for private unfurnished tenancies, and the Government are proposing to extend this system to furnished tenancies. It is clearly better to give the landlord a reasonable return through the fair rents system and so begin the process of rehabilitating the privately rented sector of the housing stock and at the same time give new allowances rather than to maintain the crude, unjust system of rent control. I feel that noble Lords opposite sometimes have a tendency to treat landlords as Victorian villains who should be hissed off the stage when they appear, and I am glad to say that my noble friend Lord Nugent of Guildford (who is not in his place at the moment) has often represented the rights of some landlords—and some decent landlords—in our community.

Therefore I would say that the Government have acted to remove the anomalies and inconsistencies in the system of housing finance and that will provide a structure which will help to solve this great problem in the future. We claim that the Housing Finance Act 1972 provides a universal system of fair rents in both public and private sectors. It provides rent rebates and allowances for those in unfurnished accommodation who cannot afford fair rents. It concentrates Exchequer help for new building on those areas where the housing needs are greatest and many noble Lords on both sides of the House—and I was particularly impressed by what was said by my noble friend Lord Hylton—emphasised that we should concentrate on areas of special need, and of course it provides a slum clearance subsidy.

As to the political differences between the two sides of the House, we of course believe that subsidies under the Housing Subsidies Act 1967 were somewhat indiscriminate. We felt that they attached themselves to bricks and mortar, as laid down under earlier legislation. Every house built by every local authority received a subsidy. There was not sufficient recognition that the housing problems of the different areas to which I have referred were in fact different. Some received subsidies who did not need them and too little went to the authorities with the worst problems of slum clearance and overcrowding. The system produced a pattern of rents which varied unfairly between the tenants of one authority and another.

Other measures connected with the previous Government that I feel we must answer as our debate has been a fairly political one—and I would say rightly—are, first, that the previous Government's selective employment tax applied to all workers employed by construction firms, even apprentices. This we held to be a very strong disincentive to the employment and training of apprentices. We may partly be suffering for this now. The present Government halved S.E.T. in 1971 and have undertaken that on the abolition of S.E.T. with the coming into operation of value added tax, no value added tax will be paid on new construction. So I should think that even the anti-Marketeers can give two guarded cheers on that topic. We reckon that full selective employment tax added some £120 to the cost of a house, and although we recognise that its abolition does not necessarily mean that there will be a commensurate reduction we believe that it will halt costs and therefore improve the situation.

A basic plank in our platform to-night in the other place, dealing with housing generally, is connected with the supply of land. We feel that so far as land is concerned the basic need is to ensure that this becomes available to house builders in sufficient quantity, and this we are now trying to do. We believe that the measures we have taken will not only ensure this but will also act as a curb on increases in the price of land, and I would say to noble Lords opposite that so far as we can tell we are approaching a plateau rather than another peak in the assault of this problem. As I have said, increases in the past two years have been very serious indeed but I think it is important not to be lured into a state of hysteria and thus add fuel to inflation. Hearing the speech made by the noble Lord, Lord Garnsworthy. I wanted to go and sell what few savings I had left and put them into property, but I shall try to keep them in areas of industrial growth.

LORD GARNSWORTHY

My Lords, may I express congratulations to the noble Earl for not following the course that is set by many people who appear to support his Party and who anticipate the future and are buying land as rapidly as they can—even land that is not yet zoned for development?

THE EARL OF GOWRIE

My Lords, it is the business of Governments to try to supply a climate in which people will invest their money usefully and sensibly in land as well as in other things. I think my noble friend Lord Sandford set the context of this debate within inflation and I do not think even the noble Lord, Lord Garnsworthy, would require me to say from this Dispatch Box that people should stop buying land. That is a matter for them. We do not want to add fuel to inflation by this kind of talk and we believe it is important that our measures (which I shall outline) should be given a chance to work. Nevertheless we shall not hesitate to take additional action if it seems to be needed. We are serious about this debate, and we note the things said in it.

Looking to the longer term, it is essential that we should not be panicked into premature release of land in unsuitable situations. What I have in mind are cases which would put our environmental policy in jeopardy, and I think noble Lords opposite would agree with that. To put the same case more positively, we have to see to it that developments take place within the broad framework of regional strategies. The Government have already in operation an approved strategy for the South-East and it is hoped that, following consultations with local authorities, a strategy will be agreed for the West Midlands before the end of the year. We have also started work with the local authorities on a strategy for the North-West and are about to try ones on the South-West and the North-East as well.

