The city council selected blocks of houses for enveloping contracts in a manner that was designed to attract maximum help from the Government, following the Chancellor of the Exchequer's Budget statements of 1982 and 1983, in repairing the external fabric of thousands of dwellings with only a modest contribution from the owner-occupiers. That was the other great assistance to my constituents and the constituents of other Birmingham Members.
Many of the owner-occupiers involved are elderly and many others are unemployed. In many roads the majority of owner-occupiers are first and second-generation immigrants. They saw an opportunity for the first time to make a real improvement to the homes that they had bought and occupied for many years. They had found that they could not carry the entire burden of repairing and improving their homes because of the general decay. Those who could afford to spend money on their homes often found that there were only one or two others in the street in that position. These factors were holding up the regeneration of the inner city.
The great benefit of the enveloping scheme is that it provides an incentive for all occupiers. Entire blocks are improved under single contracts, which means that half the properties in a street are not left in decay. The city council used its authority and powers and exploited to the full the opportunity that had been presented by the Chancellor. Large construction companies had not wanted to know about home improvement work for years because they regarded the work as penny-pinching and not worth their while. Under the enveloping scheme, large construction companies were obtaining contracts worth about £1 million in the Birmingham area. That sort of business is obviously attracted to the large construction companies. Small, large and extremely large companies have been involved in Birmingham's enveloping schemes.
Birmingham received an average of 3,000 applications for home improvement grants each year until about 1982. In the past two years it has received 35,000 applications. The increase cannot be attributed to magic. It has occurred because it has been the city council's deliberate policy while under the control of both the Labour and Conservative parties to inform people of their rights under the Chancellor's Budget statements. "Spend, spend, spend," said Ministers. "There is no limit on the sum of money available." Admittedly, it was only available until a certain date. That exhortation was repeated the following year. People were encouraged to apply, and there was the jump in two years from 3,000 applications a year to 35,000. That bulk of applications could not be dealt with overnight.
The real issue affecting several thousand of my constituents became apparent earlier this year. A year or 18 months ago, the roofs and external parts of the houses were being repaired. There were contractors all over the place, bedroom ceilings were caving in and there were lots of problems, but a great deal of good work was being done. The city council told my constituents, "You do not want contractors all over the outside of the house and the inside at the same time. Wait until the external block enveloping has been done before you apply for the internal improvements to the kitchen and bathroom and so on." Thousands of people were given that advice.
The city environmental officer, Mr. Reynolds, wrote to me on 20 February this year. He said:
During the course of the Heathfield Zone II envelope contract, prospective applicants were advised, in good faith, that in order to avoid problems of having two contractors working on the same property at the same time it would be advisable for them to delay their application until the completion of envelope works to their property.
That was sound advice and given in good faith, but it turned out to have been based on a false premise of what the Government's policy would be. A major problem now faces hundreds or thousands of my constituents and those of my hon. Friends who represent Birmingham. I believe that the whole inner city is represented by my hon. Friends, unless part of it falls within the constituency of the hon. Member for Birmingham, Edgbaston (Mrs. Knight). I am not sure of the effect of the boundary changes.
These people have better garden walls and front paths than bathrooms and kitchens. If one drives, cycles or walks around the roads in the Birchfield and Handsworth part of Perry Barr, it looks great. The roofs have been redone, the guttering has been repaired, there are new window frames, the external fabric looks great and there are new gates and walls. However, some of those houses cannot be lived in. I have many elderly constituents who have had to go to live with their children since the work on the inside of the house could not be done because, with the change of policy since the general election, the owners could not get the grant. Those houses will deteriorate. There will be vandalism. This is a crisis of monumental proportions.
The problems connected with the block improvement work are not confined to the inner city. In another part of my constituency, in the green leaf area on the city boundary, there is a pre-war council estate built in the '20s and '30s called Kingstanding. It borders the leafy suburb of Sutton Coldfield. There are 2,000 houses there with outside toilets. The council has been modifying about 100 a year. Under the schemes, that work has had to stop. Many of the houses have been sold in recent years, either to sitting tenants or as empty houses under the scheme that operated until May this year.
One of the key points for those buying such houses, which might have been thought sub-standard because they had outside toilets, was that one could get a grant for a mini-mod to convert to an inside toilet. That was a key selling point, for octogenarians as well as for families with young children. I have constituents in their seventies, eighties and nineties who have not been able to get a grant to convert an outside toilet. The problem extends from the inner city to the boundaries of Birmingham. In some cases, it affects entire rows of houses because the improvements have been made in a block enveloping scheme.
This year, Birmingham has £17 million available for home improvements but it is already committed to spending £22 million simply because the previous administration did not turn the tap off on the applications quickly enough because it was not told by its Government that there would be a change. Conservative Members should just imagine Councillor Neville Bosworth during the recent elections on the telephone to the Secretary of State for the Environment saying, "Patrick, do you not know that I am trying to run an election up here?" He said that because Ministers did not understand what would happen in Birmingham.
That is the reality, but it is not for lack of ministerial visits to Birmingham. On 29 June, the Secretary of State said that he had made five official visits to Birmingham in the past 12 months. He then listed six. The present Secretary of State is so accident-prone it is not true. Four of those visits were specificlly to the inner-city partnership programme. Lord Bellwin had been there twice, the Minister for Housing and Construction had been three times—he might have been since—one Under-Secretary of State had been three times and another Under-Secretary of State had been there once. Ministers are therefore fully aware of what is going on. However, the prospects for 1985–86 are probably worse than for this year. A serious problem is emerging.
Do we have to wait until two years before the next general election before the Government decide to change their policy and tell us to spend, spend, spend, as the Prime Minister did? She told local authorities that they were not spending enough on capital improvements. She had the brass face to accuse them of not spending enough. That gave authorities such as Birmingham a massive incentive to spend and then commit. People's expectations were raised. They were encouraged to apply. It was only by encouraging people to apply that Birmingham could assess the scale of the problem. It could then get the big international building companies to take an interest. They are not interested in 20 or 40 houses; these boys are interested in 100 or 500 houses on one contract. It is not possible to do that without testing the market. That is where Birmingham has failed because of its success.
