HL Deb 01 February 1973 vol 338 cc808-26

8.15 p.m.

LORD MOWBRAY AND STOURTON

My Lords, it would perhaps be helpful to noble Lords if I were to begin by outlining the main purposes of this small but important Bill before turning to examine some of the broader housing policy considerations upon which the Bill has a bearing. There are two purposes to the Bill. The first, set out in Clause 1, is the proposal to extend to June 23, 1974, the availability of a higher rate of grant and Government contribution towards house improvement and general area improvement within the development and intermediate areas. This extra help, originally provided under the Housing Act 1971, would otherwise terminate in June, 1973. This Bill therefore proposes an extension of the availability of these higher grants by a further year.

Clause 1 also extends the 1971 Act very slightly in scope. For example, under the 1971 Act local authorities are not able to receive the higher 90 per cent. contribution from the Government towards a grant to a private owner if that grant does not amount to three-quarters of the approved expense of the work. This provision was originally designed to encourage local authorities to be generous, but in practice it has been found to give rise to some anomalies in cases where owners applied for grant-aid towards expensive and ambitious improvement schemes. In such cases local authorities, for perfectly good and sensible reasons, having decided not to make a case for special treatment but having restricted grants to the normal maximum, then find that they are penalised by not receiving a 90 per cent. Government contribution but only 75 per cent. This Bill proposes to remedy this administrative defect by allowing a 90 per cent. Government contribution on all grants approved at the normal maximum figure, whether or not that maximum amounts to three-quarters of the approved expense of the work. This concession is to be made retrospective to August 4, 1972, when the Government's intention was first announced.

The provisions of this Bill will help to keep up the momentum of improving living conditions in those areas where the tendency has been for the harsher economic climate to hold back progress. I believe that the extra year provided by this proposed legislation will take us a good deal further towards our ultimate aim of providing every family in the country with a decent home.

The second purpose of this Bill is to give the Secretary of State power to allow or to require local authorities to attach conditions to the sale of council houses for a longer pre-emption than the five years which is the limit imposed under existing legislation. This proposal is set out in Clause 2. Clause 2 will enable local authorities in areas where there have been exceptional rises in council house prices to offer discounts of up to 30 per cent., instead of the normal 20 per cent., if they wish to do so, coupled with the imposition of pre-emption conditions for eight years, instead of the normal five. In 1967 the Labour Government introduced the idea of allowing local authorities the discretion of giving discounts of up to 20 per cent. on council house sales in areas of special housing scarcity. Many local authorities since then have availed themselves of this facility, creating the new restricted market value by the imposition of the conditions restricting re-sale for a period of five years. That period is the present legal maximum for which such conditions may be imposed. When, therefore, it was felt right to grant the request of several local authorities in recent months to grant discounts of up to 30 per cent., legislation became necessary for authorising longer pre-emption periods.

The Government's policy is clear. Many tenants of council houses want to buy the homes in which they live. We believe they should be given the chance to buy and that the ability to give them this provides local authorities with a unique opportunity to encourage owner occupation for many people who do not want to move and could not otherwise afford to buy. Tenants' wishes in this matter should be taken into account by local authorities. Of course they should also see to the needs of people waiting for houses to rent, and the way to do that is to provide more accommodation. Stopping sales does not help them. We believe that as time goes on local authorities will become increasingly aware of the extent of the demand from their tenants to buy, and more and more authorities will decide to adopt positive sales policies. We want local authorities to use their discretion in this matter voluntarily and in response to local demand. I trust that noble Lords in all parts of the House will feel able to give this measure their unqualified support.

Moved, That the Bill be now read 2ª.—(Lord Mowbray and Stourton.)

8.20 p.m.

LORD GARNSWORTHY

My Lords, the House will be grateful to the noble Lord, Lord Mowbray and Stourton, for his explanation of the Bill before us. The Minister for Housing and Construction, Mr. Paul Channon, speaking in the other place on November 28 last year, paid a very deserved tribute to the Housing Act 1969, for which my noble friend Lord Greenwood of Rossendale was responsible. I think it proper that his constructive enterprise should be remembered to-day, for it is following the initiative of what the Minister, Mr. Channon, stated was a "radical and imaginative measure" that the 1971 Act was enacted. I would in turn acknowledge the value of the later measure. The 1971 Act was aimed at securing an acceleration in the rate of improvement of houses in development and intermediate areas by way of improving the rate of grant and Government contributions. The ambition of the Government appears to have been to break the back of the problem by June, 1973, and some £46 million was provided for that purpose. Whatever speeding up was achieved has been most welcome, but quite clearly more remains to be done; hence this present Bill, which extends by one year the period for which the higher grants will be available.

