HL Deb 28 June 1977 vol 384 cc1022-31

3.35 p.m.

The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk)

My Lords, with the leave of the House, I will now repeat a Statement being made in another place by my right honourable friend the Secretary of State for the Environment. The Statement is as follows:

"The Government are today publishing a Green Paper on housing policy in England and Wales, together with the first two parts of a supporting Technical Volume. Copies of these documents—the Green Paper in typescript form—are available in the Vote Office. The third and last part of the Technical Volume will be published next month. My right honourable friend the Secretary of State for Scotland is today making a similar statement about housing policy in Scotland.

"Although the House has had in the past many White Papers on housing this is the first time that any Government has sought to review their housing policy in a comprehensive and detailed way, and to publish the results as a basis for further consultation.

"The Green Paper enables us to take stock of the whole national housing situation: to record what has been achieved in the past as well as to judge what needs to be done in the future.

"The main conclusions the Government draw from the Review are these:—

"First, that housing conditions have been transformed in the last 25 years. Since 1951 we have completed 7½ million new houses, and renovated nearly 2½million more. In 1951 more than two out of every three households were living in physically unsatisfactory conditions or were sharing. Last year the figure had fallen to one in seven.

"Second, however, substantial needs remain, not least in respect of those one in seven—2.7 million—the bulk of whom live in unsatisfactory conditions, and new problems, particularly those of the elderly, the disabled, the single and the mobile are emerging.

"Third, it is no longer sensible to consider housing as a single national problem, but as a series of local ones requiring attention area by area.

"Fourth, now that the clearance of irredeemable slums is almost at an end, greater emphasis should be placed upon the renewal and modernisation of property wherever this is sensible. But a substantial level of new housebuilding will still be needed, not only to deal with the backlog of bad housing but also with the rising number of households over the next decade.

"Fifth, that there remains a demand and need for an adequate supply of rented accommodation which will be met overwhelmingly by the public sector. But equally there is a strong and growing desire for house ownership which should be met.

"Against these general conclusions we have looked at arrangements for housing finance. The present general subsidies to tenants and owner occupiers have been much criticised. Many proposals for change have been made. But the effect of most of the alternatives—when stripped to their essentials—would be significantly to increase the cost to the tenant and to the home owner of renting or buying his house. We reject this approach. First, because such increases would place an additional and unnecessary burden on millions of families, and second, because they would act to check the supply of decent homes.

"We therefore intend to maintain mortgage tax relief, and the general subsidy to the public sector. But we do believe that the present housing subsidy system—established on a temporary basis in 1974—should be recast and made more sensitive to the needs of those authorities with the most pressing housing requirements. On rents, we have in mind that increases should over a run of years keep broadly in line with money incomes.

"In recent years there has been much comparison of assistance going to council tenants on the one hand and the house owners on the other. A great deal of analysis has been done on this aspect of housing finance in the course of the Review, and this is published in the Technical Volume. This shows that to arrive at an incontrovertible balance sheet is impossible because the systems are so different and the assumptions so debatable. But the analysis does explode the myth that there is a clear imbalance of benefit one way or the other. And the new subsidy system gives us the opportunity to introduce more formal measures which would be regarded by most as broadly fair between the two sectors. To do this we are suggesting that the minimum rate of general subsidy towards local authority housing interest payments should be related to the basic rate of tax relief on mortgage interest.

"At the heart of our approach to meeting the housing needs of the next decade lies a new role for local authorities—in developing effective local housing strategies which must embrace both public and private sectors, in partnership with all concerned—the building societies, housing associations and the housebuilding industry. These strategies will take into account the whole range of authorities' housing activities including those policies for the sale and acquisition of houses. At the core of an authority's direct contribution to its local housing strategy will be a four year rolling housing investment programme appraised annually with Government. To co-ordinate national and local policy I propose to establish a Housing Consultative Council for England with the local authorities and to maintain existing national machinery with the building societies and the house builders. My right honourable and learned friend will be developing existing relationships with the Council of the Principality.

"To help the programme of renewal, we propose that the emphasis should go on bringing more unsatisfactory houses up to a basic standard, rather than less houses to a higher standard. Repairs-only grants will be made more widely available, and we are considering increases in existing cost and rateable value limits for improvements grants. Grants will be made more readily available for houses in multiple occupation, and to private tenants.

"On empty houses we intend to speed up procedures for dealing with compulsory purchase orders. We shall also he urging local authorities to take more leases of empty privately owned houses, and to reduce vacancies in their own stock.

"As a Government, we welcome the clear desire of many to own their own homes, and we wish to facilitate this wherever we can. We intend to clear the path for home ownership for more people, more quickly by special Government assistance for first-time purchasers. We shall introduce legislation for a Government savings bonus, and for a matching Government savings loan of £500 interest free for the first five years. Building societies have a key role to play. We make proposals for them to lend more "down market" to people with modest incomes, and on older property. We also want to build on the steps we have already taken to secure a reasonably stable and adequate flow of mortgage funds. Partnerships between local authorities and building societies should be developed, with local authorities complementing the work of building societies, through "topping up" loans and other measures. The local authorities will be enabled to bring their home loans rate into line with the building societies' rate.

