I beg to move,
That the draft Housing Support Grant (Scotland) Variation Order 1987, which was laid before this House on 14th January, be approved.
I understand that it will be for the convenience of the House to discuss also the second order:
That the draft Housing Support Grant (Scotland) Order 1987, which was laid before this House on 14th January, be approved.
and the prayer:
That an humble Address be presented to Her Majesty, praying that the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order 1987 (S.I., 1987, No. 11), dated 7th January 1987, a copy of which was laid before this House on 20th January be annulled.
Full details of the Housing Support Grant settlement are set out in the report which accompanies the draft Housing Support Grant Order. In view of the time limit on the debate, I shall not burden the House with excessive detail. I shall explain the thinking behind these proposals and the limits that have been set out in the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order.
We have reached agreement with the Convention of Scottish Local Authorities on the formula for the distribution of housing support grant this year. I should like to place on record our thanks to the convention for its contribution to our discussion.
Whatever COSLA may or may not be, the discussions that we have had on the formula and the contributions that it made to those discussions were constructive and useful. Therefore, it is only right that in this instance I should record my appreciation of COSLA's part in them.
In the housing support grant settlement for 1987–88, the Government have aimed again at concentrating resources on those authorities which, in our view, require them. We have estimated eligible expenditure at £288·5 million and relevant income at £242 million. Housing support grant will therefore total £46·5 million. This will be distributed among the 25 authorities which we believe will incur deficits on their housing revenue accounts in 1987–88.
I should explain to the House that in response to representations by a number of authorities and hon. Members, and with the agreement of the convention, we have made a major change in this year's grant formula. Since the inception of HSG, the formula has incorporated a notional per head income amount on the income side of the equation to represent rate fund contributions to authorities' housing revenue accounts. Since 1985–86, however, the Secretary of State has used his statutory power to set limits on the amounts of rate fund contribution for which authorities may estimate. The notional amounts in the HSG formula, for that reason, have moved out of line with actual rate fund contributions. As a result, some authorities have received less grant, and others more, than had actual rate fund contribution figures been used. Overall, authorities as a whole benefited from the previous formula, but for 1987–88, if we continued to follow this approach, authorities would in total have received less than the figure arrived at using "real" RFC limits. For 1987–88, therefore, we have incorporated in the HSG formula a rate fund contribution figure for each authority based on a pro rata distribution of £30 million across Scotland according to council house stock numbers, or the authority's 1986–87 statutory rate fund contribution limit, whichever is the lower.
I know that the hon. Gentleman on all these occasions obviously and understandably presses the interests of Inverclyde district council. In the change in the formula that we have made, it is generally accepted that we are now working on a more realistic basis. In this year's settlement we have reached a position which is more favourable than it would have been overall had we not made the change in the formula. We have answered the legitimate concerns which have been expressed to us in previous years by certain district councils which felt that they were losing out by what had by that time effectively become an artificial assumption within the formula.
The point that the hon. Member for Glasgow, Cathcart (Mr. Maxton) fails to appreciate is that we work by a formula. If he consulted his friends in COSLA, he would find that they agreed that this formula change should be made because, overall, it produced a more beneficial effect. Within a formula there will obviously be those who gain and those who lose.
In view of what my hon. Friend the Member for Dundee, West (Mr. Ross) said, the Minister must surely acknowledge the massive problems that face Inverclyde district council? I am not worried about the hon. Member for Renfrew, West and lnverclyde (Mrs. McCurley). Inverclyde district council faces massive problems. Its unemployment continues to rise remorselessly. The Minister knows that. I am making a plea for help for that council.
I rather suspect that if the hon. Gentleman were ever, unlikely though it may be, to find himself with my responsibilities, he would find that where there is a formula that requires to be applied, he has to apply it. That is what is happening here.
Will the formula take account of large numbers of empty houses? I cannot speak for Inverclyde, but I think that it has more than its fair share of houses that Labour authorities continue to leave vacant.
My hon. Friend makes a valid point. However, the formula is not as sensitive as that. It deals with the stock held by the council, whether that stock is occupied or empty. It is important for Labour Members, as well as my hon. Friends, to appreciate that a formula improvement that takes account of real rate fund contributions as opposed to assumptions is better than the previous formula. I rather suspect that some Labour Members representing district councils will agree with that. In the case of certain councils, I am sure that the line that has been taken by the hon. Member for Greenock and Port Glasgow (Dr. Godman) will not be acceptable. I give way to my hon. Friend.
The Minister has misunderstood the point made by my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman). I am not asking for special consideration for Cumnock and Doon Valley in the formula. We are saying that not enough money is available to maintain houses either through housing support grant or the rate fund contribution. This is a cut in funding.
Does the Minister recall that I sent him a letter and a survey carried out by the Dalmellington tenants association, which showed the number of houses needing repairs and the number of houses with dampness? Will he admit that Cumnock and Doon Valley is not being permitted enough funds to enable it to carry out proper repairs?
I wish that the hon. Member for Stirling (Mr. Forsyth) would shut up. He is rabbiting on. [HON. MEMBERS: "Oh?"] The hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) has crept into the debate at last.
Will the Minister admit that, if the money were available to Cumnock and Doon Valley district council, the housing at Dalmellington would be properly upgraded and maintained, and any that were empty would be immediately snapped up? The council is unable to do that because the Minister is cutting its allocation.
I listened with a great deal of interest to what the hon. Gentleman said. On occasions, I have to call him my hon. Friend, for reasons into which we need not go.
I am a little surprised by the hon. Gentleman's allegation. I received his letter, and I am concerned about the structural problems in the housing stock of Cumnock and Doon Valley and the problems of dampness and condensation. I am sure that he was as appreciative as his council when its HRA allocation, which deals with the public sector stock, was increased by the extraordinary amount of 31 per cent. this year. How he can make these allegations, I fail to understand, unless his council has not yet informed him of the provisional allocation that it has received. I shall carry on because certain of his other points will be answered by what I say.
