HOUSING BILL (Hansard, 3 July 1974)

§ LORD GARNSWORTHY

My Lords, I have to say that page 102 of the Bill available to your Lordships is incorrect but a corrected version of page 102 is available in the Printed Paper Office. I regret this error but, as my noble friend the Chief Whip has said, a Statement is being made with regard to printing difficulties at a convenient time after 3.30 p.m.

292 My Lords, I beg to move that the Bill be now read a second time, and with permission I should like to speak at the same time about the Housing (Scotland) Bill. It has been said that Housing Bills tend to be scattered through the Parliamentary Order Papers like leaves before an autumn wind. I am told that there have been no less than 51 Acts of Parliament dealing in one way or another with housing policy since 1945. Earlier this week this House sent on its way, for consideration in another place, a Rent Bill which proposes the introduction of security of tenure for certain tenants living in furnished accommodation. And now we have before us the present Housing Bills. This legislative activity is an indication both of the complexity of our housing problems and of the importance which successive Governments rightly attach to the task of tackling them.

Before I turn, therefore, to a description of the main objectives and provisions of the Bills I should like briefly to indicate the nature of the housing situation with which they deal. The national picture is not one in which we can take any great pride, for despite a good deal of progress over the past decade, both in terms of unfit houses that have been cleared away and of poor dwellings that have been improved, we still have about one household in five in England and Wales living in sub-standard accommodation. There are still over a million houses which are statutorily unfit. The central areas of many of our major towns and cities are under the threat of physical decay, and it is in these urban cores that we find the worst concentrations of sub-standard housing. Also, there are millions of people suffering from poverty and other social disadvantages. It is there that one finds poor job opportunities, outworn schools, starved community services, and a grave lack of open space.

In order to deal effectively with such areas of multiple deprivation it has steadily become more and more obvious that we must progressively adopt an integrated policy approach. Piecemeal solutions have proved to be no solutions. We have also learned that, if we are to meet the real—if sometimes unexpressed—needs of local communities we must no longer seek to tackle our older areas by 293 the crude deployment of bulldozers. There have been occasions when areas have been neglected to such an extent that they cannot be saved, and demolition of the houses becomes the only possible solution.

However, we now realise that this sad and socially disruptive result often can and should be avoided. Instead local authorities need to be encouraged to step in early and devise a sensible strategy of gradual renewal, using a mixture of rehabilitation and improvement, of small-scale redevelopment and "infill" building, and of environmental treatment, along with a careful and integrated use of other housing and social service powers. We also need to involve the people living in these areas in the revitalisation of their district more fully than has been the case hitherto. In other words, we need to devise, nationally and locally, a comprehensive, co-ordinated and sensitive approach to the task of urban renewal.

My Lords, it is against this background that we should consider first the Housing Bill. I shall say a few words later about the Housing (Scotland) Bill. The Government have made it clear on a number of occasions that had circumstances been different this is not entirely the Bill we would have chosen to bring forward. If we had unlimited time to conduct a detailed and constructive analysis of the facts and the national housing requirements, we should have introduced, in about a year's time, a measure of a rather more radical nature. But we judged that, with suitable adjustments, early reintroduction of the provisions contained in the previous administration's Housing and Planning Bill would allow us to make a very useful start along the road we intend to follow. I believe that it is common ground between the Parties that there was much in the earlier Bill that was desirable; and those provisions are to be found in the Housing Bill before us now. There was also nothing in the earlier Bill which was inconsistent with the Government's long-term housing objectives.

We decided, therefore, quickly to strengthen certain proposals of the Party opposite prior to bringing forward this Bill, with the aim of getting it on to the Statute Book at the earliest opportunity, thus allowing a start to be made on tackling the areas of greatest housing stress. Nevertheless, certain essential changes have been made during the Bill's 294 passage through the House of Commons, and further Amendments will be proposed at the appropriate time to your Lordships. I shall be describing the more important of these as I turn now to outline the Bill's main provisions.

