Smith Houses (West Bromwich)

– in the House of Commons at 9:40 pm on 18th June 1985.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Member, Labour Party National Executive Committee 10:27 pm, 18th June 1985

I want to begin this evening by congratulating the Parliamentary Under-Secretary, who I believe is to respond to my Adjournment debate. I understand that this is his 110th Adjournment debate since he first became a Minister. I have to say to him that, unless his Department is more conciliatory in amending the Housing Defects Act 1984, it will probably be his 510th Adjournment debate by the end of this parliamentary Session.

Late last week I met about 250 constituents in West Bromwich. All of them are owners of Smith houses. All of them bought their houses in good faith. Some of those families bought their houses many years ago under local schemes; others bought more recently under the Government's right to buy.

The one feeling all Smith owners have in common is the deep sense of injustice at the Government's refusal to put Smith-built properties in the Housing Defects Act, and they expressed to me, as they have done over very many months, their worries and their concerns about their future and the life savings which have gone into investing in home ownership.

Housing problems are not new to those of us in West Bromwich. The council has been crippled by savage reductions in its housing investment programme over the years. At a time when there are some 6,000 families waiting to be housed or rehoused, the authority is not even allowed to spend its own income from the sale of houses to make provision for these families. The last thing that we need in West Bromwich is to exacerbate an already poor situation, yet that is what the Minister has done.

In West Bromwich, West, my constituency, 189 families own Smith houses. Some 650 are left in council ownership. In the borough of Sandwell as a whole, there are 1,086 Smith properties, of which 273 are privately owned.

In referring to defective housing, the Minister for Housing and Construction spoke of the findings of the Building Research Establishment and the difficult position in which owners would find themselves. In November 1983, he said: The Government have decided to introduce early legislation to provide a scheme of assistance to private owners of houses sold by the public sector and since found to be defective or potentially defective."—[Official Report, 10 November 1983; Vol. 48, c. 420–1.] That statement gave a ray of hope. It was especially reassuring a month later when the report concluded that Smith houses suffer from some defects. The Minister for Housing and Construction confirmed that conclusion to me by letter only last month.

Let me make it clear that I am not referring to the shale-filled houses in Birmingham. There are no shale-filled properties in Sandwell. I am speaking of constituents who own Smith houses, some of which exhibit defects because of cracking between wall units, which is due to changes in temperature and humidity, or some which may be found to be potentially defective.

But the hope that the Minister inspired faded when owners found that their homes were not to be included in the legislation and they were not to receive equal treatment with others in the same position. Tonight, I wish to direct the Minister's attention to his legislation and to show where I believe that, under two criteria to be met under section 1 of the Act, he is failing in his duty. Subsection (a) gives the Secretary of State powers to designate if buildings … are defective by reason of their design or construction. That language is plain enough. The Building Research Establishment's findings conclude that Smith houses suffer from some defects, and the Minister confirmed that. Yet, despite all that, the Minister consistently refuses to enact his own legislation and include those buildings in the national scheme.

The second criterion to which I wish to draw the Minister's attention lies in subsection (b). That empowers him to designate when defects, having become generally known, the value of some"— the word "some" is the operative word— or all of the dwellings concerned has been substantially reduced. I am delighted that not all properties have been substantially reduced in value, but some have. Therefore, the criterion that some of them have been affected is met. It is implicit in the BRE report and the Minister's acknowledgement, and it is now for him to operate the Act in favour of Smith homes.

May I put to the Minister the position in relation to building societies. To be consistently denied the assistance of the national scheme has caused some building societies, as I am sure the Minister is aware, to refuse lending facilities. The attitude of some major lending institutions —indeed, the attitude of the West Bromwich building society itself—is blighting by reputation the value of even reasonably adequate property, and it is causing great distress to those owners. Real human problems exist because of the refusal of mortgage loans.

