Mrs. Margaret Thatcher (Finchley)
May I say how sorry we are that R. Freesonthe Minister cannot be here and that we are even sorrier for the reason, but we hope that he will soon be fully recovered. In these circumstances perhaps it would be appropriate to express sympathy for G. Kaufmanthe Under-Secretary who has had to take over at the last minute. However, we do not feel that this Under-Secretary will need such expressions of sympathy since he will no doubt do very well without them.
Anthony CroslandThe Secretary of State began with a good explanation of why he had done a somersault on the Bill. He moved a fierce amendment to the Conservative Government's Bill—an amendment which sought to decline to give the Bill a Second Reading, setting out the reasons. The right hon. Gentleman then went on to a number of things which are not quite within the Bill concerning wider housing problems. He mentioned public expenditure and confirmed what I thought must be a misprint in the Bill. In the Conservatives' Housing and Planning Bill the Financial Memorandum stated that the amount of money involved would be £106 million within a few years. In the Bill before us it is put at only £102 [column 57]million, and the loss falls upon the Scots. However, the Bill applies to Scotland and I can point out the causes concerned.
I think that there must be a genuine misunderstanding here. Some clauses relate to Scotland, but there will be a special Scottish Bill on the same subject which means that a number of provisions of the previous Government's Bill relating to Scotland have been removed. Therefore, Scotland will receive £2 million under the Bill before us and another £4 million under the separate Scottish Bill.
It is good to see that the Scots will not be deprived.
The right hon. Gentleman went on to talk about the need to set his housing policy in a generally rising programme, The right hon. Gentleman returned to that matter towards the end of his speech when he pointed out the difficulties that various Governments have had in trying to achieve a generally rising programme. I think that he knows as well as I do that the real problem has been to get some kind of equilibrium between the supply of finance, the supply of homes, the supply of materials and the supply of labour. No Government have ever managed at one and the same time to get those four things in balance on a steadily rising trend.
All Governments have gone through a series of peaks and troughs instead of a general rising slope. Labour hon. Members need only to look at the figures. I could give a dissertation on them but I shall not do so.
The right hon. Gentleman will be very much aware that the previous Conservative Government followed the policies that are set out in the 1969 Act of transfering some of the effort from total clearance programmes to improvement projects. I noticed that my hon. Friend the Member for Southend, West (Mr. Channon) actually paid a tribute to the right hon. Gentleman's attitude towards that matter. I sometimes find that tributes paid by my colleagues are not always returned by Labour right hon. and hon. Members even though we have followed their policies. Indeed, we followed their policy and had great success with the number of improvement grants and the expenditure upon them. I [column 58]think that that policy improved the housing conditions of many people.
As the right hon. Gentleman knows, the cost of maintenance places a considerable demand on both resources and finance. One of the reasons for the reduction in the number of new houses built was that there had been a heavy demand upon resources and finance because of the success of the improvement programme. I am afraid that I am not making the speech which my notes contain but one that flows from the speech that was made by the right hon. Gentleman.
The right hon. Gentleman said that he is anxious to add to the council housing stock, or words to that effect. In the United Kingdom we have a higher level of council housing, I believe, than anywhere in Europe. Council housing already represents 30 per cent. of all housing. Many of us take the view that while there are reasons from time to time for a local authority to purchase houses from the private sector, there are no compelling reasons for an authority to retain them or to continue to increase the number of houses under its control. I hope that authorities will not retain such houses, thereby getting an ever-increasing proportion of the total housing stock. I do not believe that that would be good for some of the housing areas or good for the country as a whole.
The right hon. Gentleman referred to the freezing of residential rents, which I assume will end in December. Perhaps the Minister who replies will make clear the action that I understand the Government propose to take under the Housing Finance Act 1972 regarding extra subsidies for the housing associations, which have been affected by the rent freeze. I understand from a letter to my hon. Friend the Member for Hornsey (Mr. Rossi) that subsidies available under the Housing Finance Act 1972 will not be withdrawn. If that is so, it would be as well if we could have it on the record.
