§ 3.50 p.m.
§ Second Reading debate resumed.
§ Baroness BIRK
My Lords, this complex and highly indigestible measure, on which we were engaged before the Statement intervened, was carefully explored by the Minister in his outline of the Government's housing plans and their philosophy. The context in which it is set, and in which it has to be looked at, is Britain's critical housing crisis. I shall not pretend that it is all the fault of the present Government; nevertheless, the picture is dark and dense.
First, the steep price rises throughout the last decade have made it increasingly difficult for potential first-time buyers to find a house at a price to suit their pockets. The Government's economic strategy has escalated interest rates to such unsurpassed heights, with mortgage rates of 15 per cent., that this has worsened the situation. Secondly, the private house industry is in decline and building industry spokesmen have widely articulated their concern. I should be very surprised if there are not a number of 33 building firms among the expected bankruptcies that we have heard about today.
Housing starts and council house building, which had been falling, are now at the lowest level since the war. These have been deliberately reduced by the Government's harsh attack on finance for capital investment. The Government are to cut spending on council houses from £5,372 million in 1979–80 to £2,390 million by 1983–84. This is a massive cut of 48 per cent. which will put an end to new building for those most in housing need. Among all the cuts that have been made by the Government in social services and kindred fields, housing has turned out to be the worst victim. At the same time, the waiting lists now contain the names of over 1 million people and homelessness is at a record high level.
The private rented sector continues its grim decline, as it has since the First World War—not, as is simplistically alleged, as a result of the Rent Acts; in fact, the decline actually accelerated between 1957 and 1964, when tenant security was reduced by the then Conservative Government—and the poorest people arc, as we know, disproportionately housed in the private sector. The test of the Government's legislation is the extent to which they will remedy this critical condition in housing.
It would be churlish not to welcome some of the proposals. I can only say how delighted I am that the Government have included the tenants' charter, which was enshrined in Labour's 1979 Bill, from which many of the proposals have been taken. The Bill does not, however, go as far as Labour's measure; for example, the extension of eligibility for council housing is significantly missing; there is no change in the mediaeval distraint orders and tenants' participation is not as wide as we had sketched it out. Nevertheless, it is still to be welcomed, as also is the extension of repair and improvement grants. The real test, however, is how far the Government's overall strategy will achieve a higher rate of improvement, since legislation is insufficient without the necessary resources to back it up. It is against this bleak background that the Government's policy must be judged.
34 Labour's policy was to sell council houses, but not irrespective of the needs of the area and not without discretion to relate policies to local circumstances. It is not only Labour authorities that are concerned about the compulsory sales which are enshrined in this Bill; a number of Conservative authorities have also shown their deep concern. One sees this all over the country: in the North-West, in the West Midlands, in the South-East, in places such as mid-Bedfordshire, Chelmsford, Southend and East Hertfordshire, and in the South-West, in places such as Christchurch and Wiltshire. I could go on for quite a bit longer, but to do so would take up too much time.
The arrangements for the rural areas —and I notice that the Minister took considerable pride in these—are certainly on the trivial side and do not go anything like far enough. In rural areas, the amount of rented housing is small. A local authority can buy back a property, but after 10 years other people will have moved out, particularly if it is a village, and the authority will have to buy back at the existing market value, which will no doubt be far higher than what it was sold for, with the 50 per cent. discount.
If there is a way of trying to denude rural areas and take people out of them this seems to be one, because if young people cannot get houses locally they will move, communities will be diminished and the whole area will be depleted of people. Some of these arguments were used when we debated the school transport clause in the Education Bill. The argument then was that if anything would adversely affect the rural areas, then that was very unfortunate and ought not to be allowed to go through.
The question here is: should there be an absolute right to buy? The Government will say that they have a clear mandate, but they do not necessarily have to follow it to extremes, and to an extreme of which many people did not understand some of the consequences. Apart from the economics of the proposal, which are dubious, the right of every person in this country to a respectable roof over his head is surely not a right to improverish other people. That cannot be correct. In England and Wales, 44 per cent. of council tenants are dependent upon supplementary benefits and rate rebates. Will they ever 35 be in a position to buy? How can families transfer from tower blocks or less desirable property to more attractive homes? There will not be the property available.
How can young single people hope for accommodation in tower blocks, if the families are unable to move? At one time Wandsworth was carrying out a successful experiment in that area, but with the cuts and with a Conservative-controlled council that has now stopped. All the evidence shows that the best housing in the most attractive districts is sold, leaving the worst, inner city tenements which no one wants to buy. What social spread is this? A great deal was made, certainly in another place, about the social spread. The Minister took pride in the sales of council houses in the GLC area and in Leeds; but one can see there, and in other examples as well, that it is in the outer suburbs and not in the dismal inner areas that the sales have taken place.
Then there is the question of the elderly. I shall just touch on that aspect, as I am sure there are many other speakers who want to enlarge on it. True, the Government have exempted sheltered housing, but the amount of other housing for the elderly is not so great that we can afford to lose it. Since this accommodation is for the elderly, the turnover is larger than in other housing, which means that a great many houses which are adaptable and proper for the elderly will go out of a council's control. So many elderly people will have neither a chance of having a home that they deserve, nor be able to move somewhere else when they are getting older and more infirm. They will not be able to get sheltered housing, because none will be available.
The Government really must look at this. Coupled with the drastic cut in council house building, it is a deliberate policy to erode the public sector. It will mean relegating council housing to welfare housing, with all the social stigma attached to that. We know that housing in a had environment encourages neglect, vandalism, delinquency and despair. I was very well aware of this when I was Minister in the noble Lord's department. But is this good social policy? Is it moral to exacerbate this 36 situation, or to create such a situation where it does not exist at the moment? The stress on sales will be akin to door-to-door high pressure salesmanship.
Under the Bill, people are being incited to take on more than they can afford. Is this really what a Government should be promoting? The £100 option is rank financial profligacy, heavily criticised by many people—among others, by the AMA. People are being encouraged to overstretch their finances and their future. Mortgage default accounted for 6 per cent. of the homeless accepted by local authorities in the first half of 1978. This Government, which appear to be ideologically opposed to a healthy public sector, for they are trying to demolish it, are negating Britain's exceptional achievements, compared with most other European countries, in breaking the connection between poverty and bad housing. That is what the Bill is going to do.
So far as subsidies, which is a long and very technical subject, are concerned, these must be seen in relation to the Government's drastic expenditure cuts. Extensive powers have been given to the Secretary of State to decide what expenditure by local authorities shall be taken into account for subsidy purposes. This is a further attack on the autonomy of local authorities, though I seem to remember very clearly that when they were in Opposition the present Government were always commenting on this, and stressing and supporting it. The mechanism for imposing heavy cuts on local authorities and sharp increases in council rents will be that of subsidies. This year council rents are up 28 per cent. The sale of council houses will not generate more money for new houses because money will go into the housing revenue account fund and will also help to pay off the mortgage debt. Therefore the sale of council houses, it seems to me and to my noble friends on this side of the House, will bring about a great deal of hardship because of the way the Government are reorganising it, and certainly there will be nothing like the social spread which we were promised.
I turn now to the private sector. The Government are involved in a head-on collision with private tenants. I attended a meeting the other day at which there were over 200 people, most of whom 37 acknowledged that they had been supporters of the Conservative Party at the last election. I can only tell your Lordships that they attacked the Government in terms which I might hesitate to employ. It was the first time that at a meeting composed almost totally of members, or perhaps by now erstwhile members, of the Conservative Party I received a round of applause when the chairman insisted on pointing me out as leading the opposition to this Bill from the Opposition Front Bench. The Minister's right honourable friend in another place referred to this Bill as "a social revolution". It may be that they should rethink it and see it in terms of a Conservative revolution against a Conservative Government, because this is what they are forcing.
The thinking behind the shorthold, which the noble Lord, the Minister, made sound so very attractive an item on the Government's menu, seems to me not to be borne out by any real fact or evidence. First, the majority of tenants want long-term protected lettings. It is true, as the Minister said, that some young people want shorter lettings, and this will continue to be so. As the Minister also pointed out, the letting by resident landlords will still continue. It is fair to say that no enthusiasm for this has been shown by landlords, who would much prefer to sell with vacant possession. I am wondering how many people will take up the idea—which the noble Lord floated as a very good, bright, new idea—of building to rent when they will be far better off today building for sale? Anyhow, we shall see.
Clauses 50 and 51 define shorthold tenancies. It is true that they cannot be granted to protected or statutory tenants. In theory, this disposes of the criticism that existing tenants will lose security of tenure. In practice, however, it will still be possible for the rascally landlord to tempt the tenant to move to a shorthold tenancy in another house or flat. It is not too hard to take advantage of those who are innocent of property law knowledge and who are open to pressing persuasion and exploitation. When people are nervous of losing their home and also are being offered, temptingly, something which sounds better at the same rent, it will be no surprise if some of them fall for that particular ploy.
38 As present protected tenants move or die, long-term security of tenure will disappear altogether. I think there can be no doubt about that. This has been commented upon not just by members of my own party. What incentive will there be if a landlord can let for a year? Even with the very minor amendment which has been made and which the Minister made a great deal of, that if notice is not given after a year then the tenant can take on another year, this is still going to result in very much of a hand-to-mouth security position for the tenant.
I thought that the Minister dealt very lightly with the safeguards. He should have heard what was said at the meeting that I attended the other day. No doubt he has received letters similar to those I have received, right across the board, from people in all income groups all over the country. Even the safeguards which Sir Brandon Rhys Williams included in his Private Member's Bill and which were endorsed by the present Government when in Opposition have been omitted. This resulted in a sharp rebuke to the Government from The Times, in a recent editorial. As was stated in another place, our view is that we shall repeal this section when we are returned to office. Nevertheless, I would say to the noble Lord the Minister that we do not have closed minds. If the Government were to come forward in this House with pretty substantial amendments, we should consider the experiment and see how it went. Unless, however, something more is offered than the safeguards, or non-safeguards, that the Minister mentioned in his speech, it seems to me that the next Labour Government will have no other choice than to repeal this section.
I turn now to rents. It is true that there will be a fair rent. Either this will be already registered or the landlord must apply within 28 days. However, it appears from what the noble Lord said, or did not say, that so far the Government have found no way of speeding up applications being dealt with by rent officers, thus leaving a gap for abuse at the beginning of the rental. As we are all aware, if the fair rent is established at a lower rent than that agreed originally between the landlord and the potential tenant, the tenant does not get any retrospective repayment; he receives a reduction only from the time that the rent is registered.
39 There is power in Clause 51(4) for the Secretary of State to take some or all of such properties out of rent regulation. I noticed that the noble Lord did not draw our attention to that subsection. The result must be a considerable shrinkage in the scope for security of tenure under the Rent Acts—also in the number of properties covered by the rent regulations. The Government's plans include, in Clause 59, steep increases in rents through the rent reviews which are to take place every two instead of every three years. This is a most inflationary measure. Not only will there be that phasing; also, phasing for the payment of rent will mean a great deal of hardship for a great many tenants who are absolutely—this is no exaggeration—frightened to death about these provisions. Phasing itself can be cut out altogether by a simple decision of the Secretary of State under Clause 59(6) which would mean that there would be no phasing over years at all. We could in fact say that that was finished and the rent must be paid immediately. For housing association tenants rents will increase much faster because the 75p limit on annual increase disappears and they will be subject to the same phasing procedure as private tenants.
One of the burning issues for private tenants in this Bill, to which I noticed the Minister did not refer at all, is the question of service charges. There is nothing in the Bill which provides adequate protection for tenants being charged exorbitant and often phoney service charges. In brief, the Government have claimed that their proposals will lead to a revival of private lettings and that short-holds will encourage landlords back into the market. There is no evidence whatever to support that view. What the Government are doing is exposing many existing and potential future private tenants to the risk of exploitation and the return of Rachmanism, which followed the 1957 Rent Act.
Some of the poorest and worst housed of our people are unfortunately the single homeless in hostels. This was raised in another place and the Minister agreed to bring forward amendments to the present unsatisfactory legislation on fire precaution and overcrowding. I hope the non-mention of this today does not mean 40 that it will not be brought forward. The grave concern felt there and, I am sure, in this House, will not be deflated unless substantial amendments are brought forward and accepted at Committee stage.
In conclusion, there is a great deal of the Bill which I have not covered because there is a long list of speakers and I should be speaking the whole afternoon and evening. There is leasehold reform, which some of my noble friends are very concerned about, the national parks and a whole range of other parts of the Bill which badly need some very substantial amendment. The Minister also skated very easily over the no-profits rule where it will affect other ratepayers and, if the rents go up, the tenants as well. Again that is a retrograde step for those in the public sector.
I would say that the few positive benefits in this Bill are outweighed by the damaging and painful elements in it. It will hurt the elderly, it will hurt the tenants in the 200,000 controlled tenancies which are to be decontrolled. They really are a handful of people living in dilapidated property and their rents will rise. It will hurt those on the housing waiting lists whose expectations will sink right down again; it will hurt those who will not now get on the list; it will hurt families in tower blocks and poor properties whose hope of transfer will disappear. This is a recipe for housing ghettos. It will hurt young single men and women, who will stand very little chance of getting any housing under this Bill unless they are able to pay fairly high rents, and those renting from private landlords will be hurt through the service charges and the phasing of rents and through the lack of all the other safeguards which the Government have not thought fit to introduce. We know the terrible effect that homelessness, bad housing, fear of rising rents, fear of eviction and housing insecurity have on family life, on marriage and on the single-parent family. Unless there are substantial changes made in this House, this Housing Bill will become an ugly monument to social and moral irresponsibility.
§ 4.15 p.m.
§ Lord EVANS of CLAUGHTON
My Lords, I should like warmly to commend the noble Lord, Lord Bellwin, on the way 41 in which he introduced the Second Reading of this Bill. His political upbringing, like my own, was in local government and I cannot think of a better one for discussing this kind of complex but extremely important social measure. There are parts of this Bill, as the noble Baroness, Lady Birk, has said, which are perfectly acceptable to all parties. Many facets of the tenants' charter are welcome to those of us on these Benches, and repeat with very little change the previous Labour Government's draft proposals which disappeared at the general election.
On these Benches we support in principle the concept of people owning their own houses, whether those houses were built in the public or in the private sector. I think it is widely agreed that the gravamen of this Bill is the introduction of legislation which seeks to compel local authorities to sell their stock of houses to secure tenants in furtherance of the Government's manifesto commitment (as they call it), based in my view on the constitutionally doubtful and certainly crude argument of the mandate. I believe that the maximum number of people should have the right to own their own home, but, as a Liberal, I also believe firmly and very strongly in the independence of local government, which this Government seem hell bent on under-mining in this Bill and in the Local Government, Planning and Land Bill, soon to come before your Lordships' House. It is a curious paradox that on the one hand the Government should seek to underpin local autonomy in education, as we have recently seen in the Education Act, while on the other hand seeking to emasculate local judgment by the sale of council housing and the control of council housing stock by local authorities.
As I think we all know, except perhaps the Secretary of State, conditions in this country vary from urban to rural areas, within urban areas and within rural areas, and one cannot have a broad brush approach to the question of whether it is appropriate to sell the stock of council houses throughout the country because the conditions vary so much from town to town and from district to district. We must not forget that on the same day—on the 1st May, 1979—when this Government were getting their famous 42 mandate, many local councillors in the Labour and Liberal Parties were elected with an equally valid but entirely different mandate in the areas which they represented on that same day and with the same electorate.
I should like to assure your Lordships that I have no time at all for the local council which, for purely dogmatic political reasons, refuses on principle to sell any part of its housing stock, regardless of local need. I understand this to be the argument used by the Secretary of State in putting forward the proposal for blanket compulsion. I have no time for the latter-day Clay Crosses and councils of that nature who, purely for dogmatic reasons, oppose the sale of council houses. I am thinking rather of those councils with a huge waiting list—7,000 or 8,000 in some areas—with a large proportion of their population who cannot afford and are never likely to he able to afford to buy a house, because of low wages, high unemployment or other similar conditions. I am thinking of the rural council with only a tiny housing stock which, if sold, might change the balance of the community or get into the hands of the growing number of second home owners. I am afraid I do not think that Clause 18, as worded at present, goes far enough to deal effectively with this particular problem.
This part of the Bill would be far more acceptable if there were some provision for local councils to have the right to produce schemes for opting out, in part or whole, from the sale of council houses, which could be implemented only after approval by the Secretary of State. I should have thought that the resources available to Her Majesty's Government might have enabled the Government to produce that kind of proposal because, as the noble Baroness has said, Conservative-controlled councils, Conservative Members and the AMA with its Conservative control have considerable reservations about the wholesale sale of council houses. I should have hoped that the Government could have introduced an element of selection and choice in this particular field.
I am also concerned that certain categories of housing are included in the right to buy and, as has already been mentioned by the noble Baroness, Lady Birk, I 43 should like to see pensioners' bungalows excluded. I think it is entirely wrong that pensioners' bungalows should be subject to the right to sell, because the probability is that when the time comes for sale they will not be sold to pensioners but are more likely to be sold to younger couples. From all the evidence I have, from what I have read and from my experience as a lawyer, I doubt whether the scheme for flat sales will work out satisfactorily.
The Secretary of State has said that the right to buy a council house is a basic human liberty which enriches and enhances the life of the former tenant. But in other ways the Bill does not go far enough in enhancing and enriching the lives of former tenants, or indeed existing tenants. Though I am aware that half the total stock of all houses in the United Kingdom is owner-occupied, a higher proportion than in West Germany, France, Holland or Denmark, it seems to me grossly unfair that if the council tenant is entitled to enhance his life in the way the Secretary of State mentioned, the tenants in the private sector, though receiving better terms, admittedly, under the housing charter, do not have the opportunity in any form of buying their own houses. Indeed, as we all know, private landlords, understandably, when the time comes for an opportunity to sell with vacant possession wait for that vacant possession to come round. So the opportunity of a sitting tenant of a private landlord to buy, unless he or she is willing to pay what is virtually a vacant possession price, is very slight.
Though I concede that just under 14 per cent. of the population of this country is in privately tenanted houses, in parts of the country, for instance in Merseyside, over 30 per cent. of the houses are privately tenanted properties, and a very high proportion of those tenants are extremely anxious to own their own houses, if for no other reason than to be able to obtain the grants to install basic amenities like a bathroom or an indoor lavatory, which the landlords have either refused or cannot afford.
I hope that during the Committee stage the Government will be persuaded to increase the limit for improvement grants and assist former tenants to prevent many thousands of previously 44 privately let houses from becoming slums. I should have thought it would be one of the keynotes of this Government's policy to assist the private tenant to buy his own house and to improve it, by the aid of grants and by encouraging self-help.
The Bill certainly does not go far enough in protecting lessees on long leases. This Bill was, in my opinion, an excellent opportunity, which the Government have missed, to make thorough-going amendments to the Leasehold Reform Act 1967, to ensure that every lessee has the unconditional right to buy his freehold at a fair price on a fixed formula with variables. Though the concessions made in the Bill are to be welcomed, they do not go nearly far enough, as I think your Lordships will know, to overcome the very severe difficulties many of the leaseholders in the West Midlands, in the North East and in South Wales are suffering from.
There are many thousands of these householders on long leases. I think we have all seen and read heartrending cases of elderly people who thought they had a house of their own for the rest of their lives, and that they could pass it on to their family, who find that in fact the long lease under which they hold their house is coming to an end, and the prospects of affording to renew it, or the opportunity of doing so, particularly of the lease being renewed, are very slight indeed. I hope that means can be found to close what is really a very serious gap in our housing policy, which is based on a totally out-dated feudal attitude to house tenure. If the Government are really seeking a social revolution—that is what the Secretary of State said, so we should not be complaining too much if we spend quite some time on Second Reading discussing what is, after all, a social revolution—they should give some real hope to the many thousands of private tenants and lessees who want to be owner-occupiers and to improve their property.
In my opinion, they should have done far more in this Bill to encourage the pioneering work done by some local authorities, such as Swindon, Liverpool and elsewhere, to encourage a partnership between local government and private enterprise to build houses for sale on local authority land in inner urban areas 45 of our great cities, with genuine incentives, such as guaranteed mortgages and assistance for removal expenses and solicitors' charges, with priority given to certain categories of buyer such as existing council tenants.
Every time a council tenant moved into one of the newly built houses a council house would be released for a family on a very long waiting list, as the noble Baroness, Lady Birk, mentioned. It must not be forgotten that there are still very long waiting lists for council houses, since there is still a very large number of people in this country who cannot afford to buy, either because of low wages or unemployment, or who have chosen—and they have a free choice—not to buy, or who have the kind of job which prevents their putting down permanent roots.
The encouragement of the private sector is, in my view, particularly important at present. At a time when the public house-building programme is crippled by extremely high interest rates and cash limits, the building industry is at a very low ebb of confidence. As the National House Builders Registration Council has pointed out, the level of new starts in the private sector is likely to be at its lowest ebb this year for over 50 years. It would be a useful reform if the Government were willing to grant private builders the same rate of stock depreciation against investment as trading companies are granted. I hope the Minister will consider that as a useful reform to the private building sector.
