§ 9.8 pm
§ Mr. Peter Pike (Burnley)
I welcome this rare opportunity for a second Adjournment debate because it does not happen often. I appreciate that, in view of the shortness of notice, the Minister will have some difficulty in replying to some of the specific points I raise. I shall not criticise him for that, but I hope that he will try to respond to some of my general comments and I hope that he will take on board the more specific points and come back to me with some of the answers. I think that that is the normal method for a second Adjournment debate, because they are always arranged at short notice and it puts the Minister, whoever it is, in some difficulty. I recognise that, although the Minister is from the Department of the Environment, this matter is not within his area of responsibility.
The subject of housing, especially in Burnley, is important and it is right that I should take this opportunity to draw it to the attention of the House. This is certainly not the first occasion on which I have had an Adjournment debate on the subject and it is far from the first occasion on which I have spoken about the housing problems in my constituency of Burnley.
I think that it is true to say that housing in Burnley is the second most serious problem after unemployment. It is a matter of grave concern to the people of the town, in both the private and public housing sectors. One of the great differences between the two main political parties is on housing policy. We believe that the Government should make available many more resources to deal with housing in places such as Burnley. Not only would that deal with the housing problem, which is a common feature in Burnley and many other areas, but it would enable people to be put back to work.
My main criticism hinges on the provision of resources. It is apparent that the present housing investment programme allocations to local authorities are inadequate. The second aspect connected with cash and the ability of local authorities to deal with their housing problems relates to the use of capital receipts from the sale of council houses. It seems wrong to me and to many people in local government that local authorities are restricted to using 20 per cent. of capital receipts. The Government should look again at that policy. I hope that they will do so with a view to increasing the percentage that can be spent, if not making it possible to spend all the capital receipts.
A housing crisis is rapidly dawning in the constituency that I represent. There is a problem in many areas. First, we still have a large number of pre-war council houses—864, which is about 10 per cent. of our housing stock awaiting improvement. Those houses urgently need modernisation. The council estimates that it will take about eight and a half years at the present rate of progress to modernise them. The present cost is £15,000 to £16,000 per dwelling, and there is no subsidy for the improvement of council houses in the main.
The total cost to the council at 1986 prices is about £14 million. If the Government turned round and said tomorrow that they would give Burnley an extra allocation of £14 million, and if one assumed that the labour was available to deal with that programme, there would be implications for the housing revenue account, which would have to be met by an increase in either rent or rates.
223 That burden would be unacceptable. I have long been of the view that we should look differently at the way in which we subsidise improvements. It is time that we considered subsidising improvements to council houses in the same way as we subsidise improvements to houses in the private sector.
As I said, at the present rate of progress we shall have completed those improvements in eight and a half years' time. If one takes the pessimistic view that that cannot be improved on, at that time the council will also be faced with the problem of having to improve houses built immediately after the war. At the stage, those houses will be 50 years old. Improvements such as central heating are missing from houses built in the immediate post-war years. We have several estates in that category. But the immediate priority is to deal with the pre-war council houses.
§ Mr. Pike
In a moment.
There are such houses on the Stoops estate in Burnley, but the council has had to divert resources to other estates in the town. In one part— Naples avenue — people are gravely concerned about the council's inability to modernise those houses. Hargher Clough is another prewar estate, as are Barden Casterton Avenue, Old Palace House and Bleak House estates. Bleak House estate is in the ward that I represented and the council was forced to sell 112 houses to Wimpey's. The council recognised that it would be unable to deal with the problems on that estate because of the Government's policies.
§ Mr. Marlow
This is a very important debate not just for the hon. Gentleman but for many other right hon. and hon. Members with constituencies that face similar problems. The hon. Gentleman referred to the need for council houses to be modernised and repaired. Is he able to say to what extent the work is done by the council's work force and to what extent outsiders are brought in to deal with it? Is he able to compare the cost?
§ Mr. Pike
The council puts all this work out to tender. It depends upon who wins the tender. Wimpey has done the work in a number of cases and the direct labour organisation has done the work in other cases. A number of other builders have also been involved. One builder who carried out the work on a section of the Stoops estate made a very poor job of it. On the other hand, Wimpey does as good a job as the council's direct labour organisation. There is little to choose between the two.