It might have been useful if we had been given some indication of the size of the problem remaining because, having regard to the size of the problem yet to be tackled in the light of the rate of progress experienced, one wonders whether one year's extension will be adequate. If two years were allowed, as they were, for the expenditure of some £46 million, by what reckoning do the Government anticipate that in an additional year £41 million, as provided in this Bill, can be successfully employed? If the Minister says that the limited extension of one year is to secure speed in the rate of improvement, then I should like to ask whether the Government are being realistic. I ask that question against the background of the question which I have just put to the Minister: what is the size of the problem remaining, and has there been any recognition that the problem will inevitably grow with the passage of time?

There are a number of other questions that arise in one's mind about the use of grants and the rate of take-up. We have all heard or read of houses being bought, improved by the assistance of grant aid, and then sold at a grossly increased price. Indeed, this matter was referred to yesterday, and because it was referred to at some length I shall not take up your Lordships' time this evening. I wonder what is being done to ensure that local authorities use their powers to deal with any abuse such as was referred to in the debate yesterday afternoon. The matter is one of considerable concern for, as the Minister, Mr. Channon, showed in the other place, he is aware of the problem and of the social implications that follow from what is taking place in this regard.

On the matter of the rate of take-up (and here again the Minister showed some awareness) the percentage of grants that went to landlords of privately owned houses, as I understand what he said in the other place, was only some 20 per cent.: indeed, he gave figures which suggested a fall from 21 per cent. for the first six months of 1972 to 19 per cent. in the third quarter. Without much doubt, this is the sector which most stands in need of improvement. They will be the properties which can all too soon deteriorate below any reasonable standard and become unfit for human habitation. What impetus will the Government provide for an effort commensurate with the need in this particular field? The examples of local authorities and housing associations are on record and prompt me to mention the attractions of public ownership of these rented properties—perhaps by way of municipalisation. In those cases where the landlord is unable or fails to bring about the improvements which this Bill is aimed at securing, or to maintain properties at reasonable levels, we certainly need a new approach. I suggest that serious consideration should be given to the municipalisation of these properties as desirable social policy.

I should like to ask the noble Lord, Lord Mowbray and Stourton, whether grants on the scale on which they are being made available for development in the intermediate areas will be made in the areas of housing stress—because the problem is a considerable one. I ask that because I believe it ought to be made clear, not only for the benefit of landlords but also for the benefit of tenants, whether Government grants will extend to and include such matters as electrical re-wiring.

The second part of the Bill, as the noble Lord has said, makes provision to enable conditions imposed by local authorities in England and Wales on the sale of their houses to be applied for a longer period than the existing five years. I have nothing to say against the principle of home ownership. I own the house in which I live, as I suppose do many of your Lordships. But, despite that fact, I view housing as a social service, and in the case of a very substantial section of the community their housing needs can best be met by renting; indeed, for a great many it is the only possibility. Not only is it the only possibility, but it is also the only sensible solution. In the overwhelming majority of cases, provision for those who need houses to rent, on the scale required, can best be made by public enterprise, by local authorities —who might, incidentally, build more for sale to those who want to buy than at present they are doing.

I appreciate that the idea of the sale of council houses rejoices the hearts of the Front Bench opposite. It is a political gimmick that stirs the enthusiasm of those who so dislike public enterprise, and particularly successful public enterprise. But the sale of council houses does nothing to add to, and will not add a single house to, the stock of housing. I have refreshed my memory as to the terms of a circular sent out in 1967 by the Ministry of Housing and Local Government, Circular 24/67. Again I think these were the years when my noble friend Lord Greenwood of Rossendale was at the Ministry. If I may, very briefly, I will quote what that circular had to say on this particular topic of the sale of council houses: The Ministers take the view that, in areas where there is still an unsatisfied demand for houses to let at moderate rents, they"— that is to say, the councils— should not sell their existing houses except where there are special reasons in the case of a particular property. To do so would postpone the time when an adequate supply of rented housing becomes available; and could mean that families on the waiting list, who are among the most inadequately housed, would have to wait longer for a vacancy. Moreover, the sale of a substantial number of the older houses and their replacement by new houses to let could have the effect of unnecessarily increasing the rents of the remaining houses or of putting extra charges on the general ratepayers, or both. The Housing Finance Act is going to do enough damage in the matter of rents, and the rating revaluation may well have a very damaging effect additionally in some parts of the country.

