I beg to move,
That the draft Grants by Local Authorities (Appropriate Percentage and Exchequer Contribution) (Repairs Grants for Airey Houses) Order 1982, which was laid before this House on 8th December, be approved.
On 7 September my hon. Friend the Minister for Housing and Construction announced that the Government were proposing to make financial assistance available to private owners of Airey houses. Airey houses are a type of prefabricated house designed by William Airey and Sons (Leeds) Limited and built in the 1940s and 1950s for local authorities and other public bodies. Recently, many have been found to have serious defects. It is estimated that about 2,000 of this type of house are now in private ownership, all in England and Wales.
In the exceptional circumstances of the case, the Government consider that they should assist owners who bought their houses at prices that can now be seen to have been based on a substantial overvaluation.
Under the scheme announced by my hon. Friend, a private owner who has bought an Airey house at a "defect-free" price will have the option of following two courses. He will either be able to apply to his local authority for a repairs grant towards the cost of remedial work or, in cases where the owner did not wish to undertake repairs or where repairs were not practicable or cost-effective, he would have the option of seeking the purchase of his home by the local authority or Government Department that originally owned it. It is for the individual owner to decide whether he wishes to take advantage of the scheme and, if so, which of the two options he wishes to exercise. The order concerns the first option, that of repair.
To enable local authorities to make grants to owners of Airey houses for the repair of their homes three statutory instruments are required. Two are subject to the negative resolution procedure and were laid before the House on 17 January. They set the limit on the expense that will be eligible for grant aid—the eligible expense limit—at £14,000 in Greater London and £10,500 elsewhere. They also seek to ensure that no owner of an Airey house is ineligible for a grant because the rateable value of his house is too high by enabling authorities to give grants on any house outside London that has a rateable value of less than £275. The rateable value limit would otherwise be £225. In London the rateable value limit remains unchanged at £400.
The order concerns the rate at which a grant may be given by an authority and the proportion of the costs of that grant that will be met by the Exchequer. The order provides that authorities may make a grant up to a sum equal to 90 per cent. of the eligible expense limit. It also provides that in those exceptional circumstances the Exchequer contribution will be 100 per cent. Local authorities will be reimbursed in full by the Exchequer for the grants that they make to Airey house owners.
Local authorities will not be legally obliged to grant applications, but I hope that the knowledge that there will be full reimbursement will encourage them to treat all applications for grant sympathetically.
The arrangements for repurchase are being dealt with administratively. They will be set out fully in a circular which we shall issue shortly to all local authorities. The circular will also explain to authorities the arrangements approved by the House for repairs grants.
All the arrangements that I have outlined are optional, but we hope that as 100 per cent. compensation from the Exchequer will be available to local authorities they will exercise the discretion allowed to them under the order.
The Under-Secretary has made one or two important announcements, including the fact that all the arrangements are optional. Local authorities may exercise their option and pay grants to people who have purchased Airey houses, but, because of the Department's intransigence, local authorities have to refuse grants to those who have purchased Parkinson houses and are in exactly the same position as the owners of Airey houses.
The hon. Gentleman seeks to extend the order to other types of property. I understand his argument. As my hon. Friend explained in the statement on 7 September, the circumstances surrounding the Airey houses are unique, and the buildings to which the hon. Gentleman is referring, which are Parkinson houses, are in no way comparable. I wrote to the hon. Member recently and set out the reasons why Parkinson houses are not comparable to Airey houses. That is why the order does not extend to them. No doubt, Mr. Deputy Speaker, if the hon. Member catches your eye he will seek to develop his arguments further.
I referred to the circular that we shall issue shortly to local authorities. This is at present with the local authority associations and the Building Societies Association for comments. I take this opportunity to thank the association and individual local authorities for their help and co-operation so far in this scheme. If we can achieve the same degree of co-operation in its execution, we shall succeed in giving real help to Airey house owners who through no fault of their own would otherwise face a bleak future. I commend the order to the House.
The Minister has spoken briefly about the order, which the Opposition shall not be opposing. It is an initiative from the Government that we welcome. This is an unusual day, one of those rare occasions on which a Minister accepts his moral obligation, in this case to some people with housing problems. The Opposition think that it is right that the Government should accept responsibility for the defects that have been found in this type of system-built housing that was approved by Governments, and which local authorities were encouraged to adopt. We have no disagreement with the Government.
The regulations and the circular that goes with them give the unfortunate owners of Airey houses the opportunities, which the Minister has outlined, to receive a 90 per cent. repair grant, or to sell their homes back to the local authority or other public bodies. I hope that the Minister will go on to deal with other public bodies, such as the National Coal Board, that have sold Airey houses to sitting tenants. Their position is unclear from the statutory instrument, and from what the Minister has said.
Airey homes have been popular. On the whole they have given good service to the tenant and have lasted for about 30 years. We have these problems that we are discussing because the expected lifespan of Airey properties was about 60 years and, as the properties were relatively inexpensive to build, they were popular with local authorities as well as with tenants. Most people expected the properties to last for 60 years, and it was on this basis that several thousand of the 26,000 Airey home dwellers decided to buy. Many of the purchases took place in the 1970s on a voluntary basis, when local authorities were willing to sell to sitting tenants. There was then another wave of sales under the right-to-buy legislation.
The fire hazards and the structural weaknesses of the concrete columns were discovered. I should mention here my hon. Friend the Member for Penistone (Mr. McKay) who, when he was chairman of the building department of Barnsley council, instructed the first dismantling of an Airey house for examination. It was his work of examination that led to the full revelation of the scale of the problem.
The order is not simply about Airey houses. It is about a small minority of Airey houses, those that have been sold to private buyers. Many may be touched by the Government's concern for the unfortunate owners who found that they had bought a pig in a poke and were left with an unsaleable or potentially unsafe property. The Government's generosity to these unfortunate people is unprecedented. The repair grants of 90 per cent. will cover repairs, redecoration and even the cost of survey fees. If repairs have already been carried out at the owner's expense, ex gratia payments will be made.
If the owner-occupier decides to wash his hands of the affair and resell to the local authority, he gets 90 per cent. of the difference between current market value and the defect-free value as an ex gratia payment from the Government. Even legal and survey fees will be covered. The Government will shoulder the burden of responsibility by reimbursing the local authority 100 per cent. of the cost of the repair grant and by assuming the cost of the ex gratia payment to bridge the gap between current market value and defect-free value on resale.
So what is the problem about this statutory instrument? What is the fly in the ointment? Despite the generous compensation to unfortunate owner-occupiers, there is no compensation for the unfortunate owner if it is a local authority. Here we have one rule for some owners and another rule for others. I do not think that the Minister has considered the position of the owner-occupier's neighbour who has not bought his house from the local authority. He cannot get a repairs grant. The circular to which the Minister referred says that the repairs in those circumstances are the clear responsibility of the local authority, as landlord, to carry out and that an Exchequer contribution will not be made in respect of such grants. What we have not heard from the Minister is why this problem is the responsibility of the Government if the house is privately owned but not if it is occupied by a tenant. Why do we have these two sets of rules?
I wonder whether the Minister realises the full impact of this problem for local authorities. If he does not, I am sure that some of my hon. Friends will enlighten him from their own experience. If the hon. Gentleman recognises the problems of local authorities, why has not he helped them? Why is there no help for them in the order?
The cost of repairing these properties, according to the Government's estimate, is more than £10,000 each. Many other estimates put the figure much higher if a proper job is to be done. The cost to some local authorities is tremendous. I know that my hon. Friend the Member for Leeds, West (Mr. Dean) will want to develop this, but Leeds, for example, has 2,250 Airey houses. It faces a bill of £22·5 million to put all those properties in good order. In Doncaster, with nearly 900 houses, the bill is estimated to be more than £14 million. My right hon. Friend the Member for Bristol, South (Mr. Cocks) has been campaigning for help. Bristol, with 330 houses, will have to spend about £3·5 million just to put right some of the defects of Airey properties.