When the Furnished Lettings Bill comes up we shall consider it and comment upon it. I noticed that the right hon. Gentleman said that if he had had more time for preparation it would probably be a rather different Bill. If I might gently remind him, his right hon. Friend Michael Footthe Secretary of State for Employment appears [column 59]to have had plenty of time for preparation and he had introduced a different Bill upon which we shall be voting this week. It is interesting to observe that the right hon. Gentleman's right hon. Friend had time to prepare when he did not.
The right hon. Gentleman has referred to the private landlord, to local authority action and to the GLC. I intended to deal with those matters in the comments which I shall make on the Bill.
I agree that bad housing conditions are at the root of many of the problems in our society. It so happens that I had occasion the other day to turn out some election addresses. They went back to the first election I ever fought, in 1950. I gathered together a clutch of election addresses written by people in my party and from the Labour Party. All of them said almost exactly what we are now saying about housing—namely, that it is our objective to provide a decent home for every family. Some of the addresses could have been written today. They are just as appropriate now as they were then. It is still our objective to provide a decent home for every family. That objective does not vary from one side of the House to the other.
We now know some of the problems of meeting that objective. We know, for example, of the problems of houses falling into decay faster than they can be replaced or renewed. We know some of the problems arising from the faster rate of household formation which means that we need more houses for the same number of people. However, our aims remain the same—namely, to secure a decent home for every family. Progress will be adjudged by the progress that can be achieved, subject to the economic circumstances. I think that the right hon. Gentleman will probably find us reasonably understanding upon that. Perhaps he will find us rather more understanding than we found the Labour Party when the previous Conservative Government were facing similar economic difficulties.
I now turn to what Anthony Croslandthe right hon. Gentleman said on Tuesday 5th February 1974. He made a pretty spiky speech. He can make them sometimes. The right hon. Gentleman seems surprised. He has tempered some of his comments a little and perhaps some of his ideas since then. [column 60]I thought that his speech was spiky even if he did not. He said:
“I especially welcome the stronger emphasis on compulsion …”
He later said that he welcomed central direction. Thirdly, he welcomed Clause 6, to which I shall refer later, on the ground that,
“It could be the basis for a large-scale competitive public enterprise in the construction industry.” —[Official Report, 5th February 1974; Vol. 868, c. 1075 and 1085.]
He then said that municipalisation is an essential aspect of labour policy. Fifthly, he said that expansion of direct labour departments was one of the objectives of his party's programme.
We there have central control, direction, nationalisation, and municipalisation. There is the whole lot, one after another. I took the phrases out of the right hon. Gentleman's outline of policy and put them together. I believe that it was because the right hon. Gentleman's party had embarked on such a policy—and they would have introduced it if they could have done so—that they attracted fewer votes in the General Election than the Conservative Party. The right hon. Gentleman cannot argue that his party did not receive fewer votes. That happened because the policies to which I have just referred are not generally wanted by the people. Perhaps the Labour Party would have done better in the London borough elections but for similar reasons.
The truth is that the right hon. Gentleman welcomes the power of compulsion. He likes central direction. The Socialist immediately thinks of solving a problem by Government taking power and property and keeping it, and not by helping people to solve the problem by themselves and then handing back property.
In the private rented sector the Labour Party's tactics have been the same for years. By a series of measures it has made it impossible for a landlord properly to maintain his property. The landlord's only way out of his difficulty was to sell the property. When that was done the Labour Party complained because the private rented sector was declining. It was then said that either central or local government must take over.
The right hon. Gentleman must know that the private rented sector could not flourish because it could not get rents [column 61]sufficiently high to enable it to carry out proper maintenance work. The right hon. Gentleman must know the book that is almost a bible on housing matters which has been published by the National Economic Institute of Economic and Social Research entitled “Population Trends and Housing” by P. A. Stone. I shall quote one paragraph from that document. The right hon. Gentleman would probably quarrel with me if I used the same words. At page 300, it says,
“The tenants of local authority dwellings have incomes about a sixth higher than the tenants of private dwellings and pay rents about two-fifths higher. The stock of local authority housing is, of course, much younger and better maintained and equipped than the stock of private rented housing. Because of the effect of rent control and the absence of allowances for depreciating capital expenditure, and because many owners of private rented property are poor, it is generally badly maintained. In the absence of fair rents and depreciation allowances, little new property has been built for renting for about fifty years. A flow of private finance to new property for rent is unlikely unless landlords can feel confidence in being allowed to obtain a fair financial return in future.”