The end result of the formula change is that all authorities in HSG will benefit in 1987–88. Aggregate grant is £2 million higher than in the current year and £16 million higher than if we continued with the previous formula. I would have thought that for that reason, if for no other, local authorities, quite apart from COSLA, would welcome the change in the formula.
Perhaps the Minister will clarify this point for the record. I think that he is a man who believes in some truth. Would it be better if he compared last year's housing support grant order in terms of money with this one? In that case, of course. there is a reduction of more than £4 million.
The hon. Gentleman is aware that that is due to the variation that occurs as a result of changes in the interest rates. The real figure for the housing budgets of councils is affected if interest charges are lower than was expected. If interest rates moved in the opposite direction, I suspect that if I was to suggest that the amounts were higher because of that, the hon. Gentleman would be the first to challenge me. It is right that 1 should consider the figures after the interest rates are taken into account rather than to play with them in the way in which the hon. Member for Cathcart is playing with them.
The point about which Opposition Members cannot argue is that a formula which produces about £16 million more than the previous formula must be acceptable, and in general terms, I would have thought that the Opposition would welcome that, although I accept that at times we are surprised by the Opposition's response.
Local authorities' expenditure on housing is, of course, very sensitive to changes in interest rates and we are again applying an average rate of interest to authorities' individual volumes of debt— 10·4 per cent. has been assumed in this settlement. If, however, in practice, interest rates prove to be significantly different from our current assumptions, we will bring forward an appropriate variation order in due course. The 1986–87 variation order before the House today reflects a similar undertaking given at this time last year. Because average pool interest rates have fallen from 11 per cent. to 10·6 per cent. during the year, HSG, as the hon. Member for Cathcart explained, is reduced for this year by £6·2 million to a revised amount of £44·5 million.
The figures in the housing support grant orders reflect our continuing concern to balance the undoubted need for expenditure on housing against our responsibility to control public expenditure as a whole. This is particularly the case in the amounts that we have allowed for management and maintenance expenditure. We are at present. in conjunction with the convention, involved in a review of these allowances. But, for 1987–88, we have uprated the management and maintenance provision in the 1986–87 settlement by 7 per cent., which is well above the rate of inflation. Rightly we believe that to be generous. In the light of present inflation rates, that should allow some real growth on repairs expenditure. The new figure is £303 per house—a total of £253 million.
Does the Minister accept that many authorities, including West Lothian, are now becoming deeply worried about the problems of rewiring as the housing stock reaches a certain age? The Convention of Scottish Local Authorities has given the figure of 118,200 houses which need rewiring. Do the Government dispute the COSLA figures? I recognise that this is a difficult problem.
The hon. Gentleman knows that COSLA set out a series of figures which I have not been prepared to accept and have asked COSLA to justify. I believe that there has been a degree of double counting.
I wish that the hon. Member for Cathcart would stop muttering, "Of course there has been a degree of double counting." It took me six months to get him to admit that double counting had occurred in the first place.
We are all concerned to try to discover the real extent of need in Scottish housing and to meet that within the available resources. I will consider the question of capital allocations that I have made available this year in due course.
Briefly, in the light of the Minister's comments about the level of investment required and the doubt that exists within his Department about the COSLA figures, will he respond positively to the request made by COSLA in December for a working party of officials to examine some of the problems on a joint basis and provide figures about which we can all agree?
I have told COSLA that I do not rule out the possibility of joint discussions at an official level. COSLA issued a series of figures last year and I have made a detailed response to them. I said that before we had joint discussions, I wanted to receive and consider COSLA's reaction to my response. That is a fair position for me to hold.
On the income side, we are assuming for the purposes of the settlement that rents will increase by £2 per week over 1986–87 order levels, bringing rents to £15·85 in order terms. Taking these housing support grant assumptions together with the Government's decisions on rate fund contribution limits, with which I will deal shortly, we estimate that average council house rents will rise by about £1·32 per house per week in 1987–88. This will result in an average weekly rent for Scottish local authorities of about £14·34 per week.
This is a short debate and I have been very generous in giving way. If the hon. Gentleman wishes to intervene later in my remarks, I shall give way then.
I shall return to rents later in my speech and, depending on the time available, if the h on. Gentleman wishes to intervene then, I shall consider giving way to him.
Let me turn now to the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order 1987. It is right to consider this order at the same time as the housing support grant orders, because they all directly affect the income side of authorities' housing revenue accounts.
The Government must take difficult decisions about the total resources which the country can afford to devote to housing, against the competing pressures on public expenditure as a whole. Although I am pleased to have been able to increase housing support grant because of the formula change, as I have already outlined our policy continues to be to reduce indiscriminate subsidies to enable us to devote greater resources to investment in the general housing stock.
Between 1981 and 1985 many authorities, by keeping rents unnecessarily and artificially low, and by requiring ever higher contributions from ratepayers to balance their housing revenue accounts, chose to forfeit £112 million of capital expenditure consents which could and should have been used to carry out modernisations, to deal with dampness, condensation and similar problems. However, since we took the statutory power to limit rate fund contributions, first exercised in 1985–86, this trend has been reversed. We have reduced the RFC aggregate from a non-statutory advisory limit of £120 million in 1984–85 to £43·7 million for 1987–88, as set out in the order before the House tonight. We have increased capital allocations on the HRA block each year by more than the RFC reductions required. For 1987–88, for example, the RFC limit aggregate is £26 million lower than for 1986–87, and this has contributed to a £40 million increase in the provisional HRA allocations next year as compared with 1986–87. The HRA allocation, at £362 million, is for the third year running substantially up in real terms. During the three years, the increase has been £135 million, or very nearly 60 per cent. over the level of three years ago.
Next year's allocations will again be augmented by authorities' ability automatically to carry forward underspends of up to 3·5 per cent. of the issued allocations. But capital allocations alone no longer provide a comprehensive picture of investment in council housing. As a result of the covenant scheme facility which we have temporarily made available, mainstream capital investment is likely to be boosted next year by a further £60 million and £215 million in total during the next three to four years. Investment in the Scottish council housing stock in 1987–88 will, therefore, be about £100 million, or over 30 per cent., higher than in the current year. Indeed, the increase over just three years is approaching 90 per cent. and clearly demonstrates the Government's concern to enable the real problems in the housing stock to be tackled. I have to say that if today's problems are the legacy of past underinvestment and lack of proper repair and maintenance, a great deal of responsibility for those problems must lie with those who made policy between 1974 and 1979. [Laughter.] Oppositions Members laugh.