The Minister for Housing and Construction was not at all helpful when he wrote to me only a few weeks ago, saying that lending is a matter in which he cannot intervene. I remind him that he has had discussions with the Building Societies Association on other occasions about such matters, and I remind him that a Minister for Housing in a previous Labour Government intervened firmly with the building societies at one stage. If it could be done on earlier occasions, he can do so now. It is not a matter from which he can remain aloof. He must seek the co-operation of the building societies now, and he must restore lost confidence through an approved national scheme.

Why does the Minister insist that this is a local issue to be left to local councils to deal with? It is not a local issue. The Minister's answers to my questions, and to questions from some of my hon. Friends, show that Smith houses exist in a dozen areas of the country. We know that the BRE report showed that approximately 4,500 such houses have been built. The families who have bought those houses cannot be dealt with by a different, fragmented approach whereby each local authority is left to determine its response to reinstatement grants. It is a national problem, and it is incumbent on the Minister to acknowledge the scale of the problem and not to abnegate responsibility, which I believe he is doing.

Where is the answer that I give to my constituents for whom reinstatement grants are insufficient to meet their need and who require the council to repurchase the property? As the Minister knows, repurchase of the property would have to be done without recompense. What practical help do I offer to a young couple, encouraged by the Government under the right to buy, who did buy? Subsequently the husband lost his job. He followed another Minister's advice, got on his bike and found a job—he was one of the lucky ones—100 miles away. His wife told me last week that their marriage is on the rocks because of the long separation caused because she cannot sell the house and join her husband, who is in lodgings earning a living elsewhere.

What am Ito tell solicitors wo are dealing with delicate family matters where Smith property has to be disposed of and there are no buyers? How does the Minister suggest I respond to elderly couples who bought their homes some 20 years ago in good faith, with the dream of spending their retirement in greener surroundings, and who want to move from the industrialised area in which they have lived all their lives? They are heartbroken because they cannot sell their homes and move, as they had always planned.

None of these people can sell their adequately sound property because that property has become clouded by reputation. It is for the Government to lift that cloud. Sandwell council cannot do it. It cannot repurchase under the present provisions with no recompense. Even if it tried to do so, it would cost something like £3 million and would swallow nearly a quarter of my council's housing investment allocation.

It is for the Minister to understand the human problems that this is causing. The Minister for Housing and Construction may have found on his desk this morning representations from me asking him to meet some of those constituents—not all 250 of them, of course—that I met only last week. I have asked him to meet a deputation of them. I hope that he will respond positively and see them within the next few weeks.

Let me just remind the Minister that even in the days of full employment in my area of the Black Country it was never an area of high wages. People did not have money to throw about. Those who managed to save put those savings into home ownership. Today there are wards in my constituency of West Bromwich where Smith houses exist and have been bought by people, and where now 22 per cent. of the working population is out of a job. Many of those people who have been made redundant put their redundancy money into investment in their homes. Why should they now be denied the advantages offered to others under the Act?

All I am asking is that the Minister should deal with them even-handedly and that the national scheme be made available to those who own Smith properties, because the same position obtains. Surely the Minister must accept that natural justice demands to be done, and I want no less for those people I represent.

Photo of George Young George Young Parliamentary Under-Secretary (Department of Environment) 10:39 pm, 18th June 1985

The hon. Member for West Bromwich, West (Miss Boothroyd) has spoken movingly about the problems facing a number of her constituents who bought Smith houses from the local authority. They now face a range of problems because they find that they cannot sell them because the purchaser cannot obtain a mortgage.

One cannot feel anything but sympathy for the case that the hon. Lady mentioned of the husband who has found a job elsewhere and whose family cannot join him because of difficulty in selling the family home. I hope that some of the things that I say about the role of the building societies will be of help to that couple. The hon. Lady also asked whether I would meet a deputation of tenants. I wonder whether she meant tenants, because during most of her remarks she was speaking about owner-occupiers.

Photo of George Young George Young Parliamentary Under-Secretary (Department of Environment)

I understand that the hon. Lady meant the owner-occupiers. I have not seen the letter that she mentioned, but I hope to respond positively.