The Government's circular says blandly that expenditure by local authorities in repairing Airey homes in their ownership will be eligible for housing subsidy in the normal way. They say that as though that is of great help to local authorities. Although it may be of some help to some authorities that are still in receipt of subsidy, the vast majority, including Leeds and Doncaster, will see this as a hollow statement because the majority of housing authorities no longer receive any subsidy from the Government. They will have to meet the bill themselves.
Local authorities such as Leeds, Doncaster and all the others with many Airey properties will have to look to their long suffering tenants or to their ratepayers to foot the bill. This is on top of all the rent increases that this Government have already forced on tenants. In Doncaster, for example, it has been calculated that if Airey houses are to be repaired rents will have to go up by £1·16 per week in addition to all the other increases that have already been imposed.
The uncertain future and the daunting repair costs of Airey houses are causing worry and distress to everyone, but why do the Government feel that the worry and distress of the owner-occupiers are a matter about which they should be concerned, while the equal worry and distress of local authority tenants can be glossed over? In many areas, Airey houses are becoming unlettable. Again I take Doncaster as an example, where many of the Airey houses have to be boarded up when they become vacant because no tenant is willing to take the risk of moving in. That, of course, means an increasing loss of rents to the local authority—another pressure on local authorities that they can well do without at present.
The Government are leaving local authorities very much to their own devices when it comes to repairs. Although the Minister referred in his statement of 7 September to the unique circumstances of Airey houses, he is doing nothing special to assist local authorities to deal with the problem. Although repairs will be eligible for subsidy, where subsidy is still given, Airey houses will have to compete with all the other local authority needs for their share of investment in housing, and that means competing for limited resources.
On the repurchase option, which the Minister is anxious should be offered to the buyers of Airey houses, the Government, although generous to the owner-occupier, are far from generous to the local authority. The local authority has to fund the purchase at current market values. It gets no allowance for its survey or its legal or administrative costs, and when the repurchase is complete it will be faced with a repair bill of upwards of £10,000. Once the house is in good order, the local authority may have to sell the property again to the tenant, and at a massive discount.
I was interested to hear my hon. Friend's last few words. Is it not true that within the space of five years a person could qualify for two maximum discounts on the purchase of a council house?
My hon. Friend is right. It is certainly possible for a tenant to qualify for two amounts of discount. Where an Airey house was sold on a voluntary basis by the local authority and then repurchased under the regulations and the circular that the Minister has now produced, the tenant could, in a short period, exercise his right to buy under the 1980 Act, and get a further discount on the same property.
Will the hon. Lady recognise that in those circumstances the cost floor provisions might well bite, and that that would insulate the local authority against a subsequent loss?
It might—as the Minister says, it might—insulate the local authority against a subsequent loss, but he should remember that we are talking about properties that are quite old, and that therefore the cost floor does not really apply when we are talking about current market values. I doubt whether that cost floor would give protection to most local authorities in the case of properties that are the best part of 30 years old.
I have tried to calculate some of the costs to the local authorities. With houses originally purchased in the early 1970s, the tenant may get a cash gain of up to £10,000 because of the possibility of the tenant getting a discount twice and the local authority having to pick up the bill for the overall repairs, which the Minister is seeking to persuade local authorities to pay.
In fact, I do not believe that there will be any great rush to buy refurbished Airey houses. The scare that has taken place means that many people have lost confidence in Airey properties, and I therefore do not imagine that Airey houses will have a large resale value. It is virtually impossible to get a building society mortgage on such property, and, even if the proposed certificate of repair that the Minister is considering were introduced, I am sure that building societies would not want to consider the purchase of Airey properties. That is one problem that the Minister has so far failed to deal with.
The Opposition could not, and would not, want to object to what the order does. We acknowledge that Airey houses present special problems. They are not, however, as the Minister claimed, unique. There are other types of system-built houses that have problems. There are the Caspan houses in Leeds, and many others. My hon. Friend the Member for Newton (Mr. Evans) has raised another example of system-built housing that creates many problems for local authorities and for the those who have purchased their own homes.
The question that remain unanswered is why the Minister is helping these few people. Why should he choose those who have purchased Airey houses for this help? I suspect that the reason probably lies in the Government's determination to prop up their council house sales policy, at the expense of all else, to allay the fears of those whom the Government want to push towards exercising the right to buy. So long as people who have bought their own council houses are faced with bills of this magnitude others may be deterred from exercising their right to buy. That would be completely against all that the Government want.
The Opposition believe that the order displays the Government's dual standard—one set of rules for owner-occupiers and another for tenants. While we approve of the order, we cannot but condemn the duplicity that lies behind it.
Unlike the hon. Member for Bolton, West (Mrs. Taylor), who welcomed the order grudgingly, I welcome it enthusiastically. I congratulate my hon. Friend the Minister for Housing and Construction on his statement on 7 September last year and my hon. Friend the Under-Secretary of State on the announcement that he has made tonight.
Like the hon. Member for Leeds, West (Mr. Dean), who has taken a close interest in these matters, I feel that I am qualified to speak in the debate because I raised the plight of the Airey house owner and tenant in an Adjournment debate on 25 June last year. I congratulate the Government on the swift, sympathetic and constructive action that they took in September and have taken again now.
The hon. Member for Bolton, West misled the House, probably inadvertently, when she suggested that the cost of repairing and bringing back into life and into active occupation these Airey houses would be about £10,000. I am sure that the hon. Member for Leeds, West agrees that there are a large number of construction companies in Yorkshire and elsewhere, certainly in Staffordshire, as I know, which have made a specific study of the inherent structural problems of Airey houses and have devised foolproof 25-year package proposals to enable these Airey houses to come back into useful life.
I ask the House to disregard the somewhat sensational figure of £10,000 to which the hon. Lady referred. To my knowledge, Taylor Woodrow Construction (Midlands) Ltd. will, in almost any circumstances, be prepared to carry out for local authorities, on a package basis, the revitalisation and regeneration of these properties for between £2,000 and £5,000.
I am grateful to the hon. Member for Don Valley (Mr. Welsh) for raising a matter to which I wish to refer. I ask him to bear with me for one or two moments.
In my Adjournment debate on 25 June I reminded the House of a document that was circulating during the time when these houses were constructed immediately in the post-war period. This document was given to me by my hon. Friend the Member for Folkestone and Hythe (Sir A. Costain), whose firm at the time was closely connected with the construction of these properties. I wish to remind the House of the quotations that I made from the document. It is pertinent to bear in mind that at the time one Government Department on one side of Whitehall thought that Airey houses were of a permanent nature, while another Government Department on the other side of Whitehall, co-operating with the first Government Department, suggested that the houses, being of a prefabricated nature, had a temporary life.
I quote from a letter which Sir Edmund Airey, the chartered architect from Leeds who designed the properties, wrote to my hon. Friend the Member for Folkestone and Hythe. He said that the system
has been selected by the Government as the quickest and most effective means of providing additional new permanent houses to meet the urgent needs of rural areas.
Another document circulating in Whitehall at that time had this sentence:
The system complies with the recommended structural and physical standards laid down by the Inter-Departmental Committee on House Construction appointed by the Ministry of Works, and has been approved by the Ministry of Health for adoption by local authorities.
There are two schools of thought, and I hope that the Minister will be able to shed some light on one aspect, if not tonight, by subsequent correspondence. The document that I have just read states specifically that Airey houses were erected in accordance with the specifications and guidelines laid down by the then Ministry of Housing. It seems that there was no intention that the properties should have a limited life, although they were of necessity of prefabricated construction, and it was assumed that buildings known as prefabs, which were constructed after the war to fulfil a specific and urgent need, had a limited life.