When the Labour party last held office, capital investment in Scottish housing by public agencies—the local authorities, the Housing Corporation, the Scottish Special Housing Association and new towns—fell in real terms by a massive and damaging 37 per cent. Since this Government came to office, we have turned the tide such that the figures for next year represent a real term increase of over 5 per cent. since 1979. That is the measure of the Government's commitment to dealing with Scotland's housing problems.
In setting an aggregate limit to rate fund contributions of £43·7 million, we have consulted widely about the implications of the individual limits set. The distribution of this aggregate took account, initially, of the number of council houses in each authority. We subsequently invited representations and considered carefully the implied rent increase and rent level in 1987–88 in each authority. As a result of those representations, we made upward adjustments for six of those authorities. Of course, rent implications for the 56 housing authorities vary widely. We took the view that rate fund contributions should be set so that, on the basis of reasonable assumptions on expenditure, individual authorities' average rent increases need not be higher than £2 per week and that no authority—
—should be required to raise its average rent level to more than £17·15per week.
If the hon. Gentleman will bear with me, I will give way just once more in a moment.
In this calculation we again assumed that authorities would spend 7 per cent. more on management and maintenance than last year. As a result, we calculate that the average rent increase next year will be about £1·32 per week.
On the £1·32 per week rent increase, could the Minister express that as a percentage? Could he confirm that the average percentage increase is well in excess of 10 per cent.? Since inflation and wage increases are well below that, how does he expect the ordinary council house tenant to be able to pay for that huge rent increase?
If the hon. Gentleman will bear with me, I am about to come to the point of percentages in comparative terms. The effect of our decisions in these orders on Cumnock and Doon Valley would be an estimated rent increase of just above the average that I have given.
Perhaps the hon. Gentleman will just bear with me.
I expect we shall hear some exaggerated claims from Opposition Members about the effect of these limits upon rent levels. It is worth looking at what has happened in the past. In the equivalent debate last year I predicted that rents would rise by up to £1·60 per week. In the event, the actual rent increase turned out to be just under £1·50. If rents go up by the £1·32 we are forecasting next year— and this figure was not disputed by the convention when I met it in December— the average council rent will stand at £14·34per week in Scotland. The rental figures that I am giving are not unreasonable.
Two points are worth emphasising. First, the £14·34 average next year is well below the current year's average council rent of £16·55 in England and Wales and below current rent levels in housing associations, the Scottish Special Housing Association and new town houses and the prevate sector in Scotland.
Secondly, although we hear much from the Opposition Benches about local authority rent increases over the past year, let me remind the House of some figures given in answer to the hon. Member for Fulham (Mr. Raynsford) on 3 December 1986, which showed that registered rents, that is, fair rents independently assessed, in Scotland rose faster between 1979 and 1985 than local authority rents—by 174 per cent. against 135 per cent. Those are rent increases set not by councils but by independent assessment. In 1985 they stood at £2·64 per week higher than the local authority figure we are forecasting for 1987. Of course, if tenants have genuine difficulty in meeting their housing costs, relief is available to them through the housing benefit system.
Just in case the hon. Member has any interests in Kyle and Carrick, which I think may touch on part of his constituency, I might point out to him that the increase in rent involved in the figures that I have given tonight, in terms of our estimate, would be only 21 pence. I am sure that he, among others in the area, would welcome that.
In conclusion, let me emphasise that the figures included in the orders before the House tonight are designed to reinforce our policies for housing in Scotland across the whole range. Reductions in rate fund contributions and housing support grant, taken together, are evidence of our continuing determination to concentrate on using the resources available for housing on capital investment.
Indiscriminate subsidies are wasteful and do not encourage efficient management by authorities. The reduction in rate fund contributions will offer relief to hard-pressed ratepayers, and it has contributed towards further increases in capital expenditure. These increases, totalling nearly 60 per cent. over three years, together with the 7 per cent. increase for management and maintenance expenditure built into the calculations, will ensure overall that tenants benefit by a higher standard of housing provision.
We have consulted widely on the orders. I am satisfied that the figures they contain are fair and reasonable. I commend the orders to the House.
On a point of order, Mr. Deputy Speaker. It was clear when the debate started that items 3 to 5 on today's Order Paper were to be taken together; the House had earlier consented to that. What was not clear, however, was that the Minister would take the best part of half an hour to address the House on the business. I am seeking your help, Mr. Deputy Speaker. Is there any way in which we can undo the undertaking to deal with these matters together so that the debate may be extended for three hours? That would allow the Opposition to reply adequately to the puerile case that was made by the Minister.
It is not possible to extend the debate by the length of time that the hon. Gentleman wishes, because the House previously made a decision by motion to take the orders together. I remind the House that Mr. Speaker put the question to the House—I was present when he put it—about taking the orders and prayer together, and the House did not dissent.
I have heard of generosity, but generosity from this Minister cannot be believed. If he had applied the formula that he used in previous years he would have cut the housing support grant by £13 million instead of by only £6 million. I suppose one could call him generous for doing that.
The Minister then suggested that the Government have been inordinately generous because tenants in council houses have benefited from the marvellous works that this beneficent Government have done. He seems to think that they are a marvellous lot and that everyone will finish up voting for them. What a laugh.
Let us consider the facts. Let us start with the housing support grant. Let us see what has happened under this Government. In 1979, housing support grant was £213 million. By 1984–85, it was down to £120 million. By 1985–86, it was reduced to £90 million. In 1986–87, it was reduced to £51 million. This year it is being reduced again to £46·5million. Those are all in cash terms and not affected by inflation. In cash terms alone the reduction in housing support grant has been 75 per cent. Yet the Minister tried to tell us that he was being generous in increasing the capital allocation by some 5 per cent.
