§ Debate resumed.
§ 4.4 p.m.
§ Lord Roberthall
My Lords, perhaps we can now return to another, much longer-term problem. The House is indebted to the noble Lord, Lord Vaizey, for being given the opportunity to discuss this important matter. Let me begin by adding my congratulations to those of the noble Lord, Lord Robbins, to the noble Lord, Lord Coleraine, He will hardly believe me when I say that I hung on every word that he said. I am afraid that this may sound very fulsome, but the 1053 fact is that, for the reasons he gave, I was forced a few years ago to become the owner of a very long lease and I suffered all the disadvantages which he has so eloquently and with so much experience explained to us. On a slightly personal note—but I am sure that the noble Lord will be interested—I was so much irritated by the situation that I found the ground landlord and managed to buy the ground lease from him, because a lease is worth very little indeed to the ground landlord, whereas tenants are personally interested in such matters. I managed to persuade the other tenants to form a tenants' association and since then we have overcome all of our troubles.
I return to the wider issues raised by the noble Lord, Lord Vaizey. I do not want to say very much on the question of the sale of council houses. My own view is that, subject to a small limit which the council ought to sell and to another small limit which the council must retain because of its obligations in certain cases to find accomodation, this is a matter that might be left to the local authority; that is, the decision about which way its policy should go. If the constituents want a great many sales, then they can have them. However, that is just a passing comment.
I want to speak mainly about the question of the Rent Acts. As my noble friend Lord Robbins has already informed the House, this is a question about which a very large number of economists—who, especially at the moment, are disagreeing like mad on many matters— are very much agreed. The Rent Acts are a real anomaly. There is nothing in the whole economic system which corresponds in the least to the market for rented houses. It was orignally introduced in the First World War. In a war everyone has to make sacrifices, and often the best way to do that is by rationing. It is very difficult to ration houses except where they are to be used as billets. The Government felt that they had to do something about it; the owners were in a monopoly situation and they were prevented from exploiting the monopoly. That was the foundation which left this extraordinary legacy from which we are now suffering. They did not get rid of them in the inter-war period—I suppose that they could have been introduced again for the same reasons. However, it is now approximately 37 years since the end of the last war and the matter has become increasingly complex.
In trying to prepare myself for this debate, I went to the Westminster Council Housing Department and obtained some of the literature that they provide. I was absolutely appalled at the large amount of it. There was a large table which was simply covered with pamphlets. I had intended to take one of each, but I felt that I could not face doing so and, therefore, I took only about seven. They are admirable pamphlets. They are very well drafted and, as your Lordships will hardly be surprised to know—I am sure that the noble Lord, Lord Coleraine, will not be surprised—a great many of them conclude by saying that the position is not altogether clear and that it is hoped, therefore, that people in doubt will get legal advice and that they will probably be able to get legal aid to assist them.
To summerise what has been said so much better by the noble Lord, Lord Robbins, the present Rent Acts 1054 aggravate the situation. They diminish the supply and they frustrate the demand. The result is completely unclear. The community is divided into those who have what used to be called, until a short time ago, a protected tenancy, and those who want rented accommodation and who find it extremely difficult to obtain. In some towns where there is not a bad housing situation—for example, in the university towns—people go out of their way to let rooms to non-residents because non-residents cannot get protection under the Act; they are rather nervous anyway and they do not like to go round and get an assessment for a fair rent. So the people who are there because they have had to change their jobs and would like rented accommodation are frustrated.
The result is that the situation is now very complex indeed. I do not think that it would be possible to get rid of the Acts and the present situation in one blow. I think that it will have to be phased out very carefully, with particular attention being paid to the question of security, which I notice the noble Lord, Lord Coleraine, mentioned.
But more important than the care with which the situation is phased out, is that I do not believe it would be acceptable to a great majority of the community if the Rent Acts were dropped at a time when there is still a very severe housing shortage. I think that the Government can take a certain amount of credit for the Housing Act 1980 in this respect. I agree with the noble Lord, Lord Vaizey, rather than the noble Baroness, Lady Birk, on this. The Government moved in the right direction by easing the position for people who wanted to let rooms in housing which they occupy and by the shorthold tenancy. But although the Government have moved in one direction with which I would agree, they have moved much further back in an opposite direction, because they have cut the allocation for house building by between 40 and 50 per cent. since 1979. If we are to have a satisfactory end to the Rent Acts, it is essential that the supply of houses should be increased. We are going back on the whole housing situation because of the severe restrictions on new council house building.
At the same time, the problem of the deterioration of existing stock is getting worse. So the value of a protected tenancy will become greater again and the difficulty of finding rented accommodation will also become greater. From this point of view, the programme of the SDP and the Alliance should certainly commend itself much more than that of the Government, because in its first modest stimulus to the economy —-and to start with it has to be a modest one it intends to do a substantial amount in the construction trades and will pay particular attention to the question of rehabilitation and modernisation of the large existing stock. I hope that it will also do something about councils owning a great many houses and doing nothing about them—not modernising them or letting people live in them in districts where there is a bad housing shortage and thus giving an invitation to squatters. No one likes to do anything about squatters in that situation. It is altogether a most unfortunate affair.
To sum up, in the long term we ought to have a plan for phasing out the Rent Acts, and in the immediate future we should pay much more attention to improving and modernising the stock of houses.
§ 4.14 p.m.
§ Lord Northfield
My Lords, as one who is involved actually in selling off Government-owned houses, I want to say a few words and to give the House some of the facts and figures and the opportunities that this creates for tenants. I would introduce what I have to say in this way. The noble Lord, Lord Vaizey, hinted at the revolution which is happening under our feet. The average salary and wage-earner has only two ways of getting Government help in accumulating capital. The first is that he pays into a pension fund, if he is one of those exempt from the state scheme, or into life insurance. Those two kinds of ownership are now transforming our ownership of capital assets in society—a revolution of which, in my view, we are taking no heed. For example, we do not realise that pension funds buy four-fifths of Government stock, and that the Post Office pension fund has £½ million a day coming in and is almost finding it hard to know where to invest. A similar revolution is happening through sales of houses and the Government subsidy that goes to them in tax relief. This is spreading home ownership and capital, and I very much welcome it. Just as over half the ownership of shares quoted on the Stock Exchange is in the hands of pension funds and life insurance companies, so more than half of our housing stock is now in individual ownership.