The circular continues: Local authority tenants who wish to move to a private house can be given every encouragement and assistant to do so. The authority can then relet to a family in need. The principal consideration is that the sale of existing council houses reduces the stock of houses that can be let at moderate rents.…Any reduction in the stock of rented houses both reduces the chances of families on the waiting list and restricts the opportunities for transfer and exchange among tenants. Thus a valuable element of flexibility in the management of the council's housing stock is diminished. I thought if I read what the circular said the issue would he put more succinctly to the House than I might have done by using my own words to cover the matter. Nothing has occurred since to alter or to detract from the soundness of that advice given there. My noble friend was right then, and what was said then remains valid now. I have to say that the circular sent out in June of last year added nothing of value, as it added nothing to the stock of houses available for living in.

The Government do not seem to be doing too well in this matter of housing provision. As I understand from yesterday's Press, fewer new houses were available last year than at any time in the past nine years. The number of council houses slumped by nearly 25 per cent., to 1961 levels. These are the houses that the Government want to see increasingly sold. For the first year since 1963 the total figures have dropped below 350,000—down to 319,100. I remember when we were sitting on that side what was said from the Benches behind me when the present Conservative leaders were in Opposition. They chided and derided us for what we achieved in the field of housing construction. Here we are to-day at a point when we have gone back to before 1963.

On slum clearance, despite their declared intention of clearing slums by 1980, the programme shows a drop of from more than 70,000 in 1970 to just over 66,000 in 1972, the lowest figure for five years. All this against a background of soaring resale prices. The figures issued by the Nationwide Building Society are startling, indeed, alarming, as to the increases that have been taking place in these last 12 months. When we are told that perhaps the percentage increase has not been as great as it has been in other years when it has been extraordinarily high, I ask: percentage of what—the enhanced price that followed the other very substantial percentage increases?

We talk about home ownership. Let us consider the issue of land prices. We are told that the average price for an acre of building land throughout the country is running at about £25,000, varying from less than £10,000 in Yorkshire to, in the county where I live, Surrey, £100,000 an acre. These are figures that give some indication of the background against which the Government want to encourage local authorities to sell council houses, despite the very heavy lists in so many areas of applicants for houses.

We shall not oppose this Bill; indeed, we welcome the extended period as far as the grants are concerned. The second Part we note, but hope, perhaps with little expectation of realisation, that the Government will, however reluctantly, realise the error of Mr. Julian Amery's ways when he was in charge, as revealed by his endeavours in 1972, as they have lived to learn the folly of so many of their other policies. Meantime, we shall do nothing to delay the passage of the Bill.

8.37 p.m.

LORD HYLTON

My Lords, I welcome this Bill for two reasons. I am sure it will help forward the work of improvement which is so badly needed particularly in the development and intermediate areas, and it will also do something to tidy up and improve the arrangements for the sale of council houses.

I would, however, like to raise two particular points. One is a general point and concerns the effect on prices of the system of improvement grants. The other is more specific and concerns housing associations. The existence of the present system of improvement grants has had, I believe, a definite effect on the demand for unimproved properties, and as a result prices for these have risen. Vendors have found that they can add perhaps up to £1,000, and maybe a little more in development areas, to the price of an unimproved property without in any way affecting the net cost of the finished article to the person who purchases and improves. This would appear to convey a benefit to the previous owner, and to reduce, and perhaps even eliminate, the benefit to the purchaser and improver.

I think this cannot have been intended when the system of improvement grants was brought in in the first place, and later on was improved and extended in several ways. I understand that a general review of improvement policy is being carried out at the moment within the Department of the Environment, and I hope that, as a result of that review, new and better incentives will be worked out which will encourage improvement without inflating the prices of unimproved properties.