"Although it is unrealistic to think in terms of a reversal of the long secular decline of the private rented sector, it will remain important in London and other cities for some years to come. We are studying the problems of the sector in a special Review of the Rent Acts, but in advance of this we propose to take measures to encourage letting by resident private landlords and the letting of accommodation over shops and other businesses. We shall also enable private tenants to apply for improvement grants.

"So far, I have spoken of proposals designed to improve the supply of, and access to the right kind of housing. But we also propose a tenant's charter—a code of principles and practices designed to protect the rights of public sector tenants with legislation to give them security of tenure. Tenants will be encouraged to carry out improvements, and reimbursed for substantial improvements when their tenancy ends.

"We also want to see wider experimentation with newer forms of tenure, lying between home ownership and renting—equity sharing, co-operatives, co-ownership—and we wish to encourage the housing association movement to which the Government has given so much backing already.

"Last, but certainly not least, there are special groups of people who deserve separate attention—the elderly, the disabled and handicapped, the homeless, one-parent families. Proposals in respect of all of these are made in the Green Paper. Our policies will also help the single and the mobile.

"We intend to hold consultations on the Green Paper with all the major bodies concerned, and to allow until 1st November for comment. The proposals put forward have been conceived as a whole. It should enable us henceforth to conduct a far more informed debate on housing policy, and it should enable us to meet more sensitively and accurately the wishes and needs of our people for whom few things are more important than their home."

My Lords, that is the end of the Statement.

3.45 p.m.

Lord SANDYS

My Lords, the House will be grateful to the noble Baroness for reading out a long, important and detailed Statement, and we look forward to receiving the Green Paper on its publication. With this end in mind, the first question that I want to ask the noble Baroness is whether she believes that the date that she has given the House of up to 1st November for comment on the Green Paper allows a sufficiently long time in view of the fact that there are difficulties over publication? The cyclostyled version available from the Printed Paper Office, although satisfactory from our point of view, will never reach a wider public.

Secondly, there were references to the establishment of a Housing Consultative Council for England and the equivalent in the Principality of Wales. I wonder whether the noble Baroness can comment on when this will be established and say a little more about the aims of the body when it has been established. It is encouraging to hear that the Government have proposals for a review of the Rent Acts. We assume that this will follow upon the Green Paper which was published a short time ago. There was no specific reference in the Statement on homelessness, a subject to which your Lordships have devoted some time in recent months. I wonder whether the noble Baroness has any comment to make about this in view of its importance in the national scene.

My Lords, rather than comment at greater length, in view of the fact that there is to be a further Statement on housing policy in Scotland, I should like to leave my remarks at that for the moment.

3.47 p.m.

Lord AVEBURY

My Lords, we on these Benches are also very grateful to the noble Baroness for repeating the Statement which has been made in another place. Does she agree that, although there has been the substantial improvement that she mentioned from two out of every three households living in physically unsatisfactory conditions to one in seven doing so, that improvement is not reflected in terms of an equivalent in the ratios of people living in unsatisfactory accommodation? Generally speaking, there tend to be more people per household in unsatisfactory accommodation than in good housing. Therefore the improvement may not be quite as striking as the figures that were mentioned in the Statement appear to show.

The Statement indicated that no fundamental change was proposed in the system of housing finance, and it went on to remark that comparison between publicly-rented accommodation and owner-occupied accommodation was impossible because the systems were so different. Does the noble Baroness not agree that this is one of the fundamental criticisms that are being made of the system? The division of our society into council tenants on the one hand, and owner-occupiers on the other hand, perpetuates the class divisions of our society. Anything which Governments can do to assimilate them to some common system would be desirable.

Therefore, does the noble Baroness appreciate that some people will be disappointed that a way of assimilating the two systems on the lines of allowances which would be common to both owner-occupiers and council tenants cannot be found? Such a system might have been developed and would have maintained the total amount of the spending on the two systems.

With regard to the grants, is the noble Baroness aware that we would agree with the approach of spreading them as much as possible so as to bring as many houses as possible up to the basic standard? But is the noble Baroness aware that we should be disappointed if no particular emphasis is placed in the grants system on the need to improve insulation, a matter on which I have corresponded with her and one on which I know she agrees that more could be done. Something has been done in the way of improving insulation in dwellings occupied by the elderly and disabled; but we might have supposed, in view of the considerable interest taken in the subject in the Department, that something special could have been done there.

Is the noble Baroness aware that most people will support the idea of the special assistance for the first-time home buyers? This particularly imaginative proposal, to grant a matching Government loan of £500 interest-free, is one which I am sure all young people getting married will have cause to be grateful for.

