Orders of the Day — Housing

Part of the debate – in the House of Commons at 4:10 pm on 25th November 1980.

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Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook 4:10 pm, 25th November 1980

I shall not talk about rate increases, because the Secretary of State gets into a tizzy when I do that. I shall say two things related to my hon. Friend's points. I believe that council rents are now pushed to such a height that they are beginning to amount to a tax on council tenancy. If we combine with that the unnecessarily high prices for energy—the price increases imposed on the gas and electricity industries by the Government's financial policy—many council tenants are paying two disguised taxes, one for their gas and one for their rents.

I turn to what the Government regard as a solution to all those problems. I have no doubt that before the night is over we shall be told—the Secretary of State almost said it in his opening speech—that the problems of the homeless, the badly housed, the slum dwellers and the overcrowded will be solved in the Government's brave new world by a greater reliance on the private sector.

Greater reliance on the private sector means three things. First, it means the sale of council houses. The sale of council houses will not increase the housing stock by a single dwelling. It will only deny rented property to some of the families who are in greatest need of rented property.

Secondly, the Housing Act will move the balance of advantage further away from the private tenant and closer towards the private landlord. I find something particularly squalid in parts of that Act. I give one simple example. The idea of shifting the time at which a fair rent is enforced from the day on which the tenant applies for it to the day when the landlord, after much delay and prevarication, has it imposed upon him seems to me the most petty way to maximise the landlord's advantage. But the great example of how the Government seek to solve our problems in the housing area by private enterprise is through the shorthold provision, about which the Secretary of State has already spoken.

The Secretary of State says that the shorthold provision has been dealt a cruel blow by the Opposition's promise to repeal it. My personal hope is that it is suffering from mortal wounds. If that provision is dead, it died unmourned by those who worry about housing. For our part, we shall not be party to a pretence that the housing crisis in this country can be overcome by making tenants survive on one-year tenancies. Anyone who believes that we could conceivably continue that provision of the Housing Act misunderstands both the nature of that provision and the nature of the Labour Party.

Thirdly, the Secretary of State said that he believed that there ought to be and that he would provide increasing provision for owner-occupation. I only wish that it had been like that during the past 18 months.

Let me remind the House of some of the figures that the Secretary of State again failed to provide. While he talks in generalities about improving the prospects of owner-occupation, he fails to give us the figures which demonstrate that owner-occupation is being reduced in this country, thanks to what he is doing. In the first six months of 1979, the building societies lent £4·32 billion, which accounted for 352,000 new mortgages. In the first six months of this year, they lent £240 million less, so that 45,000 fewer owner-occupiers were able to take out mortgages.

Thanks to the Government's policy, mortgages have become so expensive that fewer and fewer families are taking out mortgages. The Secretary of State says that the reduction in the minimum lending rate announced yesterday ought to bring some hope to these people. No one on the Labour Benches will regret that MLR was reduced from the uniquely high level at which it has been held for a uniquely long period. No one will regret that belated reduction; it is highly welcome. But we delude ourselves if we believe that it will bring very much relief to owner-occupiers.

I talked to the Building Societies Association yesterday, shortly after the announcement. I was told—I am sure that the Secretary of State knows this, but he could not bring himself to say it this afternoon—that mortgage holders should not anticipate any early relief. The reason why the building societies do not anticipate a fall in mortgage rates is partly because they are still remedying the damage done to their reserves by the false hopes held out to them by the Prime Minister in the summer of 1979. A further reason is that the index-linked national savings certificates, the so-called granny bonds, have taken from building society funds amounts which the societies estimate to be between £500 million and £750 million—money which would otherwise be available for new borrowing and to reduce the mortgage rate.

The Chancellor of the Exchequer's announcement yesterday, that index-linked bonds are to be extended in scope and that a larger issue of £3·6 billion is soon to be made available can only mean a further reduction in the funds available to building societies and the prospect of a reduction in the rate being pushed further and further into the future.

In short, in all three areas the Government's housing policy has been a ghastly failure. Never have mortgages been so expensive. Never have house building figures for local authorities been so dismal. Never have local authority rents been so high. Never has there been a Government who cared so little about housing the people. It is for that reason that we chose to debate this subject today.