So we have not got enough private rented accommodation because landlords have not had a fair financial return. The right hon. Gentleman's answer is to make it even more difficult by putting a freeze upon rents. He knows full well what the effect of that can be on the maintenance of property over the years.
I turn to the Bill, taking the question of housing action areas first. The emphasis upon this form of action stems from the right hon. Gentleman's 1969 Act. I want at the outset to give some figures about the success of the improvement grant policy as operated by the last Government. In 1969 there were 108,938 improvement grants in England and Wales. In 1973 the number had risen to 361,000—a considerable success story.
Mr. George Cunningham (Islington, South and Finsbury)
That is the second time the right hon. Lady has referred to the success of improvement grants by giving the number of improvement grants or the amount of money spent. Is she aware that the Expenditure Committee's report on improvement grants brings out the point that in relation to my borough of Islington improvement grants resulted, in an area which was examined in detail, [column 62]in a reduction in the number of dwellings available for rent?
Taking the country as a whole, the improvement grant system has resulted in a very considerable increase in standards for those who live in the properties which have been the subject of improvement grants. I am sure that the hon. Gentleman will be just as concerned as I am that that should be so. We debated London last week and I dealt then with the actual number of improvement grants in the Greater London area and I mentioned one of the Islington surveys which I shall mention again today. I see that my hon. Friend on the Front Bench has a copy of it.
The policy of improving older houses receives a further boost from the Bill. The reply of the last Government to the Tenth Report from the Expenditure Committee, which was so ably chaired by my hon. Friend the Member for Hemel Hempstead (Mr. Allason), who has sent his apologies for being absent today—he has an important constituency engagement—was that greater selectivity is the keynote.
The whole housing action area policy is greater selectivity, but it is going in the opposite direction to the right hon. Gentleman's rent freeze policy, which is blanket subsidy regardless of need. I am glad to see that the right hon. Gentleman does in some areas still agree that selectivity is the keynote, because it is the basis of the Bill's policy. I warmly support the argument as it applies to this legislation.
I know that on the last occasion the right hon. Gentleman was critical of the small number of houses in housing action areas. This is dealt with, not in the Bill, but in the White Paper which supports it. The idea of having a comparatively small number of houses—say, 400 to 500—and calling that a housing action area rather appealed to me, because in such a small area it should be possible to act quickly, see the improvement and then move on to another area.
Admittedly, wherever any improvement is carried out the contrast with the area beside it, where there is no improvement, is sharp. This will be so if any progress is to be made in any area anywhere in [column 63]the country. I thought that it was better to have smaller areas, but I notice that the Bill—both the previous Bill and this Bill—does not circumscribe the size of the area. It gives only the criteria, by which the area must be defined. This makes it easier to apply the Bill to the conditions actually found.
The right hon. Gentleman has made one fundamental change, as he pointed out when he spoke on the part of the Bill dealing with the housing action areas. I rather disagree with that change. The old Clause 40 provided a kind of quid pro quo for the compulsory purchase powers given to local authorities. Comparatively simple compulsory purchase powers were given to local authorities, but a return condition was set out in the old Clause 40(3) which is now omitted—
“Where, for the purpose of a compulsory acquisition … a local authority submit a compulsory purchase order … to the Secretary of State, they shall submit to him, together with the order, any proposals which they have for the disposal of the land concerned to a registered housing association… .”
This meant that at the outset a local authority, when it issued a compulsory purchase order, had to think of the disposal of that land back to a registered housing association. The right hon. Gentleman has omitted that. He has omitted the Secretary of State's power, as he said, to ensure that the local authority did return it to a housing association. The right hon. Gentleman says that he does not want the power and he thinks that some of the housing associations do not want it. I do want it and would like the power. It is very much a difference in philosophy, because although I believe in handing back some of the properties, clearly the right hon. Gentleman does not. He wishes the power of acquisition to continue.