For consideration I would put forward the idea that a fiscal incentive might replace the present cash grants. This kind of incentive already exists in the case of the improvements that are made to agricultural workers' houses. In this particular instance, the whole of the cost of improvement of such a house is eligible for tax relief, but the tax relief is spread out over a period of 10 years. If this system of tax relief could be adapted and extended to cover improvements to all dwelling houses, I believe that there would be an incentive to improve and that there would be less of an inflationary effect on the prices to be obtained for unimproved old houses. It might well be considered whether the period for the tax relief could be shortened from 10 years to perhaps five years in cases where the income of the person carrying out the improvements is sufficient to absorb the relief.

Now I come to the much more urgent, immediate and specific point relating to housing associations. Under Section 21 of the Housing Act, 1969, associations are able to receive Exchequer contributions instead of the ordinary cash improvement grant, and in many cases this is very much to their advantage. In August 1969 a ceiling was fixed for these Exchequer contributions in the sum of£2,500. That was almost immediately after the Bill became an Act. This ceiling has been overtaken by the rise in house prices and the equally serious rise in building costs. Fortunately, the Secretary of State has discretion to vary this ceiling. I believe that he should vary it, and that he should raise it to at least£3,500 in the development and intermediate areas. A higher ceiling will probably be needed in other areas because higher costs obtain there. If nothing is done, I fear that what will happen is that the work of improvement by housing associations will simply grind to a halt. The reason for this is that there is an accidental relationship between the "fair rents", which housing associations are now obliged to charge—and the ceiling for Exchequer contributions in respect of acquisition and improvement. Unless the ceiling is roughly equal to the total capital cost of the improved dwelling, associations charging fair rents are virtually certain to make a loss, to incur a deficit, and that deficit will go on for a period of up to 20 years unless the fair rents increase very rapidly in the meanwhile.

Housing associations are improving properties in the inner city ring—otherwise known as the "twilight zone". They are providing rented dwellings, they are increasing the range of choice available to people who need houses, and they are intentionally choosing as tenants persons and families who are in great housing need at this moment. Therefore, if this work that they are doing is considered to be valuable, I urge the Secretary of State to raise the ceiling which I have mentioned immediately, and not to wait until the general review of improvement policy has been completed.

8.45 p.m.

LORD HUGHES

My Lords, this Bill applies to Scotland as well as to the rest of the country, and I take advantage of the fact that the noble Lord, Lord Milverton, is not in his place to say a few words without necessarily adding to the total of what otherwise might have been said. I want to emphasise how much I am in agreement with what my noble friend Lord Garnsworthy has said about the adequacy of the period of one year's extension. I have no knowledge of the situation this side of the Border, but I am quite certain, both from my present knowledge and the knowledge which I acquired during the time when I had responsibility for these matters in the Scottish Office, that there remains far too much to be possibly undertaken in the period of another year.

I welcome what the Government did when they extended the grant to 90 per cent., and there is no doubt that it has increased very considerably the improvements which are taking place, but even if that accelerated rate continues for the period of the year which is being added, it will still leave a great deal to be done. We have more and more come to the point where it is obvious that what is being done in a particular Bill will not see the end of the matter of giving the Minister, or Ministers, power to extend by Order being placed before Parliament in due course, and I would suggest to the noble Lord, Lord Mowbray and Stourton, that he convey to his right honourable friends the possibility that this course might be adopted in this measure. If, after all, it turns out that my noble friend and I are wrong and the problem is solved in a year, then no Order may be introduced; but if the Government find that they can add to the good they are doing by extending the provisions for the further period, then it enables that to be done in the simplest possible way.

The second point I wished to make, also briefly, concerned the way in which people are using grants for the wrong purpose—by which I mean the extent to which people are buying properties, and sometimes using rather disreputable methods of getting the existing occupiers out, so that they may pocket the whole, or a very large part, of the grant on the sale of the improved house. Until last year the position in Scotland was different from that in England and Wales, in that there was a condition attached to the grant that the whole, or part of the grant, would be repayable if the house was sold within a period of five years. That was not the position in England and Wales. I understand that this was largely because of the fact that it was so easy for people to get round it by giving long leases rather than freehold sales, and apparently it did not count as a sale if this was done. I regret that the Secretary of State for Scotland decided to follow the English example and removed that condition.

