HC Deb 22 October 1986 vol 102 cc1265-72

Motion made, and Question proposed, That this House do now adjourn.— [Mr. Malone.]

10 pm

Mr. Gerald Howarth (Cannock and Burntwood)

This is the first time I have had the privilege of raising an Adjournment debate. It is a pleasure to do so tonight. Perhaps the House will understand the defects in a particular house, Broadcasting house, but, as Broadcasting house is not in my constituency, I have no doubt that you, Mr. Speaker, would rule me out of order were I to make further references to it.

I am grateful for the opportunity to voice the concerns of an important group of constituents who have lived for the past three or four years under the cloud of ownership of defective homes. This debate concerns properties in the Cannock and Burntwood area which have been subject to defect. I am delighted to see my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle), who is renowned for his knowledge of housing matters and who also has constituents living within the Cannock Chase district council area in Rugeley who are affected by this problem. Nearly all the constituents I am talking about are beneficiaries of the Government's excellent right-to-buy policy. They are former tenants who have exercised their right to purchase their own homes. It is greatly to the Government's credit that, when it was realised that pre-cast reinforced concrete homes, which these people had purchased, were inherently defective, they acted swiftly to provide a remedy.

The essence of the problem for most of them was not that their homes were falling down but that one of the principal benefits of home ownership — the ability to mortgage one's home or to sell it and buy another—was at a stroke denied them as their properties became blighted. I believe that the Government therefore must be given credit for taking action in 1984 to bring legislation to the statute book to provide some remedy.

Much of the credit for implementing the Housing Defects Act 1984 and devising and revising the scheme which the Act brought into being must go to my hon. Friend the Member for Ealing, Acton (Sir G. Young), who held the post of Under-Secretary of State with considerable distinction.

I approve entirely of the licensing concept which was designed to provide owners of reinstated homes with that peace of mind that they currently do not have. It was inevitable that the speed with which PRC Homes Ltd.—set up by the National House Building Council and by the Government — could move would be slower than everyone would have wished and certainly slower than the affected owners and the hon. Members who represent those owners would have wished.

I believe that many of the original problems have been ironed out. After some prompting by Ministers, who themselves have been prompted by right hon. and hon. Members, PRC Homes is now implementing a much quicker appraisal process to ensure that schemes are examined as quickly as possible. There are in my constituency four categories of pre-cast reinforced concrete houses: Cornish units, Wates homes, Smith houses and Reema hollow panels. The last category has only recently been discovered, but the rest have caused anxiety and distress lasting many years.

I should like to emphasise the considerable anxiety caused to these people—not because their homes are falling down, but because many of them have invested a great deal of their own money in these properties and have brought them up to a very acceptable standard. Some of them are really beautiful homes, and there is nothing wrong with them, although in some cases signs of defects are emerging. For many owners the homes are adequate and they want to live in them.

The problem is that the owners are effectively trapped in those homes. One of the problems of a council house tenant is that he does not have the facility of moving as readily as a home-owner. The anxiety of not being able to enjoy the benefits of home ownership has caused great distress. It is not unreasonable that people should look to the Government, who implemented the Act, to do all in their power to accelerate the process of appraisal of the schemes submitted to PRC Homes, to ensure that there are realistic schemes available so that people can either continue to enjoy the homes in which they live or choose to move. For many of the people affected, the delay and the anxiety that that causes lead them to feel that they want only one option, which is repurchasing—effectively they want out.

I shall encapsulate the problems for each category of home. First, the Cornish units are more readily capable of repair, and that work is proceeding apace. However, Cannock Chase district council has acquired 10 houses on the ground of personal hardship and a further 40 are being acquired for which the cost of reinstatement, together with the cost of repair for the shale floors — which is not eligible for grant—exceed the value of the properties. Why are the shale foundations not eligible for assistance? Without the work being undertaken on the defective panels, the foundations would be adequate. I ask my hon. Friend seriously to consider including that essential repair work in the list of repairs eligible for grant under the scheme.