Mr. Bruce Douglas-Mann (Mitcham and Morden)
Has the right hon. Lady discussed this with the National Federation of Housing Associations? Is she aware that the view of the federation is that it would make its position very much more difficult if this power existed and that its relations with local authorities would deteriorate as a result?
I wonder why the federation thinks that relations between local authorities and housing associations [column 64]would deteriorate merely because there was a power to hand back houses to housing associations. Without that power it brings—I suspect that this is what the right hon. Gentleman wants—progressively more and more property into the ownerships of local authorities.
I rather thought from what the right hon. Gentleman said—I will read it tomorrow—that that is what he is after in his general policy.
I turn to the clauses dealing with the Housing Corporation. In this speech on the previous Bill from this Dispatch Box the right hon. Gentleman appeared to see the Housing Corporation as a kind of great public enterprise housing authority, and we naturally fear that he will use it for that purpose. Earlier I quoted some of the things he said about it.
Our purpose in expanding the corporation's rôle is set out in the White Paper, “Widening the Choice” :
“The Corporation's new remit will be to promote the development and effectiveness of the voluntary housing movement. … The Corporation will in particular help housing associations to be active where housing conditions are worst and housing needs are greatest. It will seek out housing land and support housing associations in its purchase. It will promote similar opportunities for housing associations to purchase existing houses and to convert and improve them to a decent standard.”
The last Government hoped that with the help of those measures the voluntary housing movement could and should play an increasingly large part in eliminating the worst housing conditions and widening housing choice for everyone. Alongside those aims went rigorous provisions for registration of housing associations.
The right hon. Gentleman has revealed a good deal more of his approach in this debate. He says that there should be a more limited rôle for the voluntary housing movement than the Opposition envisage and a much larger rôle for local authorities.
Clause 6 affects directly the powers of the Housing Corporation. The right hon. Gentleman will remember that in response to interventions from my hon. Friends during the earlier debate, my hon. Friend P. Channonthe Member for Southend, West expressed doubts about the clause, which is phrased in wide terms. He said [column 65]that he was beginning to have doubts about Clause 6 and that he would give careful attention to the matter during the passage of the Bill. The right hon. Gentleman will remember that Clause 6 says that the corporation may with the consent of the Secretary of State subscribe for or acquire any securities of a body corporate and promote or participate in the promotion of any such body. This is an extremely wide power. My understanding of the purpose of the power was that it was to enable the Housing Corporation to purchase a company consisting of, say, a block of flats rather than to purchase the land and flats themselves. It is sometimes a much simpler operation to purchase a whole company than to attempt the conveyance of the land and the several flats concerned. That is a much more limited purpose than the words of the clause and my hon. Friends will be giving further attention to this clause in committee. A number of them would rather not have it in at all than leave it in its present, virtually unlimited state.
A problem may arise in relation to Clause 10(3) which says that the corporation
“may turn their resources to account so far as they are not required for the exercise of the Corporation's functions.”
I am not sure whether that would depend on having the powers in Clause 6.
Regarding the corporation building houses for sale, the right hon. Gentleman referred to the excellent relations which Lord Goodman created between himself and the housing construction industry. My hon. Friend the Member for Southend, West in the last debate pointed out that Lord Goodman had already had a number of talks with the building industry to see whether the corporation could offer a stable load of work on behalf of the housing associations to help with the forward planning of the building industry, all of which would seem to be basically a good idea.
But the right hon. Gentleman does not seem to see it in quite the same way because he apparently wants a good deal more direct labour building and perhaps not so much by the house-building industry. That does not seem the best way to secure the confidence of that industry. I hope that the right hon. Gentleman will be a bit more enthusiastic about helping [column 66]the housing association movement than he has been.
I referred a moment ago to a document “Tomorrow in Upper Holloway” , produced by Shelter. Page 14 contains a chapter entitled “What People Want” . I appreciate that the survey referred to in the document was limited—I think it related to about 370 households, and thus it was a small survey, but one of the conclusions on page 14 was that it was striking that 40 per cent.—of the people who were asked about housing—put renting from a housing association or tenant co-operative as their first choice. Admittedly, a number of them had not much experience of that, but it is significant that there were a large number of people who would rather go to a voluntary housing organisation or tenant co-operative than to the local authority.