The Secretary of State has said:For the vast majority of people there is a desire to own their own home, their own property. The Conservative Party has long recognised and encouraged this desire, because it leads to the most economic provision of housing".This is very commendable, but the level of performance under the present Government is not living up to the flights of oratorical good intentions of the Secretary of State. From January to April 1979 building societies advanced 246,000 home loans, while in the same period this year only 203,000 loans were made, a drop of 17 per cent.
In spite of the Secretary of State's declared wish, which I think we all share, to help young first-time buyers, the facts from the Building Societies Association are that, in 1971, 51 per cent. of loans went 46 to first-time buyers while by 1979 only 45 per cent. were taken up by first time buyers and the percentage is still dropping. Anyone who is in the business of dealing with house purchase for young couples, or indeed most age groups, as I am, will bear witness to the vast numbers of potential first-time and indeed subsequent house owners who cannot now afford the level of repayments which interest rates have imposed on house buyers.
At the same time as these people cannot afford the rates of interest, cannot afford the monthly repayments, over £1,000 million is given away every year in mortgage interest relief to those in the top income brackets, so that the richest buyers are encouraged to borrow and spend as much as they can, thereby forcing up house prices unnaturally and making it even more difficult for those on lower incomes to buy.
It is curious that, while house owners get their subsidy, mortgage interest relief, from the Inland Revenue, this Bill, while quite correctly reducing local authority liability for rent rebate, still requires the local authority, in the case of the private rented sector, to provide 10 per cent. of rent rebates. Why this distinction? Why did not this Government abolish the provision for local authorities, very hard pressed local authorities, to provide 10 per cent. of rent rebates while the private owner gets his 100 per cent. from Government sources? With mortgage rate at 15 per cent. and minimum lending rate at 17 per cent. there is not much hope, I fear, for a social revolution in the field of house purchase.
Against that background I can see no serious hope for the majority of people who are not houseowners being able to afford the costs of getting on to the first rung and buying their own house, until the Government change their disastrous policy of high interest rates. When the rates are reduced—as we all hope and pray, and as the Prime Minister said that she hopes, will happen soon—the real concern for those of us in this business is that there will be such an explosion of demand for the pitifully small supply of houses now being built, that prices will shoot up again, as they did 10 years ago, and again become out of reach and cause the inflationary spiral.
47 The concept of selling council houses wholesale may have an immediate and meretricious attraction, but it hardly scrapes the surface of the real housing crisis in this country. The method that the Government have chosen to enforce the legislation on recalcitrant authorities by injunction is, in my view, extremely clumsy, as enforcement of an injunction is by committal to prison. One can imagine the opportunity that the provision will give to some latter day Clay Cross rebel to make a public martyr of himself. It would be far better to use the system of "specific performance" to ensure compliance by recalcitrant local authorities. Again I hope that the Government might be willing to consider that as a less swingeing way of achieving the same result.
Year in and year out we witness local authorities running out of mortgage loan money early in the local government year. There was much about it in the newspapers today and we learnt about the Greater London Council running out of mortgage monies. That is why I want to see it a mandatory duty on central Government to supply sufficient funds to local authorities to meet all demands of tenants and others qualified to receive local authority mortgages—a provision which the Bill does not contain.
There is much in the Bill that we welcome, quite apart from the "right to buy" provisions. While the Bill does something for improving the status of tenants, as we have already heard, it does not, in my opinion, go nearly far enough. Tenants should be given far more control over the way in which their estate is managed. Successive Governments have failed to encourage tenants to become involved in the day-to-day running of their properties. It is absurd that tenants should be encouraged, and indeed advised, to call in the local authority works department for the most trivial and minor repair, such as the repairing of a lock or the changing of a tap washer. Quite apart from the fact that such a visit averages out at £7 or £8 a time, the tenant has no encouragement to have pride in, or concern for, his property, with the result, as we all know, of a contribution to the neglect, the vandalism and the decay of so many of our council estates.
48 Tenants should, in my view, have a right, and be encouraged by rent reductions where appropriate, to establish co-operatives if they wish, and to establish co-ownership schemes particularly in blocks of council, or formerly council, flats. In my opinion, we would witness an enormous change in the quality of maintenance and the appearance of council estates if people were encouraged, advised and assisted to take control of the management of their own estates. Where that has happened, particularly in the area of housing associations, the change has been dramatic. It is a keystone of my party's philosophy that the maximum power and responsibility should be devolved to the lowest level and to the smallest unit.
I am very much personally involved in the housing association movement and I would say that the proposals in the Bill appear sensible and worthwhile. I am particularly interested in the proposals for permitting housing associations, which are registered charities, to sell their houses if they wish, which is a considerable reform. I shall be interested to know from the Minister whether the Government intend that Clause 116 should over-reach the present requirement that charities must obtain the best possible price for their houses.
I share many of the reservations expressed in the other place about the performance of the Housing Corporation. One only hopes that the new chairman will be able to reassure housing associations about the Corporation's policies and attitudes. I hope that the Government will reconsider the level of grant available under Section 123 of the Bill; but generally, as amended, the Bill will not meet with much opposition from housing associations, except in the anomalous case, which I have been asked to draw to your Lordships' attention, of some housing co-operatives who assure me that if the Bill goes through in its present form, their members will become, under the terms of the Bill, secure tenants, which will prevent them raising money from building societies. I believe that that is an unintended result of the Bill and I wonder whether the Government would be willing to examine it, as I am sure that that is not their intended outcome.
49 I turn briefly to the private rented sector. I well understand the Government's wish to increase the stock of private rented property, but I have considerable reservations about the way in which they intend to go about it in the Bill. The proposal for a new form of land tenure called "shorthold", which we have discussed already, seems to give the Government the impression that it will bring a lot of empty property on to the market, because the Government believe that the reason for the shortage of rented property is the level of protection enjoyed by private tenants. I think that the more important reason is that when properties become vacant, landlords tend to sell them.
Whether the Government view is correct or incorrect, I agree that the present position is very unsatisfactory and grim, as the noble Baroness has said, but the level of protection and limit on rents is not the only cause. I would have wished that the Government could have so changed their policies that we might have all-party agreement for experiments on the basis of the Bill introduced in the other place by Sir Brandon Rhys Williams, which was a genuine attempt to solve the problem with reasonable protection for the tenant, which protection has now been thrown away in the Bill. I only hope that the Government will introduce amendments to grant these protections, because their absence prevented many Conservatives from voting for the Third Reading in another place.
We intend to move amendments ourselves to give some protection to shorthold tenants against the worst dangers of potential Rachmanism. It is only, as we all know, a tiny minority of landlords who are bad; the overwhelming majority are perfectly good, fair and concerned, and probably own only one, two or three houses. However, it is the small minority of potential Rachmans whom we have to legislate against. I also hope that if such amendments are accepted, the previously wrecking opposition of the main Opposition party will be withdrawn. The point was well made in the other place by Mr. Nicholas Scott at column 779 of volume 985 of the Official Report, where he said:I regret the fact "—and this is a Conservative Member of the other place—that in introducing the concept of shortholds, my right honourable and honourable friends on 50 the Front Bench have not built into their system the sort of protections"—
§ Lord DENHAM
My Lords, forgive me for interrupting, but the noble Lord must paraphrase a Back-Bench Member of another place. He must not quote him.
§ Lord EVANS of CLOUGHTON
I beg your Lordships' pardon. Mr. Nicholas Scott expressed the view that the concept of protection for shortholds that was proposed in Sir Brandon Rhys Williams' Bill had not been built into the system. I think that the belief held by many Members in another place was that if there were sufficient protection for the tenants empty properties would be brought back onto the market. That is a view with which I personally do not entirely agree. Nevertheless, it is a view held—and I think that noble Lords opposite will no doubt pay attention to this—and held very strongly and sincerely by many Members of their own party. Similarly, I very much hope that the Government will find a satisfactory amendment to protect tenants in mansion blocks, particularly in the Inner London area, from the danger of exorbitant and uncontrolled service charges. There ought to be statutory opportunities for tenants to challenge the landlord's assessment.
As for Clauses 55 and 57 of the Bill, dealing with the concept of assured tenancies, it is an interesting innovation which is worth a trial, and I hope that my noble friends will support the idea in the hope that a minority of landlords may possibly take advantage of this new opportunity. I should like to see the Bill, as has already been said, do more for those who stay in hostels, but we must wait to see what the Government announce.
I believe in the field of housing the Government had a wonderful opportunity to propose legislation which could have secured all-party backing. In fact many clauses already have that backing. With their obsession, however, for the sale of council houses they have distracted attention from many useful reforms and have further emasculated—and this is my greatest fear—and are likely further very much to emasculate, local autonomy. In their unwillingness to accept perfectly reasonable amendments to protect private sector tenants, they have alienated much 51 support not only from the Opposition but from their own moderate supporters.
It also concerns me that a vast set of regulations and rules are being enacted which would be difficult enough for lawyers to understand; and I am very concerned that they will not be couched in terms sufficiently simple for tenants, who are often innocent as regards the problems and the wording of statutes, also to understand. I believe that because of necessity in another place for limiting the Committee stage of the Bill, your Lordships' House will be able to perform that function for which—indeed, it need hardly be said—it is so important: we in this Chamber can look at the Bill on a basis of review and revision. I believe that that is the vitally important function which your Lordships will perform at the Committee stage. I trust that the Government will make some amendments to a Bill which is partly good but which contains many faults and errors. I hope that at the end of the day we can produce a much better Bill for return to another House.
§ 4.41 p.m.
The Lord Bishop of NEWCASTLE
My Lords, a few weeks ago I was reading the memoirs of the man who was once vicar of the parish of St. Lawrence, Byker, from about 1927 to 1943. Some of your Lordships will know that Byker is a river-side district in the East of Newcastle. It has achieved some recent fame because of the imaginative and unusual housing redevelopment which has taken place there, including the so-called "Byker Wall". However, 50 years ago the picture was very different. The memoirs show that it was not unusual for a dwelling of four rooms intended for one family, to contain four families, and for upwards of 40 people to share the use of one outside we and one outside tap, both of which could and did freeze up in winter.
There are still about 3,500 houses or dwellings in the City of Newcastle with an outside toilet, and a good many more in other parts of Tyneside. But we have come a long way since the 1920s and 1930s. I think that it is right to start with this tiny backcloth of historical perspective to this debate, because despite all the difficulties and the present short-comings, which are still very real for those 52 directly affected by them, in the last half century we have come a long way forward, thanks to the determination of many in central and local government and in the voluntary agencies.
Your Lordships will know that over the years one of the dominant problems in the North-East has been a level of unemployment well above the average, due mainly to the decline of heavy industries, the closure of pits and the mechanisation of agriculture. Connected with this has been the existence of a huge stock of Victorian and Edwardian terraced housing, often of low standard and in increasingly poor repair. Rented accommodation has been the norm for manual workers over this period, and they are a larger proportion of the population than elsewhere in the country.
Therefore, it comes as no surprise to find that the replacement of these houses has largely been carried out by the local authorities. Council housing in the City of Newcastle, for instance, accounts for some 46 per cent. of the total stock, while in Sunderland I believe that it is around 60 per cent. As a curate in Sunderland during the early 1950s, I can well remember the sense that one had of the whole town being quietly encircled by successive rings of rather gaunt and uniform estates springing out of the intense drive to build new homes as fast as possible. Nor is it surprising to discover that an average of nearly 50 per cent. of the tenants in both urban and rural areas in the North-East are either on supplementary benefit or enjoying some measure of rent rebate.
Many Northerners have to seek work in the Midlands or the South, which may account for the fact that homelessness as such seems to be more of a problem among the single homeless—and it is a very real problem—than it is among families. In passing, may I underline the tragic consequences of a situation in which more and more jobs seem to be located in the South-East of England, with the result that the housing shortage in the South is exacerbated, councils operate tight residence qualifications (and one can understand why they do so), and men and women who want to work and who have skills and experience to offer either have to work and live away from home, like a serviceman, or give up their jobs after a few months—and many North-Eastern 53 people have done just that recently—because they and their families cannot cope with the expense and the strain.
Against that background, what are some of the likely consequences of this Bill in the North-East? In the last few days I have tried to assess this as objectively as possible, as I hope befits a maiden speech, and also to identify some particular areas of concern, while acknowledging as well some very positive and constructive proposals within the Bill. What I have to say now may, I think, illustrate in specific ways some of the points that have already been made by the two previous speakers.
On the overall right to buy, my impression is that, despite the amendments made in another place, the rural authorities are still much more anxious than the urban authorities. Only about 2,000 out of over 40,000 houses in Newcastle were sold in the period 1971–1973, when economic conditions were better than they are now. The small number of inquiries so far received would suggest that the number will be even smaller this time, though, as elsewhere, when most sales take place—if they do—they will be of houses which the authority will be sorry to lose, and a certain further polarisation between one estate and another will undoubtedly occur.
However, the sale of council houses in rural areas presents particular problems which the Bill certainly recognises in Clause 18, as amended, and as explained in the introductory speech by the noble Lord, Lord Bellwin. Many parts of Northumberland are within a national park or in areas of outstanding natural beauty. But what of the rest of the county, for instance, where there are often just a handful of council houses in a small village? Clause 18(1) says that the Minister has power to designate certain rural areas as coming within the protection afforded by that clause. But what are the criteria for such a designation? It may be that as a newcomer I have failed to read the Bill with sufficient care, but no one with whom I have spoken could answer that question. There are many borderline areas where such protection is also very much needed; and I believe that to be true, in fact, for many rural authorities in other parts of the country and not just in my own.
54 I should be very grateful if the noble Lord, Lord Bellwin, could also answer one particular question which has arisen. If the answer is already in the Bill I hope that he will forgive me, because it is a large and complex document. What is the position if someone living in an elderly person's bungalow in a village—a bungalow which has no social service or special facilities, as described in Schedule 1, paragraph 4; that is, it is not strictly sheltered accommodation—exercises the right to buy and then leaves the house to relatives in his or her will? Is that a right that would be possible? I know of an instance where an elderly person has received financial help from younger relatives who later hope to inherit, and possibly use that accommodation as a second home. In communities where there is relatively little special accommodation of this kind anyway, and a high proportion of pensioners needing such accommodation, is this the intention of the Bill?
To sum up may I express two basic concerns which have come through to me in many ways, both of which may have an ethical dimension? First, there is the argument between those who believe that all tenants should have a right to buy, and those who believe that such a right may seriously infringe the right of others to an adequate home. This is fairly evenly divided, and in a maiden speech it is not for me to comment. But what has emerged in my conversations is that much depends on where you live and the particular needs of that locality.
What this Bill seems to do, as has been pointed out, is to give local authorities less control over their housing policy than over, say, education. Is this going to lead to further difficulties for the most disadvantaged, urban or rural?—for if it does it seems a serious indictment of the underlying thrust of the whole measure. It has been put to me that where council housing in a particular locality forms less, say, than 25 per cent. of the total stock, there at least the authority should have the absolute right of decision as to whether to dispose.
The second concern is similar, and relates to finance. When I first read about this measure, I assumed that part of its intention was in fact to save Government or local government expenditure, thereby 55 hopefully releasing money for new building or rehabilitation of existing properties. But I understand that Department of the Environment figures suggest that this is not so. Can the noble Lord indicate whether this is the position? Is this concern that finance will in fact be less and not more well founded or not? In our part of the world we are still struggling to meet a great human need, and it will not help that struggle, nor indeed be just to those most in need, if, as a result of this Bill as it stands, authorities actually end up with less housing where it is really needed and with less money than they have now.
§ 4.53 p.m.
The Lord Bishop of LONDON
My Lords, it had been expected that at this point the noble Earl, Lord Longford, would have been addressing your Lordships. It would have been particularly appropriate that a Lord Temporal should have been the first to express the felicitations of the House to the right reverend Prelate who has just delivered his maiden speech. However, he cannot be here, and so the happy priviliege falls to me to congratulate my right reverend brother on such an admirable maiden speech. If I may say so without condescension it was very well informed, very well marshalled, and very clearly delivered.
It is one of the characteristics of the episcopal office that a Bishop is a regional creature, for we are placed in certain territorial areas and we seek, as best we can, to identify ourselves with that territory over which we have a jurisdiction. It is one of the most valuable contributions that we can make to your Lordships' House and discussions, in that we can bring a regional element into a national discussion. As I proceed with my speech you will notice that I am orientated by the experiences that I have had here in London. It is most valuable for us to have had a first-hand impression of the effect of this Bill on the North-East of England, and we are grateful to the right reverend Prelate for giving us so clear a picture. Our appetite has been whetted as we look forward to many further contributions from him in the days to come.
I should also like to thank the noble Lord, Lord Bellwin, for the clarity with 56 which he has presented so complicated a Bill, for it is a Bill of great complexity, and it is very difficult for those of us who are not versed in the language of the rights of landlords and tenants, and the vast amount of legislation and regulation involved, to get our minds round the verbiage contained in its 167 pages or to comprehend exactly what it all involves. Yet we must try to do so, and we must look to those who are well versed in these matters to help us. For if we dig below and try to sift all the complications and technicalities with which this Bill deals, what we find is people and their homes. This is one of the most vital and important of all issues which ever confronts Parliament, for, if we fail to deal with it adequately and justly, we shall lay up for our nation dangers of quite incalculable magnitude.
The right to a decent home is a basic human right. It is one of the foundations of human dignity. It is one of the main sources of human happiness. If we tolerate a state of affairs where there are numerous homeless people, or encourage a situation in which those who have homes go in fear that, for one reason or another, they may be forced out, then we create within society a large body of people who are unsatisfied, unhappy and frightened, and therein lie the seeds of every kind of social evil and unrest.
It was because of our concern about the situation developing in this country over housing that a month ago Cardinal Hume and I called a press conference to draw attention to the public apathy in general towards the problems of housing. With the support of many other Christian leaders we issued a pastoral letter to our congregations. In those statements we drew attention to the assumption that there is no housing problem in this country, since many people appear to be under the impression that everyone has access to reasonable accommodation at a price he or she can afford. We stated the fact that, as the noble Baroness has just reminded us, more than one million families are registered on council waiting lists. We reminded our hearers of the 1,000 people who take shelter very night in London in Government sponsored reception centres, to say nothing of the many more who are given a roof over their heads and some security for the night in voluntary hostels, or of those who sleep rough or in derelict buildings.
57 We expressed a special concern for the single homeless, for whom society seems to have the message, "No chance, no choice, no home". We repeated Article 25 of the Declaration of Human Rights in its assertion that,everyone has the right to a standard of living adequate for the health and well-being of himself and his family, including food, clothing, housing".In our statements the Cardinal and I attacked no one, for we know how complex and difficult are the issues. Nor did we in any way impugn the integrity of those whose responsibility it is to formulate legislation, for we believe that they are acting from the desire to put right many of the wrongs which are so obvious.
So it was all the more regrettable that a great newspaper like the Daily Telegraph could publish an article which misrepresented our intentions, which accused us of a party bias which we do not have and which attributed to us a naiveté of which I hope we are innocent. Our sole concern was to ensure that the problems of housing and homelessness are not forgotten or swept under the carpet. We sought, as is our duty, to stir and enlighten the consciences of Christian people, and of all others who are prepared to listen, as regards the presence of a far-reaching problem in our midst. We stressed that a civilised society must be built on the principle that service to one another is a duty laid upon us by God, and we expressed the opinion that the presentation of this Bill in Parliament provided an excellent opportunity to focus the attention of the public and of arousing their sympathetic interest.
Whether or not we were successful or not is not for me to say, but there can be no doubt that the Bill has aroused very wide interest and concern. Of all the matters which have come before this House in which I have expressed some interest, none has produced so widespread a reaction in my post bag as this Bill. It is not only organisations and societies which have produced material. Nor is it only cranks who have written to me. It is ordinary people who are very scared about the future. One writes:I am approaching my 80th year and am in poor health and I know that if this Bill goes through, as it undoubtedly will, I shall have to look for somewhere else to live".58 The writer is a retired civil servant who has lived 27 years in his flat. A lady writes:We are pensioners living on a fixed income, not index linked, and are afraid that we shall soon be priced out of our flat and, with the housing situation in London making it impossible to find other accommodation, we are deeply distressed".I do not know if these fears are well founded; I have no opportunity of going into all the facts, and I hope they are not well founded. I hope the Minister will be able to reiterate what he said in his opening speech and give assurances that these fears are not well founded. But they indicate the setting in which we shall be discussing the Bill, and I hope we shall not get so immersed in the technicalities that we forget the people and the human situations which form its background.
The Bill will take us into many complex areas, but there are three issues which stand out as requiring our special consideration: the condition of the single homeless, the sale of council housing, and the contribution to be made by the housing associations. I will comment briefly on each of them. The state of the single homeless is a matter of deep concern, especially here in London. It is difficult to assess how many there are, but the possibility is that every night some 50,000 single people are homeless, some sleeping rough, some going to Government reception centres and some going to commercial lodging houses. Many of them are young people, who, despite warnings and pleas, come to London and discover that the money, work and accommodation that they expected do not exist.
