Housing (Amendment) (Scotland) Bill (Hansard, 17 December 1981)

§ Lord Lyell
My Lords, I beg to move that this Bill be now read a second time. This is a short, fairly modest Bill but it is necessary to increase the amount which the Scottish Special Housing Association can borrow in order to finance its normal capital expenditure. The present limit on the Scottish Special Housing Association's borrowing is £500 million and their present commitments seem likely to reach £485 million. It is likely on present form that they will reach their present limit early next year, and the Bill before your Lordships today is needed for that reason. The Bill increases the limit to £600 million, and opportunity 292 has been taken, as was the case with previous similar Bills, to provide that my right honourable friend the Secretary of State may further increase that limit by means of an order subject to the affirmative resolution procedure in another place but always within the overall limit of £750 million. As your Lordships will be aware, the SSHA for more than 40 years has enjoyed an extremely high reputation throughout Scotland in respect of all aspects of its house building and its management work. I believe your Lordships would wish to allow that work to continue, and accordingly I beg, to move that this Bill be read a second time.

§ Lord Ross of Marnock
My Lords, I think we are all grateful to the noble Lord, Lord Lyell, for moving, this important Bill. He said it was "modest". I do not think it is, unless of course it is a reflection on the sums of money that are just bandied about by Governments nowadays. Here we are giving, an association the right to spend another £250 million. I would not have called it "modest", but it is important, and it affords us the opportunity to pay a tribute to the Scottish Special Housing Association after some 40 years. I think it was in the 1930s when Walter Elliot—and I am glad to see the noble Baroness, Lady Elliot, in her place—put on the statute book the Act creating the SSHA and gave it the right and the money to build houses where nobody else would build them—in the Highland areas, in the Islands, in country areas and towns and cities—though they could only build in towns and cities if they had the agreement of local authorities there.
I remember opening their one hundred-thousandth house in Glasgow and paying my tribute then to a series of very fine men who had headed that organisation, men in public life and in the Civil Service too. The quality of construction and the efficiency of management speak for themselves, and I think it is rather sad when I read some of the things in this particular Bill, because it is said they will probably run out of money. Of course they are governed by the Tenants Right Act: they have to sell off their houses to them; and, remembering that many of these houses were built in areas which are very isolated and where they will not be able to be replaced by other tenant-occupied houses, I think it is rather a pity they were included in that 1980 Act. Could the noble Lord tell us exactly what the sales receipts will have amounted to at the present time, and also up to the time when they are likely to run out of money in the early part of next year? I shall be grateful for that information.
The fact is also mentioned that the amount of money required by the SSHA depends on the annual deficit. There was a time when they received exactly the same subsidies as local authority houses but, unlike local authorities, the association could not dip into the rate funds in order to reduce their rents still further. That meant there was a deficit, and that deficit has been made good by the Government. There has been a change in how this is done, because there is no question of calculation of subsidies in respect of each individual house, as there was in earlier years.
293 There was a time when every time you built a house the aggregate subsidy went up because you were letting houses at rents below economic rents. That was facing the facts of the economic situation; and when I read in the memorandum that— …present public expenditure plans do not envisage an increase in the total of these subsidies…", it can only mean two things, and probably means both: First, fewer houses are going to be built by the association, and, secondly, the rents of their houses will be increased. Of course this is all part of the Government's plan, and I think it is to be regretted that the work of the SSHA is being curtailed. It has proved its worth over these 40 years and more that it has been in operation. I certainly wish it well and would not for the life of me seek to oppose this Bill and see the possibility of it running out of money in the early part of next year.
There is a second purpose in the Bill, quite apart from the purpose of providing additional money. There is a point about clarification of the law. I wonder whether the noble Lord, Lord Lyell, could tell us exactly what the question is that has been in doubt, because I see in Clause 1(2) the words: … enabling or assisting the Association to carry out such other works in connection with housing accommodation provided or improved by them". What has been the snag there? I know that the association is doing wonderful work at the moment in Glasgow. They are participating in the clearance, rehabilitation, rebuilding and reconstruction of the East End of Glasgow. That is a tremendous thing that is going on, and I believe the Secretary of State for the Environment has only just discovered that we have been doing this in Glasgow for some time. He has even been up to see it and thinks it might be well worth doing somewhere else.
One of the invaluable organisations which is participating in this is the SSHA and I hope that work is not going to be cut down. Is it in relation to some of the work there that they found they required this further power to provide not just houses but to assist the association to carry out "other works"? Could we be given a little information about what these "other works" are? Apart from all this, I certainly agree with the noble Lord, Lord Lyell, about the Bill. It may be short; he may consider it to be "modest"; but I consider it to be very important.