I want to talk about my experience of this in Telford. People perhaps do not realise that Telford New Town is a huge undertaking. We are building there a city the acreage of Coventry. This is no pocket handkerchief size operation. When it comes to this issue of selling houses, we are lucky in that we have plenty of public sector houses. I am, luckily, excused the party warfare over the issue of when it is right to sell. Indeed, I may say to my noble friend on the Front Bench that we are not selling old persons' bungalows because they are in short supply, and we have taken what I think is a proper decision to hold those back and simply to sell the houses. I am sure that she will approve of that, just as the noble Lord on the Front Bench opposite will approve of it.
What, then, is our experience? We have 11,000 houses and we have already sold 1,000. We are selling at the rate of two a day, completing two every day. I might say to the noble Lord, Lord Vaizey, who raised this issue, that that is a technical reason why we cannot go much faster, and I should like to explain it to him another time. I think that perhaps the basic system is not understood in the House. Tenants receive a 30 per cent. deduction from the valuation if they wish to buy. That deduction can rise to 50 per cent. if they have been tenants for a very long time. But there is a floor price—the original cost of the house in the first place—below which they cannot go in buying their house.
What does this mean? The opportunities for tenants are really quite extraordinary. On our earlier estates, built 10 or more years ago, the average selling price, with a 30 per cent. discount, is between £5,900 and £6,500. Many, of course, have more than a 30 per cent. discount. Of course, some houses are selling at more than £6,500—say, at £7,500. Let us look at the advantage of this to tenants today on those earlier estates. If we take their mortgage payment on these figures—and, as I say, they are buying 1056 at £5,000, £6,000 or £7,000—less the tax relief that they receive (the 30 per cent. tax relief that I started talking about; the subsidy to home ownership that we give through the taxation system) on these earlier estates it is incredible that their mortgage payments are no more than between £45 to £60 a month. But, if they stayed in the public sector, the rents of those houses would be now between £60 to £70 a month. That is by any measure quite a bargain in present-day society. With rents due to be increased a good deal further in July, the disparity on these earlier estates between what it costs to go on renting and what it costs to move over to home ownership will become even greater. The bargain will look even better.
On later estates, built within the last 10 years, of course, the houses are much higher in price. We now have houses built at considerably greater cost, double and treble the cost compared to those earlier figures. But I have done some calculations on our average houses and, again, the comparison bears out. If some of our later tenants, buying more expensive houses from us, take out a 100 per cent. mortgage, their mortgage payments are now between £100 and £110 a month. But if they kept on renting, their rent would be something over £80 a month, and it will go up even more with the recently announced rent increases due to Government withdrawal of subsidy. So even on the later houses the bargain is worth having. For something like the same price as the rent, you get into home ownership. I believe in this passionately and am pressing it as hard as I can, because we are lucky to have a surplus of houses and can introduce people to this form of ownership.
What effect is all this having? On our earlier estates, where we had got to a point where it was difficult to let some of the houses, the transformation is quite extraordinary. On our first estate, which was beginning to become a bit run down, we have already, on what one might call the worst houses in some respects—they are all absolutely first-class houses inside, but they had as an estate become slightly frowned upon—sold one-third and we shall soon be up to selling half of them.
Now people spend their weekends painting, clearing the garden, putting up fences and all the rest of it, and you see the bright smiles on their faces. You have to put up with the fact that they go to immense lengths to express their own personality on some of the outside decorations. But why not? It is a free country, and I am delighted to see it. I put up with the plastic stone and the gnomes, and all the other things, because it is a price worth paying to introduce people to this form of capital accumulation.
I come to one other point before I wind up. We also are now starting in my town the system of equity sharing. I should like again to tell Members of this Chamber our experience. Equity sharing is new in Britain to some extent. It works by our selling half the equity, or the builder in this case selling half the equity of the house. We, the new town development corporation, buy the other half, and we rent the other half of the house to the purchaser. He is buying half his house and renting half his house, and he can trade up. He can begin to buy another 10 per cent., or 20 per cent., until he finally owns 100 per cent. of his equity.
1057 This is a system which my new town is pressing hard. We finally agreed, on behalf of the new towns, the system of legal agreement which the building societies would accept in order to advance mortgages on the 50 per cent. that the purchaser is buying. This is helping developers to sell their houses. We have 79 applications already. If I may say one thing to the noble Lord without breaking the Addison Rules, if we need some more money to press on with equity sharing, I hope the noble Lord will be helping me along, because we have to buy half the houses to get the system going.
To take the small starter homes which today are selling in my town at about £18,000, if a man buys one with a 100 per cent. mortgage from the builder, in this case his mortgage payments a month are about £150. But if he does it on this new system of buying half of it and renting half, his rent and the mortgage together—half on mortgage, half rent—is about £100, or £102, something like that. So for a tenner a week he is getting his foot into home ownership and he can gradually build on his 50 per cent. up to 100 per cent. It is a price worth paying and it is a marvellous way to get people accustomed to the idea of owning their own homes.
What do we learn from all this? I see I have only one or two minutes left. It has one disadvantage which I must not disguise. If you sell too many in the circumstances and have too many empty ones on the market, it can reduce the general price and value of these houses. As a result, some people who perhaps have bought their houses and who have moved to a job in another town have difficulty in selling, because the price is not holding up due to flooding of the market. We must not go too fast. We must be left to judge carefully about the pace at which we go, otherwise we begin to have a bad effect on the mobility of labour, and a bad name with the people we got into buying houses in this way in the first place.
The good effects outweigh those bad effects. First, we are getting a proper social balance in the town, a marvellous difference on particular estates, and in the pride that people take. Secondly, we are getting, as the noble Lord, Lord Vaizey, and other noble Lords have said, the great advantage of the spread of capital ownership. It helps the saving habit because people can see the bricks and mortar, the asset into which their personal saving is going, and so the whole habit of saving is reinforced and is a good one.