I turn to another important aspect — the need to improve the older housing stock in the private sector. Burnley has a large number of pre-1914 terrace houses. They are mainly stone-built houses, of the traditional type. It will take the council 10 years to deal with the backlog of discretionary grant applications that are in the pipeline. In March 1984 the council had to stop accepting applications for improvement and repair grants. Its decision followed the Government's announcement in the autumn of 1983 of their changed policy on grants after the general election in June 1983. In order to provide the grants that are in the pipeline, the council would need to find £13 million, which is a considerable amount of money. This year the council has allocated £2 million for improvement grants.
224 The council has introduced a points system. Points are allocated according to hardship, the type of area and many other factors. Nobody argues that the points system is fair or perfect. The council tries to be as fair as possible, but it is difficult to get the points system exactly right. The council has tried to operate as fair a points system as possible, but it recognises that there are problems.
The council has also given prior approval for immediate, urgent work to be done in individual cases. I refer to applications for work to be done to deal with dry rot and other similarly urgent work. If such work were not dealt with immediately, problems would be caused that would go beyond the point where improvement or repair work could be carried out. If prior approval is given, people receive additional points, However, some of those who received prior approval for work that may have been done as long as two years ago are now coming under increasing pressure to pay the builders who carried out the work.
Not everybody is in a position to borrow money from a building society or a bank. One of my constituents is under considerable pressure from the building contractor and his bank arising from work that was done with prior approval. Another of my constituents served in the armed forces. He and his wife bought a house in Burnley. They have had to sell all their jewellery and virtually all of their possessions to pay for work that had been done after prior approval was granted.
It is a matter of regret to me that money is available only to allow the council to accept new applications for intermediate grants. I hope that the Government will provide sufficient money to enable the council to deal with the backlog of applications for discretionary grants and also to accept once again new applications for improvement and repair grants. I have to stress the important factor that if one house is not repaired and is allowed to become derelict, because of the way that the houses are built in my constituency, that can mean the demolition of the whole terrace. En turn, that means new build to replace those houses, which is far more costly than repair.
§ Mr. Ivan Lawrence (Burton)
It sounds as though some of the housing problems in the hon. Gentleman's constituency are not dissimilar from those in other urban constituencies such as mine. Has the hon. Gentleman put any pressure on his local authority to improve housing in Burnley by selling more council houses? He will be aware that the financial benefits that accrue from the sale of council houses do much to ease some of the financial problems in housing, apart from the substantial other benefits such as giving people the satisfaction and pleasure of owning their own property. It is, as the hon. Gentleman must agree, one of the Government's achievements, which I believe now has the support of the Labour party.
§ Mr. Pike
I have never been opposed to individuals being able to buy their own houses, but in the course of such a brief debate, I do not wish to embark on a discussion about the sale of council houses. I made it clear in my opening remarks that the problems to which I was referring were not by any means unique to Burnley. However, they are a result of the Government's policies and I ask the Government to consider how to solve them.
The hon. and learned Member for Burton (Mr. Lawrence) said that the sale of council houses would assist 225 our housing problems. Burnley has sold a considerable number of its council houses, and there might be more merit in the hon. and learned Gentleman's point if the Government were to allow councils to spend more than the 20 per cent. of capital receipts that they are allowed to spend. The criticism about the sale of council houses is that councils are not allowed to spend the money as they would wish.
§ Mr. Marlow
The hon. Gentleman probably knows, and if he does not it might help him, that not only is his council entitled to spend a percentage of accumulated resources from the sale of council houses but, in the year in question, it can spend a percentage of the receipts of that year. This seems to be a great incentive to Burnley to get to work and sell as many council houses as it can, given the great benefits of home ownership to the people who buy those houses, and also giving a further profit to the local authority so that it can do many of the things that he wishes it to do, and that we wish to see done as well.