Valiant efforts are being made by voluntary associations to meet the need. The one I know best is Centrepoint in St. Anne's House, in Soho, but there are many others. And some at vital points have closed or are closing. The short-stay accommodation provided by the YMCA in Endell Street off Cambridge Circus has closed. I understand that the St. Mungo Community will soon have to leave the old Charing Cross Hospital. The decision to close the Camberwell hostel alone will require the provision of a further 600 beds by 1985. What is to replace these centres?
In many of the hostels the conditions are seriously substandard, both hygieni- 59 cally and from the safety aspect, and it was to remedy this state of affairs that Mr. Dean moved his amendments to the Bill in another place. I fully appreciate the problems which are created by a demand for better standards. If the health and safety standards have to be improved, many institutions will have to close because they cannot afford to introduce new measures. If nothing is done, we run the risk of another Kilburn tragedy, when last year in the home run by the devoted care of Mother Teresa's Sisters, 10 people lost their lives in a fire. I fully recognise the action of the Government in taking steps immediately to raise the figure of maximum allowable costs for fire precautions to £5,000; but since owners may claim only 75 per cent. Of allowable costs, which would mean a maximum of £3,750, I hope the ceiling will be raised to £6,750, so that hostel owners will benefit to the full £5,000.
I trust that in the course of consideration of the Bill the Government will give further thought to tighter controls on overcrowding in hostels, will strengthen the duty of local authorities to ensure proper fire precautions, and will consider sympathetically further clauses to protect those who cannot fend for themselves when they are rendered homeless through the closing of unfit accommodation. I understand that amendments will be moved to deal with these issues, and I hope they will attract the sympathetic reaction of the Government.
I come to the right to buy. I believe in the principle of a home-owning democracy and I applaud all measures taken to help people to buy their own houses. But we shall need to ask ourselves if the provisions of the Bill will operate justly and equitably. I am no expert in this area, but I have heard it stated that the beneficiaries under the Bill are likely to be council tenants who have incomes above average and are already living in the best houses. Nor, so I understand, will the 53 per cent. of council tenants who are on supplementary benefits or rent rebates be able to profit from the Bill. As well, we need to ask how these provisions will react on the fate of those who are homeless or on waiting lists. Is it going to advance or hinder their cause? What is going to happen if and when the housing stock of a 60 local authority has been eroded to such an extent that there is no accommodation left to help those who are really in need? And what will be done with the funds that accrue from the sale of council housing? Can we be given an assurance that they will be ploughed back to be used for further house-building and so to provide a continuing stock of houses available for those who, in these very expensive days, cannot hope to be able to provide for themselves out of their own resources?
I come, finally, to the place of housing associations in this pattern of housing, and I want to take this opportunity of congratulating them on their work and thanking them for the great contribution they make to the solution of our housing problems. My own belief is that since the Bill quite properly recognises that the problems cannot be solved only by resources drawn from the public sector, it is right to make use of private money, and in this process the housing associations will have an increasingly important part to play. I believe this is especially an area in which the Church can profitably co-operate in providing further housing. Moreover, the housing associations will have a special part to play in meeting the needs of those who will require help by way of subsidy because they cannot afford to buy, and will need care and support over and above the management services normally associated with housing.
I am told that in 1978, 85 per cent. of all new tenants in housing associations earned less than the national average wage. It is these people who are being helped by the housing associations. I also applaud the encouragement given by the Government to housing associations to provide more small hostels as an alternative for those who are now in institutional accommodation. If this encouragement and these policies are to succeed, it is essential that the housing associations should be encouraged, strengthened and properly financed; and, in the case of hostels, that the planning and building regulations should be sorted out so that the goodwill and energy available should not be frustrated by the administrative jungle through which so many people have to fight their way to get anything done.
61 My Lords, I fear that I have spoken too long and yet have not touched on many of the issues which involve the intimate concerns of ordinary people. These problems are especially acute in London where big money plays so important a part, where foreigners are enabled to buy so much housing accommodation which is then not fully and regularly occupied, and where ordinary middle class people, upon whom so much of the life of London depends, are squeezed out and will either become homeless or go and live elsewhere. It is essential that we should achieve a balanced housing policy; otherwise there will no longer be in London and other great cities a cross-section of workers, students, and the middle classes, as well as the wealthy. The cities will become a desert of business houses and extremely expensive housing accommodation for the weekday use of business people. That would mean the death of our great cities as we have known them and as we love them.
I am grateful for the opportunity of being able to speak early in this debate, since I have an inescapable commitment in St. Paul's Cathedral later this evening. If the debate continues for long enough, I shall return for its final stages. If it does not, I ask the indulgence of the House and the Minister.
As his chaplain some 40 years ago, I was influenced by that great man Cyril Garbett, Archbishop of York. When he was Bishop of Southwark he was so horrified by the appalling slums of his diocese that he made himself an expert in housing and vigorously campaigned for its improvement. Things have changed drastically for the good since his clay, and much of the language he used is strangely out of date. But the heart of the problem remains and his words translated into the terms of our own problems are relevant, and should be kept in mind as we examine this Bill. He wrote:Overcrowded and insanitary buildings are a great evil … They are centres of disease and poverty. They injure character. They are a standing reproach to our civilisation. They are a fierce challenge to those who believe in the justice and the love of God!I hope that the outcome of this Bill will be to reduce the lack of housing and reduce the bad conditions and the fear of unfair pressures which are the lot of so many of our fellow citizens.
§ 5.13 p.m.
§ Baroness FAITHFULL
My Lords, I should like to add my congratulations to those already extended by the right reverend Prelate the Bishop of London to the right reverend Prelate the Bishop of Newcastle. It is certainly right and proper that we should hear of the problems of the North, bearing in mind that so many of us live in the South, and we are most grateful to the right reverend Prelate. I propose to follow his methods and make my speech a series of questions, so as to shorten it.
First, I welcome the Bill for two reasons. On the one hand it provides independence and assumption of personal responsibility for those wishing to purchase their council homes under the chapter dealing with the right to buy. I should like to say to the noble Baroness, Lady Birk, that obviously she and I have attended quite different meetings. At a meeting which I attended a number of the other people present had, when they were children, been in care, and it was their one desire to work for and purchase their own homes. On the other hand, the Bill takes into account the most vulnerable in our society. On occasions it has been said that we on this side of the House are not always full of compassion for, and understanding of, those who are in trouble and in need. However, I believe that we are mindful of the vulnerable and that the Bill is a balanced Bill and meets the needs of all sectors of society.
The right reverend Prelate the Bishop of Newcastle asked the Minister why the provision about the right to buy was included in the Bill, and he asked whether there was a financial aspect to this. I must leave the Minister to answer that question, but I can point out that in all sectors of society in this country there are many people whose passion and desire is to own their own homes.
I have torn up the speech that I had prepared, in an effort to shorten my contribution to the debate and because we are yet to hear many outstanding speakers, although we have already heard a number. I ask the indulgence of your Lordship if I do not appear to be very clear, since I do not propose to deliver my prepared speech, but rather to ask a series of questions. The first question concerns the elderly. We welcome the 63 fact that there is to be greater flexibility in the whole area of grants, repairs and improvements. I believe that this is right, bearing in mind that 48 per cent. of elderly householders are owner-occupiers. Some houses need modest adaptations and repairs so as to enable the elderly to continue to live in them In some cases there is a lack of amenities.
May I ask the Minister whether it can be borne in mind—and the right reverend Prelate the Bishop of London made this point very clear—that the elderly do not know what to do or where to go in regard to housing matters. The situation is very complicated and difficult. I would, with great diffidence, suggest to the right reverend Prelate that there are answers to the questions of the old people who went to him, and if they knew exactly what was the situation they would not be worried. Therefore I hope that under the Bill voluntary organisations and social services departments will be able to set up advice bureaux in housing departments or elsewhere in cities or other areas, to help the elderly.
My second question to the Minister also concerns grants, repairs and improvements. As your Lordships know, I support the Bill, but there is one matter that I am worried about; namely, that concerning sub-standard empty property in our country. Throughout the country—and last week I walked through various streets of Camberwell and Brixton—there are boarded up empty properties. In the area in which I used to be responsible for the homeless, the housing officer and I (as director of social services) made a list of every sub-standard property. We looked at all the properties and some of them were fairly murky; yet with small grants such properties could be made habitable. Often people prefer to live in a sub-standard property rather than to be sent to hotels or boarding houses, or to be faced with nowhere to sleep, as the right reverend Prelate mentioned. It is very worrying that in this country property remains empty while awaiting development by either local authorities or private developers. I ask the Minister whether provision could be made in the Bill to tackle this situation, or whether, alternatively, guidelines could be sent to local authorities pointing out that they should 64 no longer allow properties to remain empty.
My Lords, I think that if sub-standard property had a minimum amount of money spent on it, as I would wish were the case, many of our homeless would no longer be homeless. Perhaps your Lordships will not he surprised to hear that, as a local government officer, I ran out of money, and so we invited a number of students to work for us (the housing officer agreed) putting sub-standard property into some sort of order so that people could have a temporary home, at any rate. I may add that those people were not tenants; they were given the property to live in as licensees, which is a quite different situation, from a legal point of view, from their being tenants.
Here again, I, too, would talk about the young people. Many of us are deeply concerned with the young people—and, of course, we must deal with the here and now. But need many of our homeless young people in fact be homeless? I know that many come to London against the wishes of their parents and against the wishes of their relatives, and have nowhere to go; but I believe that we should have better education and more help given to parents, so that no young person should come to London without somewhere to go. May I also say that, sadly, many of those who are homeless have been children in care, having no homes, and we should have dealt with that situation at an easier stage.
I would also ask the Minister, as the right reverend Prelate has done, about hostels and grants for fire precautions. Fire precautions are extraordinarily difficult matters, because what is required seems to change with each change of fire officer. I would submit that £5,000 is not an adequate figure for hostels for the homeless and for others. As to the Chronically Sick and Disabled Persons Act 1970, which is dealt with in Schedule 23, up to date it has been necessary for local authorities to notify the department of those properties which they have adapted for the disabled. I know that we should leave responsibilities with local authorities, but, as I understand Schedule 23, if local authorities are not going to have to notify the Government of those properties which they have adapted, we shall not know how the chronically 65 sick and disabled are being treated, and we shall not be able to monitor. I would ask the Minister whether he would not agree that we should leave in that provision.
My Lords, the Bill does not in any way cover gypsies and those living on houseboats, but I will not go into that at the moment. I, too, should like to pay tribute to the housing associations and trusts which give so much in this country. But also, I would pay tribute to the housing departments, who work so hard in partnership with the housing trusts and associations.
§ 5.24 p.m.
My Lords, may I, too, take this opportunity to compliment, on behalf of everybody in the House, the right reverend Prelate the Bishop of Newcastle, who made a very remarkable speech and one which I am sure will lead people to hope that he will talk to us frequently and give us the benefit of his great experience and advice. Let me also turn for one moment to the right reverend Prelate the Bishop of London. I hope he will realise that very much of what he has said is in the hearts and minds, not only of those who are supporting the Bill but of those who, like myself, consider the Bill to be quite unuseful from the point of view of helping the position. After all, we are dealing with a subject which is of the utmost importance, not only from the point of view of the regular, technical side of it but from the point of view of the fact that the house is the home, and the home itself should be playing the highest part in providing a proper background to the family, which is dwindling very much today from what it was years ago—that family spirit which was so very useful in giving strength to people who were apt to drift, so preventing them from drifting into crime and all the rest. Therefore, we are dealing with a tremendously important subject.
Let me say at once that I thought the noble Lord who introduced the Bill presented his case in very interesting and (shall I say?) clear terms, because, after all, it is a very complicated Bill; but in spite of all that I am bound to tell him that my view is different from his and from the Government's—and it is based on a very long experience, which com- 66 menced very many years ago, of leasehold reform. At that time Lloyd George, who I knew well and to whose party I belonged in those days, introduced measures to prevent what was then happening in the way of the taking over of houses at the end of long leases, with a consequent reduction in the protection of tenants—and we are coming to that again in the course of our present experience. At that time there were long leaseholds being taken over and people being deprived of their homes and having to buy, and the whole purpose of the Leasehold Reform Act was to cure that. We are having a similar thing happen today—we shall have the opportunity to speak on this when we debate certain amendments—although it is being exercised in a somewhat different way; but speculators are moving in and they are dealing with a situation which is very similar to the situation which was created at the time of the Industrial Revolution, and which ultimately resulted in vast numbers of people being deprived of their homes, having believed that they could not be turned out.
Perhaps I may turn for a moment or two to my criticisms of what has happened in regard to this Bill. Let me take some of the points that are made by the Government, and let me take, first, the right to buy for public tenants. It sounds good. It is good for the few who can afford to buy; those who can take advantage of large discounts. This is a policy for better-off tenants at the expense of their neighbours. Their neighbours must pay increasing rents; and who will pay for the subsidised mortgages? But what about the one million people on housing waiting lists? Will the local authority now be able to house them? It seems to me that they will not. As the noble Baroness (with whose opening address I certainly agree) pointed out, the Government are to cut spending on council houses from £5,372 million in 1978–80 to £2,319 million by 1983–84. This is a drastic cut of 48 per cent. which will put an end to new building for those most in need of houses of their own.
Then let us take the security of tenure and improved rights for public sector tenants. Of course, tenants should not be treated like second-class citizens; of course, they should enjoy the same freedom in their homes that other occupiers enjoy. 67 But none of these rights mean much if rent levels force people to live in fear and force them out of their homes; and this, I think, will be the result of this Bill as it now stands and if there is not very full amendment of it at later stages.
What is the position? The Bill plans to do the opposite of protecting. There is the £100 returnable option to purchase, giving tenants a couple of years to see how the market is going. "If it looks profitable, exercise your option. If not, get your money back. Wait months and then you can have another little flutter". What has long been regarded as social housing is now in my opinion turning into a tame game of Monopoly.
Then we have this much-hailed innovation, the shorthold. This we are told—and we heard it today—is the answer. Let the landlords' offer shortholds (a euphemism for shortlets) and, virtually overnight, we can expect all empty properties to be put on the market for letting. But will this happen and is it what is needed? The answer to both questions in my opinion is an emphatic, No. The greatest need is for decent, long-term rented accommodation especially in London and in other cities. The majority of private tenants are not temporary residents and those who are temporary residents will leave of their own accord. At what price will these new forms of short-lets be available? It is no good offering those of our people who live and work here permanently—often single people and childless couples, not generally eligible for council housing—shortlets at prices that they cannot afford. Many are unable to raise mortgages. How will they pay the market rents and find the two months' deposit (plus the expenses of moving, often a sum of at least £500), only to find that 12 months later they are forced to move and to find a new shortlet? This is madness, and it is a madness not only reserved for those in immediate housing need.
This Bill is a great deal more insidious than that. This Bill will have the effect of eroding the limited security of tenure afforded by the Rent Acts; so that as people move (and most tenants have to move from time to time if only because they cannot afford to stay) they will find only shorthold available to them. The Govern- 68 ment have made much play of the fact that the Bill does not remove security from existing regulated tenants. This is only technically true. The real truth is that with rents rocketing up as fast as, and faster than, inflation and with rent reviews every two years—not three years—tenants will be under tremendous financial pressure and will be forced to move. This is to say nothing about the incentive for landlords to offer tenants alternative shorthold accommodation in order to get them out, and to say nothing about the lack of any incentive for landlords to fulfil obligations. The Secretary of State is to give himself powers to do away altogether with so-called "fair" rents and rent registration and he is introducing "assured" tenancies where market rents will prevail. The noble Baroness said that she was at a meeting. I wish that she would attend some of the meetings of the tenants' associations; she would then find that the story is a very different one from what she apparently heard at the meeting she attended.
Thousands and thousands of tenants are appalled at what is happening—with no attempt being made to put the situation right. We hope that in the course of our debates amendments will be introduced to give those tenants some kind of security, some kind of hope for the future, which does not appear at the present time. At a stroke, over 200,000 controlled tenancies are to be "fair rented" without any obligation on landlords to provide minimum standards of decent habitation. What is to become of the Rent Acts and of the protection which up till now—although not altogether as satisfactory as I would have it—the Rent Acts gave? Shall we not be killing the Rent Acts completely if we accept the proposals contained in this Bill?
What does all this add up to? Just this: higher and higher rents, less security, lower standards—all measures which w ill exacerbate the many problems that already exist in the private rented sector. And even where shorthold would produce some results, the Bill as drafted has many difficulties built into it. The Bill does nothing to stop widespread evasion of the Rent Acts such as holiday lets and licences. These will continue and will remain more attractive than shortholds to many operators. These evaders of the law will not 69 change their ways. Surely all genuine holiday lets should be registered with the local authorities and be subject to planning consents as an extension of the hotel industry.
The hypocrisy in this Bill is the presumption that "shorthold" is the only way to revive lettings. The truth is that the Government do not have a policy for the private sector and the Government do not have a policy which will provide secure housing. Shorthold is not a policy; it is an expedient to help landlords make more money in the hope that they will then be more willing to invest. What kind of policy is that? It is an expedient which has infuriated tens of thousands of the Government's supporters. And I think that the Government know it very well. I suggest that the noble Lord who introduced the Bill perhaps might take the advice of some of the tenants' associations with which he is personally acquainted.
I should like to recommend a policy to the Government. It is not new; it has been well tried. It is called temporary municipalisation. If the private landlord w ill not let, then the local authority should be able to extend its buying powers—and I know that in Central London this idea has appealed to many Tory-controlled boroughs. The council could then sell to tenants or let at its discretion. I recommend, if I may, this policy to the Government to assist tenants to stay in their homes; and I believe that several Members of the other place sitting on Government Benches support this policy. They and we on this side recommend it because it will work, which is more than can be said for shorthold.
Another point which is worrying the 6 million private tenants is rent levels and the nonsense by which charges can be made from services without any proper accountability. Tenants are being faced with rent levels fixed by rent officers and rent assessment committees which are by no means fair and, in spite of the provisions of the Rent Acts, reflect the scarcity of accommodations being let by landords. Tenants are being "ripped-off" (I believe the expression is) over their service charges with landlords.
Are the Government prepared to do something to halt this? Far from it. 70 The landlords are to have their scope for charging increased with provision to charge for "future" works to be undertaken, and for all but long-lease holders no adequate safeguards against fraud, and no reasonable steps taken to ensure consultation with all tenants before expenditure is incurred. The local authority will no longer be able to prosecute for non-provision of information. Does the Minister really believe that the system that prevails at present for the middle-class person is satisfactory? Ask the Conservative members of the tenants' associations what they think about this. Does he believe that charges of the kind being made at present, without any right by any body of tenants to consider the proposals, are satisfactory?
Take, for example, this situation—and I can speak from personal knowledge. I personally had to leave premises because the rent assessment was in my view impossible to meet after going through the tribunals. Talk about scarcity value being taken into consideration—what is scarcity value? Is scarcity value the fact that there are not other places to let? That is what I understand scarcity value to mean. Is it that in an area scarcity was created by those who were profiteering in property and consequently were not letting their premises but driving tenants out? There was a scarcity of rented property. Will the noble Lord explain what he is proposing to do regarding that matter in which Government action should be taken in order to clear the position?
The situation that exists for many private tenants is extremely unhealthy: anonymous landlords, often registered in Lichtenstein or some offshore island with tax advantages, buy and sell blocks of flats and properties over the heads of tenants, refuse to do repairs, ignore environmental health orders and attempts by local authorities to protect tenants, harass tenants by non-provision of essential services, ignore planning regulations, and so on.
However, can the local authority step in and buy or do anything constructive? No. This Bill does nothing to improve that situation. Can tenants withhold their rents and service charges? Yes, but few dare for fear of eviction. Can rent officers refuse to raise rents and service 71 charges because essential services and work are not carried out? No, because the onus of proof often remains with the tenant, and rents can be charged even on accommodation classed as unfit for human habitation.
If the Government honestly want to see increased home ownership, why are we not seeing an extension of the Leasehold Reform Act to enable millions of private tenants to buy their homes at realistic prices? Instead, we have the spectre of leaseholders whose families may have lived in houses for generations, often on full repairing leases, being forced to leave or being forced to pay ludicrous sums of money for their homes. This is the kind of shameful nonsense I referred to earlier in my speech; and yet the Government press ahead with this legislation. They press ahead even though they have set up a Select Committee to look into the private sector. That is rather like writing a thesis before completing your research. The private tenants have correctly asked for Part II of this Bill to be withdrawn pending proper consideration.
My Lords, there is much more one could say but I am afraid I have already used more time than I was entitled to do. I sincerely hope that the Government will do something to deal with the situation as I have presented it.
§ 5.46 p.m.
§ Lord SANDFORD
My Lords, both the people that I wanted to make my remarks to first are absent from the Chamber. The right reverend Prelate the Bishop of Newcastle explained to me that his Archbishop wanted to have a word with him, so we can understand why he is not in his place. Nevertheless, I should like to congratulate him in his absence and to confirm, also in his absence, what the right reverend Prelate the Bishop of London was saying: namely, how valuable it is to have Bishops in this House able to convey to us the special flavour of their regional scene.