I wish to direct the attention of the House to the philosophy and ethics of a local authority selling, under the right-to-buy provisions, properties built under some form of prefabricated specification some 20 or 30 years ago to fulfil a temporary need. A number of purchasers—former tenants of local authority-owned Airey houses—having bought their houses under the right-to-buy provisions of the Housing Act 1980, find themselves in a Catch 22 situation. Wishing to buy a permanent home for themselves, their heirs and assigns, they have found themselves buying a house of temporary and prefabricated construction with a limited life. The order underlines the Government's wisdom and common sense in underwriting the defects which were built into the properties, and which the purchasers could not have found out about, even by employing the most prudent and astute surveyor, because it is clear that the structural defects to which the order refers could not have been found.
I raised this matter in the Adjournment debate in June last year because I have about 172 Airey houses in my constituency. I should like the Minister to clarify the rateable value limit, to which I heard him refer. As I understand it, compensation or grant payable under the Housing Acts relates specifically to a rateable value limit of £225 outside the Greater London area. Will the Minister confirm that if an Airey house owner has improved and extended his property at his own expense subsequent to exercising his right to buy, he will still be able to obtain the repairs grant to which the order refers if the rateable value limit has exceeded the £225 ceiling?
Three matters have been raised in discussions with my local authority, the Lichfield district council. They concern the redevelopment potential of Airey houses in rural areas. In Colton, Hill Rideware and Alrewas in my constituency, and elsewhere, Airey houses are not concentrated, as are other forms of local authority housing, in inner city and urban areas. I am sure that many hon. Members will confirm that. Several Airey house developments were carried out in groups of between two and 14 on the fringes of the most charming villages. Many provided—and still do—perfectly adequate accommodation for agricultural employees and for those employed in the rural community.
It would be wrong to suggest, as the hon. Member for Bolton, West did, that because one Airey house in 10 or 20 has a minor structural defect—the percentage has not been computed—they all have. Many are still sound in wind and limb and will continue not only to be sound, attractive properties, but mortgageable.
It is suggested that, while most sites can be developed on a one-for-one basis, some sites—I am talking now of rural sites—have scope for redevelopment to provide more dwellings. It is suggested that a site-by-site appraisal be undertaken. Not only the Association of District Councils, but the Building Societies Association would like to see that. Redevelopment potential, the land value, the housing need and the condition of the properties could be considered, and that in turn would result in specific financial implications for each location.
It is wrong for the House to be persuaded by Labour Members that all Airey houses are defective. That brings me to my last point, which was raised by the chief surveyor of the Bradford and Bingley building society in correspondence with me after my Adjournment debate and before my hon. Friend the Minister made his announcement on 7 September 1982. That correspondence refers to those who fall outside the order, those who have not yet bought their Airey house, but who, by qualification of years, are able to do so under the right-to-buy provisions of the Housing Act 1980.
The chief surveyor says:
If the Government were to undertake to put right all structural defects then the cost may well prove prohibitive"—
we do not know—
but the solution may be for the Government to foot the bill for the initial survey, which in many cases may prove that the house is not deteriorating and would put many people's minds at rest. Further, it would also mean that the occupiers had a document guaranteeing present structural stability, thereby allowing future sales to continue and give confidence to the building societies in respect of their Lending Policy.
That is why I told the hon. Member for Don Valley that the building society movement is prepared to give the majority of these properties a completely clean bill of health. I suggest that the obvious agency to provide the Government with that information is the district valuer's department of the Inland Revenue. Provided that the district valuer is prepared to give the properties a clean bill of health, the building societies will be prepared to put their money where the district valuer's mouth is and therefore allow many Airey home occupiers to rise to their lifetime's aspiration of home ownership under the right-to-buy provisions of the Housing Act 1980.
Some hon. Members, and certainly the Minister, will be aware that some time ago, possibly on 13 December in a debate on tenants' rights, I raised the broader issue of industrialised building and how it was fast gathering momentum that could become a deluge of adversity for the housing policy of the present Government and any future one.
Although I support the order, dealing with Airey houses alone is rather like dealing with one small rivulet of a volcano that is about to explode. In the debate of 13 December I quoted £3 billion as being the sum necessary to put right the hundreds of thousands of industrial and semi-industrial houses that have been built in the public sector. That figure has never been denied or commented upon.
In that debate I asked why we deal with some people in the housing sector differently from others. I have always been led to believe that the Government should be evenhanded in their treatment of the community. I see no difference between a family that lives in an Airey house which it has purchased from the local authority and the family next door that rents a house from the local authority. For both families, the house is their home. It is disgraceful to say for political purposes that the owners of the house that has been purchased have priority and are socially and financially superior to the others.
My hon. Friend the Member for Bolton, West (Mrs. Taylor) quoted figures for Leeds. On 13 December I said:
The hon. Member for Lichfield and Tamworth (Mr. Heddle) had a first-class debate on Airey housing. That is another facet of industrial building that is deteriorating. People who have bought the houses will have to spend substantial sums—considerably more than they can afford—to remedy the construction defects.
The Minister gave these people certain guarantees, but hundreds of thousands of council tenants live in Airey houses that are deteriorating. The city of Leeds has over 2,000 Airey houses and it will cost approximately £20 million to remedy the defects. The Minister has made no promises about council houses. He has not told Leeds that he will underwrite a large proportion of the money needed to do these repairs.
Later in the debate I asked the Under-Secretary of State for the Environment whether he intended to answer some of the points that had been raised by my right hon. and hon. Friends. He appeared to be dwelling, as does the Minister in Committee on the Housing and Building Control Bill, on replies to his own Back Benchers. He said:
With regard to Airey houses in Leeds, the Government will take into account the costs that Leeds will have to bear to put it right when they come to calculate the HIP allocations of the years in which the expenditure will fall."—[Official Report, 13 December 1982, Vol. 34, c. 47ߝ64.]
In other words, he was saying "Well, lads, we may allow you some more as long as you pay yourself."
I am sorry that the Minister for Housing and Construction is not present. I do not mean that in any disrespectful way to the Under-Secretary of State. Hon. Members who serve on the Housing and Building Control Bill Committee will be aware that I raised the problem with him last Thursday. I said:
I had not intended to speak again but I shall take up that completely inadequate and extremely partisan response. I do not know what special persuasive powers the hon. Member for Lichfield and Tamworth (Mr. Heddle) has. It seems that the Minister's policy was determined by a bias towards his own Back Benchers. When he pays lip-service and tribute to the way that his Back Benchers represent their constituents, I assume that that could apply equally to every member of the Committee, although a political viewpoint divides us.
Some time ago the hon. Member for Lichfield and Tamworth had an Adjournment debate on what the Government had done about Airey houses. On Monday night, an order will go through giving substantial financial assistance to ex-council tenants who bought their own Airey house and who are now landed with a liability.
The Minister's reply was appalling. He said:
I make no criticism of him,"—
that is me—
but if the hon. Member had made representations to us about the considerable number of council tenants in Leeds who were
of the same nature as those mentioned in the representations that I have received from my hon. Friend … I should have been delighted to refer to them.
Obviously, the Minister had not read what happened in the housing debate in December. I have raised the issue on at least two occasions in the Chamber.
What I find even more frightening is that the Minister also said:
I am only sorry that the hon. Gentleman has not mentioned the fact that one of the major sources of difficulty for council tenants in Leeds is that the local authority has not issued the statutory right-to-buy application forms. That should be of grave concern to all hon. Members representing Leeds constituencies.—[Official Report, Standing Committee F; 20 January 1983, c. 398ߝ99.]
