Housing Co-operatives

Petitions – in the House of Commons at 2:18 pm on 20th December 1985.

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

Photo of Mr David Alton Mr David Alton , Liverpool Mossley Hill 2:30 pm, 20th December 1985

I have the privilege of opening the last debate of the last sitting before Christmas and, indeed, of this year. That gives me the opportunity to extend seasonal greetings to you and your family, Mr. Deputy Speaker, and to the Minister and his. It also enables me to comment on the appropriateness of debating housing at a time when we celebrate a feast with such obvious significance for the homeless and the badly housed.

My interest in housing co-operatives predates my entry into the House and originated when I was chairman of Liverpool council's housing committee. I believe in housing co-operatives because they offer the best way of giving tenants a stake and a say in their communities. I believe in them because, from my experience of representing people in the inner city during the past 13 years—as a local councillor or as a Member of Parliament—I am convinced that the traditional landlord-tenant relationship has failed badly. A passing glimpse at sprawling, faceless, badly-maintained municipal estates confirms my belief.

Planners and politicians have waged war against entire communities, slowly and deliberately running down neighbourhoods and depriving people of their homes, roots and identities. In their place, the "we-know-best" politicians have created nightmare developments which people have rejected utterly. One need look no further than Manchester's Hulme or Liverpool's Netherley to see the dire consequences of Labour and Tory housing policies during the past 20 years. I opposed the construction of Netherley in 1972; 13 years later, it is being demolished with about 47 years of debt charges remaining to be paid. In my constituency, two 20-year-old blocks of flats—Entwistle Heights and Milner House—are being demolished, with 40 years of debt charges remaining.

It is a bitter and costly legacy. But perhaps most damaging of all is that, in destroying the "Coronation Street" communities, family life and support has been wrecked. In the past, many inner-city communities were like large happy families, until the politicians came along and scattered the people to the winds.

The housing co-operative movement has recognised people's desire to take over from the planners and take control of their homes. Nowhere has that desire been so potent as in Liverpool, where thousands of people recognise housing co-operatives as the opportunity to realise their most cherished dreams. In a city where one in five is unemployed and many have low incomes, the right-to-buy legislation is not an option. But that should not preclude people from having the opportunity to realise their cherished dreams.

I have been saddened by the response of the Labour-controlled council to those who wish to have their own homes, but who cannot afford to buy them. The Rochdale Pioneers must be turning in their graves as they see Socialists putting every possible obstacle in the path of people who wish to shake off the municipal, corporatist yoke.

The Minister will be aware of the heroic struggle and the fight waged by the Eldonian housing co-operative in Liverpool. Its leader, Tony McGann, and his brave committee have faced every sort of threat from municipal bully-boys. Their original planning application was opposed on completely trumped-up grounds, with the council subsequently being overruled by the Secretary of State on appeal. Attempts were also made to bribe and intimidate tenants to break ranks and move out into newly-built council properties. Labour used every dirty trick in the book to try to break the spirit of that co-operative. It has happened in other developments, too. Portland gardens was to have been a housing co-operative, but it was municipalised, snatching away from people who saw homes being built opposite them the chance of homes of their own. Those properties were sequestrated by the local council and taken away from those tenants.

Furthermore, the local Merseyside Improved Housing association, which had been backing the Portland gardens development, lost about £40,000 on abortive work on the scheme. That, too, is public money.

Tenants at the Mill street co-operative were told by the local housing department that if they resigned they would immediately be offered houses—if they got out of the co-op, they would be given somewhere decent to live—but if they chose to remain, no repairs would be done to their homes.

The latest attempt by local Labour leaders is to change the allocations policy so that tenants who believed that they would be able to move into housing co-operatives will now be denied that chance. Every possible obstacle has been put in the path of people who want to live in housing co-operatives.

That bitter experience has convinced me that a new Act to guarantee the rights of co-operators is needed urgently. A right-to-co-operate Bill should be introduced at the earliest opportunity in the new year and should guarantee in law the rights of tenants who take on the full might of the council landlords.

