§ 2.58 p.m.
§ The Secretary of State for the Environment (Mr. Peter Walker)
I refer first to several matters in the Queen's Speech affecting the work of my Department. Hon. Members know that a number of major pieces of legislation will be brought before Parliament this Session which will have a considerable impact on environment matters.
There is to be a major Bill for the reorganisation of the water industry in all its forms, very much following upon the lines suggested by the major committees and commissions which have looked into this matter. When completed and implemented, the Bill will give Britain the best managed water system in the world and will, I believe, substantially reduce pollution of the river system and the seas thereafter on a considerable scale.
Another Bill, welcome on both sides, I believe, will be a major Measure concerning compensation related to motorways and other public works. Both sides of the House have felt that this was a Measure long overdue and that it was time proper compensation was paid to those adversely affected by major road programmes and major public works of other descriptions. The Bill will give considerably better compensation terms to the home owner. It will result also in the diminishment of noise and noise 339 pollution from the road system. Further, it will result in future urban motorways being given more careful consideration from the environment standpoint than ever before. This, combined with the injection we shall put into the public transport system of the bus services and the railways, will result in a general improvement in the quality of the environment.
Another important Bill of major social consequences is the one we shall introduce to extend rent allowances to furnished tenancies. This is the first time that any form of Government aid or assistance has been given to the tenant of furnished accommodation and it will mean that a large number of families, including some of the most poverty-stricken in the country, will receive aid and assistance for the first time.
The two major topics suggested for to-day's debate on the Address are housing and land. In that sphere I shall first review the progress that has been made in improving the position of housing and then I shall turn to future prospects for the release of land for building activities. Two years ago the Government inherited a fast declining house-building programme in the private and public sectors and in slum clearance. The housing programme had been in decline for three years. Many firms of builders were going bankrupt and there was no confidence in the industry. The prospect for public and private housing was very gloomy. The first essential for the Government in these conditions was to try once again to obtain a return of confidence to the industry and to stimulate demand for housing.
Mr. Eric S. Heller (Liverpool, Walton)
Will the right hon. Gentleman be fair and admit, first, that most of the local authorities were then Conservative controlled and deliberately reduced the number of houses being built—[HON. MEMBERS: "At his request."]—and, secondly, that he himself made a speech at a housing conference which indicated to those councils that they should reduce the amount of local authority housing?
§ Mr. Walker
I refute both those suggestions. There was a substantial number 340 of Labour controlled authorities whose housing programmes declined in that period and I have given the figures on several occasions. Secondly, the financial basis of slum clearance under the last Government was such as to curb local authorities which undertook such programmes, and many local authorities complained about that. We have given substantial encouragement in the public sector for slum clearance and housing for special need, encouragement which was completely lacking during the six years of Labour Government.
In the private sector the decline was very substantial and the Government therefore pursued a policy of trying to stimulate demand by a whole range of methods. For example, we abolished stamp duty on mortgages and stamp duty on the sale of houses, which had been imposed during six years of Labour Government. We halved SET, and under the new proposals of VAT there will be no form of such taxation upon house-building in future. We saw to it that the building societies operated in such a way as to have sufficient money to finance people wishing to buy a house. We did away with the restrictions constantly imposed by the Labour Government on local authority mortgages, we improved the mortgage option scheme and we improved the 100 per cent. option mortgage guarantee scheme. Those seven aspects of our policy, together with the increases in wages and the decreases in taxes that have taken place in two years of Conservative Government, have resulted in a considerable stimulation of demand in housing.
The housing figures in the first half of this year show a considerable improvement over those for the first half of 1970 when Labour was last in office. Tenders for council housing are 18 per cent. up in the first half of 1972 compared with 1970 and there has been a 43 per cent. increase in owner-occupation in the first half of this year compared with the same period of 1970. Improvement grants for older houses have more than doubled between the two periods.
The nature of owner-occupation is also of considerable interest. In the first six months of this year compared with the last six months of the Labour Government, 32 per cent. more people were 341 buying houses for the first time. Thirty per cent. more people under the age of 25 obtained a mortgage and 40 per cent. more people earning the average industrial wage or below had obtained a mortgage in the first half of this year compared with the last six months of the Labour Government. All that shows a considerable improvement in the situation, and one of the results has been that in spite of an increase in the number of starts and in spite of the large number of improvements that have taken place demand has very much exceeded supply. The result has been substantial increases in the price of housing and land.
A key factor in this matter is the supply of land available for housing development. The problem faced the last Government less in their last few years of office because with diminishing demand for houses, obviously there will be a diminishing demand for land with all of the effects that that has. It is interesting to hear the right hon. Member for Sunderland, North (Mr. Willey), who had so much to do with the Land Commission, and others argue that in the last year of the Labour Government land prices were far more stable as a result of the operations of the commission. During its two years of existence the commission disposed of only 300 acres of land—a remarkably small amount to enable it to bring stability. The stability was caused by a substantial decline in demand from 1968 to 1970. We have been in office during a period of substantially increasing demand and we have been faced with the problems of land release.
It is interesting to examine the various methods suggested for tackling the problem. The last Government instituted the Land Commission for this purpose. One presumes on reflection that Labour has decided to drop the idea because at its last party conference, in speeches by both the Leader of the Opposition and the right hon. Member for Grimsby (Mr. Crosland), Labour committed itself to the nationalisation of land for development for urban purposes. That is a solution which we shall certainly enjoy having explained to us this afternoon by the right hon. Gentleman, who will no doubt give us details of the proposal. Later in my speech I should like to pose a number of questions to him about how that 342 interesting formula would be put into operation.
The alternative method for tackling the problem was that suggested by the Government. It involves the local authorities, which are basically the planning authorities, and it requires that they should have financial resources not previously available to them and the implementation of regional planning strategies to obtain the release of land needed for housing development. We embarked upon this policy when we first came into office by immediately approving the concept—which I concede was developed by the previous Government—of the regional planning strategy. Within a few weeks of coming into office I inherited the strategy prepared for the South-East by a combination of the previous Government, the local authorities in the South-East and the Economic Planning Council. After consultations with the local authorities, I confirmed our agreement to that strategy. We are now near agreeing a strategy for the Midlands. We have started one for the North-West and we are about to start one for the South-West and one for the North-East. This is a positive way of planning.
In April this year I announced a series of proposals for providing money to local authorities which wish to acquire land for assembly, providing more loan sanctions for the necessary sewerage and road schemes, and obtaining greater cooperation from Government Departments and new towns in extending the land they have available. The indications are that in this year and the coming years we shall be successful in obtaining a far greater release of land than has been obtained in a similar period since the war.
I wish to give the House the first information available about the progress which has been made this year in ensuring that the land needed for housing development is released in the quantities required. Although the Land Commission disposed of only 300 acres of land in its two years of existence, it acquired for future development a total of 3,000 acres, some of which came from Government Departments. I hope that hon. Members will bear that figure in mind when I give the current land release figures.
Planning approvals for housing by local authorities in the South-East in the first six months of this year related to 5,000 343 acres, which is 48 per cent. up on the same period in 1970. Therefore, in the South-East alone the increase in land released for housing by local authorities this year will be greater than was obtained by the Land Commission throughout the country in the two years of its existence. This is an indication that our co-operation with the local authorities is succeeding in the South-East.
In the Midlands, which is the other great pressure area for land release, we have identified 9,300 acres of land for development over the next five years, and planning clearances since April this year have been five times more than they were in the same period last year.
In the South-East, 22,000 acres have been identified for future release, subject to completion of the appropriate sewerage and road schemes, with which my Department can considerably assist, and proposals for 11,000 acres are in the pipeline for alterations to structure plans.
§ Miss J. M. Quennell (Petersfield)
Can my right hon. Friend help the House by giving some indication of the likely average housing density per acre in the figures he has quoted so that we may have an idea of how many houses the figures represent?
§ Mr. Walker
I am afraid I cannot do that. However, I shall ensure that the figures are published in some form in the OFFICIAL REPORT.
We tried to obtain the release of land with the co-operation of Government Departments and new towns. In the new towns in the South-East we are releasing a further 5,000 acres of land for housing development, 560 acres of which will be available this year. I am pleased to say that, even prior to the Nugent Committee's examination of the lands owned by the Ministry of Defence, in the two years in which the Government have been in office 9,000 acres of defence land have been released, 16,000 acres have been released by British Railways and 2,000 acres have been released by the hospital boards. In combination, this represents a massive release of land for development on a scale not achieved by the last Government in their endeavours through the Land Commission and local authorities.
344 One of the results of pursuing the regional planning strategies is that the central Government and local government are working in combination to tackle this problem. Any applied measure which antagonises the basic planning function of local government and imposes on it the planning approach of central Government will result in a great deal of friction and perhaps far slower progress being made than otherwise would be the case.
There are a number of problems connected with the giving of planning permission which naturally cause concern. First, there is the speed with which, after planning permission has been obtained, the land is developed, and the potentialities of hoarding land in various forms. There are two possibilities. One is to examine, as we will, possible means of financial disincentives to the holding of land for a particular period. The second is to impose stricter time limits for development.
I have contacted the local authorities, which traditionally give a five-year consent on planning permissions, and have asked them, when considering planning permission for housing, to judge the period over which the land could reasonably be developed and to impose that time limit on the planning consent. I have also informed local authorities that in the case of planning appeals coming to my Department I intend to impose the smallest possible time limit conducive to the land being reasonably developed.
§ Mr. William Molloy (Ealing, North)
Will the Secretary of State consider making it compulsory for local authorities to inform local residents when planning permission has been given and not leaving it within the power of the planning officer to decide whether or not to inform them?
§ Mr. Walker
That is a problem which has faced all Governments. I should like to send the hon. Gentleman the latest advice which we have given to local authorities. I will welcome any suggestion which he or others may have on this topic which, understandably, aggravates many people. Secondly, I have informed local authorities that, when they consider that land could be brought forward for development were it not for 345 one reluctant landowner or the piecemeal nature of the land, I will sympathetically entertain applications for compulsory purchase.
A further factor delaying the release of land is the time delay in planning appeals. The Government have faced a problem, because the number of planning appeals coming in over the last 18 months has very considerably increased. That means that people making appeals to my Department for housing development are having to wait many months before their applications are heard. The only way in which to cure this problem conducive with good planning principles is to increase the number of competent planning inspectors. Therefore, earlier this year I embarked on a nation-wide campaign to recruit people with sufficient and proper qualifications. I am pleased to say that I expect that by early next year we shall have 50 per cent. more inspectors working on planning appeals than there were at the beginning of this year. That is a considerable and fast increase which will speed up planning decisions.
The other factor of concern to the House is the very substantial profits made by land speculation when planning permission is given. It is right that we should examine the question of introducing financial disincentives to the holding of land, and that we will do. But I must bring to the attention of the House, because it is important—and I think that it should be brought to the attention of the business community in general because many of its members are unaware of it —the very considerable impact of Section 488 of the Income and Corporation Taxes Act, 1970. That Act abolished short-term capital gains, but hon. Members will recall that there was one exception. It was decided by the then Government that for land and property speculation the operation of short-term capital gains tax should continue not just for the short term but for full time. Therefore, land which has been acquired for development or for sale to realise a gain will be subject to both income tax and surtax. Thus someone purchasing a piece of land today for the purpose of realising a gain, either by developing or selling, will, when that gain is realised, be subject to the full weight of income tax and surtax.
§ Mr. Clinton Davis (Hackney, Central)
Is not the right hon. Gentleman aware that many of the so-called property companies and developers engage in all sorts of schemes and so-called mitigation of tax so that the incidence of taxation for them is very little indeed?
§ Mr. Walker
It could be argued about any tax that mitigation is likely to take place and controversy likely to rage. In 1970 when the Government did away with short-term capital gains they made this important exception of property and land transactions. The prospects and the current condition of land release are encouraging.
I want to look at an alternative suggestion—the main alternative suggestion now put before the House by the party opposite—which is nationalisation of all urban land and land for development. In his speech on this topic the Leader of the Opposition said that his party would nationalise all the land needed for development between now and the end of the century. It is therefore reasonable for the country to be told exactly the basis upon which this will be done. How will existing owners of land, properties and farms be informed whether their property comes into the package of land to be developed between now and the end of the century? They must be told, otherwise considerable blighting will take place. The Labour Party must make clear what it intends to do with the land when it nationalises it. Is it to be sold to those who wish to develop premises on it? If so, will not this have very little effect on house prices or any other form of property?
What will be the position of people who buy properties on a piece of nationalised land and wish to resell? As for what is described as the land needed for development between now and the end of the century, such a statement by a major opposition party presumably means that all land scheduled in the South-East regional planning strategy as growth areas 347 is under threat of nationalisation. It is not right for a major opposition party to put forward this alternative to the land problem and not to tell the public any of the basic details.
§ Mr. Walker
This will be the first opportunity the party opposite has had to make its proposals clear since its party conference.
Turning to other aspects of the housing problem, there are areas in which it would be appropriate for local authorities to sponsor houses for sale. In the last few weeks I have authorised a number of local authorities in areas where it will obviously be of advantage in terms of price stabilisation to proceed with certain schemes for doing this. I have also told the same local authorities to see that existing council house tenants have the right to purchase the houses they live in. We will continue to encourage that policy to the full.
The new subsidy contained in the Housing Finance Act gives a considerable financial incentive to slum clearance. We have backdated this slum clearance subsidy and I am pleased to tell the House that for the second and third quarters of this year the slum clearance figures are better than in any second or third quarter since figures were first kept. This is encouraging news but what is more encouraging is to do with those authorities with particular slum problems which have been contacted by my right hon. Friend the Minister for Housing and Construction and asked, in the next few months, to review their whole slum clearance programme and accelerate it. Already a number of major authorities have responded and have stated that they are accelerating their slum clearance programme.
A word now about the problems facing one or two major cities over the working of the costs yardstick. In London, Birmingham and a number of other cities there may be an adverse effect upon the building of local authority housing. I know that some local authorities are in difficulty over the level of the housing costs yardstick. On examining tender 348 prices it has been found that they vary widely between and within regions. I am therefore prepared to grant special yardstick allowances for individual schemes in areas of particular stress where local market conditions make this necessary. In announcing this I think we will be able to prevent any loss of momentum among the authorities in their housing building programmes.
I turn now to improvement grants. Recently a number of articles have appeared in the newspapers, a report was published by Shelter and a number of people have begun to propound the argument that the great boom in house improvements is primarily concerned with certain landlords making money out of these properties. It is important for the House to know the facts. One Sunday newspaper started its article by saying that the great majority of improvement grants in this country go to London. In fact 90 per cent. of the improvement grants are made outside London. It is this sort of inaccuracy which is giving a wrong image of what is happening. In the first nine months of this year improvement grants were more than twice as high as they were two years ago. Of those grants 79 per cent. have gone either to owner-occupiers or to council houses.
§ Mr. Walker
The hon. Gentleman asks "Where?" I know something that will please hon. Gentlemen opposite, and it is that out of the 226,000 grants given in the first nine months more than half, no fewer than 122,000, have gone to the assisted areas. We are therefore seeing a real improvement in the housing in those areas.
§ Mr. Walker
I would like to deal with the 21 per cent. of improvement grants that go to the tenants of privately-owned property. It is here that the allegations have been made that these improvement grants have been used, for example, to remove families from their homes and make them homeless. The legal position is clear. If an improvement is carried out using a grant, the tenant has the right to say, first of all, that the disturbance or potential harm done to him and 349 his family is such that he does not want the improvement to take place.
§ Mr. Walker
The hon. Gentleman knows that this does not apply to furnished tenancies and that under both Governments there has never been security of tenure in furnished tenancies.
§ Mr. Walker
A committee was set up by the last Government and it recommended, in the interests of the availability of furnished tenancies, that that situation should continue.
It is in this area of rented property that some of the worst housing conditions exist. The availability, from 1st January, of rent allowances means that if a tenanted property is substantially improved and the rent is increased as a result, and the tenant cannot afford the increase, a rent allowance will be available for the first time. I cannot believe it is the wish of the House that 2½ million houses—rented accommodation in the private sector—should not receive this great encouragement which will have such a good effect upon the tenants.
I recognise that there is the possibility —no doubt it has happened—of certain tenants being told that because of an improvement grant they have to go, and, in ignorance of the law and of their rights as tenants, they have gone. I am therefore sending a circular to all local authorities asking that when in future they approve improvement grants for tenanted property they should inform the tenants of their basic legal rights in relation to that improvement. If this is done tenants will be able to get the benefit of improved houses without being adversely affected by being given incorrect information by irresponsible landlords.
§ Mr. Thomas Cox (Wandsworth, Central)
I have listened with great interest to all that the Secretary of State has said, but he must be aware of the problem we face in London. In Wandsworth there are many tenants who have lived in furnished tenancies for many years. There have been no complaints about them. They pay their rent and are well-behaved, yet they are being hounded out of their homes by landlords 350 who have been given improvement grants and who could not care less what will happen to them. We want action against this kind of thing.
§ Mr. Walker
I well understand the hon. Gentleman's anxiety on this but, with respect, it is vital that improvement grants are made available for this sector of housing. The Government have increased the penalties for the irresponsible harassment of tenants. The important thing is to see that local authorities inform tenants of their rights and tell them where to get help should they need it. It would be totally wrong to slow down the issue of improvement grants for our worst houses simply to stop a landlord obtaining a financial advantage from putting in a new bathroom. Any increase in rent in the unfurnished sector is regulated, and in the furnished sector the landlord has never been compelled to offer security of tenure.
The impact of improvement grants in many parts of the country is enormous. For example, in the North-East virtually every pre-war council house will have been modernised within the last two years and in many areas of bad housing improvements have been made in this period. This year it looks as though we shall be getting near to 300,000 old houses being improved. I believe that the country prefers the system of good old houses being improved rather than the bulldozer going in and a multi-storey block of flats going up.
§ Mr. Jeremy Thorpe (Devon, North)
Surely the right hon. Gentleman must be aware of landlords who have bought houses and obtained improvement grants. I know of a case in London where a landlord bought a house for £4,500, received the full benefit of the improvement grant and thereafter put the house on the market for £14,000 and got it. How are we to deal with that sort of case, which is a truly outrageous abuse of the whole improvement grants system?
§ Mr. Walker
I am sure the right hon. Gentleman will agree with me that we do not want to impose a series of restrictions which will stop the impetus of the whole campaign just to deal with the type of case he has cited. I have just given the figures. Eighty per cent. of the grants have gone to genuine owner-occupiers 351 and council house tenants. Of the remaining 20 per cent. many have gone to improving conditions where improvements are badly needed. It is for the reason mentioned by the right hon. Gentleman that we give discretion in these cases to the local authorities. The local authorities are the people best suited to deciding whether an applicant is a genuine applicant, and that is why the power rests with the local authorities. If any hon. Member is aware of an abuse of this system, he should tackle the local authority and ask why a grant was approved in that particular case.
§ Mr. Norman Tebbit (Epping)
I am glad that my right hon. Friend has put the matter into perspective and has pointed out the number of council house tenants who have benefited. Will he say something about a problem which affects a small number of people but is very grave in its impact? In seaside areas small hotels and boarding-houses which have been the genuine homes of people, sometimes of elderly people with small means, are being converted into flats which those people cannot afford. Can we do anything to help them?
§ Mr. Walker
In London the main threat has been the other way round; properties that have been used as flats have been converted into hotels. I have had to try to tackle that problem on planning appeals. Much depends upon the relationship between the people who occupy the properties and what they are supplied with in the form of food and other services. If my hon. Friend has a particular example I will examine it and see what can be done.
§ Mr. A. W. Stallard (St. Pancras, North)
I am very concerned about the effect of improvement grants in the London area. Will the Minister accept that his figures and percentages disguise the picture brought out by Shelter? About two-thirds of the improvement grants approved in some London boroughs went to speculators and not to owner-occupiers. In some boroughs up to 50 per cent. of the houses inspected for improvement grants were empty. Where did those tenants go?
§ Mr. Walker
I can do no more than point out to the hon. Gentleman that the security of tenure of the tenant is in no way affected. If the improvement is of such a nature that the tenant has to leave his house while it is being done, the court can stop the improvements being done unless adequate housing is found for the tenant while they are made. When the improvements are completed, the tenant has the right to the security of tenure he enjoyed before the improvements were made. The law is quite explicit on this. What I think has happened—and I hope that the inner London local authorities will co-operate with me in this—is that tenants who have received improvement grants have not been informed of their legal rights either by the landlord or the local authority. If we can get the local authorities to co-operate with us in informing the tenants of their legal rights, this will considerably change the situation.
§ Mr. Nicholas Winterton (Macclesfield)
Does not my right hon. Friend agree that the House is concerned that even a small number of speculators should make a profit out of public money? Is it not possible for my right hon. Friend to bring in legislation to give power to local authorities to demand the repayment of a proportion of the grant if a property is sold within a certain number of years?
§ Mr. Walker
The previous Labour Government originally operated that system, and they decided to drop it in 1969 because of the incredible administrative difficulties which arise in monitoring the system. For example, it is only necessary to defer the actual completion date until after the date which is fixed. Every improvement grant has to be traced, as does every sale of property in the area. The previous Government, having worked that system, found that it resulted in delays and was administratively hopeless. They came to the House of Commons and changed that system.
§ Mr. Elystan Morgan (Cardigan)
Will the Minister be so kind as to give the House information which up to the moment it has not had? What proportion of the 79 per cent. of grants which go to owner-occupiers go to owners of properties that are second or third 353 homes? Does not the Minister agree that it is quite as wrong for public finances to be devoted to second or third homes as it would be to give a person a grant to buy a yacht or a racehorse?
§ Mr. Walker
I do not know the exact figures—they are difficult to trace—but it would be a very small proportion because the discretion is with the local authorities. The local authorities pay part of the grant. In most parts of England and in many parts of Wales, quite understandably, rural district councils do not give grants to people who come into the area for second homes. They have this discretion. Surely the only people who can judge whether the applicant requires a grant for a first or second home are the local authorities. That is why the local authority has to decide that issue.
I should like to bring to the attention of the House an important development that is currently taking place in relation to the environment in which people's houses are located. Last February we announced Operation Eyesore to give environmental grants for developments in assisted areas to improve the basic environment in some of our older and least attractive industrial towns. I want to tell the House about the remarkable results of that campaign.
We have now approved 8,739 environmental schemes under Operation Eyesore. The scheme is having a massive impact on regions such as the North-West and the North-East. In the North-West alone 4,200 schemes have been approved and in the North-East nearly 2,000. This means that under Operation Eyesore about 50 environmental improvement schemes have taken place in each development area constituency. This also means that buildings which have been dirty and grimy for years are being cleaned and that areas of squalor are being landscaped and improved.
I wish to draw the attention of the House to the total impact of this policy on our worst areas in the environment. More derelict land will have been cleared in the first six months of this year than in the whole of the 1969–70 period; slag heaps are being removed at a fast, accelerating pace. Old homes are being improved at a record pace. Environmental 354 improvement under Operation Eyesore is being carried out on a massive scale and this scheme has no comparison in any other country. Smokeless zones will be granted in this country at a greater pace this year than in any year since the Clean Air Acts came into operation.
I therefore claim that in the first two years of the Department of the Environment's life we have already started to achieve what we set out to do, namely to penetrate our country's bad environments. We have only to take a typical constituency, say in the north-east of England, to realise that this year 50 major environmental schemes are being undertaken and in a period of two years every pre-war council house will have been improved; and in the first six months of this year more derelict land will have been utilised than in the whole of 1969–70. When we realise that by the end of the decade we shall have removed existing scheduled slums and shall have taken action in respect of scheduled derelict land, we can claim that the Government in their first two years of office have made a real impact in the worst environmental areas.
§ 3.42 p.m.
§ Mr. Anthony Crosland (Grimsby)
The House can seldom have listened to a thinner speech on a topic of major national importance such as the housing and land crises which we are now facing. I shall discuss a number of matters to which the right hon. Gentleman the Secretary of State for the Environment referred, but I will put them in the context of the Prime Minister's speech on Tuesday.
The Prime Minister in that speech said three things that particularly struck me as being relevant to our debate. He said in column 41:…it is the theme which is running through the whole of the Gracious Speech—protection of people…He said in column 46:The second objective"—this was after he had discussed economic growth—was the need for an improvement in the relative position of the low paid.And a little later in the same col.:The third objective was the need to moderate the rate of cost and price inflation." —[OFFICIAL REPORT, 31st October, 1972; Vol 845, c 41–46.]355 These were eloquent words and admirable aspirations. Let us see how those aspirations have been fulfilled in the sphere of the Secretary of State for the Environment. Let us ask in terms of housing how far he has contributed to the protection of people, to improving the relative position of the lower paid and to moderating the rate of inflation.
We can sum up the right hon. Gentleman's contribution in 2½ years of office very shortly. He has presided over the biggest increase in house prices of which we have record. He has presided over the largest increase in land prices in living memory. He has presided over a wholly inflationary rise in council and private rents. He has presided over the worst harassment and exploitation of poorer tenants—
§ Mr. Crosland
—in the private rented sector that we have seen since the days of Rachman. He has presided over a vulgar and offensive level of profits from property, which has led to an improvement not in the position of the lower paid but in the position of already wealthy landowners, speculators and developers. This is quite a record in two years and four months! It is quite a contribution to the Prime Minister's alleged objectives of protecting the people, helping the lower paid and reducing the rate of inflation. This record makes absolute nonsense of all the Prime Minister's grandiloquent words on Tuesday.
The Secretary of State has not yet paid the political penalty that he should have paid for this appalling record. The reason is his great skill in sending subordinate Ministers into the firing line while he remains safe at base headquarters. They do the fighting while he writes the Press communiqués. They take the Housing Finance and Local Government Bills through Parliament while he makes popular speeches on pollution—and, incidentally, I often agree with them. They answer the difficult Questions at Question time on land, rents and house prices: he answers occasional questions on desalination or official visits to Hackney. They bear the scars of combat: he is the prototype base-wallah.
356 However, I warn the hon. Gentleman that now that those two Bills are out of the way—two Bills which he devolved on to his subordinate Ministers—we shall smoke him out of his comfortable base headquarters billet and hold him, and him alone, personally responsible for the appalling record of his Department. Whether, having smoked him out, we shall get any satisfaction out of him is, I concede a different matter. All the evidence is that when he is compelled to face major issues, he has nothing to say —and even his Press handouts dry up.
Perhaps the most revealing of innumerable Press interviews which the right hon. Gentleman's highly equipped Press Office has obtained for him was that which appeared in The Guardian on 30th June. I quote:In an interview this week the Secretary of State for the Environment made it clear that the Government is not intending any further action to stem the astonishing rise in house prices since he came into office. At one point Mr. Walker spread his arms wide and said to me, 'What can I do?'What a pathetic cry! While land, rents and house prices go through the roof, virtually out of control, the Secretary of State can only spread his arms wide and say "What can I do?" At least when Rome went through the roof Nero found a fiddle to occupy himself with.
I turn to examine in more detail the record of "'What can I do?' Walker", since surely that is the name by which the Secretary of State will go down in history—if indeed he makes the history books at all, which I doubt.
First let us look at house prices. In the years of the Labour Government house prices rose, certainly, a little faster than the general level of inflation, but at a relatively steady rate and in no sense out of control. I take the years 1964 to 1970 and take the average price of new dwellings mortgaged with building societies and the official DOE figures. I find that in those years prices rose by 8 per cent. in the first year, 9 per cent. in the second year, then by 8 per cent., 6 per cent., 6 per cent., 7 per cent., and 6 per cent. That was certainly a steady rise but not out of line with the rise in incomes.