Thirdly, we get the pride in ownership. This shows as you go around, and not only in what you see. I remember when the Minister of State, Mr. Stanley, came we called on one of our tenants who was buying. Mr. Stanley actually helped the tenants to start painting the stairs. They were there with the paint pot. I swear I had not arranged all this, but the point was that the Minister came along and took a hand in helping to paint the stairs. This sort of thing is going on all round now, and how wonderful it is to see.
I come to my final point, and I must not overstretch my welcome. It is important for one final matter that has not been touched on in this debate. People today want identity. This was drilled into me by Eric Lyons, who recently died. He was one 1058 of the best of the 20th century architects. He said to me that architecture is about sense of place. What people are doing more than anything in buying their own houses, apart from saving, pride, and all that, is that they are searching for identity in an anonymous society. They can express themselves in this house which they own, which they can arrange as they want. The biggest battle today is to give people that chance of expressing themselves and seeking particular identity in this anonymous society that is so full of estates, bus queues, and all the rest of it.
This is a battle which I have to take on with the developers in my own town. I have fought them over the years—friendly fighting; we do not fall out because I want them to build more and more in my new town—and I try to tell them all the time that they must create housing with identity. Let us stop the serried ranks, and the estates without character. I have proved in my town anyway that (a) if we can let people buy their own houses, and (b) encourage developers to build houses with particular identities, the sales improve, and even the developers come back to me and thank me for pushing them further up the market than they ever really intended to go. Those are just a few words of experience in a short time about one new town. I am sure it can be mirrored all over the country, but I must say that I have immense fun in doing it and I am very satisfied at the social effects that the experiment is having.
§ 4.27 p.m.
The Lord Bishop of Southwark
My Lords, I should like to thank the noble Lord, Lord Coleraine, for his knowledgeable and helpful maiden speech. I began by thinking that I would share some sympathy with him because I made a maiden speech on this same subject of housing almost exactly two years ago, but I quickly realised that there was no need for sympathy but only for admiration. He knows a great deal more about the relationships of private landlords and tenants than the right reverend Prelate the Bishop of Norwich says I know about council housing. I wish I did know a lot about it, although I suspect that if I knew a lot about the finance involved I should be rather a boring person at times. It is a winsome characteristic of his, if I may just say this, to pay his friends generous compliments which often have rather little relationship to reality.
I have recently returned from my first visit to New York. I suppose I am a good deal later in going there than most Members of this House. I was driven in a taxi from Kennedy Airport to the Upper West Side, which meant that we went through parts of the Bronx and Harlem. The shock of seeing so much urban devastation is still with me. I saw street after street with decaying tenement blocks, many of them half burnt out; boarded up shops; pot-holed roads, and so on. All this is in a major city in the nation which many of us regard as probably the most wealthy in the world. Having gone through that experience, I suppose it was slightly less of a shock to then travel, as I did quite frequently, on the subway, sometimes coming back in the evening, and finding myself looking at armed policemen on the platforms and sometimes travelling in the very coach in which I was riding.
1059 I start with that brief personal experience, which I realise is striking a rather different note from any that we have heard so far this afternoon, because it underlines what happens when a nation, or a city, seems at least unwilling to pay the cost of adequate housing for all its people—something which is surely fundamental to a good society. Like a predecessor of mine, Bishop Garbett, later Archbishop of York, I believe it is a matter of deep Christian concern to try to ensure that everyone who truly needs it has access to suitable housing. This is a subject on which it is right from that point of view, to have some moral passion, if you like, and I am sure that is shared by noble Lords in all parts of the House; it is not—I hope it is not—a party matter in any way.
As has been pointed out by the noble Lord, Lord Vaizey, and others, in this century we have seen a massive switch from rented accommodation, which was roughly 90 per cent. of all housing in 1914, to owned accommodation, which is now between 55 and 60 per cent. I am as clear as anyone in believing that there have been many very good effects of that shift, and the noble Lord, Lord Northfield, made that clear in his lively way, looking at Telford in particular. But there are some cautionary notes that must be struck about how far the balance should go, and there have been hints about that this afternoon. The point has not been spelt out as clearly as it needs to be, however, and I shall suggest some points in relation to it.
First, there remains massive need which is never likely to be met by ownership. I use the word "never" advisedly; it may diminish a little more, but I ask your Lordships to think about the substantial number of low paid people, single people, particularly the elderly, single parents and others. I believe that the resources which the state, local authorities, housing associations or perhaps housing co-operatives—there are many variants involved—can bring to bear are the only ones that are likely to meet, and continue to meet effectively, that sort of need, and I am sure nobody would deny that. However, I think we in a way fasten on to the problems that are connected with the private sector and the Rent Acts and all we have heard about this afternoon to the point where we forget that there are other ways of meeting those needs.
I often question to myself whether we need grieve too much about the rapid shrinkage of the private sector, since I question whether housing is a sphere in which we should be thinking about what has been called today "a proper return on capital". In an age of high interest rates, people will be looking for a return which seems to me to be inapposite in relation to the housing need out of which so often it is being met. My first point, therefore, in this connection is this massive need which we must keep in our sights, and I am very conscious of that as I go around South London and look, in particular, at the inner city areas there.
Some control of council house sales is surely needed by local authorities for the very reasons that were given by the noble Lord, Lord Northfield, in relation to a new town which, if I understood him correctly, is exempt from some of those considerations. I argued about that two years ago in relation to rural areas and 1060 places like Northumberland; I think it is still also relevant in the big cities, for slightly different reasons, particularly where they have huge numbers of flats which nobody is likely ever to want to buy, and the balance is therefore altered.
Secondly, ownership does not solve all the problems, as we have heard this afternoon. There are many owners of property, elderly owners particularly, who are unable to look after their property. Bad maintenance or lack of maintenance and decay is not limited to over-pressed local authorities. Immobility is a very real problem; when you cannot sell your house, that can be just as difficult as being unable to acquire rented accommodation. There are problems of that kind and I believe that if we get the balance too far the other way, we may find that those problems become very acute indeed.