I wish to put the problem into a broad perspective. Until the Government introduced the Housing Defects Act 1984, there was no protection for anyone who had bought a house from a local authority or a public body and who found, through no fault of his or hers, that its value had depreciated. I believe that the hon. Lady commends what we did in that Act. Her complaint is that we have not extended the provisions of clause 1 to the owners of Smith houses, who are mainly in the west Midlands but also in south Wales. The Government of course understand the problems and we should like to do what we can to to help.

On 25 May last year, my hon. Friend the Minister for Housing and Construction visited Birmingham where most of the publicly and privately owned Smith houses are located. He saw at first hand the problems facing all Smith house owners and discussed them with the owners. He also met hon. Members representing Birmingham constituencies, and city officials.

We are well aware of the problems facing Smith house owners in other areas, including Sandwell, and we are grateful to those hon. Members who have kept us closely informed on the subject of Smith houses in their areas. My Department's regional office is in regular contact with officers from Sandwell borough council and has visited a number of the council's estates, including one with Smith houses on which the authority is undertaking a programme of repairs. However, it is fair to say that the houses in Birmingham, as the hon. Lady admitted, have special problems happily not replicated in Sandwell, which I shall try to explain in the course of the debate.

I shall begin by trying to clear up one or two misunderstandings about Smith houses. I should like to take the opportunity to repeat that the problems which have arisen in Smith houses are not the same as those identified in prefabricated reinforced concrete houses designed before 1960, which are, as far as we are aware, the only houses known to meet the criteria for designation under section 1 of the Housing Defects Act 1984.

About 4,500 Smith houses were built in England and Wales, and they can be found not just in the hon. Lady's constituency at Sandwell, and in Birmingham but also in other areas of the west and east Midlands, and in south Wales.

The Smith house presents the appearance of a conventional brick house but is in fact built of large concrete blocks. Although some steel was placed in the blocks for handling purposes, that is structurally redundant. The construction is therefore different from those prefabricated reinforced concrete dwellings designed before 1960 and designated under section 1 of the Housing Defects Act 1984.

Following reports of cracking in the walls and floors in some houses, the Building Research Establishment was asked to investigate Smith houses. As part of its investigation it inspected in detail three houses in the city of Birmingham, and one house each in Cardiff, Erewash and Amber Valley, and examined a further 25 houses in those areas.

The BRE's report on the structural condition of Smith houses was published in December 1983, and it concluded that they suffer from some defects. Since construction, the large concrete blocks will have been subject to continuous movement with changes in temperature and humidity, and most Smith houses show some cracking at the junctions between the blocks and between external and partition walls. Although that may be unsightly, it should present no risk to the stability of the house if repairs which may from time to time be necessary are carried out properly.

So far as my Department knows, those movements have not led to any failure. Corrosion of the steel placed in the blocks for handling purposes could cause local cracking in the blocks, but again there is no evidence to suggest that that will lead to serious structural damage.

The BRE also found that some, but not all, Smith houses in the city of Birmingham are seriously defective because of the use of shale fill in their foundations. As far as is known, shale fill was used in Smith houses only in Birmingham, and the consequent defects are not inherent in Smith houses in Sandwell or in any other areas, as the hon. Lady said.

Designation entitles owners of the houses concerned to seek financial assistance by way of a grant towards the repair of the houses or, in certain cases, by repurchase. Under the Housing Defects Act 1984, dwellings may be designated for assistance only if, as a class, they are defective by reason of their design or construction and, by reason of the defects becoming generally known, they have suffered a substantial loss in value. Under section 1, a designation by the Secretary of State must include all houses of the type concerned in the country.

The second condition is the source of difficulty. Although some Smith houses in the city of Birmingham have suffered a substantial fall in value, my Department has no evidence that this is true of Smith houses in the country generally. If the hon. Lady is able to collect any evidence, which she can make available to my Department, that section 1(1)(b) is also true—that the value of some or all of the dwellings concerned has been substantially reduced — we shall consider the matter afresh. At the moment we do not have that evidence, which is why we maintain that my right hon. Friend should not designate Smith houses under section 1. The problem is different in Birmingham, where there is a serious problem resulting from shale fill. A local estate agent or residents association might be able to collect the evidence.

