Improvement Grants (Cuts)

Part of the debate – in the House of Commons at 6:48 pm on 16 November 1983.

Alert me about debates like this

Photo of George Young George Young Parliamentary Under-Secretary (Department of Environment) 6:48, 16 November 1983

I shall try to deal with the points that have been raised in the debate, but if I do not have time to deal with all the individual points, I shall write to the Members concerned.

The hon. Member for Norwood (Mr. Fraser) mentioned the construction industry. No one would deny that it has suffered through the recession, but the picture which the hon. Member gave is incomplete, because the output figures for 1982 were up on 1981 and for the first six months of 1983 they are up by 3·5 per cent. on those for the same period of 1982. On new orders, the picture is even better. For the first eight months of 1983 they are 16 per cent. up on 1982. I hope the hon. Member draws the same encouragement that I draw from those figures.

If one thinks through the consequences for the construction industry of improvement grant policy it is worth remembering that for every £1 which local authorities contribute to repair and improvement the individual puts in £30. Of far greater importance to the construction industry is the impact that our overall policies are having on the £30 rather than the £1 put in by the public sector. Our success in bringing down interest and mortgage rates and ensuring that funds are available, and the fact that earnings are still keeping ahead of prices, have meant that more people have the resources to keep their homes in good condition. The construction industry is more interested in securing a long-term future, based on a sound economy, than in pressing for the continuation of short-term initiatives to help them as they move out of the recession.

My Department has implemented the recommendations made by Lord Scarman. The figures for the urban programme show that the Government have put their money where their mouth is. We have increased the urban programme from £165 million in 1979–80, which is the figure that we inherited from the Labour Government, to £348 million in 1983–84.

The hon. Member for Norwood gave the figures for public housing starts, but conveniently omitted the figures for private sector starts. In 1983 those are likely to exceed 165,000. That is the highest level since 1973, and reflects growing consumer confidence in the country's economic recovery. The building societies have had excellent inflows of savings since July, with October's inflow at a record £1,010 million. Those substantial funds are ample to meet current mortgage demands and reduce mortgage queues.

The right hon. Member for Brent, East (Mr. Freeson) sought to excuse the poor performance of the Labour Government by implying that they had spent more on local authority improvements. Sadly, statistics do not support his case. Between 1978–79 and 1982–83 the amount of money local authorities spent on improving their stock rose from £479 million—the figure that we inherited— to £934 million in 1982–83. So the expansion in home improvement grants has not been at the expense of improvements in local authority stock.

It is not for me to pass comment on the performance of Brent council. However, I read in the newspapers that one Brent councillor has decided that her constituents would be better served if she supported Tory councillors. I applaud her decision and her courage.

My hon. Friend the Under-Secretary of State for Scotland heard what the hon. Member for Glasgow, Springburn (Mr. Martin) said about the position in Scotland.

I must tell my hon. Friend the Member for Staffordshire, South (Mr. Cormack) that the 90 per cent. grant for hardship cases will continue. Local authorities have the discretion to define hardship. The 90 per cent. figure will apply for those in hardship in all areas, and will not be restricted — as it was under the Labour Government—to those who live in housing action areas.

My hon. Friend raised a point about rehabilitaion. We are in favour of that where it is economically practicable. There will be some role for demolition, but there is no question of returning to the major clearances of the 1960s and early 1970s. That is not needed, and it is socially costly.

There have been constructive comments from both sides of the House about improving the grant system. The hon. Member for Caerphilly (Mr. Davies) and my hon. Friend the Member for Ilford, South (Mr. Thorne) touched on that matter. The present system is legally and administratively complex, and it is not always targeted towards obtaining the best value for money. We are studying the matter, and will discuss the report of a joint working party of local authority associations and my Department at the housing consultative council next week.