But when the Secretary of State takes over, with a fanfare of trumpets, promising a new and better Britain, instructed 357 by the Prime Minister to devote himself to protecting people, helping the lower paid and cutting prices "at a stroke", a dramatic change occurs. In 1971 the price of new houses increased by more than double the rate of the previous year, namely by 13 per cent. compared with 6 per cent., and in the first half of 1972 new houses rose in price by an annual rate of 40 per cent. The same lunatic rise—for lunatic it is—has occurred under the Secretary of State's ægis in the price of second-hand houses. I take here the Nationwide Building Society figures for older existing houses. Their prices rose in the first half of 1970 by an annual rate of 6.3 per cent, in the first half of 1971 by 11.8 per cent., and in the first half of this year by 40.8 per cent.
These are fantastic figures, which would be almost incredible except that all of us know them to be true from personal experience. In London and the South-East, on which my right hon. Friend the Member for Deptford (Mr. John Silkin) will speak in more detail when he winds up, the price of the average new house has risen in the last 12 months by 55 per cent. to £11,530. Probably most hon. Members could give individual examples of even higher increases.
§ Mr. Crosland
This wild inflation has caused, and is causing, extreme hardship to young married couples trying to find homes and is pricing large numbers of people, especially wage-earners, altogether out of the owner-occupier market.
I come to the question of mortgages. Ministers—particularly the Minister for Housing and Construction, military man that he is—have put up a thick smokescreen to try to conceal this hardship. They are fond of quoting, as the Secretary of State did this afternoon, figures showing large increases in the number of mortgages given to first-time purchasers, those under 25, and so on: 31 per cent. to this category, 30 per cent. to the other category.
Of course, mortgage lending has increased enormously over the last two years. It was 35 per cent. higher in 358 1971 than in 1970. That meant an increase in mortgage lending to all the categories. But the Minister for Housing and Construction does not realise that this is cold comfort to young married couples, because mortgages do not build houses, and the number of houses completed for owner-occupation is not going up. Indeed, the number of new houses completed for owner-occupation was actually lower last year, and is lower in the first three-quarters of this year, than in 1964, 1965, 1966, 1967 and 1968—far lower than in 1968—and only marginally higher than in 1969 and 1970.
If we have a 35 per cent. increase in mortgage lending, but only a constant rate of new building for home ownership, perhaps increasing the stock of home-owned houses by 2 per cent. a year, we are not housing 35 per cent. more people—this is what the Minister cannot understand—but are simply driving up the price of housing, encouraging a speculative investment demand for housing, stimulating the demand for second houses and more expensive houses, inflating the profits of property companies, and making the ordinary family which desperately wants a new home stretch its resources dangerously.
Two years ago the average family buying a house spent 20.8 per cent. of its income on mortgage repayments. Today it is spending over 23 per cent., and in London and the South-East over 25 per cent.
The effect of this huge increase in mortgage lending is, therefore, not to house more people—that depends on the number of new houses being built—but to put up prices, especially of existing houses; to put intense strain on young married couples with lower incomes; and generally, as we can see—indeed, we knew it, but we have it confirmed in the report of yesterday's Shelter conference—to put a greater share of the supply of houses into the hands of the better off and a smaller share in the hands of the less well off.
I turn now to the price of land, because obviously we cannot divorce the price of land from the price of housing. The two are interconnected. An increase in the price of land pushes up the cost of housing. An increase in house prices pushes up the value of land. In my 359 view, and, I should guess, the view of a considerable number of other people, the price of land and the unearned profits now being made from it constitute the greatest single social scandal in Great Britain in the 1970s. Every hon. Member will have favourite, or probably unfavourite, examples of what has been happening. I take three, selected almost at random, in recent weeks. The Estates Gazette is advertising a plot of land in Bromley for 12 houses at £300,000 or £25,000 a house, just for the land alone. In Chingford 1.15 acres were sold recently for £172,000. Two years previously a similar plot fetched only £40,000.
I read in the Daily Telegraph a few weeks ago that Viscount Wimborne, aged 32—
§ Mr. Crosland
—is reported as likely to make at least £26 million from selling 575 acres of land at Canford, Dorset. Before it was recently scheduled for development, its estimated value for agricultural use was £200,000. That is £200,000 to £26 million as a result of planning permission being given.
What is typical about these grotesque profits is that they are usually unearned—the most unearned of all unearned increments—due to no efforts on the part of the landowner, but purely to community development decisions. They are the supreme example of private value due to public causes. In nine cases out of ten these profits accrue to a small and already wealthy class of landowners—frequently to those who have not even made the money themselves but have inherited it from their parents. This surely offends against every principle of equity and natural justice. I should have thought that it even offended against some such principles held by right hon. and hon. Gentlemen opposite. It certainly offends totally against the Prime Minister's remit to protect the individual, to reduce inflation, and to redistribute income towards the lower paid.
Let us turn now to the council house sector and see how the Secretary of State has carried out his remit there. At least here we do not have the indolent passivity which he shows when facing land 360 and house prices. On the contrary, we have violent intervention.
§ Mr. Idris Owen (Stockport, North)
I am intrigued by the argument the right hon. Gentleman has put forward. I sympathise with the points he has made, but I was waiting avidly to hear what solutions he proposes on the land situation.
§ Mr. Crosland
This happens to be a debate on the Government's policy. Nevertheless, I propose, if time allows—I shall do it very briefly—to give eight points at the end of my speech which I hope will satisfy the hon. Gentleman.
I was saying that in the council house sector at least we find no passivity but violent intervention. The Secretary of State may have no notion of how to curb the property speculator, but he certainly knows exactly how to clobber the council tenant. We spent days and weeks earlier this year discussing the inequities of the Housing Finance Act. I do not want to repeat those arguments today, so I shall say nothing about the curtailment of local authority freedom, the cut in subsidies, the wide extension of means-testing, the transfer from national to local shoulders of much of the burden of alleviating poverty, and the concept of landlord profit and Exchequer taxation now introduced for the first time into public sector housing. I shall stick to the effects of the Act on rents.
The Minister for Housing and Construction on 18th October, col. 249, told us that in this financial year the average increase in rebated rents of council tenants would be 35p. This works out—he did not tell us, but I have worked it out—at an increase of about 13 to 14 per cent. That is wholly, dramatically, out of line with the figures for price increases now being discussed in Downing Street. Even that figure assumes some unknown figure for the take-up of rebate. The Minister did not tell us what that assumption was, but we know from experience that many people, alas, will not take up the rebates because they are too proud, too stubborn, too ignorant or are deterred, when they see the rebate form, by the enormous complication of filling it in correctly. So I calculate the increase in unrebated rents—this is often what will be relevant—at something nearer 24 per cent. This is the Secretary of State's 361 incredible contribution to the Governments anti-inflationary policy. It would be interesting to know what view the Prime Minister—now trying to convince trade union leaders that he is serious about prices—privately takes of the Secretary of State's Housing Finance Act. I should think that it is probably unprintable.
I now turn to the private rented sector. Here at least we would have thought that the Secretary of State, with all his business experience and acumen, would at any rate have produced a policy which worked, even though we might not like the way that it worked. But we find, on the contrary, that this sector is in a state of greater convulsion, confusion and insecurity than at any time since the era of Rachmanism.
The crux of the problem is the almost total insecurity in which private tenants now live in areas of housing stress. The tax and financial advantages of selling rather than leasing residential property are now so overwhelming that the private landlord in those areas very often has only one ambition, to get his tenants out and to sell at hugely inflated prices; then, if he is a really determined speculator, as many of them are, to buy another property and repeat the process. So we have the present situation in the area where I live in North Kensington, in Hammersmith, Islington and other parts of central London, extending now to middle-class tenants of large apartment blocks, of continuous insecurity, with properties changing hands often several times in a year over the tenants' heads, of bullying, bribing and harassment to get poorer tenants out, of a loss of low-income housing into middle-class owner-occupation, and always of profit, profit, profit—a huge speculative profit on every one of those transactions, made through higher prices and at the expense of the tenants.
I will quote simply one example, a notorious one which happens to be very near where I live. It was described in the Observer by Mr. Des Wilson on 15th October and concerns a block which my hon. Friend the Member for Kensington, North (Mr. Douglas-Mann) knows as well as I do, 1–9, Colville Gardens, W.11. Mr. Wilson wrote:This year the houses went into a bewildering price spiral. The Crown Agents sold 362 to a man called Hart. He sold to a company called Prisdaly Investments Ltd., who then sold to a firm called Elkingtons PIF Ltd. …I have every reason to believe that between the sale by the Crown Agents a few months back and the purchase by Elkingtons within the last month, the price increased by between £100,000 and £150,000—more than the value of the whole property in 1968. All this was sheer profit, made by people who did little but buy and resell the houses.What a contribution by the Secretary of State to the Prime Minister's three aims: protecting the individual—that is an irony; reducing prices; and helping the lower paid!
As to helping the lower paid, Ministers are always telling us—and this is reasonable—about the new rent allowance, which I have welcomed right from the start. I welcome its extension to the furnished tenant, announced in the Gracious Speech. But the effect of the new allowance is being swamped in the areas of housing stress by the speculative convulsion which now grips the private rented sector.
Despite what the Secretary of State said this afternoon, this convulsion is made worse by the present misuse of improvement grants. I make my position perfectly plain here. I am an ardent supporter of improvement. I think, as the right hon. Gentleman does, that since 1945 we have demolished too much and improved too little. I believe that the 1969 Act was a major achievement of the Labour Government, and I always thought the present Government right in principle to maintain and extend the policy laid down in that Act. Nevertheless, not over the whole country—of course I concede the right hon. Gentleman's point—but in inner London in particular, the intentions of the Act are now being twisted and distorted in a way never foreseen by its authors.
The purpose of the Act was clear. It was to improve houses for the benefit of the people living in them, for the benefit of existing tenants. But that is not how it is working out in inner London. The system is being grossly exploited, as many of my hon. Friends know as well as I do, by speculators and property companies, and the common result in parts of inner London is the eviction of exising tenants, the conversion of low-income rented housing into middle-class houses for sale or luxury flats, an increase in the 363 already desperate problem of homelessness, and, as always, a huge increase in profits, prices and rents.
It has been an extraordinary episode whenever we have discussed this matter this year, because the Minister for Housing and Construction has shown an incredible unwillingness to face these facts. Some of his statements—
§ Mr. Ian Lloyd (Portsmouth, Langstone)
The right hon. Gentleman is making great play with the increase in the amount of middle-class housing. What would he guess was the increase in middle-class incomes in this country over the past decade?
§ Mr. Crosland
I can only tell the hon. Gentleman one absolutely definite fact, that since June, 1970, the increase in middle-class incomes has been far larger than the increase in working-class incomes.
I return to the Minister for Housing and Construction, who said on 18th April:I have heard reports of enormous capital gains made in this way out of one or two dwellings, but I have looked into these reports and, believe me, they relate to exceptional casesOn 26th July he said:Surely the situation as it stands today is in no way unsatisfactory.—[OFFICIAL REPORT, 26th July, 1972; Vol. 841, c. 1797]The Minister recently said on television:I cannot get any evidence at the moment that anybody has been made homeless as a result of improvement.One wonders how remote from reality a Tory Minister can get. I and many of my hon. Friends could take the right hon. Gentleman on a tour of areas where he could see these things happening under his eyes.
Surely the right hon. Gentleman has now taken some account at any rate of the report which the Secretary of State mentioned, "Home improvement—People or Profit?" by Shelter. I shall not take the time of the House by reading some damning examples that it gives. I say only that it proves beyond any shadow of doubt that in the inner city areas the allegations that have been made are correct, and that it is not enough for the Minister for Housing and Construction to say, as he did yesterday, that he 364 will institute an inquiry. It is not enough for the Secretary of State simply to send a circular to local authorities.
§ Mr. Peter Walker
But surely if there is complete security of tenure legally it is not possible to increase that security of tenure, and if there is anything wrong in this sphere it is because people are acting illegally. If local authorities tell each tenant of his legal rights, that is useful. So far the right hon. Gentleman has made no suggestion on how to change the situation. What does he suggest?
§ Mr. Crosland
There are two answers. First, furnished tenants do not have complete legal security of tenure, and they are frequently the victims. Secondly, in the inner areas we are often dealing with a relatively uneducated section of the population, sometimes people who have arrived in this country only in the past few years. They do not understand what their legal rights are. The kind of harassment that goes on is extremely effective, and a circular will not cure it. I was coming to deal with the problem in the brief constructive part of my speech, but I can tell the right hon. Gentleman now that I would base my policy on the proposals made at the end of the Shelter report, which seem to be good and constructive.
So, in every housing sector we have rising prices, profiteering and insecurity. This is the housing and land record of "What can I do?" Walker. These are the fruits of passivity, indifference and a Tory belief in laissez-faire. We have had no policy from the right hon. Gentleman this afternoon, other than the usual appeals and exhortations about the release of land. I hope that they will be successful, but let us face the fact that they can make only a marginal impact in the short run. We now want action to achieve the Prime Minister's stated aims of protecting the individual, reducing inflation, and helping the lower-paid.
I will tell the right hon. Gentleman some of the things that I believe should be done, things that would be effective. First, it is essential to suspend the operation of the Housing Finance Act and limit rent increases over the next 12 months to at most the 5 per cent. now being discussed at No. 10, Downing Street. I will not 365 expatiate on that, because I and my colleagues, particularly fellow members of the Standing Committee considering the Measure, made this point again and again earlier in the year. It is not possible to have a prices and incomes policy that excludes rents, and it was always crazy to think that it was possible.
Secondly, the froth should be taken off the market in owner-occupied houses by not giving mortgage interest tax relief on mortgages above a certain figure, not giving it for the purchase of second houses, and moreover, not giving improvement grants on second houses.
Thirdly, stop the wild fluctuations in house prices which result from uncontrolled fluctuations in building society lending. This, I suspect, is a point the Minister has not yet grasped so I repeat it briefly. If mortgage lending increases by 35 per cent. in a year, as it did last year, we are not increasing the number of home owners by 35 per cent. because there are not 35 per cent. more houses to be sold. There are only about 2 per cent. more houses per year to sell. So all that the building societies are doing by this vast increase in lending in which the Minister takes such pride is pushing up the prices of houses and making life much, much harder for the less-well-off young married couples. There is now an irresistible case for regulating building society lending to keep it more in line with the actual number of new houses being built each year, and if the hon. Member asked me what I would do I would remind him that a practical way of doing this has been recently put forward by the National Economic Development Office.
Fourthly, stop the present abuse of investment grants by the sort of policy referred to in the Shelter report to which I have alluded.
Fifthly, prevent the present harassment and exploitation of low-paid private tenants, particularly in inner London, by encouraging a systematic policy of municipalisation. I shall not go into greater detail on that because, as the right hon. Gentleman may be aware, I wrote an article on it in today's Guardian.
Sixth, skim off at least some of the profits from land and property speculation—here I am suggesting what even a Tory Government might do—by an effecttive— 366 I emphasise "effective"—special levy, or higher rate of capital gains tax, on profits from land and property. This would do something at least to lessen the gross increase in inequality produced by the fantastic profits in the last two years. [Interruption.] I am talking about bringing prices down and lessening inequality. I am talking about all three aims which the Prime Minister has set us—not just one out of the three, but all three.
Seventh, build more houses. Not just talk about it: do it. Here the Minister and the Secretary of State, I think, might do well to listen carefully, because they constantly try to bamboozle the public by making comparisons always with only the last two years of the Labour Government and of Tory-controlled local authorities, when there was, certainly, a regrettable fall in house building. But as I think the public do not realise the full picture because the Secretary of State has never given it, I will tell the House briefly what it is.
Council house starts in the first three-quarters of 1972 were lower than in any year of the last decade. Private sector starts, of which the Government are always boasting, were higher than in some years of the Labour Government but still lower than in the peak years of Labour Government—private sector starts. Total starts, which, after all, are what matter to anyone who is interested in the total housing situation, are significantly lower than in four out of six years of the Labour Government. This is hardly a record to be proud of. Perhaps in future the Secretary of State will be rather more candid with the House and make comparisons with the entire period of the Labour Government.
§ Mr. Peter Rost (Derbyshire, South-East)
Would the right hon. Gentleman like to tell the House how many building firms went out of business, were squeezed out of business, in the last two years of the Labour Government, and what effect this could have had on the housing programme in the first two years of this Government?
§ Mr. Crosland
I merely point out the basic, essential fact which underlines all the other arguments, that the present Government are not near to achieving the housing programme which the Labour Government did in their six years.
367 Lastly, and to satisfy the hon. Member, I turn to Labour policy for land. I would remind the House that we have tried four policies to find a solution to the problem: the Lloyd George Budget of 1909, the Finance Act, 1930, my right hon. Friend's father's Act of 1947, and the Labour Government's Land Commission. Each of these efforts was repealed by a subsequent Tory Government. We have no policy now but vague appeals and exhortations.
What we have to do is to answer two simple questions. The first is: are we willing to put up indefinitely with the present state of affairs, with the Secretary of State's hand-wringing and shoulder-shrugging—"What can I do?"—a non-policy of laissez-faire, with all its appalling effects on house prices, inflation, and distribution of wealth? The answer, certainly on this side of the House, is "No", and again. "No".
Having said "No" then do we wish to revert to any of the four previous policies which I have mentioned, of 1909, 1930, 1947 and 1965?—to which, again, my answer, at least, is "No".
So I conclude, as, indeed, I wrote in a book 10 years ago or more, that we must now come to the fundamentals of the matter and commit ourselves to the public ownership of land.
The Secretary of State pointed to the well-known problems and complexities, but he did not point out the fundamental facts of the present situation. Of course there are problems, of course there are complexities; but these problems are infinitely less than the problems which arise directly from the present policy of laissez-faire. For the one thing, surely, which the last two years have proved beyond any shadow of doubt is that the Tory belief in the free play of market forces in land and houses produces the maximum possible degree of inflation, of insecurity, and of inequality. That is why we, on this side of the House, utterly reject it.
§ 4.16 p.m.
§ Mr. Harold Gurden (Birmingham, Selly Oak)
I am obliged to you, Mr. Speaker, for calling me. It is very interesting to note this afternoon the distinct difference between the Opposition and the Government 368 in this debate. In the last speech, by the right hon. Gentleman the Member for Grimsby (Mr. Crosland), amusing as it was at times, there was not one single suggestion for increasing the housing supply in this country—not one. The whole of that speech was merely directed against the profit motive, something which could be better discussed on a Finance Bill, whereas my right hon. Friend was concerned with the problem which has worried this nation for decade after decade, in the time of both Governments, the supply of houses. My right hon. Friend is certainly to be congratulated on the achievements which he has spelled out this afternoon and which, we know, will increase as time goes on. He has to have the credit for coming out of the difficult situation which was left to him by the last Government.
Before I pass on to the main part of what I have to say I think we should now congratulate my right hon. Friend on the "fair rents" Act, the social justice of it, particularly for the low-income people and the retired. Whatever is said by the Opposition, they certainly do not pay him the credit which is his due for what he has done for the low-income tenants and the retired people. Surely that Act, above all others of this Government, is really what people think of as true Socialism, and yet the Labour Party tried to reject it.
My main subject this afternoon is home ownership. It was the subject of a Bill I put before the House in the last Session. I believe it is right for every person to be able to own his own home, which is a more essential personal need than a motor car or a television set, and comes before them. I would question the councillors in our local authorities and Members of Parliament here when they try to deny to the people the ownership of their homes. How many Members, how many of the people in this building, and how many councillors own their own homes? Having made sure that they own their homes, they seem to want to deny council tenants the right to own theirs.
Coming to the burning question of rising prices and rising rents, how much would it contribute to the leveling off of these increases if the vast stock of 369 municipal homes were owned by the present tenants? If they were so owned there would be an enormous increase in the supply of houses on the housing market, and this would enable people to switch from one house to another and from one district to another. High prices must be seriously affected by as much as half in some towns by property never being on the market at any time but being solely in the hands of the local authorities.
Whose houses are these, anyway? They do not belong to the councillors. They do not belong to Members of Parliament. They belong to the taxpayer, to the ratepayer and to the tenants themselves. The last named have the greatest claim to these properties. Certainly the local authorities have no claim to them. I believe that every tenant should be helped to own his house, and it would be wrong of the Conservative Party and the Government to go into the next election without conferring on tenants the legal right to own their homes.
There is another subject on which the shortage of houses impinges considerably, and that is the mobility of labour. In Birmingham, a man employed at the Austin Motor Works at Longbridge may wish to be transferred to the Dunlop Rubber Company factory 10 miles away across the city. Whether he lived near the latter factory and wished to move to Longbridge or vice versa, he would almost certainly be a municipal tenant, and he would have no hope of getting an exchange of tenancy in the time required to enable him to change his job.
We all know the difficulties of travelling across an industrial city such as Birmingham, to say nothing of the time that it takes and the extra cost involved to the worker. Because of those factors he is not able to change his job, and the problem is accentuated if we relate it to transferring from a job in an industrial area such as Birmingham to one in another area. A worker may wish to transfer to a job in another city 100 miles away from where he now works.
Home ownership could solve the problem. The price of houses does not matter, because the worker would get for his house the sort of price that he would have to pay for the next one, whatever 370 the price level. Local authorities which deny tenants the right to own their houses are saying, in effect, "We are councillors, and we are all right, Jack. You shall not own your houses, because they belong to the city."
§ Mr. Sidney Bidwell (Southall)
Is the hon. Gentleman postulating the idea that we should eventually abolish all landlords, or is he confining his thoughts to municipal ownership? Is he saying that the tenants of private landlords, who are sometimes property companies, should have an absolute right to buy their houses from their landlords?
§ Mr. Gurden
At no time did I say that landlords should be abolished, and I do not for a moment suggest that municipal authorities should give up the ownership of all houses. Tenants who wish to continue to be tenants should be allowed to do so. Private landlords would be delighted to sell their houses, and they do. Thousands of houses each week are transferred to tenants by private landlords.
The land problem to which my right hon. Friend referred is serious. He referred to the "release" of land, and we are delighted to hear that, but what exactly does that mean? Does it mean that the railways, or the local authorities, or somebody else has said that land can be released? Or does it mean that the land is in the hands of developers, be they local authorities or private developers? At what stage will the land have houses built on it?
This is an important matter, because the lack of houses started with the control and restrictions imposed in planning and other fields, and certainly in local authority ownership. The situation has become worse as more restrictions have been imposed, and if the financial and profit-making restrictions suggested by the right hon. Gentleman were added the situation would become almost intolerable. That is why I said that the right hon. Gentleman had not put forward any proposals that would increase the supply of properties. What we really want to know is the stage at which the land referred to by my right hon. Friend will become productive.
I have one other point to make, and that is about green belt and planning areas. It is high time that there was 371 more infilling in cities and villages, certainly in the Birmingham area. Local authorities are always complaining about the lack of land supply. There could be an enormous amount of infilling of small areas, yet very often round our large cities one finds the best agricultural land being taken for house building. It seems that local authorities get the most satisfaction from taking good agricultural land for house building. In the Midlands there are enormous areas of derelict land which ought to be put to use long before the best agricultural land is taken over.
Then there are the beauty spots. I suppose one thinks of Cannock Chase, Dartmoor, and so on, but even these areas ought to be used before the best agricultural land is taken over. Year after year there is a reduction in agricultural production because of the fall in the amount of land available. Farmers produce more per acre now than they used to, but the day will come when we shall regret having lost so much good agricultural land.
I hope that in the speeches to follow credit will be given to my right hon. Friend and the Government for all they have achieved and, more importantly, for what their policies will achieve in the next two years.
§ 4.30 p.m.
§ Mr. Cyril Smith (Rochdale)
May I crave the indulgence of the House for this my maiden speech? I should like to start by paying a very sincere tribute to the late Jack McCann, my predecessor as Member for Rochdale. He was a man I knew very well indeed. No one who knew him could fail to be impressed by his diligence, his honesty, his cheerfulness and his concern for others. Those of us who knew him well understood in the last two years how he laboured under considerable difficulties due to the handicap of illness. I am sure that the House is poorer for his passing. [HON. MEMBERS: "Hear, hear."] I hope that I may follow his example of service to others and particularly to the people of Rochdale.
I am aware that one's maiden speech is expected to be non-controversial, but naturally my arrival here will not be universally welcomed. However, I believe that I represent all sections of Rochdale.
372 I believe that my vote shows this, that I represent people of all classes, all creeds and all races. I am very happy that the Liberal Party is able to embrace them all.
We have heard a great deal today about the problems of land prices and of housing. As a member of a local authority and a past chairman of a housing committee, I am well aware of these problems. The House will forgive me, I hope, if I stray a little from the literal subject of the debate. I should have preferred to make these points earlier in the week, but obviously I was not able to do so.
One of the major problems facing local authorities today over improvement grants is the time limit that the Government have placed on them in order to obtain the 75 per cent. grant. That time limit—June, 1974—is causing a bonanza for builders in my part of the country.
The ratepayers of Rochdale and, I suspect, of many other towns are being virtually held to ransom now that builders realise that we are compelled, if we wish to obtain 75 per cent. grants, to complete the buildings by the date the Government have set. I would therefore urge the Government to announce as soon as possible an extension of that date. Such an extension would considerably reduce the price to local authorities of improving houses.
The problem of high land prices causes other problems as well. It is those problems to which I wish to refer today. One of the major problems is that of attracting industry into one's area. This is very difficult when the price of land is so high—almost exorbitant.
There is little point, however, in attracting new industry unless one retains existing industry. I want to refer particlularly to the spinning section of the textile industry. My constituents have grave doubts as to their ability to continue to produce in the new situation created from January, 1973. If I may say so in a non-controversial way, textiles have been repeatedly badly dealt with by successive Governments. I would plead with the Government to pay attention to our spinning industry before it follows the fate of 51 spinning mills which have closed in the last five years and, over textiles as a whole, the fate of 348 mills which have also closed in the last five years.
373 The real concern of the spinning industry is of course due to the liberalisation—I use the word technically rather than politically—of cotton yarn imports. This means that, from 1st January, 1973, Mediterranean countries will have no quotas on their exports to this country. My constituents greatly fear the effect that exports, particularly from Turkey and Greece, will have on our ability to sell home-spun yarn.
We cannot easily compete against countries which subsidise their yarn exports, as does Turkey, for example, to the tune of 15 per cent. I am therefore pleading for some control of yarn imports. If this is not done, anything from 5,000 to 30,000 jobs in the spinning industry are likely to be lost.
In Rochdale we already have an unemployment problem at a rate of 4.2 per cent., as against the national average of 3.6 per cent., which represents close on 2,000 people unemployed. Unemployment is a cancerous evil. It is my fervent hope that Her Majesty's Government will consider this problem before it is too late. I appeal to the Government to come clean on textiles, so say where they stand and to tell us whether they want a textile industry.
The House will know that many people previously employed in textiles now live or exist in retirement. I should like to make a last plea for them also. One welcomes anything that can be done to help pensioners enjoy the eventide of their lives. One knows that loneliness is as much a problem of age as is poverty. Coupled with the help to elderly people in combating loneliness is our whole television network, so I hope that I might raise an issue of concern to my constituents which was a major issue during the election.
I refer to the concern about why some pensioners can get a television licence for 5p while others have to pay £7. This is a bone of contention with old-age pensioners. It is grossly unfair that pensioners living in a bungalow which is warden-controlled get their licences for 5p, but that a pensioner across the road in another bungalow which is not warden-controlled has to pay £7 for the same thing. I appeal to the Government to try during this Session to introduce legislation to alleviate that anomaly. I hasten 374 to add that we want it alleviated to the extent that everyone pays 5p and not that everyone pays £7.
My final point on pensions is very simple. It came up during the election and I felt that it was worthy of consideration. A number of pensioners asked me why they could not draw their pensions through Giro as applies to social security payments. I would again urge the Government to consider the possibility of a pensioner receiving his pension in this way if he should so opt.