Parts I to III of the Bill represent the Government's charter for the voluntary housing movement, and since they largely reflect the previous Administration's own proposals I hope we may find that they represent a bipartisan, or indeed an all-Party, realisation of the significant role that housing associations can play in meeting housing needs, particularly in the areas of greatest stress. The difference between the Government and their predecessors in this matter is only one of emphasis. We do not accept that the voluntary housing movement can ever, or should ever, compete with local authorities in meeting the housing needs of an area. We believe it is unrealistic to pretend that within the foreseeable future the number of houses provided by housing associations will form a dominant proportion of the nation's housing stock, although in particular stress areas the proportion can be significant.

Local authorities, the elected representatives of the community, however, have the wider duty and the powers to determine the housing priorities of their areas, and must bear the major share of the task of meeting them. But in doing this they will find it increasingly useful—and indeed many of them have already found it useful—to make use of housing associations, with the flexibility that housing associations can offer to meet specialised needs, uninhibited by some of the constraints within which local authorities quite properly have to work in respect of housing lists and so on. We can, I think, expect to see housing associations leading the way in catering for the needs of particular categories of tenant—especially those not forming conventional family groups—and in developing new forms of tenant participation and cooperative tenure whereby tenants can acquire a real stake in their homes.

For the first time, the Government have accepted in this Bill that the full cost of housing association schemes must be met. Instead of the previous confusing hotch-potch of inadequate grants and subsidies, which left even the best of housing associations living from hand 295 to mouth, the Bill will provide a system of financial support for housing associations which will completely cover the net cost of all new projects—whether by purchase, improvement, or new building—which provide rented housing or hostel accommodation. In addition there are new deficit grants which will, at the discretion of my right honourable friend the Secretary of State, take care of the inherited burdens of the past.

In order to ensure that the public funds we propose to allocate to housing associations are put to good use, the Bill also provides for a new and stricter régime for the voluntary housing movement. In this new régime the Housing Corporation will play the key part. Under the provisions of Part I of the Bill, the Corporation is given extended powers to provide land and loan finance for housing associations; and also, through the registration system in. Part II, to exercise control over the movement. Registered housing associations will be prevented from disposing of property without the Corporation's consent, and they will be subject to inquiry and audit into their management affairs. This sort of control is something for which the best of the housing associations have themselves been calling for a very long time.

I ought to say a few words about the registration of housing associations. In the longer term, I think everyone will accept that the voluntary housing movement has to be rationalised and streamlined, so that the future growth we all wish to see derives from and is concentrated upon associations with the necessary expertise and management resources. We have considered how far it will be possible for the Corporation to use registration as a means of carrying out this process of streamlining. They will certainly wish to refuse registration to associations which seem too shaky to do a really adequate job, and this will not necessarily reflect on the honesty or good faith of those in charge. But it is clear that in the time available it will not be practicable to use registration to carry out a full restructuring of the movement, so as to eliminate duplication and embody a fully worked out set of housing priorities. This process will, however, follow as a consequence of the system of allocating finance for further development.

296 The whole registration process will be under the control of an Advisory Committee. It has been suggested that there should be an appeals system for housing associations whose application for registration is rejected by the Housing Corporation. This matter has been very carefully considered by the Government. We realise that the refusal of registration could be a serious matter for an association. The new housing association grants provided for in Part III of the Bill will be available only to registered associations, as will loan finance from either the Housing Corporation or local authorities.

Nevertheless, in the Government's view it would not be feasible to set up any formal appeals mechanism. Registration will be a difficult task for the Housing Corporation, and we must give them the necessary flexibility to carry it out properly. The Corporation must be able to exercise their judgment about the competence and stability of associations, often on the basis of confidential information, in a way which simply would not work if it had to stand up to formal justification before an appellate body.