This means that there is a big rôle for the voluntary housing movement to play, if the right hon. Gentleman will allow the movement to play it. I doubt whether he will, because I notice that his Department's circular on local authority housing programmes puts all the emphasis on the acquisition of more and more houses by local authorities by one means or another. The main section of the circular was on municipalisation, a policy already causing a great deal of disquiet in areas inside and outside of London.
People see local authorities buying up an empty house at great cost in a road in which there are similar houses. The local authority puts in a tenant paying a small rent and he is surrounded by people who are paying high outgoings and rates and who therefore have a sense of grievance and injustice. Such people are making their feelings known to us.
Looking at the end of the circular, it seems to me that someone on seeing it had said, “Oh, goodness, we must say something about voluntary housing organisation” . It is a long circular and the voluntary housing movement gets five lines of treatment at the end. I hope that by the time the Bill goes through the right hon. Gentleman will have agreed to give this movement a bigger rôle than he at present appears to intend.
The right hon. Gentleman also referred to improvement grants. One might have thought from what he said about the provisions in the Bill that they had come [column 67]from his party's policies and had not been included in the previous Government's policy, but the number of changes in the part of the Bill dealing with improvements is comparatively small. Most of the clauses are those which were initiated by the previous Government, for instance the decision not to give improvement grants for second homes. It is also proposed that grants will not be given where the house will be for sale but will be given only where the house is to remain in owner-occupation for five years, or is to remain let for five years, after a grant has been approved. The previous figure was three years. The Government have put it up to five years. If a house does not remain in owner-occupation for five years, or remain let for five years—seven years in housing action areas—the grant will be repayable at compound interest. The only change proposed by the right hon. Gentleman is to alter the three-year condition to five years.
However the right hon. Gentleman has made a further change regarding improvement grants, namely, that in cases in which two or three properties are being converted into one, eligibility on a test of rateable value will be by reference to the total rateable value on the properties and not to the rateable values of the single properties. There are minor changes in the clause referring to this matter.
My hon. Friend H. Rossithe Member for Hornsey did a marvellous service by going through the two Bills and by presenting me with a Bill which had every change marked. I note that most of the changes regarding improvement grants are due to the previous Government and have merely been modified by the present Government.
I understand the right hon. Gentleman's constraint about going further than he has gone in giving 75 per cent. improvement grants for a longer period. He has set out his reasons. He would like to go further on this but the Government consider that stress areas must come first. I must say in defence of my right hon. and learned Friend the Member for Hexham (Mr. Rippon) that that was exactly the reason he gave for not being able to take any action regarding extending the period for 75 per cent. improvement grants. [column 68]
No doubt the right hon. Gentleman has done what he can in this respect—and I understand the constraints on public expenditure. Realism usually hits a Government when they get into power, but it does not always hit an Opposition. However, this Opposition are still very conscious of the public expenditure problems. The committee on improvement grants has put in some hard work and almost all its recommendations have been adopted.
I very much welcome the continuation of the clauses which we introduced, Clauses 103 and 104, regarding disclosure of a landlord's identity and the power to challenge service charges. My hon. Friend the Member for Hampstead (Mr. Finsberg) was foremost in trying to secure such provisions, which we accept and welcome.
The purpose of the Bill is to help those in the areas of greatest need. I hope that that aim will be fulfilled in the spirit in which we introduced our Bill. I understand that the right hon. Gentleman wants to make a number of changes and that his ideas about the administration of the Bill are rather different from ours.
Indeed, I hope that we are not being too co-operative. In this Parliament it is difficult to know what to do: if one is not co-operative, one is in trouble; if one is co-operative, one is in trouble. If I find that we are being too co-operative about the Bill, I assure the right hon. Gentleman that I do not find it difficult to become difficult—it is something that happens to come very easily to me.
For the time being, we shall reserve judgment, as what is before us is predominantly our Bill with only one or two changes, which some of us do not like. We shall do our best to support it and to scrutinise it in Committee in the hope that it will pass into law.