In the coming months I shall no doubt address the House on these matters and many others—I realise, with possibly less ease than I have done today. I am grateful to the House for the tolerance and patience that it has shown me this afternoon. I hope that, despite the fact that this is a maiden speech, the Government will note the three points that I have made—first, the need to control the import of yarns as from January, 1973; second, the desirability of a television licence at 5p rather than £7 for old-age pensioners; and, third, the case for pensioners being able to obtain their pensions by Giro.
If I could feel that my sojourn here had helped on all or any of these points, it will have been worth while. Certainly I expect to hear them raised again. God willing, I intend my sojourn to be a long and honourable one.
§ 4.40 p.m.
§ Mr. A. P. Costain (Folkestone and Hythe)
This is the first occasion on which I have had the honour of following a maiden speech. I congratulate the hon. Member for Rochdale (Mr. Cyril Smith) on going in to bat so early. It has recently become a fashion, because of the timing of by-elections, to hear maiden speeches at an early stage. Having listened to the hon. Gentleman putting forward the issues and the problems of his constituency with clarity and full weight, if I may be allowed to say so, the House will look forward with a great deal of interest to what he has to say in future. We welcome the hon. Gentleman.
It will be 13 years ago next week since I made my maiden speech. My topic on that occasion was one to which the hon. Gentleman has referred in a glancing manner—the Local Employment Act. 375 Since that time I have had the opportunity of addressing the House on housing, about which I have a more specialised knowledge. On those occasions I have declared my interest. At one time I was the chairman of a large firm of civil engineering and building contractors. As the work here became more onerous, I gave up my chairmanship and became an ordinary director. This year I have resigned from the board, on which I served for 40 years, and I have given up my directorship of that company.
§ Mr. Costain
I wish to make several points, not least the point about profits which has been made by the hon. Member for Liverpool, Walton (Mr. Heffer). I should also explain, so that I am not misunderstood, that I am still on the board of a small private company at Liverpool. I attend about one board meeting a year. That does not make much difference, but I should declare my interest.
I have been actively engaged in the building industry for 45 years, for 40 years as a director and for five years before that gaining experience from my parent. I can therefore look back with some interest on certain events. I recall that immediately after the First World War the first council housing scheme in the country was produced in the Liverpool area for the Bootle Corporation. I recall that at that time there was also the start of the speculative building of houses. During the First World War, zeppelin raids caused damage to a number of houses. It was understood that the original Rent Act was introduced because landlords might make unfair profits as a result of the housing shortage. It was considered that the landlords in those days—it has applied ever since—were a group of people who always smoked fat cigars and made undue profits.
I also recall that it was decided that there was a need for housing, and there has been such a need ever since. We have just heard a speech from a Liberal Member and we should recall Lloyd George's "Homes for heroes". We should recall that a housing subsidy of £100 a house was given to those who 376 came home to enable them to own houses. We should also recall that a subsidy of £100 represented one-fifth of the value of a £500 house. At that time there were howls from the small Labour Party which then existed that there was profiteering. It was said that the subsidies should be stopped. It was forgotten that the subsidies were needed to encourage house-building. The attitude was that somebody was making a profit and that the subsidies should be stopped.
On looking back on the building industry I have always considered it remarkable that if a man built up a business of manufacturing motor cars he was considered to be a great industrialist but that if he was concerned in the building of houses or the developing of property, he was thought to be not a great industrialist but a horrible speculator who must be stopped. It seems not to matter that in the process of stopping that person the production of houses is also stopped. That has always been the situation.
The extraordinary speech of the right hon. Member for Grimsby (Mr. Crosland) contained nothing but hate of profits. He made not a single constructive suggestion. I welcome the proposals which have been put forward by my right hon. Friend the Secretary of State. However, we must always understand that property and housing development depends on conditions inside and outside the industry.
Going back a little further in history, I remember the falling away of house-building following the dropping of the subsidy in 1924. As a result, prices rose. Houses which were sold for £500 in 1928 reached the record price of £1,500 in 1933. Houses which were built in Enfield for £1,500 may have been sold in 1932 or 1933, but one could not sell them in 1938 for £750.
Everybody seems to assume that house prices will continue to rise indefinitely. One of the reasons for the recent fantastic rise in house prices, which I do not support, is that everybody has become concerned that he must have bricks and mortar. That is what has caused the unprecedented rise in the price of houses. That is what we must take steps to counteract. We will not stop this tendency by saying that we must 377 eliminate profit; we must produce more houses. Whatever the commodity, its price will always depend on supply and demand.
One of the factors which have made house-building so difficult has been the proper supply of land. The industry has made many representations to my right hon. Friend the Secretary of State. Proposals have been put forward for the supply of land on a positive planning basis. It is so easy to say "No", but the right way to get houses built is to say "Yes". There is available in the Library an independent report, the Housing Research Foundation Report No. 8, sponsored by the National Association of Registered House Builders, the purpose of which was to discover the truth about the alleged shortage of land and whether some of the local authorities were right when they said that there was no shortage while builders were saying that there was a shortage.
The study to which I have referred is a short one and I shall inform the House of some of its contents. The aim of the study is stated as beingto establish the facts of the present situation, where local authorities state that enough land is available for house building and the building industry maintains that the supply is inadequate.The report states that an independent survey was carefully carried out. The survey showed that the builders' other difficulties were relatively unimportant when compared with obtaining land. The report states:The proportion finding most difficulty from the various factors was: 66 per cent. obtaining land, 16 per cent. obtaining planning permission, 8 per cent. obtaining labour, 4 per cent. miscellaneous, and 6 per cent. no difficulty or no answer.That was in the South-East.
Arising out of that, I thought that I would have a little private look at the situation. How can we properly judge the housing situation and where the shortages are, and what can we do about it? What is the cost of building a house, regardless of land and services? I decided to get a survey of a house of 900 ft. super, the sort of size of a council house. I worked things out on that basis. I found that the building costs of a house built 378 for local authority or private enterprise purposes were approximately £4,500.
Then I thought that I should have a look at different counties and what the average selling price of a house was. I decided to see what it was all about and why the prices vary. They vary from £4,600 in Shropshire to £15,000 in London. These are the facts. Let us see what they teach us.
In Shropshire the cost was £4,600. That is hardly any allowance for the price of land. In Yorkshire it is £4,670; in Lincolnshire £4,750; in Derbyshire £5,000; in Nottinghamshire £5,000; in Glamorgan £6,750; and in Warwickshire £7,000. The new towns in Scotland produced a figure of £7,000, which I found interesting. The figure for Leicester was £7,050. The figure for Devon and Suffolk was £7,800. The price in Kent was £9,000, in Surrey it was £12,000 and in the London boroughs it was £15,000.
Let us have a look at how those figures relate to other parts of the world. The figure in Australia is £10,000. In New Zealand it is £6,000 and in Canada it is £9,000. The average for the United Kingdom is £6,000.
What can we learn from those figures? First, we can learn that houses in certain parts of the country are still relatively cheap. They are cheap because basically there is not a big demand for them and land is more freely available.
I did another survey, with some help from friends—allied to the building industry—on how many houses local authorities had built in the last three years. Three years is the sort of practical time that it takes to process a house from the time when a builder looks at the land until he hands over the key. The survey covered about 1,000 local authorities, with the co-operation of local authority staff. If we are to satisfy an increased demand for housing we must build as many as have been built in the last three years or a greater number.
I then looked at local authorities' land with planning permission. I found the situation remarkable. A number of local authorities have less than a half year's supply of land with planning and building permission. Others have up to 10 years' supply. One can say that to some degree —not as accurately as at first I thought—the price of a house has something to do 379 with the amount of land available for building. But basically it is the demand for housing which is the main factor.
Are we using our housing properly? Is it right that houses in Kent and Surrey should cost £12,000 and £9,000? There is some reason for the higher prices in London—the high rail fares and the number of people having to live here. But the prices in Surrey and Kent are high because they are nice places in which to live, people want to retire there and amenities have been built up for retired people. That should be so. But there should be some more thinking on this subject.
In those areas where houses are still plentiful, indeed, sometimes empty, should we not be doing more to attract people to live in those places when they do not have to live in a certain area? When my right hon. Friend the Secretary of State spoke today about reclaiming land and how he is getting rid of derelict areas, I wondered whether we were doing enough to turn derelict areas into amenity areas and whether we should be doing much more. Instead of giving grants for new factories in areas which at heart we know can never be viable industrial areas, should we not induce those areas to build up a new type of industry? When one examines the statistics, one finds that the new industry is retirement. Instead of factories which cannot be let, would it not be a good idea to provide amenities so that people will retire to particular areas? People go to Bournemouth because they like the shelter, the climate and the shops. Why should we not think big and make areas of this sort attractive to retired people? This would release houses in congested areas for people who need them.
Much has been said today about landlords hounding people out because of improvement grants. But many people who live in London are retiring earlier because they can sell their house for a high price. I know a person who sold his house for £15,000. He was an employee of the Ministry of Works. He moved before he retired because he could buy a house in the country for very much less than £15,000 and get a retirement income on the profit. I thought that he paid too much for his new house, but that does not matter to my argument.
A number of people would retire early, sell their houses and move to areas of 380 cheaper housing if we had the foresight to give those areas amenities such as golf courses and indoor bowling greens. This would redistribute our housing. That is what we want.
Back benchers of the House are not doing enough about the housing situation. On both sides of the House we criticise and ask what the Government will do. But how many hon. Members can answer that question in their constituency? How many know the number of years' supply of land held by their local authority? If hon. Members do not know, why not? If they do know, what are they doing about it?
§ Mr. Ronald Brown (Shoreditch and Finsbury)
The hon. Gentleman is well aware that the places such as Bromley. Redbridge and Richmond are the places in London that have the land but will not give it to the inner London areas.
§ Mr. Costain
The question whether they give it to the inner London area is a global problem. This is the problem we have to solve. It may be the wrong thing from a planning point of view. I have often criticised Conservative Governments and Labour Governments for their attitude over green belts. There is a reason for green belts but not a reason for green blankets. Many green belts were designated thus because at a certain point in time someone said "We must have green belts of land which cannot be built on". But land has to have a use. It must be a productive farm, a recreation ground, a public park, or something else. To leave land derelict, land which cannot be farmed or properly used, is a waste.
A great deal more could be done to help the housing situation by looking at it more broadly. Even our new Member, the hon. Member for Rochdale, spoke about people's retirement in Rochdale. Can we not find a use for these areas to make housing less expensive? That would be a quick solution.
I have never welcomed a speech of my right hon. Friend as much as the one he made today. He has announced the release of a great deal more land. But I put this to him. If we are to build 400,000 houses a year, as indeed we must, even with 10 houses to the acre we need 40.000 acres a year. We have not reached that stage yet, but 381 we must do so if we are to improve the housing situation.
§ 5.0 p.m.
§ Mr. Ernest G. Perry (Battersea, South)
I want first to pay a tribute to the hon. Member for Rochdale (Mr. Cyril Smith) who made a very fine maiden speech. I wish to draw particular attention to his tribute to our old colleague Jack McCann. [HON. MEMBERS: "Hear, hear."] His tribute to Jack McCann will go down very well in this House. We all look forward to hearing contributions from the hon. Gentleman in the future. I do not know whether Jack McCann handed over his joke book to him. If he did, perhaps the hon. Gentleman will let me have a look at it, because Jack was one of the finest purveyors of jokes in this House and many of us used to consult him if we wanted a good story to tell at dinner.
I now turn my attention to the hon. Member for Folkestone and Hythe (Mr. Costain). He referred to hon. Members who represent some of the inner London boroughs. I happen to represent an inner London borough—Battersea, South, in the borough of Wandsworth. In common with all the other inner London Members, I can assure the hon. Gentleman that we know how much land is available in our areas for housing. It is negligible.
§ Mr. Costain
I accept that there is very little land available. What I find so extraordinary is that when boroughs have little land available and the Government propose improvement grants in order to provide more houses, hon. Members opposite shout that somebody is making a profit.
§ Mr. Perry
The hon. Gentleman said that inner London Members did not know how much land was available in their own constituencies. I can assure him that they do. In the borough of Wandsworth there is no land available except when old houses are pulled down in order that modern flats may be erected. Within the last two or three years one of the largest firms in Wandsworth, the Morgan Crucible Co. Ltd., received enormous investment and special grants to move down to Swansea. That firm is moving its factory from its 11-acre site to Swansea, and the land is becoming available in the London borough of Wandsworth. The Morgan Crucible Co. Ltd. and 382 Wates, the builders, are forming a consortium to develop this land in Wandsworth to build luxury hotels and flats on a river frontage. The London borough of Wandsworth is meeting to protest about this because we should get at least 50 per cent. of that land for municipal development.
The present Government, like previous Governments, are giving enormous sums of money in investment grants and special grants to such companies. They move to a development area. A huge factory site of 11 acres in Battersea becomes available. The firm then forms a consortium with a large builder to construct luxury hotels and flats on a river frontage at Battersea. The Secretary of State for the Environment will receive letters from the borough of Wandsworth and from Wandsworth Members of Parliament protesting against this. If we can be given only 50 per cent. of the land, we can help solve the housing problem in Battersea and Wandsworth.
The hon. Member for Folkestone and Hythe said that he had recently given up a number of his directorships with Costains. I feel sorry for him. In its recent report that company declared record profits this year of over £3 million.
§ Mr. Perry
I said that I was sorry for the hon. Member, having left the firm and not receiving some of the "gravy".
The problems of London are so different from the problems of the rest of the country. When we refer to house prices we do not have in mind the building of new houses. We mean the prices of old houses which were built in 1880, 1890, just before and just after the turn of the century. The price of a house, the original mortgage for which in 1890 was £200, is now £20,000 in Battersea. This is a house 82 years old. That is how house prices have risen since the present Government have been in power.
The Minister for Housing and Construction has been very helpful to us, both in Committee and at Question Time. He has attempted to answer all our questions. He has always been present to deal with matters that we have raised. But I cannot say the same for the Secretary of State. In the Committee stages of the two most important Bills which the 383 House has considered this year—the Local Government Bill and the Housing Finance Bill—the Secretary of State was noticeable by his absence. I liken him to the absentee landlord; he has become the absentee Minister. As my right hon. Friend the Member for Grimsby (Mr. Crosland) said, he has been going up and down the country making speeches about pollution, the protection of the environment and a thousand and one other things with which the Department is concerned, but his attention to housing matters has been negligible. He, more than any other Minister, has been responsible for the inflationary tendency today.
That is borne out not only by myself but by people who are much more important. I refer to the Chairman of the Confederation of British Industry, Mr. Campbell Adamson. In the Evening Standard of 8th June this year, under the heading:Price freeze to end—CBI Chief",he is reported as saying that thehouse and land price spiral was a 'running sore' which would 'poison our whole efforts to combat inflation'…he called for 'the most urgent action' by the Government. He hit out at:House prices—'fewer people can afford to buy their own houses.'Rents—'increase all the time'.Land sales—where large profits were made 'very often by the chance decision of whether or not planning permission is granted.'He went on to say:It is hardly surprising that the response is pressure for higher and higher money wages.The report goes on to say:He sympathised with the unions' view that workers were being asked to bear the brunt of the wages battle 'while others seem to remain immune.'That was not a member of the Labour Party speaking. It was the Chairman of the CBI.
§ Mr. Perry
The hon. Member corrects me. He is the Director-General, not the Chairman. That is a much more important position. I am much obliged to the hon. Gentleman. That is what the Director-General of the CBI says about the present Government and today's house prices.
384 I should like to relate the question of house prices and the whole housing situation—the buying and selling of houses—to the matter of consumer protection. One of the most important parts of the Gracious Speech deals with consumer protection. I should like to remind hon. Members that probably the most important financial transaction involving the majority of people in this country is the buying or selling of a house. That is the biggest financial enterprise into which they enter, and if ever they need protection it is when they buy or sell a house.
We ought to delve a little more into the business of estate agency, which comes between buyer and seller. Let me make clear straight away that I think that 75 per cent. of estate agents in business today are honourable, that one can rely upon them and that they are completely trustworthy.
§ Mr. Perry
I hear what the hon. Gentleman says—98 per cent., not 75 per cent. I pay a tribute to a Member on the Government side in this connection, the hon. Member for Northants, South (Mr. Arthur Jones), who introduced a Bill concerning estate agents in 1965 or 1966. It never went through because there was not enough time for it, but it was an interesting Measure. A Bill of that nature should be prepared and presented by the Government, providing for the registration of all estate agents and for proper qualifications, so as to stop any individual who thinks he would like to do so from opening a shop in the High Street or somewhere else and setting up in business as an estate agent. This is the most necessary part of consumer protection.
§ Mr. Clinton Davis
My hon. Friend will recall that the Minister was pressed about that very matter at Question Time last Session, and he said that he did not see any need for it. No doubt my hon. Friend will have had in his constituency experience similar to mine of certain estate agents—true, a minority—who have behaved incredibly badly.
§ Mr. Perry
I go along with my hon. Friend there, and I shall now mention two specific cases. I shall give names, and I shall identify the properties involved, because it is vital that the Minister should 385 know of these things so that he may take action.
Here is the first case. A constituent of mine, a civil servant wishing to retire down to Hastings—he lives at the moment in a nice part of Battersea, South, near Clapham Common—attended a property auction in Hastings with a view to purchase. I have with me the auction brochure. He sat in the auction room waiting for the bidding and he was interested in a certain house. He bid up to £6,000, but it was sold for £6,500 by an organisation known as the Hastings Cottage Improvement Society Limited.
My constituent thought that it was rather odd, and he had noted that someone at the front was bidding and eventually got the property. Then, lo and behold, after the property was sold at the auction for £6,500, within three days it was put up for sale by the same estate agent and advertised in a Hastings newspaper—I have the cutting—for £1,000 more.
It appears that the auctioneer, Mr. Quintin Smith of Hastings, was also Secretary of the Hastings Cottage Improvement Society Limited. I have a letter from Mr. Quintin Smith telling me that the person to whom he sold the property was one of his clients, who really only bought it in order to make a quick sale.
That is the sort of thing which is going on in estate agency. Estate agents are acting on behalf of clients and acting at the same time on behalf of such organisations as the Hastings Cottage Improvement Society. Plainly, the whole business of estate agency should be looked into so that matters may be put right. Everything may be above board, but the fact remains that that house was sold within three days for £1,000 on top of the sale price at the auction.
The second case is far more serious. I received a telephone call this morning asking me to go and see a constituent, a Miss Pashley, of 33A Taybridge Road, Lavender Hill, S.W.11. She is 91 years of age and she has been living in that house for 19 years. I had inspected the property before, and I had expected that it would be repaired, but when I visited it this morning I found that it had not been repaired at all. Practically one-third of the floor of the back room was in ruins. Miss Pashley had complained to the landlord 386 on numerous occasions, and for that matter so had the health inspector, but nothing had been done about it.
I was called to the house this morning, because fire had broken out in the flat upstairs, and the old lady was in a parlous state. Wandsworth Borough Council is rehousing her this afternoon. In the course of my inquiries, I found out that the estate agent who had been told of this old lady's difficulties through the home help service of Wandsworth Borough Council was a firm on Lavender Hill by the name of Redgewell and Harris. I made further inquiries and discovered that the senior partner in that firm was a Mr. William Harris, the Mr. William Harris who chaired the Tory Party conference this year. He is the estate agent responsible for that old lady's plight at No. 33A Taybridge Road.
§ Mr. Perry
I regard this case as so serious that I shall repeat the facts. The agent handling the property—I do not know whether he is the owner, and it would be interesting to know how many finance or property companies he holds directorships in at the same time—is Mr. William Harris, who chaired the Tory Party conference this year.
I give those two instances because I regard it as of the utmost importance that whatever is done about consumer protection shall cover protection in house purchase and sale and tenancies, which, as I said, are the most important deals into which anyone enters.
§ Mr. Peter Fry (Wellingborough)
Does the hon. Gentleman agree that consumers need protection also against the chairman of this year's Labour Party conference?
§ Mr. Perry
Perhaps so, and if the hon. Gentleman can produce evidence of a similar kind I shall go along with him and support what he tries to do. For the moment, I have given evidence which I am prepared to substantiate. If the hon. Gentleman can do the same, I shall be the first to agree with him.
It is vital that there be consumer protection in housing, in the supply of housing land, and in municipal or private housing. Home buyers and sellers and tenants should have proper protection.
387 Consumer protection is not just a matter of looking after people's interests when they buy a packet of Persil or a bar of soap. It must extend to the occasion when they undertake the most important deal of their lives, the buying or selling of a house or the taking of a tenancy. Let us ensure that they get value for money when they buy and that they get the right price when they sell. Let us have no more of these examples of properties bought on the side by a property company simply in order to sell at an exorbitant figure thereafter. Unfortunately, however, this is what many estate agents are doing at present.
I thought it right to take a few minutes in mentioning those two cases, although I realise that many hon. Members wish to speak, because I know that the right hon. Gentleman is just as concerned as I am about this sort of thing. From past experience with him, I know that he will do all he possibly can to try to eradicate such evils in our housing situation.
§ 5.20 p.m.
§ Mr. W. Benyon (Buckingham)
I listened with great interest to the speech of the hon. Member for Battersea, South (Mr. Ernest G. Perry). It is not surprising that the borough of Wandsworth does not have a great deal of surplus land at its beck and call, because the whole of the borough is more or less developed. He should encourage his constituents to come to my constituency where there is large-scale development expressly for the purpose.
The hon. Member referred to Morgan Crucible, and here I am with him. I have for long thought that more money should be put aside for extinguishing industrial consents in central London so that a better environment could be obtained. However, the hon. Member will have seen the remarks of the Chief Planning Officer of the Greater London Council who retired only this week. He questioned very strongly whether the flight from London had not reached too great proportions and whether industry was not being run down too fast. It is not an easy problem but I would strongly support the extinguishment of industrial consents in central London. In my view, the fears of the Chief Planning Officer are exaggerated and there is the possibility 388 of achieving something really good in the environment of central London.
I wish to deal with that part of the Gracious Speech which covers compensation for those whose property is compulsorily purchased by public authorities. I have personal constituency experience of this in the new town of Milton Keynes where under the New Towns Act there has been the largest purchase of land by any public authority since the war—amounting to 22,000 acres. The greater part of the land has already been purchased. I realise that this state of affairs is mirrored to a lesser degree up and down the country under a number of different Acts of Parliament.
This is the other side of the coin to which the right hon. Member for Grimsby (Mr. Crosland) referred. The nation has acquired this land on the cheap. As an example, a mile of motorway requires 30 acres of land. The cost of a mile of motorway last year was between £1 million and £2 million and yet in agricultural areas the cost of purchasing that land was about.£9,000, or less than 1 per cent. of the total. The evidence of this cheapness is there for everyone to see in the prodigal use of land by public authorities, particularly where roads are concerned. Verges and junctions are a good example. Yet land is our most precious asset.
The essence of the compensation problem is two-fold. First, the seller is unwilling and, second, land as an asset is irreplaceable in this country. In a large country like Canada the principle of comparability can be applied and it is more or less possible for a dispossessed owner to find something similar, given time. But here, where land is in very short supply, if he is to buy something similar, even at a time of relatively stable land prices, the owner will have to move very far afield.
There is also the case, as happened in my constituency, of a large number of farmers being dispossessed at the same time, and this is a situation which forces the price up. That would happen in a relatively stable market situation, but in the present rising market for land it is well-nigh impossible for an owner to find another agricultural holding. Therefore, to be compulsorily purchased in this 389 way is tantamount to destroying a farmer's livelihood.
I welcome the intention in the White Paper to deal with the compensation problem, and I understand the difficulties which have faced my right hon. Friend in coming to the conclusions set out in the White Paper and the pressures to which he has been subjected, particularly by the local authority associations and the Treasury. It is a matter of striking a balance, but the balance is not, I suggest, as stated in the first paragraph of the White Paper. The balance which must be achieved is between the cost to the community on the one hand and the need to compensate adequately those who are dispossessed on the other. In this respect I fear that the White Paper proposals do not go nearly far enough, and the agricultural community in particular will be gravely disappointed.
This is not the time, in a debate on the Gracious Speech, to go into detailed criticism of the White Paper. There will be an opportunity for that in the future. But I do not believe that in these circumstances market value can be taken as a fair method of compensation. I regret that the Government have not followed the advice of the Law Society and others who suggested that the district valuer's figure in these cases should be supplemented by 10 per cent. Doubtless we shall be told that the burden on the Exchequer would be too great, but I maintain that such an increment would avoid the costly delays experienced at the moment when owners bitterly oppose such purchases because they know that they are going to lose substantially in the process.
As the right hon. Member for Grimsby mentioned, this was the procedure followed up to 1919, and it grew up haphazardly in previous years. If still in existence such a procedure would have avoided a great deal of the trouble we are faced with at the moment. I welcome the acknowledgment in the White Paper of the principle of home loss and in the case of owner-occupiers on agricultural holdings the loss of livelihood. But the rates are grossly inadequate. Three times rateable value for home loss is not by any stretch of the imagination very generous and one year's profit for an owner-occupier of a farm is totally inadequate. 390 I would be happy to supply my right hon. Friend with case histories which will prove this point. The figures are really derisory. However, the most glaring omission in the White Paper is that practically nothing has been done for tenants. As far as I can see, they become eligible for home loss and the right to enlarge the notices of entry. Here again we are dealing with a totally irreplaceable asset. These tenancies just do not exist, and we are, therefore, destroying the livelihood of these people. I know from personal experience in my constituency the extent of the hardship caused. They deserve greater consideration.
It may seem churlish to make criticisms of the White Paper when there is so much in it which will be warmly welcomed throughout the country, in particular the measures proposed to deal with blight from motorways and roads even when the property is not actually purchased. Undoubtedly reform of the law of compensation is long overdue and I congratulate the Government on grasping this particular nettle. I hope, however, that before legislation is laid before the House in this Session my right hon. Friend will have second thoughts particularly on the overall basis of compensation in these cases. He must accept, and by implication in the White Paper he already does accept, that removing land from an owner extinguishes his livelihood in present conditions. It is unfair and a negation of justice that compensation should be limited in these cases to the market value of the asset.
§ 5.28 p.m.
§ Mr. Frank Allaun (Salford, East)
I am glad that the Secretary of State is here, although I thought he was about to go. I wish to speak on an issue which has affected millions of homes and about which the Secretary of State carefully avoided saying a word—the sharp rent increases which are being imposed on tenants.
I accuse the Government of playing one of the dirtiest tricks in political history. First, they have insisted on rent increases which are not needed to cover existing costs and subsidies. That is causing a deliberate rise in the cost of living. In Birmingham, for example, the Government have demanded this steep rise even though there is £3½ million surplus in the 391 housing revenue account, and a similar situation applies to other cities, including Liverpool.
Secondly, instead of doing that directly themselves, they have blackmailed most councils unwillingly to impose these increases. They have threatened councils that all subsidy to tenants will be removed —not just part of it, as the Act proposes —and that councillors will be surcharged and disqualified. Ministers believe that in this cunning way they will focus the hostility of the tenants on the councillors rather than on the truly guilty men—the Prime Minister, the Secretary of State for the Environment and the Minister for Housing and Construction.
§ Mr. Julius Silverman (Birmingham, Aston)
The Minister has threatened Birmingham with four things: the two matters which my hon. Friend has mentioned, court action through mandamus and the appointment of a housing commissioner. Therefore, the Minister packs four clubs with which he proposes to threaten local councils if they do not come up to scratch.
§ Mr. Allaun
That has not only happened in Birmingham. It has happened in Salford and many other cities.