Throughout this debate there has been running an undercurrent of very real concern over the question of land prices, and it has been said to-day and on other occasions and elsewhere, that the community ought to reap the increased value of land attributable to the decisions taken by the community on the ways in which land should be developed or otherwise used. It is claimed that the disparities of land values produced by planning are so enormous as to provide a ripe field for speculation, and indeed speculation which has as its object not the release of land for development but an enhancement of capital gain by withholding it from the market.

Some specifics on this subject came up in speech after speech and I will try to deal with them when I deal with the speeches made by the noble Lord, Lord Leatherland, and the noble Lord, Lord Davies of Leek, when I shall touch upon the subject of taxation. But here I should like to say that it is a great deal easier to see the problems in the field than to devise ways of dealing with them, and I would say to the noble Lord, Lord Garnsworthy, that I think none of us here can look back with entire satisfaction on the devices hitherto attempted by the Labour Government to tax betterment. The betterment levy introduced by the Act of 1967 was difficult to administer, was liable to prove inflationary, and perhaps did prove inflationary in many situations, and had nothing to commend it in preference to the capital gains tax as now levied. I know that the noble Baroness, Lady Gaitskell, thinks of taxes as "dust in the eyes of the people", but I can assure her they are not dust in the eyes of the Inland Revenue, as I think we must all know to our cost.

It must be borne in mind that those who buy and sell land solely or mainly for the purposes of gain are liable to pay income tax and surtax on the profits at disposal, and therefore the speculator does not have it all easy. I feel that he is another potential pantomime villain in the minds of noble Lords opposite. However, my right honourable friend the previous Secretary of State made it clear that the Government would act to discourage speculative land holding, and I would say clearly to my noble friend Lord Wolverton, who mentioned this point while I stepped out for a minute, that the particular step which the Government have taken to this end is to ask local planning authorities, where appropriate, to put special short time limits on planning permissions. In addition, my right honourable friend said that financial disincentives would if necessary be considered to the long-term hoarding of land with planning permission. I do not want to take up too much of your Lordships' time with quotations, but I recommend noble Lords to look at the OFFICIAL REPORT of the last speech of Mr. Amery in his then position of a week or so ago.

Even the Labour Party now seems to accept that the measures which they tried before in this field did not work at all well, but they have gone on to suggest that the only way of tackling future land deals and problems of speculation lies in nationalisation of urban building land, or "municipalisation" as it is sometimes called. But we feel that it is no use putting forward proposals with such massive implications, and such very expensive proposals, unless it is explained how they are to be implemented. I look forward to hearing the noble Lord, Lord Garnsworthy, on this subject and to reading what his right honourable friend Mr. Crosland has to say about it in another place, or perhaps nearer the time of the election. I look forward to that and will welcome it because little or nothing has been said by the Opposition on this topic. The issue is not one between black and white—that is, between the wholesale transfer of land into public ownership and a policy of laissez faire. Surely that sort of debate belongs to a previous era.

The Government have made available a special loan sanction allocation of £80 million so that local authorities can acquire land for disposal to private builders, and they have made it clear that they are prepared, if need be, to support some compulsory purchases for this purpose; and we invite noble Lords to bring any cases of which they know or which concern them to our attention; they will of course be judged on their merits. In addition, the Government have published for consultation purposes the Report of the Working Party on Local Authority and Private Enterprise Partnership Schemes. I think that some of these are very promising. This Report outlines various possible ways in which local authorities can get together with developers and land owners in promoting large residential development schemes, and thus we see a continuing and increasing role for local authorities in acquiring and securing the development of land in urban areas.

We also see scope for experiments in public and private initiatives in this respect, and we feel that this is a truly pragmatic approach—a Tory approach, if one likes to put it that way—to the problems which face us. Such an approach must surely depend on a mixture of solutions tailored to the particular situation and nothing is more suspect than the doctrinaire view that success depends on some such wide, all-embracing panacea as the nationalisation of all building land, which would be a measure complex and difficult to implement and which could easily become a limitation on the release of land for building, and I do not think anyone in this House would wish that. Thus, in so far as public initiative and intervention in the land market is called for to release land for private housing, we see this as essentially the function of locally elected authorities, and local government reorganisation we think should strengthen their capacity to do this.