The only conclusion that people who have entered into contracts with local authorities as tenants of Airey houses can draw is that the Government have a vendetta against them. Their only hope of assistance, apart from another rapid escalation in rents, is to buy their houses. That is the policy of the party that advocates democracy. The only right that they are giving to Airey tenants is the right to occupy a house in poor repair. The Minister obviously does not read our debates and he draws a distinct line between people who rent their houses and owner-occupiers. Even-handed treatment is demanded by everyone, and people are entitled to it.
I learnt the technique of reading letters in the Chamber from the Minister of State, who always seems to have a large supply at hand from people who support his policies. I received an unsolicited letter this morning. It came from people on an estate in Leeds which is due for major repairs by the local authority because it is deteriorating. They do not live in Airey houses, but 15 families are faced with a bill which almost matches the £10,000 mentioned in the order. They will receive no assistance. They blame the local authority for selling the houses to them. I blame the Minister and the Government for making the local authority sell the houses.
I hope that the Minister will say that the door is not closed to discussions on aid for tenants or owner-occupiers of houses built by industrialised systems in the public sector, since the Government fully approved them. A responsibility lies with the Ministers involved, from whichever Government they come. I hope that sympathetic treatment will be extended to all in that difficulty.
I congratulate the Secretary of State and the Under-Secretary on their press release issued on 7 September. It was welcomed by many extraordinarily worried people. However, I am far from happy about a number of matters. I join the chorus of concern in that I agree that local authorities could have a tremendous problem in some areas. London faces a particular problem, because many of the Airey houses were originally commissioned by the GLC. Those houses have now been passed to the local boroughs. The situation in London is different from elsewhere in the country.
I agree with the comments made in an Adjournment debate by my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle), who said that a special local authority grant should be given in some shape or form in respect of Airey houses. I hope that the Minister in due course will give that further consideration.
My constituency and the London borough of Redbridge are fortunate in that the Airey houses that have been examined by local authority officers have been proved not to have defects. There is concern, and rightly so, among many private sector owners—this has also been mentioned by my hon. Friend the Member for Lichfield and Tamworth—about the problem of selling Airey property. They frequently cannot be sold because of the survey situation and the building society loan.
I am particularly perturbed—I have raised the matter in correspondence with the Secretary of State—about the question of repairs and surveys. It has already been stated, again by my hon. Friend the Member for Lichfield and Tamworth, that an ordinary survey and certainly a building society survey, let alone a full structural survey, would never have discovered the problems in the columns that occurred in the early type of construction. It is not only Airey houses that have these problems. Others have been mentioned. In my constituency, some Orlitt-built houses may well have similar problems.
The columns are an important factor when examining the Government's proposals and suggestions to alleviate the problem of the private owner. Any structural defect in an Airey house will not be discovered by an ordinary surveyor but will require a specialist surveyor, such as a structural engineer, who will have to make bore holes and use a boroscope to discover the conditions of the columns. That is the only way to guarantee that that property is sound.
It is not even as simple as that. The Minister has admitted on numerous occasions in correspondence to me that if a property is sound today it will not necessarily be sound in seven, 10, 12 or 15 years' time. It has been recommended that a check be taken at reasonable intervals to see that the columns are in a good structural condition. If that is the case, and this is important, I have been unable to get an assurance from the Minister that the cost of the survey will be borne by the Government through their agents, the local authorities, unless it is proved that there are defects and that structural work is needed.
We are not talking about £50, £80 or £100 but of figures well in excess of £100. Even if associations form together to get one company to look at a given number of properties, the cost will be between £150 to £200 for each property. If that is the case, that owner must pay that £200. If work needs to be carried out and if defects are discovered, he can receive payment for the cost of the structural examination. If no defects are found, I understand that the owner will have to bear the cost. That might enable him to dispose of the property. On the other hand, it may not be easy to dispose of it because a number of people may be highly suspicious. As a result, another structural survey or examination may have to be carried out at some future time, and if no defects are found the cost will again be borne by the individual.
It would alleviate much of the problem if the Government took on board the cost of the full structure defects survey. That would give confidence to those who wish to purchase their properties and it would alleviate the building society problem faced by those wishing to dispose of their property.
What about repurchase by the local authority? According to the Minister, the onus is not on the local authority to purchase if it desires not to do so. What will happen if a local authority decides not to carry out the repairs on behalf of the Government? Will the owner have any redress by way of appeal, or will that person suffer simply because he lives in that local authority area?
What will happen if defects are discovered in a second major survey? Will the Secretary of State and his Department review the amount of grant available to those who have purchased Airey houses and take inflation and rising costs into account?
If local authorities repurchase, will they pay the full market value or pay less than the price at which the owner originally purchased? If the owner wishes to purchase another local authority property, will he receive any discount that he originally enjoyed?
These are all ambiguous areas. I shall not detain the House because I know that other hon. Members wish to speak. I make these points because they are giving concern to my constituents and my local authority. I am in correspondence with the Minister and I shall continue to remain in correspondence with him, at least until all these questions are fully and adequately answered.
My hon. Friend the Member for Bolton, West (Mrs. Taylor) welcomed the order and did not do so in a grudging fashion. I am sure that all hon. Members welcome it, because it is generous. Indeed, it is so generous that it makes one suspicious. It means that we must look at it carefully, because it is unknown for the Government to be so generous. The Government are blatantly treating the owner-occupier differently from the local authority. I have no axe to grind in relation to the owner-occupier, because the order is generous, and rightly so.
I take the point made by the hon. Member for Lichfield and Tamworth (Mr. Heddle) about a package deal. The matter first came to light because of a fatality in my constituency. I was chairman of the local authority committee concerned. It was an Airey-type house that caught fire. Such houses do not catch fire more quickly than other old houses, but the terrific speed at which the fire spread left us in no doubt that an investigation should take place. The house was completely gutted within five minutes and a little girl lost her life.
We decided to carry out an inspection and use preventive means in all Airey houses by the installation of rock wool in the cavities, plaster boarding the walls and ceilings, building up the party walls and insulating the roof. A sum of £400,000 was set aside for those purposes to be spent over two years.
It soon became apparent that some of the concrete posts had cracks of varying lengths, mainly at the base of the posts. We decided to alter the contract and to replace the posts that had cracks of more than 200 mm. It became apparent also that the problem was far greater and more widespread than we had thought. Therefore, a full analysis of the problem had to be undertaken. We drew the contractor into the investigation. All of the Airey houses were inspected, either by taking away the skirting boards or by using a boroscope, under the supervision of our own structural engineer. He agreed that 110 dwellings were so damaged that they were critical and should be demolished. Fifty-six category B dwellings had damaged posts and could not be guaranteed for more than five or six years. A further 64 dwellings had little damage and could be proofed.
To make sure that the structural engineer and our architects were correct, the Building Research Establishment was commmissioned to provide a second opinion. It confirmed our worst fears that the repair and replacement of individual posts was possible, but that if three damaged posts were positioned together or in a critical position, the structure must be considered unsafe. There could be no guarantee whatever that the other Airey houses would not fail in a similar way in the near future. A re-inspection had to be undertaken every two years.
We examined the options, taking into account the capital and revenue costs over 10 years, the social impact of the options in each village and the physical effects of each option. Public meetings were held in every village with Airey houses and the necessity of the houses being pulled down was put to the people concerned. We decided not to replace three-bedroom houses with three-bedroom houses, but to take into consideration the size of the family in each house. If there were only two in a family, we suggested a two-bedroom house.