As for local designation, under section 12 it is open to local authorities to designate dwellings in their area, subject to the Secretary of State's approval, if they are satisfied that they meet the criteria which I have mentioned. This will help when there are local problems such as those experienced in Birmingham. If a local authority decides to designate Smith houses in its area, owners who are eligible will be entitled to assistance in the same way as they would be when a designation is made by the Secretary of State. It was not quite clear from what the hon. Lady said whether the local authority intends to apply for designation under section 12. Perhaps she wants to pursue that matter with the local authority.

Mortgageability is at the heart of the problem. Having listened to the hon. Lady, I understand the problems that owners of Smith houses are having. I understand that some building societies in the west midlands are prepared to lend on Smith houses, subject to a satisfactory structural report. I hope that that will ease some of the problems being faced by the hon. Lady's constituents, not least the couple she mentioned. I hope that, subject to a structural survey and, if necessary, some part of the advance being retained until any necessary repairs had been done, societies would be prepared to treat Smith houses like any other property offered as security for a mortgage loan.

I regret that other societies are not prepared to lend at all on this type of house. Although lending is a matter for the societies concerned and not one in which the Government intervene directly, I must say that I was disappointed to learn of the attitude which some building societies have adopted in respect of dwellings of non-traditional design. If the hon. Lady is able to let me see letters from building societies which have been contacted by her constituents and which flatly turn down any advance on Smith houses, I shall look at them and see if any pressure might be brought to bear discreetly on building societies to reconsider.

I am anxious that the problems associated with the pre-1960 PRC types which I have mentioned may have blighted other types of construction. It is important to re-emphasise that the types are distinct. The problems found in Smith houses in Birmingham should not lead building societies to cease lending on Smith houses generally.

The hon. Lady mentioned resources available to local authorities and said that Sandwell does not have the financial resources necessary to help owners of properties already designated under the Housing Defects Act or any future designation of Smith houses. She is aware of the system of Exchequer contributions to local authority expenditure under the Housing Defects Act.

In respect of the reinstatement grants, whether in pursuance of a designation made nationally or locally, the contribution is 90 per cent. of the annual loan charges on the amount of the grant. In respect of repurchase in pursuance of a designation made nationally by the Secretary of State, the contribution will generally be 75 per cent. of the price paid by the authority for the acquisition of the dwelling, plus any amount reimbursed to the owner for legal costs. Where the property was previously sold by another public authority and not the local authority which is repurchasing it, the percentage contribution will be increased to 100 per cent. However, there are no contributions towards expenditure on repurchasing dwellings in pursuance of a local designation by a local authority.

Regarding the allocation of resources, we took into account local authorities' expenditure under the Act when we made the housing investment programme allocations for 1985–86. Furthermore, my right hon. Friend the Secretary of State announced in the House on 13 March that he was prepared to consider sympathetically applications from local authorities which would have particular difficulty in meeting their obligations under the Housing Defects Act.

In general, authorities are expected, as usual, to order their priorities so as to discharge their commitments within the limits on their prescribed expenditure. But some authorities have argued that, because of other commitments, they cannot meet their obligations under the 1984 Act in 1985–86 within their total power to spend. In such cases, additional allocations will be considered to cover some of the costs involved in repurchase or making reinstatement grants during 1985–86. My Department has received more than 100 applications. Sandwell is one of the authorities which has submitted a bid for an additional allocation, and we shall give that careful consideration. We hope to come to a conclusion next month on how the applications will be processed. I can confirm that, on future expenditure, local authorities' expenditure under the Act will be fully taken into account in the HIP allocations.

The hon. Lady requested a meeting. When I have seen her letter, I hope to respond sympathetically, but before that meeting she may like to assemble some of the information that I have outlined, such as information on valuations on the properties and on the lending practices of building societies. If she comes armed with that, I shall see what I can do to help the constituents for whore she has spoken.

Question put and agreed to.

Adjourned accordingly at eight minutes to Eleven o'clock.