I come to some of the specific points that have been raised in the debate. We in this House are well used to being entertained and made to laugh by the noble Lord, Lord Leatherland. One of the noble Lord's particular attributes is that he can make us laugh while in no sense diminishing or making frivolous the seriousness of the views he is putting over. I take this opportunity, as I did not at the outset, to thank him for the debate. His points about the public sector were I think covered—I hope he was satisfied—by the speech of my noble friend Lord Sandford, to which I direct his attention and urge him to read in tomorrow's OFFICIAL REPORT. That contains the approach to public sector building that we should get away from dealing with things too quantitatively in national terms. This again is part of the Government's emphasis on special treatment for special areas and I would have thought it to be a logical enough approach.

What I should like to do now is to grasp the particular nettle which the noble Lord, Lord Leatherland, held out and which the noble Lords, Lord Davies of Leek and Lord Garnsworthy offered to me, about the effects of house prices and the freeze and the possibility of in some way freezing house prices statutorily.

The Government do not intend to control land and house prices at the present time. We feel that neither land nor houses are sold as standard commodities, like groceries. There is no standard price applicable to individual plots of land or houses. Price depends on a highly sensitive relationship between demand and supply—one need not be Powellite to feel that—and the particular circumstances of the case: location, size, condition and permitted and existing use in the case of land; and size, location, condition and quality in the case of a house. The position is further complicated by the fact that no clear price level will exist for many. Some plots may never have been the subject of a transaction and some may have been sold a generation or so ago.

The same is true of secondhand houses. These form the bulk of housing sales. Prices of secondhand houses tend to determine new house prices. Thus, the new and secondhand housing markets are indivisible. It follows from this that, in the circumstances, if control were applied to home and land prices, it would be necessary to establish a theoretical current value to which prices could be pegged. This would involve a system whereby, if necessary, a theoretical current market value would be established for every piece of land or house offered for sale and caught by the control. This would not be administratively practicable in the time available and would involve a great extension of bureaucratic supervision. It would slow down sales, encourage the establishment of a black market and undoubtedly cause unfairness as between individuals. Surely the answer is to tackle things through local government reorganisation and through our general assault on inflation itself.

I was very impressed by the speech of the noble Baroness, Lady Serota, though it was no surprise to be impressed by her remarks. I took them rather personally because I live in London, in the Covent Garden area, and I see a very great deal there of the problem on which she touched—namely, that of derelicts and people sleeping rough; the problem of homelessness at its most extreme. My personal experience in the context of this reply may be outside the scope of the debate, but had I been on the Back-Benches I would have made a speech on the subject and I noted with great interest what the noble Baroness said.

In an endeavour to follow her points more specifically, I would say that we entirely agree about the need for publicity campaigns and I assure her that we have noted that point. We of course have gone in for such campaigns vis-à-vis rent rebates and we intend to do so vis-à-vis rent allowances as well. The noble Baroness asked for more resources for building for the homeless. There is no limitation on the amount of money that housing authorities may borrow to build houses. Any proposal for homelessness or otherwise will be approved by the Government so long, obviously, as it is within the bounds of possibility; that is, satisfactory as to standards and costs. There is not, therefore, in my view a national resource problem on building for the homeless in that respect.

BARONESS SEROTA

My Lords, I trust the noble Earl will forgive me for interrupting him. My point was that there was a local resource problem which would be reflected in increased rates if local authorities were to continue to use resources for this purpose. My plea was for more national resources for local authorities for this purpose.

THE EARL OF GOWRIE

My Lords, I would have thought that that was answered by my last remark, when I said that any proposal for homelessness or otherwise would be approved by the Government within the bounds of possibility and credibility. Certainly we note that reports on homelessness have recently been published by the Joint Working Parties under the D.H.S.S. chairmanship and comprising representatives of that Department, of the Department of the Environment and of local authorities. These reports are based on research carried out by Professor Greve in London and, appropriately, by Mr. Brian Glastonbury in the South-West and Wales, and we pay tribute to their work. The main recommendations are that housing authorities should be under an overriding duty to accommodate homeless families with children; that social service authorities should cease to provide accommodation for the homeless, and that all housing, both temporary and long-term, should be met from the housing pool as a housing function. If accepted by local authorities, these recommendations will dictate close cooperation between the social service and housing authorities. The Secretaries of State for Social Services and the Environment have accepted the Report in principle. I am pleased to be able to say that to the noble Baroness following upon her speech. The reports are at present being studied by local authorities in the areas covered by them, and my right honourable friend Sir Keith Joseph, and the Minister, Mr. Paul Channon, have arranged to meet the London boroughs, where the problem is most intense, of course, on January 22 next year. The two Departments then intend to issue a circular of advice which we await with interest and with concern.