§ Mr. Pike
I am aware of the hon. Gentleman's point that councils are able to use receipts in that way. I am trying to point out that I believe that the Government should put no restriction on the way in which councils can use capital receipts from assets. The Government's argument that the PSBR could be affected if all capital receipts are used are wrong, and the Government would have a much stronger argument in pushing their case for the sale of council houses if they were to remove that restriction.
In Burnley, we have sold about 1,000 council houses out of a stock of 8,000, but a large number of other people living in council houses are unable to buy them because they do not have sufficient resources, as they are unemployed, or for some other reason. It is no good advocating the sale of council houses if people cannot buy. If a person can afford to buy, it would be silly not to let them do so. I have never argued that. I lived in a council house for some time, but then bought one of my own and I believe that people have the right to own their property.
My constituency has a high percentage of owner-occupied property. It has one of the highest percentages in the country, and many council tenants who could afford to do so have bought their homes. If more people were employed, many more would wish to buy their homes.
The sale of council houses is not the issue that I wished to pursue tonight, but it would warrant a full debate in its own right. I was discussing private sector housing, not council housing. When I was leader of Burnley borough council, we prepared a rolling programme for housing action areas. It was the council's intention to introduce housing action areas to enable owners to preserve and restore basically sound terraced properties and extend their lives. The council has been unable to do that because of the Government's failure to make adequate moneys available. Such a programme of action is extremely important in a town where there is such a high percentage of older housing in the private sector.
I urge the Government to reconsider the subsidy for the improvement for sale scheme. House prices are very low in the Burnley area, and that creates a problem with rents because people can buy so cheaply. The council has not sold at a profit any of the houses that it has improved under the improvement for sale scheme and is never likely to do 226 so. When the scheme was introduced, the subsidies to housing associations were the same as those to local authorities. If there was a good enough case for similar subsidies then, the case should apply now.
§ Mr. Marlow
The hon. Gentleman said that it has not been possible to make a profit on improvement for sale properties because of the level of house prices in his constituency. Does that not depend on the price put on the house before improvement? If the council put the house on the open market, the price might be different from the value of the house on the council's books. I am sure that the hon. Gentleman will appreciate that the loan charges have to be paid—
§ Mr. Marlow
Of course, Mr. Deputy Speaker. The loan charges have to be paid, and that is water under the bridge.
§ Mr. Pike
I note your remarks, Mr. Deputy Speaker. I have tried to give way as little as possible.
The hon. Member for Northampton, North (Mr. Marlow) is wrong, because the properties will have low values in the first instance. In some areas of Burnley, an improved pre-1914 terraced house will fetch between £12,000 and £14,000. Most of the council houses for sale have been valued at between £12,000 and £14,000, and with the discounts provided they have been sold for well below the asking price. The cost of bringing a pre-1914 house to a proper standard with a flush toilet, bathroom and other modern amenities in many cases exceeds the price which the house would fetch when sold. The council loses money, even allowing for the susidy.
It is important that the council should pursue the scheme because, as I said earlier, if it does not improve those houses dereliction can spread along a terrace of houses, destroying them. At the end of the day it will cost the local authority and Government far more to deal with the problem.
Why are the Government reviewing the slum-clearance subsidy? Perhaps the Minister will be able to enlighten me on the motive behind that.
Sheltered housing is an important area and it is the only one in which Burnley council is pursuing a policy of new build. There is no case for new build for general use in Burnley but the demand for sheltered housing is substantial and the council is trying to meet that demand in two ways. First, it is converting existing properties, and, secondly, there is new purpose-built sheltered housing. But again, because of insufficient resources, the council is unable to meet that large and justified demand.
Indeed, the council has now embarked on a central control system, which I welcome because it means that those in sheltered accommodation can have cover 24 hours a day, seven days a week, for 52 weeks a year, which is essential. It will also provide an opportunity at a later date to provide installations in individual homes, whether in council homes or in homes in the private sector, to give elderly people the type of back-up to which most hon. Members will believe they are entitled in their old age.
I welcome that move, but the council needs to provide more purpose-built sheltered accommodation to deal with 227 the problem. Every year the council is faced with the difficulty of trying to balance what should be put in its programme. Should it build purpose-built sheltered accommodation? Should money go to the private sector or to the improvement of council houses? The simple fact is that, without sufficient resources in the housing investment programme allocation, without being able to use all the capital receipts, there will be insufficient money to deal with all the problems that exist.