Let us examine the total package for this year. The rate fund contribution has been reduced from £70 million to £44 million. The housing support grant has been reduced from £51 million to £47 million. Those figures compare with £90 million and £64 million respectively in 1985–86. I accept that capital allocations have gone up from £325 million to £362 million. If we look at the totality of what is being spent on housing by the Government and the amount of money they allow local authorities to spend, we see that it was £446 million in 1986–87, and that it will be £453 million in 1987–88. That is an increase of £7 million and that includes this so-called enormously generous capital allocation. That is an increase of about 2·5 per cent., well below the rate of inflation. In real terms, it is once again a cut, even if we include those "generous" capital allocations.
There are now only 25 housing authorities in Scotland receiving any form of rate fund contribution or housing support grant. Two thirds of the total housing stock in Scotland receives no subsidy at all. Every time the Minister gives these "generous" capital allocations, of course, it is the tenants through their rent who have to pay the interest on any capital loans taken out by local authorities. Sometimes the Minister tries to create the impression that a capital allocation is a sum of money that he gives to local authorities in grant. Of course it is not: it is money that the local authorities have to borrow.
The Minister made a long speech. I want to make a short speech so that other hon. Members can join in the debate. Every time a local authority borrows money, the tenant has to pay the interest in his rent. That is exactly what the Government intend.
My hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) asked about the percentage increase in rent. On average it will be 16 per cent. That is nearly four times the rate of inflation and more than double the estimated rise in earnings in that period. My hon. Friend is right when he says that many poor people who are waged cannot get housing benefit. They will struggle in order to meet those increases, because £1 or £1·20or £2 a week which is more likely to be the average will hit them hard. We have to look at what the Government give in support to local authority housing and what has been given in the past.
At present, only 12 per cent. of total council house costs come from central Government and 88 per cent. comes from the tenants in rent. In 1979–80 the rents made up only 47 per cent. of council house costs and grants made up 53 per cent. Council house tenants suffer under the Government. We in the Opposition do not suffer in that way because very few of my hon. Friends live in council houses. The tenants have suffered enormously as a result of what the Government have done. Repairs are not now carried out. The expenditure on repairs on council houses in Scotland has gone up by 50 per cent. in cash terms between 1979 and 1985–86. The rate of inflation in that period was 74·5 per cent. That means that there has been a massive cut in repairs by local authorities. We have seen higher rents, poorer repair services and fewer opportunities to move house because there has been a lack of new building and renovation of older properties. What has happened?
The Minister keeps on saying that, but of the empty housing in Scotland, 4 per cent. of privately owned property stands empty, 11 per cent. of privately rented property stands empty, but only 2 per cent. of council housing stands empty. The Minister's argument about council housing does not stand up.
I shall certainly not give way to the hon. Lady.
We should study the figures that have been drawn up by COSLA—they are based on figures provided by the Scottish Office. The Minister should remember that when he tries to evade the evidence. The figures relate to the condition of housing— that is what matters to people. Out of the 854,000 council houses in Scotland, 332,900 need modernising; 118,200 need to be rewired; 314,000 suffer from dampness or condensation, and 50,000 need major or structural repairs.
Of course, one can double count. One can spend a great deal of money to cure the dampness and condensation in a house without modernising it or vice versa. Any fool could work that out— even this Minister. COSLA estimate that it would cost £880 million per year for the next ten years to get the existing Scottish housing stock in order.
Scotland faces a major housing crisis and the tenants in council houses are facing major problems. However, at the end of the day, the Government simply do not care and nor does the Minister. Their only concern—
The Government are interested in cutting housing expenditure so that they can give bigger tax cuts to their wealthy friends. They are not interested in the 50 per cent. of people who live in council housing—it does not concern them. They are looking for cheap votes by giving tax cuts, but at the same time hitting the poorest and weakest in our society. I ask my hon. Friends to join me in the Lobby to vote against these orders.
We have heard what might be described as a fairly traditional speech from the hon. Member for Glasgow, Cathcart (Mr. Maxton). It had little to do with the order and did not challenge the essential philosophy that was stated by my hon. Friend the Minister with his customary clarity.
My hon. Friend outlined a policy which will reduce indiscriminate subsidy and concentrate scarce resources on capital expenditure. The hon. Member for Cathcart did not say whether the Labour party agreed that that was an essentially sensible housing policy. Instead, the hon. Gentleman's speech totally disintegrated into an irrelevant discussion about tax cuts.
I agree with the basic thrust of what my hon. Friend the Minister said, but I am extremely disappointed that he has not gone further. The Minister can confirm that both housing authorities in my constituency, Eastwood and Renfrew, have fallen out of housing support grant. Therefore, we are talking of public expenditure of £46·5 million in Scotland, none of which benefits my constituents. Unless I am persuaded otherwise, that is therefore a logical reason for me and a number of my hon. Friends to vote with the Labour party. If it were successful in defeating the order, housing support grant would be abolished—clearly to the benefit of my constituents.
While my hon. Friend is contemplating which way to vote, will he remember that in 1979 some £50 million was spent on housing benefit, whereas the current figure is more than £500 million? That aid is going to the individual householder directly from the public purse. It is massive support for individual householders in Scotland—in fact, more than 50 per cent.
My hon. Friend is absolutely right. He has cut my speech by making a point that I was about to make. When resources are scarce, it makes sense to concentrate them on individuals in need, not to spend them indiscriminately on broad, general subsidies.
When my hon. Friend the Minister replies to the debate, if he is left sufficient time to do so, I hope that the will confirm the position for Eastwood and Renfrew districts. Will he emphasise that there is no need to be defensive about a reduction in housing support grant? The logic of a sensible housing policy is to concentrate resources on people and on capital expenditure. I hope that he will confirm that next year he will, at the very least, announce a substantial reduction on the present support grant figure.
I read in the Standard tonight that someone asked the Prime Minister what she had changed; she replied, "Everything". She has certainly changed the pattern and level of housing finance, and the effects of that have been both socially damaging and financially unjust.
