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 David Stoddart Mr David Stoddart , Swindon 12:00 am, 14th March 1973

I hope that the hon. Member for Tiverton (Mr. Maxwell-Hyslop) will not mind if I do not follow his remarks closely, although I was very glad to hear him outline some of the difficulties which local authorities face. It is, and it has been, all too easy even for knowledgeable people to criticise the local authorities for withholding land when they have very real difficulties in allowing that land to come forward for use.

I intend to talk about the effect of the savage increases in house prices in my constituency, because Swindon has been very hard hit. Since 1970 the price of houses has risen by more than 100 per cent. Even a small terrace house is getting beyond the pocket of the ordinary working person. This rise has been largely due to speculative activities by private firms. They have certainly greatly exacerbated an already difficult situation, and some have made very rich pickings in Swindon, which is an expanding town, through land and property speculation. The Government have done little or nothing to curb that speculation.

For example, a case which came to my attention in 1972 concerned a firm by the name of McLean, to which the council had sold land at a very reasonable rate. In 1971 it advertised houses to be built on the land. On 8th September 1971, when people were reserving plots, the cost of the houses was to be £9,740. A year later, on 10th November 1972, people were informed of the new price, which was £18,980—a doubling of price in just 12 months and after the announcement of a wage freeze.

That was a staggering price increase by any stretch of the imagination. Stage 2 of the wage freeze—or, for that matter, any other stage—was made to look quite silly, especially when we remember that the additional cost of the houses, worked out on an annual repayment basis, amounted to £630 per annum. Who has had wage or salary increases of that order, except, perhaps, the surtax payer, whom the Chancellor of the Exchequer has relieved of some of his commitments?

I took up the matter very strongly with the firm. It denied making exorbitant profits, but its balance sheet showed that between 1971 and 1972 they more than doubled—from £500,000 to £1 million—while its turnover increased by less than 33⅓ per cent. I challenged it to produce its costing figures, which it refused to do. In my estimation, having made my own researches, I have no doubt that on this project of 80 houses the firm made almost £500,000—almost the equivalent of its total profit, as a group, in 1971. In my view, what the firm did was disgraceful, especially bearing in mind that the local authority had sold it the land at a reasonable price to help alleviate the housing situation in Swindon.

I wrote to the Prime Minister about the matter. He did not reply. Instead, I received a reply from the Minister for Housing and Construction. He made no attempt to deal with the real issue. His answer was that more houses must be built until supply comes into balance with demand. That sounds very hollow, bearing in mind the Government's record last year, which was the most dismal since 1963.

Another instance of a doubling of house prices in the south-western region came to my notice. Again I took up the matter with the Prime Minister and urged him to include land and house prices in phase 2 of the prices and incomes policy, which was then being debated. I have had no reply. I know that land and house prices were not included in phase 2, but it may be indicative of the Prime Minister's attitude to the House and to hon. Members that he has not bothered to reply on a matter of the utmost importance to the country.

The latest example in my constituency is of the manager of a firm moving into Swindon who looked at a house, said that he would like it, and was told that the person who had reserved it had just dropped out, although it was nearly completed, but that if he wanted it he would have to pay £1,000 over and above the £18,000 being charged to other people. Builders, speculators and people who have property for sale are making rich pickings and quick profits out of people's need. The manager was, needless to say, most irate and upset. He wants to know how, under the Government's prices and incomes policy, he is to find the extra cost.

The effect of activities of this kind has been to increase house prices in Swindon generally. They have had a serious effect on the prospects of young people and others wishing to buy or rent houses. For them the slogan "a property-owning democracy" has no meaning. Their hope of having a decent house at a price which they can afford recedes into the mists of distant time, pushed there by the parasitic actions of speculators and profiteers in housing.

Then there is the effect on the local authorities' housing lists. In my constituency the number of relet houses which have come forward over the last few months has been halved. Tenants who would otherwise have left those houses, making way for other people on the housing list, have been priced out of the owner-occupier market. The result is that those people, unable to buy a house, must wait longer for a house. The size of the housing list in Swindon has doubled. The names of more people are going on to it and the time which people must wait for rehousing by the local authority is lengthening every week.

The future seems to hold no prospect of improvement. There will undoubtedly be a substantial rise in mortgage interest rates. If we are to believe what the newspapers say, the rate may be 9½ per cent. or perhaps even 10 per cent. Local authorities, too, will be affected by the profligacy of the Government's lending policy, because the terms on which they borrow will be higher than anything known this century. This is bound to make them diffident about increasing their housing drives and providing more houses for rent. There is a great need for houses, not only for sale but to rent.

There is need for radical action to deal with the housing problem. I agree with my right hon. Friend the Member for Newcastle-upon-Tyne, Central (Mr. Edward Short) that the only way to deal with the land question is to take land into public ownership. In a monopoly situation—and because of the limited and nearly finite supply of land in this country it is bound to be a monopoly commodity—the only way to stop the price soaring year by year is to take it into public ownership. That is one of the first needs.

We should also examine the question of building costs. I have urged the Minister to institute an inquiry into this matter. An inquiry is long overdue. We should consider how the building industry is organised. It might well be that the Government should set up an agency for this purpose and perhaps to give a lead in building methods generally. The building materials industry should also be investigated to see how some of the concerns use their monopoly position to the detriment of potential house purchasers and all those in need of accommodation.

I urge the Government to encourage rather than discourage local authorities to use direct labour, because there is no doubt that genuine savings and better quality can be achieved by it.

Housing is one of the prime needs of our community. The Government must give it the highest priority they can. It will be far better if they drop some of their prestige projects, such as that at Maplin, and concentrate those resources and that financial assistance in providing housing for our people, for this probably is their greatest need.