As I said in opening, this is a major issue; the second most important issue after unemployment in Burnley. I accept that, as other hon. Members have said, this is an important issue in many other areas. I urge the Government to think seriously about the provision of money for housing throughout Britain and in Burnley in particular to deal with that important problem to ensure that people, whether they be elderly, or whether they want private or council accommodation, have decent homes in which to live. If they were to make resources available to deal with this important problem they would, at the same time, help to reduce the present unacceptable level of unemployment.
§ Mr. Robert B. Jones (Hertfordshire, West)
This is not the first occasion on which I have taken an interest in the housing problems of Burnley. As the hon. Member for Burnley (Mr. Pike) knows, I contributed an article on housing in north-east Lancashire to Contract Journal last year. I have at least some common ground with him in identifying the problems of his area.
I congratulate the hon. Gentleman on his good fortune in securing this debate, and. for some reason, securing the presence of the leader of the Liberal party. Perhaps the hon. Gentleman's seat has now been identified as a potential alliance target at the next general election. I notice that the leader of the Liberal party has now gone. That may relate to the falling strength of the alliance in the polls, and, therefore, the relative safety of the hon. Gentleman's seat. The distinctive features of north-east Lancashire are its high level of owner-occupation and its elderly housing stock. That creates a backlog of improvements and problems financing them.
I hope that my hon. Friend the Minister will forgive me for saying that some of the ideas in the Green Paper on housing improvement grants do not take full account of regional variations. In my constituency in the south-east, for example, improvement grants serve simply to increase the value of the unimproved property and tend to go to people who would spend money improving them anyway. In north-east Lancashire, however, the value of an improved house might well be less than the total of the money received in improvement grant and the original value. The prospect of having to repay a grant, as the Green Paper contemplates, is therefore a disincentive, and I hope that my hon. Friend will take account of that.
The hon. Member for Burnley may be encouraged to learn what has happened as a result of selling unimproved council houses to Wimpey. An amendment which I made to the Housing and Planning Bill will allow councils to pay improvement grants for the common parts of flats. That will encourage local authorities to seek renovation schemes involving the private sector in a difficult part of the housing market.
The differential between house prices in north-east Lancashire and other parts of the country creates a 228 difficulty, as home owners might not be confident that they can afford to move on. The market in Burnley is not as strong as in other parts of the country, and it is difficult to encourage people to buy if they feel that they might have to move to take a job in another part of the country and that they will not be able to sell. There is, therefore, some scope for local authorities to run one of the successful in-buying schemes which are operated in some parts of the country, which enable people to sell to the local authority.
One of north-east Lancashire's problems is its aging population and their different housing requirements. Some need sheltered housing and others want to stay in their own homes but are incapable of looking after themselves properly.
§ Mr. Bowen Wells (Hertford and Stortford)
The lion. Member for Burnley (Mr. Pike) spoke of subsidising improvements in Burnley. If that policy were carried through, the subsidies would have to be paid for by ratepayers in other parts of the country, notably those whom my hon. Friend the Member for Hertfordshire, West (Mr. Jones) and I represent. Is that not incredibly unfair on our constituents?
§ Mr. Jones
A more serious problem is the fact that subsidising public sector housing will depress the price of private sector houses, as there will be less demand for them. It would therefore exacerbate the problems of first-time buyers moving to new estates.
In my constituency, Honeywell has piloted a computer-operated scheme based on the Piper-Warden scheme, but a more sophisticated version. It provides essential monitoring of elderly people in both public sector housing and many private sector houses in places such as Burnley where elderly widows live alone. Although it is a friendly area and neighbours look in, some people who wish to remain in their homes are unable to look after themselves. I commend that scheme to the hon. Member for Burnley and his council, with which he has close contact.
§ Mr. Jones
My recollection is that that is based on the Piper system. The computerised system is more sophisticated and will cover a wider area. The hon. Gentleman is in close touch with the council, as a former leader of it, and I hope that he will pass on that information. I should be pleased to arrange any necessary meetings with Honeywell, if that would be helpful.