We said to the people concerned that repairs and improvements to modern standards would cost £3,807,000 and that the revenue per annum would be over £492,000. The capital cost of demolition would be £398,550 and revenue per annum would be £123,500. Demolition and rebuilding by the local authority would have a capital cost of more than £5 million and the revenue per annum would be more than £600,000. We decided to plump for demolition and replacement by local authority housing associations from private builders, but that capital cost was estimated at £2,979,000, with an annual revenue of £365,000. That is where the difference arises, because the local authority will not be reimbursed for those costs.
The houses are usually in pairs. A house bought from the local authority may be one half but the other half may be a local authority house that must be demolished. The owner of the private half must decide whether to sell. Sometimes owner-occupiers overestimate the value of the house and underestimate the cost of the repairs needed. They forget that the local authority is constrained by valuation rules. As soon as the Government announced the grants available, some of the contracts between the local authority and the tenant or the owner-occupier fell through because the owner-occupier believed that the local authority should pay more.
The Government say constantly that allowances for Airey houses are contained in the HIP allocations, but there is no evidence to support that statement. If there is an allocation in the HIP programme, the spiralling downwards of the allocations is far worse than we believed. There is pressure on other housing activity, which is reaching breaking point in my authority. But because of the financial implications of the replacement of the Airey house, and because the local authority decided, rightly, that one of its main priorities was to replace the houses, new building has stopped, improvements have gone further back and slum clearance has been stopped.
As the Airey houses were built as a result of a Government initiative, it is up to the Government to assist the local authorities with the problem that they have inherited. The Government have accepted responsibility for those houses, through the announcement in September 1982. If the Government are to be fair to the public sector, they should consider three matters. They must allocate specific additional capital. That could be accomplished under the specific provisons made in the improvement grants that are coming into force. Local authority tenants could be permitted to apply for a grant as they do for improvement grants. If the Department of the Environment wishes to control the additional allocation, it could remove the element from the general consent to borrow and make approval subject to project control form submission.
The Government could also make specific Housing Corporation allocations to housing associations. At present, the housing associations are dependent on finance from the capital receipts of local authorities. The Government continue to hound the local authorities about the use of capital receipts. If they must use their capital receipts to finance everything that they wish to undertake, they will run out of money very quickly. My local authority has put aside money to replace Airey houses, but the Government are putting pressure on local authorities to use capital receipts. If they do not do so, they will be penalised, so what will happen to the Airey house programme during the next 10 years?
That is something that the Government could do to assist local authorities. They could provide revenue support for the net annual revenue costs of all necessary work and they could continue to be liable for all buildings. Although a house may have been pulled down, there may still be 30 years' mortgage repayments on it. That is a cost additional to that of replacing it with a new house. The Government have inherited responsibility for the Airey houses. Although they have treated the owner-occupiers generously—I applaud that—they should consider carefully their treatment of the local authorities. The financial burden of the replacement of the Airey houses is crippling my authority and shoving everything that we have looked for further and further back.
I have been considering the Barnsley side of the authority, but I should also mention the Sheffield side, which has 264 Airey houses. The secretary and research officer of the tenants' association, Leena Jones, talks about getting
equal treatment in terms of financial assistance for local authorities
We feel that the Government is treating us as second class citizens not entitled to the same consideration and assistance as owner occupiers.
That is what we find all the way through. The local authorities are doing their best to rid us of the problems associated with the Airey type houses. Considerable work and effort have been put in by valuable teams of councillors and officials such as the one of which I was chairman. They now need the backing of the Government, because without it local government finance will be crippled.
It is inevitable, in a debate of this kind, that there will be a fair amount of repetition, but it is important that the Minister should understand that doubts about the completeness of his policy are being expressed all over the country and not from just one area.
I have always thought that the Airey houses in my constituency were reasonably popular with the tenants. When I get complaints—and I certainly get many—about local authority housing in Bristol, they come mainly from the tenants of Victorian properties that have been acquired out of necessity by the local authorities over a long period. They do not come from the tenants of the specially built houses such as Airey houses. However, we must accept that serious construction defects and difficulties have been found in them, and those faults must be taken seriously.
My right hon. Friend the Member for Bristol, South (Mr. Cocks), the Opposition Chief Whip, is precluded by custom and practice from contributing to the debate. He and I went, together with the officials of Bristol housing department, to see one of the Airey houses that had been stripped to its bones. I confess that, not being a building expert, I could not see a great deal wrong with it, but I was told that unless action was taken—this was the view of the Government's experts—the house might collapse in the fullness of time.
As has been said already in the debate, the Government are rightly generous to the purchasers of the Airey houses, but they are far from generous to the local authorities which have been left with stocks of Airey houses which have now no great value.
My hon. Friend the Member for Bolton, West (Mrs. Taylor), who opened the debate for the Opposition, mentioned a figure of 330 houses for Bristol—I think the figure is actually 380—of which about 100 have been sold. The concern of the Bristol housing authorities is to know what they are to do with those tenanted houses if they are to be put in any kind of order, because the cost will fall on the other tenants of the city council. Indeed, the Bristol housing department has been so anxious that it asked my right hon. Friend the Member for Bristol, South and myself to make representations to Ministers at the first opportunity. We asked the department to make a list of all the difficulties which, from the local authority point of view, arise from the present incomplete policy of the Government.
We have been provided, Mr. Deputy Speaker, with a list as long as your arm of the authority's doubts and qualifications. I shall not dare to quote all the points as there would not be time, so I shall select one or two of them and pass the others on to the Minister in due course. Bristol city housing department states:
If Airey houses which have been sold are to be repurchased by the Bristol city council, funds will have to be allocated to pay their current market value, as the Government reimbursements will only cover the difference between the latter and the 'defect free' value of the house. In the majority of cases the local authorities will have to bear the whole cost of repairs in addition.
That is a substantial point. It continues:
As it could be said that there is no real market for these houses at present, assessment of 'current market value' could be a costly and time consuming exercise. Some provision for arbitration between the local authority and the owner, in the event of failure to agree on 'current market value', and 'defect free value' will be necessary—perhaps the district valuer
will have to make the decision.
Bristol city housing department raises a further point. It asks:
Will expenditure under the scheme count against the local authority's Housing Investment Programme Allocation?
That important question must be answered.
Bristol city housing department continues:
Some Airey houses will still be subject to a pre-emption clause, and the clause limiting the resale price. Repurchase in these cases and ex gratia payment arrangements might not be appropriate.
There is a very large ownership of council houses in Bristol going back many years. I can sum up the problem in the words of the Bristol city housing department:
Although the proposals made by central Government rightly seek to protect the interests of purchasers of Airey houses, there is no commitment to protect the interest of the local authority tenants who, in the absence of a rate fund contribution or central Government subsidy, will have to meet the whole cost of the repairs through the Housing Revenue Account.
Those are substantial points raised by an experienced and responsible local authority housing department. The Minister should make haste to reassure local housing authorities that their grave doubts and worries on Airey housing in this new situation will be put right.
In the only part of the speech of the hon. Member for Lichfield and Tamworth (Mr. Heddle) with which I agreed, he said that purchasers of Airey houses could not have known of the built-in defects in their houses no matter how prudent and careful they had been at the time of purchase. I press those words on the Under-Secretary of State because those words apply precisely to other forms of systems-built or prefabricated houses. They certainly apply to the houses to which I drew his attention in correspondence—the Parkinson frame houses. There are many other types of development with which there have been problems. I am sure that the House will return to this again and again, in Question Time, in Adjournment debates and in debates on housing policy because the Minister knows that far from being unique—the words he used both in a letter to me and in response to my earlier intervention—there is nothing unique about the Airey houses. The problems are symptomatic of many other houses.
I should like to concentrate on Airey houses because there are 60 or 70 such houses in my constituency, which were built by Warrington rural district council some years ago in some of the most attractive villages in my constituency. They have been taken over by Warrington borough council or Warrington district council and about 15 of the houses have been sold.