The Eldonians were a particularly strong group. They had the support of their local councillors, some of whom were moderates in the Labour group. I admire them immensely for the way in which they stood up to the local Militants. The Eldonians also had the support of the Archbishop of Liverpool and of the Liberal group on the city council. My right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), the leader of the Liberal party, met that group at one of its meetings and gave it his personal support.

The Eldonians' fight has secured for them £6 million of housing investment in Liverpool. The housing will be managed by the tenants. That is jobs; that is services; that is homes. How ironic it is that political leaders, who never stop parroting those phrases, should have been in the vanguard in trying to prevent that investment and those homes from coming to Liverpool.

The Eldonians were fortunate to have the support of the Merseyside Improved Housing association in their fight. The work of that association has been magnificant, and I pay particular tribute to the chief officer, Mr. Barry Natton, to Tom Clay, who has done much of the groundwork, and to the other members of the team. Merseyside Improved Housing backed its commitment to housing associations by putting its money where its mouth was. It put £150,000 into the Eldonians' scheme alone, and £50,000 of that will ultimately be a direct subsidy which is not reclaimable.

Merseyside Improved Housing cannot afford to do that every time, as my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) learned last Friday when we visited St. Andrew's gardens in my constituency and met the fledgling Bronte housing co-operative. The members of that co-operative need resources and help desperately. Representatives of Merseyside Improved Housing came to that meeting and will happily provide the professional advice and skills, but they must be backed up by resources.

The Department of the Environment's funds for housing co-operatives are lamentably small. The Minister for Housing, Urban Affairs and Construction told me last month in answer to my question about grants under section 121 of the Housing Act 1980: I consider that the present arrangements are satisfactory: the total provision for such grants in 1985–86 is £342,700 of which £94,700 has been set aside for co-operatives".—[Official Report, 25 November 1985; Vol. 87, c. 381.] In other words, less than £100,000 has been provided throughout the country for the development of housing co-operatives through grants under the 1980 Act. I have given an example of one co-op which required £50,000 to get only one scheme off the ground.

The Housing Corporation provides a co-operative promotion allowance, but that is only £2,100 per scheme. The Minister told me in another written answer: The level of co-operative promotion allowance for 1986–87 is currently being considered as part of the annual review of all housing association grant allowances. The Minister admitted that the current rates were only £2,135 per scheme for projects in the provinces, and slightly more in London. He went on to say: The rates to take effect from 1 April 1986 will be promulgated early in 1986."—[Official Report, 27 November 1985; Vol 87, c. 570.] That gives the Minister the opportunity to review those small allowances. The Government should take into account as well the size of the scheme and an additional per unit allowance should be made available.

Thirdly, we should be looking at the funding for repair grants, the upper limit of which is about £200. That is not enough money if one lives in a run-down fiat in the middle of a hard-to-let development on a peripheral council estate. The House must pass legislation or bring in orders that will enable more money to be made available to tenants who want to turn around their estates. If special grants, such as repair grants, were given where people formed housing co-operatives, they could act as a catalyst and be responsible for tackling the major problem of hard-to-let and empty property that we see on so many of the big municipal developments.

There is a need for plurality of funding from a number of different pockets both in the Housing Corporation and in the Department of the Environment. The present derisory sums are hopelessly inadequate. None of the existing mechanisms recognises this most difficult and important work and the struggle that so many tenants have to mount without professional advice or expertise.

As an illustration of how low a priority such action is at the moment, I point out that the Housing Corporation nationally allocated only half of one person's time specifically to housing co-operatives, and that is not good enough. I hope that the Minister will say that the Government will look again at funding the need for more professional backing and help. If the housing co-operatives succeed, they will form a springboard for more co-operative ventures. The Mondragon experience in Spain came about when groups of unemployed Basques got together with the help of the local priest to set up a people's bank. They put their savings into the bank and financed the development of workers' co-operatives. That experience could be repeated in areas such as central Liverpool, which can work on the basis of a successful housing co-operative.