§ Baroness Elliot of Harwood
My Lords, I should like to say just a word or two to thank the noble Lord, Lord Ross, for his reference to my husband, because it was he who put through the original Bill. If I remember rightly, it was the first Bill that gave an independent housing authority—controlled by the Scottish Office but still not attached to local government authority—the chance to build houses, as the noble Lord, Lord Ross, has said, in parts of Scotland which were difficult of access and expensive to build in, and so on.
But it went much further than that, because of course it also covered houses to be built in cities with the acquiescence and the authority of the Scottish Office and the money for them came from central funds. It is encouraging to think that an Act which I believe 294 was passed either in 1936 or 1937 should still be so useful today, because while there is a great deal of legislation we could do without, this is one of those pieces of legislation that has an interesting past and a very important future. I support wholeheartedly what the noble Lords, Lord Lyell and Lord Ross, have said because I am sure this is a useful Bill and I am glad that it is to be continued.

§ Lord Mackie of Benshie
My Lords, like the noble Lord, Lord Ross of Marnock, and the noble Baroness, Lady Elliot, we must welcome this Bill; and I must repeat the words of commendation of the noble Lord, Lord Ross, and also his great praise for the work that has been done by the Scottish Special Housing Association over very many years. I have in the past criticised the quality and beauty of some of their schemes but, taken on the whole, there is no question that the Scottish people generally are greatly benefited by the Scottish Special Housing Association.
It is very difficult speaking after the noble Lord, Lord Ross, because he has said it all, but like him I should like to expand on the sinister words, present public expenditure plans do not envisage an increase in the total of these subsidies. If he could tell us how this will be achieved I should be grateful.

§ Lord Drumalbyn
My Lords, may I also welcome this Bill very much and briefly comment on what the noble Lord, Lord Ross of Marnock, has said in regard to the special works and additional works. If I remember rightly, the Scottish Special Housing Association was to build managerial houses—

§ Lord Ross of Marnock
That is recent.

§ Lord Drumalbyn
At any rate, my Lords, that is a very special function, and I should like to ask my noble friend whether it is anticipated that that will still continue. It seems necessary, when you are seeking to found new industries, to provide houses for them. I wonder whether my noble friend could refresh our memories on the question of the purchase of houses. My recollection is that these houses have not before been offered for sale by the Scottish Special Housing Association. The noble Lord, Lord Ross of Marnock, nods his head, indicating that they have been offered for sale—

§ Lord Ross of Marnock
My Lords, will the noble Lord allow me to intervene? We are coming on to another very important order when we can discuss this very fully. But there has been a certain measure of frustration at the Scottish Office, because the Bill on tenants' rights has been held up in respect of certain of their houses. However, I can assure the noble Lord that they are in the Bill. One of the things that worries me is the houses that were built for executives, young people, who may be there for only two or three years. What is the use of building houses if they can be sold to a sitting tenant and if the purpose is lost?

§ Lord Drumalbyn
My Lords, if they are sold to a sitting tenant, they will be lost if the sitting tenant 295 ceases to be an executive. Is that what the noble Lord means?

§ Lord Ross of Marnock
No, my Lords. We do not want to go over the whole subject. But a sitting tenant can buy an SSHA house, provided that he meets the qualifications, in the same way as he can buy a public authority house. I remember agreeing to their building houses to be let at economic rents, and very desirable places there were, too. But the purpose for which they were built will be lost if the sitting tenants can buy them and sell them to whoever they like at a very considerable profit. This is one of the weaknesses of the Bill on tenants' rights. But the short answer to the noble Lord's question, which I am sure will be confirmed by the noble Lord, Lord Lyell, is that they are affected by the Bill on tenants' rights, in the same way as any other public sector house.

§ Lord Drumalbyn
My Lords, I am much obliged. I am sure that my noble friend will deal with this matter in a later order. I need not pursue that any further, but I would reiterate the need for us to know what are the new purposes, because that will be an indication of what will be covered in paragraph (bb).