Ministers must put that right. They must show that they do not hold in cynical contempt inner-city problems and the desire of people who live in them to improve their areas. People who live in the inner city in Birmingham have attempted to improve their environment. They want to live there. Only a few are forced to live there because of house prices or other factors. Unfortunately, the people who want to improve their environment are being prevented from doing so because the Government are not making their contribution.
The Government have shown a callous disregard for the implicit commitment to make the funds available. They have a duty to make that good. Birmingham still has about 18,000 applications that it must inquire into before deciding how they will be processed. Ministers should act like statesmen rather than as Tory politicians. I am aware that they are concerned for the fabric of society and for their fellow citizens. That is what they keep telling us. But are they concerned for the integrity of Government? That is what is involved here.
Although Ministers might have been coming up the motorway for lunches, dinners and breakfasts with various people, they have not met my constituents and gone into their houses to see the reality. The Secretary of State has refused to meet my constituents who are involved in the Heathfield envelope scheme. He said that he would not meet them in London or in Birmingham because no useful purpose would be served by meeting them. They are the people who have the outside of their houses done but cannot get the inside done. They need to know that their case is being put effectively and to talk to Ministers. They honestly do not believe that Ministers understand what has happened in Birmingham.
I am making a special plea for Birmingham. It is not possible for any other hon. Member to claim that his or her authority made such great strides as Birmingham did following the 1982 Budget announcement. We have created a problem because of our success in moving so fast. I ask one of the Ministers—preferably the Minister for Housing and Construction, who is to reply to the debate, because it is more likely that he will still be here when Parliament returns after the recess than the Secretary of State—to give a commitment that, before the end of the recess, he will come to my constituency as my guest. I shall even pay his train fare if need be. He need not put an impost on the Civil Service. I do not want any increase in public expenditure. He can enjoy the hospitality of my constituents, who will be more than happy to show him the problems of the inside of their dwellings.
There are important issues at stake. It is worth just drawing the attention of the House to a couple of quotes from the book by Paul Harrison entitled "Inside the Inner City". In his concluding chapter on page 434, he says:
The very existence of inner cities and depressed regions as distinct georgraphical entities militates against policies to assist them. It is perfectly possible for a suburban or rural resident, a Tory minister or a higher civil servant, to live and die without ever witnessing, let alone understanding, the realities of life on the lower terraces of the social ziggurat. It then becomes easy, all in good faith, to underestimate the scale and depth of the problems, to misconceive their causes and consequences, and to support misguided measures that only serve to aggravate the situation.
He made a further point which will not be valid because of this debate tonight, when he said:
it is much easier to crush the disadvantaged without an outcry than it is to reduce the privileges of the privileged.
As long as there is breath in my body and in those of my hon. Friends, the demands of our constituents will not go unspoken in the House. As sincerely as I possibly could, I have deliberately attempted not to make this a partisan speech. It is political—by God, it is—but I have deliberately sought not to make it highly partisan because the structure and the cause of the problems are not of that nature.
I am pleading with the Minister to come and look at the problem. I do not expect him to come to the Dispatch Box tonight and say that there is an extra £10 million or £20 million for Birmingham. I suspect that the Prime Minister is not too happy about the rates there being cut two years running and the Tories losing control. She must think that something is wrong in Birmingham. One of the things that is wrong in Birmingham is that the people feel cheated. They knew about the problem in May. I am paraphrasing the efforts of Councillor Bosworth. He made valiant efforts before the election to change the policies, but he failed. That is out of the way now. I ask the Minister in all good conscience to listen to and study what I and my hon. Friends have said and to come with us to Birmingham before Parliament returns after the recess to see the reality of the problem for himself.
This important debate affects thousands of people in Britain. I want to echo some of the remarks of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), because many of the points that have been made about Birmingham apply equally to the areas of west Yorkshire that I represent— the metropolitan districts of Wakefield and Leeds. I want to try to bring to the Minister's notice the effects that the Government's policies are having on housing in those areas.
Having been involved in local government for a considerable time and held the responsible position of deputy leader of an authority with some 48,000 council dwellings — the tenth largest housing authority in the country — I know that housing matters have always loomed large in the minds of councillors in areas such as mine.
As we have heard in this and previous housing debates, the metropolitan districts have major problems with defective housing and pleas have been made to the Government many times to allow local authorities such as mine to undertake the urgent expenditure required to keep such housing habitable. A report to the Wakefield metropolitan district housing committee in November 1983 on the subject of Airey houses stated:
Following discussions with the Chief Housing Officer and Committee approval, structural inspections together with temporary repairs were commenced on 10th February, 1982".
The need to channel resources into those areas has a long history. Contrary to the Government's policy of cutting resources, investigations show that additional resources are needed to provide and maintain dwellings in the metropolitan districts.
The report continues:
The method of inspection was to remove plasterboard at ground floor level to a height of 600 mm, together with 'U' Foam insulation and to make a visual inspection of each column base.
That extensive investigation showed:
The number of columns found to be affected in any dwelling varied from 9 per cent. to 68 per cent. and the damage varied between fine hair cracks 50 mm long, to severe cracking and spalling 500 mm long, although the general average was approximately 150 mm.
That report to Wakefield district council expressed concern about the deterioration in the Airey houses.
As for Leeds city council housing committee, a report dated as recently as 14 June, concludes:
It is also relevant to point out that at no time since Local Government re-organisation in 1974 has the Authority faced such a daunting array of problems with it housing stock, nor has the need for capital investment in repairs and renewals ever been so high. The resources of the Department of Public Works will need to be maintained at least at the present level for the foreseeable future and may well, depending on events, need to be expanded. The potential workload by which the department lives is also more in evidence than ever before and, subject only to an adequate provision of funding by Central Government, the prospects for the immediate future appear to be secure.