The Ministers do the dirty work and cowardly cause others to get the blame. This is a shocking business. There is a close parallel here with the Industrial Relations Act and with the pressure to make the T.U.C. impose a policy of wage restriction. The Cabinet's aim is to split trade unions by making the union leaders its unwilling agents, just as it aims to divide Labour councillors and their tenants.
But the battle is far from over. In addition to the refusal by some councils and many tenants to impose, on the one hand, or to pay, on the other hand, the present unfair rent rises, the second round will open shortly. It will come over next year's rent increases. In April, vast numbers of council tenants will be faced with a further 50p increase, and a roughly equal number are due to pay a 50p increase next October. They will be followed by annual increases until the new rent level is reached. Even that will not be the end, for every three years the new rents are to be "reviewed", which 392 will mean still greater increases. The infamous Department of the Environment document estimates that the most savage increases will take place in 1976. In January the first section of the 1¼ million private landlords' controlled tenants will come out of control.
The impression has been created that if the Government allow the councils to raise rents by less than £1 this October that is all that tenants need to worry about for the next three years. That is not so. The new rents will be decided next year by the rent scrutiny boards, against whose decision there is no appeal, and they are likely to be far in excess of the recently increased rents. These watered-down increases are only temporary. They were hurriedly introduced by the Minister in an amendment last spring as a sop to the intense opposition to the Bill. The Minister knows what I am talking about. They were a tactical retreat, later to be recovered by the rent scrutiny boards.
Here is a foretaste of what is to come. A typical council tenant in Sale, Cheshire, has just been informed by his Conservative-controlled council that its estimate for his rent, which was £2.21 last April, is that it should be raised under the Act to £5.15, plus rates of £1.36. In other words, it believes that the rent should be more than double, which was the Ministry's original estimate for average rents. I hope and believe that councils will say to their tenants and the rent scrutiny boards "Enough is enough. Our present rents are sufficient. We are opposed to any further rent increase as it is not justified by the state of our housing revenue account." I can see the rent scrutiny boards being involved in violent dispute with councils throughout the country.
The Government's excuse is their widely and expensively advertised rebate scheme. It is a trick, because the Minister knows very well that most of those who do succeed in getting a rebate will find that it is less than the increase in rent they will be forced to pay.
My main point is this. The Government will be in serious trouble in imposing any further rent increases. They will be clearly seen as a deliberate, unfair and unnecessary increase in the cost of 393 living, particularly at a time when the Prime Minister is talking a great deal at No. 10 about curbing prices. It is a swindle for the Government to prate about curbing prices and simultaneously to raise rents without just cause.
§ Mr. John Silkin (Deptford)
My hon. Friend has far more experience of the Housing Finance Act than I have; he spent many weary hours in its Committee stage. However, is it not a fact that if the Government were serious about their package and about reducing prices they could reduce rents under Section 105 of the Act?
§ Mr. Allaun
Certainly. The Government could drop the increases immediately. I thank my right hon. Friend for his intervention.
I warn the Minister that the Cabinet is extremely vulnerable on this issue. The unions are demanding the abandonment of all further rent increases, and they are absolutely right. The Association of Municipal Corporations is demanding repeal of the Act. Council officials, such as borough treasurers, who are not the most radical of men in many towns, are finding the scheme unworkable and the systems of rate fixing completely arbitrary. If the Minister refers to last week's Local Government Chronicle he will see an article on this matter by probably the leading borough treasurer in the country.
Tenants are demanding the withdrawal of the present increases and abandonment of next year's rises. I hope that there will be a united campaign of trade unions, Labour Parties, councillors and tenants to make the Government halt their attack on working people. It should aim at Whitehall rather than at the town hall, for the guilty men are the authors of the vicious Housing Finance Act—the Prime Minister and the Ministers of the Environment and of Housing.
The Labour Party's National Executive is now engaged in working out an alternative policy for the time when Labour returns to power. It has not yet completed its task, but here are six points on which agreement has already been reached.
Secondly, the general principle of fixing council rents is that they should not be such as to make a profit out of council houses; that is not what council housing was intended for.
Thirdly, subsidies will be restored so as to provide an adequate supply of council houses at reasonable rents.
Fourthly, there should be parity between the £201 million a year in Government grants for council house building and the £340 million a year subsidy to owner-occupiers in the form of tax relief on interest payments. That does not mean reducing the subsidy to owner-occupiers; it means increasing the subsidy to council tenants. It is manifestly unfair to maintain the subsidy for owner-occupiers and take it away from council tenants.
Fifthly, there should be an extension of municipal ownership to stop the abuses of private landlordism and exploitation of housing improvement grants.
Sixthly, land should be publicly owned so that where the value of land increases not through the efforts of the owner but through the efforts of the community, that increase in the value of the land goes back to the community which created it.
There is taking place, although we would not gather it from the speech of the Secretary of State, a disastrous fall in the council house building programme. For the first three quarters of the year the number of council house starts has fallen from 109,000 in 1970 to 95,000 last year and to 84,000 this year—the lowest for many years. While the building strike may have had some effect it certainly does not account for this reduction. Private house building has increased—although not compared with the 1964–68 period—but for families on the average worker's wage this is of no use, because even with mortgages they cannot afford to buy at present prices. It seems that the Secretary of State's speech in Manchester in June, 1969, urging councillors to resist the temptation to go on building council houses for all kinds of seemingly good reasons was not a temporary aberration. He is now achieving his purpose at the cost of widespread misery.
§ 5.43 p.m.
§ Mr. James Hill (Southampton, Test)
The part of the Gracious Speech with which I want to begin is that dealing with legislation to extend rent allowances to tenants of furnished accommodation. It was last April that my right hon. Friend the Minister for Housing and Construction gave this promise:I am convinced that a rent allowance scheme for tenants in furnished homes can be worked out and I assure you that we are determined, with the help of the local authorities, to solve the problem of extending allowances to furnished tenants and to do so as speeedily and efficiently as we can.I do not think that anyone will deny that he has done it speedily. Whether a combination of local and central Government will be able to do it as efficiently—because this is one of the most difficult sectors of accommodation—is another matter.
It is not for me to tell my right hon. Friend that there is multi-occupation in furnished accommodation which will be difficult to control; there is movement of tenancies, like quicksilver in certain areas. There is also the matter of the quality of furnishings. Some of it is quite disgraceful—a rush mat, four chairs, a table and a bed. These are the problems that my right hon. Friend has willingly taken on. May I suggest that a fair rent for unfurnished accommodation should be the base line from which he should work for furnished accommodation? If he can allow the rent officers to examine the furnished accommodation as if it were completely vacant, then he will get a good base line to work on and will be able to get an equitable valuation.
I want to pick up one point in the speech of the hon. Member for Battersea, South (Mr. Ernest G. Perry), who castigated 2 per cent. of estate agents. I have been in communication for some time with the National Association of Estate Agents, of which I am a member. It is pressing for legislation dealing with registration of agents. Such legislation fell as a result of lack of time in the last Parliament. If any hon. Member is lucky enough in the Ballot and will bring in a Bill on this subject I know that he will receive the utmost co-operation from all the chartered bodies. There must be professional discipline in estate agency. Certainly there must be supervision of clients' accounts to ensure that they are used for the correct purpose.
396 We must give powers for the expulsion of a member so that deregistration will have the same effect as the loss of a driving licence has for a lorry driver. The penalties must be made as stiff as possible.
§ Mr. Clinton Davis
I entirely agree with the hon. Gentleman's observations. Can he explain the total lack of interest of the Secretary of State for Trade and Industry in the proposition which he and I and others have advanced for some time?
§ Mr. Hill
I am sure that my right hon. Friend is not uninterested, but the time factor in the last Session must have had some bearing on this. A Private Member's Bill would be an ideal vehicle for this legislation, and if I were lucky in the Ballot I would be only too glad to bring in such a Bill. If any other Member should succeed in the Ballot and would like to do the same thing I will collaborate with him to the utmost.
I was gratified to hear the figures my right hon. Friend gave this afternoon about the release of land. I have been very worried about this. I live in the area of the South Hampshire plan, and land is in short supply there. To know that 22,000 acres have been identified and 11,000 acres are in the pipeline and that the nationalised industries and Defence Department are releasing land to the extent of 27.000 acres is very comforting indeed. It will be of great help to builders and developers in that part of the United Kingdom.
I do not view quite so happily the fact that there are to be 50 per cent. more inspectors. Planning authorities should ensure that as many of these plans as possible do not reach the rather lengthy and perhaps odious stage of going to appeal. Anything that can be done to speed up planning approvals and bring down the price of land would be welcomed by me.
I spent five months with the right hon. Member for Grimsby (Mr. Crosland) in the Committee on the Housing Finance Bill and I came to know a great deal about him, but, although we had a very humorous speech from him today, there were not too many constructive paragraphs. There was not one word about land and house prices in about 75 per cent. of his speech, only a general 397 grumble about his own party's legislation on improvement grants. The trouble with these is that they have been successful, and the Labour Party perhaps does not like success. As it is their legislation, cannot hon. Members opposite puff out their chests and claim this as one of their children?
I was surprised when in August, 1969, at local level, we were asked to implement improvement grants over the board with no restrictions at all on anyone and on any form of repayment. The terms were very generous, and at that time finance was so short. It was a dangerous piece of legislation which could have meant that owner-occupiers would not get their fair slice of the cake. The figures given this afternoon by my right hon. Friend prove to me that the fair slice of the cake is going in the direction in which the original legislators wished it to go.
Improvement grants are always associated with a high standard of development. Any builder who implements an improvement grant has to go backwards and forwards to the local authority and the medical officer of health and the building inspectors. By the time he gets his improvement grant we can rest assured that there will be a high-quality low-priced urban house on the market instead of a slowly-decaying property propped up by scaffold poles. If the scheme is being exploited in London and in some of the main cities, that is one of the penalties we have to pay for the success of the scheme.
At the end of his speech the right hon. Member for Grimsby gave us a few pointers on how the Opposition would deal with everything. The first one was to do away with the Housing Finance Act. But that would also do away with rent allowances and rent rebates. It would do away with the favourable subsidies for slum clearance and to housing societies and associations. Those of us who were on the Standing Committee on the Housing Finance Bill know how pleased the housing societies and associations were at the outcome.
The right hon. Gentleman's second suggestion was to take the froth off the private purchaser by stopping income tax relief over a certain level. What is "a 398 certain level"? Is it £15,000, £20,000 or £5,000? He has changed his mind since January when in Committee he said that he was prepared to stop tax relief on all private mortgages. Perhaps one day we shall know what that level is. His third suggestion for curing the housing shortage was to cut mortgage advances. How that helps I do not know. It does nothing to assist the building of a single house.
§ Mr. Dick Douglas (Clackmannan and East Stirlingshire)
My right hon. Friend made an important additional point which the hon. Gentleman has missed. My right hon. Friend said that the owner-occupier should be denied income tax relief on second mortgages. What is the hon. Gentleman's view of that?
§ Mr. Hill
Yes, I could go along with that. A second mortgage is usually to enable the owner-occupier to put up an extension or a garage, and there could well not be tax relief on second mortgages. But for initial mortgages it is essential, especially for young couples who are just starting out, who, if they are suffering hardship, should certainly be eligible for tax relief on mortgages.
The right hon. Gentleman's next suggestion was to stop the harassment of tenants. My right hon. Friend the Secretary of State has answered this by making the penalties for harassment much stronger. Why was it necessary for this point to be mentioned? The right hon. Gentleman next wanted to skim off some of the profits of the land deals by effective heavy taxation. He must be a simpleton not to know that the developer immediately will add that tax to the price of the land or house. The developer does not want to pay heavy taxation, any more than anyone else, and if he can include the taxation in the price he will do so. So that is a non-starter.
The right hon. Gentleman's next point was very clear; it was to build more houses. I think we are all agreed on that.
§ Mr. Deputy Speaker (Miss Harvie Anderson)
Order. If the hon. Gentleman wishes to make a speech he must wait until he is called.
§ Mr. Hill
At long last we have had revealed the Labour Party's land policy, which is to buy up every scrap of land that can be found and keep it in cotton wool. Where the money is to be found is not a question which the Labour Party would like to answer. That is a nonstarter. The compulsory purchase orders that my right hon. Friend is already allowing to local authorities should be sufficient to allow for the assembly of land.
Having sat on the Standing Committee on the Housing Finance Bill for five months, and having listened to the scare-mongering of Labour Members, I can only deplore their political dishonesty. In Committee they were continuously saying, as a lunatic chant, "Beware, your rent will increase two or three times." I have not heard that chant once today. We have been told that we shall have to fear if we put up rents again, but there is no talk now of rents being two or three times the present rents. I can imagine the fears on the other side of the House and the distress of elderly persons living on fixed incomes and State pensions. There has been no word from the Opposition about the rent rebates and allowances and all the other benefits contained in the Housing Finance Act.
For the first time we are having a complete look at housing. The housing stock was in a deplorable state, the building record was abysmal and there was massive bankruptcy in the building industry. Between 1966 and 1970 almost one builder out of two building for council development was faced with the spectre of bankruptcy. No one who knows anything about the building market can deny that. There has been a long-needed switch of subsidy from those who can afford a fair rent—and there are plenty of them—to those who need maximum help. I should have thought that all Opposition hon. Members would say that this is the way to do it, to give to those who have not and make those who have pay. I thought that was the whole philosophy of Socialism—to take from those who have and give to those who have not.
There is an unprotected sector of the housing market—council tenants who wish to buy their own homes. In many areas they have been treated shabbily.
400 My right hon. Friend the Secretary of State for the Environment at the Conservative Party conference uttered some sentiments with which I agree. He said:I deplore those Tory councils who, from what I believe is normally bad advice from their officials, do not offer the prospect of owner-occupation to their tenants.The Opposition may well say "That is your problem". My right hon. Friend went on to say:I deplore also those Socialist councils who, out of political doctrine, wish to keep council house tenants as tenants and do not wish them to own their own homes. I would like to see our party organisations go door to door to the council houses of Britain, getting tenants to sign petitions to their councils to provide the option of ownership that this Government considers should be theirs.How much I agree with him, and how much I would approve of would-be council house purchasers making their views known by becoming organised and resorting to protest marches, petitions and all peaceful ways of bringing their opinions and ambitions to the hard cold-eyed Socialist councillors.
The experience in Southampton in the past month is indicative of the situation in the rest of the Socialist-controlled councils. Following the deaths of two Conservative aldermen, control of the Southampton City Council moved to Socialism. The majority was achieved with the mayor's casting vote. The Socialist opposition, without an election, appointed an alderman from outside the council chamber, so anxious was it to get control, and it then stopped the sale of council houses.
Following pressures from my colleagues on the council in Southampton, as a result of representations by many tenants who wished to buy their council houses, I wrote to the Under-Secretary of State in the Department of the Environment. He explained the situation to me in a letter as follows:I fully understand your concern following the recent change. Southampton has an exceptionally good record on sales and we would certainly want to see this continue. My understanding of the situation is that the Council have decided to go ahead on all cases where offers had been made up to 11th October, that the numbers involved are considerable and the processes will take some time to complete. Meanwhile, I am told the Council will be considering their future policy I certainly hope they will decide to continue selling and I am sure you yourself, local 401 Conservative councillors and tenants wanting to buy will do all you can to impress on the council the desirability to doing so.My hon. Friend did not appear to realise—nor will many of the council tenants until they read my words tomorrow or the next day—that in the motion which was before the council there was one small line which completely destroyed the hopes of council tenants; namely, a re-examination of the terms under which sales will be made. The picture can be easily seen. In this way they can up the interest rates, cut down the mortgage time and do numerous things to the original scheme for the sale of council houses. I hope that my right hon. Friend, if not this year certainly next year, will be able to sit down and examine the matter closely.
There are cases of injustice which most be considered. In Southampton, out of 12 Socialist councillors who live in council houses six bought their own houses; they then voted to stop the rest of the council tenants buying theirs. That is neither the sort of fair-mindedness nor the sort of equality I should like to think the Socialist Party stands for. I shall be grateful if this year or next year some way can be found of introducing a home ownership Bill.
§ 6.2 p.m.
§ Mr. William Molloy (Ealing, North)
I shall not take up all the topics dealt with by the hon. Member for Southampton, Test (Mr. James Hill), but there was one aspect of his speech which I found somewhat remarkable. He began by saying that my right hon. Friend the Member for Grimsby (Mr. Crosland) had not said much and then took 20 minutes to criticise what he had said.
I find it a little distasteful to have to listen to Conservatives shedding crocodile tears about council house tenants. One of the greatest crimes committed by the Conservative Party under the present Prime Minister is that it tends to put people into categories: council house tenants and non-council house tenants. If the Tory Party had its way, we should have some estates of council house tenants of which it could be said "All those living in that estate are on an income of so much". I cannot imagine a more despicable policy. When I hear such remarks, I recall Disraeli's description of 402 the Tory Party as being nothing more than an organised hypocrisy.
Many statistics and details have been quoted in this debate by hon. Members on both sides of the House, but we must always remember that housing is much more than a question of mere statistics. The hon. Member for Folkestone and Hythe (Mr. Costain), recalling the zeppelin raids of the First World War, rightly mentioned the very first Rent Act. I would remind him that that piece of legislation was introduced not because of damage done by the zeppelin raids but because of the damage that was then done by vicious, cruel, mean landlords who were evicting the families of soldiers and sailors and thereby causing a serious loss of morale in the Armed Forces. That is why the first Rent Act was introduced in the First World War, and it is largely because of the behaviour of greedy people ever since that Governments of both complexions have been compelled to introduce some form of Rent Act.
It is disgraceful that as a nation we still have a housing problem. It is more than a question of people wanting a place in which to live. It also involves those who are inadequately housed and ill-housed and who are suffering all the misery, upset and anguish, and indeed the quarrels among family members, which this problem entails. These are the things we must have in mind when debating the housing situation.
We must acknowledge that there are tens of thousands of our fellow citizens fighting for the right to a decent existence in a home fit to bring up their children. They rightly ask for a good, decent society, and we in our turn, on both sides of the House, must say to them that the home is the only basis for a good society. What is to happen to people who have not a good home? Is it not about time something drastic was done to help them? I believe that preventable bad housing conditions are a blot on any society.
The hon. Member for Folkestone and Hythe also mentioned the difficulties experienced in the building industry in the late 1930s and said that nobody wanted to buy houses. Does he not know why? I would remind him that there were three million people on the dole. Many millions of our fellow Britons were housed in reasonably decent conditions only because of the actions of Labour 403 councils in providing local authority housing estates. The nation and the building industry gained from this situation. That initiative was taken by Labour-controlled councils.
Those who stand in the way of the building of homes deserve the condemnation of the nation. Those who go further and deliberately go out of their way to see that decent homes are not provided are committing a heinous crime.
§ Mr. Costain
The hon. Gentleman has referred to me several times, and perhaps he will allow me to make one important point. Does he not appreciate that the sort of attacks which we hear from the Labour benches seeking to label every landlord as a criminal prevent people from investing their money in property and becoming landlords? Does he not realise that at one time property developers built residential properties because they wanted to produce a proper investment? The Rent Acts caused a cessation of that sort of investment and people turned to the building of offices. But they did not particularly want to build offices; they wanted to build houses. The sort of attack we have heard from the hon. Gentleman prevents people wanting to become landlords of houses.
§ Mr. Molloy
The hon. Gentleman is turning back on his own argument. First, he said that he could not understand why in the mid-thirties people did not buy their own houses. I tried to point out that this was due to the simple fact that people spent years on the dole and could not afford to buy their own properties. No doubt the hon. Gentleman, unlike many hon. Members on this side of the House, has had no experience of spending a couple of years on the dole. If he had had such experience he would know why it was so necessary for people to go to the council for their housing. Much work which was carried out in housing and public works schemes begun by local authorities in those days contributed to an easing of social problems and also helped the building industry.
The Secretary of State for the Environment is a very crafty boy. He explained that during a large amount of the Labour Government's period of office there was a decline in council-house building. The 404 reason was that most of those councils were Conservative-controlled, and the Shadow Cabinet said to those Conservative councils: "When an election takes place we want to be able to argue that the wicked Labour Government's housing programme is not very good. You must assist us by ensuring that a minimum number of council houses is built." People guilty of that behaviour make the train robbers look like a bunch of archangels, because the social problems that arise are enormous.
For example, the London borough of Ealing has the second worst housing record in London. despite having had a Labour council for just over a year. In a special report for the whole of the United Kingdom the London borough of Ealing, under Conservative control, was picked out as a glaring example of having one of the worst housing programmes ever recorded. It is from this inheritance that the present Labour council is doing its best to pick up.
At the local elections the people said "We have had enough of this lot", and they kicked out the Conservative councils and have had Labour councils for the last two years. So the Minister, having looked at the figures, has said "These wicked Labour councils have organised themselves to increase council-house building. However, they now enable me, as a Tory Minister, to say that I have a housing record superior to that of the Labour Government. "That is not very clever. If the Government think they can pull that kind of stunt and get away with it they are very much mistaken.
I note that the Minister for Housing and Construction is present. I understand that in the Committee stages of the Housing Finance Act he was in good attendance. I am glad that he is here this evening, because I want to comment on his interview on television the other day. When asked "How is it that the price of second-hand houses has increased enormously?" the right hon. Gentleman replied "They would not increase unless people had the money to buy them." That is not the situation at all.
Out of sheer desperation people today are taking out mortgages which represent millstones round their necks. Young people realise that they will have these millstones round their necks because of the enormous mortage repayments they 405 will have to make for the rest of their lives.
§ Mr. Molloy
Just a moment. I have not finished with the utter condemnation. When people are really desperate and have young families they are prepared to take a chance. They know what they are doing. They know what an enormous risk they are taking in buying a house and having a huge mortgage to pay off. The Government have allowed this to happen. But, even worse, they have said to people "If you put these millstones round your necks and are going to try to pay all this money, do not come the old acid of going to your trade unions to try to get a few more pounds a month to pay off the burden we have imposed on you." They are doing that as well.
§ Mr. Winterton
Does the hon. Gentleman agree that the purchase of a house through a mortgage is the best barrier against inflation, that the average young family have their first home for only about four years, and that they then capitalise on that asset and buy a better home?
§ Mr. Molloy
I do not agree. I think that is a vulgar approach. A home is a place in which a family want to live and be happy, not a place about which they say "We will be here for five years; we will then flog it and take on something better." By that intervention the hon. Gentleman has shown—I would bet he goes to church—that current Tory philosophy is hateful, wicked and appalling. It is now on the record for all to note.
§ Mr. Molloy
I should like to comment now on the Housing Finance Act with which the Minister has been so involved. That Act has not put one brick on top of another in solving the housing problem. The Government say "We will give subsidies, we will help the old-age pensioners, we will help the poorly-paid." They will be getting subsidies. They will be trooping down to the town hall to get their extra couple of bob to give to the landlord in their rent. What a way to treat old people and the poor—make them the mugs to get the extra cash to give to the landlords who will be encouraged 406 to put up the rents. The Government say "We know that the landlords have put up your rent, but we will give you the honoured position of having to go to the town hall, or wherever it is, to get the extra money to give to the landlords." That is the essence of the Act. If that is not acknowledged by the Government, I would seriously remind them that it is known by ordinary people, who are becoming very bitter. The social climate could change dramatically if the Government think they can keep pushing people about like this and use the old and the poor as the collectors for the wealthy landlords.
I have a suggestion to make about the Government's housing record. In every town hall we see notices showing the accident rate in particular months: how many people have been killed, injured or maimed. Why cannot we have in every town hall a notice showing the numbers of people who are ill-housed? For example, in Ealing 6,000 of my fellow countrymen with families are desperately ill-housed. Let us have that figure of 6,000 put up large for all to see and every month observe how much we are reducing it. This ought to be attractive to right hon. and hon. Gentlemen opposite. It has a competitive spirit about it. I hope that the Minister will accept it.
Homelessness and lack of decent accommodation have for many years, like silent pain, evoked no response, but before very long it will evoke a big response. Homelessness and inadequate housing represent a serious threat to our society, and it is not so far beneath the surface. I hope the right hon. Gentleman will take cognisance of it.
When ordinary people are given new council houses—my hon. Friends and I have experienced the joy of having new homes—they eagerly struggle to buy carpets, bedroom suites and all the things which make homes for their children. They do not want to flog their houses in a couple of years; they want homes. When people have been encouraged and moved into council houses they are prepared, in making them comfortable and tidy, to give up many things. They should be encouraged in all this.
When a badly-housed family is re-housed everyone gains. The chambers of commerce gain. I do not know of any 407 chamber of commerce which would say "We will not have wicked council tenants coming here buying their TV sets", as hon. Gentlemen opposite try to suggest. I do not know of any chamber of commerce which would say "We will not have wicked council tenants coming to our shops and rigging their children out to go to school because we are subsidising them." We all know about the subsidies.
For many years I had the privilege of being the leader of the Fulham borough council. We worked out how much each house cost us. We took into consideration the town hall contribution, the cost of the land, the bricks, the mortar, the salaries of the professional people, the wages of the carpenters, electricians, bricklayers, wiring—the whole lot—fixtures and fittings. We got it all there and discovered that the cost would be £4,000 to £5,000. However, to borrow that £4,000 to £5,000 we had to put our heads in a noose for another £20,000. If that could have been done away with, it would have helped. Let us go back to the days of Nye Bevan. Let us have at central level an organisation from which councils can borrow money at low interest rates that will encourage them to built more homes.
I referred earlier to the right hon. Gentleman's television appearance. There was also a programme about land speculation, and that was followed by a debate on Centre Point, complete with a picture of it. It showed the building rising high into the sky, with every floor empty.
§ Mr. Molloy
Later in the evening viewers saw the destitute and homeless in London living on park benches and under railway arches. Many thousands of our fellow citizens are in that predicament, and that is the sort of problem about which we must be concerned.
If bad housing were a threat to our existence, if it hung over us like a hydrogen bomb or a foreign nation getting ready to threaten us, we would gird ourselves up and solve the problem. If there were a threat to our national security we would, quite rightly, garner all our forces and defend ourselves. We 408 are now being attacked. Our consciences ought to be attacked by the fact that thousands of our fellow citizens have no decent homes.
I do not think that any Government have mounted a full-scale military-type operation to solve the problems of the ill-housed and homeless. My Government did their best, and they had the right general approach. My colleagues are now moving towards the policies which I have been advocating for many years, and I hope that they will carry them out when we win the next election in a year or two, because that is the only real hope for these people.
What we are talking about when we debate housing and refer to statistics, subsidies, and so on, is the quality of life of the ordinary family in Britain, and that is what housing means to me. I therefore add my appeal to those that have been made to the right hon. Gentleman to realise that his stature would increase immensely if the Housing Finance Act increases were not imposed next year. The right hon. Gentleman knows in his heart, as his right hon. Friend must do, that that Act will not provide one additional house. All that will happen is that speculators will be encouraged to carry on. People who have more houses than ordinary people have rooms will do well out of the Act.
If we can solve the housing problem in a period of five to 10 years and enrich the quality of life of our people as a result, other things will flow from it. We can make an honest and forthright attack on inflation by uplifting the standards of life of all our people. By having no depressed minorities we would not only have a better Britain but we would set an example to many other tragic parts of the world and be able to assist them.
In the span of a housing debate in the House it would be wrong not to acknowledge that we have this grievous housing problem. By resolving it we could make our country a better place in which to live, and at the same time make a contribution to those who are lagging so far behind us. That is what a housing debate means to me, and I hope that the House will take serious cognisance of the fact that we have set ourselves on the road to enrich the 409 quality of life of our people by ensuring that every family has a decent home.
§ 6.25 p.m.