Moreover, it is difficult to see what such an appellate body would, in fact, be able to consider. It is for the Corporation to determine the criteria by which registration is carried out, and it would be very difficult for any other body to assess the extent to which a particular association met those criteria. It would certainly not be right, in our view, for the Housing Association's Registration Advisory Committee to be given an appeals role in respect of all rejected associations, although the Advisory Committee can consider individual cases which are referred to it by the Corporation.

In our view, the proper way to ensure that registration is properly handled is to strengthen the general role of the Advisory Committee. This is why at Committee stage we propose to introduce an Amendment requiring the Housing Corporation to determine criteria for registration in consultation with the Advisory Committee. This, together with the membership of the Advisory Committee (my honourable friend the Minister for Housing and Construction has already announced that Mr. Harold Campbell is to be Chairman of the Committee) will, we think, reassure the housing associations that registration will be properly carried out.

297 In addition to its duties in respect of housing associations, the Housing Corporation will also be given powers to provide housing on its own behalf, to acquire securities and for subsidiaries and to guarantee loans from private lenders. These powers are not to be feared as representing some Trojan horse of State control. They will be used for the broad objectives of promoting the provision of much-needed housing by the voluntary housing movement, in full co-operation with the housing associations themselves, and with local authorities.

I turn now to Part IV of the Bill, which contains the Government's proposals for housing action areas, a concept which is the major innovation in this legislation and which will enable local authorities more incisively to improve housing conditions in the worst areas; providing a real alternative to clearance of unfit houses in appropriate cases. It is to these objectives that the Bill relates the more generous improvement grants and the more specific powers for local authorities to purchase property in these areas—by agreement, negotiation and compulsory purchase order if need be—in the interests of residents. It is the Government's belief that bringing rented accommodation into social ownership—primarily into local authority ownership, but we also include within that category dwellings coming into the hands of registered housing associations—will be, in many cases, the most direct, effective and permanent way of meeting the challenge of the stress areas.

The Bill does not attempt to lay down specific criteria which would make an area eligible for declaration as a housing action area, but it makes clear that the physical state of the accommodation and social conditions are the basic guide. Nor does it say what size a housing action area should be. It has deliberately been drawn wide so as to provide a framework within which local authorities can deal with these bad areas, which will vary in their characteristics and size throughout England and Wales.

Within housing action areas a number of special powers will operate. These include: improvement grants at a rate of 75 per cent. with the possibility of grants of up to 90 per cent. in cases of hardship; grants for repair only not 298 associated with improvement; stronger powers of compulsory improvement; the more specific powers of purchase I have just mentioned; and a grant for improving living conditions in the area. We plan to go further than this by adding to and extending the range of special powers to deal with substandard housing.

We shall introduce Amendments while the Bill is in your Lordships' House so that people (other than defined categories of owner-occupiers) selling residential property in a housing action area will have to advise the local authority in advance and declare their interest in the property. Anyone giving a tenant notice to quit will likewise have to notify the authority. This will inform authorities of those tenanted, or formerly tenanted, properties in housing action areas which are up for sale or are in danger of leaving the rented sector: they will thus know what is afoot, and will be able to take appropriate action under their housing powers, including perhaps seeking to buy the property themselves. We regard this as a practical measure for realising the kind of objectives the previous Government had in mind when they suggested the so-called "first refusal" option. They found that that original idea, while beguilingly attractive, proved to be extremely complex when an attempt was made to translate it into legal and practical terms.

The notification system will, as I think the House will agree when we bring our Amendments forward, prove to be a very acceptable alternative way of achieving the result we all wish to see. We shall also propose a new power for local authorities to declare a further kind of area. It will be designed to prevent stress from just "rippling out" from housing action areas and general improvement areas. It will help to discourage anti-social landlords from anticipating more intensive treatment by local authorities by taking steps, as regards their properties or their tenants, which would merely transfer the problems local authorities have to deal with from one area to the next. And it will pave the way for future action. These special areas will thus be both protected and safeguarded, and they will be seen to be neighbourhoods which will receive priority action in the not-too-distant future. I trust that this, too, will commend itself to your Lordships.