I should also like to be able to speak directly to my noble friend the Minister and give him some words of comfort and support, because nine years ago I was occupying his position and battling with 72 the Housing Finance Bill. The whole exercise is still vivid in my memory. We worked for many long hours throughout the night battling with the noble Lord, Lord Diamond. I should like to congratulate my noble friend on presenting this Bill, and I think that noble Lords will agree that he did it with great clarity and skill.
I should also like to congratulate him because it is a good, comprehensive and imaginative Bill and it will be effective. Also, it fulfils in all fundamental respects what successive Conservative Party conferences have been very carefully considering for several years. I am sure that noble Lords will not delude themselves into thinking that Conservative Party Conferences are made up entirely of plutocrats. They contain council house tenants and a wide range of people from all walks of life.
This Bill fulfils in all fundamentals what was clearly put from the Conservative Party Conference into the Conservative manifesto at the general election last year and which gained us a great deal of popularity. It is that manifesto mandate which this Bill now enacts—and pretty closely.
As my noble friend has said, the Bill starts with the main election promise in the housing field; the council tenant's right to buy. This will be enacted by the Bill in substantially the form it was in in the election manifesto. Despite what the noble Baroness, Lady Birk, said when she was in her place, it is true that the sale of council houses is now generally supported by the Association of District Councils. I can say that because I am one of their vice-presidents. That is an association which contains within it 330 or so of the non-metropolitan housing authorities, the great majority of the housing authorities in the country.
There are a number of disputed details, and we shall need to look carefully at them at the Committee stage. Clause 18 has already been mentioned. That deals with the important exceptions that have had to be made in the rural areas. If we have not got those quite right yet, they can still be improved. But my belief is that they are about as good as they can be. We have to look carefully at the exceptions being made for sheltered accommodation 73 and for other accommodation for the elderly, but, as the right reverend Prelate, the Bishop of London, was saying, it is tremendously important to strike a proper balance here and not overdo provisions of the Bill one way or the other. We shall need to look, too, at the arrangements in Part VIII of the Bill relating to housing associations. I was glad to hear the noble Lord, Lord Evans of Claughton, when he was here, say that on the whole he likes that Part of the Bill.
The second part of the Bill fufils the rest of the Conservative manifesto on housing. These were the Conservative proposals for reviving the private rented sector. We have heard a good deal about that—as to whether the balance is right or not—already in this debate, and we shall have to return to it. What it will undoubtedly do is help to bring back into useful service the 300,000 or 400,000 units of private rented accommodation which have been withdrawn from the market, as the noble Baroness, Lady Faithfull, was explaining. As your Lordships will remember, this loss occurred in 1974.
In 1969 the Labour Party, I think very wisely, set up a balanced, non-party, expert committee—the Francis Committee. Noble Lords can judge that it was both expert and non-party by the fact that my noble friend, Lord Bellwin, was serving on it. This committee, which, as I say, was established by the Labour Government in 1969, reported in 1971 and from then on, for the rest of the Conservative Administration, we followed their advice, which was not to extend too widely the security for the tenant in the private rented sector because, as they said, if one did so it would take a whole lot of private rented stock off the market. Unfortunately in 1974 the Labour Party, which had set up that committee, disregarded that advice, and exactly what the Francis Committee said would happen, did happen, and we have lost all that housing stock.
In times like these it is essential to make the most of all the housing stock that we have got. Time and again speakers have talked about the high cost of building new houses and have said, "For heaven's sake, let us use the houses that we have got and, if we can, afford proper protection to private tenants as well". I put it to your Lordships 74 that it is intolerable to have excessive housing under-used or used only for holiday lets or for foreign visitors, as the right reverend Prelate, the Bishop of London, said, when it could be providing roofs over the heads of families that are in real need.
I very much welcome the call which was first made—I hope it will be made again—by the noble Lord, Lord Evans of Claughton, that we should try to move (this is the House which could do this) towards a more bipartisan position on housing policy. I was sorry when the noble Baroness, Lady Birk, seemed to me to exaggerate unnecessarily such differences as do still show upon the face of this Bill. In so far as I have any influence in matters—and I do have some through the Association of District Councils, which is the association for the greatest number of housing authorities—I hope the area of bipartisan agreement can be increased at every stage, and not least during the passage of this Bill in the House.
§ 5.54 p.m.
§ Baroness DENINGTON
My Lords, I wish to commence my speech by expressing my thanks to the noble Lord, Lord Bellwin, for the clear exposition he gave of this Bill, which is a very complicated one. He was very helpful to us. I also want to add my congratulations on his maiden speech to those already expressed to the right reverend Prelate, the Bishop of Newcastle, though he is now absent. I thought it was a very moving, deeply felt and wise speech and I am sure we all look forward to hearing him again many times.
Those of us who have ever been involved in endeavouring to deal with the housing needs of our people will know that we seem to be beset with endless problems, and it is easy to feel that the situation never gets any better at all. Many of us can remember the early days after the war, particularly in our great urban areas—and that is largely where the pressing problems remain—when families with several children were living in one room, sharing a lavatory with four or five other families in the same house; a cooker on the landing, shared; no bath; rain coming through the ill-mended roof after the bombing, and so on. Indeed, I am echoing the thoughts 75 expressed by the right reverend Prelate, the Bishop of Newcastle, who mentioned such things. The queues at our political surgeries in those days were just endless.
It is not so today. We have made progress. Tremendous efforts have been made. Some developments are not liked, but at least the people who live in the tower blocks have good separate dwellings and modern amenities. A growing number of people have second homes. There are more separate households than ever before as the young go off on their own, and ageing parents are now expected to live in separate accommodation, too. But very severe problems remain. Homelessness is one. Would that people would realise that accommodation in London is not only very expensive but is exceedingly scarce. The right reverend Prelate, the Bishop of London, reminded us very forcibly of the problems of homelessness in London. The nation still has far too many old and dilapidated houses remaining to be dealt with. There are formidable numbers of people on local authority waiting and transfer lists. Young married couples and wanting-to-be-married couples are pressing for their own separate homes, and some can afford to buy starter homes, although there are not many of those yet. But many must rent.
As rents rise more and more, people are seized with the advantages of home ownership and are queueing for mortgages and feeling desperate as prices rise against them while they try to save for the down payment. The judgment on a new Housing Bill must surely rest on the measure to which it is likely to enable the various housing agencies, both public and private, to meet the problems and satisfy the desires of our people. I consider the Bill in the light of those criteria. Today I can select only a few aspects for comment. The first is the right to buy. Recognising that a person who is and has been a local authority tenant has been lucky, in that he has had a responsible and caring landlord and usually has had a very reasonable rent and security of tenure, unless his conduct has really been quite unacceptable, nevertheless I do not in general quarrel with the right to buy. If people like their home and wish to secure this valuable asset and fashion it in so 76 far as structure and planning regulations will allow, then let them. Let them have their home. Let them make it their own and let them enjoy it.
But in satisfying the desire of individuals who wish to buy, Parliament must surely safeguard the ability of the responsible authorities to meet the needs of others. Their housing stock has been built with certain categories in mind—so many large houses for big families, so many two- and three-bedroom houses, so many one-bedroom flats and bedsitters for people of any age, and a quota of bungalows always intended for the elderly and clearly marked on plans as OPDs—old persons' dwellings. There is a wide concern at the Secretary of State's refusal to allow this particular stock of homes suitable for old people to be safeguarded.
He has recognised the need to preserve for re-letting a house which —and here I should like to quote from Schedule 1 on page 95—… has features which are substantially different from those of ordinary dwelling-houses and which are designed to make it suitable for occupation by physically disabled persons".How necessary, how wise and how proper! Then the next paragraph, No. 4, goes on to deal further with safeguards, if—the dwelling-house is one of a group of dwelling-houses which it is the practice of the landlord to let for occupation by persons of pensionable age and …"—and it is the "and" and what follows that is the rub—… and a social service or special facilities are provided in close proximity to the group of dwelling-houses for the only or main purpose of assisting those persons".That is fine: those are exempted from sale, but the concern arises from those provisos stipulated in paragraph 4 following the word "and".
The requirement for special and social service facilities will exclude thousands of dwellings vital to the housing of our ageing population—dwellings that have been purposely built for them: the OPD's marked on the plans when they were approved by the Ministry. If they are sold, the old people now waiting for a vacancy will be left with little hope. It is incomprehensible to me that the Secretary of State has refused so far to agree to all the representations made to him on this subject.
77 In order to meet his views as far as possible, a final amendment was moved in the other place on Report Stage asking for the local authorities to have the right of pre-emption in perpetuity but allowing the tenant to receive, on surrender of the tenancy, the full current market value of the house. Was that not fair? I thought it was. The Secretary of State refused to accept the amendment. I find it just impossible to see why. Would he accept if a term of years were set instead of there being a perpetual right of pre-emption? The rights and advantages of the individual would be fully protected but the needs of other elderly people needing the accommodation would be safeguarded.
I have just stated that the rights of existing tenants would be fully safeguarded, but that is not quite correct. They would not have the right to leave their purpose-built bungalow or flat to anyone of their choice—who would of course be a son or daughter—after death, nor could they sell to anyone on the open market who might pay them a high price for a desirable pied-à-terre in an urban area, or a second home in the country, because all these dwellings are usually very attractively designed and landscaped: indeed they are highly desirable dwellings.
The local authorities are responsible for doing their utmost to see that they meet the housing needs of our people. Housing associations in receipt of public funds have a similar duty. Why does the Secretary of State insist on ignoring the strong representations that have been made to him on this subject? Why does he refuse to recognise the needs of our older citizens? The fundamental question, surely, is whether a person who has been housed in an old person's dwelling as suitable to his needs owing to his age but one not provided with special warden and similar facilities—those excluded by paragraph 4 following the word "and"—is to be permitted to allow that dwelling to pass out of the control of the authority who let it to him, and so prevent other old people still looking to the authority for that kind of accommodation from being suitably housed.
I have had many distressing cases to deal with over the years in connection with the accommodation of elderly people who have become prisoners in their flats because they could not go up and down 78 stairs and the older blocks of flats still have no lifts. The only hope of helping them was when a vacancy arose on the ground floor. Do not the Government care about such cases? Let us try in your Lordships' House to move them on this matter. Amendments will be moved, because this is a matter of general concern, being just as vital everywhere as in some special rural areas.
I have some hope of acceptance of the general case when the Secretary of State recognised similar representations with regard to the need for more pre-emption, not only in the national parks and areas of outstanding national beauty but (at the Report stage, as he has just told us) the added approved rural areas. Let him unbend a little further. The point is not a political one: it is purely a practical and humanitarian one—one asking to ensure that elderly people everywhere have their chance of a suitable home preserved for them.
The management problems of local authority housing departments are very great these days, especially in stress areas. They do their best, but if two of their most precious assets are taken from them—the re-lets of purpose-built accommodation for the aged in addition to the houses for families in great need of them—the distressed tenants will be penalised and the problems will be intensified. I really do beg the Government to think again.
Some of my friends may have been surprised and even a little pained to hear me say that I am not against the right to buy; I seek only safeguards. The reason is that I agree not only that we should endeavour to meet people's wishes, but that it is socially undesirable to drive out all the would-be, and all those who are financially able to be, owner-occupiers from local authority estates. Out of my experience on a new town development corporation, where we have sold many houses, I have seen the problems arising from different tenures side by side to be minimal, and the benefits of letting people put down roots and gain a valuable and enjoyable asset are great. I have a firm conviction that near-monopoly landlordism is not a good thing. We want variety. We must preserve enough rented housing to meet the need.
79 I would talk about shortholds, but I do not wish to speak for too long. The main point on shortholds is that if they would make more private accommodation available at reasonable rents and charges, with cast-iron safeguards against exploitation and abuse, they could be welcomed. But as I read the Bill at present, the safeguards are quite inadequate. What we need is a variety of landlords, and this is where the housing associations have an important role to play. I think the Bill is intended to help housing associations, and this I welcome. A great deal of responsibility is placed on the Housing Corporation and I hope it will be able to move speedily enough to satisfy its customers. Certainly the output of housing associations has grown considerably of late years, and our thanks—this is a matter that has already been referred to in the House this afternoon—are due to the great number who give voluntary service in this field.
I should like to refer to one special aspect of housing association work; that is, the formation of co-operatives of various kinds—management co-operatives, community leaseholds and co-ownerships. I was very interested to hear the words of the noble Lord, Lord Evans of Claughton, on this same point. This is a field that should receive the utmost encouragement from the Government. I know that they support it, because I am a member of the Greater London Secondary Housing Association, which was set up originally at the instance of the Housing Corporation and the GLC, with the support of the DoE. We had distinguished members of the present Government on the board, until they had to resign on taking office. We also have a bishop, Members of both main parties from the other place, and other good people who believe in encouraging ventures in which people will take far greater responsibility for the management of their own affairs.
Community leaseholds and co-ownership are another state-aided step to ownership. Management co-ops are co-operatives of tenants whose landlord has agreed to enter into an arrangement approved by the DoE, for some or all of the management responsibilities to be transferred to the co-operative, and for a payment to be made to the co-operative for such services as they undertake.
80 At present, among other interesting activities, this organisation to which I belong is trying to establish four cooperatives, being groupings of dwellings on a large GLC estate. If this succeeds, as I trust it will, we shall perhaps have shown that council tenants on large estates can be allowed and helped to do the day-to-day management of their homes themselves to their own desires and standards, and being relieved of a large area of what I believe is now commonly called "aggro". Such an approach could surely be spread to every large tower and slab block. It needs two things to get it going. The first is the willing co-operation of the local authority, and the second is some extra finance.
People who have no experience of working together, of committee procedures and duties, of meeting the regulations under which they must work and so on must be tutored. It is no good just selling them an idea and expecting them to cope. They must have a short course of education and guidance, and someone to hold their hand until they are established. This can best be done through a housing association. A housing association must run the course of guidance for them and provide a worker who will be their friend and adviser in the early days.
The embryo co-ops—and this applies equally to community leasehold and co-ownership co-ops—will have no money at that stage to pay for this help, and so the supportive housing association must fund it. What is needed is money for setting up grants. I think that Clause 115 of this Bill will cover this kind of grant. Will the Minister confirm this, and also indicate the Government's support for this movement? Those of us who are trying to get it going would be delighted if he would give positive encouragement to the Housing Corporation and the local authorities to be forthcoming with grants for this purpose.
The only other problem that I have time to deal with today is the position of the family whose breadwinner loses his job in an area of high unemployment, where there are already many with his particular skill on the unemployment register. Because he is a person with initiative and is not satisfied to try to exist on the dole, he gets himself another job in a different area which involves moving home. Unless 81 he has a house to sell and can buy another in the new district—this is very difficult if he is moving from North to South, where house prices are considerably higher—he has to rent and is in great difficulties, because of the dearth of private rented property, the level of rent demanded for it and the refusal of the local authority usually to house him, unless he goes on the waiting list and is prepared to wait for maybe two or three years.
He is put in an impossible position, so he throws up the job and goes back home and lives on the dole. It is an absurd and wicked situation. There is great need to help the mobility of labour and it is a point of national importance. It is economically harmful to the nation to have unfilled vacancies in manufacturing industry in one area, with employers crying out for labour, and would-be workers living on the dole in another area because they cannot be housed where the work is. I know that the CBI have pressed this point on the Government.
This Bill makes a feeble attempt to ameliorate the matter—I cannot say to deal with it, because what is proposed is quite inadequate. If your Lordships will turn to Clause 45 on page 33, you will read that the Secretary of State may, with the consent of the Treasury, make grants or loans towards such moves as I have outlined, or towards the organisation of mutual transfers between a tenant in one area and a tenant in another. This is quite inadequate. I hope that the Minister will give further consideration to this matter. He will surely be aware how valuable an attraction to industry it is to have its workers housed, as was found in the new and expanding towns. Here is a Government which insists that industry must be made efficient and competitive, setting up enterprise zones, but taking no firm steps to ensure the mobility of labour. Industry must be enabled to recruit its key workers and some definite understanding with local authorities on this matter ought to be sought.
There is much in this Bill, and if the Government will listen to the amendments that I can tell are going to be put to them from all sides of this House, and will be a little flexible, this could change from being a party Bill to being a great Bill. The opportunity is there. On behalf of all your Lordships, let me beg the Minister to 82 listen to the amendments when they are moved.
§ 6.18 p.m.
§ Lord HYLTON
My Lords, this Bill has been subject to timetables and to the guillotine in another place. It is quite clear that it is very much in need of revision, and that is one of the chief functions of your Lordships' House. May I welcome Chapter II of the Bill, and go on to make two rather specialised points? I want to reinforce everything that has been said so far in this debate about hostels and common lodging houses. It is a very sad fact that, in the last two and a half years, there have been over 30 deaths from fires in such premises.
My honourable friend the Minister for Housing in the other place said, at a late stage, that he would consider certain amendments that had been moved but not pressed. Those dealt with fire precautions and overcrowding in hostels and lodging houses. Can my noble friend Lord Bellwin give us an assurance that the Government will be bringing in amendments in this House to meet some of those points? May I go on to ask him, what is to happen to the occupants of unfit hostels and lodging houses when they are closed by a local authority? Will there, in future, be a duty to rehouse such people or, at the very least, will a local authority have an obligation to arrange alternative accommodation for the people whose hostel is closed?
My second specialised point concerns housing associations. I know that the National Federation of Housing Associations has written to the Minister for Housing on four technical matters. Can my noble friend Lord Bellwin give us an assurance that these matters will receive a sympathetic hearing? I realise that it would be possible, maybe, to deal with them by amendment, but it may also be possible to deal with them by means of regulations or other administrative measures. It would be good to hear something on that.
I come now to the substance of the Bill—and that is, in particular, the right to buy. This Bill, with very few exceptions, gives an absolute right to tenants who have occupied a local authority house or flat for a certain time. It removes virtually all discretion from local authorities and 83 from a large number of housing associations. The Bill gives enormous powers to the Secretary of State. Is this right, I wonder? Many noble Lords in all parts of the House have served for a vast number of years in local government, and some are closely connected with local authority associations. I am quite sure therefore that questions will be raised from all sides as to whether it is right to bring about such a very great centralisation of power under the cloak of increasing citizens' rights.
My honourable friend Mr. Benyon, the Member for Buckingham, both spoke and voted at Second Reading against the Bill for reasons of this sort. I shall not repeat his arguments, although they were very cogent. All I will say is that it has been quite accepted now for a number of years that it can be very misleading to generalise about the national housing situation. There are so many different local situations and local problems, and local solutions arc needed. That is why the Housing Acts of 1969 and 1974 put a duty on local authorities to survey the housing needs of their areas and to produce plans that would meet these needs by the combined action of all the housing agencies.
I understand that at the moment housing investment plans are supposed to be based on a comprehensive assessment of local needs. This is what makes me question how we can expect local authorities to devise sensible and appropriate local housing strategies when their existing tenants are to have a statutory right to buy. The noble Baroness, Lady Denington, touched on the question of the balance and the composition of the housing stock, and in particular the various sizes of its units. She also made some excellent points, I thought, about mobility. I would just add that both in the towns and in the country every single vacancy and every single opportunity for tenants to transfer can be of vital importance.
This Bill is in many ways very inflexible. My honourable friend Mr. Scott, himself a former Front Bench spokesman for the Conservative Party on housing, described the Bill as "a blunt, inflexible instrument". He pleaded for greater discretion for local authorities, especially in the city centres, 84 and I support him 100 per cent. In the City of Leeds, in 1979, the Liberal Party put forward proposals for limiting the number and proportion of council dwellings to be sold on any given estate. They also asked for differential discounts to encourage house purchase on the most unpopular estates.
What do we see in this Bill? We see no provision for anything of that kind. I would describe the Bill as a Procrustean bed. It is so rigid. Let us take, for example, the rule to be applied to the sale of flats on long leases. There is to be a minimum period for leases of 125 years—nothing less. I ask this question: What is to happen if those flats happen to fall down before 125 years have expired? Surely we could trust local authorities to fix the length of leases of the flats they are selling. The local authorities know when particular flats are going to come into a modernisation programme. They know, roughly speaking, when they will be needed for redevelopment. Why can we not have many differing lengths of lease? Surely this would suit the particular circumstances of the locality and also the pockets of the purchasers, who may be people of very varying means and wealth.
I come now to the exceptions to the right to buy. I should like to support everything that has been said on this point by the noble Baroness, Lady Birk, the noble Lord, Lord Evans of Claughton, and the noble Baroness, Lady Denington. Like them, I am concerned about those old people's bungalows and flatlets which are not included in group schemes with wardens. My honourable friend Mr. Mates, the Member for Petersfield, made this point with great force a propos small villages in the countryside which are too small to sustain a sheltered housing scheme with a warden. My own village in Somerset is a case in point. In that village there are four bungalows, built in the mid-1960s. The local authority changed its mind and built bungalows instead of houses at the suggestion of the man who was then the local councillor and myself.