What is happening in Scotland—and I see no reason why it should not happen on this side of the Border also—is that a number of local authorities, even though they are anxious to have the maximum amount of improvements, are refusing to give grants to those who are obviously developing for the purpose of pocketing an extra profit, but are confining their grants to owner-occupiers or to owners of properties who are to continue to rent the improved property. Very largely, of course, the second category is being undertaken by the housing associations, who often acquire the property for the purpose of improvement and then subsequent letting.

I would suggest to the noble Lord, Lord Mowbray and Stourton, that even at this late stage the Government should either consider reinserting a period during which the grant may be repaid in whole or in part, or alternatively, if it were possible to do it by administrative action, advising local authorities not to make grants payable to speculative developers, but rather to confine them to those who are going to continue to rent properties or who are going to occupy the property themselves after the improvement has taken place.

That is all that I had intended to say, but the words of the noble Lord, Lord Hyton, make me feel that I must add two further points. First of all, I agree with him wholeheartedly about the need to help the housing associations. I think that the ceiling is now completely out of date. After all, there was a wage award which took effect in June of this year, which immediately added 30 per cent. to housebuilding costs; and I know from my own business experience—certainly in Scotland—that that was the equivalent of a 23 per cent. overall increase in the cost of building. The cost of some of the materials has gone up and imported timber, for instance, which is not affected by the freeze, has gone up by 20 or 25 per cent. in the last few weeks. So there is an urgent need for an increase in the ceiling.

However, I do not find myself able to go along with the noble Lord, Lord Hylton, in suggesting that grants should be replaced by fiscal incentives. They would undoubtedly make it very difficult for many owner-occupiers to carry out improvements, because they would not be able to lay their hands on the necessary money to enable work to go ahead. I know that this can be a great difficulty, and one of the stumbling blocks which was removed in the last Government's legislation was when we enabled the cost of necessary repairs to be reckoned for grant purposes, in addition to the actual improvement. Sometimes an improvement could not take place without essential repairs being carried out, and if an owner had to find money for that from his own resources the work could not go ahead. Therefore, a system of financial incentives might mean that, at the end of the day, an owner would have to find someone to lend him the money to go ahead, and he could not always rely on the local authority to do that. Although fiscal incentives would be a useful way of ensuring that money was being used in the right way, a better alternative is to restore the former situation so that if somebody attempts to profit from doing a job he should be required over a period to repay either the whole or a part of the grant.

8.53 p.m.

LORD MOWBRAY AND STOURTON

My Lords, we have had an interesting debate ranging widely over the housing field. This small Bill does not range quite so widely as one might have imagined from listening to some of the speeches. As we know, its purpose is simply to extend the higher grant limit for one year, and to enable councils to sell houses more cheaply. Noble Lords have spoken of the necessity to extend the time limit. The original objective was to get a short, sharp stimulus to house improvements in the assisted areas, and it has become clear from the results that we have achieved what we were aiming at. We should not have been able to achieve it in a two-year period, but there is no reason to go beyond the proposed year. Everyone knows that not all the problems will have been solved by 1974, and that not all houses will have been improved by then.

What we expected was that the rate of improvement in the assisted areas would be brought up to the level achieved in the rest of the country, and in that we have succeeded; in fact, the figures have now overtaken those for the rest of the country. So what we have done has generated a good head of steam, and we hope that there will be enough momentum to keep a high level of improvement work going after June, 1974. After all, we are not withdrawing grants, which will remain at the 50 per cent. level of the rest of the country, and local authorities will be able to qualify for additional help under the terms of the Housing Finance Act. We see no reason why local authorities in the assisted areas should not have made very major inroads into their problems within the time available. Indeed, we know that several authorities in the North-East and the North-West plan to have improved all their council houses needing such treatment by June, 1974.

As to the period beyond that, I would remind your Lordships that last November the Minister for Housing and Construction announced that we had embarked on a comprehensive policy review of improvement grants. The aim of that review is to consider ways of concentrating our efforts and resources increasingly on those parts of the country where areas of sub-standard housing still remain. At this moment, we are receiving from local authorities statements of their remaining problems, and we shall take these into account in the policy review. I think we have already received 70 per cent. of the returns requested from local authorities. I must apologise to the noble Lord, Lord Hughes, for the fact that the figures to which I am referring cover England and Wales, and I do not have the Scottish ones in my head. This review will examine ways of concentrating our efforts and resources more specifically on those parts of the country where areas needing improvement will still exist after 1974. This has been a three-stage exercise.