I never cease to be amazed and. indeed, saddened by the number of people who ask me to help them obtain a house. All hon. Members must have experienced that. The great majority are genuine cases living in inadequate circumstances. What do we do?
We raise the matter with the local authority, but we know that it cannot help because there has been no new build, and there are no plans to begin any.
We have in our midst a mimic—a highly inadequate and untalented mimic. I believe that if one does not have talent, one should keep quiet—[HON. MEMBERS: "Sit down then."] Does the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) agree that if there was not a certain degree of political patronage in assigning local council houses, that might end some of the problems?
This hon. Gentleman does not agree, actually.
I was saying that there had been no new-build and no money to start any. Most of those who come to me for help do not have a hope of obtaining a mortgage. I imagine that that experience must be shared by Conservative Members, so I am surprised that they are not also shocked. After all, this is supposed to be the International Year of Shelter for the Homeless—to make no mention of the disabled.
This Housing Support Grant (Scotland) Variation Order could be called the Housing Support Grant (Scotland) Contraction Order. When the Government took office, half of the housing revenue account in the Inverness district came from housing support grant, but the figure has now dropped to 16 per cent.—although I admit that, even at that level, it is better than a great many districts receive. In Aberdeen it has gone from 40 per cent. to 1·8 per cent., and next year it will disappear. In Strathkelvin and Bearsden it has gone from 32 per cent. to nil.
At first, councils tried to compensate by increasing the rate fund contributions, but, as we know, the Government cut that back. What was left? As the hon. Member for Glasgow, Cathcart (Mr. Maxton) said, rents. In Aberdeen, rents have doubled as a percentage of the housing revenue account from 45 to 79 per cent. The Scottish average is 82 per cent. Rents have increased by 165 per cent. in the past seven years. As the hon. Member for Cathcart said. that is at least four times the rate of inflation. I accept that some increases were necessary, but I do not accept that it is fair that rents should now have become such a proportion of the housing revenue account. Inevitably, that means that council tenants are now funding general community services, such as the operation of the homeless persons Act through their rents. That is not reasonable.
One can see the consequences in the growth of housing benefit payments. If the Government introduce the cash-limited fund under the provisions of the Social Security Act 1986, which they can, I can see a mad scramble for what is available, and heaven knows what will happen then.
The Minister said that we were all concerned with the real extent of need. Therefore, why do we not have a housing condition survey? He also said that he did not rule out joint discussions. His dynamism makes one dizzy. Even if there is a dispute about COSLA figures—
Even if there is a dispute about the COSLA figures—and there is such a dispute, as both the Minister and the hon. Member for Cathcart have said—there cannot he any dispute about the scale and the gravity of the Scottish housing crisis, nor will the proposed capital allocation do anything other than slowly mitigate it.
With so many hon. Members wishing to speak in the debate, I can make only a brief contribution. I end by saying that I was quite struck by the Minister's ringing assertion—that is the only way of describing it—at the end of his speech when he said that the capital allocation had risen by five per cent. since 1979. He said
that that is the measure of the Government's commitment.
I suppose that, on that at least, he was right. He is the Minister with the five per cent. commitment.
I welcome the chance to say a few words in this short debate on Scottish housing orders. The Minister will recall that last July we had a debate on housing in the Scottish Grand Committee, when I raised several matters with him. He will no doubt also recall that at that time I urged the Government to increase support for the new-build programme. Since then, there has been some encouraging news. Indeed, the housing capital allocation from the Scottish Office for 1987–88 is good news for my constituency of Moray. The housing revenue account allocation of £5 million represents a remarkable 93 per cent. of the district councils own bid and is an increase of 11 per cent. over the allocation of last March. The non-HRA block for the private sector is even better, with a 100 per cent. allocation of Moray district council's bid. That is most encouraging, and I congratulate the Minister on his response.
Of course, I must advise the Minister and the House of the important role of housing associations in new house provision, especially for those with special needs. I saw an excellent example of that last October when I had the honour of opening a new development at Buckpool undertaken by the Hanover housing association. I should like to remind the House of what I said on that occasion:
Of the seventy-seven Hanover schemes in Scotland, this Buckpool development is the eleventh to be tenanted by the elderly in Moray. It is worthy of note that Hanover Housing Association were the recipients of commendations for two earlier schemes in Moray at Rothes and Elgin …
I have no doubt that it is precisely because of the excellent record of the housing association movement … that the Government have invested over £100 million in Scotland for the sixth successive year and have enabled 24,000 houses to be added to the association's stock since 1979.
Since then, I have received details of further proposed housing association developments elsewhere in my constituency in Buckie, Keith and Dufftown, again all funded through the Housing Corporation from allocations by central Government via the Scottish Office.
It is indeed.
That, in turn, has been followed by both good, and possibly bad, news on funding. The Secretary of State, in his statement to the House on 9 December referred to the extra funding for the Housing Corporation, making a total of £123 million in Scotland. That sum was warmly welcomed by the Housing Corporation. But there is a worry about the provisional allocation of resources for 1987–88 announced at the turn of the year by the Housing Corporation. I have already written to the Secretary of State about this and I am sure that the Minister is also aware of the problem. It relates to achieving the right balance between extra assistance for housing needs within Strathclyde and the provision of needs elsewhere in Scotland. I hope that he can respond sympathetically when his decision is made.
Finally, I must speak of a matter raised in the July debate and touched on by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston). It relates to ascertaining the true condition of the present housing stock. At that time I made clear the willingness of Moray district council to take part in a pilot survey which would be part of an early initiative to find out the state of the housing stock. In reply, the Minister made it clear that he might be willing to embark on such a scheme for two pilot authorities in 1987. If he catches your eye, Mr. Deputy Speaker, I wonder whether he could say what progress has been made on reaching a decision on pilot schemes in Scotland. That would be of general and particular interest.
I should like to ask four clear, related factual questions.
First, COSLA states in its brief that 332,900 houses need remodernising. Do the Government accept that figure? If not, what is their figure? Secondly, COSLA says that 118,200 houses need to be rewired—a subject on which I interrupted the Minister. Do the Government accept this figure, or do they have a better figure of their own?