There is evidence beyond any shadow of doubt to prove that there is a need for further resources to be made available for housing purposes in the metropolitan areas, in particular, and in local government in general. The report, which was considered by the public works committee of the Leeds city council, continues:
The survey was intended to provide a basis for future planning, resource allocation and to provide advance knowledge of problems that will become more pressing with the passing of time. Leeds city council have a current housing stock of 94,157 properties. A high proportion of the total have features that will make them actually or potentially expensive to maintain. Because the housing stock is large and in general need of repair, the Housing Investment Programme funding is insufficient to enable adequate progress to be made towards correcting this unsatisfactory state of affairs. Items of exceptional maintenance, that is maintenance which the City Council cannot fund properly from its present resources, have therefore been tabulated below to indicate the scale of the problem.
A list of the houses in the public and private sectors that are in need of urgent consideration is then given.
On more than one occasion, the Minister and the Department have been made aware of the needs of Wakefield and Leeds metropolitan district councils. I should be grateful to hear what the Minister's intentions are to ensure that resources are made available to guarantee that the houses of tenants or owner-occupiers will be maintained to an acceptable standard.
My hon. Friend probably knows that on 29 June the Secretary of State came to Leeds to look at the housing situation, and I think that he was impressed by the scale of problems in the city. The debate may well give the Minister an opportunity to explain how the Government intend to respond to those problems. I am sure that my hon. Friend will agree that the citizens of the city of Leeds will be looking forward to a favourable response from the Minister when he winds up. The only form of favourable response, of course, will be the allocation of additional resources to deal with all the problems that my hon. Friend so adequately spotlighted in the earlier part of his speech.
I appreciate my hon. Friend's intervention, which demonstrates the need of the city of Leeds for an increase in its housing investment programme. As my hon. Friend has pointed out, investigations have been carried out, and representations have been made. I hope that the Minister will make some reference to the visit, and that some assurances will be given that the programme drawn up by the Leeds city council can be carried out.
The report continues:
The city council already commenced rehabilitation work on Airey properties. It is the view of the City's professional advisers that all Airey properties should be repaired within five years. At the present rate of funding, however, the programme will take 12–15 years to complete.
If we are to retain properties for occupation by tenants in Leeds and Wakefield, I hope that the Minister will take into consideration the important points that have been made in the report.
Wakefield and Leeds, as well as other cities, have experienced problems with multi-storey flats. Remedial work is needed, but, because of reductions in the HIP allocation, the programme for maintaining and repairing multi-storey flats has been retarded. I hope that high-rise flats will be repaired in the near future. The matter is urgent. The report says that if the present allocation is continued it could take 14½ years to complete the repair and maintenance scheme for high-rise flats in Leeds.
Re-roofing of properties is necessary in Wakefield and Leeds. The Wakefield area contains 13 authorities which were housing authorities in their own right before reorganisation. Extra resources must be made available for re-roofing, to make houses safe and habitable and to prevent demolition — the only alternative if more resources are not made available. Some houses also need rewiring.
Last year a publicity campaign was launched to encourage house owners to apply for improvement grants. Television advertisements encouraged people to apply to local authorities for improvement grants. The number of people applying surpassed anything that local authorities expected.
Each week at my surgery people want to know why their application for an improvement grant has not been dealt with. The Minister should explain that the reason is the reduction in the money made available to local authorities for house improvements. He should explain that, because of that reduction, local authorities have to tell owner-occupiers that they must wait another year or two years. If more money is not made available, some people will have to wait 10 years before they can improve their homes.
If the Minister will not meet the demand by people encouraged by the Government to apply for improvement grants, he must make it clear that the delay is caused by the Government's policy of reducing local authorities' allocations for house improvements.
There is a need for a statutory examination of the provisions made for lift replacement and maintenance in high-rise blocks. Allocation for that work is made under the housing investment programme, but I ask the Minister to make examination of those aspects a priority. If necessary, because of the safety implications, funds for that purpose should be taken out of the total allocation.
As regards Leeds, the report of the director of public works stated:
The provision of funding identified for exceptional repairs would need to take place over varying periods as indicated in the text but in no case should the period exceed 10–12 years.
If the Government do not make resources available, a number of the repair and maintenance programmes envisaged by local authorities in my constituency in particular, and throughout the country in general, will have to continue for 14 or 15 years.
The report continues:
Funding at the present level would also need to continue to arrest deterioration by continuing to upgrade the many priority estates of Council properties currently in need of planned corrective and preventive maintenance and to permit the construction of a significant number of new properties particularly in those sectors not being served by the private housing market.
A number of hon. Members who were elected to Parliament for the first time last year received an open letter from the National Home Improvement Council asking them to take a special interest in the matter of home improvements. The letter stated:
This is an open invitation especially addressed to the new Members who have joined the House of Commons this year. You all have your own special constituency problems, whether you represent a farming community, a decaying inner city suburb, or an area in need of new industries or more jobs. But the one problem you will have in common is Housing.
That statement is true. Every hon. Member faces the housing problem in his constituency. Because of the recent increases in mortgage interest rates, people who plan to purchase a house are increasingly looking to the rented. sector to relieve their housing problems.
Last week, a young couple came to me with a problem. They advised me that they were to marry in March next year. Their mortgage arrangement had gone through four weeks ago. Just after signing the agreement, but before they could enter their house, their mortgage payments had increased by £5 per week. The Leeds Permanent building society has increased its mortgage interest rate to 13 per cent. That problem faces people who want to purchase a home.
Many other problems face local authorities. Condensation problems are increasing. Resources should be made available to relieve defects and ensure that housing improvements are made. I share the plea that my collegues will make to the Minister for resources to be made available to local authorities to provide proper and effective housing schemes. I share the plea made by my hon. Friend the Member for Perry Barr, that we should take this problem out of the arena of the "them and us" situation, treat it with humanity, and give it the consideration that it rightly deserves.
Order. Before I call the two hon. Members who wish to speak, I should tell them that the winding-up speeches will begin at 10.15 and that the Front Benches wish to divide the time between them.
I am grateful to my hon. Friend the Member for Birmingham, Erdington, (Mr. Corbett) for initiating this debate. I very much regret that I could not be here to listen to his speech and to speeches made earlier by my hon. Friends.