§ Mr. Peter Fry (Wellingborough)
I commend the hon. Member for Ealing, North (Mr. Molloy) for his fine principles on housing but he, like many of his hon. Friends, insists on introducing class-conscious slogans which we get weary of hearing. The hon. Gentleman referred to the millstone of a mortgage round the necks of young couples. Why is it supposed to be all right to buy a motor car over a period of two years, which involves heavy expenditure—and one must remember that a car depreciates at the rate of £4 to £5 a week—whereas the buying of a house with a mortgage, which is building for the future, is a millstone?
The majority of landlords are not exceedingly wealthy people. There is one landlady in my constituency—she is well on the wrong side of 80—who owns six properties which bring her a gross income of less than £4 a week. She has begged her tenants to buy their houses. They are all employed, and some have wives and children who also go to work, but they laugh at her request. They are not prepared to buy their houses. What is more, they demand that repairs are carried out punctually even though they know that the old lady is losing money on her properties. One good thing about the Housing Finance Act is that landladies like my constituent will be assisted.
Earlier this afternoon my mind went back to the time, three years ago, when I was fighting a by-election. I remember the housing situation in November, 1969. At that time in my constituency houses were not being sold. Mortgages were virtually impossible to obtain. Builders were going out of business every week, and one builder admitted that he had not sold a house for a year. That was the sum total of five years of Labour's housing policy.
I, too, was fascinated this afternoon to hear the right hon. Member for Grimsby (Mr. Crosland) expound Labour's housing policy. I suppose, having heard the reactions to the idea of moving house, we must not be surprised if hon. Gentlemen opposite are as stuck in the mud as they are. Their policy is to nationalise land, municipalise rented property and not 410 allow mortgage interest payments to count for tax purposes for some owner-occupiers. Such views may bring plaudits at the Labour Party conference, but I do not think they will bring many votes at the next election.
It would be wrong if my right hon. Friend were to get the impression that everyone on these benches is happy about the level of house prices. We are all alarmed, as I am sure he is, at the way in which they have shot ahead in the last couple of years, no matter what the reasons are.
On Monday of this week I met a young gentleman who last year bought a house for £6,600 with a 90 per cent. mortgage. With a salary of £2,000 a year he was able to afford it. A year later he is thinking of selling that house for £11,000, which means that anybody who wants to buy the house, and who needs a 90 per cent. mortgage, must have a minimum income of £3,300. That is the sort of problem which the Government have to face. I suggest that there is today a new credibility gap between the amount that people who want to purchase a house can afford and the prices which many houses are reaching on the open market, and I regard it as a challenge to the Conservative Government to close that gap.
It is easy to criticise the builders. I was talking to one of my clients the other day. He told me that at the end of last year he contracted to sell a house for £13,000. The contract was not completed then, but he was still bound to sell at that price later. He has now discovered that the purchaser has resold the house for £21,000. He does not want to go out of business, and as he will have to buy land for more houses in future he will have to put up his price to £21,000 too. The Government must do something to stabilise prices. If there were a too-sudden fallback in prices, many young people who have borrowed more than their houses are worth would be worried. Stabilisation is essential. The Government should consider some form of excess profits tax for anybody who sells a house within 12 months of its purchase, even if he is the owner-occupier.
I should like to widen the debate a little and refer briefly to two other matters within the realm of my right hon. Friend's Department. I support what my hon.
411 Friend the Member for Buckingham (Mr. Benyon) said about the payment of adequate compensation. A constituent of mine, an elderly gentleman of pensionable age, was notified by the local council that his house was to be made subject to a clearance order. Being rather worried about this he made inquiries, found alternative accommodation and moved out of his house. It was a well-maintained house and had been subject to a well-maintained grant. It had a value of £1,000, which he should have received.
Unfortunately for my constituent, two or three days before the official date of the notice to treat he was visited by a homeless young couple who begged to be allowed to live in his empty house for two or three weeks until they could be rehoused or until the house was pulled down. Not knowing the technicalities of the law, he allowed them to go in and received three or four weeks' rent. For that sin, he was "fined" £500 in the fact that he got only £500 for his house. I do not care how one dresses up the legal jargon: in my language that is unfair. I hope that cases like this will be taken into consideration and adequate compensation paid.
The third and last topic that I should like to raise can be summed up in the following motion put by the National Federation of Women's Institutes at its annual general meeting this year:In order to allow full public participation in planning, this meeting urges Her Majesty's Government to make financial aid more readily available to individuals and to formally constituted voluntary organisations when opposing applications at planning inquiries and other public local inquiries.It is becoming increasingly clear today that all change is not necessarily good and that all that is new is not necessarily better for the environment.
Often, a major effort is needed by individuals or organisations to oppose local authorities or the central Government. The most outstanding example, of course, was that of the third London airport. It has been suggested that it cost each of the defence committees about £40,000 to defend those parts of the country. There are not many areas that would find it easy to raise anything like that amount.
Only recently, in the town in which I live—Kettering—there was a public inquiry 412 which cost the local Civic Society £300, which it took the society an awfully long time to raise, to challenge the local council. Next year there will be another planning inquiry into the future of Wellingborough. At these inquiries the full panoply of local government will turn up, with Q.C.s, paid for by the ratepayers, many of them people who do not want the plan which is to be put into operation.
Because it is so expensive to appear, many councils are able to get their way without any resistance, even though opinions are very strongly felt. Indeed the Civic Trust, a body which does much to support and encourage amenity societies generally, has made it a practice to advise societies not to have legal representation at inquiries merely because of the tremendous expense.
But there are occasions, of course, when, if one wants to get one's case across properly, one has to have the very best legal advice. Then, it is often a choice of spending time preparing one's case or of running around trying to raise the money to pay for counsel. This means that the case is not perhaps prepared as well as it might be.
I think most of us would agree that to improve the environment we must not just improve what is not so good; the present Government have done a tremendous amount in that direction. We must also protect what is already of value. Often, amenity societies are the only local bodies that stand out against the destruction of what is valued in a particular area.
I know that there are those who consider people belonging to those societies as do-gooders and sometimes as people who make a nuisance of themselves. The statistics show, however, that in 57 per cent. of cases in which amenity societies comment on local planning authorities' plans they agree with the planning authorities and that in only 43 per cent. of cases do they disagree.
The real problem is to involve people in the planning decisions that will affect their own lives. Local government reorganisation will make this even more essential. In my constituency, for example, there is a new local authority which will have 36 councillors. Three of the six authorities which will be joined 413 together will have only three representatives each. I know what it is like to serve on a body on which only two or three people represent one locality and many of the other councillors do not know what they are talking about when they discuss a local problem. Therefore, in order for adequate local opinion to be put forward, it must be done at a local level.
I was very impressed by the following quotation from a pamphlet produced by the Bedford Society, one of those which is affiliated to the Civic Trust:The question must be asked, are we really serious in finding a way of ensuring that our environment is protected? Only by producing matched forces can you ensure a balanced and fairly conducted inquiry. It is absurd to ask any private individual to finance something which is essential for the good of society as a whole. We submit, therefore, that a strong case is made for placing the environment on an equal footing with that of the accused in criminal court hearings, that a system he devised for granting legal aid to societies and individuals in similar positions to our own.All hon. Members must ask themselves why society allows the individual to defend himself against a criminal charge yet makes it very difficult or almost impossible for him to defend himself against other dangers which he may consider almost as dire.
If we accept that a case can be made out, it is right to ask how this aid can be channelled. We might well take advantage of the services of an enlarged Civic Trust. This body enrols one society from each borough, urban district or parish area. This helps to ensure that societies are concerned with whole communities and do not represent just one very small, localised point of view. By the autumn of last year, there were 850 registered societies and there are probably 100 more today.
The Civic Trust's own finances certainly need augmenting. But if it had assistance, took on extra staff and employed a central unit of professional skills, it could sift all the appeals that came to it from local societies to see that they were not trivial or designed for some commercial end. Secondly, it could put societies in touch with consultants on retainer who could give advice as to how the society should appear, comment on the value of the case and arrange for representative opinions. If there were a 414 fee element, this could be met by some form of central grant.
I accept that the cost of this scheme is possibly difficult to quantify but it has been estimated that the essential central staff that the Civic Trust might need would cost only £35,000 a year. However, one would have to accept that, if this money and assistance were made available, more societies would probably come into existence and more would appear at appeals.
Thirdly, of course, a block grant could be made to the Civic Trust and it could administer it, on certain terms, to local amenity societies.
Whatever scheme is adopted, however, we must stop paying lip service to involving people in the discussion of changes in the environment if they are prevented from having an active voice because of financial considerations. A scheme such as I have suggested, properly administered, would do much to remove the public's suspicion that the individual or local opinion is disregarded and no longer matters and that it is the planners who always know best.
If we can bring about such a scheme, it will provide a safety valve for the many who feel frustrated by the mechanics of local and national government; it will nourish democracy at the grass roots and will give to the word "participation" a very real meaning.
§ 6.40 p.m.
§ Mr. Dick Douglas (Clackmannan and East Stirlingshire)
I do not wish to follow the hon. Member for Wellingborough (Mr. Fry), who has given us an interesting commentary, particularly in his latter remarks, on how public inquiries might be made cheaper, but it is an important item which is not peculiar to England and Wales. We have a similar problem in Scotland. The Select Committee on Scottish Affairs took evidence—I hope that when the report is published the House will receive some guidance—on how we might ensure that the type of legal aid which is made available for other purposes might be made available for planning purposes as well.
The point I wish to make about the Gracious Speech is not directly related to the topic of land and housing. I wish to speak, with the permission of the 415 House, on the part of the Gracious Speech which promises a measure to facilitate the building of a third London airport. On 22nd May last I raised this matter—the House is alive to the extension of port facilities at Maplin—in an Adjournment debate. Many of the arguments which I put forward have then since been strengthened. I received some assurances from the Under-Secretary of State for the Environment. He said:I can assure the hon. Member that there is nothing in Maplin which needs to give rise to fears that this great scheme of itself will detract from developments in Scotland, or anywhere else."—[OFFICIAL REPORT, 22nd May, 1972, Vol. 837, c. 1196.]We are now talking about the pressure of population and the general pressure of demand on the resources of the nation. One of the most vital arguments which have been put forward on regional planning is that the South-East and the Metropolitan area are too congested and that their industry should not be allowed to grow any further. I see the development of Maplin as a great seaport and airport, including the scheme for tanker terminals, as a great counter-pull to other parts of the United Kingdom. There may be a good economic case for making extensive port facilities available, but I have not yet seen any real economic case for substantial public intervention in relation to the airport, the spin-off of its activity and the extension of port facilities. I argue strenuously against the congestion of the Channel which will result from the passage of massive tankers of 250,000 tons and more. It is potentially an extremely dangerous situation and should be looked at carefully.
The assurances that I was given sounded very firm, but in recent months we in Scotland have become increasingly concerned lest some of our natural advantages should be under-used or inadequately used by Government economic and physical planning. I am grateful that the Secretary of State for Scotland is present. I gave the right hon. Gentleman notice that I would raise the matter today. Last night he disclosed, not for the first time—I say this with respect to him—the inadequacies of his own thinking in relation to a major United Kingdom asset at Hunterston.
416 Referring to his planning decisions relating to Hunterston, the right hon. Gentleman said:Those planning decisions of mine still leave the options open and they require individual projects to be submitted for further approval.The Secretary of State laid great stress on his determination that Hunterston should be used to the best advantage. He said:…and I am determined that it shall be used for the best possible purposes."—[OFFICIAL REPORT, 1st November, 1972; Vol. 845, c 311.]If the case is that the best possible purposes are to be on a United Kingdom or Scottish basis, what instruments are available to the Government to judge those purposes? Many people would argue that the word of the Hunterston Development Corporation suffices. But I submit that such a judgment of the best possible purposes for Hunterston cannot be made on the basis of allowing individual industrial projections to come into being. The Secretary of State must have an overall strategy relating to the development of this peninsula. One would have to be extremely lucky to get a set of individual industrial projects which would in summation maximise the return to the nation by the development of Hunterston.
A related subject, which has been debated a great deal in the House, is that of North Sea oil. I assume that in the next year or so the Government will be requesting offers for new licence areas. My disappointment with the Gracious Speech is that there is nothing in it which indicates that new legislation will be forthcoming in this important area. There is nothing in the Gracious Speech that says that the Government will be reviewing the terms and conditions of licences, and that they have conceded, yielding to pressure from both sides of the House, and on the basis of public opinion in Scotland and elsewhere, that they should have a clause in any new agreement similar to that which the Norwegian Government deployed.
There is nothing in the Gracious Speech to indicate that the Government have thought of new ways of Government and public participation in this very important venture. There is nothing to suggest that they will be reviewing the 417 royalty requirements. These are important topics. My opinion, which is not a firm conclusion, is that there should be further investigations by the Public Accounts Committee, which would shed a great deal of light on this vital aspect. I have to be open-minded as I am a member of that Committee. Further investigations would show whether we played our cards properly in allowing the oil companies to set the pace in the exploitation of oil findings. All the events so far suggest that we have not played our cards properly—that applies to the last Government and the present Government —and that the terms and conditions of future licences should be much more stringent.
The Secretary of State for Scotland argued last night that the Norwegian situation is entirely different from our own. I take it that "our situation" is a reference to the United Kingdom situation. However, the Norwegian situation is not entirely different from the Scottish situation. I suggest to hon. Members on both sides that we should be neglecting our responsibilities if we were not sensitive to the opinion which is growing in Scotland that, at a stroke, Scotland has solved its oil problems. While Norway will get about 15 million tons of oil from the Ekofisk field, Scotland will get 20 million tons by 1975 from the Forties field. Scotland's oil consumption is now about 9 million tons. Therefore, the arguments about Norway are very much on all fours with the argument about Scotland.
This House will exhibit a fine degree of political insensitivity if it does not take cognisance of Scotland's feeling. Figures are being bandied about in Scotland about the value to a separate Scottish economy of the resources emanating from North Sea oil, and it is as well to get the record straight early on. I believe that the figures are exaggerated.
§ The Secretary of State for Scotland (Mr. Gordon Campbell)
§ Mr. Douglas
I notice that the Secretary of State nods in assent. However, we have a responsibility to proceed as vigorously as we possibly can on the basis of existing royalties, or projected royalties, and existing ideas of profitability from oil and existing concepts of corporation tax.
§ Mr. Gordon Campbell
I nodded because I presumed that the hon. Gentleman was referring to figures appearing in advertisements which the Scottish National Party is putting in newspapers. Those figures are grossly exaggerated.
§ Mr. Douglas
I am grateful to the right hon. Gentleman for that intervention. I would agree. I do not want to take up time in going into financial details, but the price for oil is a managed price. It is not a free market price.
Unlike some of my right hon. and hon. Friends, I do not see any great problem in looking at these oil finds in a European sense. I therefore see the need to develop an energy policy in that context, but, having conceded that, I press the Government to take the responsibility for getting a United Kingdom energy policy right. We on this side do not agree with everything projected in the document we have received from the National Union of Mineworkers on a national energy policy, but there is a great deal in it which should demand the attention of the House.
I predict that the world is moving towards an energy shortage and that the behaviour of the oil-producing and exporting countries—OPEC—which wish to move further downstream in terms of energy policy and the utilisation of their resources will further exacerbate the situation. The oil companies do not operate in a free market and their pattern of investment is not necessarily aligned to political realities. The investment in coalmining in this country—I have a large number of miners in my constituency, although no mines—has to be very much aligned to political and social realities. I am talking here not about land but about the minerals under the land, which are very important.
It would be wise to use the North Sea finds to look at a total energy concept and to align this with the mining industry. It would be wise to develop coal, oil and gas production and nuclear power as total energy factors. This has to be done in a European setting, and in particular the Government should get their own energy policy sorted out.
We must get used in this House to meddling in each other's affairs. I would not take the view that because other 419 Governments questioned our policy we should resent it. I believe that it was in the absence of intellectual sincerity that our predecessors in this House did not seek in years gone by to interfere in Northern Ireland affairs, for example. We must get used to interfering in each other's affairs and to seeing the problems which beset us in the 1970s and moving on to the latter years of the 20th century in at least a European but also a world setting.
§ 6.53 p.m.
§ Mr. Nicholas Winterton (Macclesfield)
I hope that the hon. Member for East Stirlingshire (Mr. Douglas) will forgive me if I do not follow him in the subjects he has covered but restrict my comments to housing. I regret that whenever a housing debate takes place in this House it seems so party-politically motivated. We are dealing here with a basic family necessity. While it is inevitable that the policies of the two or even three major parties will differ, it is a pity that our debates become so bitter. Statistics are thrown from one side to the other in an attempt to prove a case. It is true to say that statistics can be made to prove anything a person wishes to prove. But what we all want to see is more houses for people to live in at a price they can afford to pay.
The Conservative Party manifesto at the last election laid down three main aims in housing policy. The first was to house the homeless—obviously a basic essential—to concentrate on slum clearance, and to provide better housing for the many families still living without basic modern amenities. In Macclesfield, in Congleton and in the urban district of Bollington, there are still homes without hot water, with no baths and with only bucket lavatories outside. This is intolerable. It is the duty of any Government to put that right at the earliest possible moment.
The second aim of the Government's policy is to bring about a great increase in home ownership so that the majority of our people can fulfil their wish to live in a home of their own. It is perhaps true to say that an Englishman's home is his castle, and in an intervention I made earlier when the hon. Member for Ealing, North (Mr. Molloy) was speaking, 420 I was honest in what I said—that the struggle of many young people in obtaining a house through a mortgage is one of the best investments and one of the most worthwhile struggles they will have in their lives.
The third aim of Government policy is to see that the tenants, whether private or council, receive a fair deal. I can obviously skip over some of the items under these various headings because they have been adequately dealt with by my right hon. Friend the Secretary of State for the Environment and others.
In achieving the first housing policy aim—slum clearance—much has been done by the Government to remove many of the eyesores from public scrutiny. "Operation Eyesore", as my right hon. Friend said, has been an outstanding success. My constituency has taken its fair share of the money allocated.
Improvement grants have been referred to in the debate at some length, including in many interventions during my right hon. Friend's speech. I am sure that hon. Members on both sides accept that the benefits and advantages of such grants are undeniable, but in another intervention earlier I expressed concern that the grants were open to some abuse. However, such abuse is practised by only a very small number of people, who are using public money for their own personal private profit. This is unfortunate, and I would support the representations which have been made by the Bollington Urban District Council to the Secretary of State. It asks that the improvement grant in the case of a home sold within a certain period after improvement should be repaid to the local authority which made it. Perhaps the proportion of repayment would vary, depending upon the time the sale of the house took place after the improvements had been carried out with the assistance of public money.
It is true to say that since this Government took office house prices have risen dramatically. It is also true to say that in 1964, when the Labour Government took office, the average earnings to qualify for the average mortgage were about £18 a week. Now the figure is £45 to £50 a week. We know that land prices have risen dramatically in the South-East—land price is now 33 per 421 cent. of the cost of the property. The rest of the United Kingdom is not very far behind on this score.
I have had personal experience of this situation. I have been endeavouring to buy a house in my constituency. In 13 months I have failed to do so because the prices of properties of the sort I would want to buy are extremely high, and even on a parliamentary salary I cannot find what I want. Forty per cent. of builders recently interviewed stated that they were unable at this time to obtain sufficient land to maintain their current building programmes.
This may be an aspect of the problem of housing and land that we should consider. Why should the ordinary local builder be unable to obtain land upon which to build? The fact is that too much of the land throughout the United Kingdom is being gathered into too few hands; the big developer and speculator can obtain bank credit to buy land well in advance of his needs, but the ordinary local builder cannot afford to pay the prices that the bigger boys can afford. This is creating a housing shortage in many areas, because the local builders who could afford to get on and build the houses they want to build there and then cannot get the land to do so and the bigger boys are, I regret to say, inclined to hold on to the land in order to build a particular programme.
Hon. Members on this side of the House have been subject to much criticism from the Labour Party. The right hon. Member for Grimsby (Mr. Crosland) this afternoon produced a very clever speech which will no doubt go down very well in the mass media. He presented a case which it was difficult to answer. But the Labour Party may be the past master at destroying values. I am sure that in its efforts to bring down the cost of housing it would make the money market stagnant again, and it might also couple with that the non-availability of mortgages and mortgage finance to enable people to buy their own homes. We also remember the SET it slapped on building. It might now introduce a different form of tax to put on house-building.
No doubt the Labour Party would also consider—although I hope it would not—something like the Land Commission, which would bring with it many injustices. 422 Perhaps, too, hon. Members opposite should remember that while they were in power they drove many builders to the threshold of bankruptcy. They may also remember the millions of bricks that were stockpiled and the homes that were not built. I believe that they could control prices, as they did before, but lack of demand and stagnation does not act as an effective control. I do not think any hon. Member opposite—certainly none of my hon. Friends—would wish to go back to the bad old days of 1964–70.
My right hon. Friend has been given much advice from hon. Members on both sides of the House about what action he should take to remedy the present situation. I draw his attention to a pamphlet which was recently released by some of my hon. Friends, two of whom are in the Chamber at the moment. The pamphlet was headed "Need House Prices Rise?" Several conclusions are arrived at by those who produced the leaflet. They suggest that the Domesday Book Register of all land and property should be enlarged to cover the whole of the United Kingdom. That is a positive and constructive proposal. They further suggest that an outside expert should be appointed to report to the Minister on programmes of land release. That is another positive step, which could help to solve the present difficult situation. They suggest that financial incentives should be provided to encourage local planning authorities to release more building land in the short term.
At this point I ought to say that local councils are surely some of the biggest land owners in the country. Hon. Members on both sides of the House often criticise the speculator and the private developer, but very little criticism is laid at the door of local councils. Yet they are among the biggest land owners and they often withhold large acreages of land which could be developed either by themselves or by selling it off to local private builders. I am sure that that extra land and housing would stabilise to some degree the rapid rise in house prices that we have experienced in recent years.
The pamphlet to which I have referred also proposes that local authorities should be required to give an account of their land holdings. This proposal is tied up with my last point; local authorities are 423 very big land owners themselves and they should be accountable to the central Government, to their own ratepayers and to the taxpayers as to the way in which they are using this land.
The pamphlet urges that more use should be made of private enterprise developers in new towns such as Bourn-vine and Port Sunlight. These are positive suggestions which should be considered by my right hon. Friend and his Department, because we cannot get away from the fact—it has been highlighted by the right hon. Member for Grimsby —that there is a crisis in housing today, not so much because housing is not available—because every house that is built is snapped up without delay—but because the price of housing is critical, and something must be done about it. The proposals put forward by my hon. Friends should be considered.
Going back to my opening remarks, I repeat that housing is a vital, human and family necessity. Let hon. Members on both sides of the House look at the problem constructively. Let us not tear each other to pieces. People outside this place expect us to make a positive contribution to make sufficient housing available so that those who want to buy their homes can do so and those who want to rent them can do likewise.
§ 7.07 p.m.
§ Mr. Harry Lamborn (Southwark)
I speak as one who over the past 20 years has been actively engaged as a member of a metropolitan borough, the former London County Council, and the Greater London Council in endeavouring to solve the housing problem of the inner London area. Throughout this debate hon. Members, in speaking of such things as land holding and local authorities, have tended to talk about a situation different from that which applies to local authorities which are endeavouring to get on with the job of dealing with slum clearance and removing unsatisfactory housing from the inner areas of London.
The hon. Member for Southampton, Test (Mr. James Hill) made much of the desirability of local authorities selling council houses. That may be all right in a rural area; indeed, I have no doctrinaire objections to the sale of council houses. Having seen some of the examples 424 of the private speculator recently I would think that this is a field into which local authorities will probably need to get in order to give protection to would-be house purchasers.
Dealing with the inner London area, considering the borough that I represent —Southwark—one finds that despite the fact that in 1971 it rehoused more families than any other borough, it still has a housing list of over 7,000 families. It still has a tremendous overspill to deal with from properties which need redeveloping. In such a situation, how can we ask local authorities to sell council houses, thereby diminishing the housing pool which provides a certain number of vacancies during the course of a year, which helps to deal with the overspill from such areas?
That is not the only sort of frustration that is created among authorities which are endeavouring to deal with this type of area. Hon. Members talk glibly about the situation in the country as a whole and forget areas in which people have been living and are still living in overcrowded and substandard conditions. These are the areas which need tackling immediately. In these circumstances the inner London boroughs, seeing the Conservative-controlled Greater London Council selling off council dwellings and diminishing the pool which is vitally necessary to deal with the overspill from the inner London areas, can only despair.
Another situation which still needs to be faced is the fact that the acquisition of property in such areas takes far too long despite all that has been done. This stems from the fact that property gets far more protection than people. I can illustrate this with a typical case in my borough of a group of dwellings, a six-storey Victorian monstrosity in four blocks, housing 500 families at a density of over 600 to the acre. It took a four-year legal battle, with a public inquiry followed by an appeal to the High Court, before the council was permitted to get on with its vitally important job of rehousing and clearing this deplorable property which was completely lacking in modern amenities, where folk were condemned to continue endeavouring to raise a family, while the law pursued its leisurely processes towards allowing the authority to get on with the job for which it was elected.
425 Turning to another aspect, I mention the situation of the young couple seeking housing, particularly in the older rural areas. The hon. Member for Macclesfield (Mr. Winterton) spoke of the destruction of values. What the young couple seeking a property are concerned about is not destroying values but accelerating values. In our advice surgeries week after week all of us interview young couples who, in desperation, are going to the council for rehousing, in situations where there is no council housing available, having been saving to buy a house while month after month seeing property prices accelerate. The price of a property that they had their eye on gets further and further out of their sights until the possibility of buying it disappears entirely.
In Southwark the council, as an experiment embracing about 100 young married couples, repaired property in an area awaiting redevelopment. Young married couples were required to pay a nominal rent. I have no doubt that that rent will need some adjustment as a result of the Housing Finance Act, which has taken the initiative in housing away from local authorities. In this case, however, they were asked to pay a nominal rent and were required to save £12 a month with a building society. To keep pace with the acceleration in house prices that figure was increased to £20 a month. But we all know that even if young couples can eventually afford to put down a deposit on a house it is impossible for them to meet the mortgage repayments.
§ Mr. Clinton Davis
Is my hon. Friend aware that in his constituency, as in most, I imagine, some young people are confronted with the burden of having to discharge second mortgages with interest rates far beyond those of the first mortgage—something approaching 20 per cent.—and very often fixed so that no provision is made for interest on reduced amounts?
§ Mr. Lamborn
I am grateful to my hon. Friend. That is true. It all stems from the fact that successive Conservative Governments, in their desire to allow private housing to be the legitimate field of the property speculator, have allowed new words to creep into the English language. Last time it was "Rachmanism". Now it is "gazumping" Both are symptoms of a society which 426 considers property more important than people. They are symptoms which are causing heartbreak and misery to numerous young married couples. The Gracious Speech offers no suggestion or hope for the future to the young couples in question.
§ 7.17 p.m.
§ Mr. Idris Owen (Stockport, North)
The right hon. Member for Grimsby (Mr. Crosland) is justified in strongly criticising the present housing situation in Britain. But the time for scoring cheap party points on this very serious human problem should now give way to trying to resolve the problem for the benefit of those who are suffering so considerably at present.
My right hon. Friend the Secretary of State was justified in giving an account of the success that he had achieved to date. But in the final analysis there has not been a satisfactory land policy since the end of the last war. The only reason why this problem did not hit us at the end of the war was that because of hostile activities there was a considerable amount of land in banks waiting for development. But after that land was consumed the problem became very serious. No political party has put forward sufficient constructive proposals to resolve the present position.