The third is a more general point: one which I find rather difficult to express, but I believe it to be very important. There is a sense in which what we are observing at the present time is an increasing polarisation of society, and there is a real danger that we shall begin to regard those who can live only in rented accommodation as somehow in a very low grade sub-group of their own. You can see something of the shift when you hear people talking about "welfare housing" and making the suggestion, which I have heard more than once, that owning is good and renting is bad, that everybody who makes an effort can own but that some people cannot be bothered; just as everybody who wants a job can get one, but some people do not try. I appreciate that I am exaggerating and making a parallel of it, but there is a slippage in that direction and we need to watch it carefully because there is no question of "better" or "worse" about it: there are appropriate categories of accommodation for different needs. In all this, we are not looking at a straight conflict between council housing and owner occupation. There are some in betweens, and they are very important; tenants co-operatives, housing association and so on may yet prove the way into the gap we are looking at this afternoon.
For all those reasons, I urge that local authorities and other bodies, especially those in hard-pressed inner areas, should have the opportunity to preserve a balance between houses for sale and houses for rent in order to prevent an excessive swing in either direction—we are certainly remedying the previous one—and that they should have the financial strength to preserve the existing housing stock in good condition (failure to do so is a most alarming feature at the present time) and should be able to do something to meet the considerable need which still exists in those areas in terms of people who are simply without housing at all. I am sure we all share the deep concern of the noble Lord, Lord Vaizey, about seeing people properly housed in the way they want to be housed. I simply want to make sure that we keep our vision whole at this time.
§ Viscount Massereene and Ferrard
My Lords, I knew the area in New York about which the right reverend Prelate talked because I used to go to America a lot and—
§ Lord Vaizey
My Lords, I would remind my noble friend that this is a short debate and that, if he has not put his name down to speak, it is very unfair to those who have done so for him to intervene.
§ Viscount Massereene and Ferrard
I was simply going to point out that in that area a great number of the occupants wreck the houses—it is a violent area—but otherwise I agreed with the remainder of the right reverend Prelate's speech.
§ 4.39 p.m.
§ Lord Harris of High Cross
My Lords, thanks to the remarkable self-discipline of earlier speakers, the pressure of time is not now so acute that I must refrain from pursuing the normal courtesies. Therefore, I wish first to thank the noble Lord, Lord Vaizey, for putting down the Motion and giving us an opportunity to review this important subject. I wish also to add my congratulations to the maiden speaker, the noble Lord, Lord Coleraine. I too had the great privilege over a period of 15 to 20 years of knowing his father very well. I recall his father as a Conservative with marked classical liberal leanings, which brought us into much agreement on contentious issues, and I have no doubt that his father would have been proud to hear the eloquent and thoughtful speech which we enjoyed this afternoon.
I am sure an apology is called for because I am the fourth, luckily the last, economist to address the House out of a list of no more than a dozen. I would want to add my voice to that of my noble friend Lord Robbins and say that I can think of no issue in political economy on which professional economists of widely differing tendencies are in more substantial agreement than on the unholy mess which successive Governments have made of the housing market. It is surely worth pondering that, despite the spending of mounting billions of pounds over half a century by Governments of both parties, housing has become a growing cause of human misery. I would go so far from the Cross-Benches as to argue that the so-called "housing shortage" is largely the creation of politicians in their destruction and demolition of the market for rented accommodation.
It becomes a little easier almost week by week to assert the economist's basic proposition that prices do affect supply and demand. As we see with the common agricultural policy, an artificially high price will increase supply and reduce demand and thereby create an embarrassing surplus of farm products. In precisely the same way rent control, by holding the price below the market level, will increase demand for accommodation, reduce the supply, and create the famous housing shortage. I am afraid that the real handicap which the occupants of the Labour Benches suffer is that this kind of logic is simultaneously irresistible and unacceptable.
Noble Lords have said that rent control was introduced in 1915 as an emergency wartime measure. As a self-confessed market economist I have no difficulty in defending that kind of intervention. My noble friend Lord Robbins has taught in his writings over many years that price control, and indeed rationing, are appropriate to a condition of siege, and for one simple reason. Whereas a rise in price can generally 1062 be relied upon in an open market to call forth an increased supply that helps to redress the shortage, no such corrective is possible in the abnormal circumstances of war.
The trouble was that instead of ending rent control with the end of the emergency that was its justification, successive Governments have, frankly, found it electorally profitable in the short run—which is the only run they know—to extend control and even to grant life tenancy into the second generation. As my noble friend Lord Robbins has said, the ill-effects of drying-up the supply were not immediately visible, simply because houses last a long time before they need replacing. But under rent control they just do not get replaced.
It is no wonder that politicians really thought that at last they had stumbled on a free lunch. They could indulge their favourite passion for doing good, or at least for feeling good, and at the same time serve their own electoral interest by collecting millions of grateful votes for keeping rents down. The cost was obligingly paid for by the landlords, who had conveniently little political weight. We have heard about the injustices between prosperous tenants and often poorer landlords, and also between favoured tenants in controlled property and their unlucky neighbours, forced on to lengthening queues for council houses or into uncontrolled houses at inflated rents.
The lesson of every country that has resorted to rent control has been that market forces are not so easily cheated. As the Francis Report conceded back in 1971, the combination of low rents and security of tenure ensured that no new family houses were built for letting. Even worse, by holding rents below the rising cost of maintenance and repair, especially in an age of inflation, political expediency has caused the decay and rapid decline in the number of houses under control. The statistics are remarkable. From a peak of 8½ million after the recent war, the number of private tenancies fell to 4½ million in 1960, and today is 2¾ million.
