Orders of the Day — Land and Housing

Part of the debate – in the House of Commons at 12:00 am on 14th March 1973.

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Photo of Mr Edward Short Mr Edward Short , Newcastle upon Tyne Central 12:00 am, 14th March 1973

When the Government came into office they set about demolishing a great many worthwhile pieces of machinery which they had inherited from the Labour Government and which could now be making a useful contribution in many areas of policy. They abolished the Prices and Incomes Board the IRC, Circular 10/65 in education, and much regional machinery. The Land Commission was getting under way in dealing with the availability and price of land when the Government came into office and abolished it at a stroke.

Last summer a leading article in The Guardian commented: The Land Commission, like other Wilson creations which have been destroyed, could have played a very useful part in tackling our present problems. All of these devices were destroyed by the Government for purely doctrinaire reasons. Perhaps the most spectacular failue of all in this area by this miserable Government has been their failure to build homes.

In 1972 the number of homes built were 31,000 down on the number built in 1971. What is not generally known, but will very soon be known, is that the figure for completions in 1973 will be lower than in 1972. By no stretch of the imagination can the Labour Government be blamed for that. The starts in January are 28·6 per cent. down on the previous year in public housing and 11·4 per cent. up in private housing. In total they are 4·7 per cent. down. Total completions in January are 14 per cent. down on the same period in the previous year. If right hon. Gentlemen opposite object to my taking one month then I point out that the figures for total completions in the last three-month period are 14 per cent. down on the previous year. This miserable record has been achieved during one of the mildest of winters for many years.

Not only are the Government doing nothing about the major scandals of land and house prices but they are failing lamentably in house building. Let us not hear that this is not the Government's affair because the number of houses built is merely the sum total of thousands of individual decisions taken throughout the country, as we are so often told. The Government can and must and are expected to influence the total building programme. In "A Better Tomorrow" they specifically promised "a vigorous new housing drive in the 70s". Is this that new housing drive with completions 31 per cent. down on 1971?

I have quoted a number of lower-paid workers for whom the housing situation is becoming impossible. For a large number of others, up to those with average incomes and beyond, home ownership is becoming more and more difficult. Quite apart from the impending increase in interest rates, the monthly repayments of a mortgage on the average house have increased from £36·65 in June 1970 to £65·97 in December 1972.

I am informed that the building societies would require a minimum income of £2,000 for a mortgage of this size. Older houses in London and the South-East mortgaged to the Nationwide Building Society at the end of 1972 cost an average of £11,324. The required income for a mortgage on such a house was £70 a week. I ought to mention that it also requires an assurance of 25 years security in employment at that kind of salary.

A recent survey of mortgages advanced in 1972 in Greater London showed that nine out of 10 were to people earning over £2,000 a year. The average price of the dwellings bought with the mortgages was £12,400. The average mortgage was £8,000 and the average deposit was £4,400. What chance has the lower-paid worker got? Clearly homeownership, except for the affluent, is rapidly becoming much more difficult.

Where can those who are other than affluent turn for accommodation? There is no doubt that the national stock of privately rented accommodation is diminishing while the number of households remains static. In other words, such accommodation is becoming increasingly overcrowded. Government policy is creating this overcrowding in privately rented accommodation. The escalation of house prices together with the uncontrolled availability of improvement grants, encourages landlords to sell out.

There are three choices before landlords in London and elsewhere. First they can take in tenants, the bulk of whom are likely to be unable to afford other than low rents, which will encourage the landlord to overcrowd the property with the result that the fabric of the building will decline. Secondly, the landlord can improve the property with a grant, subsequently reduce the number of occupants, evict the remainder and put up the rent by anything up to 400 per cent. There are literally hundreds of examples of this happening all over London.

When this happens the process which is coming to be called "gentrification" takes place. For instance, in Barnsley and Islington, which I have quoted, in 1962, 4 per cent. of the inhabitants were from the professional-managerial class. By 1972 this figure had risen to 50 per cent. That means that the working-class population are being forced out and pushed out.

Thirdly, the landlord can sell the house, preferably with vacant possession, or to a developer specialising in conversion to luxury flats for sale. Even well-intentioned landlords are forced or lured out of the provision of low-cost rented accommodation. In my view, private landlordism can have no permanent place in the provision of houses in future. It has been failing for a long time but in the last two years its failure has been abject.