The debate centres on the deepening housing crisis that confronts the country. We have heard from many hon. Members representing constituencies throughout the country about the housing crisis that afflicts the inner cities of west Yorksire, Bradford — my own city — Leeds, Birmingham, Liverpool and many others. The crisis is directly due to the failure by the Government to devote public expenditure to combat the housing crisis and to a lack of political commitment and priority.
It is extraordinary that at this time of a deep housing crisis, when millions of people are in acute housing need, particularly in inner cities, tens of thousands of construction and building workers are unemployed and we have mountains of building bricks. I hope that as a result of the debate the Government will reconsider their housing policies, which have resulted in the recent lamentable house building programmes since 1979. Under the last Labour Government, in one year as many houses were built as have been built under this Administration in three years. The scale of the housing problem has magnified since the Government first came to power in 1979.
Since then, still more problems have been created. Year by year there has been a reduction in rate support grant, which helps local authorities to combat the housing crisis in their own areas. There has been a massive reduction in improvement grants, which enable local authorities and others to improve homes and bring them up to acceptable standards. Most recently, there was the imposition of VAT on those who are willing and keen to repair and improve their homes. Those Government policies make it much harder to combat the housing crisis.
I should like to dwell on one specific aspect of the housing crisis—the problems that many of the poorest single people and childless couples face, especially with regard to the availability of furniture grants, which are administered by the Department of Health and Social Security. You may suspect, Mr. Speaker, that I am straying out of order. I hope that that will not be so, because I hope that the Minister will take the view that the Department of the Environment, in its role as the Ministry responsible for overall housing policy, should concern itself with the effect that the rule is having upon the housing needs of the poorest sections of our community. I hope that the Department of the Environment will also exert pressure on the Department of Health and Social Security to abolish that rule, which I and many charities and agencies involved in the housing crisis believe is contributing significantly to the difficulties that we face. The rule to which I refer prevents single people and childless couples who are qualified to claim a grant from getting that grant if, in the view of the Department of Health and Social Security, suitable alternative furnished accommodation is available.
In a recently prepared paper the Campaign for Single Homeless People referred to a case which can be duplicated up and down the country, especially in our inner cities. It said:
After years of homelessness and living in unsuitable, expensive bed and breakfast, she has finally been offered a council flat. She goes along to the DHSS office to ask for the furniture grant she needs to move in. Since she has been unemployed for over six months she qualifies, but the DHSS office, if it is following its instructions, will ask her to go away and get up to 15 refusals from landlords. If she manages to do this DHSS can still tell her to try any address they know about —usually the most sub-standard bed and breakfast in town, which has vacancies most of the time because anyone who can, leaves as soon as possible. No-one could blame the claimant if she has given up by now. Either she will give up the tenancy, and go back to the cycle of temporary, unsuitable housing and homelessness or she will try to live in an empty flat on bare boards. Of course the DHSS office may not bother following its instructions. Many just refuse single claimants straight off. Because the rules give DHSS officers so much discretion, decisions are often different for claimants in the same situation at the same office.
I have a constituent who is in exactly that position. The local authority, which is anxious to rehouse her large family, has nominated her through a housing association for an empty council flat. She has accepted the tenancy and would like to furnish it. That would be extremely convenient to the local authority, which could then rehouse the rest of her family in suitable, available accommodation. However, because the DHSS is refusing that grant, she cannot furnish the flat and is in great difficulty. That story could be told by many of my right hon. and hon. Friends about constituents in a similar situation.
That problem relates to public expenditure. Taxpayers, because of this stupid rule, are being asked to finance something which is expensive to them and wholly unnecessary in practice. The CHAR briefing cites another claimant who is caught in the trap of this rule It says:
a claimant in inner London could be paying up to £98 a week in a hotel, with a total entitlement of £106·85 a week and be refused a furniture grant to enable them to move into a council flat at perhaps £25 a week which would reduce their entitlement to £51·80.
In public expenditure terms, this rule is extremely costly to the taxpayer. It is ludicrous in terms of local authority house planning, because it undermines local authority house building plans, programmes and policies. It is extremely discriminatory, because it discriminates against the poorer sections of society — the single homeless and couples without children. Therefore, I appeal to the Minister to consider the social and financial implications of the rule. Because of his overall housing responsibilities and his responsibilities for planning housing, I urge him to have discussions with the DHSS about the effect of the rule and to persuade it to do what it can to abolish the rule as quickly as possible.
I understand that the rule is being reviewed by the DHSS. I hope that the information which must be in the Minister's Department will be made available to the DHSS so that steps can be taken to remove it. All the housing agencies involved see the rule as one of the biggest obstacles that they face in trying to secure proper and satisfactory housing for those in most need.
I hope that as a result of tonight's debate the Minister will reflect and reverse the Government's housing policies and take one modest step by suggesting urgently to the DHSS that it should abolish this stupid rule as quickly as possible.
I wish to deal briefly with only three aspects of housing as I have an Adjournment debate at the end of today's business on the specific problems of housing in Burnley. The debate has been interesting in highlighting a number of housing problems facing local government at present as a result of the Government's financial policy.
First, I wish to refer to sheltered housing. It is important at present, and, as time goes on, the demand for sheltered housing will increase. Most councils are far from able to meet the demand for that type of accommodation. The increasing number of people living longer means that this type of accommodation will be required by more people as each year passes. Councils should be provided with sufficient resources adequately to meet the needs of the community for sheltered housing.
The central control system is another important development in sheltered housing. It is a welcome new feature which will cover a wider range of the population. I am not suggesting that central control systems should replace the traditional sheltered housing scheme whether it is converted sheltered housing or purpose-built. The central control system has the added feature that it gives 24-hour coverage for 365 days a year to those people who are fortunate enough to be in sheltered accommodation. It means that the warden can go out. There is cover when the warden is sick and on other occasions when cover cannot be maintained at present for 24 hours.
That type or provision has a capital and revenue cost. It is important that the Government should assist councils to meet the capital cost and to ensure that they do not suffer penalties as a result of incurring revenue costs.
Another important aspect of the central control system is that it can be introduced into individual homes, whether on council estates or in the private sector. Many elderly people wish to remain in their own home, not to move into sheltered accommodation. They may have lived in their own homes throughout their lives and may not want to move until they really must. The central control system will enable them to enjoy life in their own homes until it is necessary for them to move. That is another important reason why the Government should assist that facility.