Third, COSLA says that 314,000 houses suffer from dampness and condensation. Again I repeat the same question: do the Government accept this figure, or do they have a better figure?
Fourthly, COSLA says that 150,000 houses need major or structural repairs. Again I ask the Government: do they agree with this figure, or do they have a better figure?
I promised to be extremely brief. The Minister will recollect that, when he was a well-received and very successful Conservative candidate in the West Lothian constituency, as was the hon. Member for Moray (Mr. Pollock), communities such as Whitburn and Blackburn, and also parts of Livingston, faced very real problems because of deterioration. The housing stock was built at a time when suddenly the rewiring, for reasons that were not the fault of the tenants or the local authority, or even the builders, deteriorated. Do the Government accept this problem of sudden deterioration? In particular, do they accept the COSLA figures? If they do not, the Government had better produce figures of their own.
I, too, shall be brief and will endeavour to concentrate my remarks on the orders and to relate them to the history of this matter.
Does my hon. Friend the Minister agree that when we took office in 1979 there was a problem over the housing stock in Scotland and over the way in which local authorities were tackling the difficulties that faced individual tenants? We are concerned about individual tenants who are living in houses where there are problems.
Part of the difficulty was that many local authorities believed it to be their duty and responsibility to offer the same conditions to each of their tenants. They said that, if there were to be a fairly substantial input from ratepayers as a contribution towards rent support, it should go to everyone, regardless of whether or not they could afford to pay the rent in full.
We decided to provide aid to those who needed it and we have provided support in two ways. Support went to local authorities that used it to provide for tenants on a collective basis. Through housing benefits, we have also provided help for individual tenants. Indeed, the majority of help to tenants has been provided through housing benefit. It goes directly to the tenant and it pays part of the rent—often the whole of the rent.
The increase from £50 million in 1979 to £500 million today represents a real change in housing support. It goes directly to individual tenants, it is paid out of the public purse and it provides help for those in need. We are proud of that policy. It is wrong to adopt a blanket approach to the use of public money. Aid should go to those in need. A caring society looks after those who, for whatever reason, cannot provide for their own needs. That is the aim of our housing policy.
These orders will drive another nail into tenants' coffins. It is a further attempt by the Government to disregard Scottish traditions and to attack and discriminate against Scottish tenants. Cunninghame district council tenants are now facing a rent increase of £2·50 a week because of these orders. That is a 25 per cent. increase in rent, and the kind of increase that the council has never tried to impose before.
The increase has been brought about by three actions of this Government. This year, Cunninghame district council will receive no housing support grant. In fact, it has received nothing since 1983–84. It last received housing support grant when the influence of the last Labour Government was still being exercised. That was in 1980–81. Cunninghame district council then received just under £5 million. Therefore, the grant has been reduced by this Government from £5 million to nil.
The limit this year on the rate fund contribution is just under £800,000. That will have a rent impact of £2·28a week. The council can do nothing about it. Last year, the limit on the rate fund contribution was just over £2 million. This year, there is a 77 per cent. reduction. That is because this Government have failed to control interest rates. Interest rates of between 10 and 11 per cent. are being charged on houses, although in most other industrialised countries the interest rates on houses are between 3 and 6 per cent. In Japan, interest rates are 3 per cent.
The withdrawal of the housing support grant, the limit on the rate fund contribution and the failure of the Government's economic policy to control interest rates has meant that my district council is faced with that reduction. The people whom I represent, who live in council houses, face rent increases of £2·50per week. That is a continuation of the attack on people who live in public sector housing. The Urban Development Corporation—another major housing authority in my constituency—is allowing substantial increases in rents. The rents of the Urban Development Corporation are currently the highest of the new towns in Scotland. The Scottish Special Housing Association, which is under direct Government control, has increased rents by an average of 9 per cent., and in most of the areas that I represent by between 9 per cent. and 15 per cent. That is another attack by a south of England owner-occupation Tory Government against council tenants in Scotland.
I was surprised to hear the Minister and other Tory Members talk about indiscriminate subsidies. We are dealing with council housing, which receives no subsidy. The tenants in Cunninghame district council receive no housing support grant. The Minister did not mention the billions of pounds that the Government are paying in tax relief on interest on mortgages above £30,000. The hon. and learned Member for Perth and Kinross (Mr. Fairbairn) did not mention the indiscriminate subsidies to the Prime Minister, who bought a house for £400,000 and has the cheek to claim an income tax rebate on her mortgage. Nobody mentioned the richest family in Britain, the royal family, who are buying indiscriminately—
The royal family are buying houses for members of their family, and they are claiming income tax rebates on the mortgage below £30,000.
I do not represent the rich people of Britain, or the rich people of the south-east of England, who have a tradition of owner-occupation. I represent council and public sector tenants, who are not receiving the indiscriminate housing subsidies that the Minister talked about, unlike the Prime Minister and all the people who are buying their houses. I represent the people who have been forced to live in council houses and pay increases in rent that they cannot afford, and a constituency where every third man is unemployed. That is why I will be voting against these orders.
I shall tell my electorate that unless we get a change of Government and of policy with regard to housing, so that the working people of Scotland get their share of these indiscriminate subsidies, we will never get fair treatment. That is why I am looking forward to the general election, to get rid of that crowd and get the representatives of the council tenants back in power in Britain, when we will get a fair deal.
On a point of order, Mr. Deputy Speaker. Would it be in order, just once, to have a Scottish debate without another contribution from the hon. Member for Dumfries?
The hon. Member for Cunninghame, South (Mr. Lambie) should spend a little more time thanking the Government for the many new jobs that have been brought to his constituency. His constituents would be much more grateful for that than the rubbish that he has been talking for the past 10 minutes.
We appreciate the increase of £68 million in capital allocation for 1987–88. At £362·5 million, housing revenue account is up £40 million, or 12·5 per cent. To listen to the hon. Member for Glasgow, Cathcart (Mr. Maxton), however, one would think that the money had been reduced. On a three-year average, there has been an increase of 60 per cent. Non-HRA money affects the private sector and helps the building industry.