Finally, the hon. Gentleman touched on the point about the true percentage of capital receipts. I know that that subject worries hon. Members on both sides of the House. When in the recent past we have seen rising interest rates it has been difficult to justify a measure which could remove £5,500 billion from the money market overnight, or from local authority internal lending, with its concomitant pressure on interest rates. There are two sides to that issue. It is not as simple as the hon. Gentleman maintains.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey)
It is only right to 229 start by paying tribute to the hon. Member for Burnley (Mr. Pike) who grasps opportunities with both hands and speaks on behalf of his constituents. I must apologise to him for the fact that housing Ministers in the Department of the Environment have unavoidable engagements tonight. He may have grasped the opportunity, but, unfortunately, they cannot be present to answer the precise details of his speech. I undertake to have the correct information supplied to him by letter after we have read his speech. I shall ensure that my hon. Friend the Minister for Housing, Urban Affairs and Construction considers the points carefully.
I shall answer some points and take the opportunity to put forward some general details about the Government's attitude towards housing and to set out some of our housing policy once again. The Government have an excellent record on housing. It would be wrong for anybody to run away with the idea that the Government minimise the extent of housing problems, with the creation of many of which the Government had nothing to do.
Certainly, we have set out to find out the facts about the housing stock. First, we did so through the housing stock condition inquiry last year, which was the first of its type. In the inquiry local authorities provided information about renovation needs in their housing stock. Secondly, we are doing so through the English house condition survey later this year, which will be the most comprehensive survey ever undertaken. We shall cover both private and public sector housing.
Because of the scale of the problem, the resources and skills of the private sector as well as the public sector must be fully harnessed. Of the expenditure of £9,000 million a year on renovation in the private sector, 90 per cent. is provided by the private sector itself, but the Government have provided large-scale assistance, amounting to over £3,000 million, in home improvement grants. That £3,000 million has to be compared with a mere £90 million in the last year of the Labour Government.
In a Green Paper last year the Government set out proposals for targeting Government assistance where it is most needed. There were numerous responses to the Green Paper, and my hon. Friend the Minister for Housing, Urban Affairs and Construction and colleagues in the Department are now considering those responses before making decisions on the future thrust of our policy.
We have also provided extra assistance to local authorities—an increase of £200 million in their planned level of capital expenditure on housing in 1986–87. But with local authority housing, too, we believe that full use must be made of the private sector and other innovative approaches.
The hon. Gentleman has concentrated on Burnley. I am aware that in Burnley the Bleak House estate has been successfully renovated for re-sale by the building company, Wimpey. Other private developers are interested in undertaking schemes of this kind, and the local authority, as the hon. Gentleman will know, is in touch with my Department's urban housing renewal unit. I hope that it will be successful in an application for extra housing investment programme allocation to renovate one or more of the other estates.
Two essential elements in the UHRU approach are, firstly, decentralising the local authority's management so that it is more effective, more responsive to and in closer 230 touch with the tenants whom it sets out to serve and, secondly, involving people directly in the renovation of their own estates, especially through community refurbishment schemes, in which funds from the Manpower Services Commission and my Department enable unemployed people to be employed on improving their own environment. A number of such schemes have now been approved, and I hope that Burnley will follow suit.
§ Mr. Michael McGuire (Makerfield)
Could the Minister tell me what use his Department is making of a unit, which I think is privately sponsored, known as the land resource unit? I believe that it has carried out studies and surveys on two estates in inner London, both of them, I think, in Hackney. One estate has been renovated to the extent that everyone has his own front door and patch of garden. It means getting away from the tower block mentality. The incredible thing is that there has been not one burglary on one of those inner London council estates this year. The other estate, which has been left largely untouched, has all the problems that we have come to associate with tower blocks. That was done by this land resource unit, which is worldwide. The author of the report was speaking on the radio. That is how I happened to hear her. I thought it was so interesting that it would be appropriate to ask the Minister about it while he was on his feet.
§ Mr. Tracey
As you rightly point out, Mr. Speaker, the debate relates specifically to Burnley.
