§ 20. Mr. Tebbit
asked the Secretary of State for the Environment if he will inquire into the effect on private sector house prices of the purchasing by local authorities of existing houses coming on to the open market.
§ Mr. Rippon
I am not in favour of the acquisition of existing private houses by local authorities simply in order to bring them into public ownership. I do not think that a special inquiry is called for but I am keeping a close watch on developments.
§ Mr. Tebbit
Is my right hon. and learned Friend aware that I am receiving letters from some of those young married couples over whom the hon. Member for Gateshead, West (Mr. Horam) sheds crocodile tears? The people who write the letters tell me that they try to buy houses in my constituency but that the council always comes in, overbids them and thus gets in first, thereby keeping up house prices. When will my right hon. and learned Friend take action to force councils to spend their energies on building houses and not municipalising existing houses? What action is to be taken to increase the housing supply?
§ Mr. Rippon
It is right that local authorities should concentrate on their own programmes. I am glad to say that in the first 11 months of last year local authority tenders showed a 28 per cent. increase. Regarding the particular problem which my hon. Friend raised, I do not believe that the local authority ought to intervene where there are willing purchasers, as my hon. Friend suggests may be so. However, there may be cases in 1214 which the local authority can negotiate with a builder to purchase houses which are not finding a ready market. In such cases I ask local authorities to bear in mind the powers they have to make loans to priority categories of people who wish to buy.
§ Mr. Bagier
Does the right hon. and learned Gentleman agree that the public housing sector offers one of the main means of keeping house prices down? When will the Government agree to an increase in the house building programmes of local authorities? Will the right hon. and learned Gentleman comment on how a local authority threat to buy up property would affect, for example, an offer which many hon. Members have received today of a 2-bedroom house in the Westminster area, in Smith Square, which can be secured at the knock-down price of £55,000, plus rates and leasehold costs? Is not this the type of property which should be taken from the landlord who offers it at that price?
§ Mr. Rippon
I wonder whether that property belongs to the Leader of the Opposition. If it does, I cannot comment on that particular case. [HON. MEMBERS: "Cheap."] It is absurd to take a particular case in an area of that kind. On the general question, there is no barrier to the local authorities putting forward their schemes. There is no limitation at all on their expenditure. They are entitled to the full benefit of the generous subsidies under the Housing Finance Act 1972. We have had difficulty over the cost yardsticks, but we have eased them enormously and there has been an increase in the number of local authority tenders.
§ Mr. Farr
Where the policy of meaningless buying of private houses occurs, will my right hon. and learned Friend ask councils to reconsider their actions? I raise this point because I wonder whether he is aware of the hardship being experienced by young married couples wishing to buy their own homes when prices are inflated by local authorities going into the market. This problem is aggravated particularly in Leicestershire, where local authorities refuse to sell council houses to people who would like to buy them if they had the opportunity.
§ Mr. Rippon
That is a real problem in many areas. I am sure that my hon. Friend is right in asking that local authorities should not go into the market when what he has described is the effect.
§ Mr. Stallard
Will the right hon. and learned Gentleman return to the original point in the Question? If he has an inquiry, will he inquire into the effects of the so-called fair rents and the inflated prices being asked for second-hand houses in the inner London area?
§ Mr. William Clark
Is my right hon. and learned Friend aware that in inner London an additional competitive factor is that the GLC is competing for secondhand houses, particularly in Croydon, and that Croydon Borough Council is taking evasive action? This sort of competition is ludicrous. When will something be done about the borrowing powers of the GLC, which is exempt from my right hon. and learned Friend's sanction?
§ Mr. Rippon
The GLC has to bring forward a Money Bill. When it does, that may be an appropriate moment to consider that aspect of the situation.
§ Mr. Freeson
Is the right hon. and learned Gentleman aware that there is a grave shortage of rented accommodation in big city areas, particularly London? Does he not agree that one way to protect the market and to keep it available for tenants is for furnished properties which otherwise would go for speculative deals to be brought into public ownership through either local authorities or reputable housing associations? Will the right hon. and learned Gentleman answer the question which he refused to answer properly last night? If he believes that there should be an increase in local authority housing construction to increase the supply, why are the Government in their public expenditure survey and White Paper on improvement grants reducing investment expenditure in housing by nearly £1,000 million in the next four years?
§ Mr. Rippon
I explained to the hon. Gentleman yesterday that he had his figures wrong and that he had failed to 1216 put them in the proper perspective. He had not allowed for the private sector or for the Housing Corporation's new borrowing powers and its opportunities to raise money privately, to give guarantees and so on. I agree with the hon. Gentleman about the problems of the inner areas. It is the purpose of the Housing and Planning Bill, which was given a Second Reading last night, to deal with them. The effect of the proposals for improvement grants concentrated on the inner areas, and the housing action areas and the new resources of the Housing Corporation on those aspects of our housing policy is that we shall be spending about £500 million a year by 1977–78.