I welcome the order and particularly the Government's decision to extend grant payments to individuals who purchased their houses between 14 May 1981 and 7 September 1982. Two or three of my constituents in that category were extremely worried and they now know that they will qualify for assistance.
Of course, the order applies only to those who have purchased their houses. It is significant that the hon. Member for Lichfield and Tamworth did not refer to local authorities and their tenants. Hon. Members on both sides have asked repeatedly about the position of councils and their tenants who will have to foot the bill.
I understand that Warrington borough council has an allocation of £40,000 for Airey houses in its HIP allocation. I am not sure what it is supposed to do with that money. We do not know whether the council can use it for repairs to its own Airey houses or whether it is for the repurchase of Airey houses. In either case, it is not enough.
Clearly, the burden will be borne by Warrington tenants with no assistance from the Government. The policy of the borough council has been that charges for repairs, maintenance, management and so on should be borne by tenants. Unless it changes its policy, tenants will have to pay the cost of dealing with the council's stock of Airey houses.
Three years ago, Warrington district council, a most prudent housing authority, received £2 million from central Government for its housing account. It now receives not a single penny. There is no question of Government assistance; the cost will have to be met by council tenants.
The Airey houses have been built on blocks of two, four, six, eight or 10 and are fairly widely scattered. In Warrington only one or two houses in such blocks have been sold. If an owner accepts the Government's generosity and has his house put right, but the local authority decides that it cannot afford to make good the defects in the rest of the block and moves out the tenants, will one or two owner-occupiers be left in a derelict block? Alternatively, if the council decides to modernise the block it will face a potential cost of £10,000 per house.
The hon. Member for Lichfield and Tamworth accused my hon. Friend the Member for Bolton, West (Mrs. Taylor) of using sensationalist figures, but my hon. Friend and I got the figure of £10,000 from the Under-Secretary.
The circumstances that I quoted regarding the letter that I received this morning were a carbon copy of the circumstances described by my hon. Friend. There are houses in my constituency which are not Airey houses. They are interdependent, in rows, and some have been sold. The corporation is finding the money to put right the structural defects on its own. The quantification for those who have bought the units to put theirs right is £10,000. The corporation does not have the money and is not going to get any.
I accept that the hon. Member has used the figure of £10,000 because that is the maximum figure to which my hon. Friend referred. However, I ask the hon. Gentleman, and the hon. Member for Bolton, West (Mrs. Taylor), to produce evidence that the cost of revitalising these properties is necessarily as high as £10,000.
I should be happy to produce for the hon. Members figures from construction companies such as the Shepherd Construction company of York, and Taylor Woodrow Construction (Midlands) Ltd. of Stafford, that have carried out extensive research in South Wales, Staffordshire, Barnsley Penistone, the Don Valley, and Leeds, that show that the average cost of putting even the more serious examples of these properties into good habitable and mortgagable repair is about £2,500 to £5,000.
I advise the hon. Gentleman to take seriously some of the letters that he receives from building organisations. Up and down the length and breadth of Britain, local authorities are pulling down properties that building companies guaranteed would last for 60 years. Most people who have been in local authority for any length of time have cause to regret some of the statements that they believed from building organisations.
I point out to the hon. Member for Lichfield and Tamworth that until such time as the Minister takes up the point made by his hon. Friend the Member for Ilford, North (Mr. Bendall) and conducts and finances a full structural survey, none of us will know precisely how much the cost will be. That is why we are entitled to use, not our figures drawn from thin air, but the Minister's figure of £10,000.
In the case of Warrington we are faced with a potential bill of over £500,000 to repair the Airey houses, on the Minister's figures.
That is what Barnsley council did. It took and examined each and every house separately to decide what was wrong with the house. We found, for example, that in one area, of the 18 houses there, 260 posts, or 60 per cent. of the posts used, were broken, and the houses had to be pulled down. Will my hon. Friend take into consideration the fact that in repairing houses one can clean the windows and put new curtains in, or one can clean the windows and put the old curtains back? That is the difference in money.
I am grateful to my hon. Friend. I am sure that all hon. Members will take notice of what he says on this subject, because he has as much experience as any other hon. Member.
What happens if the council persuades purchasers to sell their properties back to the local authority, and then, because of the colossal cost involved with the potential problems, to which the hon. Member for Ilford, North rightly drew attention, the local authority demolishes the block? What does it put in its place? As long as there is a Tory Government with their ridiculous right-to-buy hung around the necks of local authorities they would be lunatics to build semi-detached houses, because they would be faced with having to sell those houses in three or four years' time at colossal cost to the ratepayers and the taxpayers.
I suspect that, because of the special nature of the sites involved, which are small sites of two, four, six, eight or 10, the costs would be exceedingly high, and we could be talking of anything up to £20,000 a year to be put back. The only thing that a local authority can do in these circumstances is to put old age pensioners bungalows on the sites, because they are not covered by the right-to-buy provisions. But if we do that, what do we do with the people at present living in the houses in these villages? They have lived there for many years, and their children go to the village schools. There are no other council houses in the villages that I represent. Where do they go? Do they have to accept council houses in central Warrington, miles from their employment, their children's schools, their friends and their families?
The Government have not thought through the problems involved. It is all very well to treat 2,000 out of 24,000 or 26,000 people generously and ignore the remainder, who still depend on the local authority for their housing. Unless the Minister returns to this theme and approaches the problems in a more rational and reasonable way, he will be creating enormous difficulties for the future. His only sensible course of action is to tackle the problems of all prefabricated houses, including the Airey houses, on a rational basis by conducting the sort of survey suggested by the hon. Member for Ilford, North, and then presenting to the House the bill which will have to be incurred if we are to make these houses reasonably habitable again. If he does that, he will get the Opposition's support for the order. He will also get our support to carry out a wider and much needed housing programme.
I have a great interest in the subject-matter of this debate, because I shall have an Adjournment debate next Monday on the Airey houses in my local authority area. I thank hon. Members on both sides of the House who have contributed to this debate, because their speeches will make the Minister more aware of the problems being experienced by local authorities and may persuade him to come up with a different answer from mine when I raise the matter on Monday. The House may have the rare experience of seeing the Opposition win an argument.
I welcome the order, so far as it goes, although I do not welcome the money part of it. However, the hon. Member for Lichfield and Tamworth (Mr. Heddle) spoke of a clean bill of health for these houses. I remind him that the National Coal Board's surveyors and architects gave tenanted houses in Doncaster a clean bill of health, and several tenants decided to buy their houses, only to find that no building society would grant them mortgages.
The Minister has before him a letter from me on behalf of a Mr. Sutton, of Campsell, who has been told by the Halifax Building Society that it will not give him a mortgage and that if he spends what the Minister says he will allow it is still doubtful whether a mortgage will be granted. I am awaiting the Minister's reply to my letter. I am sure that he will be writing to me as soon as he can, because this decision of the building society is a very serious matter, yet the Suttons got a clean bill of health when they decided to buy their house, and there are 197 similar houses in the Doncaster metropolitan borough.
The trouble with the order is that it makes insufficient money available. People who have already bought their houses—and I hope that no more decide to do so until their properties are brought up to a standard which is considered reasonable by a building society—find themselves saddled with a big headache, despite their houses having been given a clean bill of health, and one cannot but feel extremely sorry for them. We must help them all as much as possible. I am sure that that is the Minister's intention.
We hear that the proposed grant was increased even before it came before the House from £9,000 to £10,000, and that is very acceptable, even when we consider that in London it is to be £14,000. But everything depends on the 90 per cent. about which we have been told. Very few people in the country who have rehabilitated their houses have got the full 90 per cent. of the present hardship figure of £8,500. So it is possible to get less for refurbishing an Airey house than people are getting under the old system, because of the break-up of the grants. With repair grants one gets a certain amount for certain items.
