Council Housing and Home Ownership

Oral Answers to Questions — Environment – in the House of Commons at 12:00 am on 18th May 1988.

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Photo of Mr Peter Pike Mr Peter Pike , Burnley 12:00 am, 18th May 1988

To ask the Secretary of State for the Environment what was the total subsidy to council housing for the year 1980–81 and for the year 1987–88; and what was the total level of support for home ownership for each of the same two years.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

Housing subsidy up to 1980–81 was paid under a different system, so I am using 1981–82 as the base year for this reply. Council houses in receipt of Exchequer subsidy and contributions from general rate funds received an average of £265 in 1981–82; those similarly supported in 1987–88 received an average of £271. In addition, housing benefit was available to those who qualified. Owner-occupiers receiving mortgage interest tax relief in 1981–82 obtained an average of £514 and in 1987–88, £576.

Photo of Mr Peter Pike Mr Peter Pike , Burnley

Is it not a fact that over the past nine years there has been a reduction of 1 million in the number of properties available for rent, and that more than half are in the private rented sector? Is it not true to say that the number of properties to rent will continue to decline until the Government give those who want to rent a fair deal comparable to that available for those who wish to purchase their homes?

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

First, the figures that I have given to the hon. Gentleman are not really comparable, because subsidies to council house tenants are not comparable with mortgage tax relief as the subsidy to council housing is calculated on the historic cost of building the house, whereas mortgage relief goes to people who have paid market values for their homes. If it were calculated on a comparable basis, the subsidy to the council tenant would be very much higher. Secondly, I hope that the hon. Gentleman will support the Housing Bill, which aims to bring forward more social housing to rent on a large scale.

Photo of Mr Joe Ashton Mr Joe Ashton , Bassetlaw

On a point of order, Mr. Speaker. The Minister is misleading the House. He has been asked for total subsidies, not individual house subsidies.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Order. Ministers do not deliberately mislead the House and I am not responsible for their answers.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

Does my right hon. Friend agree that the increase in home ownership under this Government is one of the Government's greatest success stories? Does he further agree that, in the outer London boroughs, a paradoxical effect is beginning to develop whereby very tight planning controls are needed to have a dampening effect on developers with strong financial power because they are impinging too much on a particular area and preventing first-time buyers making their first purchase?

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I entirely agree with my hon. Friend that the policy of encouraging people to buy their own homes has been one of immense success and satisfaction to the over 1 million tenants who have exercised their rights.

With regard to my hon. Friend's other point, as he knows, we consider all planning applications and policies with the greatest of care and I am fully aware that in some parts of the London suburbs there is a feeling that they are being asked to take too great a density to relieve pressure elsewhere.

Photo of Hilary Armstrong Hilary Armstrong Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson

May I invite the Minister to answer the question that was tabled? If he cannot deal with the total subsidy to council housing nationally, perhaps he will tell the House what is the differences in housing allocation for the north of England, in terms of Government subsidy to council housing, between 1980 and today?

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I would be happy to give the hon. Lady the global figures, but they mean little unless one directs them to the number of houses to which they are applicable. The total figures for Exchequer contributions to council housing in 1981–2 was £1·3 billion and in 1987–88, £0·8 billion. [Interruption.] There were many fewer houses. Mortgage tax relief cost £2·7 billion in 1981–82 and £4·3 billion in 1987–88, when there were many more houses. Housing benefit amounted to £1·7 billion in 1981–82 and £3.5 billion in 1987–88.

Photo of Mr David Shaw Mr David Shaw , Dover

Is it not true that the amount of private housing now being built is back to the 1973 level, which was the highest for some years? Is it not also true that people want to buy and live in private, rather than public, sector housing? Is it not further true that much public sector housing has deteriorated badly in recent years, with massive maintenance being required after about eight years, and often complete rebuilding within 30 years? Is it not therefore true that the best value for money over the past 30 years has been private sector housing?

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I cannot be absolutely sure, without notice, of the figure that my hon. Friend quoted, but it is certainly true that last year was the best year for house construction for many years. With regard to the relative merits of owner-occupation and renting, there is a need for supply in both markets, for people to buy and rent houses. That is why we are taking action through the Housing Corporation and the Housing Bill to provide more social housing to rent.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

Why is the Minister so ashamed to admit to the figures that were eventually wrenched out of him by the Opposition? Why will he not accept that there are 1 million fewer homes available for rent in this country since 1980, over half of them from his much loved private rented sector? Why do Conservative local authorities use council rents to subsidise ratepayers when, at the same time, we are prepared to use taxpayers' money to subsidise the private sector? Why can he not get his act together and make sure that there is a proper subsidy for people who seek to rent in both the public and private sectors.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

The question asked for figures which would have been misleading because, obviously, subsidy must be related to the number of houses to which it is applied, not to the total figure irrespective of the number of houses. My later point, which the hon. Gentleman did not deny, was that because council house subsidies and rents are based on historic costs the true cost of the subsidy of those houses is represented by the cost of disrepair, because enough money has not been put by to repair them and eventually replace them when that is necessary. These figures are not similar, and I made my best efforts to give the hon. Member for Burnley (Mr. Pike) the figures for which he asked.