Why cannot local authorities be allowed to make up their own minds as to the future of these old people's bungalows? Why is it that the man in Whitehall must always be presumed to know best? Like the right reverend Prelate the Bishop of 85 Newcastle, whose speech I so much enjoyed, I know of a case in the district next to mine where an elderly widow is applying under the existing rules to buy her two-bedroomed bungalow. She is buying it not for herself—this has been stated openly—but for her son and daughter-in-law who are already living in a separate and adequate house not very far away. Can we not write into the Bill something which will avoid this kind of family pressure being put upon the elderly?
Clause 18 is very much to be welcomed, as has been said already, but may I ask Her Majesty's Government whether they will extend these concessions to cover such places as seaside urban areas and all the known housing stress areas in the cities? And there are perhaps a few of them also in the country. I am referring here, of course, to the buy-back and resale provisions. It might be better to allow the Secretary of State, if we are going to give him such vast powers, to extend this kind of protection to any area that needs it.
I should like to refer to the matter of discounts, Clause 7. I know that it is the practice to give such discounts to sitting tenants, both in the public and in the private sector, who purchase, but in my view the discounts in the Bill are far too large. My noble friend the Minister referred with some pride to his home city of Leeds. There, between 1967 and 1979, some 4,400 dwellings were sold, but even when the Conservatives had control of the city council the discount level was only 15 per cent. And they insisted on a 10-year pre-emption period. I applaud those thrifty Yorkshire councillors.
If we consider the discounts in the Bill, together with the two-year option period, it is clear that discounts could reach up to 50 or 80 per cent. of the current market value at the time when the purchase is completed. This will happen unless the rate of increase in house prices falls away very sharply in the next two years. I think I have said enough to indicate how strongly I feel that the discounts are too large.
This leads me to question, as has been done earlier in the debate, the purpose of the sales policy. The Secretary of State 86 spoke of a profound social revolution and of the transfer of capital wealth to the people. The right reverend Prelate the Bishop of London and the noble Baroness, Lady Birk, have already asked: Who will benefit? It is certainly not the half of council tenants who are pensioners or are dependent on social security benefits or rent rebates. Instead it will be families with more than one income and couples with children grown up who will be the principal beneficiaries. Is this social justice, I wonder? Is it something which the heirs of Disraeli should be attempting to do in their efforts to build one nation? I think it may well be agreed quite widely that we do not want to see council housing becoming the tenure of last resort, nor do we want to see welfare housing, as has been experienced in North America.
I also question the timing of this all-out sales policy. Standards of living are remaining static or falling; unemployment is rising and affecting minorities, such as the blacks, school-leavers, older workers, ex-prisoners, particularly severely. The numbers in poverty, especially among the old and in one-parent families, are rising. Welfare benefits look likely to be cut in real terms. There is a reduction in public expenditure and rate support grants which one fears will lead to a decline in many public services. Is this therefore the right moment to try to sell off so many of the local authority and housing association houses?
In pressing the Government to have second thoughts on this matter I should like to draw attention to the research that has been done on the social effects of earlier sales. There were a quarter of a million local authority properties sold between 1951 and 1978. Detailed local studies have been made in many places of the effect by, for instance, the National Council for Social Services, the Centre for Urban and Regional Studies, Brunel University and the Catholic Housing Aid Society. The evidence seems to be fairly clear that a combination of sales and a lower degree of spending on new building and modernisation will lead to serious social strains in most areas. That is why I ask the Government to consider delaying the implementation of Chapter I until after the report which is to be made by the Select Committee of the other place on the whole question of selling council properties.
87 I want to end on a constructive note because I am as keen as anyone in this House or elsewhere on achieving balanced communities with a good mixture of tenures and with the objective of diversifying large council estates which, whether in the town or country, can so often be dreary places. I believe that this Bill is taking the wrong approach and there is a great risk that social assets built up over generations will be signed away at a stroke. What can we do instead? Local authorities and housing associations can be encouraged to build and to sell at cost. The noble Baroness, Lady Denington, mentioned tenants' co-operatives for management, co-ownership and community leasehold. All of these are very worth while. Equity sharing was pioneered by Birmingham city. The GLC have done useful experiments on homesteading, where the worst properties can be rehabilitated on free long leases by those prepared to do so. Self-build, of course, should be encouraged. Then there is the whole concept of flexible management of housing, put forward in the report of Cullingworth in 1969. I am afraid that this Bill hardly encourages that at all.
I have tried to outline an alternative housing strategy which will secure responsible social control over community assets. I think we should try everything to prevent council housing in the future being equated with bad houses for poor people. As I said before, we must avoid council housing becoming the tenure of last resort.
§ 6.35 p.m.
§ Lord HATCH of LUSBY
My Lords, this Bill is the latest in a series of measures introduced by this Government on the social and economic affairs of this country. We had the Employment Bill, which was a misnomer because its main object was to undermine the power of the trade unions. We had the Industry Bill—again a misnomer because its object was to reduce the power of the National Enterprise Board and the regional agencies. We had the Social Security Bills, whose objectives were to reduce social security, and I should like to ask the Minister who is to wind up the debate tonight, in the jargon of the Ministry of the Environment, how many new units of accommodation does he 88 expect to be provided by his Housing Bill, with all its 144 clauses and 24 schedules?
Like the noble Lord, Lord Hylton, who, I must assure him, will get a great deal of support from this side of the House if he will persuade a few more of his colleagues to think in the same vein as his speech indicated, I am somewhat taken aback by the sudden shift in political emphasis by this Government. I have heard it argued many times by members of the Government and their supporters that they have a mandate for this Bill because the main provisions were in the manifesto and they were elected on that manifesto. What happens to those councillors who were elected on the opposite manifesto? What happens to those councillors who, both before and since this Government were elected, have won their seats in opposition to the sale of council houses?
As the noble Lord, Lord Hylton, has said, despite the Conservative party's long history of continually pointing the finger at the Labour party's support for state power, this Bill is giving greater state power to the Minister responsible for the environment than any other Bill has ever given to such a Minister. It is taking away the power of the local authorities, locally elected, to organise their housing schemes in the way in which their mandate points. I should like the Minister to address himself to this issue, which seems to me to be a fundamental issue arising out of this Bill. Centralism is surely not part of the philosophy on which the Conservative party was elected to power. It is not that we on this side necessarily in principle are opposed to the sale of council houses per se; what we are totally opposed to is the compulsion on local authorities to sell council houses; the compulsion from the central Government telling local authorities what they must do with the council houses that they have been elected by their localities to supervise.
My noble friend Lady Denington made an important point, again taken up by the noble Lord, Lord Hylton, on the importance of mobility and the part that housing plays in mobility in our industrial state. It seems to me, from what I have been able to glean from the figures, that for 23 years at least, since the Act of 1957, many areas of our cities have been denuded of the working class—of the workers who work in and service those cities—as a 89 result of the on-going consequences of that Act. Will this Bill do anything to stop that forced migration of workers out of the cities into the suburbs? I do not believe it will. I believe that what you have to look for here is a combination of council accommodation and privately rented accommodation, but privately rented accommodation with the conditions that prevent that privately rented accommodation from following the consequences of the 1957 Act which came to be known by the term "Rachmanism". And the way to do that is by increasing the social ownership of privately rented accommodation.
Here I come to one of the central issues that I should like to ask the Minister to answer in his winding-up speech. The noble Lord, Lord Hylton, has mentioned the housing associations and the representations of the National Federation of Housing Associations. I wish he had gone a little further, because according to the National Federation only 25 per cent. of those now having rented accommodation within a housing association will be eligible to buy that accommodation. But that is only part of the story. What happens to the other part, what happens when a tenant of a housing association is able to purchase his house? How does that affect the association? In my submission, it weakens that association by reducing its revenues, although that association at the same time has to maintain the same standard of services in looking after arrears, looking after repairs and so on, and the same staff.
It is just a matter of accident as to whether the tenant within a housing association happens to live in accommodation which allows him to purchase his accommodation, or whether he happens, as in at least three-quarters of the cases, to live in accommodation which is not allowed by this Bill to be purchased. If, as the noble Lord, Lord Hylton, suggested, there is a feeling on that side of the House that the housing associations should be supported, I should like the Minister to tell us just how he is able to distinguish between the right of certain individuals who are members of housing associations to purchase their houses and those who are not. Secondly, is he open to amendments on these clauses; would he, for instance, consider exempting housing associations altogether from the 90 compulsion to sell, in order to protect the revenues which they require to carry on their operations efficiently?
Secondly, I want to follow the right reverend Prelate the Bishop of Newcastle and others, including Lord Hylton, who have addressed themselves to the problems that this Bill can raise in the rural areas. In the other place it is normal for a Member to speak on behalf of his constituency. In this House we do not have constituencies, but many of us, and indeed very many Members on the other side of the House, have been brought up and still live in rural areas. There is indeed a rural lobby in this House, which was seen a few weeks ago in the vote on educational transport. I hope that the noble Lord, Lord Hylton, and his friends on that side of the House will get together to bring their pressure to bear on the Government as to the disastrous effects which could arise from the application of this Bill to the rural areas. Like them, I was brought up and lived in a rural area, and so am able to speak, as many Members of this House are, with personal knowledge.
The first thing I should like to ask the Minister is to give us some idea of the Government's opinion of the definition of a rural area. According to the Bill, in Clause 18, the definition reads:an area designated by order of the Secretary of State as a rural area".What does that mean? For example, I am sure the right reverend Prelate, whose maiden speech was very much enjoyed this afternoon, would agree with me that Newcastle is a city, but Newcastle is also a rural area, and there are rural areas with cities at their centre. We need to know. We cannot just leave it in the hands of the Secretary of State to make his arbitrary definition of what a rural area is. So could we have some much clearer definition of what the Government have in mind when they talk about rural areas being designated by the Secretary of State? I know that the Minister, when he is answering the worries that many of us have about the effect on the rural areas, will talk about the ten-year rule. People in rural areas are not very happy about this ten-year rule. At its best it will simply postpone the issue; at its worst it will become a lawyers' charter for those who wish to get round it.
91 The rural areas of this country have communities of character, and one of the essential elements in these communities is the place that the local council can have in providing accommodation. This is important not just for the individual as a human being but because rural areas, by definition at least, are associated with agriculture. What happens to the agricultural workers? Many agricultural workers have been accustomed to living in tied cottages. It is the normal practice when an agricultural worker retires from a tied cottage for the council to look favourably on his application for a council house, thereby releasing the cottage, whether it happens to be a tied cottage or whether it is a convenient cottage near the farm, for his replacement as an agricultural worker. This will be at least severely threatened by the compulsion that rural authorities must sell their council houses, or must offer for sale their council houses, and thus reduce—and in this case, as the right reverend Prelate pointed out, reduce from a very small base—the number of council houses, when there are only a few council houses available in such an area.
Again in following my noble friend Lady Denington, it is also in rural areas that you find so many of the bungalows specially built for the elderly that will come outside the exceptions to this Bill, the elderly who are looking for community, for continuation in the community and for the security of being near friends and relatives in their old age. Indeed, the threat that is made by this Bill to the rural communities as communities is likely to undermine those communities in very large areas of our country, and force people unwillingly to go and live in towns. And then what? What is happening to our rural communities? They are being denuded of their public transport; their residents are being forced to try and run a car, because there is no other transport; they are then being hit by the increase in the cost of cars and the cost of petrol and insurance; they are being hit by the educational cuts; they are being damaged by substantial rate increases; and now, on top of all that, comes the threat to the settled order of their housing facilities.
I suggest to the Minister, and particularly to the noble Lord, Lord Hylton, and his colleagues on that side of the House 92 that, as happened in another place, they get together and bring their pressure to bear on the Government before the Government get away with the undermining of the health of our rural communities and destroy what has for long been a heritage of this country, and still makes an important contribution to the development of the economic, the social and the cultural life of this country.
§ 6.52 p.m.
§ Lord MONSON
My Lords, I should like to join other noble Lords in congratulating the right reverend Prelate the Bishop of Newcastle on a most eloquent maiden speech. This is a lengthy and complex Bill and we have not been given a great deal of time to study it in depth. If it appears that I have misinterpreted any of the details, therefore, I trust that the noble Lord, Lord Bellwin, who is to wind up for the Government, will understand.
If Labour Bills dealing with housing tend to be heavily underscored by ideology of a fairly extreme and uncompromising nature—even when the Labour Administrations tend to be moderate in other respects (and I shall return to this later)—then Conservative Bills dealing with housing also tend to reflect one particular strand of Conservative philosophy—the strand that heavily plays down principle, or ideology, as those in this camp would term it, in favour of pragmatism. This Bill runs true to form in being long on pragmatism, or at any rate would-be pragmatism, and short on principle. Let me give an example.
The White Paper that preceded and paved the way for the Leasehold Reform Act 1967 was surely one of the most intellectually dishonest documents ever to emerge from a Government department. The Conservative Party, both in this House and in another place, rightly fought the Bill through all its stages with extreme vigour, almost entirely on grounds of principle. Yet, Clause 133, at the end of this Bill, far from making the 1967 Act fairer to the freeholder, actually extends its scope, even if only by a small degree.
Similarly, one must doubt whether the proposal to grant tenants who have lived in their council houses for as little as three years, more often than not at a 93 subsidised rent, the right to buy their houses at a discount of 33 per cent.—a discount which may well be worth £10,000 or more in certain cases and which will effectively be paid for by the taxpayer or the rate-payers of the borough in question, some of whom may well be poorer than those who are buying their houses and flats—can have anything to do with principle. Here I strongly agree with the noble Lord, Lord Hylton.
If we accept then that principles play only a minor part in the Bill, then (the admirable Clause 42, dealing with tenants' rights is perhaps one exception) how does it shape up in terms of the Government's pragmatic objectives? Let us revert to Chapter 1 of Part I which gives council tenants the right to buy the freehold or long leasehold of their houses or flats.
First, will it benefit the nation as opposed to the purchaser, from the longterm economic point of view? The Government argue, of course, that the savings in annual maintenance costs will more than offset the adverse effects of disposing of assets at between 50 and 67 per cent. of their market value. The Government may well be right, but will the savings in annual maintenance expenditure be as great as they anticipate? We must bear in mind that council flats, as opposed to council houses, will be sold on 125 year leases at a fixed ground rent of £10 per annum. Even if inflation should drop to only 8 per cent. per annum—which seems pretty remote at the moment —within less than 60 years £10 will not cover the cost of a second-class postage stamp. Surely there is a case for some indexation of the ground rent, and also perhaps for introducing a fair service charge. I am sure that in this House we are all opposed to the unfair or bogus service charge, about which many noble Lords have spoken, and which is levied by a few private landlords and which I understand Clause 129 is meant to remedy. However, few could object to a fairly-calculated service charge, designed to cover the maintenance and insurance of the roof, stairways, lifts and other communal areas.
There is another reason, I think, why the overall economic gains may be smaller than envisaged. The noble Baroness, Lady Birk, has pointed out that many 94 tenants who buy will be taking on a greater economic burden than they can actually afford. I entirely agree with the noble Lord, Lord Evans of Claughton, who spoke from the Liberal Benches, that most councils do far too many things for tenants which they could easily do for themselves—for example, changing the locks, replacing tap washers and so on and, in certain cases, even changing the tenants' light bulbs, if my informantion is correct. One particular merit of the Government's proposals is that such wastefulness will be greatly reduced.
However, there are certain jobs—the maintenance of the roof, chimneys, drains and the structure generally—which even the most talented do-it-yourselfer cannot manage without outside help. It will be extremely expensive outside help, as those who already own a house will know, and over the long-term it is hound to be reflected in higher wage claims. I hope that the Government are aware of that.
Secondly, will giving the right to buy, encourage labour mobility? Perhaps, but not, I think, to the extent imagined. The political correspondent of the Spectator usually writes extremely good sense, but a few months ago he came something of a cropper, in my view. Mr. Mount was writing about the Glasgow constituency of Cathcart, the constituency represented up until May last year by Mr. Teddy Taylor, and speculating upon the effects of the sort of legislation contained in Part I of the Bill upon the area, had such legislation been in force at the time. He suggested that ownership of their council houses would open up great avenues of opportunity for unemployed shipyard workers in the area, by enabling them to sell and to buy comparable houses elsewhere where more work was available. But who on earth would buy a house in Cathcart if no work were available for him in the area? Retired people will scarcely choose Cathcart in preference to Bournemouth or Torquay. What use is it to a shipyard worker to be able to have a house to sell, if the price realised represents only one-fifth of the cost of a comparable house elsewhere where work is in fact available?
Thirdly, bearing in mind the rights conferred by Clause 1, is Clause 18 really adequate as a safeguard to prevent extra burdens being imposed on farmers, with workers living in tied cottages who 95 subsequently obtain jobs outside farming? Like the noble Baroness, Lady Birk, I doubt it, notwithstanding that it was the Government of which the noble Baroness was a member that caused the difficulties in the first place via the 1976 Act dealing with tied cottages.
Let me turn to Part II of the Bill dealing with the private sector. One can unreservedly welcome Clauses 50 to 52 which introduce the concept of the shorthold tenancy. This will be of immeasurable benefit to students, young married couples and others desperate for accommodation. I said that I welcomed it unreservedly, but I have one proviso, which is the unilateral right given to the tenant in Clause 52 to give up the tenancy at as little as one month's notice. This will surely be highly discouraging to anyone leaving for, say, Canada, Saudi Arabia or Australia on a two-year contract and who wants to let his house or flat while he is abroad, and will certainly reduce the amount of accommodation coming on to the market. This case must be looked at extremely carefully when the Bill goes to Committee.
But what a pity that the Opposition are threatening to throw a spanner in the works because of outdated ideological obsessions. It was the late Richard Crossman who once wrote that he had an instinctive prejudice against landlords. Of course, the late Mr. Crossman must be given credit for his honesty and for admitting his prejudice, unlike fellow Socialists who will not admit their prejudices openly. But it cannot be left at that. A blanket prejudice against landlords is no different morally or intellectually from blanket prejudices against Americans, Pakistanis, Germans, Jews, Roman Catholics, or against butchers, bakers, candlestick-makers or any other occupational group, and it is something which intelligent people ought to work to overcome.
§ Baroness BIRK
My Lords, perhaps I may briefly interrupt the noble Lord, as we are running so late. It is not a blanket prejudice against the landlords. He is talking about the shorthold section and we were saying that the safeguards, which, in fact, were introduced by a Conservative Member in another place, have not yet been honoured. That is what we were speaking about.
§ Lord MONSON
My Lords, I entirely accept that the noble Baroness, Lady Birk, is devoid of such a blanket prejudice. I merely mention that the late Mr. Richard Crossman was not, and I believe that many of his colleagues were not. At the same time, I am extremely glad to know that this is now no longer an important factor.
I now turn to Clauses 58 to 62 dealing with registered rents. Here I must declare an interest, inasmuch as I own property let at "fair rents", albeit on a voluntary basis. In other words, although over the years I have had many tempting opportunities to sell very profitably with vacant possession, I have chosen not to so on what might be termed, at the risk of sounding priggish, "conservationist" grounds; that is to say, I believe that village houses should, so far as possible, be kept for village people, many of whom are of slender means, rather than being sold to urban commuters—the young executives who use slimline brief-cases and drive their firms' Cortinas, in the memorable words of Sir John Betjeman.
However, although one does not and should not expect much of a net return from letting residential property, there comes a point when the return is so derisory as to make one wonder whether it is worth continuing at all. I think that it was the Royal Institute of Chartered Surveyors which a year or two ago estimated that the net return on so-called "fair rented" property was as little as 1.8 per cent. per annum, this in an era when three months' money attracts interest at a rate of 17½ per cent., and when even blue chip equities yield 10 per cent. This great disadvantage is compounded by the illogical phasing system, which ensures that rents which come in never keep up with the rising cost of outgoings—repairs, insurance and so on.
The proposal in Clause 59 to shorten the re-registration interval from 3 years to 2 years will certainly help a little, although to some extent it will be counter-balanced by the effect of Clause 60, which effectively brings a revised rent into operation somewhat later than it has done hitherto.
I should like to suggest an entirely different approach to the pattern of rent revision—one which is based on human nature and human psychology, as it actually is. Your Lordships will have 97 noticed that petrol prices have risen by well over 100 per cent. over the past three years, while "fair rents" have risen by scarcely one quarter of that amount —well below the rate of inflation. Yet people accept the rise in petrol prices with barely a murmur and they become angry when rents increase. Most people are resigned to paying steadily higher prices every year for food, clothing, gas, electricity, bus fares, train fares, and so on, in line with inflation. Yet, again, they are indignant when rents rise by very much smaller cumulative amounts over a three-year period.
Why should this be so? It can only be because the rise in food prices, clothing prices, bus fares and so on happens at least annually; in the case of petrol the rises takes place almost monthly now whereas rent reviews take place at only three-year intervals, which is far too long a period in an era of rapid inflation. I have worn both caps, and been on both sides of the fence; in other words, I have been a residential landlord and a residential tenant; I have been, and still am, a business landlord and a business tenant. In the case of the latter I must admit that emotionally I have become most annoyed when a rent has been increased sharply after seven years of static rent, even though intellectually I have to admit that it is entirely justified.