Finally, on the question of private landlords, obviously one will have to wait to see what may be the outcome of this review of the Rent Acts; but in the meantime does not the noble Baroness agree that, if one is to avoid the private landlord disappearing altogether, at least the rents in the privately-rented sector should be permitted to increase in line with money incomes which, as the statement says, is to be permitted in the public sector. There is one further point. On the systems line between ownership and renting—equity sharing and so on—would the noble Baroness say whether there can he a transfer of properties from local authorities into these new forms of tenure as well as the use of those forms of tenure for houses newly constructed?

Baroness BIRK

My Lords, in reply to the points raised by the noble Lord, Lord Sandys, may I deal first with his query of whether up to 1st November will be enough? I can assure him that, if the delay on publication continues, the consultation period can be extended. His next point was on the housing consultative council. This will only be established after discussion and this will also take part of the consultation period. It is a new national forum on which there will be representatives of the local authorities and central Government bodies and possibly other housing agencies. The review of the Rent Acts will be completed, we hope, by the end of the year. That matter will be dealt with. This is why the question of the private-rented sector just threads in and out of the Green Paper for we are awaiting the Rent Acts review.

Homelessness is discussed in the Green Paper. It is certainly one of the factors which will have to be taken into account in the new housing strategy at both local and central level. Although it was a fairly long Statement, I am sure the noble Lord appreciates that the consultation paper is a very long document with three annexes; and I could not cover every point in the Statement. With regard to what the noble Lord, Lord Avebury, said about the figures not being so good, in the Green Paper we were careful not to exaggerate progress by making too much of the surplus of houses or by doing more than really making an assessment of how the figures will improve. He would agree that there has been an improvement over the years. When he has had an opportunity to read the document carefully—and I appreciate that with a paper of this size it is not possible for him yet to have done so—he will see there is in it very much more detail about the problems that concerned him.

On his point about the division into council tenants, on one side, and owner occupiers on the other creating a class division, I am sure that when he reads the Green Paper fully he will appreciate that the Government have done what people have asked for and have queried for some time; that is, they have made it entirely clear that they support home ownership and recognise this is what so many people aim at and want. But, at the same time, they are keeping this balance of rented houses both for people for whom it is the preferred option and for people for whom it is the only one.

He made reference to trying to even that out by means—so I imagine —of tax credit. I think that that is probably what he had in mind. We have looked at this carefully and he will find a long passage in the Green Paper which goes into the arguments and explanations of why the Government have rejected it. Brefly, it is that the universal housing allowance looks attractive as a concept; but when you get down to considering how to put it into effect it was found to be quite impracticable. The evidence does not support the case for such a radical scheme which would disrupt the lives of many householders. It would also affect the tax system and there would be no certain prospects of major advantages to come from it.

I am grateful to him for his warm support for the help to first-time buyers—which we think not only will be helpful to young married people but also will be a fillip to the construction industry which is extremely important. That is one of the factors behind a great deal of it. Some of the other points he raised were the same as those raised by Lord Sandys. He referred to the Rent Acts. I think it better to await the review. I would remind him that the Statement mentions the role of the private landlord and it shows we are cognisant of that fact. This is referred to also in the Green Paper, but it is closely tied up with the review of the Rent Acts.

Lord ROBERTHALL

My Lords, perhaps it is rash to comment on a Statement that I have not seen, but the Statement seems to be encouraging in a number of ways in a field which is so chaotic and in many respects so unfair. There is the great gulf between the people who own their houses, the people in council houses and people with protected tenancies, on the one hand, and the rest on the other hand. The encouragement of the sale of houses is a help. May I ask whether the Government will make it clear to the local authorities that the policy will be in this direction? I am sure that the great difficulty about letting houses at the moment is the extreme security of tenure which is now given to almost all tenants. I could hardly expect the Minister to make a statement on this. But will the Government bear in mind that there is this conflict, that the degree of security given to the average tenant presents an enormous hardship to all those people who have neither council houses nor protected tenancies—especially in places like London where there is still a severe housing shortage?

Baroness BIRK

My Lords, on the noble Lord's first point, the gulf between the council house tenant and the home owner, the local authority associations will certainly be seeing the Green Paper. In fact, they will have had copies by today or by this week. They will know exactly what is the Government thinking on this and the balance that the Government are trying to bring in this area. I think the noble Lord should remember that the local authorities have considerable, almost complete, autonomy in their own areas for how they work out their housing assessment. Under the new system, they will be helped in this way, because there will be a housing investment programme, a strategy plan; and, within the amount they get, they will be able, themselves, to adjust as to whether they wish to build new houses or to spend more on improvements and repairs, and so on. There will be in this an encouragement to them which, in the end, ought to reduce gradually the amount of subsidy.

So far as security of tenure is concerned, the Government, as I have already said, are awaiting the review of the Rent Acts; but I think it would be misleading to the noble Lord if I were to indicate that the Government want to ease to any degree the question of security of tenure.