I apologise to the hon. Member for Makerfield (Mr. McGuire) for not being briefed on that point. He has raised a matter of considerable interest. Just as I undertook to write to the hon. Member for Burnley, so I shall refer the point made by the hon. Member for Makerfield to my hon. Friend the Minister for Housing, Urban Affairs and Construction, and we shall make sure that the hon. Gentleman gets an answer.
§ Mr. Tracey
I have been led to the right source.
The Government have achieved a great deal since May 1979. In Great Britain 1.25 million new homes have been built. On a very important part of our policy, 870,000 houses and flats, although perhaps not as many flats as we would wish, have been sold by local authorities, new towns and housing associations in Britain; 800,000 of those sales were to sitting tenants. Sales are still at about 100,000 a year. Great Britain is the only country in western Europe with such an enormous public housing sector—27 per cent. of total housing. That is a legacy of many years of municipal socialism in housing.
The right-to-buy has been successful because it has recognised the wishes of the great majority of the people to own their own homes. Nearly 1 million families have bought their flats or houses from councils, new towns and housing associations. Owner-occupation has grown by 2 million. Nearly two thirds of British families now own their homes. That is their choice and they have had the essential freedom to exercise that choice. We are also proud that mortgage famines have disappeared. Mortgage rates are coming down, with the third significant reduction in a matter of weeks.
231 The policy of the Government is more choice, more freedom and more fairness in the rented sector as well. That is the best way to avoid the mistakes of the past. Council tenants did not have much choice in the design of the tower blocks that were built in the 1960s and the 1970s. Those designs reflected what bureaucrats and architects in central and local government thought was best for tenants. Unfortunately, the people were not consulted. The result has been many of the housing problems which we have today.
I regret that the management record of many local authorities has not made the resolution of the problems easier. There are 116,000 houses and flats standing empty—more than the total number of families accepted as homeless last year. Of those, 26,000 houses and fiats have been empty for more than 12 months. That record is not acceptable. Rent arrears now total nearly £200 million. In the worst 20 authorities, arrears amount to £94 million.
We hear a great deal from Labour authorities about the need for more money to spend on their housing stock. We have heard about that from the hon. Member for Burnley tonight. We must ask some serious questions about it. If the housing stock is in poor repair, why did those authorities allow it to get into that state? What have they been doing for the past 40 years? The record of many councils which complain in that way is poor, but they cannot be held entirely to blame. Many council housing departments are simply too big—too much like monsters—to manage their housing properly.
We have to find ways to break up those great empires, to achieve more diversity of management and ownership and to encourage more tenant participation in the organisation and management of estates and blocks.
I am proud to say that the Housing and Planning Bill will promote such a change. I welcome the enlightened attitude which all the Opposition parties represented on the Committee adopted towards the Bill.
232 I am pleased that we have had a positive response from most local authorities, including Labour authorities, to the UHRU operation. Over 100 authorities have asked for visits and more than 120 schemes have already been worked out. The schemes vary greatly. Some lever in private funds and others do not, but the essential element is to persuade managers to respond to the needs of tenants, not to the needs of the bureaucratic or political machine.
§ Mr. Robert B. Jones
The trouble is that many local authorities have used direct labour for housing maintenance for years and have therefore been geared to the convenience of the work force and managers in those departments instead of the convenience of customers.
§ Mr. Tracey
In his usual thrusting way, my hon. Friend the Member for Hertfordshire, West (Mr. Jones) goes to the heart of the matter. I do not attempt to deny what he says. He makes an apposite point.
The authorities recognise that they do not have all the answers. We have to examine new ways of providing rented housing. The private sector has a part to play, as do housing associations, management trusts and tenant cooperatives. Not only can such alternatives offer tenants the prospect of better management, but they offer more choice, more freedom and more fairness. That is what this Government are all about.
§ Mr. Ivan Lawrence (Burton)
On a point of order, Mr. Speaker. I wondered what the position was. I hope that the matter on which you are about to rule is not pre-empted because of the anxiety of my hon. Friend the Minister to sit down three minutes before 10 o'clock. If there is no problem, I shall resume my seat.