My noble friend Lord Hylton made a long and extremely well-informed speech, which is no surprise to us because he is the General Secretary of the Catholic Housing Aid Society which has family housing associations up and down the country and co-operates with Shelter (which has been mentioned in this debate) in the Shelter Housing Advice Centre. His own work and the work of his Society should be commended and recognised by us all. At the end of his speech he asked me about Government inspectors or the possibility of creating a housing inspectorate, parallel, let us say, with inspectors in schools. Our answer is that local authorities have executive responsibility and the idea of such an inspectorate we feel should be left to them to consider. On his point about hostels, I do not think that people living in hostels would qualify for rent allowances. I will check that again, but that is the advice that I have at the moment. I can assure my noble friend, however, that a full review of the hostel policy is going ahead. He will be glad to know that it involves the Departments which he mentioned, that is to say, the Home Office, Health and Social Security, and, of course, the Department of the Environment.

My Lords, he mentioned something else, which is rather dear to my own heart as an inhabitant of Covent Garden; namely, the question of housing for lower paid people in inner urban areas. I am sorry simply to say that this is being looked at; but it may be a little more positive to say that the London problem was tackled vigorously with the setting up in the autumn of 1971 of the London Action Group whose chairman was Mr. Paul Channon who, of course, is now Minister, and that augurs well for its work. My noble friend raised so many points in his speech that I am nervous that I may not be able to satisfy him on all of them in the time available. He mentioned the Housing Finance Act of 1972. I can tell him that, following representations made by the Committee during the passage of the Bill the scheme of rent rebates and allowances introduced by this Act does include special provision for one-parent families. I believe that the noble Baroness, Lady Serota, would welcome that. A lone parent with dependent children is treated as having the same needs allowance as a married couple.

I then come to the, as always, invigorating speech of the noble Baroness, Lady Gaitskell, who lambasted Tory councils. She was echoed in this later on by her noble friend Lord Popplewell. This is not the hour of night for me to engage in a passionate Miltonic defence of Tory councils, but we would point out that they were operating in a squeeze and a noble friend on the Front Bench—who shall be nameless, as I have not been able to check his or my own history—said to me when that remark came out:" "Wasn't it Neville Chamberlain who started council houses, anyway?"

We find also that, in spite of our concern for the problems of young couples setting up a home, nevertheless the evidence is that more homes than before are being acquired by them and loans are being granted. The noble Baroness mentioned Centre Point but immediately after that to my intense relief said that it was a rhetorical question, so I shall treat it with a rhetorical smile.

BARONESS GAITSKELL

My Lords, that is very unfair. I did not mean that that was a rhetorical question. What I meant was a rhetorical question was the fact that we know the answer about spiralling land prices and rents.

THE EARL OF GOWRIE

My Lords, I shall scrutinise the noble Baroness's definition of rhetoric and my own in the morning, if I can get out of here alive.

I must come now to the points made by my noble friend Lady Masham of Ilton on the questions of the elderly and disabled. Her fine speech overlapped again with that of the noble Baroness, Lady Serota. We recognise that there continues to be a need for new house building in the public sector, especially to meet the housing needs which still exist, not necessarily over the country as a whole, but in particular areas like London where the total problem is enormous. We must not overlook in this context two particular groups in the community to whose special housing needs I believe particular attention should be given—I am thinking of the elderly and the physically handicapped. Nothing could make a greater contribution to their wellbeing than adequate housing which meets their specific needs. The elderly do form an increasing portion of our population and the task of housing them must assume more and more importance. I am glad to see that the specific point I was going to make was taken up by the noble Baroness, Lady Masham of Ilton, because she talked about the relative interchangeability of housing for the old and housing for the disabled. More and more new dwellings by local authorities are being built to cater for the old. I believe that something in the region of between a quarter and a third of the total is now in single-form dwellings largely designed for old people.