Another matter to which I wish to refer is improvement grants and the cowboy firms which do some of that work. I believe that the Government should introduce measures to give councils greater powers and resources to control work undertaken by private companies. I accept, of course, that many companies do a first-class job and cannot be criticised.
The Minister will recall that when he came to Burnley some time ago he paid an unplanned visit to a home where the owner was complaining about a cowboy firm which had undertaken grant work. The Minister was going round in his car, and suddenly he asked to stop. He sought the first pedestrian on the street and asked what his house was like. That person took the Minister into his home and complained forcefully about the standard of work that had been done.
As I said to the Minister at the time, that was not the worst example of shoddy work carried out regrettably by some cowboy firms at present. I know that the Government are considering that problem. It is an important point if we are to make the best use of public money that is being spent on improvements. Members on both sides of the House will welcome any measures that will ensure that the public receive the best possible value for money, and that the house owner has a good job done and does not have to ask for a further grant. Some of my constituents are having to do that because of the standard of the work that has been done.
I intervened earlier and mentioned the important subject of interest rates and the burden that they place on housing revenue accounts and the effect that they have on rents. We all know of the changes in Government policy affecting housing revenue account subsidy. That has meant that rents have been forced up rapidly, and in many areas they are now at unacceptably high levels. It is time that the Government thought seriously about changing the structure yet again to ensure that council tenants get a fair deal compared with those in the private sector.
The balance has now moved away from the council tenant and is heavily in favour of the home owner. The Government should give serious thought to ensuring that rents are fixed at acceptable levels. Local authorities should not be forced to put rents up to levels that people cannot afford. It is also important to take account of rent levels in specific areas. Levels in my area are far lower in the private sector.
As the Minister will know, in certain areas houses are cheaper than in London.
The Government often fall into the trap of assuming that because council houses sell at a certain price in London, they sell at the same price in the provinces. In Burnley, the average council house — assuming full discount—will sell at between £6,500 and £7,000, given that a person has been a tenant for 20 years. That does not provide much capital. Therefore, I hope that the Government will stop basing their housing policy on London prices and will instead take more account of the situation in the rural areas.
Sheltered housing is an important issue. I am sure that all hon. Members believe that the elderly have a right to live their last years in decent accommodation, with proper back-up facilities. It is therefore essential that the Government make the cash available so that councils are able to meet the demands placed upon them by this important requirement.
It is a pity that the debate was interrupted by a dog fight, but it has shown two things —an overwhelming discontent with the levels of public expenditure and a lack of interest by Conservative Members; there has been only one contribution from Conservative Back Benches.
I want to underline the extent to which my Labour colleagues have expressed concern about public expenditure on housing without partiality as to tenure. As much concern has been expressed about the availability of improvement and repair grants to owner-occupiers as about the level of expenditure that can be undertaken by local authorities. That simply shows the fairness and broadness with which the Labour party approaches housing policy.
I begin by mentioning two things of which I have given the Minister notice. The first arises out of the recent agreement on the Housing and Building Control Bill. The House will recall that, as a result of defeats in another place, we agreed that where housing was particularly suitable for old people, the right to buy would not be exercisable under the Housing Act 1980. The Bill has now received Royal Assent, and the sections dealing with the right to buy are due to come into force on 26 August.
The Minister has issued guidance to local authorities on the circumstances in which dwellings will be exempt from the right to buy, but there is great discontent about the short time that has been allowed for consultation with local authorities. I am told by the Association of Metropolitan Authorities that he has allowed only eight working days to consider the criteria that he has published for making judgments as to whether an elderly person's accommodation is to be subject to the right to buy. Perhaps the speech by my hon. Friend the Member for Burnley (Mr. Pike), and the endorsement that the House gave it, showed the importance that is attached to preserving elderly persons' accommodation to be available for letting.
I ask the Minister to allow sufficient additional time for consultation to deal with the discontent that has emerged from the discussions with the local authorities and from the notes sent to him by the National Housing and Town Planning Council. It has shown some concern about the code that he has issued and says:
The Council would wish to emphasise that the Code should be drafted to be of benefit to both the Secretary of State and the local authorities who will have a key role to play in the procedures … the code will need to be a much more substantial document and not take the form of a checklist for the Secretary of State … Whilst the Council understands the reasons for a tight timetable, it will clearly be impossible for consultation with interested bodies to be completed by 20 July.
That is the deadline that was set. That is just one comment on the timetable, and I hope that the Minister will take it seriously.
The Association of District councils does not agree with the criteria, and many reservations have been expressed by the Association of Metropolitan Authorities. The central objection to the criteria is that there are no clear words to suggest that the code that the Minister is publishing is not a cumulative set of tests. I am sure that it is not intended that the items that he has set out in the code — for instance, that the house:
is particularly suitable, having regard to its location, size, design, heating system"—
is not to be a cumulative test to be taken together with factors such as whether the house is within easy reach of the shops, post offices or public transport and has easy pedestrian access and so on.
There seems to be, from the way in which the code is drawn at the moment, an attempt to evade the defeat that the Government suffered in the House of Lords and the compromise that was arrived at in the House of Commons. I want the Minister to give an undertaking that he will, if necessary, give more time to the objections by local authorities, and that he will treat the headings that he has already published simply as illustrations of the circumstances in which the house may be considered particularly suitable for elderly persons. They must not be regarded either as a acumulative or exclusive list of criteria.
Let me give an example. It says on the list that one of the tests of whether an elderly person's dwelling is to be exempt from the right to buy is whether it has central heating in all the rooms. The absence of central heating may have nothing to do with whether the dwelling is suitable or not. Some elderly people do not like central heating because they find that it gets on their chests or is not suitable. The fact that a flat does not have central heating in every room should not disqualify it from being exempt from the right to buy.