Housing co-operatives give people a stake and a say in their own community and homes. Families need greater protection if they are not to see the homes that they have helped to plan snatched away from under them. That is why we need a right-to-co-operate Bill. Co-operatives are about the most important form of home rule. They enable us to decentralise power and ownership in the most radical way possible. They are worthy of full support from the House. In the spirit of Christmas, which is of such special significance to the homeless and the badly housed, I hope that the Minister will be able to give me the assurances that I have sought.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. Does the hon. Gentleman have the consent of both the Minister and the hon. Member for Liverpool, Mossley Hill (Mr. Alton) to speak? I see that he does.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Environment, Food and Rural Affairs)

I am grateful to my hon. Friend for granting me a few minutes to speak in support of his plea to the Government to be more supportive of the housing co-operative movement.

At the moment, our lament is that the housing co-operative movement is seen as incidental rather than integral to the planning of housing provision in Britain. For many—and the Government have still to learn this lesson—they are the only way out of municipal misery. They are the only alternative that offers self-management and self-control rather than that other fallacious alternative, the unmanageable financial prospect of being able to buy, and then keep up payments for, a house. The liability of owner occupation and the right to buy is a useless resource to those who do not have the money to purchase and then sustain a commitment.

The Government should no longer consider the co-operative movement to be the reserve of the trendy middle class. That is not the reality. They are often most appreciated by working people in inner cities, London as well as Liverpool. The working people are backed up with the expertise and resources, both financial and skilled, of people who can advise and assist.

I have three propositions to make to the Government. First, they should establish, as part of the Department of the Environment, a national co-operative development fund—a co-operative corporation to balance the Housing Corporation—which would channel funds to the co-operative movement to build up that part of our housing sector.

Secondly, the Government should ask local authorities to present proposals for co-operative schemes in what is presently the public sector and in newbuild when, each year, they ask for local authorities' housing plans. That would help us to get away from the idea that the only alternative to public sector build is private sector build. Local authorities could get used to the idea that they had to plan co-operative ventures.

Thirdly, the Government should facilitate a network of expertise, administrative skills, financial advice and resources to enable those who would choose co-operative housing if they were given the chance to make that choice and to be supported.

Such steps would give the Government a new reputation for the new year as the improving, enabling, co-operative Government—which even they will find appealing.

May I, on behalf of Opposition Members, offer our good wishes to you, Mr. Deputy Speaker, and to the Clerks and staff of the House who make our work so much easier? May I ask the Government to reflect that the more co-operative they are on matters such as this, the happier people will be and the better our housing will be in 1986?

Photo of George Young George Young Parliamentary Under-Secretary (Department of Environment) 2:46 pm, 20th December 1985

Nobody is more committed than the Government to breaking up the municipal monopolies that the hon. Members for Liverpool, Mossley Hill (Mr. Alton) and for Southwark and Bermondsey (Mr. Hughes) have mentioned. Similarly, nobody is more committed to moving away from the town hall paternalism which has doomed many local authority tenants to live in rather depressing surroundings.

That is why we are happy to review our support for the co-operative movement and to see how we might usefully build on it to provide greater impetus in this growing movement. I was disturbed but not surprised to hear of the irregularities of Liverpool city council that the hon. Member for Mossley Hill described. It is appropriate at a time of year when thoughts of many of our colleagues turn to other things to consider the role of co-operatives in tackling some of the remaining housing problems.

The debate shows the anxiety of the hon. Member for Mossley Hill about the many recent disturbing developments that affect his constituency and the whole of Liverpool. Some of the incidents that he described show the damage that can be wrought by militant Socialism in a deprived inner-city area.

There is not much between the Government and the hon. Members for Mossley Hill and for Southwark and Bermondsey about the desirability of extending further the housing co-operative movement. Only last week, my right hon. Friend the Secretary of State for the Environment said in a debate on the inner cities that co-operatives are working successfully in many inner city areas, not least Liverpool. We are anxious to see how we might help best.

Co-operatives are formed by a group of tenants or prospective tenants who are in housing need. If they are registered with the Housing Corporation, they have access to development funding, as do other housing associations. What distinguishes them is the fact that they are completely self governing, that their rules restrict membership to tenants and would-be tenants, and that all tenants have to be members of the co-operative. Almost by definition, therefore, their experience of the broader requirements of developing a housing scheme is somewhat limited.