I followed the right reverend Prelate in his observations about the sorry and sad sight of decay in New York. New York is a classic case of the devastation created by rent control. It was indeed the universal phenomenon of devastation by rent control that produced a verdict from a Swedish professor, Assar Linbeck—of sufficiently good Social Democratic credentials to appeal to the noble Lord, Lord Robert-hall. In his book, The Political Economy of the New Left, he wrote as follows:In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing ".It is a by-product of this destructive policy that has caused Governments to mount the treadmill of building houses to let at subsidised rents in a vain effort to make good the shortage contrived by their own past follies. Others have spoken of the ill-effects on the mobility of labour, and I would underline an observation by the noble Lord, Lord Vaizey—that the effect of rent control has often been to force many people into the market for buying a home when they would much prefer the convenience and flexibility of renting in a free market.
1063 The pretext for all of this costly and damaging policy has always been that poor families cannot afford market rents. But this is no new discovery. Poor families cannot afford sufficient food or sufficient clothing. It has been increasingly accepted, over a very long period, that the appropriate solution to this social problem of poverty is to top up their incomes in some way, not to fake the price system, with all the consequent distortions of supply, demand, and consumer choice.
There is not much time to go into alternative policies. My preference would be that of the noble Lord, Lord Vaizey—along the lines of straightforward repeal. We should sweep away the damaging rent controls as well as the wasteful, indiscriminate subsidies. We should address ourselves to those in need by introducing some coherent system of personal and portable housing allowances that would not be tied to staying put in the same home. In my view we should also phase out mortgage relief in return for progressive cuts in the rates of income tax.
In the past the partial and piecemeal efforts of Conservative Governments to tackle these problems have been frustrated by what the noble Baroness, Lady Birk, acknowledged was the threat that the next Labour Government would repeal any sensible measure in this field. I hope that the noble Lords remaining on the dwindling Labour Benches will forgive me for speaking frankly, but the emotional muddle of the last Labour Cabinet was revealed by a chastened Joel Barnett in his remarkable recent memoir, Inside the Treasury, which I commend to present occupants of the Labour Front Bench. He wrote as follows:Talk of increasing council house rents and it was as if you were planning to snatch children from their mothers or put them to work down a mine.I sympathise with Mr. Barnett, and know what it is to be made to feel that kind of guilt.
But I want to conclude on this more positive note. We should not allow that kind of mentality to obscure the merits of radical reform to remedy a housing problem that has been caused by an unholy mixture of misplaced benevolence, intellectual confusion and electoral opportunism.
§ 4.50 p.m.
§ Lord Taylor of Gryfe
My Lords, I should like to congratulate the noble Lord, Lord Coleraine, on his maiden speech. Once again it has emerged in this House that we have a great fund of knowledge and expertise in the various subjects that are discussed. I hope we shall hear more from the noble Lord. I should like to apologise, too, to the noble Lord, Lord Vaizey. I am sure he will understand that the difficulty of getting from an airport to this House is considerable these days. Indeed, it was much quicker to fiy from Scotland to London than it was to get from Victoria into the City today.
I have an abiding interest in the housing problem, and it derives from an early experience which I am sure was shared by the noble Lord, Lord Strathclyde, who I am glad to see in his place. Both of us were members of the Glasgow City Council, and Glasgow had the unfortunate and unenviable distinction of being at that time the worst-housed city in Europe. It was not 1064 uncommon in my constituency to find six, seven, and eight people sharing a single apartment dwelling. I can recall frequently visiting houses that were damp-infested and I could see babies in their prams whose faces were scarred by the bites of vermin and insects. That was the situation in the City of Glasgow.
I believe the majority of houses had no bathroom and one-third of the houses had outside toilets. It was in that environment that we tried to develop our rational housing policy. It was a city of dull grey tenements; a city in which the name "Gorbals" was synonymous with slums and squalor. So we took power, and we decided that this was the major social evil in the city. We sent in the bulldozers and knocked down the slums. We embarked on a housing programme of 6,000 houses a year, because we had a waiting list of 60,000 at that time. We created new housing estates. We were building the new Jerusalem, and so intent were we on this that we decided we would have no licensed premises in these new housing estates. That was a major disaster, for a very simple social reason, and that was that in the process of building houses we forgot about all the other aspects of human activity and community life.
We destroyed the city centres, because the city centres were largely made up of the old tenements, and we built the new cities outside of town. As a result of that policy, of the total number of houses in the City of Glasgow—300,000 houses in the entire city—185,000 houses are local authority houses. That means that there was a large vested interest in local authority politics in Glasgow and in other areas at that time. I read the interesting statistic the other day, when someone was surveying the Coatbridge and Airdrie prospects, that 80 per cent. of the people in Coatbridge live in local authority housing.
I think it is time, having seen that interesting experiment, to take stock of its advantages and its weaknesses. First, it has many advantages. We gave some people the opportunity of greater comfort and an ability to raise children in a happier social environment. We cut dramatically the rates of infantile mortality which were a consequence of neglect and slum living in the east end of Glasgow. We built new schools which were exciting and interesting, and which provided better opportunities for raising educational standards.
But, on the other side, it is important to review the weaknesses of our achievement. First, all the tenants were taken off the register of greatest need, and therefore we tended to create a one-class community. There was no diversity in that community at all; they all came from the same social strata. That in itself does not create the diversity which makes community life interesting and exciting. Secondly, we destroyed communities. These people had enjoyed a very intimate personal relationship, even in the Gorbals, and they now found themselves in a new environment, and we did not pay enough attention to creating community interests.
Thirdly, we created very large housing estates, many of them bigger than many cities in this country, and we controlled and directed these estates from a central bureaucratic control. There was little personal or tenant involvement. Of course, tenants' associations grew up, largely as complaints bureaux, largely to knock at the doors of the local councillors to get 1065 the water fixed or the damp-proofing attended to. Involvement in running that area was never given to the tenants. So, as I say, you almost alienated people in the new environment which you created.
Recently, in anticipation of a debate in this House, I had a look at the poverty problem in the City of Glasgow. I discovered that the poverty was no longer in the slum areas but that there was greater poverty out in the new housing estates because, first, people had to travel to their work, and travel is expensive. Secondly, many of them had taken on hire-purchase commitments for new carpets or for electrical devices which they had never formerly enjoyed, and unemployment was hitting these areas hard. So you had created new communities but you had not solved the poverty problem.