It has been the desire of every young family man, on acquiring sufficient capital, to own a home of his own. It has been one of his major priorities. The reason why he has had to put his name down on the housing list for a house to rent is that he has not had sufficient capital to buy a house for himself, although he has looked forward to the day when he could own his own home. There is an inherent desire in practically every married man in Britain to own his own home. We should be wrong to discourage him from doing so.
I do not pretend for a moment to suggest that our land policy, which is at the root of most of our troubles, has been successful. Land has escalated in price out of all reason. In an area in Cheshire about four miles from my constituency land was being sold in 1970 at £15,000 an acre. A group of six house-owners owning between them an area of 2½ acres has just put that land on the market at £300,000 per acre. This is no cause for 427 complacency. It is a tragic situation, to say the least. Unfortunately, because it is a desperate situation it demands desperate measures. The measures that we have adopted to date have been constructive, but they have not gone far enough. There is no doubt that a considerable demand for homes and a rapidly diminishing supply of land is conducive to escalating prices to the levels which we are now experiencing.
One's memory is bound to go back to those years when we did not have the home ownership problem. Of course, we have had housing problems with us from time immemorial. People have lived in shocking conditions, and many Governments over the century have tried to do something about it. But it is reasonable to say that in the inter-war years we did not have the house purchasing problem. It was relatively easy to acquire a home of one's own. The various Acts which were introduced enabled a man with a limited amount of money to become the owner of a small house.
I will give an example, and it must make people wonder how it was done. In the early 1930s the company with which I started my commercial career was building houses at £285 each. The deposit was £14 10s. Repayments and interest amounted to 13s. 9d. a week all-in. The people who bought those houses were ordinary working men and women —bus conductors, railways engine drivers, lorry drivers—that kind of person. Such a person was able to acquire a home of his own. Today those who are still living are in possession of a reasonable capital advantage over those who do not have a home of their own.
This is not possible for the young people today. Nothing would give me greater pleasure than to see those people in the lower income levels who want to buy their homes in a position to do so. Why should a person with a slender income not have the opportunity of owning his own home, just as the man with a higher income? In those days there was a plentiful supply of land, labour and materials. Those are the basic ingredients necessary for a swinging housing programme. Today land is impossible to obtain for the majority of those people who are able to develop the land.
428 As my hon. Friend the Member for Macclesfield (Mr. Winterton) has said, large national contractors and speculators with unlimited financial resources and smaller builders with very small overhead expenses are unable to acquire any land to develop. It has always been my experience, as a student of housing and as one who has practised in this industry, that the smaller builder with minimum overheads, the master on the site, can offer houses cheaper than any other agency in the country, but he is unable to do so because he has not got the land on which to build, which is the basic raw material. Land to the builder is like petrol to a motor car. Without it, it will not go; one cannot even make a start.
I suggest that my right hon. Friend and his colleagues should direct their attention much more to this question of land release. I know they are informed by planners that sufficient land has been released, but I suggest that it is no use releasing land where there is no demand for housing. It all goes into the statistics. In the pressure areas there in an inadequate supply, and in the areas where there is no demand for housing there is an adequate supply.
To give an example, in the Cheshire area just over the border in Derbyshire, in a village called Chapel-en-le-Frith, in the High Peak area, a company with which I am associated was able to build homes at about £2,500 less than the price of the same home 15 miles further north, because the land 15 miles further north was 10 times the price of the land at Chapel-en-le-Frith. The builders of whom I have been speaking have got the problem of increasing the price of their houses almost every month of the year during the period of the construction programme. The reason is this. They have a feasibility study on the land and they decide that their market price must be based on the purchase price of the land. But before they have been on the site three months they hear that the market price of land has increased by 100 per cent., so, in order to raise sufficient capital to buy the next parcel, they immediately increase the price of the houses on the land which they bought more cheaply. The whole thing is a vicious circle and it is time that something was done about it.
The constructive proposal which I make is this. There must be a more 429 positive release of land. Circular 10/70 was ignored. If my right hon. Friend were to say "You are wrong; it has not been ignored", then I would ask: why has it been necessary to double his inspectorate on inquiries? If there has been a considerable release of land, there has been no need to go to appeal. But there must be some significance in the fact that the appeal inspectors have had to be increased by 100 per cent. It means that local authorities and planning authorities are continually refusing to grant planning permission and are forcing developers to go to appeal. That is why the inspectorate has to be doubled. In other words, they have not responded to the Minister's requests to release more land. The only time that land is released is as a result of appeal. That is not a positive way of dealing with the dramatic situation that we have today. There must be a greater release of land.
Running in parallel with this land situation has been the desperate labour situation. During the early part of the 1960s when the housing programme was declining, labour left the industry and went elsewhere. It may be that wages were inadequate. Skilled craftsmen left the industry to go into others, denuding the industry of skilled craftsmen. I recall that in the early 1960s the labour force in the construction industry was about 1¼ million. Today it is less than 900,000. Many skilled craftsmen have left the industry, so that now there is a fantastic demand for skilled craftsmen, and they are not available.
Nobody can suggest that there is any justification for paying the rates of skilled craftsmen that the nation has to pay today. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Kinsey) showed me a Press cutting from the Birmingham Mail last week, in which it was stated that builders were offering £150 a week to brick-layers. Bricklayers were demanding £150 a week. This situation has become farcical and tragic, and something must be done about it. In the columns of every newspaper in the stress areas throughout the country one can find building employers offering fantastically high rates of pay for their operatives. These men are not producing very much more for these fantastically high rates. There is not much more productivity.
430 There is a limit to a man's productive capacity. He may lay 500 bricks a day for £30 a week; he may lay 1,000 bricks a day for £60 a week. But he cannot lay more than 1,000 a day and so the cost of building is rising. The result is that houses which were built in 1970 in the North-West area at £4,500 are now costing £7,000.
The pressure on young people to try to obtain a home is terrific. A young couple came to see me at my surgery a fortnight ago. I knew the young man. He told me that they had got engaged and he was wanting a home. I asked him his income, and when I knew what it was I had to tell him that I could not encourage him to saddle himself with that responsibility, because the mortgage on the house he was desirous of buying would take nearly 30 per cent. of his income. But so anxious was he to acquire his own home that he was prepared to make that sacrifice.
This is where I part company with some hon. Members opposite who, quite sincerely, I know, are prepared to say that a council tenant should not be expected to pay more than 10 per cent. of his income in rent. I have never understood that. If housing is such a great social problem and is of such importance, it should demand more than that sort of priority in a man's income. It is a worrying problem, but I believe that to expect 30 per cent. of a person's income to be spent on a mortgage is farcical in the extreme.
We shall never resolve this problem until we get hold of it by the scruff of the neck and take really dramatic action.
§ Mr. Winterton
Will my hon. Friend comment on the view that, in their very right determination to make home ownership available to as many people as possible as early in this Parliament as possible, our Government may have released too much money into the economy, making too much money available for mortgages, so that, with the number of people coming forward for mortgages, there were not sufficient houses 431 for them to buy, and that has contributed to the rapid rise in home prices?
§ Mr. Owen
It is true that people who have enjoyed a higher income have built up resources. Let us not deny that economists have argued that there has been an improvement in the standard of living, and this means, in effect, that there has been an improvement in incomes. Not only have workers had increases in income but people in the middle range have had increases, too, and this has created the demand. People have been quick to appreciate the situation. Those on council waiting lists, for example, have been quick to realise that the best hedge against inflation is to own one's own home, because it is a winner. Young men under 30 years of age, when they could raise the money for the deposit, have bought three or four houses and sold them at a profit in order to acquire the house they would ultimately live in free. This is the sort of situation that has developed.
In our pamphlet we have recognised that, in spite of their recommendations to the planning authorities and in spite of their circulars, the Government have not had a response commensurate with the seriousness of the situation. Circular 10/70 may have produced some acreage, but it is insignificant. One of my hon. Friends may say that in the Wilmslow area a certain acreage was released for housing, but I assure him that it will not be long before the hospital board snaffles a third of it for a hospital. Whenever any deep investigations have been made into land availability in Cheshire, the land has, so to speak, evaporated. If someone suggests that there are 1,000 acres available, when the position is investigated one finds that a good part of it is a golf course and the owners have no intention of disposing of it.
We have suggested in our pamphlet that an impartial expert in planning should go to every local planning authority in the stress areas and, on the Minister's behalf, investigate the situation at grass-roots level. I am certain that he would come back with some revealing information, for there is, without doubt, a considerable amount of resistance in these areas.
Second, we must institute a major crash training programme for skilled labour. It 432 is not good enough to go into the market with one builder out-bidding another, poaching one another's labour. If a builder requires carpenters or bricklayers today, he has to poach them from his colleague or his competitor down the road. This is conducive not to bringing prices down but to taking them up. If a builder gets in touch with the Department of Employment, he finds that it cannot offer him any labour.
There is insufficient labour for the task to be done. In the dramatic unemployment situation which we have today, it would not seem to call for too much effort to translate some of the 860,000 unemployed into much needed labour for the construction industry by a crash training programme so that a builder may ask for labour and get it.
There has been no free choice of labour. Most builders will say that they have to spend thousands of pounds a year more on advertising for a labour force than they do on advertising the thing which they produce.
§ Mr. Kenneth Lomas (Huddersfield, West)
I hear what the hon. Gentleman says about the labour force, but it is the cost of land that is at the root of escalating house prices, is it not? The cost of land has risen enormously under the present Government, and it is escalating all the time. What does he suggest the Government should do about it? How would he hold down the price of land so as to reduce the cost of housing?
§ Mr. Owen
Unless we are prepared to introduce fiscal measures or penal measures to suppress demand, we should tackle the problem at the source. We should meet the demand, not suppress it. The hon. Gentleman is right when he says that land prices have escalated and that this has had a dramatic influence on house prices, but there are three major factors at work. It may sound trite, but I assure the House, as one who has spent 45 years in the construction industry and as one who represents the third generation in providing homes, that the answer lies in a plentiful supply of land, a plentiful supply of labour, and a plentiful supply of materials. Any industrialist would want the same. If a motor car manufacturer cannot have steel, he can not make motor cars for us. If he 433 cannot have labour, he cannot make motor cars. These are the basic ingredients, yet we do not seem to recognise it in the housing context.
We look for theoretical solutions, but the truth of the matter is staring us in the face. There must be an adequate supply of land to meet a massive increase in housing demand, and there must be a crash labour training programme. No matter how much land is released—if 50,000 acres were released tomorrow—there is not the labour force to develop it.
Labour has gone into other industries, and that which remains, I regret to say, is holding the industry to ransom. This is not unnatural. Any workman is quick to seize his opportunity, just as any commercial entrepreneur would seize his opportunity—shortage means higher prices. I recall the time when people were prepared to pay fantastic prices for petrol when it was rationed. Immediately it ceased to be rationed, they would not do it. When it was rationed, people were paying £1 a gallon on the black market, but down it came to the standard price when rationing ceased.
We now have rationing of labour and rationing of land in what is supposed to be a free market. We have got ourselves into a crazy situation. We must recognise it for what it is, a crazy yet desperately serious situation. No Government will win the confidence or acclaim of the electorate unless they tackle the problem, and, with respect, I do not think that either party has yet found the solution. I respectfully suggest, as someone involved practically in these matters, that we must ensure a considerable increase in the basics of the business—labour, materials, and the raw material, which is land. When it has those ingredients, the industry will, I believe, produce magic.
§ 7.40 p.m.
§ Mr. Clinton Davis (Hackney, Central)
The speeches by the hon. Member for Stockport, North (Mr. Idris Owen) and the hon. Member for Macclesfield (Mr. Winterton) in describing quite rightly the tragic situation in land and housing were in marked contrast to the speech of the Secretary of State for the Environment, who was euphoric about the position. He and the Minister for Housing and Construction, 434 in their euphoria about the programme which has been undertaken by the Government, have been grossly misleading, and the evidence was contained in the speeches of the two hon. Members.
The hon. Member for Stockport, North, pointed out the tragedy of the situation and said that desperate measures were called for. I did not hear him get to the roots of the problem. If he says that desperate measures are called for, they were significantly absent from his speech. But at least the two hon. Members perceived the mischief in the startling rise in land prices. They at least perceived the mischief of the way in which property developers have exploited this tragic situation, and the hon. Member for Macclesfield also perceived the mischief that is occurring in the misuse of improvement grants.
I may be accused of making a party political point, which Conservative Members regard as an appalling sin in this place, but the Ministers concerned have an incredible capacity to hide their incapacity—the incapacity to face up to the problems that exist and the incapacity to take action to remedy the serious wrongs that have arisen. They have an incapacity to take effective deterrent steps against rapacious property speculators. We have heard today about a circular, but is that to be the Government's complete answer? Council tenants did not receive a circular. They got the Housing Finance Act. The Government are showing a complete incapacity to understand how the squalid profiteering about which we have heard from both sides today is undermining the fabric of our society.
It is very difficult for people to have much respect for law and order when they see others misusing their position and exploiting the tragic plight of so many people while operating within the framework of law and order. How can an incomes policy operate within such a context? The Secretary of State omitted that answer from his speech.
Improvement grants are desperately affecting inner London, and my constituency is one of the most serious stress areas within inner London. I believe that the aims of the 1969 Act were in every respect laudable but the mistake of the Labour Government was to conceive that private landlordism, which had 435 ignominiously failed in the stress areas in the past, could succeed with the assistance offered by the Act. They believed that given additional stimulus the landlords would respond to the needs of our time. They failed, too, to perceive the rapacious nature of private landlords and property speculators. They failed to perceive the dangers to which the tenants of properties would be exposed as a result of the misuse of improvement grants.
The Labour Government failed to design effective safeguards against those dangers but they also failed to look ahead and prophesy what might happen. They did not foresee the contingencies which might arise. The offence committed by the Minister for Housing and Construction and the Secretary of State has been totally to ignore the dangers although it has been shown conclusively that these exist. There is overwhelming evidence today that the eviction of tenants, homelessness and the exorbitant pickings by speculators are all directly related to the misuse of improvement grants in too many instances. I am not sure whether the Minister for Housing and Construction is better at suppressing evidence or ignoring it. He blamed my hon. Friend the Member for Salford, East (Mr. Frank Allaun) over the alleged receiving of a document from the Department. The House will recall that incident during the passage of the Housing Finance Bill. Vital evidence was contained there which the country should have known about but the right hon. Gentleman chose to suppress it.
Perhaps the greater offence now is that the right hon. Gentleman is ignoring the evidence which has been put before him by Shelter, by my right hon. Friend the Member for Grimsby (Mr. Crosland), by the Sunday Times and by numerous organisations which are deeply involved in the problem of improvement grants. On 18th September in "World in Action" he said that he could not get any evidence at the moment that anybody had been made homeless as a result of an improvement grant. There are none so blind as those who will not see. Shelter has provided the evidence in a document of its own. It shows that in the Lanhill and Mary-lands general improvement area 11 per cent. of the tenants had been given notice 436 to quit; and average rents of furnished flats increased from £5.70 a week before improvement to £22.39 a week, and that includes 16 units let at £35 a week. That is the evidence. No doubt in his winding-up speech the Minister will deal with these matters because there is a duty upon him to do so.
Similarly, Shelter points out the story of the Colville and Tavistock general improvement area. I do not wish to go into all the facts and details here because I see that the Minister is looking at the document for himself. I hope he will not merely look at it but will digest its contents and deal with the points it makes.
Although unquestionably properties have been improved through the use of improvement grants, what is not always done and is certainly not being done in sufficient cases in inner London is for those properties to be improved for the poor occupiers who were there before the improvement grant was given. In many cases the misuse of improvement grants has necessarily imposed greater burdens on already heavy council waiting lists. There are far too many instances when tenants of furnished property have been given notice to quit in order to enable landlords to sell with vacant possession.
It is highly significant that the Gracious Speech says nothing about providing furnished tenants with security of tenure. We in the Labour Party are now firmly on record as saying that this is an essential step which must be taken in helping to solve the problems in the stress areas.
There are too many cases where vast profits have been made following the application of improvement grants. In my constituency, in De Beauvoir Town, properties selling three or four years ago for £2,000 are now selling at £18,000, and they are nothing to write home about. There are too many cases where tenants of unfurnished accommodation receive inadequate inducements to leave and then find that they cannot get alternative accommodation.
It is not a question of harassment, because people go voluntarily. They are offered £500 or £1,000 and they go and then find that, although the offer appeared attractive initially, they cannot easily get alternative accommodation. In too many cases the local authority finds that not 437 only has it to give a grant to the landlord or speculator but it has to provide temporary accommodation at a very high rate—£30, £40 or even £50 a week, with bed and breakfast provision—to an evicted family. That is a grotesque situation.
The Minister is at least consistent in his complacency because in a speech he made yesterday to a conference of builders he said:There are some, including those who should know better, who knock the grants".It is a question not of "knocking" the grants but of pointing out a situation which has arisen and about which the Minister will not do anything. It is not enough for him to say "I do not believe the evidence you are producing, but I will carry out a survey". The evidence is available and he has ignored it.
The Minister went on to say:The vast majority of grants—75 per cent. —go to owner-occupiers and local authorities".Today we were told that the figure is 79 per cent. Which is correct? In this connection, 4 per cent. is a significant difference. The right hon. Gentleman went on to say:Only some 25 per cent. go to private landlords and most of these are used for the thoroughly legitimate purpose of enabling the landlord to make much-needed improvement for his tenant".But about half the properties which are subject to improvement grant are vacant before the grant is utilised and it is not the tenant who returns to the property. It is true that some people move out temporarily and return. But, according to the Shelter inquiry, that happens in only one case in seven.
§ The Minister for Housing and Construction (Mr. Julian Amery)
I am sorry to interrupt the hon. Gentleman, because I shall speak later, but since he is on this point may I point out that only 10 per cent. of the improvement grants go to London. Less than half of that 10 per cent. goes to landlords. Improvements are being made throughout the country all the time, often with people still living in the premises. The great majority of people, if they leave at all, leave and then return. In London, taking the outer and inner boroughs together, a large number of people return to the houses when they have been improved.
438 The inaccuracy of some of the reports and observations needs to be recognised from the fact that the case histories are extremely ill defined and from the very strange figure which preceded the beginning of the Sunday Times inquiry where it was said that most of the grants were spent in London. Only 10 per cent. of them are.
§ Mr. Davis
That has not dealt with my point. I am talking about London, and I think that the right hon. Gentleman has a duty to deal with London. Perhaps only 10 per cent. of the grants is utilised in London. If, however, the right hon. Gentleman is saying that the figures which have been utilised by the Sunday Times and Shelter are wrong and inaccurate, let him put forward a detailed analysis of the situation in London. I rather think he has not done the research and that he will not be able to rebut the assertions which have been made.
My observations in an area—Hackney —where I do not suggest improvement grants have been misused on the scale that they have been misused elsewhere in London shows that many people left the premises while improvements were being carried out and did not return later either because they were bought off or for other reasons. This is something which the Minister must face. It is happening in far too many cases. If the figure is not one in seven, what is it?
To whom are the grants directed? The Minister says that 75 per cent. go to owner-occupiers and local authorities. As I have already indicated, the figure given by the Secretary of State for the Environment was different. But that does not appear to be the situation in London. The Shelter booklet asserts that the proportion going to private landlords and property developers is significantly higher than that would indicate—between 60 and 40 per cent. I concede that it is sometimes very difficult to get the figures from the local authorities, but this would seem to be consistent with the situation in Hackney, although I think that the figure is closer to 40 per cent. there.
The Minister understates the situation when he says that no doubt there are developers making substantial profits out of the conversion game. He has raised a hue and cry about subsidising council 439 tenants, but he has no objection to subsidising private developers in this way.
What we need first is security of tenure for furnished tenants. We should arrange for a refunding of grant wholly or in part if a property is sold within, say, five years of the development. We must also invest local authorities with real powers to enforce undertakings which are flouted by property speculators.
I wish to say a few words about another quite serious aspect of housing which has not been mentioned, namely, housing associations and societies. Some local authorities, particularly Conservative authorities, like the GLC—and this applied when Hackney was Conservativecontrolled—believed that housing associations could provide an effective replacement for local authority development. Clearly that was untrue; it was nonsense. They can perform only a peripheral function. That is accepted by most reputable housing associations. But clearly there is something wrong with some housing associations.
My right hon. Friend the Member for Grimsby established the Cohen Committee to investigate the matter. What has happened to its conclusions? Its report indicated that there was a great deal wrong with housing associations and societies. Following a case affecting the Second Actel Housing Association in my constituency, a great deal that is patently wrong has been revealed. It is quite wrong, in my view, that housing associations and societies should be used as vehicles to obtain rewards for professional men who are members of the committee and associated with these organisations. If they are philanthropic, they should not demand fees; they should offer their advice. Of course the work must be done, but it should be done through a roster of surveyors and a roster of solicitors.
If the public forms the view that these associations are being used in this way, it will bring the associations and the professional bodies which are serving them into disrepute. The view was expressed in a recent case that they are used as a profiteering racket. I do not believe that that is entirely true, but there is a germ of truth in it. Therefore, no member of a committee should take professional 440 fees. A roster should be operated so that the work is shared fairly between professional organisations in the area and they should operate the tender system, which many of them do not at present.
There is a great deal that is wrong. The Minister hides it from the public. He should be ashamed of that. The public would respect him much more if he were to come clean and recognise that the situation is tragic instead of trying to put a gloss on a tragedy which affects the lives of hundreds of thousands, if not millions, of people.
§ 8.0 p.m.
§ Mr. J. R. Kinsey (Birmingham, Perry Barr)
I found remarkable the claim of the Leader of the Opposition yesterday that the contents of the Gracious Speech were "thin". The claim of the right hon. Member for Grimsby (Mr. Crosland) was even more surprising. He said that the speech of the Secretary of State was also thin. This is opposition for opposition's sake and we should not have these distortions from right hon. Gentlemen opposite who ought to be putting forward constructive opposition to our policies. We cannot complain about what my right hon. Friend the Secretary of State has told the House today. It was a speech filled with good solid information, of work being done in the background that is the answer in part to some of the complaints about land shortage that had been coming from both sides of the House.
The land releases that my right hon. Friend has planned, plus the increase in the rate of building in the private and council house sector, is to be welcomed in this battle—that is what it is—against the housing shortage. If we compare that description of "thin" with the policies of the former Labour Government, we find that they had an absolute skeleton in the cupboard with land and building figures. Under their rule there was a decrease in private and public sector building. Right hon. and hon. Gentlemen opposite put the blame on Conservative-controlled councils, but that is nonsense because those councils had nothing to do with the declining private sector. It was certainly not true in Birmingham where the Conservatives hold the world record for house-building —9,034 units of housing accommodation provided in 1967, and with the Labour Government to contend with.
§ Mr. Julius Silverman
The hon. Gentleman mentioned the figure of 9,000 houses built in the first year of Conservative control. Will he concede that these houses were in the pipeline, planned by the previous Labour administration?
§ Mr. Kinsey
There were all these things in the pipeline with the previous Labour administration but the houses were not built. We went ahead and built them. It took a massive marshalling of forces to do that. It is no good having things in the pipeline. What we want is results, and we are beginning to get them from this Government as can be seen with the improving figures of the Birmingham City Council. Under any year of control by the Birmingham Conservatives the housing figures have been better than in any year under the Socialists. We were penalised for this efficiency by the financial arrangements of the Labour Government through high interest rates in the private sector. Local authorities which built up housing stocks under the Socialists were building up debts.
My right hon. Friend the Secretary of State highlighted the difficulties being experienced in places such as Birmingham and other large conurbations. His announcement on Wednesday about the green belt area was a fine and right decision to protect the environment of large built-up areas but it will aggravate the land shortage and give an upward twist to the prices spiral unless we can get on top of the problem. Last night's Birmingham Mail quoted the case of a half-acre back garden in Sutton Coldfield —in a very desirable area—which fetched £18,000.
It would be interesting to know what the land nationalisation proposals of the Labour Party mean. Do they mean that everyone's back garden which might he used for housing will be nationalised? This clearly needs to be answered tonight. We must find space for housing, and the Minister must take the initiative along with local councils. We must make the best possible use of available land. I know that this is on a small scale, but it always amazes me that whenever petrol stations are built—and there are hundreds of them now—there is never any housing on the same site. In large built-up areas such as London they are often built under blocks of housing, and 442 if that is possible I would have thought that safety aspects could be taken into consideration when planning applications are made for petrol stations elsewhere. Much land near railway lines and railway cuttings could be utilised with a little bit of imagination, but these are mere drops in the ocean. We are facing a crisis here, and, as has rightly been said, land is not being made any more these days.
We must use present housing stocks efficiently and economically. We are woefully slow in dealing with this problem. In my constituency we have a large population of old people in the King-standing area living in council houses People constantly ask me for smaller accommodation but we cannot provide it within the area. We need all possible help from the Minister to overcome this problem. It applies just as much in the privately-owned sector where there is a serious problem because as a city authority we are not building houses for those in the private sector. Our efforts have failed badly.
Let me relate an enterprise that I am trying to get off the ground in my constituency. It is a purely voluntary scheme. We tried to get planning permission seven years ago to build old peoples' bungalows for people living in private houses. We have still not got that scheme off the ground and I am ashamed at the way things have gone. The land was almost given to us for £25. When we talk of the high land prices today, that is an absolutely astounding figure. A local landowner co-operated to a great extent in selling this piece of triangular back land. Now we are experiencing difficulty in financing the scheme, having got the seven bungalows planned. The housing association sector cannot help us and we cannot make it a commercial venture. If we approach the city it wants to nominate the tenants and that will not be helpful, because this is for people in the private sector. Whatever we gained by getting the land cheaply has been lost in rising building costs. This scheme was intended to snowball and help old people living in privately-owned houses but the authorities, instead of being helpful, have been restrictive. The Government and local authorities should be initiating schemes like this and not holding them back.
443 I am pleased that my right hon. Friend referred to the sale of council houses. I wish that he would be more positive and give people the right to purchase instead of simply being allowed to purchase. When the Conservatives were in office in Birmingham they went ahead with this kind of plan. It was well received and as the initial deposit was only £5 the scheme was within the range of most people. When the Socialists took over in Birmingham they agreed to let the applications in the pipeline go through. They have, however, narrowed the pipeline considerably, which is what I would expect. Let the council tenants buy. By buying his house, a council tenant in the higher income bracket can escape increases in council house rents—which, it must be remembered, doubled when the Socialists were in office. In spite of the parrot cries now, the Labour Government did not make available to the underprivileged the generous help which is now available under the Housing Finance Act. The generous help given by the Government to those on lower incomes is always ignored by Opposition speakers.
A problem which affects my constituency considerably is that of motorway blight, to which reference is made in the Queen's Speech. The M6/M5/M1 motorway link road through the area has just been opened. I say a big "Thank you" to the Minister for tackling this job. It is the first time that any Government have proposed such generous help. The Leader of the Opposition described the Queen's Speech as thin, but on this issue my constituents would disagree with him entirely.
My constituents have suffered considerably from noise, as have the constituents of the hon. Member for Birmingham, Aston (Mr. Julius Silverman). There is a need for a noise barrier, landscaping, soundproofing of homes and generous compensation for the people who own their own homes. From what we have heard today we know the difficulties these people would experience if they had to move away and purchase another house elsewhere. I am glad that all these matters are covered in the White Paper. We must see that these people are treated generously, but they need sympathy too, because even with all these palliatives the area will not be quite such a pleasant place to live in as it was.