No authority could be more benevolent to owner-occupiers than Doncaster. I was chairman of the technical services committee which comes under the public health department. I and my committee said that we should be as generous as possible to owner-occupiers who wanted revitalisation grants, and that where there was any doubt the grants should be given. I believe that I was right. Governments of both parties allocated these grants but few got the full grant because of the way it was broken down and allocated. One has to fill in long lists. One gets so much for a kitchen sink, and so much for other items. With Airey houses it is a matter of big structural damage, not repairs as such, and for that reason people get less under this generous-looking grant than in the case of pre-1965 houses, which received £8,500.
Perhaps the Minister will have another look at such cases to make sure that people do not suffer. It is a matter that must be borne in mind when seeking refurbishment grants. The matter cannot be worked out by rule of thumb or by just looking at it. It has to be worked out correctly and attract allocation.
I am surprised that the £10,500—90 per cent.—is good enough. I and my hon. Friend the Member for Penistone (Mr. McKay) were involved in a full-scale survey of one such house. Even the girders were eaten away. One could even put one's finger through them. No one is to blame. It was something that was not properly looked into at the time, and the Government of the day accepted it. However, the estimate to bring such houses up to a standard that would be acceptable for mortgage purposes is £15,000, and it may be higher. The director of housing, who eventually has to find the money in some way or other, could give a complete breakdown. A sum of £15,000 or more is necessary to make the properties acceptable for building societies to give mortgages.
If the sum that is needed is £15,000, and we are allowing only 90 per cent. of the £10,500, it means that people who want to bring the properties up to standard would then have to find a considerable amount of money—about £6,000. If people want to sell the property later, or leave it to their children, they will have to take out another mortgage. This is the Catch 22 situation, as the hon. Member for Lichfield and Tamworth said. They cannot get a second mortgage because now they cannot even get a first mortgage. They could not get a second mortgage, over and above the allocation, because the building society would not give one. The Minister may tell me that I am wrong, but I do not believe that the local authority would give a second mortgage—or would have great difficulty in giving a second mortgage—on properties on which building societies would not give a first mortgage. That is a terrible situation for these poor people to find themselves in.
Therefore, this order may not help a lot of people. The grant is not enough. If people cannot get another mortgage, it is no good having the property repaired. It is no good patching good stuff on to bad stuff, because it breaks away and is not worth doing. That would be very bad. Most of the people in my area have bought their houses from utilities like the National Coal Board. I wonder whether the local authority will have to buy back the houses under the generous terms that the Minister stated.
On many issues, equity under this Government is not apparent. Money is available for houses built before 1963 because the structure is sound. A mortgage can be obtained. Hon. Members should be seeking to ensure that those with Airey type houses also receive enough money to enable a mortgage to be obtained at a later date.
Some structures of Airey type houses in the Doncaster area leave much to be desired. Those who have bought such houses face difficulties. I hope that the Minister will be able to re-examine the position to ensure that people who, by accident, have bought the worst houses do not suffer. It is a strange world when owners who repair their houses may still be unable to sell them because a mortgage cannot be obtained. If they do not make repairs and the houses cannot be sold back to the authority, their position will become worse through no fault of their own.
The Minister should allow a grant that is big enough to permit the houses to be revitalised and gain a certificate guaranteeing that a mortgage will be available for anyone wishing to buy them at a later date. That is what the owners of the houses want. I hope that the Minister will be able to produce such a scheme.
The order has been eagerly awaited by Airey house owners in my constituency. Ever since they first discovered that their houses could be subject to serious defects they have experienced considerable worry. I am anxious that the order should be implemented as soon as possible.
There are a number of Airey houses in Harlow and adjacent areas, but in only a few of them is there any evidence of serious faults. I want to address my remarks to the hon. Member for Lichfield and Tamworth (Mr. Heddle), because that does not signify that the owners are not faced with serious problems. All those who have purchased Airey houses have found that they are blighted and that it is impossible to sell them. Building societies do not just refuse to advance a mortgage to people who inquire about buying them; they will not even send a surveyor to inspect the property.
In those circumstances, owners are trapped and cannot move. It is difficult to sell some houses in the present economic climate, but it is impossible to sell Airey houses. It is not good enough that local authorities have the option of purchasing or providing the help given by this order. I believe that the Minister must reconsider carefully that aspect of what he proposes this evening.
If any local authority fails to avail itself of the powers to purchase or make the grants provided for under the order, owners who live in that local authority area will be severely penalised compared with owners of Airey houses in other areas. I do not necessarily blame the local authorities. Some of my hon. Friends have pointed out the tremendous difficulties with which local authorities are faced. The order does not assist Airey house owners who are faced with a local authority which refuses to purchase. The order is not clear enough.
In my view, the policy of selling council houses is bound to give rise to such problems. On this occasion the Government are anxious to state that they are not legally liable and that the payments are ex gratia and not a precedent, because they are aware, as some of my hon. Friends have said, that there are many other houses that are subject to structural defects. I believe that one of the aims of selling council houses is to shrug off responsibility for repairs and maintenance. Airey houses illustrate that that policy is fraught with problems for those who decide to buy.
I wish to raise another point that has not been clarified. What is the position of the owner who does not avail himself now of the right to which he is entitled and discovers in 10 years time or later that his house has a structural defect? Will he still be eligible for the grants and the arrangements that prevail now? It is important to clarify that, because all hon. Members know that we sometimes meet individuals who, for one reason or another, have not taken advantage of their rights at a particular time. We need to know whether there will be any time limit on applications for grants for repairs and the right to purchase.
I am grateful to the hon. Gentleman for his support. I am aware from his speech that in his constituency he has met many of the problems that I have met in mine.
I fear that, although we are discussing what appears to be a comparatively limited problem tonight, the problem of Airey houses is likely to be repeated in many other system-built houses over the years. In those circumstances, the problems of Airey houses may pale against future ones. Therefore, although I am anxious to support the order in so far as it goes, I want to point out that it is still grossly inadequate.
The Minister knows that I have had experience of the Government's policy for the new towns, where they have failed to meet their responsibility to remedy design defects in system-built houses. Although the scheme goes a certain way, it is not adequate, and I hope that the Minister will be prepared to consider some of the points that have been made by hon. Members.
I, and I am sure other hon. Members, will monitor matters carefully. If it is found that constituents are still suffering, we shall return to the Minister or his successor to demand an adequate scheme to meet the problems faced by the owners and occupiers of Airey houses.
At the end of this important and difficult debate, I want to put a suggestion to the Minister which I hope that the Government will think worthy of consideration. The Minister has listened carefully to the anxieties expressed by all hon. Members. There is a measure of agreement that the information that the Minister gave the House is inadequate because of the grave concern about Airey housing. The hon. Member for Ilford, North (Mr. Bendall), amongst others, has expressed such anxiety.
In view of all that has been said, I suggest that the Minister should consider whether to withdraw the order and deal with the problem on a wider scale so that the problems of tenants as well as owner-occupiers can be taken into account and that he should think again about the limited assistance that is given by the order.
I hope that the Minister will not simply stick by his earlier statement but will genuinely consider the points that have been raised. He would have the full support of Labour Members if he were to withdraw the order and bring it back later on a far wider basis.
I am somewhat surprised by the latest intervention of the hon. Member for Bolton, West (Mrs. Taylor). Every speaker in the debate has welcomed the order which the Government have laid before the House. Not to proceed with it, not to enable owners of Airey houses to have the support that everybody has agreed they should have, would be far from productive and would not be welcomed at all.