People searching for this diminishing pool of private rented accommodation have little hope in the vast majority of cases of ever becoming house owners. Their incomes are inadequate and they simply cannot raise the amount of deposit I have mentioned. So there is a diminished chance, after 30 months of this Government, of buying, even for average earners and a very slim chance only of renting privately-owned property.

For these reasons the problem of homelessness grows and it is a shocking indictment of our society. The only statistics available are figures published annually by the DHSS and they are based on the number of applicants for temporary accommodation for the homeless. The ratio of applicants to vacancies varies from 1½ to 12. The problem is most acute in London but it is known in the regions as well. The true extent of it is not known. Certainly last year there were 100,000 families who reached the pitch of despair necessary to apply for this kind of accommodation which often entails the splitting up of families. The numbers are now almost certainly greater than those figures. The statistics are quite inadequate for either policy decisions or administrative action.

On any sensible assessment of the whole tragic housing situation a major element in the solution must be the provision of far more publicly-owned houses to let, yet in this situation the Conservative local government conference was told—by, I believe, the present Minister for Housing and Construction—that it was monstrous —that was his word, "monstrous"—for any local authority to frustrate the wishes of its tenants who want to buy their own council houses. I should have thought that the plight of the homeless or the plight of the low-income families who cannot afford to buy or cannot afford privately-rented accommodation was a great deal more monstrous than that. Has the hon. Member heard of the £1,500-a-year civil servant in Westminster who applied to Westminster City Council to buy his house and was told that the special discount price would be £30,800? Or has he heard about Peterborough Borough Council? In January the council stopped selling council houses because it said that people could no longer afford the mortgage repayments. They need to be earning at least £40 a week to purchase one of our houses. I and my colleagues believe that to sell council houses in areas of housing stress is callously to ignore the plight of the homeless and the inadequately housed. But this Government encourage it, and their encouragement of all local authorities to sell council houses is one of the best commentaries on the morality of this Government.

Manchester—I have checked this figure this week—has 12,295 people on the waiting list and 14,760 slum families awaiting public rehousing. We were told that the Housing Finance Act would encourage council house tenants to move out and to become owner-occupiers and so vacate their council houses. But what is happening in Manchester and elsewhere? In Manchester the movement from corporation houses to owner-occupier houses has been falling—and it continues to fall—since May 1972, and the movement from corporation property to private rented accommodation has been falling rapidly since August 1972. The waiting list to which I have just referred increased last year by 4,500—in 12 months.

The simple fact is that in Manchester as elsewhere people simply have nowhere else to look for a house. They must go to their council for a house, in spite of high rents induced by this Government's legislation by which the Government are making difficulties for the local authorities. They are making it as difficult as possible for them to build—that is quite deliberate Government policy—in three ways: by doing nothing about land prices; by the financial constraints on housing cost yardsticks—The Times survey of 1st December last year showed that nine out of 10 housing projects in London failed to keep within the limits; and thirdly, by the new rules about rate contributions which rise annually on a sliding scale. The local authority is the only hope for increasing numbers of house hunters, but even the local authorities are being priced out of house building. I have not mentioned the Government's quite deliberate policy of increasing council house rents.

Finally, I turn to rates. The increased rates are the last straw for the householder under this Government. the Sunday Times last Sunday said: A large number of domestic ratepayers will be paying a bill in April which will be 40 per cent. to 75 per cent above what they paid last April. This is despite the latest Budget concessions to the domestic ratepayer. Looking through Press cuttings I find the following assessments of rate increases: Worcestershire, 25 per cent.; Reading, 48 per cent.; Birmingham, 13 per cent.; Bristol, 20 per cent.; Manchester, 17·4 per cent.; Nottingham, 20 per cent.; Chesterfield, 45 per cent.

The Prime Minister's proposal to help in this difficult situation was even more pathetic than the Chancellor's land-hoarding charge. Here again the saving on lollipops and humbugs could have been used to give some significant assistance. As it is, it has been estimated that the average assistance per household in Birmingham will be £2·50 against a 13 per cent. rate increase. This means that the occupier of a three-bedroomed pre-war semi will be paying between £10 and £12 more a year even with Government assistance. The assistance in Manchester works out at rather lower than that, at £2·30 per household.