444 Recently at Aston University hon. Members from both sides of the House, university staff and leaders of the city council discussed ways of investigating environmental pollution and the giving of environmental aid. I welcome this, as I know the Minister will. There is a vital need for expert advice to citizens in the pre-planning stage about how any proposal, whether of the Government or of a local authority, will affect an area. We in Perry Barr were not aware of the detrimental effects of a motorway. We were given at a public meeting an official assurance that was to some degree comforting. We were told that a motorway would be going through the area which would be of advantage to the nation and would enable speedier travel but that it would not vitally affect the constituency. That has not proved to be so. What is needed is expert opinion beforehand. I welcome the initiative of Aston University and I recommend other authorities to make sure they get the benefit of advice at the pre-planning stage.
I have visited the Transport and Road Research Laboratory because I am concerned about the question of motorway noise. This problem bedevils many people. Sound barriers are woefully inadequate. The only way to tackle the problem is to make motor vehicles quieter. We should be getting on with the job now and introducing legislation to control the vehicle noise. This would ease considerably the burdens on the Department, which must be inundated with complaints of vehicle noise. If the Queen's Speech contained nothing but these measures I should be satisfied.
The reorganisation of water resources is mentioned in the Queen's Speech. The people of Birmingham would not forgive me if I did not say how proud they are of Birmingham's forward-looking policy which provides an excellent and adequate water supply to that city of one million people. I ask my right hon. Friend not to penalise us for our efficiency as in the past we have been penalised by other Governments. We have provided adequate storage reservoirs in Wales and the necessary servicing arrangements and pipelines to feed the city. We see the need for an overall policy in the interests of the country as a whole, but we have been efficient providers of water and Birmingham housewives will not forgive the 445 Government if they deprive them of the good, soft water which they so much treasure. Nor will the Birmingham people willingly tolerate increasing costs. They have provided all the equipment and machinery that is necessary. By all means plan to use water resources efficiently, but the Government should give credit to those who are already doing the job efficiently and in a way they are anxious to see spread to the rest of the country.
§ 8.18 p.m.
§ Mr. Frank Judd (Portsmouth, West)
The Secretary of State in his opening remarks claimed a great deal of credit for what he described as a flourishing and optimistic scenario in the South-East of England. I should be failing my constituents if I did not take this opportunity to say that the picture of South-East England as he painted it is questionable for the whole region. When one knows as well as I know the urban centre of one of the major cities of the South-East, one is immediately aware of the extreme contrast within the area between affluence and poverty, between the high inflationary pressures caused by, amongst other things, the high price of land, and the problems of ordinary working folk in trying to combat these pressures which are making life almost impossible for them to cope with.
I represent a constituency in which the majority of workers are directly employed by the Government, most of them in the largest single industry in the city. At the end of this week too many of those workers will have take-home pay of as little as £16 or even less. They are suffering under a system which gives them a basic wage rate of £17£30. When the Secretary of State for the Environment makes sweeping generalisations in this House about the situation in the South-East, I ask him to imagine in human terms the implications of high-priced housing and inflation and the consequences on ordinary people earning such pitifully low wages.
Whatever may happen at the Downing Street talks which are now taking place, it must be said that it is a lamentable commentary on the Queen's Speech that in an area of our own direct responsibility for the employment of countless thousands of citizens in the Government service, in the hospital services, naval 446 dockyards, ordnance factories, prisons and borstals we are totally failing to take on board the difficulties and complications which people face in their ordinary lives. We have the opportunity to spell out how we shall answer their immediate needs. Nothing is said in the Gracious Speech about any continuing obligation to our own employees, and it is indicative of the general cynicism among members of the Government that the Secretary of State can get away with generalised observations about the apparent affluence in the South-East.
I wish to spell out some of the implications of this attitude for ordinary people. In the case of a city like Portsmouth it is not a matter of how much land is available there; virtually no land at all is available. In trying to cope with housing problems people have to move into the hinterland where one immediately is confronted with the dreadful and appalling inflationary pressures of the South-East which we all know operate there. There is in the South-East a higher degree of inflation than elsewhere—and it is bad enough in the country as a whole—and there are below average wages paid to members of the community who are trying to cope with the situation.
There is a second point we must spell out which applies not only to Portsmouth but to other urban areas in centres of high population. There is a real confrontation, about which we have not spoken enough in this debate, between the needs of people in urban centres and the way of life of those who live in the hinterland, who, by definition, are on the whole more affluent. I see this unholy confrontation spelt out in the contrast between the almost sacrosanct nature of the motor car in the hands of the out-of-town dweller, who must be allowed free access to the city centre with ever more urban motorways at his disposal, and the lack of consideration accorded to the town dweller living in the centre of an urban area. The homes of elderly people, who have saved all their lives to acquire a home and a little security in their declining years, are swept away to make way for those motorways in the name of progress. Elementary justice demands that we spend more time considering how to balance the rights of the out-of-town dweller and the rights of the in-town dweller in this basic confrontation.
447 Bearing in mind this rather grim picture, it is encouraging to hear that the Secretary of State is taking account more generously than in the past of the needs of some of the people who are marginally affected by the construction of motorways. It would be churlish not to applaud the steps taken by the Government in this direction. However, it does nothing to overcome the basic problem of how to ensure that city centres are not regarded as mere facilities for the people who live outside and do not in the process become a hell on earth for the people for whom city centres have traditionally been their homes.
There is a further matter about which we have not talked enough and that is the sort of consideration that must be given to areas which contain a large proportion of council housing. This problem has a great deal of relevance in the sort of community which I represent. We have spoken about the need for renewal of older houses in the private sector, but some of the worst housing in my constituency is to be found in the council-owned properties. We have not talked enough about how to generate resources to improve declining and inadequate housing in the public sector. Only last weekend I visited families in a council housing area in Portsmouth. I saw in those houses rotting floor boards and damp coming half way up the walls of the main living rooms. I emphasise that this was not inadequate private housing but local authority housing. We do not spend enough time discussing our responsibilities in this sphere and how we should undertake a searching radical investigation into the quality of local authority houses.
The fourth point with which I should like to deal is the subject of the release of Government land. Again in his speech today the Secretary of State made some encouraging comments on this topic. In a city such as Portsmouth one should not have to apologise for saying that the Services should have to fight to justify every square inch of land that they occupy. As more land is released to the community it is most important to ensure that it can be obtained at a price which is not exploitative. The land is already in public ownership and should be transferred to use by the community 448 on a basis other than that of profit-making by a Government Department.
I should like to say a few words about improvement grants. I thank the Under-Secretary of State for the courteous way in which he has dealt with the correspondence which I have conducted with him on this subject. This is not a problem limited only to London; it also exists outside London. It is officially recognised in Portsmouth that 20 per cent. of improvement grants which have so far been made have gone to property companies or speculators. It may be argued that this is a small, marginal price to pay for the general benefits to come. If hon. Gentlemen opposite were to come to my advice centre any weekend and meet the people with problems of inadequate housing and shortage of housing and were to tell them that 20 per cent. of improvement grants going to speculators is a marginal price to pay when only a few hundred pounds may make all the difference to them in their immediate predicament, they would see how weak and lacking in conviction this explanation sounds.
I will give an example which has come to light in my constituency. A privately-owned house was in a very bad state of repair. The medical officer of health's department was called in and became very concerned about it. In the end a closure order was put on the house and the family was moved out and re-housed by the local authority. The landlord then applied for an improvement grant, which was granted. Because a public fuss was created, that application was subsequently withdrawn. That was one case which came to light, about which there was a public fuss. I wonder how many other cases there might be.
Earlier the Secretary of State emphasised that if people knew their rights there would be no problem. I agree with the hon. Gentleman who said that often we are dealing with people who do not begin to understand how to find their way about the jungle of legislation. It is not sufficient to tell them theoretically what their rights are. They need a great deal of assistance to know their rights and to begin to make use of them even when they are theoretically informed of what they potentially guarantee for them.
Another problem which frequently arises in my constituency is the quality of 449 work. It is all very well for a local authority to say "We will make the grant; we agree you should go ahead; it is up to you, the owner-occupier, to see that the work is adequate", but so often the owner-occupier has no experience, knowledge or technical ability to assess the work being undertaken. We then have two evils: first, the owner-occupier is presented with a shoddy piece of workmanship, and, secondly, the taxpayer is contributing towards that shoddy workmanship and thereby wasting public resources.
Another sinister problem which is now beginning to rear its head, of which we may hear more in future, concerns the difficulty of local councillors, because they do not enjoy the privilege that we have in this House, in trying to focus public attention on the abuses which are taking place. Crude quasi-legal pressures can be brought to bear in no time which it takes a very brave councillor to find in no way inhibiting.
As a backbencher I was involved in the Labour Government's Housing Act. It was an imaginative step forward to introduce improvement grants, and there was a great deal of agreement between the parties at that time. However, it seems absurd to people that, having introduced a new piece of legislation, when inadequacies, difficulties and stresses appear we must pretend they are not there. The job of a responsible legislative body is all the time to review new, important measures which have been introduced to see how the weaknesses can be overcome.
I should like to place on record my appreciation of the way that the Minister responded to a suggestion from me that the local authority in Portsmouth should undertake a survey of the front-line problems experienced in such a community in trying to implement the improvement grant policy and to submit its findings so that he might take them into account. The right hon. Gentleman said that he would welcome such a response if the authority were willing to organise a survey and prepare a memorandum. I suggest that in the cause of making this policy as effective as it should be throughout the country, all local authorities should be asked to lend their support by undertaking investigations and submitting memoranda so that the Minister can 450 take account of the real difficulties at grass-roots level.
§ 8.34 p.m.
§ Mr. David Stoddart (Swindon)
I have sat here just about all day listening to this extremely interesting and informative debate which has been graced with many speeches from across the Chamber. I have noticed that many excuses have been made by hon. Gentlemen opposite for the awful job that the Government have made of the housing situation. Indeed, an attempt has been made to shift the blame on to shoulders which should not bear it.
For example, the hon. Member for Macclesfield (Mr. Winterton) blamed the land shortage on local authorities. This is a slander which is often quite wrongly perpetrated, because the local authorities, far from hoarding land, are ensuring that land is used for the best possible purposes. Indeed, if local authorities do not preserve the land which they have for essential development, town planning is at a virtual end.
Let me tell the House of my experience as a member of a local authority when the Conservatives took over and undertook the kind of policy that is being advocated today by hon. Gentlemen opposite; that is, selling off land to private developers and speculators. They did so in accordance with their doctrine, and they sold it in 1968 at £25,000 per acre. Today the local authority is buying land at £75,000 per acre and the ratepayers are having to pay through the nose for the policies that have been advocated today by hon. Gentlemen opposite.
The housing situation is disgraceful. The fact that young couples are having to pay 25 per cent. of their incomes in mortgage repayments is a disgrace to this nation. What it really means is that young couples in particular have to accept that if they want a roof over their heads both of them will have to continue working for a long time, and that means that they will have to forgo having a family.
The land situation is in such a muddle, and the prices being charged are so high, that unless land is brought into public ownership many of us cannot see a way out of the problem. Land is a scarce commodity. We know that its availability 451 is limited by the size of the island. Therefore, many of us believe—and, I think, correctly—that if the price of land is to be brought under control, then land itself must be put under public control.
Under all the circumstances, and bearing in mind the shortage of land, one would have imagined that every effort would have been made by the Government to economise on the use of land and to preserve existing houses. But that is far from being the case. We are still smashing down perfectly good houses in town centres and elsewhere to build roads which can stave off traffic chaos for only a limited time.
Throughout Britain thousands of houses are being demolished every day. In my constituency 87 perfectly good houses which people have lived in for many years, which they have kept in good repair, and which they are proud of are to be smashed down to build a relief road which will merely carry more traffic into the town centre to make it even more congested than it is now. We find the same sort of thing with the building of trunk roads. In Reading recently 180 houses which had been built only eight years ago were smashed to pieces to allow the building of the M4 link road to Winnersh. The people had to move, and 180 houses were taken from our stock.
The Gracious Speech contains no proposals to deal with transportation in a rational and co-ordinated manner. It is true that there is a short and cryptic sentence that the Governmentwill take further positive action on the protection and improvement of the environment",but there is no suggestion that they have grasped the desperate urgency of dealing quickly with transportation, and, in particular, with where the railways fit in and what future role they have.
This is simply not good enough, and it is a crying scandal that it should be left to the Sunday Times to alert the nation to the dangers which face us as a result of the Government's failure to deal with transportation and to formulate a policy which will make the fullest possible use of our existing facilities, conserve energy resources, protect the environment, and enable planners to look ahead to the 1980s.
452 We are all aware of the hatred that the Minister for Transport Industries has for our nationalised industries. Railwaymen and other people are fearful about their jobs and the future of our environment. The publication in the Sunday Times of details of a study by economists in the Department sent even chiller shivers down the spines of railwaymen and all who fear for the future of living conditions in Britain. It is true that the Minister has since made a statement on the subject but that has not eliminated the feeling that this Government are intent on reducing the rôle of railways in our transportation system.
Yet all the facts point to the need for a much greater rôle for the railways. In the interests of efficiency, safety, the environment and land use, it is vital that our railway system is not allowed to fall further into decay. It is not good enough to say that competition and market forces must govern the future of transportation, particularly when the competition is unfair, as it is in relation to the railways.
The report in the Sunday Times on 10th September showed clearly the penalties that are being paid by society and the risks that are being taken as the result of the Government's failure to have a national transportation policy. One in every four lorries stopped in roadside checks in 1971 was suffering from a serious and sometimes dangerous defect. One in every five was overloaded; yet, with all the risks of overloading, the average fine for lorry owners was only £10.
The noise of lorries is known to all of us. Most of them sound like a series of pneumatic drills. As for vibration, Britain's cathedrals have crumbled more in the last few decades, since the advent of the diesel engine, than in the previous six or seven centuries.
Yet the Minister cheerfully contemplates even heavier lorries on our already congested roads and intends to spend some £4,500 million on road building over the next decade. He has clearly not given proper thought to whether this would be wasteful of land and resources.
At the same time, the spending on railways will hardly exceed £70 million to £100 million per annum, including vehicles. So this country will spend £450 million per annum on road building, plus 453 the cost of vehicles at roughtly £1,200 million, making a total of £1,650 million, as against only £70 million to £100 million on rail transport, including vehicles.
How on earth we can expect our railways to be viable in those circumstances, I do not know. How we can expect them to compete with the road system when capital resources poured into road transport are annually 16 times greater than the amount spent on the railways, I fail to see.
Road transport must have a large part to play. No one wants to deprive the ordinary man of the freedom of movement of the private motor car. But if we are to avoid the American experience, we must act now to prevent railways from declining further.
In any evaluation of comparative transport systems, all the elements must be taken into account. Road transport should be debited with the cost of pollution, damage to property, accidents and congestion. Account should be taken of the greater appetite for land of motorways over railways. It is an interesting fact that a double track railway can be accommodated in the breath of 27 feet whereas a six-lane motorway requires a breadth of 116 feet. But the railway can carry the same volume of freight as the motorway in one hour. If weight is used as the criterion, the railway can carry three times as much as the motorway. The railway can move about 12 times as many people in an hour as the motorway. The total capital investment, including signalling, is little more than one-third of that required for a motorway.
It is clear that a great deal of thinking needs to go into transportation. The situation is urgent. We already know that the M6 motorway—or should we call it a lorryway?—is overcrowded. Before very long, we shall have to decide whether we will build another six-lane motorway alongside the M6. These are real problems, and successive Governments have not dealt with them in a deep and rational manner. It is a devastating fact that since I have been a Member of this House there has been no debate on transportation. It is about time that we had such a debate, and I hope that if the Government will not give the time the Opposition will give one of their Supply 454 Days to debate this most urgent and important subject.
§ 8.47 p.m.
§ Mr. R. C. Mitchell (Southampton. Itchen)
Almost every speaker from both sides of the House has drawn attention to and deplored the spiralling prices of land and houses. It is remarkable that in a speech of 43 minutes the Secretary of State hardly referred to either.
In South Hampshire we have perhaps a more acute problem than any other part of the country outside the Greater London area. There has been a bigger increase in house and land prices in South Hampshire than anywhere else. More important, the rising prices have endangered the future development of South Hampshire. South Hampshire is a natural growth area. Its population is increasing at about 12,000 a year. The Strategic Plan for the South-East, referring to South Hampshire, said:South Hampshire is potentially the core of a largely self-contained city region, with a substantial existing employment base, good employment growth prospects and a number of attributes favourable to future rapid and successful growth.Arising from the report of the Strategic Plan for the South-East, the planning committees of Southampton, Portsmouth and Hampshire got together and, at considerable expense to the ratepayers, employed a technical unit to produce the first of the new structure plans envisaged under the 1968 and 1971 Acts. It is a powerful and weighty document entitled the South Hampshire Structure Plan.
It is an imaginative piece of forward planning. South Hampshire has a rapidly growing and expanding population. In 1966 the population of the area was 818.000. It is estimated to reach 1,161,000 in 1991. The number of houses in 1966 was 262,000. The South Hampshire plan estimates that 383,000 houses will be needed by 1991, a 50 per cent. increase. It frightens me when I see the estimates for transport. The present number of cars in the area is 145,000. The estimated number of cars by 1991 is 473,000—a 350 per cent. increase. There are similar trends in services such as education and shopping facilities.
We can all have our own individual criticisms of the details of the plan, which has been submitted to the Secretary of State for his consideration, but this is not 455 the appropriate time to deal with it. But I say to the Government that the whole plan will be a failure unless it can be implemented within the time scale laid down and unless it can be implemented at reasonable cost. In my view, the powers and machinery at present available for the implementation of the plan are completely inadequate. Two main problems areinvolved—first, land assembly, and, secondly, cost.
We are dealing here with a scale of total development larger than many new towns. If the conditions are not right and the powers are not there to assemble land, future development, both private and public, cannot take place in an orderly fashion. The planning bodies of all three authorities—both Conservative and Labour controlled—are very concerned that they have not adequate powers to do the job.
Recently, the Department issued a circular making certain proposals, but in the view of the local authorities it does not measure up to the task. When one is dealing with massive development of this kind what is needed is either new town powers or something similar. Unless we can get such powers, we see little hope of achieving the plan within the time scale laid down.
I come now to the question of cost. Many of us feel that unless there is considerable Government assistance the plan will never get off the drawing board. South Hampshire is one of the areas of the greatest increases in the price of land in the last few years. Since the publication of the structure plan in September, agricultural land formerly selling at £400 an acre is changing hands at £20,000 an acre. The speculators have moved in in a big way.
What will happen unless there are special new town or similar powers? The ratepayers will pay for servicing the area with new roads and new sewers which will be required for the expansion. Once that servicing is done, the land which now changes hands at £20,000 an acre will be ready for development and will change hands at £50,000 an acre, which is the normal price in the area for land ready for development. The ratepayers will pay twice. They will be paying for 456 the new services and then they will have to pay to acquire the land at an increased value which they themselves have created.
We have estimated that at current prices the total land acquisition costs needed to implement the South Hampshire plan will be about £1,500 million. Obviously, this will be quite outside the purse of the local authorities. There will have to be either some substantial Government financial assistance or—and I would prefer this—Government legislation to prevent the inflationary spiral in land costs and to allow local authorities to purchase the land required for this development at reasonable prices and not at £50,000 an acre. Just think what £50,000 an acre means. To obtain enough land for one primary school, with its playing fields around it, without starting on the building, would cost £250,000. That would be before the first brick was put on the land. So I emphasise that the Government must be prepared either to put in substantial financial help or, as I would prefer, to legislate to prevent land prices increasing.
I turn now to the Housing Finance Act. We now have a little more experience of it. The Conservative council in Southampton, with great glee, increased rents on 3rd July this year by 78p. It did not even bother to ask the Minister for any of the dispensations that were introduced during the later stages of the Bill. We are now in a rather better position to see the effects of the Act.
Whenever we talk about rent increases somebody on the Government benches says "What about the rebates?" Let us analyse the position. It is estimated that in Southampton—and there is no reason why the same should not be true of other towns—if everyone entitled to rebate claims it, which is a very big "if", just over 70 per cent. of Southampton tenants will be paying more rent than they were before the Act was introduced.
Just under 20 per cent. will be paying roughly the same. That will include all those people who previously had their rents paid for them through social security and are now having it paid for them by the rent rebate scheme. That number includes many who paid nil rent. The cost of this has been transferred from the general taxpayer, where it should have remained, to the council house tenant.
457 Just under 10 per cent. of Southampton tenants will pay a lower rent than before, and a large proportion of those will be tenants of the very highly-rented properties, with rents of over £6 a week.
The net result of the Housing Finance Act in Southampton—taking the rebates into account—is that well over 70 per cent. of the tenants will be paying more rent.
I am tempted to reply to one point that was made in the speech of the hon. Member for Southampton, Test (Mr. James Hill). I tried to intervene, but he would not allow me to do so, and I make the point now. He was addressing my right hon. Friend the Member for Grimsby (Mr. Crosland) and going through the list of proposals that my right hon. Friend had put forward. My right hon. Friend had said that one solution would be to build more houses, and the hon. Member said, "Of course, everyone agrees with that." I remind him that he was Chairman of the Southampton Housing Committee when the Tories were in control, when they drastically cut the house building programme in Southampton from over 1,000 a year to a few hundred a year. I do not blame the hon. Gentleman alone, but the result of that policy is that many people in Southampton today are still living in very bad houses when they should have been rehoused.
The hon. Member also referred to the sale of council houses. The hon. Gentleman stated that this had been stopped. What has happened in Southampton now that the Labour Party controls the council is that the council has said that it will sell all those houses which are in the pipeline, totalling 2,437. So ultimately we shall have sold 4,821 council houses out of a total stock of 12,960. Those figures are for houses and do not include maisonettes and flats. Therefore, 37 per cent. of all council houses in Southampton will be sold.
This matter raises considerable problems. It would not matter so much if we had had a building programme along with it. But when these facts are combined with the fact that during the last five years, under Conservative control, hardly any houses have been built in Southampton and the waiting-list is considerably longer than it was in 1967 458 when the Conservatives took control, it is understandable that Labour councillors in Southampton have said "We must stop here and examine and assess the situation to make sure that before we continue to sell more houses we restore an adequate building programme." Many people would have liked us to go even further than that, but the compromise arrived at was right.
Finally, I agree with what has been said by several hon. Members tonight. The important thing is to get more houses built. But they must be built at a price which people can afford to pay. In 1972 it seems strange and scandalous that in spite of all the technological advance of the last 25 years the problem of homelessness is still with us and in some areas is worsening. This is a blot on our nation, especially when we are a so-called wealthy country.
§ 9.2 p.m.
§ Mr. Julius Silverman (Birmingham, Aston)
The time at my disposal allows me to make one short point, I hope as succinctly as possible. My hon. Friend the Member for Southampton, Itchen (Mr. R. C. Mitchell) mentioned his experience on the question of rebates. I want to deal with that point. Throughout the passage of the Housing Finance Act we heard from the Government side of the House about rebates and the great boon and advantage they are.
In Birmingham rent allowances in the private sector have been in operation for several weeks. They were well publicised. In all, the total number of applications amounts to 492, from an estimated total of about 60,000 houses in the private sector. As I have forecast previously, this bonanza for private tenants will not come about, although hundreds of thousands of them, as control passes into regulations, will pay higher rents. Even tenants of the most unfit properties will be paying perhaps double the present rent in 1975, when the whole of the privately rented sector comes out of control. My hon. Friend the Member for Southampton has already mentioned the public sector and the disappointment of many people.
§ Mr. James Hill
Will the hon. Gentleman please refer to the hon. Member for Southampton, Itchen (Mr. R. C. Mitchell) in case his remarks are taken to refer to me.
§ Mr. Silverman
I am quite sure that the hon. Gentleman would not say that sort of thing. I am simply mentioning the fact that the result in the private sector will be disappointing.
In the private sector there is the question of introducing allowances to the furnished sector. We welcome this, but let us not expect too much from it. Birmingham operated a scheme of allowances in the private sector by means of a Private Bill before the Housing Finance Act came into operation. In all, 250 people benefited under the Birmingham scheme. It contained provision for the furnished tenants. Of those, I believe that the total number of furnished tenants who benefited was two, or perhaps four. I know that that is a difference of 100 per cent., but it will be agreed that it makes little difference.
As my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis) said, unless we get security for tenants in the furnished sector, the much-trumpeted allowances for the private sector will be very nearly meaningless and the private tenant will derive very little benefit from them. In short, millions will be worse off and very few will benefit from the rebates. Indeed, as has been said on several occasions, even those in the public and private sectors who get the rebates will be much worse off than they were before.
§ 9.5 p.m.
§ Mr. John Silkin (Deptford)
It is my pleasant duty to start by congratulating the hon. Member for Rochdale (Mr. Cyril Smith) on his very interesting maiden speech. I hope he will not regard it as a precedent if I say that on one thing in particular I very much agree with him. That is the question, at a time when old-age pensioners have to suffer inadequate pensions, of looking at the whole basis of the television licence and its cost. I discussed that with my hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie), who shadows Post Office questions, and he also felt that despite a large number of difficulties—and there would be difficulties—it was a very interesting point that had been made.
I should like to say two other things. The hon. Member for Rochdale is to be congratulated, first, on the athletic 460 speed with which he made his maiden speech—three leaps into the Chamber and into his seat—and also, which I regard as a major triumph, on actually getting some Liberals to attend a housing debate.
Throughout this very long debate there have been three major threads. The first is the effect of Government policy on rented accommodation. The second is the cost of houses to buy. The third is the price of land. It is right that we should discuss these three points because all of them concern ordinary people with low incomes and their quest for a home of their own. My hon. Friend the Member for Ealing, North (Mr. Molloy) pointed out that this was at the root of all our discussions, and of course that is true.
A great deal has been made in this debate of the unfairness and, as my right hon. Friend the Member for Grimsby (Mr. Crosland) pointed out, the inflationary effect of the Government's policy with regard to rented premises. The fact is that the whole of the Government's Housing Finance Act has a number of effects upon accommodation in general. My hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) gave us some very interesting points on take-up and on rebates. I also remember that in Committee he pointed out that as a result of the Act it will not be very long—I hope I have got the figure right; perhaps he will correct me if I am wrong—before the price of land in the private sector is 2.6 times what it is today. If rent goes up by 2.6 times, the basis is that the capital value of a house also increases 2.6 times. This is one of the inflationary effects on housing generally, apart altogether from the rise in council rents. The effect of this is that second-hand houses go up in price and they in turn force up prices of new houses.
It has been said by the hon. Member for Southampton, Test (Mr. James Hill) and by other hon. Members, including most of my hon. Friends, that one way to bring down the prices of houses is to build houses. This would be admirable. But if we are agreed that the start of it all is local authority housing —and I think we have so agreed—it follows that we ought to examine the Government's record in local authority 461 housing. I do it in no partisan spirit but in response to the kind invitation of the Secretary of State, who talked about local authority house-building under Labour and said that there was a decline.
Let us give the right hon. Gentleman some figures. In the lowest quarter in 1970—that is, at the worst possible time, at the height of the financial crisis—under the Labour Government the figure for public sector completions was 42,821. It was not a figure of which I was particularly proud, but there it was—42,821. In the last recorded quarter under the present Government this year the figure was 28,890.
The effect of that is simple: it forces people to look for accommodation to buy even when their circumstances militate against it, even when they cannot afford it, even when the house they wish to buy is in poor condition. It is largely this fact which has led to the increase in the number of mortgages about which the Secretary of State boasted earlier today, but it does not increase the stock of houses available. It is time we began to consider the reality of the situation, not just the Minister's special pleading.