The review will also consider the question of abuses of improvement grants. I shall come back to that point in a moment, because I know that noble Lords generally are worried about this point. The adequacy of the existing cash grant limits is something that will be looked at and, if necessary, may well receive action. Anything else at which we think we should take a fresh look in the light of experience gained and information coining in will also be dealt with. The noble Lord, Lord Garnsworthy, asked whether the problem of repairs, including re-wiring, could be dealt with; and that is one of the points which will be looked at in the overall review.

On housing stress, I have said that we recognise the need to do more here. We have not overlooked the needs of people living in sub-standard houses in London and in the inner Midlands. Their problems will of course be considered in the comprehensive policy review of housing and related matters, which has now been embarked upon.

LORD GARNSWORTHY

My Lords, before the noble Lord leaves that point, can lie tell us when we are likely to get the result of this review, because the problem is a very large one and daily becomes more urgent?

LORD MOWBRAY AND STOURTON

My Lords, I cannot give the noble Lord a specific date, but I can assure him that the present Minister for Housing and Construction is not a person who likes to let the grass grow under his feet.

LORD GARNSWORTHY

My Lords, is the noble Lord suggesting that we need an improvement to Mr. Julian Amery?

LORD MOWBRAY AND STOURTON

I am not saying that, my Lords. I bow to no one in my admiration for Mr. Julian Amery; and Mr. Paul Channon, also, is very much a "live wire" and is very keen to finish the policy review as soon as possible. I can promise the noble Lord that things are moving in the Department. Speculation is something which worries the Party of the noble Lords opposite—

LORD HUGHES

My Lords, does it not worry the Government?

LORD MOWBRAY AND STOURTON

My Lords, bad speculation is never to be encouraged. We do not aim to have speculation, and if there is a little of it it is not the fault of the Government: it is very difficult to get everything perfect in this world.

The noble Lord, Lord Garnsworthy, was correct in saying that owner-occupiers and local authorities have been getting 80 per cent. of these grants in England and Wales. The figures for Scotland are similar, though I cannot give the exact figures. The Sunday newspaper which stated in October, 1972, that only 50 per cent. of all improvement grants awarded in England and Wales go to London, was incorrect. The proportion of grants given to people who could be speculators is very small indeed, and I do not think they are a major problem. Our problem is to get the houses improved. If you take the overall picture you see that we are getting these houses improved.

I should like to inform your Lordships that in the year 1972 some 368,000 housing improvements grants were approved. This is the highest total there has ever been. Going slightly wide of the field (because noble Lords opposite went slightly wide), in 1972 there were also some 350,000 starts made in the housing field—I am talking now about the whole of Great Britain. That makes a total figure for house improvement approvals and house starts in 1972 of 718.000. That is a figure which has never been equalled in this country previously.

LORD GARNSWORTHY

My Lords, I think the noble Lord did not take the point I was trying to make with regard to landlords taking up grants. I think I used the figures that were employed in the other place by his noble friend Mr. Channon and by members of the Opposition speaking in Committee. I was referring to the failure of landlords to take up grants. There is—and, again, this was referred to in the other place; and it seems to me we have had no clear indication that we are going to have anything done about it—the owner of one or two houses who is relatively poor and does not feel he can afford to make any kind of contribution at all. What is going to be done? I do not think we can ride off by claiming that some record achievements are to anybody's credit in this field. There is so much to be done.

LORD MOWBRAY AND STOURTON

My Lords, I am very grateful to the noble Lord, Lord Garnsworthy. If he can help the Government to draw the attention of landlords to getting their properties improved, we shall be as pleased as the noble Lord himself. We shall do everything we can to encourage landlords, tenants and owner-occupiers. We want everybody to persuade other people. There would be no happier people in the country than myself and my right honourable friend the Minister for Housing and Construction if we could do this. But the starts are coming along, and the housing improvement grants are going up. Councils are taking advantage of grants; and I think that as landlords see the effect of houses being improved, with massive Government help, they will probably take the hint and do it, too, while the going is good. As we know, there is not a great deal of time to get the higher grants.