It has increased substantially—by £28 million, or 24 per cent. Opposition Members, who are jeering away on the Back Benches, do not seem to realise that there is a substantial increase in money available for housing in Scotland.
Annandale and Eskdale has got 88·5 per cent of its bid, which is a 10 per cent. increase, and its HRA bid of 96 per cent. is an increase of 25 per cent. It is especially grateful for the HRA supplementary of £450,000 for 1986–87, out of a total of £1·5 million for Scotland.
For Nithsdale, which my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Lang) also represents, it is impressive to see that HRA expenditure is going up by 15 per cent. in 1987–88 and that non-HRA expenditure is going up by no less than 114 per cent. That must be good for local building contractors.
I join my hon. Friend the Member for Tayside, North (Mr. Walker) and others in their tribute to the housing associations for the important part that they are playing, especially when housing is required for special needs. We should not miss out the Scottish Special Housing Association and fail to comment on the standard of housing that it provides.
My hon. Friend the Member for Tayside, North was right to stress the importance of housing benefit to the tune of £500 million, which has been completely ignored by the Opposition Front Bench. It is important to support people who are least able to afford good housing.
Scotland has benefited enormously from the sale of council houses, which was so vehemently opposed by the Opposition. That policy has successfully enabled many people in Scotland to own their own homes. Whatever the Opposition have said, and whatever is their reason for voting against this increased expenditure on housing in Scotland, the Government have done a first-class job.
There is no doubt on this side of the House that housing allocations for the coming year are grossly inadequate and unable to deal with our bad housing situation.
Two questions must be asked. First, have the Government added to housing resources and, secondly, is the allocation adequate to meet the problems now to be found in the public sector? I was struck by the good briefing provided by the Convention of Scottish local Authorities, which showed that there is not all that great an improvement in the 1987–88 figures over the 1984–85 figures. It says that resources have been increased by £7 million between 1986–87 and 1987–88. This is a reduction of about 2 per cent. when inflation is taken into account. It also drew to the attention of those hon. Members whom it saw the fact that there is still a backlog in the repair grants in the private sector from 1984, when the 90 per cent. grants were abolished. That shows the extent to which the Government have been failing.
The hon. Member for Glasgow, Cathcart (Mr. Maxton) has made it clear that about 68 per cent. of local authorities now receive no rate support grant, and the city of Dundee has not had such a grant for 1983–84. Those of us who have to deal with constituencies with a large council house sector are all too well aware of the human misery that comes from repairs not being carried out in time, of problems of dampness that cannot be dealt with properly because of the slow down in insulation programmes, of the delays in carrying out repairs, particularly towards the end of the financial year, when the local authority has to wait for the new financial year to get access to cash, and of the slow-down in modernisation programmes. All of these are bad enough to describe, but, if we had to live with such housing conditions, there would be a squeal of pain, horror and anxiety from the Tory Benches, for a change.
The Government's statistical bulletin shows that in the first quarter of 1986 only 14 houses in Dundee were demolished. I refuse to accept, from my knowledge of the city's housing conditions, that that dealt with the problems of our housing. In that period, there were only two public tenders, and only 265 private sector grants. Table 8 in the bulletin shows that although starts were better, at 131 houses, that was completely Inadequate. Of that number, 35 were private starts, 19 were Scottish special housing association starts, 77 were housing associations starts, but there were none by local authorities. The district was not able to supply the housing needs, particularly in the specialised housing sector. There were 46 completions—24 from the housing association sector, and 22 from the private sector. Such a record is inadequate to deal with the housing problems of one of Scotland's major cities.
Despite the letter that I recently received from the Minister, there is a question mark over what share of increased resources coming from the Housing Corporation will go to housing associations on the east coast. There is a great fear that what limited money is available will be taken to Glasgow and Strathclyde, and people on the east coast will not get a fair share of the cash.
It is hardly surprising that, of the rising unemployment in Dundee, a large part is caused by lack of employment in the building sector, because of lack of activity. People are unnecessarily laid off work when a good job could be done, which would upgrade the existing housing stock and provide desperately needed specialised housing.
We have had a useful debate on these grant orders. It has been instructive for Conservative Members to find out how many Labour Members seem unaware of what allocations have been going to their areas. It was interesting to note that my hon. Friends appeared to be well aware of the way in which the Government have increased allocations and met the problems in Scotland's housing stock.
I am about to do so, but it is only right that first I set the debate in context.
My hon. Friend the Member for Eastwood (Mr. Stewart) made it clear that in his area the HRA was increased by 23 per cent., and 100 per cent. of the non- HRA bid was met. I know that the people of Eastwood will be grateful for that and will not see it in the same terms as Labour Members. My hon. Friend the Member for Renfrew, West and Inverclyde (Mrs. McCurley), who made an excellent intervention, told us that 100 per cent. of her housing revenue account was met and that there was a 17 per cent. increase. The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) seemed unaware that he had had an increase this year of 31 per cent. in his HRA—
Over the past three years the hon. Gentleman's HRA capital allocation— the hon. Gentleman seems to think that he does not have one, but if he checks he will find that his district council does.
He will find that his district council has enjoyed an increase of 111 per cent. over the past three years, nearly double the average increase for Scotland as a whole. I find it difficult to accept from the hon. Gentleman that he is not grateful for that and that he does not believe that that will go a long way towards meeting the housing problems in the area that he represents.
The hon. Member for Linlithgow (Mr. Dalyell) raised a number of specific matters that were based on COSLA figures. I have some difficulty in answering his questions because his figures do not tally with those that appear in the COSLA paper that was presented to me in the summer of 1986. I shall be interested to learn why there are differences between the hon. Gentleman's figures and those of COSLA. The hon. Gentleman referred to the problems of condensation and dampness, which were mentioned by the hon. Member for Dundee, East (Mr. Wilson). It is worth reminding the House that because we recognise these problems we have encouraged local authorities to concentrate their efforts on tackling the difficulties. To that end, we have issued special allocations amounting to £61 million over three years. We made it clear at the time that we were issuing them that we did not expect £61 million to be the total sum spent on tackling condensation and dampness. The allocations were additional to those that would have been made and we made them in the hope that we would encourage housing authorities to move faster on these serious and difficult problems.