I hope that we all agree that the policy of improvement grants and the publicity surrounding them have had the beneficial long-term effect of bringing home to owners of buildings the importance of keeping their properties in good repair. It has compelled local authorities to reorder their priorities and allocate a higher place to the conservation, maintenance and improvement of existing stock. I make no apology for those consequences.

A number of hon. Members have expressed concern about next year. I cannot anticipate the Chancelllor of the Exchequer's statement tomorrow about the Government's public expenditure plans, but I can see no reason why English authorities should not find it possible next year to match the £430 million that they spent on grants this year — which was a record. The resources that we shall make available to local authorities will allow them to tackle defective dwellings in their stock that need immediate attention. There is no reason why, at the same time, they should not maintain a significant programme of home improvement grants.

The real problem appears to be uncertainty — until local authorities know their allocations for next year they are reluctant to commit themselves. That is why we hope to announce the HIP allocations for individual authorities before the end of the month. We have told them that the minimum provision will be at least 80 per cent. of their allocation for this year. Given that assurance, and the clear terms in which the temporary nature of the 90 per cent. grant was described by the Chancellor, I do not think that any authority can claim to have been misled. Indeed, one could argue that the reduction from 90 per cent. to 75 per cent. helps local authorities, because for any given volume of improvement work, the cost to them is slightly reduced.

The Government vigorously deny allegations of misleading the public. All publicity from my Department has made it clear that, where applicable, the grants are at the discretion of the local authority. The Labour party criticises us for our lack of generosity when we are spending seven times what it spent on improvement grants. The public will realise the shortage of constructive criticism and new ideas within the Labour party. We have all read in the press how the Labour party is abandoning its dogmatic approach to housing, which cost so much support at the general election. But we saw little sign of that new approach today.

If we have not persuaded the Labour party in the House to change its policy on housing, there are welcome signs outside. On September 27 the Scunthorpe Evening Telegraph carried the headline: Homes sale critic to buy house. The article stated: A Labour Party chairman on Scunthorpe Borough Council, who has been one of the severest critics of the Government's right to buy Act which allows council tenants up to 50 per cent. discount on the price of their homes, has applied to buy his council house… Councillor Vessey said in a prepared statement last night: 'After much heart searching I have decided that it is right for me to purchase my council house in Scunthorpe.' Of course it is right for him to do that. Yet when we seek to extend those rights we meet opposition from the Labour party, which simply does not understand how out of touch it is with public opinion.

The policy on the right to buy has increased the resources available to local authorities. Between April 1979 and June 1983 total receipts from council house sales were £2·1 billion. The average improvement grant is about £3,000. Therefore, in principle, about 700,000 improvement grants could be financed by the implementation of our right-to-buy policy. Each sale of a council house is the equivalent of two and a half improvement grants. Not only does our policy give independence to the home buyer: it helps to finance the improvement of the housing stock as a whole.

It is difficult to find a less promising subject than improvement grants for the Labour party to choose for its attack on the Government. It is like winning the toss and putting the other side in to bat on a plum wicket. Whatever objective measurement we choose, the only conclusion is that the Government are half way around the course while the Labour party is still in the starting trap, facing the wrong way.

The number of home improvement grants in 1978–79 was 60,000, and this year it is likely to be 200,000. In 1978–79 grants totalled £90 million; this year they will total £650 million. In each constituency about £70,000 was spent in 1978–79; this year it will be £1 million. If we asked thousands of people who live in poor conditions which party has benefited them most in their improvement policy, they will quickly reach the conclusion that it is the Conservative party.

For every grant given in 1978–79, three grants are being given this year. We have made the policy more flexible and better attuned to priority needs. The Labour party restricted the 90 per cent. rate to those in hardship in housing action areas. We have removed that restriction. The Labour party denied grants to disabled occupants whose property was above the rateable value limit, and we have removed that restriction. The improvement grant regime for next year, so fiercely criticised by Opposition Members, will still be far more generous than the regime that we inherited from the Labour Government. The Opposition's motion is sheer hypocrisy, and I invite the House to support the amendment.