The right way in which to approach that lack of experience is to help with the necessary training, advice and support. The Housing Corporation now insists that any new co-operative seeking registration and public finance must have a development agreement with a recognised secondary co-operative or housing association that provides back-up services and training. Secondary co-operatives are bodies which own no properties, but exist solely to provide development and other services to the primary co-operatives which carry out the work. I pay tribute to Co-operative Development Services, one of the major secondary co-operatives in Liverpool, which has done so much to encourage and foster the movement in Liverpool.

I have touched on the difficulties that can arise with housing co-operatives, but a recent review by my Department showed that they are balanced—and, indeed, outweighed—by the benefits and advantages that the movement can bring, not least in inner urban areas. Inherent in the co-operative movement—and both hon. Members touched on that—is the willingness of the residents to take responsibility for managing their own houses and taking a real sense of pride in the area in which they live. That avoids many of the problems and the resentments between landlord and tenant which have been a feature on large local authority estates.

That participative approach extends to the design of the dwellings to be built or renovated by the co-operatives. Apart from the co-operative style of management, a key feature is likely to be the close involvement of the actual members who work closely with building professionals in the physical arrangement of the development so that it fully reflects the wishes of the members of the co-operative. For that reason, they are now in the forefront of the community architectural movement that has attracted considerable publicity and most distinguished endorsement during recent months. Those of us interested in the inner cities simply have to take note of the growing awareness and willingness of those who live there to take responsibility for their future and to transform the soulless inner-city estates into an area in which they are proud to live.

The development of those schemes is funded primarily by loans from the Housing Corporation. I note what the hon. Member for Southwark and Bermondsey said about the need to set up a separate source of funds—he used the initials NCDF—for that movement.

At the moment, every scheme, whether submitted by a co-operative or a conventional housing association, is considered by the corporation on its merits. That ensures that only the best and most suitable projects are approved and that funds are used in the most effective way within the corporation's overall strategy.

In 1984–85, the level of capital expenditure on co-operative schemes was £23 million. It is too early to say what the figure will be for this year, but the indications are that the value of new schemes may be running at a slightly higher level. Yesterday we announced the Housing Corporation's approved development programme for next year. Gross provision has been maintained at the same level but we will concentrate resources on meeting needs in inner-city areas. That should encourage the funding of co-operative schemes.

However, development loans are not the sum total of our commitment to housing co-operatives. On 1 April this year an additional development allowance, the co-operative promotion allowance, was introduced. It is provided exclusively to housing co-operatives and its aim is to meet the extra costs that they face in obtaining back-up and advice from registered associations and secondary co-operatives. It currently stands at £3,522 for each first project in London and £2,135 elsewhere. The hon. Member for Mossley Hill implied that that was a derisory sum. When it is reviewed, we shall take his comments into account. Second and subsequent projects receive a smaller allowance.

We have attempted to recognise the special problems that co-operatives face when considering section 121 grants. Out of the total of nearly £350,000 available, some 30 per cent. has been set aside for secondary co-operatives in the current year.

Photo of Mr David Alton Mr David Alton , Liverpool Mossley Hill

Can I press the Minister further on allowances? Will he look at the question of their being paid only on successful completion of the scheme? There are occasions when co-operatives fail, through no fault of their own, and the allowances are not paid.

Will the Minister say something about the number of staff employed by the Housing Corporation who deal with housing co-operatives?

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

The Government are anxious not to spend too much on abortive expenditure. That principle inspires our approach to housing associations and co-operatives. I shall have another look at the matter, but obviously we want the money to go on schemes that are completed rather than on those that are simply contemplated. I shall also take another look at the resources of the housing corporations that are devoted to promoting co-operatives in the light of the fraction of 1 per cent., or one person, as mentioned by the hon. Gentleman.