The latest check-list figures— these are the figures that we use because they come from the councils—tend to suggest that the increase in allocations is having the desired effect. Over the past year the number of houses requiring treatment for condensation has fallen by 37,000 or over 15 per cent. That is a reduction from 28 per cent. to 24 per cent. of the total stock. If we take the total of affected stock in the third category, which is the most severe, we find that there has been a reduction from 25 per cent. to 12 per cent. Over the same period the percentage of the total stock affected by dampness has reduced from 7·7 to 4·7. These are the figures that are provided to the Government by the local authorities in their check lists.
The hon. Member for Glasgow, Cathcart (Mr. Maxton) stirs in his place, but the figures suggest that, contrary to the argument that he has advanced of a deterioriation, the problems of condensation and dampness have been reduced. We should recognise that and congratulate the local authorities on responding to the encouragement that we have given them and tackling the problems.
The hon. Gentleman has heard me say that because of that, and because we were supplied with the same figures, we question the figures that have been put to us this evening. Housing surveys would present only a general picture of the problems in Scotland, and accordingly the check lists provide a sounder basis for assessment.
While any diminution in levels of condensation and dampness is to be welcomed, what steps are the Minister's Department taking to monitor the supposed decrease? I paid a visit to one of the most difficult housing areas in Dunfermline on Monday with representatives of the two local authorities concerned and it was manifestly clear that whatever the authorities believe—and I am not knocking the local authorities—the tenants, having rising aspirations and rising standards, are faced with the problem of rising dampness and rising condensation.
The hon. Gentleman asked what steps we are taking to monitor progress. We look closely at the check lists which are returned to us by the local authorities, to assess what changes have occurred in comparison to previous years, to evaluate the trends and to decide what problems exist within the housing stock. I am glad that the hon. Gentleman has welcomed the fact that those check lists show that the encouragement that we have given, which means that authorities will spend £135 million—or 60 per cent.—more than they were spending three years ago, is beginning to have some effect.
Before my hon. Friend concludes his remarks, will he carefully consider the point that I raised about housing benefit and the way in which that relates to the percentages given from the Opposition Front Bench? The Opposition Front Bench obviously took no account of housing benefit when they calculated the public financial support given to local authority housing in Scotland. If the Opposition work out percentages without considering all the inputs, they will always come up with the wrong answers. If they feed in rubbish, they will get rubbish out.
When my hon. Friend made that very percipient intervention, I nodded in agreement, because he is absolutely right. The hon. Member for Cathcart, as always, gave only part of the figures. If he considers the total provision for housing, he must take into account the housing benefit. If there is a rental effect, that benefit may be replacing some of the indiscriminate subsidies that were paid before.
My hon. Friend the Member for Tayside, North (Mr. Walker) was absolutely right. The figure of housing benefit paid in Scotland in 1979–80 was £58·925 million. The 1986–87 figure was £503·075 million. If the hon. Member for Cathcart had been honest with his figures, he would have had to have taken those figures into account.
The hon. Member for Cathcart continued to quote figures and claimed that there was an increase of only £7 million next year in the capital allocations. He said that the rise was from £446 million to £453 million. I remind the hon. Gentleman that the capital allocations issued in March last year for the current year were £441·5 million. The provisional allocations for next year with both blocks together on the same basis is £510 million—a £68 million increase and a 15 . 5 per cent. increase overall. The hon. Gentleman does himself and his credibility no favours by diminishing the figures.
The hon. Member for Cathcart also claimed that only 25 authorities in Scotland were still in housing support grant. He did not mention the fact that the number of housing authorities in housing support grant will be higher in the coming year than last year because of the change in the formula that I have mentioned.
My hon. Friend the Member for Moray (Mr. Pollock) raised a number of important points, in particular matters relating to the Housing Corporation. The Housing Corporation will be submitting its annual development plan to me. I will want to consider that carefully and I will bear in mind the points made by my hon. Friend the Member for Moray and others.
My hon. Friend the Member for Moray also referred to the pilot scheme for a local housing condition survey. I can confirm that Moray district council was approached but declined to participate and my original offer was not fulfilled.
I always enjoy the speeches made by the hon. Member for Cunninghame, South (Mr. Lambie). Tonight he told us about the requirement to increase rents by more than £2·50 within Cunninghame district council. Our estimate, as a result of the orders under discussion tonight, is that there will be an increase of £1·07. I am sure that there are very good reasons why Cunninghame district council has decided to make a higher increase than that. What is more interesting, in the light of what the hon. Gentleman said, is that Cunninghame district council's rents are the lowest in Scotland at only £10·53. I f our increase was added, they would rise to £11·60, but they would still be among the lowest in Scotland.
Will my hon. Friend bear in mind the fact that we must relate Scottish figures to English figures? Is it not true that, under the orders, Scottish rents will still be lower than those in England?
Yes. I made it clear in my original remarks that that will remain the case. Indeed, with average manual workers' wages in Scotland at about the same level as those in England, it is interesting to note that a lower proportion of that income is spent on rent than it is south of the border.
I hope that the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) will support the orders, because the councils of Inverness, Lochaber and Nairn will receive more housing support grant in 1987–88 than they did this year. I am sure that he will welcome that and will be in the Lobby with us tonight.
In this debate, as usual., we have heard from the Opposition nothing but tales of destruction and deterioration in Scotland's housing stock under this Government. May I point out that under this Government 140,000 new houses have been built— a 3·5 per cent. increase in the total stock at a time when the population is falling. The Government are proud of that figure. Under the Government, the number of sheltered dwellings has trebled to more than 22,400 compared with the figure under the Labour Government. On the same basis, the number of amenity dwellings has trebled to more than 8,500. During the past three years, capital allocations for local authorities have increased by almost 60 per cent. More local authority dwellings were improved last year—45,000—than in any of the previous 10 years.
That is a record of which the Government can be proud, and I ask my hon. Friends to support the orders.