Another consideration is whether the flat is on the ground floor, but many local authorities find it convenient and economic to build old persons' dwellings on the first and second floors. They do not have to have lifts, and elderly people are often quite content to live on the first floor. The criterion that an elderly person's dwelling should be on the ground floor only is far too narrow a definition of the sort of dwellings that should be exempt from the right to buy.
I do not wish to go through the whole list, as there are many other things that I wish to say about housing policy. However, I ask the Minister to consider seriously the request for an extension of time and for a publication of a code that is merely illustrative and not construed in the constricted manner in which local authorities see it now.
Perhaps I should declare an interest as a member of a firm that advises housing associations. I say this because my second particular question is over the Housing Corporation's newly published arrangements for shared ownership. I understand that it has found itself in some difficulty about the funds available for housing associations as a result of the imposition of VAT on house alterations. It is estimated that the imposition of that tax alone will reduce the money available from the Housing Corporation by about £30 million in a full year. One of the victims of that imposition will be the shared ownership schemes.
The Government and the Housing Corporation have been able to put together a scheme with the Nationwide building society that will substitute for the present shared ownership arrangements something called an index-linked shared ownership scheme, under which public expenditure will provide 10 per cent. of the cost of the dwelling, and the building society will provide the mortgage for the other 90 per cent. Indeed, 45 per cent. of the cost of the dwelling will be covered by the conventional type of mortgage and the other 45 per cent. will involve an index-linked scheme. I have looked through costings provided by the Housing Corporation as well as costings provided by a housing association. In both cases, the cost of shared ownership will apparently be more under the index-linked shared ownership scheme than under the existing scheme.
That is most unusual, as the shared ownership scheme is for the first time enshrined in statute, in the Housing and Building Control Bill, which comes into force on 26 August. The extraordinary thing about this Government's housing policy is that a scheme for people buying their own council houses—the shared ownership scheme—which will not even begin until 26 August, is being dumped for the housing association sector, perhaps this month.
Will the Minister confirm that existing shared ownership schemes that are being put forward by housing associations will not be tossed arbitrarily to one side in favour of the index-linked shared ownership scheme that has recently been published by the Housing Corporation? Will he confirm that, at least for the next few months, the two schemes will be able to run side by side? If the Government decide otherwise, a good many housing development schemes being pioneered by housing associations will be stopped in their tracks until the new scheme comes into effect.
I return to the main issue, which is the Government's scandalous neglect of responsibility for housing, despite the pressing evidence of unmet need and the fact that between 400,000 and 500,000 building workers are available to meet it, and could thus come off the unemployment register. A considerable saving could be made in social security budgets, because for every building worker found a job as a result of increased public expenditure, at least £5,000 a year would be saved.
I shall spell out that need, to which many hon. Members have referred. England has a stock of just over 18 million dwellings. Of them, 2 million dwellings, or one house in nine, are unfit—there are about 1·1 million unfit houses — lack the basic amenities or are in need of repair costing £7,000 or more. Thus, there are 2 million homes in a severe state of disrepair. If the number of homes requiring repairs that cost more than £2,500 is added to that, 4 million of those 18 million homes in England are in need of substantial expenditure of one kind or another.
Furthermore, those conditions are getting not better but worse. Between the two English house condition surveys of 1976 and 1981, the number of houses needing more than £7,000 spent on them increased by 22 per cent. The big increase in the number of houses needing repair no longer comes in the private rented sector but in the owner-occupied sector. Even excluding inflation, our housing is becoming not better but worse.
In terms of human need, 1·1 million people are on housing waiting lists and of them, at least 250,000 are in the GLC area. It is an accepted fact that in a year 80,000 people are made homeless and that twice that number apply to be treated as such. More than 500,000 families are sharing accommodation, and there are over 250,000 of what are called concealed households. There is, therefore, a massive unmet need for public expenditure to relieve these poor housing conditions. It is a need which goes right across the board, a need for expenditure by local authorities, housing associations and owner-occupiers.
The most important statistic is represented by the misery, denied opportunity and loss of employment which has been caused by the cutting of public expenditure on housing during the years while the Conservatives have been in office. Only a lunatic Treasury monetarist would divert public expenditure—and, in the case of the 18 July announcement, money actually in the kitty—from housing.
The consequence is that money which might have been spent on housing—which has little import consequences and which helps to relieve unemployment as well as the conditions of misery in which many homeless or badly housed people find themselves — will be diverted to people to buy Japanese cars and video recorders and foreign imported goods. That is the effect of the Government's lunatic monetarist policy, which will bankrupt this country as the oil runs out.
The public expenditure figures are appalling. It is a story of liquidation of the Government's responsibilities in housing. About 60 per cent. of all cuts in public expenditure have been visited on the housing sector, and the level of expenditure next year will be 35 per cent. in real terms of the public housing expenditure which the Conservatives inherited in 1979.
Taking all housing spending, and using 1982–83 as the base year — following the pattern of the public expenditure White Paper — public expenditure has dropped from £6·286 million in 1979–80 to £2·264 million in 1984–85. By the next financial year, public expenditure in housing in Britain will account for 3p in every £1 of public expenditure, compared with 10p per pound in the mid-1970s.
The Prime Minister encouraged local authorities to spend more on housing. She said in November 1982:
We need more capital spending by local government and in the public sector generally". — [Official Report, 3 November 1982; Vol. 31, c. 21.]
In a letter to Sir Jack Smart, the right hon. Lady said:
Local authorities have been enabled, and indeed encouraged, to increase their capital expenditure by using capital receipts to supplement their capital allocations.
As a result, local authorities, in accordance with the Housing Act 1980, had large capital receipts in the financial years 1981 to 1984. They had accumulated in their coffers enough money to spend on big housing programmes. Anybody with knowledge of running a housing committee knows that one cannot sell a house today and start a new one tomorrow. These things must be planned, and sometimes it is necessary to keep the money in the bank for a time before undertaking a housing expenditure programme.
The Government have prevented local authorities from spending their accumulated capital receipts, which they previously said formed no part of public expenditure. It is public expenditure in the sense that it is local expenditure, but it is simply taking from one source, the sale of council houses—money provided by building society mortgages — and recycling it either into the building of other council houses or, more often, in Birmingham and such places, recycling it into the private sector by way of repair and improvement grants. However, the ability of local authorities to recycle capital receipts in that way has been denied to them.