If I may now come to the second Part of this Bill, the sale of council houses was a point made by the noble Lord, Lord Garnsworthy. The noble Lord said, in effect, that the sale of houses was not going to help towards a solution of the housing problem in this country; that was the gist of his message. We all know that there is a difference of philosophy between the Parties here, but we feel that if our policies are taken together they make a sort of grand strategy for housing in this country. The sale of council houses is just one integral part of the encouragement of owner-occupation. This, my Lords, is no Party issue; we all believe in owner-occupation. It has been one of the greatest attractions in social democracy for a long time. A property-owning democracy is something we have all been taught since Burke started discussing the matter. The aspiration of council tenants to own their houses represents a very significant aspect of local housing need which can be realised without any disadvantage to those waiting for council houses to rent.

LORD GARNSWORTHY

My Lords, if I may say so with respect, that is just not true. May I put it to the noble Lord in this way? The Government are seeking to sell off houses at up to 30 per cent. below what should be the market value, knowing full well that the local authority cannot buy land at the price of the land on which the old house stands and cannot build at the price which the old house cost.

LORD MOWBRAY AND STOURTON

My Lords, if the noble Lord will be patient I shall be answering his questions. We point out that if a tenant wants to own his house but cannot buy it from the council, he will not leave that council house; he will stay as a tenant. So you are not helping the people on the waiting list one bit. If he cannot buy it, he is still the same man occupying the house. There is also, as is obvious, no Government restriction on the number of new houses which a local authority may build to let to meet local housing needs. This is what local authorities should do. I know there are still cases where, as the noble Lord says, there are great problems; but selling to tenants will not hinder or help this problem one little bit—and it is certainly not, as the noble Lord said it was, a gimmick.

There is just one more point on houses for sale. Last year, of the 350,000 starts I mentioned, 227,000 were in the private sector. This is the third highest number since the war and the highest since 1967. In the previous year, 1970, influenced by the previous Administration, the number was 170,000; so that is a figure which is going up. I think the noble Lord, Lord Hylton, mentioned the impact of grants on resale values. There is no certainty of anyone receiving the grant. Most improvement is still non-grant-aided. People naturally go about making their houses more comfortable to live in. Therefore there is great difficulty about the taxation proposals. But I was interested in the noble Lord's view and will bear it in mind in relation to the policy review.

The Department is conscious of the difficulties being met by the voluntary housing movement as regards the cost of improvement and conversion in assisted areas and elsewhere. Up to the beginning of last year this was not a major problem, but recent cost movements have been rapid. We accept this. Cost trends have been to some extent the penalty of success. The rate of improvement in development and intermediate areas increased dramatically. The actual rate of increase in 1972 was 154 per cent. up on 1971 in terms of grant approvals. Not unnaturally, this led to pressures on local builders which caused prices to move up sharply. One of the objects of this Bill is to reduce that by allowing more time for work to be done, which should mean that building costs during the corning year will moderate. Nevertheless, I admit that the housing associations will be placed in a particular difficulty because the cost ceiling set by the Governament in 1969 is now proving to be too low to cope with 1973 prices.

This is a matter which we are examining urgently as part of our comprehensive policy review. It would not have been sensible, or advantageous to the voluntary movements, for the Minister for Housing and Construction to deal with the problems of the housing associations outside the scope of this full review; because to reach a clear judgment on the way in which the improvement policy may develop it is essential to consider the very important contribution which the voluntary movement can and will make. I must ask the noble Lord to contain his patience a little longer, but I would say that my right honourable friend has on a number of occasions made it clear that if a housing association has on any particular occasion got into difficulties because of cost, and if the local authorities in the area will support the housing association, the Ministers will give the most sympathetic consideration to an application for a higher grant in that particular case. But it must have local authority support. I think that is a very generous gesture on the part of the Minister and shows that before policies can be established he will consider each case on its merits.

The housing field is so wide and this Bill so narrow that I do not think that at this late hour I should go on. So, confident that noble Lords on both sides of the House share the view, despite minor points, that this Bill is essentially a good one, I commend it to your Lordships.

LORD HUGHES

My Lords, I do not think we should leave it without two notes of congratulation to the noble Lord, Lord Mowbray and Stourton. He read the speeches as if he had written them himself and, what is more, read them as if he believed them.

On Question, Bill read 2ª and committed to a Committee of the Whole House.