The answer then, surely, is for all fair rents to be automatically adjusted annually in line either with the retail price index or with the earnings index, whichever has risen the less in the preceding 12-month period. This would still be somewhat unfair on the landlord, but a lot less so than the present system. From the tenant's point of view such a change would produce two inestimable benefits. He or she would not have to cope with a sudden unforeseen increase in rents every three years or so, for which he or she was mentally unprepared. Secondly, and more important, the tenant would know that the rent would never swallow a larger proportion of his or her income than at the outset of the let. In other words, in some years—those years when earnings rose faster than prices—the rent would actually take a smaller proportion of his or her income. It would still, of course, be necessary for rents to be re-registered periodically to take into account changes in other extraneous 98 circumstances, but it should not be necessary to do so as often as once every two years or even as often as once every three years. Therefore, there would be a most useful saving in public expenditure.
I believe—and if noble Lords on either side of the House disbelieve me I urge them to reflect carefully upon this—that 90 per cent. of private tenants would vote for such a scheme were it put to a ballot. The valid and desirable objectives of Government policy must surely be, first, substantially to increase the amount of rented accommodation coming on to the market—indeed, the noble Lord, Lord Bellwin, himself said that the Government were determined to stem the unabated decline of the private rented sector; secondly, to create genuine fairness as between landlord and tenant; and, thirdly, for the sake of social harmony, to foster good and durable relations between landlord and tenant. I believe that my proposal would achieve all three objectives, and I urge the Government to give it serious consideration.
§ 7.8 p.m.
§ Lord PITT of HAMPSTEAD
My Lords, I think that it is in the context of the country's very difficult housing situation that this Bill should be examined. It is in terms of its contribution in helping to solve the housing problem that, like my noble friend Lady Birk, I have examined this Bill. The Bill proposes to give security of tenure and the right to buy their homes to tenants of local authorities and other bodies, to make provision with respect to those and other tenants, to amend the law about housing finance in the public sector, and to make other provisions with respect to housing.
Security of tenure for public sector tenants is obviously desirable and the tenants' charter should be welcomed. As my noble friend Lady Denington has already pointed out, it is unfortunate that the Government have not gone as far as they might in helping to increase the mobility of public sector tenants. Perhaps the Minister could give us more details of the voluntary scheme, which he mentioned in introducing the Bill. I also think that the Government ought to have abolished residential qualifications, because they so often prevent newcomers from getting on to the council housing 99 register, and that the power of distraint on tenants' goods ought to have been abolished in this Bill so that the public tenant can be placed on the same level as the private tenant.
The right to buy their homes—which is a new right conferred on council tenants —needs to be examined carefully in relation to its effect on people in housing need. Remember that these council tenants, and tenants of other public bodies, are the only tenants with such a right. A house which has been sold, and can be re-sold, is no longer available to house someone who is homeless or living in bad conditions. That is obvious. It will not be available for people with children who may be living in high rise flats and needing to transfer to more suitable accommodation. That is also obvious. Moreover, in some areas its effect can be catastrophic. The Government have accepted this fact in relation to rural areas, and have been pressed by several speakers this evening to go further than they have gone in this matter. However, I think that this applies with equal force to the many stress areas in our inner cities.
Further, the tenants will have the right to buy, even though they may have been the tenants of this particular local authority for no more than six months, provided that they have been tenants of other authorities and the total period is three years. This will create hardship, or anyway administrative problems for local authorities. If the dwelling is a house it has to be sold freehold, and if a flat for a lease of 125 years. We have had speakers query the inflexibility of the lease, and I hope that the Government will be prepared to look at this aspect again.
The purchaser is to receive a discount ranging from 33 per cent. if he has been a tenant for three years, and up to 50 per cent. after 20 years. The first question I wish to ask the Minister is how the Government arrived at this level of discount, and what is its purpose? The Minister attempted to explain it when he introduced the Bill. But his explanation is not consonant with that level of discount. I can see and understand it as a deliberate means of redistributing wealth, since it is one of the few ways that a working man has of accumulating capital.
100 If that is the purpose, the Government should say so, and say so straightforwardly. But if that is the purpose, then it is the resources of the central Government that should be used and not the resources of local authorities. In other words, since central Government are compelling local authorities to sell their houses at a discount, central Government should meet the cost of that discount. Admittedly, because of housing subsidies some of these resources belong to the central Government, and the Government have underlined that fact by insisting on receiving 50 per cent. of any surplus that may accrue from sale. The least therefore that the Government can do is to repay the selling authority 50 per cent. of the discount, and agree to compensate authorities which are forced to sell below historic cost.
This matter is more important than it may seem at first sight, because the only way in which the detrimental effects of the sale of council houses can be offset is by provision of more new dwellings. This means that we must add a percentage of council houses sold to the 290.000 to 310,000 houses that the last Government estimated we need to build each year. Let us not forget that in 1979 there were only 220,000 dwellings started, so we were far from the target.
A house building programme of the magnitude required calls for a large increase in housing expenditure, but the public expenditure White Paper has indicated that the total housing expenditure for 1980/81 is expected to be £4,700 million at 1979 prices, which is little more than half the expenditure in 1974/75. The anticipated expenditure for 1983/84 will be nearly half the 1980/81 level. This is quite important because it means that not only are we selling council houses, but we are not prepared to supply the finance to provide the replacement.
The Bill introduces a new form of local authority housing subsidies, under which local authorities will be paid subsidies which represent the difference between what is called the basic amount (which is expected to be what the authority received in 1980/81), and its reckonable expenditure, which consists mainly of loan charges on admissible capital costs and amounts related to the costs of managing and maintaining housing revenue account dwellings, minus what is called local contribu 101 tion differential, which is the amount received from rents and rates.
Moreover, the Secretary of State has taken power to amend the basic amount upwards or downwards; to decide what expenditure will be accepted as reckonable expenditure; and also the reckonable income of that authority, which is to be the local contribution differential. It follows from this that the Secretary of State can substantially reduce the amount of subsidy paid to any authority by keeping the base amount as low as possible, restricting the reckonable expenditure, and assuming a large increase in rent for purposes of calculating subsidy. The authority will then merely have the choice of charging the rent that the Minister used, or increasing its rate contribution; in other words, the Government have again placed themselves in a position to force local authorities to charge high rents, much as they did in the Housing Finance Act 1972, but on this occasion they have been more subtle.
The question of relevant expenditure for determining subsidies is inextricably linked with arrangements for project control. The Secretary of State has promised a consultation paper on the subject, but it has not yet been produced; perhaps the Minister will tell us when the paper will be published. The Secretary of State's powers on housing subsidies are too wide-ranging and they should be more narrowly defined. I hope the House will take steps to see that happens.
Moreover, the purchasers of council dwellings also have a right to a mortgage. The extent, therefore, to which local authorities are forced to provide mortgages will determine the amount of cash which will accrue to them from council house sales, and if there is very little private investment available to finance council house sales, then the amount available for housing expenditure will be small. And the right of local authority tenants to a mortgage could result in building societies adopting a policy that finance will not be available from their funds to enable sitting tenants to purchase. Thus, if there is very little private finance available, the discount becomes much more important and the necessity to have it refunded by the central Government becomes more meaningful. I hope I have made my point.
102 There are other aspects of the scheme which call for criticism. Many of them have already been mentioned and I will not pursue them. I must, however, again mention the question of the 100 per cent. grant option limiting the eventual selling price for a period of two years to the value ruling at the time of the original valuation, because that really amounts in practice to an additional and very significant discount at a time of high inflation.
Although sheltered housing is exempted from the right to buy provision, that does not apply to other old people's dwellings, but my noble friend Lady Denington dealt with that so well that there is no need for me to go into it, except to mention a point she did not deal with, namely, that this will present some difficulties for the Greater London Council, which built some very expensive and desirable seaside dwellings for old people. There is no doubt that if they are sold to the sitting tenants they will certainly be outwith the availablity of other old people. The right reverend Prelate the Lord Bishop of Newcastle instanced various difficulties and I wish to take this opportunity of congratulating him on his maiden speech, which I found really excellent, and I am sure noble Lords will agree with me that we look forward to hearing from him in the future.
There are other difficulties and in Committee we shall have to amend the Bill in many ways. There were other points to which I intended to refer but I will not prolong my speech. I must say, however, that I too attended the meeting which my noble friend Lady Birk attended in the Grand Committee Room and I formed the same impression as she did. The people present were not anti-landlord, but they were very worried about the consequential effect of shorthold tenancies and about the present situation regarding service charges. I feel a great deal of sympathy for those people.
I know the Government firmly believe it is necessary to revive the private rented sector of housing and that shorthold tenures, assured tenancies, the abolition of controlled tenancies, the more frequent re-registration of fair rents and less security of tenure for tenants of resident landlords will contribute to that objective. I do not believe it. The consequence will be increased insecurity, as happened after 1957, and the continued decline of the 103 private sector. But the Government feel strongly about this and we must try their plan. I simply urge them to try to reassure those tenants who will be affected.
I know that the Westminster City Council wrote to the Department of the Environment giving its views on this subject and making proposals. I am told that the Borough Council of Kensington and Chelsea has done the same. I hope the Government will give careful consideration to the representations made by those two important Conservative-controlled councils, because they are very worried about the possible consequences of the Bill on their areas. They are inner London areas with major problems and they do not want the Government to add to them.
Finally, a comment about empty houses. Schedule 3 to the Bill deals with tenancies which are not secure tenancies. Short life or short-term accommodation is affected by the arrangements in paragraph (5) and, in paragraph (3), land acquired for development. Local authorities in inner London make considerable use of short-life accommodation, in particular accommodation which at some time in the future is destined for rehabilitation or major repair. This is often let out to householders, who would otherwise have little priority, on short-term licence arrangements. Acquired property is often used in this way and it has the dual advantage of keeping scarce accommodation in occupation and making houses available to groups with less priority for mainstream local authority housing. The effect of Schedule 3(3) will be to make a proportion of short life accommodation secure from the date of the passing of the measure. That will leave authorities with the difficult problem of what to do with tenants in accommodation which is about to be secure.
It is likely that some authorities may have to consider whether to evict the occupants prior to the Bill becoming law, and there is certainly the danger that the authorities may cease to carry out this very useful service. The Bill will have to be amended in Committee to circumvent this particular problem. This is a very important Bill, which will affect the lives of millions of people in this country. Its principles, whether we like them or not, 104 have already been accepted by the other place, but we can amend the Bill and send it back there very much improved. Let us try to do that.
§ Lord MOWBRAY and STOURTON
My Lords, before the noble Baroness rises, may I make an appeal to your Lordships. The two Front Benches have been appealing to their respective BackBenchers to try to keep their speeches brief. I have been assured by speakers on our side that they will try to do this. I must point out to noble Lords opposite that the last three speakers on their side have averaged just over 20 minutes each. May I appeal to your Lordships to be brief? We have important business to follow, and it is in the interests of all of us to try to be brief. I appreciate that this Bill is important and that your Lordships feel very strongly about it, but perhaps it would be helpful if we could express our views rather more briefly.
§ 7.31 p.m.
My Lords, I shall try to take notice of what the noble Lord has just said. First, I wish to congratulate the right reverend Prelate the Bishop of Newcastle on his excellent speech. I know Newcastle quite well and realise the difficulties there. I agree with the right reverend Prelate in what he said about elderly people trying to buy houses. I know of instances of estate agents—not in Newcastle—who have been to see old people and have said, "We will buy your houses for you if you will make provision in your wills to leave them to us". We must see that this kind of practice is prevented.
I also wish to thank the right reverend Prelate the Bishop of London because he has been so helpful to me in regard to the hostels that I run. I entirely agree with the Liberal spokesman, the noble Lord, Lord Evans of Claughton, in what he said about allowing tenants to do their own repairs wherever possible. The difficulty here is that often local authorities take a long time to carry out repairs and houses fall into a worse condition than they otherwise would have done.
I wish quickly to pass on to one or two points which I do not think have so far been raised. The noble Baroness, Lady Faithfull, spoke about sub-standard 105 houses. It is estimated that at present there are 900,000 such houses, and with a current clearance rate of approximately 37,000 a year, the potential life of a house is now between 400 and 500 years. Clearance must continue; otherwise there will have to be a massive clearance programme in 20 years' time.
The recent take-up of grants in the private sector is poor, the total in 1979 being only 50,000, compared with 217,000 in 1974. Perhaps the taking up of such grants could be encouraged. One difficulty here is that when a property is improved usually the rates go up, which is very unfortunate. There should be a much more simplified application form for grants. It is sad that 90 per cent. of the grants are for dwellings which lack basic amenities. Houses are the only buildings which do not legally have to have a hot-water system. I believe that there should be an amendment to the Housing Act 1957 so that in future each house has a bath, a hot water system, and an internal WC.
With regard to the homeless—in whom I am particularly interested, as the chairman of hostels in London for young people aged 17 to 21 years—I should like the Department of the Environment to call a meeting to discuss with the voluntary organisations, the housing associations, and the hostels the different types of housing needed, and to decide what should be the functions of those involved in this matter.
It seems to me that we should have one Ministry in charge of grants. At the moment both the Department of the Environment and the DHSS are involved with grants. There should be a central agency to direct people to the type of hostel or home to which they should go. Let me give an example here. In the case of a hostel obtaining a grant from the Department of the Environment, no welfare services are expected to be provided; in fact they are forbidden. If money is used for welfare purposes, the grant can be taken away. Furthermore, such a hostel is allowed to employ only one warden, which is not enough. I understand that in the future grant-in-aid will be paid to the Housing Corporation and that there will be a finite grant budget for any given year. Subsections (2) and (3) of the clause dealing with this matter 106 confirm that the Housing Corporation can continue to make grants to housing associations and bodies connected with voluntary housing movements, by which I assume is meant hostels. Perhaps the Minister can tell me something about how these allocations are to be made.
In 1978 local authorities had to obtain accommodation for some 50,000 households under the Act dealing with the homeless. Perhaps we can be told—though not necessarily tonight—what the corresponding figure is now and how many such households are accommodated by local authorities and how many by voluntary organisations.
One of the difficulties about public sector housing that I learnt of when I was a Member of Parliament is that often people are not prepared to take the first house allocated to them by the local authority, perhaps because it is in a district which they do not like, or is in a poor state of repair. Thus 230,000 dwellings—4 to 5 per cent.—of the local authority housing stock are at present empty. I should also like to know what action is being taken regarding 21,000 Ministry of Defence houses which are empty, and which are administered by the Property Services Agency.
I should like to support what has been said about fire precautions. Bearing in mind experience from the hostels that I run, it seems that a new fire officer coming into an area has ideas different from those of his predecessor. Now there is also a move to bring in the health authorities, too, in this regard.
I should like to see elderly local authority tenants who are over-housed but who do not want to move from their neighbourhood where their friends are, allowed to take in a lodger. This would be very beneficial, particularly for young homeless people. In such cases there could be an agreement with the local authority, which could go to court and quite easily manage to get the lodgers out if they were unsatisfactory. The National Association for Voluntary Housing proposed a lodging scheme and has a very good response from potential landladies. The idea was that all prospective lodgers should be interviewed by a qualified social worker or probation officer. But difficulties arose because there could be no guarantee to 107 get such lodgers out of the accommodation if they proved to be undesirable.
Finally, at this early stage of our consideration of the Bill I should like to draw attention to the fact that many provisions in it will lead to a substantial increase in administrative work for the housing associations. For example, the proposal to change the period of rent registration from three years to two years would increase administrative work by 50 per cent. Similarly the tenants' charter will mean that housing management staff will have increased responsibilities, as will accountants in preparing and maintaining the grant redemption fund. If housing associations are required to undertake these extra activities under the Bill, then the department should be aware that the associations will expect a commensurate increase in the appropriate allowances.
§ 7.38 p.m.
§ Lord GIFFORD
My Lords, I, too, wish to pay my tribute to the maiden speech of the right reverend Prelate the Bishop of Newcastle, and in so doing I hope that I may be a little more controversial than he felt himself open to be by adding the following point. The probing questions which the right reverend Prelate put to the Government as a result of his experience in the North-East can, I suggest, be answered in only one way: that the untrammelled right to buy, which is contained in the Bill, is bound to lead to quite intolerable shortages in those areas where there is the most acute housing need.
Having said that, I wish to confine my speech to those provisions of the Bill which deal with security of tenure, because it is in that field that my own experience as a lawyer has been. When we speak about security of tenure let us remember what we mean. We mean the right of people to live in, and build up, their homes in the secure knowledge that no outside agency will arbitrarily take away those homes.
It is a right which is taken completely for granted by the 55 per cent. of owner-occupiers, and one sees in their case, whenever there is a question of compulsory purchase, how precious it is to them. But in the rented field, of course, the right has 108 been much less well recognised and much less complete; and my own practice has led me to witness the extraordinary unfairness and misery which is felt when people who are in no way at fault come to face eviction proceedings in the courts and the courts, for one reason or another, can do nothing to stop it.
This Bill deals with security of tenure in both sectors. In the public sector, I also support fully the tenants' charter. The practice of local authorities has varied in the past; some have very fair procedures for investigating complaints against tenants, some evict on the basis of allegations made by neighbours or other third parties against tenants which the tenant often has no chance to answer at all. There will now be the provision for a proper court hearing and for an eviction only if the complaint is proved and it is reasonable to make an order.
I would suggest that we could make one improvement which has not been mentioned this afternoon but which I hope the Minister will consider, and that concerns what happens when there is the break-up of a family. I hope the noble Lord, Lord Bellwin, will listen to what I am saying and will consider it, if not in his reply then at any rate in Committee. When there is the breakdown of a family, whether married or unmarried, and the wife and children have to leave, often under the threat of violence, it is not right that the man, if he is left there, should have the full right to security of tenure of the large house or flat that the family have occupied, and with it the right to buy, and that the local authority should have perhaps to rehouse the woman and the children and not have the flexibility, as they have at the moment, to change the tenancy from the man's name to the woman's name and perhaps rehouse the man in some smaller accommodation. That is an amendment and an improvement to which I shall return in Committee.
To turn to the private sector, the security of tenure, which in Part I of the Bill has appeared as a right to be valued, in Part II becomes a burden from which landlords are to be freed. I appreciate that existing secure tenants will not lose their protection unless they are subject to some kind of switching around, but every future tenant will obviously receive a shorthold of one year and no more, because there would be 109 no point in a landlord providing more. It will not just be young people who will receive these tenancies, these shortholds; it will be everyone—young and old, families with children and those without—who have recourse to the private rented market. From now on every such new tenant will live at the grace and favour of the landlord. It is not fanciful to suppose that that is a terrifying thing, because in a property market subject to peaks and troughs it is inevitable that a property owner will obtain, and will want to obtain, vacant possession and sell for owner-occupation whenever the market is high—and that is exactly what happened when we had the furnished tenancies which were insecure.
My Lords, we are being invited to legislate for this insecurity and for this homelessness because it is argued that this will encourage people to let properties which are now empty. In another place, at the Report stage, there was a significant intervention by Mr. Vivian Bendall, a Conservative Member and an estate agent, who told another place that in the view of his profession shortholds would not be attractive because they will be subject to rent control. This is where the pressure is clearly going to come next—not only against security of tenure, but against the rent control provisions. Indeed, the Government have written in a device in Clause 51(4) by which, by mere order, rent control over shortholds can be abolished at a stroke, and I hope that the Minister will tell us (because he did not in his opening) in what circumstances and when it is envisaged that that power is going to be used, because that is insupportable.
So, my Lords, although I would have the greatest misgivings about the introduction of shortholds at all, we must examine this Bill on the basis that the Government's policy is to provide for short-term lettings without security of tenure but to subject those lettings to rent control. It is my suggestion that the Bill does not achieve that object. As it is drafted, it is wide open to exploitation. You have perhaps to work inside the legal profession to appreciate the fantastic ingenuity of those who advise and who draft agreements for owners of property, and it is therefore necessary, I think, to spell out the changes to this Bill which are needed to close off the opportunities for evasion which it contains.
110 First of all, it should be mandatory to register the fair rent before the shorthold was granted, and not merely to say that the landlord must apply for it within 28 days; because that gives not only a month's bonanza period, but the right to charge a deposit at the contractual rent, which may be very much higher than the registered rent. It was said in another place that such an amendment would be put before this House, and I would ask the Minister to confirm whether that is going to be the case.
Secondly, there is a deplorable provision in Clause 60 that a fair rent will not take effect from the date that it is applied for but will take effect from the date on which it is registered. This is quite extraordinary. It gives every incentive to the landlord and his solicitors to delay the proceedings before the rent officer, which sometimes even now can take four or five months, during which time the tenant will be paying a non-refundable market rent in areas of scarcity at the highest possible level.