The Government claim, despite all the failings that I have mentioned, that they have a good housing record. They have not. I shall quote from the most recent publication on house building for May 1984, which was published by the Department of the Environment on 4 July 1984. I shall deal with the public sector, as that is the only sector for which the Minister has responsibility. From March to May 1984, total starts, on a seasonally adjusted basis, were 3 per cent. down. In the public sector, starts were 23 per cent. down on the previous three months when similar comparisons were made. In case anyone says that there is a seasonal variation that has to be taken into account over the three months, the figure for public housing starts was 22 per cent. lower than a year ago.
The Department of the Environment in Marsham street has become a sort of Treasury abattoir with the massive slaughter of the plans of local authorities and the hopes of those on housing waiting lists and of those who are badly housed. I have used the words "lunatic" and "moronic" in describing the actions of the Department, and I do not think that I am guilty of exaggerated language. It seems that there is a PA within the Department, and I do not mean a personal assistant or someone who spends too long in the bar. I am talking about a project abortionist.
The DoE is the only Department that I know of that aborts successful projects. The Government had one jewel in their crown. Ministers often talked about increased expenditure on improvement and repair grants. It stood about £90 million under the previous Labour Government and it had increased to about £740 million last year. It is estimated that expenditure will increase to about £900 million in the current year. The Minister says that that is a great achievement, and I do not deny it, but it has been achieved by a reduction in other forms of public expenditure on housing. However, taken by itself, the increase in improvement grants and repair grants was a success story.
One of the Department's officials must have said, "Minister, we have a success on our hands. Let's abort. "The Minister came to the House and announced the abortion of the grants. Authority after authority has cut off its housing and improvement grant programme, to the tremendous distress of many owners who bought their houses in the full expectation that the grant system would continue. They may not have thought that the 90 per cent. grants would continue, but they thought that local authorities would continue to grant money. Public expenditure cuts have denied that possibility. The distress which has been caused is to be found among those whom the Government profess to defend and not in the local authority and housing association sectors.
The Government had great success with a scheme which involved in part the right to rent as well as the right to buy. It was called the-do-it-yourself shared ownership scheme. It was a highly popular scheme which was pressed by the Housing Corporation and housing associations. However, the PA in the Department appeared and said, "This scheme is a success, Minister. Let's abort." The scheme was brought to an end last year. The other shared ownership scheme involved a mixture of renting and buying, and that, too, has been aborted.
The picture for 1985–86 is dismal. It is estimated that net public expenditure on housing, after taking into account the capital receipts of local authorities, will be about £1 billion for 1985–86. That is the estimate that appears in the public expenditure figures which were published in February.
What the Secretary of State said on 18 July was that local authorities had overspent by £368 million in 1983–84 and were likely to overspend by about the same amount, or more, in the current year. He went on to say that the so-called overspend of £750 million to £800 million would be deducted from the housing investment programme for 1985–86.
If next year's HIP is cut in that way, there will be a total moratorium on new housing projects, and that will be a crematorium for people's housing hopes. The effect of such a cut in the building programme for next year will be catastrophic. It is taking place when the local authorities have capital receipts of £2·5 billion or so, accumulated between 1981 and 1984 which are available to spend on public housing but have not been spent. Local authorities will be prevented from spending the very money that they were encouraged to build up from the sale of council houses. They are being constrained from using the £2·5 billion in their hands. The Government will be stealing that money and banking it for their own monetarist purposes.
Ministers can point to one or two small successes, but the Government have achieved an almost total liquidation of net public expenditure on housing. There will be a few schemes, but under this Department of the Environment and this Minister for Housing and Construction public housing has become a token run by ciphers.
I congratulate the hon. Member for Birmingham, Erdington (Mr. Corbett) on having won first place in the ballot. We have had a most interesting debate.
With characteristic courtesy, the hon. Gentleman gave me notice of the two specific matters that he wished to raise. First, he asked about the consultation with local authorities regarding the provisions for the purchase of elderly persons' dwellings under the Housing and Building Control Act 1984 which, as the hon. Gentleman rightly said, comes into force on 26 August.
The Department issued a consultation letter on 9 July. Because the provisions of the Act come into force on 26 August, we asked that replies should be received by Friday 20 July. Of course, the subject matter—the purchase by tenants of houses or flats which may be considered to be particularly suitable for the elderly—was contained in almost identical form in the Housing Act 1980. We are not springing a new subject on local authorities.
The hon. Gentleman was right to say that the chairman of the housing committee of the Association of Metropolitan Authorities wrote to me on 11 July. In a letter of 13 July I explained to Councillor Donnelly:
The Department asked for comments on the draft guidance on the new provisions for elderly persons' dwellings by 20 July because the provisions come into force on 26 August. Between those two dates comments on the draft guidance need to be considered, final decisions on the text taken, the text reproduced and incorporated into the draft circular on implementation".
At the end, I said:
If your comments should arrive late they will of course be taken into account if we are able to do so.
If comments either from Councillor Donnelly or from others are received after 20 July, we shall do our utmost to take them into consideration.
I give the assurance in, I hope, the terms that the hon. Gentleman seeks. It will not be necessary to satisfy all the tests (a) to (i) in paragraph 6 for an exemption from the right to buy to be granted by my right hon. Friend. Each case will be judged on its merits. This is a consultation paper, and we shall revise it in the light of the comments that we receive from those whom we have consulted.
The hon. Member for Norwood (Mr. Fraser) also asked about index-linked finance, about which the chairman of the Housing Corporation made an announcement on 4 July. The Nationwide building society has agreed to provide a total of £30 million—half in conventional mortgages and half in index-linked mortgages—to cover 90 per cent. of the cost of housing association homes that are provided for shared ownership. That means that the corporation is able to provide new homes at a cost of only £1 for every £9 that is put up by the private sector. The shared ownership programme enables people to enter home ownership at an income level of about 70 per cent. of that which is normally required. I confirm that, for the time being, the two schemes will exist side by side.