Finally, we had created a situation in which there was a lack of attention to amenity—sports and other recreation activities. If I may say so in the presence of the noble Lord, Lord Northfield, the new towns have planned community living far better than the local authority housing estates, with their obsession to get so many houses built as the measure of their achievement. The local authorities had a new dilemma. First, they found that the housing revenue account was running into deficit, but in the light of the poverty situation in many of these areas they were reluctant to increase the rents to economic levels—and this was understandable. If I may say so, too, in a community or a city where 60 per cent. of the people lived in council houses the electors were reluctant to elect councillors who would take a realistic view of council house rents.
So, in the light of this interesting stocktaking in housing, I think we must look at new directions for housing. As so often is the case in the political debate, the Social Democratic Party tries to strike some kind of middle way between the doctrinaire views of the local authority enthusiast and the private enterprise enthusiast on the other side. As the right reverend Prelate has said, there are many possibilities for diversity in house-building and management. I was interested in the fact that he observed the squalor of Harlem, and was upset. If he had taken his taxi just a little further out of town he would have come across two large housing estates. One is called Rochdale, in memory of the Rochdale pioneers of Lancashire, because it is a co-operative housing development in which several thousand people are living together in co-operative housing. Then, further up the road there is Co-op City, once again a co-op housing development in which the people own their houses and run that enterprise as a co-operative development.
There are three forms of co-operative housing which might be pursued: management co-operatives in which people share the management; non-equity co-operatives in which they do not have an equity stake in the development, and co-partnership associations in which the people own the houses and work as co-partners in the community. There is a great variety of forms of management of community housing which ought to be explored and we ought to be looking at new directions. Similarly, I was delighted to hear in the debate so many references to the improvement of the existing stock of houses. That is so much 1066 encouraged now by the creation of housing associations. They are doing a tremendous job in rehabilitating desert areas such as those to be found in the City of Glasgow.
So, my Lords, the Social Democratic Party is committed to decentralisation in the running of housing estates. It believes in handing back power to the people. We want neighbourhood management staff to relate to district committees and made up of tenants. Within the housing budgets, although some councils will wish to build more council houses, there must be a much higher priority for rehabilitation and maintenance. In all housing policy, as emphasised by the right reverend Prelate, there must be care. We must not be so market orientated and so profit orientated that we forget to care for those people who are not able to enjoy home ownership and who are not able to pay an economic rent. People who are single-parent families, the aged and the sick must be cared for in any reasonable social housing policy. That is the view of our party and these Benches.
§ 5.2 p.m.
§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)
My Lords, I am grateful to my noble friend Lord Vaizey for introducing this debate. I confess, listening to it, that looking over perhaps some part of a lifetime in this field of housing I find it so frustrating to know before I begin that the time I have available to me to talk on this massive subject is so short that I can only help a little by speaking a little quicker and perhaps hoping that your Lordships will bear with me if I take perhaps a little longer in presenting the Government's position than I think perhaps is permissible. I hope my noble friend Lord Vaizey will bear with me. That is what I would like to do. I will read very carefully all that has been said in the debate, because there have been some excellent speeches and I shall want to study very carefully and discuss their contents with my colleagues. May I add my own congratulations to my noble friend Lord Coleraine for a splendid speech. As the the noble Lord, Lord Robbins, said, it was certainly of a kind to make one want to listen to him much more—and this I look forward to doing in the future. The noble Lord, Lord Taylor of Gryfe, really got into the nuts and bolts of the whole field of housing. How dearly I would like to have a whole debate for some hours so that we could talk of that !— because, frankly, that really is what housing is about, about people, about the needs, about the economics, certainly; for if we ignore that we get nowhere. But at the end of the day it is also about what have we achieved, what were the mistakes, what was the slum clearance as opposed to the rebuild of the housing scene.
It is so vast a subject that my heart sinks slightly as I embark upon trying to respond to the comments made so far and at the same time to give some indication of how the Government feel about these matters. It has been the aim of this Government to make all parts of the housing market more responsive to the genuine needs of people and to break down the barriers between the different providers and users of housing. There are two key elements in this. The first is the clear, unequivocal acceptance of the fact that the 1067 great majority of people do want to own their own homes and that meeting this need must be our top priority.
In saying that, I am absolutely agreed that there are categories of people who do not want to do so. There are those who do not need to; and their position also is part of the whole debate. But we delude ourselves if we do not acknowledge that the majority want to own their own homes. All the main political parties talk about the importance of owner-occupation. Indeed, frankly, they have no option; for 90 per cent. of households whose head is under 45 years, according to the general housing survey, prefer to own their own homes. But the present Government have been working actively to make it possible for people to achieve this goal.
The second element is that we must make the best use of the limited resources of houses, land and money available. That means there must be a sensible balance, as the noble Lord, Lord Taylor of Gryfe, has said, between rehabilitation and new build; and the resources of the public and private sectors must be used effectively together in a way which they have not always been so used in the past.
The Motion we are debating today rightly stresses the importance of home ownership. There is in the country, as every speaker has said, a deep-rooted desire for it. It is also close to the hearts of millions of council tenants as well as of other aspiring owners. Home ownership gives people a stronger stake in society; it encourages them, as the noble Lord, Lord Northfield, said, in what 1 thought was a splendid speech. We shall have to have him as a salesman on this side of the House—except that for council house selling, frankly, we do not need a salesman. The case is self made.
What else does ownership do? It encourages an attitude of self-reliance and independence. That is why this Government took office with a pledge to give many more low-income households—and this is the point—the chance to realise their dream of home ownership. But the cornerstone of that policy is the right to buy, and I should like to tell your Lordships the response there has been to this. Without going into a great deal of detail, I sum it up simply by saying that it is estimated that by the end of March 1983 over 400,000 council tenants in England will have bought their property under the present Administration.
Well, you can talk of the 6i million council tenants and I think, to answer the right reverend Prelate the Bishop of Southwark, who said that we should maintain a balance, that he is right. We should maintain a balance. But what is a balance? Is a balance 3 million? Is it 2 million? Is it 5 million? What is a balance? Everyone will have their own view as to that. But I would suggest that there is little fear for the right reverend Prelate that there will ever be so great an imbalance in the total number of sales as to prevent local authorities from providing rented accommodation for those who need it and indeed, for those who would want it.