The housing co-operative movement was pioneered in Liverpool in the late 1970s when people in depressing public housing started to band together into self-help groups to find a way to better housing. That approach, harnessing the energies of local people, was supported initially both by the housing corporation and the city council of the day, and many of those early schemes are now complete.

Notable successes have been, for example, the Weller street and the Grafton crescent housing co-operatives in Liverpool 8. Those achievements have been widely recognised and some have won awards. The Prime Minister visited Grafton crescent co-operative in Liverpool last year and she, like others, was deeply impressed by what she saw.

In the Merseyside context, the co-operative principle provides an opportunity for those with no realistic prospect of home ownership, a point made by both hon. Members. The people there can now take real responsibility for the design, management and maintenance of their homes. It enables them to escape from inefficient local bureaucracy and to play a role in creating and sustaining good sheltered housing.

It was extremely sad, therefore, that the present Labour city council should have adopted a deliberate and dogmatic policy of municipalisation at the expense of co-operative schemes. The city council is not now prepared to enter into arrangements for tenant management co-ops or to found newbuild schemes for co-operative ownership because of its wish to direct all available resources to the council's newbuild for rent programmes, a narrow-minded and counter-productive approach.

That means that Liverpool co-operatives must now look exclusively to the Housing Corporation for funding and compete directly with many other claims on resources. Even though the corporation's resources are fully committed, it has been possible—through the special allocation for Merseyside which the Minister for Housing, Urban Affairs and Construction announced yesterday as £8·6 million for next year—to help some deserving co-operative schemes, in particular the Eldonian community association, which established the Portland gardens housing co-op in 1982 with the objective of developing a scheme of 111 houses and bungalows for families from the Portland gardens tenement block.

That scheme had been caught by the change in Liverpool city council's policy, but a deal was struck by which the council took over the scheme as a municipal development. But as co-operative members were involved in the design work, they will be allocated the new houses and bungalows.

That association has further plans for another scheme of 145 houses, bungalows and flats on the Tate and Lyle site. The scheme will be for families living in tenement blocks due to be demolished in Vauxhall. The proposed scheme is 60 houses for shared ownership for families in employment, 40 houses for rent by unemployed families and 45 bungalows and flats for rent by pensioners. We have been able to agree that resources should be made available from the Housing Corporation's approved development programme to make a special allocation to the co-operative to acquire and develop the site.

The former sugar refinery had been acquired by English Estates, which demolished it, and it is now reclaiming the land, with the aid of a derelict land grant, fox future development. As the hon. Gentleman pointed out, there was a problem with planning permission, which the Secretary of State resolved, and the Eldonians have now started to work out detailed design proposals.

Despite Liverpool city council's rejection of the co-operative movement, that movement still demands attention. The Government have shown their commitment and have made special funds available, through the Housing Corporation, to enable a number of schemes to proceed.

When the city withdrew support, we provided resources for the Dingle residents and the Shorefields co-operatives to proceed on land owned by the Merseyside development corporation near the garden festival. Those are almost complete. Co-operative development services, neighbourhood housing services and major co-operative housing agencies in Liverpool, together with other bodies, have been in the forefront of building up the co-operative movement in Liverpool.

There is much to be said in favour of housing co-operatives. The forthcoming legislation may provide an opportunity for a debate on the lines that the hon. Gentleman outlined about a right to manage. I readily concede that there is energy and resource in our inner cities that the Government must harness, perhaps through the cooperative movement, to enable people to have a greater say in their own destinies, and the Government are ready to give those people an opportunity to achieve their aspirations.

As the final speaker before Christmas, I join in what has been said in wishing you, Mr. Deputy Speaker, and your fellow occupants of the Chair, the officers of the House and the Whips a richly deserved happy Christmas and all the best for 1986. I have no doubt that when the House reassembles early in January we shall have been refreshed and invigorated by our holidays and will be ready to tackle some of the problems that hon. Members have outlined in these Adjournment debates.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

I am grateful to hon. Members for their kind expressions of good will. I join them in extending our best wishes to all who serve us here, and I extend my personal best wishes to all right hon. and honourable Members.

Question put and agreed to.

Adjourned accordingly at Three o'clock.