299 Within such areas, two of the special housing action area powers should be immediately available—the powers of acquisition by local authorities provided for in Clause 42 of the Bill and the system of notification of property transactions and of notices to quit which I have described a few moments ago. We shall propose that this new type of area may be declarable in respect of areas adjoining (or surrounding) a housing action area or general improvement area. These proposed powers would add substantially to the housing action area concept, providing an essential defence against potential social disruption and deprivation. They would also usefully prepare for future declarations of general improvement areas and housing action areas, and pave the way to dealing with those neighbourhoods by rehabilitation, environmental improvements and a certain amount of redevelopment action to which other social programmes—education, amenities, health and welfare services and so on—could be related.

Another change we have already made—and it is one your Lordships will welcome—concerns the grant for external environmental works in housing action areas. The provision in the Bill as first introduced was limited to improvements to individual properties within housing action areas. Expenditure on improving the environment and living conditions in housing action areas will now be eligible for assistance. The total amount of local authority expenditure, for providing assistance to a housing action area, which will now be eligible for Exchequer subsidy will be £50, multiplied by the number of all the dwellings and other units of housing accommodation in the area; but under the Bill as it was first introduced, only those dwellings improved to intermediate standard were included.

The power to vary by Order the sum of £50, generally referred to in Clause 45(6), has been extended so that it can be varied also for descriptions of authorities or areas. This will enable different treatment to be given to different regions of the country. These alterations to the grant envisaged by the previous Administration will help to widen the concept of housing action areas and make their treatment more relevant to the range of conditions which need to be tackled in 300 areas of bad housing in the different parts of England and Wales. I do not claim that this is more than a modest provision, but it is a useful start, as I think your Lordships will agree. Parts V, VI and VII of the Bill contain new and strengthened arrangements for general improvement areas, for the house renovation grant system and for compulsory improvement powers.

There has been a tremendous surge in the number of houses that have been modernised in recent years with the aid of grants. I am pleased that an increasing number of local authorities are beginning to switch their attention towards the possibility of rehabilitation and away from slum clearance. Indeed, we estimate that since 1967 about 100,000 unfit dwellings have been restored to fitness annually, on top of the 65,000 or so unfit houses that have been cleared each year. The trend—which I am sure your Lordships will agree is a healthy one—looks like continuing. Fewer houses will be cleared in 1974 than in any year since the early 1950s, while very substantial numbers will be improved, many of them with the help of grants.

As I said in my opening remarks, we still have a long way to go before we reach the goal we set ourselves of providing everyone with a decent home. And I also pointed out that the worst areas are concentrated in the hearts ca our older industrial towns and major cities. It is not before time, therefore, that the Government are introducing measures which, while maintaining the drive on house improvement, will redirect resources and effort to where it is most needed and where it will do most good.

In future, the Bill's provisions will see to it that we are more selective and discriminating in the use to which grants are put. In the past, there has been virtually no bar on the kind of owner who could obtain a grant, nor on the kind of improvement which is grant-aided. This has led to obvious abuses that have been raised in this House from time to time. Grants have gone towards the improvement of leisure homes, often to the disadvantage of local people in the villages concerned who find themselves priced out of the market. Speculators, especially in London, have seized on the grants as an aid to their anti-social 301 activities in buying up old properties, winkling out the tenants, converting the properties into high-priced flats and selling at a vast capital gain.