The figure that I have mentioned is, I submit respectfully, a huge response and a vindication of the Government's policy. The noble Lord, Lord Northfield, was so right when he said that while some theorisea 1068 about the quality and the redistribution of wealth, the fact is that this, a Conservative Government, are doing something about it. They are doing, I submit, more than has ever been done before about further equalisation of wealth through this policy. And is it not ironical that this is a policy that really was fought so much by the party opposite!
There are wider benefits, too, to the industrial purchaser. For example, there is normally greater ease of mobility in the owner-occupied sector, although we are taking steps to improve it in the public sector. too. There are social advantages in mixing forms of tenure, rather than having whole areas of cities consisting of nothing but council housing. Again, the noble Lord, Lord Northfield, said; "Go round the council estates and see what is happening there! See what happens when the council homes have been purchased and are being looked after and the gardens looked after!" I remember when I first introduced myself to the selling of council houses in Leeds in 1968 that one of the fiercest opponents of it said; "Do you realise that the tenants will paint their houses in different colours?" I said that I sincerely hoped that they would. But I tell you that was done by very responsible politicians. They thought that would be dreadful. It is true they paint them different colours and do their gardens different ways—and thank goodness for it—because that really uplifts the whole of housing. If the right reverend Prelate is so rightly concerned that we should not have polariastion, I would ask: What is polarisation but massive council estates which clearly set up not individual tenants or owners but whole areas of polarisation? I will not say more about this subject. I think the case is made: it is game, set and match, if I may use that expression at this particular time.
1 should therefore now like to turn to other aspects of the Government's policy of promoting home ownership. Many local authorities own land which is unlikely to be developed for many years; yet builders and developers badly need land now so as to meet the demand for low-cost starter homes for many people who at present will appear on council waiting lists. The merits of forging a partnership between local authorities and developers to ensure that houses acceptable to all concerned are actually built may appear self-evident, but it does represent a radical change in the way of doing business both for authorities and builders. This Government have done more than any other to promote this new approach. We have been urging local authorities to recognise that a great many of the housing needs in their areas do not require the traditional solution of building homes for rent. Making land available to builders for starter homes is one direct form of help, and authorities can sell on terms which ensure that a low land price is fully reflected in the price of the homes. Again, there is scope here for a whole new debate so that we could speak at length on this topic. At this time, however, I would only say that we warmly welcome the efforts of the Housebuilders' Federation in telling local authorities of the help their members can offer. They are doing this now in a very active way and we are very pleased to see it.
Perhaps I should refer to one point made by my noble friend Lord Vaizey and assure him, in case 1069 there should be those who have any doubts, that the Government remain committed to the continuation of the principle of mortgage interest relief. The limit on relief, currently £25,000, is carefully reviewed every year. In the Budget we also reduced the cost of buying a house by increasing the threshold above which stamp duty is payable from £20,000 to £25,000. I welcome, also, the movement within the private building sector towards building the kind of accommodation they always said they would not build; namely, accommodation for the single person and similar types of accommodation. They are building that today and they are building in the inner cities. They will build more in the inner cities if local authorities would make more land available to them. In my opinion, that is a very great contribution towards the whole problem of housing stock.
The Government are very concerned about the adequate supply of land and therefore, among a lot of other measures, we have introduced registers of used and under-used land in public ownership. Three hundred and fifty-eight have now been published, covering some 9,600 sites totalling 87,000 acres. The experience of the first 35 registers—I think this is very interesting—published last year suggests that half of this land may be suitable for development. I am concerned that there are still a few local authorities whose planning policies place excessive restrictions on density and make it difficult to get low-cost home ownership schemes off the ground. I would urge them to look again at their planning policies in this respect.
Is it not good to know that activity is now picking up in the public sector as well as in the private sector? I am hoping that local authorities will now make use of these hundreds of millions of pounds of capital receipts now in their hands so that they can do with them what they claim they have been unable to do in the past. In other words, if they want to rehabilitate their homes, that is fine; if they want to build some more, that is up to them. They can increase their housing capital allocations so to do, and they now have the kind of manoeuvrability and flexibility which has not pertained for quite some time. I hope that they will make the most of that.
I am not going to rise to the bait by talking about the politics of the numbers of homes built. Circumstances have changed. The postwar shortfall in numbers of dwellings compared to the numbers of households has created a new situation, and we should be quite wrong to be diverted from the mainstream of this subject—certainly of today's debate—by going into that, but I hope time may be made available on another occasion so that we can do so.
The final theme I want to refer to is the private rented sector, about which so many of your Lordships have spoken today. My goodness!—those speeches will repay some careful reading. In a short and very sharp contribution, I thought that the noble Lord, Lord Harris, made a rather devastating speech. As to the noble Lord, Lord Robbins, my complaint is that he does not speak often enough, because his comments are always worthy of the greatest consideration, and I do assure him that they will get it.
What can one say about the situation which now prevails? I served on the Francis Committee, which studied the working of the Acts, and every Friday for 1070 15 months we sat down and talked about this. We took oral evidence and we visited and we looked into the working of those Acts. Among other things, what we said at the end of the day was: "If you give security of tenure to furnished tenancies, it will inevitably have a dramatic impact on the availability of accommodation to rent".
Nobody took the slightest notice. I sometimes wonder why the committee was appointed. What happened was exactly what we had said would happen, and I personally feel it is catastrophic that the number of homes available to rent in the private sector continues to decline as it does. With great respect to the noble Baroness, Lady Birk, when she says that it is only a financial matter, she is wrong. The fact is that if I had spare room in my house to rent and I knew that by renting them I would be giving somebody complete security of tenure for who knows how many generations, I should need my head examining if I did so rent those rooms. That is the biggest deterrent of all, and we delude ourselves if we think otherwise. I am not going further into the private rented accommodation question, but one day we shall certainly have to come back to it. It is a problem which will go on. It will not go away, and we must come back to it.
