Housing Finance (Hansard, 16 December 1980)

§ Lord Hylton
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)
My Lords, no. Now is not the time for another major review. Only three years ago these issues were considered very thoroughly in the Green Paper Housing Policy: a Consultative Document. Indeed, I have with me a little of the conclusions at that time and I thought it might be helpful to show them to your Lordships.

§ Lord Hylton
My Lords, I thank my noble friend for his reply. Is it not a fact that over the last 10 years successive Governments have avoided rationalising personal housing finance; that this has very considerable implications both for income support for families with children and for pensions policy, and that all these matters tie in very closely with the whole question of means testing? Can we not have some further progress?

§ Lord Bellwin
My Lords, the whole study of housing finance is in fact an ongoing process. It is something that never seems to stop. There are so many factors each year, almost each month, that concern housing finance. I do assure my noble friend that it is not a subject where one can say, "We have sorted this one out for the moment and we can leave it". It just never stops.

§ Baroness Birk
My Lords, if the Minister is referring to the cut in housing expenditure and the burden it is creating, it certainly is not stopping under the Tories. I should like to ask two questions. In view of the steep council house rent rises announced yesterday, and the proposal to reduce housing expenditure from £4,700 million in 1980–81 to £2,790 million in 1983–84, can the Minister say what is the Government's future policy, or if they are considering one, on subsidies to council tenants? Secondly, does not the Minister feel that the rent increases and the consequential reduction in subsidies have gravely enlarged the inequality between the public and private sectors as tax relief on mortgages is running currently at roughly £1.5 billion?

§ Lord Bellwin
My Lords, I should have thought that those questions roamed very far from the original Question, but I entirely understand that the noble Baroness would not want to pass up an opportunity to make an observation on this matter and I of course respect that. I would only say, on the question of fairness between the sectors, that owner-occupiers' mortgage outgoings, and hence their tax relief, depend on the price they actually paid for their own houses, whereas local authority subsidies are based on historic costs and are pooled. So, there is no unambiguous way of comparing the two, and I am sure that the noble Baroness would not want me to start to dissertate on the record of what Labour did as regards housing subsidies and records.

§ Baroness Birk
My Lords, all I wish to ask the noble Lord is, first, whether he agrees that the question is not irrelevant but is absolutely "bang on" as regards the original Question asked by the noble Lord, Lord Hylton? Secondly, will he accept that there is a considerable inequality of sacrifice—let me put it that way—between the tenants of the public sector and owner-occupiers in the private sector?

§ Lord Bellwin
My Lords, for the reasons that I have just given, the answer is, "No".

§ Lord Hylton
My Lords, can I persuade my noble friend that it might be useful to compare the methods used in other countries to resolve the difficulties of personal housing finance, given that I think there is fairly widespread acceptance that our own public subsidy system is shot through with anomalies?

§ Lord Bellwin
My Lords, one would have to look at the whole of the way in which other countries manage their housing affairs and that is something which, as I have said previously, we look at all of the time. There are some examples, such as West Germany, where the extent of private sector accommodation is far, far greater than exists in this country. Indeed, perhaps if we had followed some of the same kind of policies as they have followed to encourage that situation, we should be in the same position—and a happy position it would be. So, I would say to my noble friend that, yes, there is of course scope to look at this whole area and, indeed, we must look at it the whole of the time and I assure him that we shall do so.

§ Lord Shinwell
My Lords, does the Minister realise that in all the Government's so-called housing schemes and legislation there has been no concern whatever for the financial position of tenants in the private sector? As a result, rents have soared to a very high level, creating extreme financial difficulties for those in the private sector. When will the Government do something about it? Is the Minister aware that he is one of the worst villains where this matter is concerned?

§ Lord Bellwin
My Lords, I suppose that I shall have to become used to being called a villain along with others and it really does not trouble me too much. However, what I must be concerned about is that I try to ensure that we do that which we see as right and best in the interests of everyone concerned. Having said that, I entirely accept that private tenants do not get the same form of financial support as owner-occupiers or public tenants, but substantial rent allowances are available to help meet private tenants' housing costs and, in the financial year ending March 1980, £94 million was made available in rent allowances.

§ Lord Shinwell
My Lords, is the Minister aware that that answer demonstrates that my impression of him is correct?—he is the worst villain in the piece!

Lord Oram
My Lords, will the Minister have in mind that there is another category of housing not mentioned in the Question on the Order Paper or, indeed, in any of the supplementary questions—namely, co-operative housing? Will the Minister 981 ensure that, in the continuing studies of housing finance to which he referred, housing co-operatives will have their due consideration particularly in view of the fact—and I am reverting to the supplementary question by the noble Lord, Lord Hylton—that co-operative housing schemes are a major sector of housing in other countries and ought to be in this country?

§ Lord Bellwin
My Lords, co-operative housing certainly has a part to play and I have always felt that it was one of the forms that we should follow in housing. So I take the point made by the noble Lord without question.