The Bill provides that grants will not henceforth be available for improving second homes, nor will they be available for developers who wish merely to improve houses and then sell them. Grants will go only to genuine owner-occupiers and to other owners who undertake to keep their dwellings available for letting. Moreover, we have reintroduced strengthened conditions to be attached to grants. They will apply to improved dwellings outside housing action areas for five years, while inside housing action areas the conditions will run for seven years. Beyond that, we propose to make a change which will have the effect of guaranteeing that landlords in housing action areas and general improvements areas will be prevented from improving their property and then charging their furnished tenants a vastly inflated rent. We shall he further strengthening the conditions to make it a breach of grant conditions if anyone sells during the five years or seven years period, as appropriate. And there will be provision to stop discretionary improvement grants going to the more expensive types of owner-occupier property; and to stop any grants going to houses built as recently as twelve years ago.

Within this controlled structure we have adopted the proposals in the former Administration's Bill for 60 per cent grants in general improvement areas, and 75 per cent, grants in housing action areas, with grants of up to 90 per cent. in latter areas in case of hardship. And we have retained the proposals for repairs-only grants for needy owners in both these types of special area. We have also retained the proposal that the Government share of the preferential grants should be increased from the normal 75 per cent. to 90 per cent., thus leaving local authorities to carry only a very small part of grant expenditure in these special areas. We believe that this extra measure of support will enable swift and necessary progress to be made towards dealing with the worst housing conditions in our towns and cities.

The extra grant aid will of course be backed by the powers of compulsory 302 improvement in Part VII of the Bill. These powers, too, will be stronger than the earlier proposals in that they now apply to certain owner-occupiers in general improvement areas; moreover, local authorities will be able more readily to use their default powers where they believe the owners do not intend to carry out the required work within the time specified. In the worst cases of course we expect that local authorities would make use of their powers of compulsory purchase, not as a prelude to demolition, but to secure that the management and maintenance of older houses passes into responsible hands. But this does not mean that there is no need for the cornpulsory improvement powers proposed in Part VII of the Bill. The Government accept the view of the many local authorities that have been consulted on this issue, that it would be helpful to them to have this additional power which would enable them to make a more flexible response to the demands and duties placed upon them to remedy a variety of bad housing conditions.

Part VIII of the Bill contains a number of miscellaneous but important provisions. I shall not take up the time of the House by describing the purpose of these various clauses, but if any points are raised on them during the debate my noble friend will deal with them when he winds up. As I have said, we are debating two Bills to-day—the Housing Bill and the Housing (Scotland) Bill. I think it would be appropriate and helpful if, at this point, I said a few words about the latter. It corresponds broadly to Parts IV to VII of the Housing Bill in that it deals primarily with house improvement grants and housing action areas. However, while the objectives at which it aims are the same as those in the Parts of the Housing Bill I have mentioned (for example, greater selectivity in the operation of the house improvement grant scheme) it differs in the means whereby these are achieved.

These flow from differences in existing legislation. For example, there is a procedure in the Housing (Scotland) Act 1969 for the declaration by local authorities of housing treatment areas for clearance, improvement or a mixture of the two, and the Scottish housing action area provisions in the Bill are founded 303 on this existing scheme. I do not think it is necessary or desirable at this stage to attempt to describe in detail the mainly mechanical differences between the two Bills. If any questions do arise, I know that my noble friend Lord Hughes will be glad to answer them when he winds up the debate later to-day.

However, there are two clauses, Nos. 45 and 46 in the Scottish Bill which I think I am bound to mention specifically, since they are not paralleled in the Housing Bill. Clause 45 extends the powers of local authorities in Scotland to lend money to enable people to buy, build or improve houses. This extension is in line with additional powers which were given to local authorities in England and Wales in the Local Government Act 1974 which was enacted just before the last General Election. Clause 46 provides for a new subsidy—the rent income subsidy—which will re-imburse local authorities in general for at least 80 per cent. of the rent income which they have lost as a result of the standstill on rents which the Government introduced shortly after taking Office this year.

My Lords, these are important Bills. Although they deal in the main with old houses, they look to the future and provide the means whereby that future can be one of greater hope, stability and comfort for the people living in our older residential areas. I am confident that this House will wish to welcome these Bills and to speed them on their way to enactment. My Lords, I beg to move.