My Lords, time is pressing, as we know, so I shall conclude by summing up quickly just some of the major initiatives the Government have taken in the last three years, which I hope will encourage my noble friend Lord Vaizey, who proposed this Motion. We have introduced, as I said, the right to buy. We have done more than any previous Government to encourage local authorities, made land available for starter homes. Then there are all the various other things. There are the low cost—I stress low cost—home ownership schemes, improvements and buildings for sale, homesteading and shared ownership. We have given local authorities powers to guarantee building society loans on the cheapest and most run-down dwellings. Surely we have to be concerned about the 100,000 or so council dwellings plus the more than that private sector houses that are lying empty today—just totally empty. What a massive waste of resources!
We have raised the exemption ceiling for stamp duty and increased the ceiling for local authority mortgage advances. It is now easier than at almost any other time for first-time buyers to enter the housing market, and more are now doing so. I have said what we are doing for the private rented sector by way of shorthold —at least, I have not said too much because of the time factor, but we could have a debate just about shorthold and shorthold tenancies. May I just say that I am still amazed that a leading spokesman in another place could say that he would rather see houses standing empty than being occupied under shorthold tenancies? How any politician of any party can ever justify a statement like that I shall never know: yet we have it there and they stand on it even today.
In the public sector, we have introduced a tenants' charter, giving tenants the right, among other things, to decorate, to improve, to take in lodgers and to sub-let, as well as the right of security of tenure and one succession and the right to information and consultation. It is a Conservative Government who have introduced all those rights for council tenants. Is that not ironical? 1071 To help tackle the serious problem of "difficult to let" council estates, we have launched the Priority Estates Project, which the noble Baroness, Lady Fisher, only last week commended so much to us. We have encouraged mobility; besides developing the first ever National Mobility Scheme, we have launched the Tenants' Exchange Scheme, providing a national computer-based information service for tenants who want to exchange their homes. We have launched the first major expansion in hostels provision for many years; and we have taken special measures to help, among others, servicemen, the elderly and the disabled.
I finish by saying that, after many years of personal involvement in the whole field that is housing, I am proud to be a member of a Government which has people like our Secretary of State, and my honourable friend the Minister for Housing, who are producing so many imaginative, innovative and progressive housing projects. I again thank my noble friend Lord Vaizey for giving me the opportunity to say so, and I again say that I shall read very carefully all that has been said in this most excellent debate.
§ 5.21 p.m.
§ Lord Vaizey
My Lords, I should like to reply briefly to the debate. Your Lordships have been commendably brief. We have not reached the end of the allotted time, even although we have had a Statement made by my noble friend about the Royal College of Nursing. I should first like to thank my noble friend Lord Coleraine for what was truly a remarkably impressive and very helpful maiden speech. I should also like to thank my noble friend Lord Bellwin for his knowledge, his enthusiasm and his warmth. The affection in which he is held in the House is clear to everybody. He has made a very helpful contribution, as has everybody who has spoken.
I should just like, very briefly, to make three points, First, I think that almost everybody stressed the importance for human dignity, and for a sense of citizenship, of the ownership of equity and the pride of ownership—what the noble Lord, Lord Northfield, called the search for identity. It is something of tremendous importance that people speaking from every side of the House should have emphasised this as a central and commendable feature of much of our modern life.
Secondly, it takes some doing to get unity among four economists. When you have four economists speaking out, you usually have eight opinions. But we are against the Rent Acts. The only people who are for the Rent Acts, so far as I know, are not economists, and even those who ventured to say a word in favour of the Rent Acts said that they should be abolished, but abolished slowly—if I fully took on board the message which the noble Lord, Lord Taylor of Gryfe, brought down from Glasgow, helped by British Caledonian and hindered by London Transport.
We had a brilliant exposition by the noble Lord, Lord Coleraine, of the way in which the Rent Acts actually work. This is a rather central point, and I should like to take the third stream in the debate, which I might call the problem of the Church of England. The right reverend Prelate the Bishop of Southwark is an extremely distinguished pastoral Bishop and a distinguished theologian. But one of 1072 the perplexities of those, like myself, who are loyal, dedicated sons of the Church of England, is how the Church of England has repealed the Book of Common Prayer and adopted collectivism as the new theology.
The devastation of the City of New York, through which the right reverend Prelate drove, is directly and unambiguously attributable, as the noble Viscount, Lord Massereene and Ferrard, said, to rent control, which has been imposed by the City of New York, under the pressure of a series of incredibly corrupt city governments over many years. Similarly, the devastation of the inner part of the right reverend Prelate's diocese, Southwark, which I happen to know well, because I was born and brought up there—and there are very few streets in the inner part that I could not take him down—is entirely attributable to the actions of rent restriction and the local borough council, as was rightly said by one of your Lordships this afternoon. Apart from the bombing of the city, which the Luftwaffe did, you would find that most of the vacant spaces are entirely due to the late lamented London County Council—an excellent education authority, but a very misguided local planning authority.
In fact, I remember taking a friend of mine from Dublin through Belfast and saying "It looks awfully bad, doesn't it?" He was a rather eccentric Irishman, who always went up to Belfast every three months to go to the dentist, and he said, "It doesn't look as bad as what the planners have done to Greater London". That is true, and the devastation has been brought about by a combination of the Rent Acts and town and country planning. If the Church of England persistently believes that the only way of relieving the poverty of the poor is through collectivist measures, then I despair, because it is not true, and it is a very thin theological gruel to give to the starving millions. With that, my Lords, I beg leave to withdraw the Motion.
§ Motion for Papers, by leave, withdrawn.
§ Lord Denham
My Lords, it might be helpful if, with the leave of the House, I were to repeat shortly what I said earlier in the day. It has become the accepted practice in these short debates that the mover should be entitled to approximately 15 minutes and that the Minister should rise to reply no later than 20 minutes before the scheduled end of the debate. May I suggest that other speakers should limit their speeches on the Motion of my noble friend Lord Mottistone to about 12 minutes, because, if any noble Lord should speak longer, he may well be doing so at the expense of others later in the debate.