My noble friend Lord Sandys brought us back to the quality of life, an element which I shall touch on in a minute at the very end of my speech, by drawing our attention to the problems of conservation and saying that shelter is not everything. We must extend our horizons as widely as possible. I sympathise with him about the difficulties of obtaining planning permission, particularly on old houses, as on my own house I am advised that it will be years before I can tidy up its environment by getting a garage tacked on to it, as it is a listed building. I was jealous of him too, if I may be personal again, for raising questions of the riverside and dockland regions of this country, because I had those matters down on the Order Paper as a subject for debate shortly before I was given my present task.

The noble Lord, Lord Davies of Leek, brought us down to earth, as we should expect, by concentrating on the question of profits and prices. At present there is a common belief around, and we are not quite clear where it comes from, that speculators in land escape tax. It is not clear how the idea got about, but the Inland Revenue Department are not short of powers to make assessments on such speculative gains and do not hesitate to use them. Wherever land is acquired with the object of selling at a profit, the profit is normally liable to income taxation. Moreover, there are special provisions in reserve which can be brought into use where land speculators indulge in avoidance devices. Of course capital gains tax applies where land which has been held as an investment is sold. If noble Lords were to ask me what those special provisions are, I would reply that the Inland Revenue Department is not saying. It would, of course, be a security matter. The noble Lords, Lord Davies of Leek and Lord Popplewell, mentioned the problem of gazumping. It is a problem that arises in the housing market when supply is out of balance with demand. It can arise in any market. When demand is substantially higher than supply, as has been the case over the past year or so, vendors of new or existing houses can exploit to the full their freedom, subject to contract, to obtain the highest possible price. I can say unequivocally that my noble and learned friend the Lord Chancellor has asked the Law Commission to investigate the problems of present conveyancing practice as regards houses and land. We are asked to make enquiries and we are making them.

LORD POPPLEWELL

My Lords, after those enquiries are completed, may we take it that some announcement will ultimately be made in connection with it or that some change in the law will take place?

THE EARL OF GOWRIE

My Lords, I cannot say whether there will be a change in the law, but I imagine that the findings will be made known. The noble Lord, Lord O'Hagan, asked me questions in connection with housing associations and the noble Lord, Lord Garnsworthy, also mentioned these. With grants at the present level, the amount of improvement work is increasing substantially, but having regard to the capacity of the building industry it may be doubted whether a general increase in approved cost limits would help. The limit is higher in London, where housing association activity is higher than elsewhere. A report by the housing association sub-committee of the Standing Working Party on London housing has recommended still higher limits for London. This recommendation again is under consideration. The Secretary of State has power to approve higher cost limits in special cases, and is ready to consider applications.

As to the question of building societies and housing associations, if I say I will write to the noble Lord it is not because I do not presently know the answer; I have it here, but it is very long. I think it would be better to handle it that way. My noble friend Lord Wolverton made the suggestion that there should be a time limit on planning permissions for housing and that it should be shortened. This I have already dealt with, and we are not unsympathetic to that suggestion at all.

Housing, because we all live somewhere is such a large subject that I feel that I must bring my speech and this debate to an end. If there has been a single theme in the debate, I would say that it is the wide and challenging role which the local authorities are faced with in connection with the problem. Through the reorganisation of local government under the Local Government Act, a new structure of local government is being created; there will be fewer local authorities, and they will be bigger and stronger in resources and better equipped to deal with the problems ahead. The debate has shown clearly that the housing problems of to-day are different from those of yesterday, but the local housing authorities will continue to have a key role in dealing with the problems to be solved. Now, surely, is an appropriate time in terms of housing, as well as in other respects, for local government re-organisation, and with it a reappraisal of the future role of local authorities in housing.

My noble friend Lord Sandford gave us a comprehensive and, I believe, an encouraging account of where this Government stand in relation to the human need for shelter, and the human longing, only marginally less acute, for a decent environment. In the last 200 years or so the industrial revolution, which got off the ground in this country and which has proved the only enduring revolution here, has provided the men, means and the challenges to meet, for the vast majority of people here, their needs at the most acute. The vast majority of our people are better housed, better fed, better attended medically, better educated and provided with better expectations of life and chances of personal and social fulfilment than, so far as we can tell, in fulfilment than, so far as we can tell, in any other period of our history. That is the whole picture, and we must not, despite the acuteness of these problems, forget it. We must also not forget that we have achieved so much and for so many as to cause great cost; the cost to the natural world and our planet and our corner of it is self-evident. But I personally believe that we have caught the environmental rot in time to stop it.

