Private Rented Housing (Hansard, 10 March 1987)

§ Baroness David
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Skelmersdale)
My Lords, the Government are consulting publicly about the use of the criteria referred to in the Statement, announcing that local authorities would be given a new explicit power to provide financial assistance to the private sector for the provision of rented housing with the consent of the Secretary of State.

§ Baroness David
My Lords, does the Minister realise that with the deadline that was put on certain schemes on 5th February a great number of authorities are being prevented from providing houses that they would otherwise provide? In one northern authority the numbers are 258 houses and 60 sheltered units, and in 11 outer and inner London boroughs the number of houses amounts, at a conservative estimate, to over 2,000. As the scheme seems to be combining private sector and public sector finance can the noble Lord persuade his department that there is a great loss of housing because of this very authoritative diktat by the department?

§ Lord Skelmersdale
My Lords, no. I do not recognise anything of the kind. We have not halted any schemes but merely subjected them to the requirement for consent, as I said in my original Answer. The Government are keen to hear from any authority wishing to put forward worthwhile schemes which are consistent with the Government's housing policy objectives.

§ Lord Dean of Beswick
My Lords, is the Minister aware that in the city of Leeds 60 sheltered housing units and 258 houses are now subject to a moratorium because of the new provisions and that the scheme can no longer proceed? These houses were needed for people whose homes were being demolished. Unless the city of Leeds can find 30 per cent. of the money required, as I understand it, this scheme cannot go ahead. There are many in extreme difficulty because of the cuts in the housing investment programme. Does the Minister expect Members of your Lordships' House to take seriously the Government's concern regarding building and adapting houses for people to occupy when this type of action results in 300 much-needed houses being taken out of commission in Leeds?

§ Lord Skelmersdale
My Lords, the Statement was made because we were aware that authorities were preparing many schemes which were merely devices for avoiding the capital control system. We therefore had to move quickly. But I say again that if any local authority has any scheme that it wishes to be considered by my right honourable friend the Secretary of State, it has only to declare itself.

§ Baroness David
My Lords, may I ask whether the Sheffield scheme—which was mentioned at the time of the Statement on 5th February—is entirely safe, as I understood it was at the time? However, since that time there have apparently been some problems.

§ Lord Skelmersdale
My Lords, I am speaking from memory now. When I considered the Statement which I repeated to your Lordships I understood that there were two Sheffield schemes. One scheme was not caught by the ban and will go ahead under the provisions that Sheffield decided upon at the time. The second scheme has still to be released, as it were, for my right honourable friend's consent.

§ Lord Dean of Beswick
My Lords, is the Minister aware that I found his Answer rather contradictory? He gives the impression that the measure was brought 933 in to encourage local authorities to provide more housing for people. I have just explained, I think quite clearly, that in the case of Leeds it has taken out of commission 300-plus housing units which are vitally needed in order to cope with the demand in that city. Is the noble Lord aware that this is happening in many local authorities? Why does the Minister keep saying that this is to help people by providing houses when in fact the exercise has the opposite effect?

§ Lord Skelmersdale
My Lords, the grants are limited to 30 per cent. of the cost of schemes. This 30 per cent. is approximately equivalent to the subsidy enjoyed by owner-occupiers through mortgage interest tax relief. Especially when they are combined with index linked finance, it should be possible to produce schemes at affordable rents. If we had 100 per cent. schemes not only would that create municipal housing but fewer schemes would go ahead. There are more 30 per cents. in 100 per cent. than there are 100 per cents.

§ Lord Glenamara
My Lords, does the noble Lord agree that as home ownership approaches the 70 per cent. mark it may have reached almost saturation point and that there will always be about 30 per cent. of families who require rented accommodation? There is an appalling shortage of rented accommodation. Would it not be profitable to have discussions with the building societies to see what greater contribution they can make to providing rented accommodation?

§ Lord Skelmersdale
My Lords, the Government's objective for the next Parliament is to make 1 million more houses available for the owner-occupied sector. I readily admit that the private sector will continue to have a role in the provision of rented accommodation, but that is no reason why this should be done by local authorities.