Thirdly, there is really no effective sanction against a landlord overcharging or demanding a premium for the renewal of a shorthold tenancy; for saying, "I know that the registered rent is £20 a week, but if you want to go on living here you are going to have to pay £40". Now the only remedy that a tenant will have is to refuse, in which case he will not get a renewal, or to sue at the end of the period for the rent which has been overpaid, but that is not good enough for a tenant who has just lost his home. What we need is a provision in the Bill to the effect that a landlord cannot obtain possession if he has knowingly required excess rent or knowingly required an unlawful premium.
Fourthly, there is in the Bill a power in the court to dispense with rent registration altogether if the court thinks it is just and equitable. That means that a legal adviser to a tenant, if asked, "Is my tenancy a shorthold or not?", is in many cases going to have to say, "It depends on the judge", because such a discretion given to the court will be exercised in all sorts of different ways and in ways which are quite unforeseeable.
My Lords, the final point lies in what the Bill does not contain. What is does not contain is the closing up of one of the 111 most dangerous loopholes which has appeared in the existing Rent Acts; that is, the creation of the so-called licences, the so-called non-exclusive occupation agreements, which the courts have said are perfectly legal. I have experience of tenants having been charged two and three times the registered rent on a registered property by means of these ingeniously drafted agreements.
My Lords, it must be a prime duty of a Chamber of Parliament to ensure that the laws which pass through it have the effect that they are intended to have, that they are not open to evasion, manipulation or abuse. In urban areas and in other areas of scarcity, the provision of rented housing is, I think, more exposed to profiteering than almost any other marketable commodity. There is therefore a heavy responsibility upon us in Committee to ensure that the shorthold provisions of this Bill do not become a charter for exploitation.
§ 7.51 p.m.
§ Baroness MACLEOD of BORVE
My Lords, the hour is late and I shall be brief. I should like to congratulate the Minister, if I may, on the very helpful way in which he presented this Bill this afternoon. It is an extremely complicated Bill and seems to allow for every housing need and every contingency. All the i's are carefully dotted and all the t's are laboriously crossed. But of all the many Bills which come before Parliament, none seems to have fulfilled the old adage of, "Never use one word when 10 will do" as much as this one; and yet a very important section of the population is hardly mentioned at all. I refer, of course, to those who are without homes of any sort, those whose only home is hostel accommodation. Other noble Lords have referred to the many voluntary organisations which provide invaluable service in sheltering the homeless; but far too often local authorities give inadequate help. Those Members of this House who are not aware of the problem would, I am afraid, be deeply shocked by the conditions of squalor in which many people live. Those of us who are aware of the situation feel that it is incumbent upon the Government to direct more resources for the provision of those in housing need in this category.
112 In Hansard of another place on 29th November, 1979, the Housing Minister described the housing conditions endured by thousands of single homeless people sheltering in common lodging houses and hostels as:some of the worst housing conditions faced by those who are undoubtedly amongst the most deprived and vulnerable".In the other place clauses were moved on this problem but were not pressed on the understanding that the Minister would consider certain aspects further. Perhaps we may hope that the Minister here will introduce some amendments at the Committee stage.
Clauses 34 to 39 make it possible for a secure tenant of a local authority home to sublet part of his dwelling to members of his family. This is wholly laudable and long overdue—but why only to members of his family? There is provision in Clause 34 that if you get written consent of the landlord (presumably, the local authority) you can house someone who is not a member of your family as a tenant in your house. But time will hardly allow of this if one is asked at short notice to give a room to somebody who is perfectly willing to pay. One knows only too well the difficulty of getting something out of the local authority—and certainly if it is to be in written form. This, I suggest, seems a quite ludicrous and quite unnecessary provision; and it is likely that a tenant will suddenly have a great number of nieces, aunts and in-laws so as to comply with this particular provision. On the other hand, if he is on his own and is an honest man, then much-soughtafter rooms in his house will remain vacant because of all the hassle of having to go to the council for permission to let to someone who is not a member of the family. I should like this clause to be open-ended, with no restriction other than the rent book to be complied with. It would not cost anything and more much-needed accommodation could be provided from this source.
This Bill is very far-reaching and very important, as other noble Lords have said, and its provisions will be welcomed by many thousands of people—especially so, the right it gives tenants to buy their own homes. But, as I have pleaded on other Bills in your Lordships' House, may I again make a plea that a shortened, readable version of this Bill be produced 113 for those who have to understand its intricacies and have to try to implement its intention? With those few words, I wish the Bill well.
§ 7.56 p.m.
§ Baroness STEWART of ALVECHURCH
My Lords, may I first congratulate the right reverend Prelate on his maiden speech, which was of exceptional interest to us all. We hope we shall have many further opportunities of hearing him. Many of your Lordships will agree that the provision of adequate housing accommodation for those with urgent housing needs is one of the most important duties undertaken by local authorities. We know of the misery and tragedies that may be associated with homelessness, of the countless problems associated with overcrowding and insecurity of tenure and the suffering of tenants who live in high-rise buildings. I first visited tenants in this type of building as a student many years ago. What struck me then and has done often since is the loneliness of life in these buildings. Unlike the residents of council houses and flats which are only a few storeys high, the residents of high-rise flats are usually unaware even of the names of their next door neighbours. The need to travel 15 or more storeys by lifts, which not infrequently break down, does not encourage high-rise residents to go out to visit friends or attend meetings or go for walks in the local park. The views from the windows of some of these high-rise buildings may be of interest to visitors, but there is created a great feeling of loneliness and isolation in the minds of the residents. Residents in modern council flats which may be only three or four storeys high will usually know their neighbours; while, when they look out of the window they will see children at play and will almost certainly participate in group activities.
This Bill seems to be in some respects anti-social in its approach to human needs. Although adequate housing accommodation is one of the greatest human needs and the provisions of housing one of the most important social services undertaken by local authorities, one of the main purposes of the Bill would appear to be to encourage local authorities to sell their most attractive properties (which would, no doubt, in some areas include houses 114 with small gardens) and retain the least attractive (which in urban areas would include high-rise flats) for citizens who could not afford to buy a house or flat. One of the results of this policy will be to reduce both the amount and the standards of council houses, and many of the million or more people on the local authority waiting lists will be deprived of council houses and flats for many years to come. It is also likely, under the Government's policy, that there will be large rent increases for many of the poorest tenants, and for those in the worst accommodation.
When considering this Bill, we must bear in mind that local authorities are elected bodies and that it is the duty of their members to serve the community which voted them into power. I think it extremely unlikely that a Government policy which encourages local authorities to sell all their best property, houses and flats, to the well-to-do members of the community, and thereby greatly reduce the number of houses and flats available to the less fortunate, will meet with the approval of the majority of electors in large cities.
§ 8 p.m.
§ Viscount BOYD of MERTON
My Lords, I must apologise to the House (as I have already done to the Minister) for not having been here at the opening of the debate. It is possible that one of the two brief points that I want to make may already have been made by another noble Lord. If this is so I must apologise to him. My points concern solely the older charitable housing trusts. Here I must declare a personal interest. I am a trustee of the Guinness Trust, a housing trust founded 90 years ago by my wife's grandfather. Certain points I know have been raised with Ministers—and the noble Lord, Lord Hylton, made a reference to it today—of the views which concern the National Federation of Housing Associations.
However, the older trusts are concerned also about two points which go beyond the general points raised by the National Federation. I know that my anxieties are shared by my noble kinsman Lord Moyne, who is also a Guinness housing trustee, and Lord Jellicoe and Lord Blakenham, who are Peabody trustees. The anxieties are also shared by the Samuel Lewis and the Sutton Trusts. 115 Our anxieties concern Clause 124 of the Bill, which provide that every registered housing association which has received a grant under the 1974 Act shall show separately in its accounts the surpluses arriving from increased rental income from housing projects to which the grant was made, and that the surpluses are to be shown by each association in a fund to be known as the Grant Redemption Fund; and the method of constituting this Fund and of showing it in the accounts is to be as required by the Secretary of State.
However, these older trusts that I have mentioned had considerable holdings of land and properties prior to the passing of the Housing Act 1974. The Peabody Trust had some 10,000 dwellings and the Guinness Trust had round about 3,000. These holdings had been very little, if at all, affected by the housing association grants. It can therefore be justly claimed that some of the surpluses arising on these estates will be generated by those holdings which were created out of the original endowments. This part of the surplus should therefore go to the general reserve funds of the various trusts and not to the Grant Redemption Fund, where it would be subject to the recoupment powers of the Secretary of State. We trustees forsee many difficulties and misunderstandings unless an agreed formula can he arrived at to deal with these cases of the older trusts.
My second point is this: some of the older charitable trusts are not entirely confined to housing and do not use the whole of their resources for housing purposes. It is just possible that the proposals in the Bill could result in the Secretary of State taking away funds generated at least in part by the original bequest, and preventing a trust from using its funds to the benefit of the poor in other ways. I know that the Charity Commissioners are concerned about this.
On both these counts we are very anxious that a formula should be provided which will ensure that only part of any surplus should go into the Grant Redemption Fund and be subject to its rules, and the balance should remain in the accounts of the trusts as a reserve available for use in accordance with each trust's objects, which in some cases include purposes other than housing. If it is possible for 116 the noble Lord the Minister at the Committee stage to give some reassurances of a formal kind for the points that I have made, it will I know allay the doubts of very many trustees.
§ 8.5 p.m.
§ Lord STEWART of FULHAM
My Lords, we have had a lengthy, wide-ranging debate on the many aspects of the Bill. I do not know whether we can call it an enthusastic debate so far as the Bill is concerned. I am sure that the noble Lord who opened and will reply to the debate will have made careful note of all the criticisms and misgivings that not only we on this side but his noble friends have expressed. There is one aspect of the matter with which I should like to begin and which has not received a great deal of attention. It is this: all the things which the Bill proposes to do are going to be carried out in a climate of steadily declining house building. There is nothing in this Bill to deal with the fact that we just do not have a large enough housing stock and the rate at which new houses are being provided is steadily declining. That makes the solution of all the problems more difficult.
This is a Bill which, among other things, reduces the security of tenure of some tenants and raises the rents of many others. Those are not desirable things to do at any time. At a time when there is going to be an increasing shortage in the total supply of housing, they are all the more alarming. If we look, for example, at what has happened between 1978 and 1979 and look at the number of dwellings started in those two years, we find that as compared with 1978, the number of starts in the public sector in 1979 had fallen, in round figures, by 30,000 and in the private sector by 20,000. As my noble friend Lady Birk pointed out, all our prognostications for the future are that there is going to be an even more alarming decline in the rate of house building. That is certainly true so far as the public sector is concerned. To judge from the provisions made for subsidies in the Bill it is the positive intention of the Government that publically provided housing should become a less and less important part of the total stock, which is disquieting, because it is still true, despite all that has been done, that a very large section of the population have a housing need which can only be met by 117 the provision of property for rent at reasonable rents; and so far only the public authority has really been able to meet that.
I believe that my noble friend Lord Pitt of Hampstead (whose speech I was sorry to miss) referred to the subsidy provisions. I should like to develop them a little. We are told—and things always sound more impressive if you put them in an algebraic formula—that the subsidies are to be determined by BA + HCD -;LCD: base amount plus higher costs differential minus local contributions differential. But what are BA, HCD and LCD? Clauses 93, 94 and 95 respectively tell us. Clause 93 tells us how the base amount is to be calculated. But, having told us that, it then adds that the Secretary of State, if he thinks that the circumstances are appropriate, can either increase the base amount or decrease it, without any limit placed on the extent to which he can do so. So we are not much wiser at the end of Clause 93 as to what the base amount actually will be.
In the following Clauses, 94 and 95, we find exactly the same provision. HCD is to be made up of two amounts, both of which can be determined by the Secretary of State. We come to the conclusion, then, that BA, HCD and LCD are what the Secretary of State thinks they ought to be. That is the situation with which local authorities are faced as to the amount of subsidy they may expect. They can be quite sure that it will be substantially less than it has been in the past.
It may be the Government's hope that the stock of houses provided by private builders will increase. There seems to be the assumption that if you make it easier for the private landlord to get his tenant out or if you enable him to charge a higher rent, this will bring on to the market, and cause to be built, more and more private accommodation for rent. This assumption has been tried out several times in the past and it has never worked.
It is quite clear that, whatever the state of legislation, the private rented section in housing is steadily declining. I think one fairly obvious reason for it is that for years we have given owner-occupiers tax relief on their mortgage payments and we do not give tax relief for the 118 rent that is paid. That may or may not be right. But it is obviously going to have the result that the private rented sector is going to shrink. The idea that it shrinks because of wicked rent control legislation has nothing to support it. Still less have we any solid reason based on experience for supposing that less security and higher rents for the tenant will result in an outpouring of private rented accommodation. So we have to conclude that this is not so much a Housing Bill as a de-housing Bill. It legislates in an atmosphere of steadily declining provision, which it does nothing to alleviate and something to aggravate. That affects almost every housing problem we are concerned with.
My noble friend Lady Denington referred to the importance of the mobility of labour and the need for the man who has got a job in another part of the country to be able to get a house there. But it is terribly difficult for the local authority in the area to which he proposes to move to make provision for someone it regards as a stranger if it is up against a desperate shortage all the time. No doubt it ought to be more generous. We ought not to have residential qualifications, but it is very difficult to persuade local councils of that when every vacancy they have got is sought after desperately. If we want greater mobility of labour we simply have got to increase the housing stock more than we are doing or plan to do at present.
However, it may be argued that if the Bill does nothing to increase the housing stock it is going to provide a better use of the existing stock. It has two instruments for doing that. The first instrument is in the public sector. It is argued that if one provides for the sale of council houses this will be a better use of the existing stock. Let me say at once that there is nothing new about the idea of sale of council houses or, indeed, the building of houses by councils for sale. Councils of all political complexions have done this in different places and in different times. But—and this is a very large "but"—whether it is done and the extent to which it is done should be a matter for local judgment, because whether it is a sensible thing to do or not varies greatly from one part of the country to another.
119 If I may say so, this was brought out very clearly in the distinguished maiden speech we heard from the right reverend Prelate the Bishop of Newcastle, when he pointed out that the local conditions and the finance of each local authority affects whether it is sensible for it to sell council houses. Under this Bill every local authority has got to do it whether the conditions and the finance make it a suitable thing to do or not. Early in the debate the noble Lord, Lord Evans of Claughton, made the same point about the need for local discretion in the sale of council houses, and my noble friend Lord Hatch of Lusby stressed particularly how this will affect the needs of the elderly—that the provision for them, in particular, will gradually shrink.
But perhaps the most devastating case against the iron rule that all councils must sell was made by the noble Lord, Lord Hylton, who rightly described the action of the Minister as like that of the brigand Procrustes, who either stretched or locked his guests so that they should fit his inflexible iron bed. I must congratulate the noble Lord on Procrustes. As one who is always looking for suitable words and phrases with which to describe the policies of Conservative Governments, I wish I had thought of that one myself.
The Government's policy of universal sales is one that predominantly will help the better-off tenants. This point was made very forcefully by the right reverend Prelate the Bishop of London. Not so very long ago a publication by the Tory Reform Group, of all bodies, had something very similar to say. What, it asked, did such a policy really achieve? It said that what it resulted in was that better housing was being sold to the wealthier tenants. It would be of no advantage to the old and would not be available to the poor. It reduced the overall quality of the public housing stock, and this had financial consequences when average repair and maintenance costs rose. I wish we had here the noble Lord, Lord Carrington, who is one of the vice-presidents of the Tory Reform Group; or even, from another place, Mr. Peter Walker, who is its patron; or the right honourable William Whitelaw, who is another of its vice-presidents. All told, this idea of absolute and universal council house sales does not seem to have many 120 friends and I really think the Government ought to look again before they persist with this.
Then, of course, compulsory sales leave the other tenants—those who cannot buy, and they arc overwhelmingly in the majority—with less and less hope of transfer to something a bit better than what they took on first offer because they felt they must have something. They are also left with the prospect of higher rents. This is partly because the no-profit rule has been abolished. Local authorities are now to be encouraged to run their housing account at a profit. They are going to be under continual pressure from the central Government to raise rents, and the tenants' charter, which has some admirable things in it, does not contain what the Labour version of it contained—a right of tenants to be consulted about rents.
The stock argument put forward for allowing rises in rents is that if one compares rents with what has happened to prices and incomes in other fields, really they have not gone up all that much. Possibly the noble Lord was going to say that. It looks as if the Government have looked round and said, "We've got a rate of inflation running in general at rather more than 20 per cent. but we've found one field where this isn't happening. It isn't happening to that extent in rents so we had better see that they go up like all the other things". This is a very odd performance for a Government who were supposed to make the battle against inflation their highest priority.
Perhaps I am dealing with the subject a little too lightheartedly. It is going to be a very ugly and nasty business for a great many of the council tenants and they will by definition be those who can least afford it, because those who can really afford it will have taken advantage and bought their houses to the disadvantage of the other tenants. The situation of those who are not yet tenants but are on waiting lists is going to be rendered hopeless because the pool of council housing from which alone they could have hoped to get a decent home is going to be steadily shrunk as year follows year.
The effect of this policy, then, as so often with Conservative policies, is that those who are already tolerably housed 121 will find it is made easier for them to improve their position. Those who are less fortunate will be thrust further down. A wedge will be driven all the time between the two sections. That is the Bill's device for dealing with the public sector. Its device for dealing with the proper use of the housing stock in the private sector is predominantly the shorthold tenancies. It is important to notice what could result from the creation of shorthold tenancies, and I must pay tribute to the speech of the noble Lord, Lord Gifford, who spelt out in a way that helped laymen to understand a number of the legal traps and difficulties into which tenants could be drawn.
The point I would like to make is this. The merit of existing legislation about rents is that the landlord—I am speaking now not of the landlord who wants to get in and possess the property itself but of one whose business it is to let property for rent—as things now stand, has no financial motive for wanting to squeeze out a sitting tenant because the law requires that the dwelling would still have a registered rent and the next tenant who came would pay that same rent.
What shorthold would do is this: if you can manage to persuade, cajole or bully your tenant out of a registered tenancy into a shorthold, arid then make another shorthold of the place he used to occupy, there is a decided advantage to you. In the first place, you are nearer in time to the point where you may be able to sell the property free of all restrictions; and, secondly, very probably you will be able to put up the rent because, although it is a condition at the beginning of a shorthold or at least within 28 days of its beginning that there must be a registered rent, Clause 51(4) of the Bill enables the Secretary of State to remove that condition at any time he likes. There is substantial financial motive, then, for the landlord to try to get a tenant out so that he can turn premises which had a registered tenancy into one with a shorthold tenancy for a new tenant.
If you create that situation, what will happen? We do not need theoretical speculation about that because it has all happened before. The 1957 Rent Act created a situation whereby, if you owned controlled property and if you could get the sitting tenant out by hook or by crook 122 —if he were not so obliging as to move or die—the tenancy became uncontrolled and you could let it at four, five or six times the rent you had been getting. That was a plain invitation to landlords to harass tenants out in one way or another.
I accept without argument what was said by, I think, the noble Lord, Lord Evans, that not all landlords are heartless and avaricious; to suggest otherwise is quite wrong. But the point about the 1957 Rent Act and shorthold tenancies is that it puts a premium on avarice. The landlord who wants to behave decently is made to look a mug by comparison with the landlord who is out to make as much money as he can. It is true that the temptation to do that kind of thing in this Bill is not so serious as it was in the 1957 Act, but though less serious in degree it is the same in kind. This Bill when enacted will create a situation in which it pays the landlord to get the tenant out.
How do you get a tenant out? The Government say there is absolutely nothing in this Bill that disturbs the security of any sitting tenant. In a number of cases that may be so, but there are a variety of ways of getting your tenant to go if you really want him to. You can neglect the repairs until the place becomes almost uninhabitable. If the tenant's situation is that he occupies part of the house and the other part is vacant, you can get hold of some peculiarly undesirable people and put them in the other half, with a deliberate remit to make the place most uninhabitable. You can practise deceit by persuading the tenant that his legal rights are not in fact what they are, and that you will be able to do particularly skilfully with those who find it most difficult to cope with modern life: the less well-educated, the semi-literate, perhaps, and some who by disease or disability are not able to get about and know how to do things. I remember one particularly heartless deceit being practised under the 1957 Act on a blind man. In the last resort, you can do it by straightforward bullying. The tenant can be visited by "strong arm men" and possibly by alsatian dogs.
None of these things have I invented. All of them happened under the 1957 Rent Act, despite the assurance of the Government which passed it that nothing of the sort would happen, and despite a determined effort, I am sorry to say, by a large 123 section of the press to pretend that it was not happening, until you got somebody with a nasty foreign-sounding name like Rachman, and the possibility of a really juicy scandal, and then it burst and the Government did something about it.
It is interesting to notice where Rachman and his like got the money from to buy up controlled property and practise these rackets. They got it from the most impeccable sources, as newspaper inquiries revealed; from people from the best clubs, the best regiments, the best public schools, who cheerfully lent them money and, equally cheerfully, did not inquire how it was they were able to draw a rate of interest so much higher than was normally available from investments in house property at that time. As I said, these things happened once. We certainly have no certainty that they will not happen again. One would have thought, having gone through that experience, that the Government would have been at great pains not to re-create anything like that situation; but that is what they are doing.
