We have had from the Opposition tonight a mishmash of ideas based on no particular distinct political philosophy. Earlier, one Conservative Member, who has, of course, since left the Chamber said that the Bill was an effort to please council tenants, as though the Opposition's efforts in offering council houses at considerably below the market value during the election was somehow totally divorced from a desire to win the votes of council tenants.
Then we had the hon. Member for Bury St. Edmunds (Mr. Griffiths) talking about a surplus of bricks. Does he not think that there are some contradictions in a private enterprise free market system and that sometimes it will break down? In housing it breaks down with monotonous regularity. This is something the Government are trying to eradicate by introducing some Socialist element and some degree of regulation. He should not grumble about these contradictions and then complain about an expenditure of £700 million in an effort to regulate at least part of them.
As for creeping control, the Housing Finance Act was regarded by many local authorities as creeping control by central Government. They were not even allowed to regulate or to assess their rents. They were not even allowed to decide when they should impose rent increases. The rent increases were decided not by local authorities but by the men in Whitehall. The consensus of opinion of local authorities, Conservative and Labour controlled, was that the Tory Government, who introduced the Housing Finance Act 1972, imposed control for purely doctrinaire reasons.
The background of this debate is, by common consent, a situation of crisis in housing. It is worth reminding ourselves and putting on record that in 1973, under the Conservative administration, we had the worst housing situation since 1959. In 1973, 293,000 houses were completed. In 1968, under the Labour Government, 413,000 houses were completed. In 1973 there was an expression of the doctrinaire opposition of the Conservative Government because we had the lowest number of council house completions since 1945. Therefore, when the Labour Government were elected, they inherited a severe and difficult housing crisis, and I do not think that it is a point of argument that interest rates were about to go up to 13 per cent.
Hon. Members in the Opposition have said that high interest rates are bad. So they are. If anyone has doctrinaire opposition to high interest rates, it is the Labour Party. It is a number of years since Dr. Hugh Dalton, who was then Labour Chancellor of the Exchequer, fought the City to get interest rates down to 3 per cent. He failed because of the power of the City. The Labour Party does not stand for high interest rates because the people who benefit from them gain their incomes without contributing to the community. However, when the Opposition talk about high interest rates they might point out, in all fairness, that it was under the Conservative Government that mortgage interest rates increased from 8 per cent. to 11 per cent. and that the Labour Government halted the rise to 13 per cent. only by making a massive loan of £500 million to the building societies.
The building societies have sent to a number of hon. Members—I do not suppose that I am any exception—statistics which clearly show that that loan has helped. For example, in the first quarter of this year the increase in savings was a paltry £135 million. By the third quarter the increase was £547 million because of the increase in confidence among the building societies and investors as a result of the loan. The number of loans on new houses has increased from 24,000 in the first quarter to 27,000 in the third quarter. It is not a matter for complacency, but at least that is a move in the right direction.
In their document the building societies say:
The number of mortgages granted rose sharply from the depressed level of the second quarter, reflecting the improvement in net receipts and drawings on the Government loan. £792 million was advanced to 119,000 home-buyers in the quarter.
Therefore, the Government have made some effort to improve the situation in the private sector. They have encouraged local authorities to advance mortgages to first-time buyers. They have also allocated £350 million to the public sector.
One characteristic of the Opposition is that they regard the debate as being about the owner-occupier versus the council tenant. It is nothing of the sort. The speeches made by Opposition Members reflect a characteristically divisive attitude. Both council tenants and owner-occupiers face the same problems—increasing costs, the difficuties of getting homes of any sort, the increase in maintenance costs, and so on. It is not a question of for or against.
One factor mentioned by the hon. Member for Bury St. Edmunds is common to both council tenants and owner-occupiers. What will improve our housing situation beyond all recognition is the public ownership of building land. Building land is limited in supply, and it has always been a gross abuse by a privileged minority that when they have got their greedy fingers on to land they have been able to obtain a large unearned capital gain as soon as planning permission has been granted. The Labour policy of taking into public ownership development land at existing use value was one of the most important elements of our policy at the recent election.
That is a pledge that we must fulfil, and one that the Labour movement has been asking about for the past 40 or 50 years. I want to see a measure for the public ownership of development land in conjunction with this Bill as a general attack on the grave housing crisis. It is encouraging to note that the Government have issued a White Paper on the problem.
I welcome the Bill especially because it removes from local authorities, however they are controlled, the requirement to charge a profit-making rent on council houses. The Bill allows a greater degree of flexibility to local authorities. It does not allow total flexibility, but no legislation ever does. The Government nearly always give some powers to a Secertary of State to administer the nuts and bolts of legislation by orders, and this Bill is no exception, but local authorities, for the first time since 1972, will be able to assess their own needs in public housing. My constituency of Keighley is a relatively low-wage area. Wages there, in comparison with wages in the Midlands, London and the South-East, are much lower. That is one of the most important reasons why a local authority, in conjunction with central Government subsidies, should be allowed to assess its own level of rents, without the imposition of a doctrinaire basis from Whitehall.
In contrast to what the hon. Member for Bury St. Edmunds said, the general pattern of the Bill is to encourage local authorities to build public sector housing and to give them confidence. It is regrettable but true that many hundreds of thousands have put down their names on council house lists. We want to encourage people into good homes, either owner-occupied or public sector. It is the price increase and the increased interest rate under the Conservative administration that have forced people on to the housing lists.
My hon. Friend the Member for Birmingham, Selly Oak (Mr. Litterick) is a welcome addition to the House, and a welcome replacement. As he said, we cannot wave a magic wand and wish people into an income bracket to enable them to purchase homes. There will always be a need for low-cost houses for rent.
We have heard a good deal in this debate about council houses, and indeed, this subject was the centre of a Conservative bribe in the election. I believe that the selling of council houses is a retrograde step. It takes out of stock readily available low-cost housing which cannot easily be replaced. In Keighley, where houses have had to be sold and offered back to the local authority within five years, a certain number of urgently- needed houses have been standing empty, since the process of sale and resale, as against the process of reletting, takes many months.
The Housing Finance Act, which this Bill happily replaces, was the most divisive measure which the Conservative Government ever introduced. Although we have heard from Conservative Members that meetings on the Housing Finance Act attracted only a small number of council tenants I can tell the House that in Keighley there were huge, crowded meetings at which great concern was expressed about the onerous obligations which that Act imposed on tenants. We must remember that that legislation involved penalties if rent scrutineers were obstructed, and that there were means tests which changed as a person's income altered. This was the sort of situation which Labour Members discovered in their constituencies, although Conservative Members do not appear to have had a similar experience.
Conservative Members have said that the Bill should be criticised because we are keeping an election pledge. The Government are more likely to be criticised if they do not keep their election pledges. I am pleased and proud that the Labour Government are keeping on the paths they trod in Labour's election manifesto and are following the line laid down by rank and file members of the Labour Party. If the Labour Government keep on that path we shall have no worries in giving our people an improved housing programme or in facing the people at tha next election.