I am glad that the Secretary of State intervened to clarify that point. We look forward to his justification of what he said. All that he has said is that he does not know the answer to the question. It would be charitable to leave that point there and to let the Minister for Housing and Construction answer in more detail later.
With regard to charitable properties, the Secretary of State is taking no account of the practical difficulties that will inevitably arise. It will be impossible for the housing charities to replace the homes that they are forced to sell. The receipts after discounts and repayments of outstanding loans will be minimal. We know that the charitable organisations will not be able to replace those properties.
Therefore, the ability of the charities to fulfil their obligations will be seriously curtailed. Moreover, the proposal will be divisive because some tenants with the right to buy will make a good profit on later resale due to the improvements to an area made by housing associations, especially in the inner cities, about which the Secretary of State expresses so much concern. At the same time, other tenants of the same charitable trust will be excluded from the right to buy and will not be able to get anything.
In one street one could have, and probably will have, tenants of housing trusts who have lived in properties for 10 years but are unable to buy their property, whereas their neighbours, whose property was acquired later by the trust and is therefore more modern and who may have been tenants for only about four years, will be able to buy the property at a large discount. Subsequently they will be able to make a large profit on the sale. I look forward to a Minister telling us where the justice is in that. The Secretary of State is creating many problems for housing associations, which will have to explain all that detail to tenants.
As I said, the measures are rightly causing alarm among the charitable groups affected. They will prove an administrative and perhaps a legal nightmare for the associations concerned. They pose a threat to all charities that accept Government grants, even those that repay those grants. We shall oppose the provisions vigorously in Committee. We look forward to support from many quarters. I only wish that there were more support from Conservative Members.
I must restate our basic opposition to the right to buy as the Government have created it. None of the arguments that were put forward by my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) and others in 1980 is any less relevant now. They become more pertinent as our housing crisis intensifies.
We argued in 1980 that the nation could not afford the loss of rented accommodation created by the 1980 Act. Since then sales, combined with the abysmally low levels of replacement building that the Government allowed, have led to a drop in the number of public sector homes. I do not see how the Secretary of State can think that it is good to lose so many rented properties when all around him are so many signs of the need for good rented accommodation.
My right hon. Friend said in 1980 that we could not afford the loss of that rented accommodation. Events have proved him right. However, one thing has changed since the debates in 1980, and that is the cost of the sales policy. At the time many questions were asked, such as: "Will council house sales create a profit or a loss?" The Secretary of State said that that depended on 'the assumptions that were made.
One of the crucial assumptions was about rent levels. The Government issued a cheerful-sounding document called:
The appraisal of the financial effects of council house sales".
They made a number of assumptions about rent levels. In that now amazing document rents were assumed by the Government to rise by a minimum of 3 per cent. and a maximum of 11 per cent. per year. Then the Secretary of State's rent directives forced up rents by 117 per cent., with more increases to come. Part of the reason for the increase in rents was the encouragement of sales, but one of the effects has been to increase the cost of sales for local authorities.
One of the remarkable ironies is that the buyer of a council home may receive more subsidy as an owner-occupier than he did as a council tenant, yet the Government still portray council tenants as the subsidised sector of society. We were opposed to compulsory sales in 1980. Everything that has happened since reinforces our opposition.