§ Lord Lyell
My Lords, I am sure that the whole House will be grateful for the reception that has been given to this Bill. I am convinced that the Scottish Special Housing Association will read with the greatest of pleasure the tributes that have been paid to that organisation, and to all the work that it has been doing for well over 40 years. According to the memory of my noble friend Lady Elliot, it must be 45 or 46 years. But, certainly, we all agree that the Scottish Special Housing Association has done, and we hope will continue to do, enormously valuable work throughout Scotland. I am very grateful for the support of my noble friend Lady Elliot. I should have known that it was her husband who instituted the Scottish Special Housing Association, but I regret to say that I was not aware of that fact. However, I am very grateful to noble Lords who have explained it to me.
The noble Lord, Lord Ross, asked me a number of questions, with two main ones. I hope that I shall be able to give him reasonable satisfaction on them. He asked me whether I could give an approximation of the figures of sales. We understand that gross house sales of Scottish Special Housing Association property during 1981–82 are estimated at being around £17½ million and that about two-thirds, or 66 per cent., of this total is likely to be financed by building societies and other private sources. So that sales receipts, net of lending to tenants, would amount to about £10 million, which should be available to the Scottish Special Housing Association to reduce its borrowing from the National Loans Fund. But I would qualify that—

§ Lord Ross of Marnock
My Lords, can the noble Lord say how many houses?

§ Lord Lyell
I am sorry, my Lords; I am afraid I cannot tell the noble Lord that. If he will bear with 296 me, I shall finish explaining the figures. No precise estimate of the sales in future years has been made, but we believe there is every likelihood that these sales will continue at about the current level for the foreseeable future. I am afraid I have no information on the precise number of houses that have been sold. Did the noble Lord want the figures for the whole of Scotland, or for any particular area?

§ Lord Ross of Marnock
Just throughout Scotland.

§ Lord Lyell
I am sorry, my Lords, I do not have that figure. As soon as I can obtain it, I shall let the noble Lord know. If I obtain it before I sit down, I shall give it to him; otherwise, perhaps I may give him a brief written note before the festive season over-takes us. I am pleased to say that the winged messengers have now produced the information. The figure is thought to be around 2,000 houses in this year, which I presume means in the current financial year 1981–82, or the calendar year. But, at any rate, it is 2,000 houses in this year. I hope that that answers the first half of the noble Lord's question.
The noble Lord, Lord Ross, and my noble friend Lord Drumalbyn asked about the fascinating paragraph (bb), and the noble Lord, Lord Ross, was wondering about the carrying out of "other works". I think that the "other works" refer to what we call environmental improvements, which I expect will be clear to the noble Lord. So far as I am concerned, it means non-capital expenditure on repairs to existing property. I am advised that environmental improvements are not directly related to new housing development, so they will be the "other works" which are mentioned in paragraph (bb).
I am advised that we have received some legal advice which indicates that there is some doubt surrounding the continued effect of paragraph (bb); certainly, there was some doubt about the continued effect of the paragraph in the 1968 Act. The Scottish Special Housing Association will be very grateful to receive the tributes that have been paid to them from all sides of your Lordships' House today, and I hope that I have said enough to answer the bulk of the questions—

§ Lord Mackie of Benshie
My Lords, would the noble Lord please answer the question I asked about how economies are going to be effected which will keep down the subsidies to the present level?

§ Lord Lyell
My Lords, I have no specific information on that point. The winged messengers have been unable to convey any information to me about it. Perhaps I could inquire and write to the noble Lord as expeditiously as I may.

§ Lord Mackie of Benshie
My Lords, one of the points which needs to be brought out in the debate on Second Reading is how this money is going to be saved. If subsidies are not going to rise, money will have to be saved somewhere. If, however, the noble Lord does not know the answer, of course he may write to me.

§ Lord Ross of Marnock
My Lords, I wonder whether the noble Lord would include me in this correspondence. I asked him whether this meant that 297 fewer houses are going to be built and that rents will be increased. Will he deal with that point, too, in the letter?

§ Lord Lyell
My Lords, I am afraid I do not have that information. Therefore I shall have to include the noble Lord, Lord Ross of Marnock, in the correspondence to the noble Lord, Lord Mackie of Benshie. I beg to move that this Bill be now read a second time.