In the course of my remarks I shall deal with the wider issues which the hon. Lady has raised about the assistance available to local authorities, but I do not think that her hon. Friends would welcome any delay in the extension of assistance to those who have bought Airey houses. Indeed, when the hon. Lady spoke at the beginning of the debate she said that this was an act of unprecedented generosity. Modesty prevented me from describing the order in those terms, but as she has done so I think that that is an apt description and a compelling reason why it would be wrong to withdraw it.
The hon. Lady raised an important issue, and it was also raised by many other hon. Members. She asked why private owners are different from local authority owners of Airey houses. Today's debate has been a knock-up for the debate which the hon. Member for Don Valley (Mr. Welsh) will have on the Adjournment in exactly a week's time, when he will raise the subject of assistance for local authorities which are owners of Airey houses.
Perhaps I might anticipate that debate and attempt to deal with it. Public bodies, such as local authorities, already receive public funds. The resources that are available to a local authority to tackle these problems far exceeds those that are available to an owner-occupier. The Housing Act 1980 makes local authorities' costs for capitalised repairs eligible for subsidy. In determining the HIP allocations the Department's regional offices take into account, where appropriate, the incidence of need for work on Airey houses in the same way as any other special local need. One hundred per cent. of the national loan charges on the qualifying costs, which is 70 per cent. of the admissible costs, will be reckonable expenditure and will count in the calculation of local authorities' subsidy entitlement. That is why there is a difference between the owner-occupier and the local authority. The former does not at the moment have access to public funds, whereas the local authority does.
The hon. Lady asked me about discounts. If she examines the Housing Act 1980, she will discover that an owner-occupier who sells his Airey house back to the local authority is not entitled to count for discount purposes the years that he may have counted for the original purchase. Therefore, he is not entitled to count the years twice. The cost floor provisions may bite if the costs of putting the Airey house back into good condition is as high as some hon. Members have suggested.
Does the right hon. Gentleman agree that there is a difference between those who fall under the right-to-buy legislation and those who bought before 1980, when local authorities were willing to sell without any special legislation? Does he also agree that those who sell their homes to local authorities and then buy them back if they are resident for three or five years before they operate their new right to buy will qualify for the full discount on the period since the repurchase by the local authority?
Yes. The hon. Lady is right, but that is subject to the cost floor provisions, which would stop the local authority making a loss on the transaction.
I apologise for intervening again, but is the Minister now saying that the full cost—the current market value—which the local authority must pay the owner of an Airey house would become a new cost floor? If not, surely the cost floor would be the low cost of when the house was originally built?
I shall write to the hon. Lady if I am wrong, but the cost floor for calculating the second sale is not the defect-free price but the price that takes account of the defect when the local authority bought it back from the owner-occupier. Otherwise, I agree, it would introduce a high cost floor that would be unrealistic in the light of the property's condition.
The hon. Lady asked whether houses that are sold by other public bodies will be eligible for repair grants from local authorities. They will be eligible.
Several hon. Members asked why we had singled out Airey houses for this treatment. The hon. Member for Newton (Mr. Evans) was one. The Airey house is unique. Not only is there a risk to human safety from a concealed design fault, but it is a risk that can be present at any time, which affects a substantial number of owners and which potentially involves them in unusually costly repairs. It therefore seemed right to facilitate the early inspection of privately owned houses and remedial action as necessary by providing the owners with financial assistance in the face of potentially heavy costs. No other case that hon. Members have presented, today or in writing, has produced the same balance of considerations.
A few hon. Members asked about the likely cost of repairs. It would be misleading to give any amounts, as the cost will vary considerably. It would be wrong to give examples. The figures in the order are maxima and they are based on our assessment of costs on 1 January 1984. We hope that the cost in many cases will be substantially less.
My hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) referred to his Adjournment debate on 25 June last year. No doubt it was in part in response to his eloquence on that occasion that we have moved as we have done. The rateable values he asked about have been raised to take account of the importance of ensuring that everyone is eligible. We are satisfied that they are generous enough. We raised them after consultation with the valuation office. If by any chance somebody owns an Airey house that is over the top of the rateable values, we shall have a look at that. If that were the case, they would have quite a good reason for asking for their rateable value to be reduced in the light of defects in the property.
My hon. Friend the Member for Ilford, North (Mr. Bendall) asked about the costs of the initial survey on which he has written to me. Defects in the posts of Airey houses cannot be detected without a survey as they are hidden within the wall cavity except in a few places where they appear as window mullions, so two surveys may be necessary. The first survey is to establish whether the supporting columns are at risk and whether there is a problem worth serious investigation. That could be carried out at a small cost. If, following this initial survey, no repairs are considered necessary, the cost of the survey will have to be borne by the owner as there is no power to pay grant.
However, if works are considered necessary, a further major survey will probably be needed as a preliminary to the repairs. If local authorities consider the subsequent repairs to be eligible for grant aid, they will doubtless consider the cost of both of the surveys leading directly to those repairs to be eligible for grant aid subject to the overall eligible expense limits.
In the hypothesis that my hon. Friend puts forward, if somebody has a first survey carried out and no repairs are necessary, he has saved the 10 per cent. that he would have had to find out of his own pocket if he proceeded with the repairs. The owner of the Airey house has to find something out of his pocket. I suspect that the first survey cost might be less than the cost which he would have to find to make up the difference between the 90 per cent. and the totality. The object of the order is to extend assistance to people who have defective properties. If properties are not defective, the order does not extend assistance to them.
The hon. Member for Leeds, West (Mr. Dean) asked about the difference between private owners and public owners. I explained that briefly earlier on. If he is not satisfied with what I said, he may be able to pentacle his hon. Friend the Member for Don Valley to give him a minute or two of his Adjournment debate next Monday when we can return at greater length to the question of local authority owned Airey houses.
I do not see any point in repeating an argument. I raised the case of a person who has bought an Airey house living next door to a council house tenant with the same type of house, same length of tenancy and same income bracket. To both of those families that unit has one purpose only—it is their home; it is where they live. Why differentiate in favour of one against the other?
The Government do not differentiate in the way suggested by the hon. Gentleman. We have made it quite clear that we will include in local authority HIP allocations for next year the costs of putting right the defective Airey houses. For the private owner, we are introducing special assistance in the order. Thus, the Government are making help available to both types of Airey houses. The assistance comes through different channels to reflect the different resources available to local authorities as against owner-occupiers. The Government are making resources available to owners, be they private or public, who live in Airey houses to meet their problems.
The HIP allocations have been increased by the amount of money that those local authorities think is necessary next year to meet the defects in the Airey houses. That is how we have met their needs.
Several hon. Members asked what would happen if a local authority refused to buy. Local authorities have made it clear that they support the scheme, and I see no evidence whatsoever that they will refuse to buy back properties that are offered to them. Indeed, they would be singularly bloody-minded if they did so as 100 per cent. of the cost comes back from the Government. I am sure that no Labour Member is suggesting that his own local authority would act in that way and inflict considerable hardship on someone in its area, given that there is no financial obligation on the local authority.
The limits are set out at January 1984 costs. There is no time limit on application for grant, but there is a time limit on the period during which people can serve notice on the local authority to buy back the home. That time is set out as 7 September 1985.
What will occur if an investigation shows that the building is apparently in a reasonable state of repair but something happens 10 years later that brings a structural defect to light? Is the hon. Gentleman saying that there will be no limit on the claim for grant? I hope that he is.
Unless the House rescinds this order, the entitlement to grant will remain indefinitely. There is no time limit on that.
A number of the other points raised will be clarified in the circular to be sent to local authorities. This will deal with defect-free prices, which the hon. Member for Bristol, North-East (Mr. Palmer) raised. Perhaps I can deal with some of the other points by way of correspondence, but, in the light of the general support for the order, I hope that the House will agree that it can proceed.