But there is also the price to pay of greater knowledge and awareness. The pockets remaining of poverty and deprivation rebuke us more keenly than ever they did when they were the rule and not the exception in our society. That, I think, is what underlies the relative vehemence of the tone of the debate in your Lordships' House today. There is also something called the revolution of rising expectations, the impatience, the frustration, sometimes, alas! even the violence, generated by the speed of our communications and the desire for urgent solutions to urgent problems. There is the allied feeling—I would call it fallacy—that somehow decency in the conditions of life is a natural benefice. It is not. It has to be fought for and won in the sweat of national as well as of individual brows. And there is the knowledge that in meeting many of our literal and biological needs we have neglected our hunger for harmony and order, for a garden as well as a house, for community as well as near proximity, and for nourishing contrast between town and country and the natural as well as the man-made world.

BARONESS GAITSKELL

My Lords, before the noble Earl sits down, may I ask him please to let me know whether the Government are going to do something about Centre Point? I really cannot let him slither out of that one.

THE EARL OF GOWRIE

My Lords, I think it is my right honourable friend the Secretary of State for Trade and Industry who would be in line to answer questions about slithering, but he is not a slithery fellow and I am sure that he will do a great deal about it.

7.25 p.m.

LORD LEATHERLAND

My Lords, the noble Earl, Lord Gowrie, in that most eloquent speech, has left us with the impression that everything in the garden is rosy. I am glad that I raised this question of housing in one of our earliest Back-Bench debates of the Session, because it has demonstrated that there is severe dissatisfaction over a very wide field regarding many aspects of the Government's housing and house-price policy. We have had many constructive proposals from many quarters. We have had the views of the organisation known as Shelter, the views of the disabled, the views of people who cannot afford to buy a house, and, from the noble Lord, Lord O'Hagan, the views of the universities so far as housing is concerned. As treasurer of a university, I may tell him that this is a problem which has caused me much worry over the last ten years. We have had from my noble friend Lady Serota a very clear exposition of the social suffering that comes from bad housing.

But it would not be courteous at this stage if I tried to reopen the debate. I will just say this. We had from the noble Lord, Lord Sandford, many interesting details about various aspects of Government policy, but I think he only toyed around the frills and I want to explore beneath the frills and see what we find there. We find that both he and Lord Gowrie told us that the Government are not altering their policy in any substantial way. They are going to do nothing about controlling land prices; they are going to do nothing about controlling house prices; they are going to do nothing about freezing council rents; they are going to do nothing about having lower interest rates for council housing schemes; they are going to do nothing about removing tax relief on mortgages for second and third homes; they are going to do nothing about speeding up building in the new towns, and we have had no evidence that house building is going to be in- creased on the scale that is necessary. The noble Lord, Lord Sandford, did not attempt to blind us with science and statistics, I know, but he gave some statistics which really suggested that there was a great upsurge in building activity. Let me give the real facts. In the first three quarters of this year the monthly average housing starts were 29,400; in the whole of last year they were 28,700. But in the six Labour years the average monthly starts were 31,600, higher than in any of the Tory Government years. If we take the housing completions, in the first three-quarters of 1972 they were 26,400; in the whole of 1971 29,200; in the average of the six Labour years 32,000. Both in starts and in completions the present Government have fallen short of the records that were established during the life time of the Labour Government.

The noble Lord, Lord Sandford, in a playful kind of way, tried to denigrate the importance of the Land Commission. He said that the Land Commission had disposed of only 300 acres during its lifetime. But that is to misunderstand the whole position. It was the very existence of the Land Commission that kept land prices down and resulted in land prices falling by 4 per cent. in the first six months of 1970. You do not judge the watchdog by the number of postmen he bites. Prevention is better than cure, and prevention is one of the things in which the Land Commission was successful. I am sorry, listening to the noble Earl, Lord Gowrie, that the Government feel that the present land and house prices are inevitable. He says that it is not administratively practicable to keep prices down. But it was administratively practicable to devise a very complicated scheme for putting council rents up and keeping them up. My Lords, I do not want to follow the subject any further. I beg your Lordships' leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.