It is nearly three years since the right hon. Gentleman made his 10-point proposals. He will remember, as I do. He was modest enough today to talk about only seven of them—I forget what happened to the other three—but he said that they had had an effect on the cost of houses. The right hon. Gentleman may recall that on 27th April, 1972, I put a question to him. I do not like quoting my own words, but I paused for a reply on that occasion and had no answer, so perhaps the right hon. Gentleman will answer now. I said:I calculate—the right hon. Gentleman may disagree, but he cannot disagree, very much—one gives him the benefit of all these figures, the effect on the price of a house is rather less than f240."—[OFFICIAL REPORT, 27th April, 1972; Vol. 835, c. 1790.]And I went on to say that, since the price of houses was at that time rising at the rate of £6 a day, it would take only 40 days of the present Government to erode the whole lot.
Would the Secretary of State still like to challenge those figures? He has had about six months in which to do it. He does not reply, and I am glad about that, 462 because it means that we agree at least on one thing.
A great deal has been said, and understandably, about the plight of the young couple trying to buy their own home for the first time, but I shall put a slightly different problem to the House. I ask hon. Members to consider the position of the larger family, a family with growing children, perhaps three of them, and an elderly widowed parent living with the family. According to the Nationwide Building Society, the average price of a four-bedroom house—this is new and old together—is £11,000. I should point out that that covers a wide range, from £9,000 in the North-East and Wales to more than £18,000 in London and the South-East. The problem is accentuated in the areas of overcrowding, which is why there are the wide differences.
It may be said that four-bedroom houses are not the normal requirement, and I agree that they are not, but they are important to a large number of people with families, the very people whom we want to help.
What about the average modern house? In 1970, in the time of the Labour Government, in London and the South-East the average industrial worker had to put down—I am sure the Secretary of State will agree, for they were his figures on which I dwelt—a deposit of £1,000. The average deposit today, according to the report of the Nationwide Building Society, in London and the South-East is £3,100. It is cold comfort to my hon. Friend the Member for Southampton, Itchen (Mr. R. C. Mitchell) and even less comfort to the hon. Member for Southampton, Test that in their area the figure is £3,235. This represents the largest rise in house prices in modern times.
What is the reason? What possible answer could there be? Sure enough the Minister for Housing and Construction gave the answer to the House when he said:What has happened is that there has been an increase in the money in people's pockets and an increase in the credit facilities available, for which this Government, far from being ashamed, can take credit."—[OFFICIAL REPORT, October 18th, 1972; Vol 843, c. 242.]That is his excuse and that is what he is proud of, although the Prime Minister, 463 as far as I can gather from what he says, does not seem to think that more money in people's pockets is a good thing.
The average manual worker's monthly earnings in 1970 were £117. The latest available figures show an increase to £129, so that he has £12 a month more in his pocket. In 1970 when the Labour Government left office the average monthly repayment on a mortgage was £32. I do not think that the Secretary of State will challenge the figures, which are his own. The average monthly repayment in London and the South-East today—and again these are the figures given by the Nationwide Building Society—is £57. Therefore, the person who wants to buy a house has not only to put down £2,100 more on the deposit than he had to under the Labour Government but he also has to find another £25 a month out of the £12 a month increase in wages in order to make his mortgage payments. All that is in addition to all the other enormous rises in prices, including 21 per cent. more on food prices. No doubt that is what the Minister for Housing and Construction means when he says that the situation is one for which the Governmentfar from being ashamed, can take credit".The right hon. Gentleman may not feel ashamed, but in his speech yesterday to the National House-builders Registration Council I thought I could at last detect the first timid faint glimmerings of concern. On this side of the House we have always been concerned, and much more. When we think of the many millions of people, whether they have a growing family or whether they are young couples starting up in life, waiting for a home of their own, we are ashamed.
What is causing the enormous rise in prices? By far the largest principal factor in the rise in house prices is the rise in the cost of land. When last we debated the subject some months ago I said that the land accounted for about one-third of the cost of a house. I am inclined to think I under-estimated, certainly as regards London and the South-East. It could be so in some areas but in many cases I feel that it is perhaps not far off two-fifths.
But why has the cost of land rocketed so much and why have the Government 464 done nothing about it? Certainly the Government tried to do something about it on 22nd July, 1970. The Secretary of State announced in the House the end of the Land Commission. Why was it abolished? The Secretary of State had this answer. He said:The Land Commission has failed…to stabilise the price of land…".—[OFFICIAL REPORT, 22nd July, 1970; Vol. 804, c. 549.]I have pointed out many times that in the last six months of the Labour Governnment land prices fell by 4 per cent. The right hon. Gentleman has said to me many times "But that was because there was a tight money situation". I have done a little research and perhaps between now and the next time we discuss the matter the right hon. Gentleman will also do some research. Perhaps he will examine the previous occasions when we had "stop-go" under his Government. He will find that in the "stop" phases the price of land did not go down. Mostly it continued to go up although, I agree, not by very much. There was only one new factor in 1970, and that was that the Land Commission was in existence.
When we left office in June, 1970, the price of land had fallen by 4 per cent. By mid-1972 it had risen by an average of 50 per cent. My guess is that by the end of 1972 there will be an even bigger rise. So what price land stabilisation now? The Secretary of State is a very agreeable, plausible chap, and when he talked of stabilisation in 1970 the country probably trusted him. But I dare say the country would have trusted him if he had been alive in 1912 and had talked about stabilising the "Titanic".
Why has the price of land rocketed? The cause, very simply, is the revival of the free market following the abolition of the Land Commission in July, 1970. Incidentally, there has not only been a boom in the price of housing land. An example was given me recently of 150 acres of land the price of which had gone up from £200 to £600 an acre in three months. But the point about this land is that it is very bad agricultural land for which it would be impossible to get planning consent. All the turf was removed before it was sold.
The Secretary of State's words about land speculation were very forceful. He 465 warned that there was a section in the Finance Act under which some people might even have to pay tax if they made profits. I can understand this frightening threat. But although the Secretary of State sounded like a witch doctor of the militant Left, those of us who listened to him last Session when he talked about the rigorous action in which he would indulge if Centre Point was not used or sold will simply measure it by that—and Centre Point has been neither used nor sold.
A real, emergency policy for land is necessary at this stage. The Government are doing nothing, and I propose to make to the Secretary of State some suggestions about what should be done. My hon. Friends the Members for Portsmouth, West (Mr. Judd) and Battersea, South (Mr. Ernest G. Perry), both of whom made eloquent speeches, said something with which I disagree. They said that no land was available in their areas. What they meant, I think, was that no land in their areas was available to local authorities, and that is very different.
First, the Government should forthwith reverse the policy of selling local authority land to private developers and encourage local authorities to buy land themselves. Only yesterday Dr. David Eversley, the former Chief of Strategic Planning in the Greater London Council, reminded us of what we on this side of the House have said many times, namely that developers, so far from bursting to develop land, are hoarding it. It is the local authorities to which we should be looking for houses. The first point, therefore, is to let the local authorities have the land.
Further, we should speed up the completion of the survey of surplus land held by nationalised industries, particularly British Rail, hospital boards, the Ministry of Defence and other Government Departments, and offer that surplus to the local authorities at existing use value. Thirdly, I was glad that the Secretary of State mentioned that he was giving a direction to local authorities about planning permissions and that they need not be bound by the five years. That is not quite good enough. What he should do is to insist on a two-year period during which work has to be started on a planning permission otherwise it will lapse.
§ Mr. Silkin
Before the hon. Gentleman intervenes, I would point out that his right hon. Friend has only half an hour in which to reply.
§ Mr. Costain
The right hon. Gentleman spoke about local authorities being offered land at existing use value. Does he also say that local authorities should use that land within two years, as he is suggesting private enterprise should?
§ Mr. Silkin
No, on the contrary, because local authorities should plan ahead. That was the whole basis of the Land Commission. It was one point, apart from anything else, which the Secretary of State never understood.
Fourthly, and perhaps the Secretary of State will listen to this because I do not expect the Minister for Housing and Construction to reply to it tonight, why on earth should planning permission of any sort be in perpetuity? The more I look into it the more absurd it seems. Someone applies for planning permission, and therefore for all time that planning permission rests. Why do we not put on it a terminal date of, say, 30 years after which it would have to be renewed? It may be turned down then by a local authority which may wish to give a totally different use to an area. It would be a way of dealing with urban renewal and of quickly bringing down the price of land. If the Government can carry out these interim measures, we will give them every support to deal with what is one of the greatest social evils of our time.
Unfortunately there was little in the right hon. Gentleman's speech to give us any confidence either that he understands the problem or that he knows how to deal with it. It will only be under a Labour Government that a real solution to the problem of housing and land will be reached. What is needed is a great deal more than expedients. What is needed is a radical solution, and the only solution—the one that has been staring us in the face all these years—is public ownership. This is the way, when our time comes, that we propose to deal with the problem. We advocate that with the exception of owner-occupiers of houses, who should be allowed to keep their freeholds—
§ Mr. Silkin
—all freeholds should be vested in the community. Only then can we have a proper land policy on a proper basis. We shall not get it with the present Government. It will have to come, and I tell the Secretary of State that when it does it will have the support of almost everyone in the country.
§ 9.28 p.m.
§ The Minister for Housing and Construction (Mr. Julian Amery)
I would like at the outset to follow the right hon. Member for Deptford (Mr. John Silkin) in offering my congratulations to the hon. Member for Rochdale (Mr. Cyril Smith) on his maiden speech this afternoon. We all felt that he would bring weight and breadth to our counsels but he has also given a quality of depth and humour which the House appreciated very much.
The hon. Member referred to the problem of improvement grants in his part of the country, the North-West. The results there have been sensational—144 per cent. is the increase for the first six months' take-up compared with the first six months of 1970. The local authorities there, about which he knows a good deal, have done particularly well, showing an increase of 550 per cent. for the first six months of this year compared with the first six months of 1970.
I very much enjoyed the hon. Gentleman's comments on the textile industry, although this is not the occasion for me to reply to them. They seemed to be more in keeping with the principles upon which I was brought up than with those of the party he has joined, but I must leave him to thrash that out with his own leader. Like the right hon. Member for Deptford, I took his point about television licences for the old. What a lot the old will be missing if the House is not to be televised, as we have, alas, decided, in not having the opportunity of seeing the hon. Gentleman in action.
The right hon. Member for Grimsby (Mr. Crosland), as always, treated us to an agreeable and interesting speech. He seemed to take it rather amiss that we should always be comparing the achievements of the last two years of the Labour Government with those of the first two years of the Conservative Government.
468 We took the nearest two Labour years we could find as being the most honest and straightforward thing to do. We also felt that it was appropriate to do this because these were the years when the right hon. Gentleman presided over the co-ordination of housing programmes.
The right hon. Gentleman had a lot of fun at the expense of my right hon. Friend about "'What can I do? Walker". When the last trump sounds, when we are called to the final division between the sheep and the goats, the Lord in his infinite mercy will turn to the right hon. Gentleman and will say "What did you do, Crosland?". If he is honest, the right hon. Gentleman will reply "I presided over the steepest decline there has ever been since the war in providing private housing, public housing, slum clearance and land release."
May I take this opportunity of giving a word of explanation to the hon. Member for Salford, East (Mr. Frank Allaun). I think he felt that I had ill-treated him the other day when I said I thought he was not in favour of breaking the law. I did withdraw this unfortunate allegation, and I have looked up the facts. In Committee he did not say that he was against breaking the law—I acquit him of that—but he said that he was not in favour of rent strikes. I can let him have the quotation if he wants it. I am glad that on this matter we can count on his support.
May I follow the arguments which have been deployed by the right hon. Member for Grimsby, the right hon. Member for Deptford and the Leader of the Opposition on the council-house programme? The Leader of the Opposition said that council-house programmes have been slashed. Those words are indicative of an interesting state of mind. Perhaps when he was in power central Government did slash council-house programmes by approvals being refused by the Ministry. There are no limitations of that kind now; there are no physical limitations, and no approvals are refused. What has happened is that some councils have stopped building because they see no apparent need at the moment. I illustrate this by referring to Manchester. I have frequently said that the housing programme is no longer one of building 469 new council houses everywhere but is a series of local programmes to be dealt with by the local housing authority on its own assessment of its own needs. I was interested to hear today of a report on the situation in Manchester which was unanimously approved by the Labour-controlled city council. It envisages a housing surplus in the city in five years' time, with the abolition of all limitations for getting on to the housing waiting-list. If this assessment proves right, the council will presumably reduce its house-building programme over the next few years.
The council may feel—and if so I welcome it—that it needs to go on building at a good rate for a little longer, but the decision is Manchester's. The fact that Manchester City Council can even be contemplating a housing surplus in five years' time emphasises the need to get away from our pre-occupation with national global totals. We have made sure that an authority like Manchester can build all the houses which it thinks it needs. When it has done that and stopped building, that ends its problem.
There are other authorities which have not built because under the old system new building meant either increased rents or increased rates. All that has changed. New building no longer means increased rents. The old rent-pooling arrangement is over. Fair rents have taken its place. With a rebate anyone can now afford a council house. Hon. Members will know that hitherto good council houses were in many places too expensive for a great many tenants. Our legislation brings for the first time the best houses within the reach of the poorest potential tenants. The burden of building on the rates equally will now become manageable and not catastrophic as it sometimes was. Where an authority is in surplus there will be no problem. Where an authority is in deficit we shall carry 75 per cent. of the bill.
There is now no physical barrier to new building, and indeed no financial barrier either for a local authority or for a tenant who wants to move into a house. It would be wrong to talk about public sector programmes being slashed. Indeed, substantial new building programmes are taking place. My right hon. Friend has already explained that 14 per cent, more tenders were approved 470 in the first nine months of this year than was the case in the nine months of 1971. If we compare the first nine months of 1970 with the first nine months of 1972, we find that in London public tender approvals are up by 19 per cent., in the Midlands by 21 per cent., and in East Anglia by 30 per cent.
Local authorities now have all the means they need to end overcrowding. They also have all the means to end the slums. I have said on more than one occasion that this can be done within a decade. There are said to be 700,000 slums in clearance areas or potential clearance areas. We have already been clearing 70,000 a year, and we believe that they can all be cleared within a decade even at the present rate. There are 400,000 or more outside the clearance areas, but it will not need a large increase in the slum clearance programme to get rid of those also within a decade
Last May we asked local authorities by circular to assess the overall situation of substandard housing and to draw up strategies for dealing with the problem within a decade. The results are encouraging. I understand that Birmingham and Liverpool plan to clear their remaining slums by 1980 and Leicester and Stoke-on-Trent by 1977. In general, information coming in to the Department seems to substantiate the claim that we can clear the slums within a decade.
The right hon. Gentleman the Leader of the Opposition—and the right hon. Member for Grimsby today rather echoed his Leader's sentiments—has advocated that we should hold down all rents to a limit of 5 per cent. This is a rather difficult concept, and the right hon. Gentleman as an economist will appreciate the difficulty easily enough.
The variations in rents up and down the country are enormous. Rents are not like prices since both retail and wholesale prices are fairly standard all over the country. But rents vary tremendously from one part of the country to another, and often within the same town. We have experience of buildings of a similar character and quality, some owned by the Greater London Council and some by a particular London borough, which command differing rents. Therefore, it is not easy to achieve equitably a percentage ceiling on rents.
471 I have always resisted the idea of discussing average national rents, although I am always being asked to do so by the hon. Member for Salford, East, but if we are to think in terms of percentage ceilings on rents we should have to think in terms of average national rents. As I said the other day, the average national increase paid by council tenants this year is about 35p and it averages out at about 14 per cent. The right hon. Member for Grimsby seemed to think that the situation next year would be worse than it is this year and the hon. Member for Salford, East seemed to think that it would be a good deal worse. Our projections seem to suggest that it will be in the region of 25p next year, which brings the figure down to around 8 per cent.
I hope that this is an effective answer to all those right hon. and hon. Gentlemen opposite who have so often said that we should see a doubling in rents. We heard suggestions of vast increases and allegations that on average people would pay £1 more and all the rest. In fact, it seems to end up at 35p this year and 25p next year. Taking these averages, some will pay more, some less, and others nothing at all.
§ Mr. Frank Allaun
The point I made, which the right hon. Gentleman has not answered, was that it is a swindle to talk about curbing prices and at the same time deliberately to increase rents beyond what they need be, which is what the Government are doing under the Act.
§ Mr. Amery
If I remember rightly, when the Labour Government were in office and introduced their freeze, rents went up by 12 per cent. almost immediately afterwards.
We then come to the great issue which the right hon. Member for Grimsby raised about the nationalisation of land. This is not a new cry. It was not so long ago that Lord Carrington marched down the streets of High Wycombe carrying a banner with the words "God gave the land to the people." Fortunately for my noble Friend the Secretary of State for Defence, his great grandfather's slogan was not approved by the nation at the time, so he has remained a landowner of some consequence.
472 I do not believe that this recipe is likely to commend itself to the people either on a national scale or in the form advocated by the right hon. Gentleman in his article in The Guardian this morning which we all read with the greatest interest. I suppose he was really out to win the landlords' vote. My God, they would be pleased if they were given the bonanza which he offers them. I had it costed in the office this morning. Somewhere between £6,000 million and £10,000 million would have to be paid out in compensation, to say nothing of repairs and maintenance or the new staff to administer this great new estate. It would be a bonanza for the rentier aimed at only one thing: to preserve a particular form of tenure and turn it into a municipal monopoly. I know that the right hon. Gentleman is aware of the dangers of monopoly and that he said it would not all be kept by the local councils; he would try to give or sell some of it to the voluntary movement and some to tenants.
I saw a redeeming ray of light. The right hon. Gentleman was to sell council property to tenants. It was too good to be true. It seemed—I say this with no disrespect to any Irishman in the House —an awfully Irish way to go about it: to take it from the landlords and sell it to the tenants.
We know that most landlords are doing a very good job. That is the general experience of all of us who live and work in either industrial or residential towns. Many of them should be able to do a better job now that they can combine the advantages of the fair rents legislation introduced by the right hon. Member for Coventry, East (Mr. Crossman) with Lord Greenwood's unrestricted improvement grants and our own Housing Finance Act. A combination of these three measures should help them to raise the standards of their property.
That brings me to improvement grants. I am sorry that so many hon. Gentlemen, including the Leader of the Opposition, knock the grants. The right hon. Member for Huyton (Mr. Harold Wilson) said:we read of house prices rising from £3,000 to £30,000 in four years as a result of speculation and the unscrupulous use of improvement grants."—[OFFICIAL REPORT, 31st October, 1972; Vol. 845, c. 20.]473 If a speculator sold his £3,000 London house for £30,000 public funds could not possibly have contributed to more than £1,200 of the £27,000 profit. So if anybody thinks that improvement grants sparked this off, he is wrong. We must not blame the grants for the increase in prices. The grants have not sparked off this development. The speculator, if he is to be called such, would have sold his house at very nearly the same large profit whether there had been grants or not. I think that grants have been one of the greatest contributions made by this Government to the solution of the housing problem. I say "made by this Government" but I pay tribute to Lord Greenwood's work in this in 1969.
There are, as we sit here tonight, more than 2 million substandard houses in the country.
§ Mr. Amery
The figure I have given is from the 1971 survey. There are another 1 million in the slums, but they are coming down so they would not qualify for grant. There are 2.2 million houses that would qualify for grant.
In the first half of 1972, grants were approved at the rate of 104 per cent. more than in the first half of 1970. In the Northern Region they were 280 per cent. more, in Wales 139 per cent. more, and in London 112 per cent. more. As my right hon. Friend said, 75 per cent. go to councils and owner-occupiers—35 per cent. to councils, and 40 per cent. to owner-occupiers. I think that my right hon. Friend gave a figure of 79 per cent.; he may have a later figure. Only 25 per cent., or less, go to landlords, and landlords have not been all that active, in spite of all the talk about speculation, in taking them up.
Landlords have been slow to make use of the grants. I quote from a good authority on the subject:Owner-ocupiers and local authorities have very sensibly, taken advantage of these offers in a big way…but, despite the enormous carrot, the majority of private landlords have not. They just won't be bothered.That is from a book called "No place like Home", by Frank Allaun. I wish that landlords would take rather more grants. I wish they were keener about getting them, because a lot of their 474 property is just the property which needs improvement grants. London absorbs only 10 per cent. of the total of grants, and by no conceivable stretch of the imagination can more than half go to landlords.
I have no doubt that the great majority of grants go to landlords who develop small properties for the benefit of their tenants. No doubt there are developers who get the grants and do not need them and who would develop in any event, while others would not develop without the grants. The ones who would not develop without grants are the people to whom we want the grants to go, because we want to see the stock improved. But it is difficult for the central Government to judge which developers should qualify and which should not. That is why, in discretionary grants, we give discretion to the local authorities. That is why we say it is for them to decide—not for us —which developer should or should not qualify for a grant.
But the great thing surely is to make sure that the improvement is done, and all experience shows that to lay down restrictive conditions slows down improvement. That is why I think Lord Greenwood was right when he scrapped the restrictive provisions which existed before. Nor do I believe that improvement grants are driving people out of their homes. I am prepared to accept that the buoyancy in the housing market and the increased value of property is leading to a movement of population, but not the grants themselves, and the owner-occupier or regulated tenant cannot be forced to go. Not only have penalties against harassment been increased, but the introduction of the rent allowance will give extra protection against eviction, because it is non-payment of rent which is the most common cause of eviction.
I recognise that the change in the condition of the London housing market is leading to changes of occupancy and movement of population. This is not necessarily a bad thing. Nor is it mainly due to improvement grants. But I should like to know what is going on, and what are the social implications for inner London. That is why, last July, I launched a survey to try to determine whether people are moving to smaller or larger, better or worse accommodation.
475 In logic, they ought to be moving out from existing dilapidated accommodation which is bought for improvement to better accommodation than they had at the beginning of the improvement process, but we need to know whether, and if so to what extent, some of them are experiencing hardship on the way. This is the key question, to which no one yet knows the answer. If the results of the survey show that there is genuine hardship, of course we will take action, but in the meantime any fair-minded person must come down in favour of a policy that rids us of substandard housing and can rid us of it completely in the next 10 years.
§ Mr. Amery
Of course there are these problems, and it is up to good local authorities to deal with them. I have had a series of meetings with the leaders of the inner London boroughs in the stress areas to discuss just these problems, and we shall be having another meeting shortly.
I come now to house prices, which are a cause of major concern to the community as a whole—even to the builders who are doing well out of them, because they see this as a potentially unstable market, and even to the property owners, who are half the country, because they, too, have children and relatives who want to buy a house and who face this serious problem of rising prices.
I hesitate to say what the present condition of the market is, but I will give an opinion from a major building society:During the past few months, there has been evidence to show that the rise in house prices has slowed down quite considerably. Whilst the position obviously varies in different parts of the country according to pressure of demand, it may be said in broad terms that we are at the present time in a period of stabilisation, with the prospect that future increases will not on average be at a rate approaching that which has applied in the last 18 months or so. One indication of the present position is the increase in the number of properties which estate agents are now able to offer for sale, giving purchasers a wider choice and a return to the former position of being able to negotiate the asking price rather 476 than having to offer or even exceed it in order to secure the property.That is not my view; it is that of a leading building society.
We should look at the causes. I am not sure whether there is total agreement between the right hon. Member for Grimsby and myself as to what those causes are. I do not believe that we are faced with a cost-push inflation. It is not the cost of materials, labour or even land—although I recognise that when a builder sells a house freehold he has to think not only of what the land cost him to buy but of the replacement for which he will have to pay.
Even so, the gap between prices and the cost of materials, labour and land still remains very great. The only explanation is that we are faced with a major demand-pull inflation of a long-pent-up and now effective popular demand. People have more money in their pockets because wages have risen and taxes have come down. There are better credit facilities available—far better than there were two years ago. The result is pretty plain to see.
This is happening—[Interruption.] There can be no doubt about this. It is a demand-pull inflation. If the right hon. Gentleman wants the evidence, it is this. It is not the new houses which have risen in price so sharply but the second-hand ones. They went up by 45 per cent. in the second quarter of 1972 compared with the second quarter of 1970, while new houses increased in price by only 30 per cent. So it is the demand from those at the bottom end of the market, who want to become house owners. They have always wanted to; now at last the credit facilities are there and they have the market.
The facts on the production of new houses are that the response has been notable. In 1970, 170,000 houses were built; last year the figure was 208,000 and it looks this year as though we will get 225,000. perhaps even 230,000. Houses are being built at the rate of 4,000 a week. I find these latest figures on the whole encouraging.
Of course we are concerned about the position affecting young married people, people who are trying to buy their first house, who are aged 25 or less. In the first half of 1970 first-time purchases 477 numbered 140,000; in the first half of 1972 they were 185,000–31 per cent. more. Borrowers under the age of 25 rose in number from 57,000 to 74,000, an increase of 30 per cent. That is not only a national figure. The building societies tell me that it is very much the same figure in London, the South-East and the West Midlands. A similar picture emerges when we look at manual workers operating on an average wage. In the first half of 1970, 71,000 of those workers bought their own house. In the first half of 1971, 94,000 did so, and in the first half of 1972, 100,000 did so. What is happening is only human and perfectly natural. A great many people hoped that when they got to the wage level which they are enjoying today they would have been able to buy a house. They were disappointed in their expectation. However, I do not believe that there is anybody who is unable to buy a house today who could have bought one two years ago on the salary scales, wage scales and mortgage conditions which then prevailed.
The Leader of the Opposition, the other day, and the right hon. Member for Grimsby dealt at some length with the 23 per cent. of a householder's income which goes to paying off his mortgage in the first year. As I understand the position, that 23 per cent. applies only to the income of the borrower and excludes any provision of his wife's income. Of course, the building societies have been taking a much more liberal view of that aspect than in the past. If it is 23 per cent. today, it was 20.8 per cent., as the right hon. Gentleman admitted, in 1970. Regrettably, there has been an increase, but it has not been anything like as dramatic as the increase in prices of the houses which we are considering.
I am not quite clear about the Labour Party's policy for tackling the situation. The Leader of the Opposition said that we should keep down mortgage rates even if that meant subsidy. As I understand it, the right hon. Gentleman is prepared to subsidise the difference between the rate at which the building societies borrow and the rate which they charge. I welcome the spirit in which the proposal was made. It seems to be an important step in Labour Party thinking to encourage more home ownership. My reservation is about the timing. With the market as hot as it is today, I wonder 478 whether it is right to inject still more purchasing power into it than at present. However, I like the proposal much better than some of the proposals which were raised at the Shelter conference and some of the things which were said by the right hon. Member for Grimsby, which left me with the impression that his recipe for dealing with the problem was to turn off the tap and cut back on credit facilities. The rich will always be able to find a deposit and pay the repayments. They will always be all right. The people who will not be all right will be those operating at the margin, the people whom we want to help.
The right hon. Gentleman the Leader of the Opposition also had an idea about an excess profits levy which would exempt the owner-occupier. The right hon. Gentleman wanted the levy to fall on the speculator but not the owner-occupier. But who is the speculator? As I see it, it is the second-hand market that leads the field. Of the 600,000 transactions which take place each year, almost all involving individual householders changing house, there are about 200,000—perhaps a little more but not much more— which involve "speculators". The "speculators" follow the field but they do not lead it. It is our belief that the only solution to the problem lies in increasing supply to meet the demand. In that way the Government are trying to help. We are trying to help by encouraging councils to sell council houses. I welcome very much what my hon. Friends the Member for Birmingham, Selly Oak (Mr. Gurden) and the Member for Southampton, Test (Mr. James Hill) said. In the first nine months of this year, 30,000 council houses were sold, nearly twice as many as last year, which gives some indication of the demand. We are also prepared, where private enterprise cannot or will not do the job, to authorise authorities to build for sale. However, at the end of the day it is the industry which has to do the job. We have created the conditions for a spectacular increase in the expansion of the private sector of house building. I am confident that the industry will rise to the opportunity which the Government have created for it.
§ It being Ten o'clock, the debate stood adjourned.
§ Debate to be resumed tomorrow.