Quite properly, because we are considering public investment in housing, this debate has concentrated on the stock of local authority housing. I expect that a growing proportion of the nation's housing needs will be met from the private sector. Today we have 60 per cent. rising home ownership. I expect that trend to continue. Opposition Members have reminded the House today that they share our goal—I hope that I do not misrepresent them—of trying to achieve a nationwide property-owning democracy. If I have misrepresented any Opposition Member, I shall gladly give way.
I shall take up the Minister's challenge. We have already made it clear that we are in favour of owner-occupation. When in government, we would never have introduced the option mortgage scheme if we had not been in favour of it. There should be no distortion about Labour's stance on owner-occupation. Does the Minister agree that many people—certainly no less than 30 per cent.—even if there were not mass unemployment, will not be able to obtain a mortgage? What will be done about that? Will the number of council house starts continue to decline? Will the Government accept the responsibility to ensure that people who cannot get a mortgage and have no other means of being adequately housed will be able to obtain accommodation in the normal way through a local authority?
Of course, I agree with the hon. Gentleman that many people and families do not want or cannot afford to become owner-occupiers. I merely want to achieve some bipartisanship and, subject to that qualification, I think that I have the assent of the Opposition. No representative of the Liberal or Social Democratic parties is present. I welcome the assent of the two major parties that we should strive for and welcome a nationwide propety-owning democracy. I am most happy with that assent.
I shall come to that later. I embrace the Front and Back Benches of the Opposition in this common ground and am happy to welcome the interest in and passion for home ownership shown by the hon. Member for Birmingham, Perry Barr (Mr. Rooker). Although the hon. Member for Perry Barr, who made an eloquent speech, may not be an assiduous reader of the Financial Times, we may be sure that the hon. Member for Norwood is.
In Monday's Financial Times we discovered a further interesting conversion, recently confirmed by the Labour party, towards the concept of home ownership. I thought that I would have the rapt attention of the Labour party, because this is a country which has sometimes served as a model and guide for Socialists throughout the world—[Interruption.] Hon. Gentlemen must not divert me.
Mr. Mark Baker, writing from Peking, said:
A home of your own is now the great Chinese dream. For the first time since the early 1950s, the Government" —[Interruption.]
The Labour party says that the conversion took place only following the visit of my right hon. Friend the Prime Minister. That was not a claim that was made initially by the Minister for Housing and Construction. On the contrary, that was a claim that came from the Labour Benches. However, I do not want to be diverted. I shall read on.
Tens of thousands of Chinese families have purchased their own apartments and houses during the past two years and demand is
far outstripping supply. After experimenting with real estate development on capitalist lines in several cities, the Government now appears to have decided to shift the emphasis of its housing programme from public rental to private freehold. The policy shift"——
this will be of particular interest to the hon. Members for Perry Barr and for Bradford, West (Mr. Madden)—
was recently endorsed by the most senior Chinese leader, Deng Xiaoping. He told the party newspaper, People's Daily, that encouraging people to buy and sell their homes would make the construction industry more profitable and stimulate residential building.
There follows an interesting piece of advice.
Deng even advocated increasing rents on government-owned accommodation to encourage the change—`if house rents are too low, people won't buy houses,' he observed.
I wish to move from Peking to London. I want to examine the level of public expenditure in housing and what it is achieving. The figures for local authority capital expenditure on housing for 1983–84 were published last week. Gross capital expenditure on housing was over £3 billion. That is a considerable sum by any standards—[Interruption.] The hon. Member for Norwood suggest that £3 billion is not a substantial sum.
I shall be comparing the £3 billion with various other figures. I hope that the hon. Gentleman will allow me to do that. He and some of his hon. Friends described the statement made by my right hon. Friend the Secretary of State a week ago as a moratorium. I should make it clear that local authority capital expenditure is subject to a cash limit, as was well understood when the cash limit for the current year was set. A week ago my right hon. Friend appealed to local authorities for restraint. That certainly was not a statutory moratorium, and he invoked no statutory powers. He asked for restraint by local authorities to achieve not a cut but to remain within the limits for local capital expenditure in the current year.
Capital expenditure by local authorities on housing was just under £2 billion in 1981–82. By 1982–83 it had risen to nearly £2·5 billion. Last year it was more than £3 billion —one third higher in cash terms than in 1978–79 when the Labour Government were in power.
The nature of housing expenditure has also changed markedly in the past few years. Much more is being spent than in the past on renovating existing stock, both public and private. In 1978–79, the last year for which the Labour Government were responsible, expenditure on improvement grants was £90 million. In the year ended 31 March 1983, total expenditure on improvement grants was £430 million. We do not yet have the final figures for the year ended 31 March 1984, but total expenditure in that year exceeded £900 million.
The Government have been criticised because the exceptional arrangements announced by my right hon. and learned Friend the then Chancellor on 9 March 1982 were not continued beyond 31 March 1984. Although you were not Speaker at that time, Mr. Speaker, I believe that you presided over the House during my right hon. and learned Friend's Budget statement on 9 March 1982. As you will doubtless recall, he said that the exceptional arrangements were to continue only until 31 December 1982. Having extended those arrangements well beyond that date, until 31 March 1984, we are now rebuked by the very party which spent only £90 million on improvement grants when it was in power.
I am replying to specific criticisms of the Government's improvement grant policy.
Last year £730 million was spent on new council house building, more than £1 billion on repairs and improvements to local authority stock and more than £900 on home improvement grants. For the first time, expenditure on repairs and home improvement grants exceeded that on new build, even though expenditure on new build has remained relatively constant.
I understand the hon. Gentleman's point. The hon. Gentleman will agree that the debate has lasted for three hours, and I made no complaint about the time left to me by the hon. Member for Norwood.
The hon. Member for Perry Barr asked me whether I would visit his constituency. I cannot give the hon. Gentleman a specific undertaking about which month it will be, hut, before the end of this year, I will come to his constituency and visit those parts that he would like me to visit. I have already visited the constituency of the hon. Member for Burnley (Mr. Pike). I was particularly interested to do so, because the hon. Member used to be the leader of the Burnely borough council. I do not want to enter into too many commitments.