However, there are some good features in this Bill. For example, there is the tenants' charter—the noble Lord should be grateful to me because not many people have said much about it—although even that could be improved. There are arrangements about improvements which I think will be helpful; but if we look at the most distinctive characteristic of the Bill, it is that it ignores the need for more housing and especially for more housing to let at reasonable rents, and its two special features—the shorthold tenancies and the sale of council houses—will increase inequality, and injustice.
§ 8.26 p.m.
§ Lord BELLWIN
My Lords, really, it is a question of where to begin! I think I should do so by saying that noble Lords opposite, and indeed all those who have spoken, would not really expect me to try to deal with all the points that have been raised, many of which are really more appropriate for Committee stage where they can be much better debated in detail rather than by my merely giving a riposte to them now. At the same time, there are a good many comments I wish to make, but before I do so may I apologise 124 to those noble Lords who may feel that I have not picked up all or, in the odd case, any of the points they have raised. It is for the reasons I have just given, which I believe to be in the best interests of the House.
Before I tackle the points specifically raised on the Bill itself, perhaps I should make one or two general observations in response to many of the general observations that were made. Quite a number of comments referred to the Government's broad housing policy generally and not to specific items in the Bill. I suppose that is fair enough; after all, this is a debate about housing and this is an important Bill; therefore I have no complaint about that. But, equally, I have to presume that noble Lords opposite, in particular, and also my noble friend Lord Hylton, will not mind if I comment accordingly on what they have had to say.
From the Labour side we have, not unexpectedly, listened to expressions of some of their philosophies—as always very strong on rhetoric and not so strong on logic, sounding always very plausible and emotive. But one has to look at the record, and really if we started to dig there, there would be a lot that we should want to say. Had the debate come to a close sooner I should have wanted to do that, because I have masses of material with me. However, I think that in the interests of brevity we had better leave that for the Committee stage.
Even so, perhaps I might make the odd observation, and not least in response to the provocation—shall I say, in the nicest possible way—from noble Lords opposite. For example, the noble Baroness, Lady Birk, referred to the Government's cutback in housing investment allocations, as indeed did several other noble Lords. She referred to the dreadful effect that that would have on the new building programme. I think that I have to say this, and in so doing pick up a point which the noble Lord, Lord Stewart, made towards the very end, when he referred to the decline in the rate of new house building.
The fact is that new house building in England fell from 110,000 starts in 1975 to 47,000 starts in 1979—a drop of over 50 per cent. in Labour's last five years in office. Net capital expenditure also fell 125 by over half, from £4,202 million in 1974/75 to £2,077 million in 1979/80. Yet, despite this reduction in the level of funds available for housing—and this is a very important point—local authorities were still either unable or unwilling to maintain the earlier level of new building and, in fact, underspent even those reduced targets by £340 million in 1978/79. Yes, even after we had removed £300 million from Labour's 1979/80 housing expenditure plans, authorities failed to reach the new cash limit.
Local authorities are responsible for drawing up their own housing strategies, and it is clear that their perception of need has changed over the years. I have been one of those who have been there while that change has been taking place. The matter is reflected in the increasing proportion of the housing investment programme resources which are being spent today on rehabilitation and improvement of the existing stock. That is right, and that is as it should be. The needs and problems have become increasingly specific and local. The emphasis of public sector housing policy now must be to meet particular needs, such as those of the elderly and the handicapped. We have to concentrate on modernising, improving and making better use of the existing stock, rather than on the general provision of new houses, and we must encourage, as we are now doing, home ownership and the private rented sector.
I can speak with a great deal of feeling and at some length on this subject. I was personally involved over many years in the debate on what should be the rate of slum clearance; what should be the rate of new build; was it right to have torn out areas and destroyed communities to the extent that we did; or, on the other hand, was it right to say—and there are those who do—that if we had not done that to the extent that we did, then we should have had even more slums today?
This is a very finely balanced debate, but I make the point because it ill becomes anybody, who is really talking about housing in its broadest sense, to try to proclaim that the answer is solely in any one sector, because it is not. Least of all is it in saying that new public sector house building is the only solution, because I do not believe that it is the only solution. It may again become a solution, when we 126 have restored the existing stock of housing to the proper state that we all want to see. We can then look again at the situation, as it will be.
Among the general reviews of the national housing scene, and complaints from the Benches opposite about our housing policy, I listened in vain for at least some acknowledgment of the shortcomings—and I have to say this—of many of the Labour-controlled authorities and their contribution to the nation's housing ills. My noble friend Lady Faithfull referred to sub-standard properties and I take her point to as starts on them. No doubt, we shall be coming back to that. But why no reference to the thousands of council-owned properties which are standing empty all over the country, and nowhere more so than in some Labour areas? I am told that there are over 1,000 such in Lambeth alone, yet they bludgeon their ratepayers for some £20 million a year to subsidise their council housing; and they are not the only ones, by any means, although they are indeed among the worst.
Why have we heard nothing about the scandal of rent arrears? Just how many tens of millions of pounds are locked up in them today? Again Labour authorities are in the lead. Yes, my Lords, we hear much of municipalisation, and they are very quick to municipalise and to lay their hands on all the housing that they can acquire. But can it really be said that they are putting it to the most efficient service of their citizens when we see this kind of record, which I see as much as most people as I go around the country?
I make only one further riposte to the comments we have had, which I consider to be very much of a political nature today. There has been a lot said about the shortage of private rented accommodation, about how critical this is for so many single, elderly and young families, and some noble Lords opposite became quite involved in this argument. To hear them, we might well have been excused for thinking that their party's past policies had been as pure as the driven snow on this, until one starts to look at the facts, especially at the rent legislation in their last five-year term of office.
127 Over the years, while never ceasing to bemoan the shortage of private rented accommodation, the fact is that the Labour Party's hostile attitude to the private landlord has become steadily more marked. The Rent Act 1974 and the Housing Rents and Subsidies Act 1975 provided further fuel to hasten the decline of the private landlord. The 1974 Rent Act extended security of tenure to many tenants in furnished accommodation, and from the beginning of 1974 to December 1977 hundreds of thousands of dwellings ceased to be available for rent. The noble Lord, Lord Stewart, did not seem to think that that was in any way a contributory factor. He and I will have to agree to differ as to that.
In passing the 1974 Act,—as my noble friend Lord Sandford said earlier, the Labour Government ignored the advice of the committee which was set up to study the working of the Rent Acts. I very quickly quote from one part of that report, which read:The eventual overall reduction in the supply of privately rented accommodation would, as we think, be substantial. Greater security for those in occupation when the extended security code came into force could well he bought at the cost of greater hardship and difficulty for the much larger number of households seeking accommodation in the following weeks, months and years. For the reasons we have indicated, we cannot recommend such an extension. On the contrary, we venture to sound a solemn warning against it.Prophetic words indeed, as events turned out!
On the right to buy, which has most certainly been the most talked about topic today, I feel that I should like to say this. I listened carefully to arguments here, as I have listened to them for so many years in the past, as I have read of them, as I have heard them put to us so often by our political opponents and by some well-meaning, but usually biased, advocates of public ownership at all costs. We will have none of it. Why should we compel public tenants always to have to pay rent, without ever owning anything? Why should they be disadvantaged? Why should they not have the chance to leave something of real value to their children?
The right to buy is what the people want. It is what we received a mandate for in the General Election. Despite all the well-practised and, by now, all too 128 plausible arguments to the contrary, it will not have any meaningful effect on the overall pool of dwellings relative to renting need. Furthermore, it will not mean that only the best will be sold. The record shows otherwise and my own experience confirms that. If anyone wants to argue with me, I shall be very happy to take him on when we come to Committee stage.
Let me demolish another of the antiright-to-buy myths. The fact that a house changes ownership through being sold to the sitting tenant does not mean that the local authority will have to build another house to replace it. There is no need to replace a dwelling simply because the family who have occupied it hitherto as tenants now occupy it as owners. Again, the noble Baroness, Lady Birk, said that only the best and most attractive housing will be sold, but experience shows that this just is not so. A wide variety of property is bought—
§ Lord BELLWIN
I will give way in a moment, but I want to conclude what I have to say on the right to buy, because time is pressing and I do not have much time available. I speak from my own personal experience in Leeds. When we had sold some 2,000 to 3,000 houses, we carried out a survey to find out where they had been sold. Was it true that they had been sold only in the better estates? The record was there, and is there, to show that that was not so. They were sold on an incredibly broad spread of housing, of all the different standards in the city. So I will not have anyone tell me that that is not so. The tenants of the most desirable residences are clearly those who are least likely to transfer to older accommodation, so that sales of such property to sitting tenants have much less effect on opportunities for transfer than some have suggested. I will give way to the noble Baroness.
§ Baroness BIRK
Yes, my Lords, otherwise we shall be past the point of no return, which perhaps is the noble Lord's purpose. The Minister said that he had experience of Leeds where there is a social spread in terms of property sold. Very well; the noble Lord has his figures 129 and surveys. However, may I point out to him—we can go into it at the Committee stage—that the figures in the survey I have seen do not show this. They show that in the better outlying districts like Moortown, with which the noble Lord is familiar, the bigger sales have taken place. The same is true in London and everywhere else.
Finally, on the question of the right to buy, which the Minister has very obligingly been rattling through, may I say that what we are complaining about is the compulsion to sell. We are not complaining that people should have the right to buy. We are saying that local authorities should not have imposed upon them an overall compulsion to sell. This has been criticised on all sides of the House this afternoon and evening, and the noble Lord has not had much support from his own Benches.
§ Lord BELLWIN
My Lords, I will come back in depth to this at the Committee stage, but when the noble Baroness speaks to me about districts in Leeds, may I ask her to tell me how many houses were sold in Middleton, Belle Isle and other parts of the city which she may or may not know but which I assure her are inhabited solely by those whom she, not I, would call working class people? I have forgotten what the noble Baroness's other point was about—
§ Baroness FAITHFULL
My Lords, the noble Baroness said that my noble friend is not supported by the people sitting behind him, but may I assure him that he is so supported.
§ Lord BELLWIN
My Lords, I thank my noble friend very much for what she has said. May I say something about waiting lists? They are used as an argument to try to justify something which is unjustifiable. I think we should look very carefully at waiting lists, I refute entirely the argument that the right to buy will add to the length of waiting lists, for the reasons I have given. But waiting lists alone do not by any means represent an adequate measure of housing 130 need. The lists contain a variety of applicants, many of whom could in no way be said to have a priority housing need. Many of them are already well housed elsewhere but have not bothered to let the council know. Many want something smaller, now that the children have grown up and moved away. Many want something more modern, or something lower in rent.
The permutations are many and clearly illustrate the folly in using blanket numbers of people on so-called waiting lists. It is emotive, certainly, but it is also thoroughly, and in some cases mischievously, misleading. There have been dramatic alterations to the numbers on waiting lists where these have been thoroughly analysed. If the criteria is solely genuine housing need, within a definition of none or simply bad housing, many lists would be substantially reduced. I do not want to quote percentages because they could be considered to be overdramatic, but I say that the list would be decimated in terms of genuine housing need.
Let me try to deal with some of the individual observations made by noble Lords. The noble Lord, Lord Evans of Claughton, asked why private tenants should not have the right to buy. I would answer by saying that there is a world of difference between giving rights of this kind where public money has been involved and where no public money has been involved. To me this is the key. Many other arguments were raised in another place. But at the end of the day, on the one hand there is public money involved, while on the other hand no public money is involved. To me that is the critical difference.
The noble Lord was concerned about whether we should have Clay Cross martyrs if local authorities refused to sell. This will not arise because the regulations, as they will be laid down, will give to the tenant the right to buy. When I introduced the Bill I said that this was a reserve power. If authorities do not agree to carry out the law, tenants will have the right to circumvent them. We hope that it will happen only rarely, and from my experience of local government I think it will be rare indeed, despite what has been said in some places.
131 I think that the noble Baroness, Lady Birk, the noble Baroness, Lady Denington, and other speakers were concerned about the right to buy so far as it affected the elderly and the disabled. One hopes that everyone will be concerned about that. We recognise the genuineness of much of that concern and I pay tribute to the sincere and, by and large, responsible way in which it has been expressed. The treatment of old people's dwellings in the Bill is a matter of judgment. It involves balancing community interests against the interests, or in this case the rights, of individuals. That is a balance which we have tried our best to strike correctly, as I hope that even those who would have struck it differently themselves will agree.
When the Bill was being prepared last year some of the authorities and organisations which we consulted argued at the one extreme that the right to buy should not apply to any accommodation at all which was suitable for old or disabled people. Some still so argue. This would be an extremely wide exclusion. On the other hand, some people argued very strongly that the exclusion even of accommodation which was highly adapted for their special needs would discriminate against them unfairly because of their disability or their age. We decided that the right way to deal with the problem was to identify the dwellings for which there was an overriding need in the community and to exclude them from the right to buy.
In the case of the disabled, I believe it is right that the exclusion should apply only to dwellings that are substantially different from ordinary ones. The Government cannot accept that a disabled tenant, whose home may have some unusual fixtures or superficial adaptations yet is essentially a normal house or flat, should be prevented from buying. That would be to penalise him for his disability. Similarly, elderly people's housing is to be excluded only if it is a group dwelling with a social service or where special facilities were provided in close proximity, entirely or mainly for assisting the occupants. Our judgment is that the elderly must not be deprived of their right to buy when their accommodation has little or nothing to differentiate it from general needs accommodation which 132 may be equally suitable for occupation by tenants of any age.
Before I leave the right to buy argument, may I return to the point which was mentioned by the noble Lord, Lord Evans of Claughton, the noble Lord, Lord Stewart of Fulham, and the noble Lord, Lord Hatch of Lusby, namely, the independence of local authorities themselves to decide. This is a very important point, and I feel I cannot leave the subject without commenting upon it even though I am trying so much to hurry on with what I have to say. Your Lordships are rightly jealous of our democratic rights, but there are bound to be instances where it has to be accepted that national policies must dominate over local policies. All parties have subscribed to this and in their turn have criticised it. There is no shortage of precedent, but regrettably it has been made even more unavoidable in this instance by the rigid, doctrinaire attitude of certain Labour controlled authorities resolutely pursuing political dogma, as they see it, and seeking to preserve intact their public sector, regardless of the cost to the individuals wanting to buy their own homes. The opportunity for council tenants to buy their homes was a plank in our election manifesto, and we intend to fulfil that promise as quickly as possible for the 2 million tenants still denied the opportunity because their local authorities are refusing to sell.
May I say here how much I, too, would like to join in with what just about every other speaker has today said, in paying tribute to the right reverend Prelate the Bishop of Newcastle for what was a splendid maiden speech by any standards. Many of the things which he said are so apposite, but I would ask him to excuse me, as I ask all noble Lords to excuse me, if I do not go into detail tonight. There will be plenty of opportunities to do so, and I am sure that all noble Lords and I will be glad of them.
That covers the points I wanted to make about the rural areas which were a cause of much concern. May I now refer to some of the points which were made by the noble Lord, Lord Hatch of Lusby. Well, really? I think that he pinpointed the whole thing so far as he was concerned. I suspect, so far as many noble Lords opposite are concerned, and certainly so 133 far as I am concerned, he pinpointed clearly where he stood when he said, and I wrote it down very carefully, that what he wants is "the social ownership of private rented accommodation". That, I think, tells the whole story. That is what he wants: "the social ownership of private rented accommodation". I should have thought that was pretty much the death knell of any landlord in the private sector who might ever contemplate letting his house or accommodation become available to rent. I really do not know where to start to answer the noble Lord, Lord Hatch, because his remarks were so blatantly political and, if I may say so, contributed very little to the debate.
I was very grateful to my noble friend Lady Faithfull for what she had to say and indeed to my noble friend Lord Sandford for his encouraging remarks. As the noble Lord, Lord Stewart, said, perhaps there were not so many of them today but when they came they were all the more welcome for that.
What can I say to—I was about to say, except that I do not think it would do him any good, "my noble friend Lord Janner", with whom I regularly exchange debating points on the subject of fair rents and all that goes with them. We do that at regular intervals and I really do not know whether I can help him very much. I sincerely respect his great concern for the matters which he raises so regularly and I appreciate the manner in which he does it. I am sorry that I cannot give him more comfort in what I have to say today, but I tell him now that his remarks have not gone unheeded, despite the long period of time over which he has made them—but who knows? I shall have to let it go at that for the moment and I think he follows me.
I am trying to come to a conclusion now, but on the subject of the private rented sector that is a most difficult area of housing. The noble Lord, Lord Stewart, is quite right; the decline has gone on for years. We could differ (as we clearly do) about the cause of it, and we also apparently differ on what would make it better. I am very sad about the shorthold provisions because I believe that is a genuine attempt to make better a situation which is declining so much.
Ignoring my notes, this is how I would sum up. If, in fact, the provisions contain 134 some of the fears which trouble noble Lords opposite, as they do—and I accept the basis of some of their fears—is it not at least worth trying to do something? What is the good of trying to protect prospective tenants who will never become tenants if the property does not become available on the market? We shall never have to worry about what some wicked landlord will do to them because they will not have any accommodation. These arc the same tenants who today do not have any accommodation, who arc waiting for someone to bring something forth. They have nothing, and yet there is this great concern to protect them from something that might happen—yet at the present time there is nothing there for them in the first place. If there is an attempt at least to tackle something, is it not far better to do that rather than simply going on and saying "Nothing can be done; that is the end of the private rented sector". To me that is not the solution and if there are indeed ways in which we can improve this Bill in Committee by all means let us look at it. I can assure noble Lords that we will treat it accordingly.
The only thing that the noble Lord, Lord Janner, said that really disturbed me was his remarks about controlled tenancies. Nobody can possibly defend a situation where landlords can be expected to charge the same rents today as they were charging in 1956—£1 or £1.50 a week. How can one say that it is wicked and wrong to bring people within the Rent Acts because they would then have to end these controlled tenancies? I cannot accept that argument in any way at all. It is not one minute too soon for these tenancies to be brought within the regulation of the existing procedures for fair rents.
I will not go on about leasehold reform. It is a subject on its own and we shall certainly be going into it at great depth later, just as we shall about multiple occupation, homelessness, and so on. I am tempted to go on at some length on that because the right reverend Prelates who raised this, and indeed other noble Lords, were quite properly anxious about it. I share their anxiety, but I feel that we have some positive and firm proposals that we are bringing forth in the Bill which really will help the situation and they will know that we have taken this on at a fairly late stage in the life of the Bill 135 because we accept entirely that this is a matter which we cannot skate over at all.
I think I should make one or two observations on what the noble Lord, Lord Hylton, said. I would just tell him this when he gives me a left-handed pat on the back because Leeds was only giving 15 per cent. discount on the sale of its council houses. I can tell him that the only reason why that was done was, first, that a Labour Secretary of State would not allow them to do any more, and, secondly, when the stage came when he was not there the Liberal minority on the council also prevented us from doing anything more. So although I should like to accept his word of praise, I have to tell him that we should have liked to give more discount and sold more houses. He will see how much he and I differ on this whole subject, which I am sure will not surprise him one bit. When he talks of the social effects of sales he will have to forgive me if I tell him that I am totally unimpressed. I have seen the effects, not now for a year or two but prior to that for 13 years, and I found them to be okay. I will settle for them any time.
When he asks whether it is social justice to sell, I would ask him whether it is social justice to deny the right of people to own their own homes. Clearly we shall get nowhere with it tonight, although I should like to say to him that on one or two of the points that he raised I am glad to tell him that we have some movement in the direction he is wanting to take, but rather than my going through it at length now perhaps he will allow me to do so in writing and later on by discussion, so that any other noble Lord who is interested may take up the points.
Because of the lateness of the hour perhaps noble Lords will forgive me if I do not go into detail. I should have liked to say more to the noble Lord, Lord Stewart, particularly. I am grateful also to my noble friend Lady Macleod of Borve for a short but helpful contribution. I hope we shall be able to help her in some of the concerns which she has about hostel accommodation. We shall be trying, just as we shall also for my noble friend Lady Vickers, who also clearly has interests in this whole matter which are important.
136 I do not think there is much more I want to say at this stage. We have had a wide-ranging debate covering housing policy generally as well as the particular proposals in the Bill. I have spoken at length about what we seek to achieve and your Lordships would expect me to do no less. Despite the efforts of successive Governments and the expenditure of vast amounts of public money, housing problems remain among the most intractable in our society, as the concern shown by your Lordships today has amply demonstrated. I do not suggest that the Bill can be a panacea for all the ills of our housing situation, but it will make radical and important changes in housing policy which will go some way towards solving the more serious problems. I commend it to the House as a landmark in housing legislation and a foundation for the future, giving people what they want rather than what politicians and public authorities think best for them. I ask your Lordships to give the Bill a Second Reading tonight.
On Question, Bill read 2a, and committed to a Committee of the Whole House.