The second category is Wates homes, of which about 47 are in private ownership. After a long wait, there is now a real prospect of implementing a viable repair scheme. I understand that one of the leading consultants, Michael Dyson Associates, is hoping to undertake a pilot project in Tamworth with the assistance of Tarmac Construction. In the meantime, the owners are enduring a lengthy wait.

Further, despite the welcome increase in the maximum grant availability announced in August—an increase from £14,000 to £20,000—a problem arises because the quoted cost of repairs has also risen. In February owners were quoted £13,500 for repair, but that has risen in stages to between £17,000 and £19,000. The owners find that rise inexplicable. Indeed, such a figure is likely to make the value of the properties less than the cost of repair. The inevitable conclusion being drawn is that as soon as the Government raise the grant the builders will suddenly find that the cost of repairs has also risen. I cannot tell my hon. Friend where to find the solution. He has responded to pressure in the House to raise the maximum grant, but contractors have magically increased the cost of repairs to coincide with the grant. I hope that more people will come into the market, but my hon. Friend must realise that only a limited number are prepared to operate in it, despite the enormous attractions that there will be to builders and developers who undertake such work in the private and public sectors.

The Wates homes in my constituency were all owned by the National Coal Board, now British Coal. It is disposing of the properties as quickly as possible, and they are being bought at defective value by people who are subdividing them and renting them out. The tenants often do not provide the type of atmosphere which home owners on the estates would like. Home owners may want to reinstate their homes, but find that the former NCB property next door is no longer eligible for grant and that the new owners are interested only in packing in as many tenants as possible. As a result, the standard of the area is declining. I hope that my hon. Friend the Minister will be able to say something about British Coal's future policy in that respect.

The problems concerning Smith homes are intractable. The hon. Member for West Bromwich, West (Miss Boothroyd), who is in her place, the hon. and learned Member for Leicester, West (Mr. Janner) and my hon. Friend the Member for Leicester, East (Mr. Bruinvels) have fought valiantly for the interests of this group of people. I have about 14 such owner-occupiers in my constituency. They are fed up to the back teeth with having to wait for an approved scheme. I understand that a south Wales company may have a suitable scheme. The likely cost is £24,000, however, which means that repurchase is the only option. As the scheme involves the virtual demolition of the property—it leaves the roof—and as we are a long way from achieving an approved scheme of reinstatement, which could itself exclude many detached properties, I should have thought that the solution was to give all owners the option of repurchase. The 14 properties in my constituency are detached.

Miss Betty Boothroyd (West Bromwich, West)

I am grateful to the hon. Gentleman for giving way. He told me earlier that he would be happy if I intervened at this point. He said that many people in Smith houses would be happy if resources were made available to local authorities so that there could be repurchase. Would he press the Government on this matter? He knows that the resources are available. If they were made available to local authorities, they might repurchase Smith houses.

Mr. Howarth

The hon. Lady pre-empts my speech, but I am grateful to her.

To allow my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) to speak, I shall say nothing about Reema homes, but just invite my hon. Friend the Minister to comment on them. They are less of a problem than others.

I fully understand why the Government allocated administration of the scheme to local authorities. They undoubtedly have the necessary organisation and often owned the properties. Indeed, they were often responsible for building the defective properties, so it is no hardship for them to carry the can now. The Cornish units and Wates homes in Cannock were owned by the National Coal Board, and I understand Cannock Chase district council's slight resentment at picking up the cost of reinstating or repurchasing those homes.

It is true that the Government allocated £814,000 in the 1986–87 housing improvement allocation for Cannock Chase district council specifically to deal with its obligations under the Housing Defects Act 1984. The council is grateful for that, but its problem is that this is a demand-led area of the budget. It is a fairly reasonable Labour authority and is not like some that have been mentioned in the House. It seeks an assurance that if it is to meet its obligations under the Act—it cannot tell when they will be foisted upon it—it will not be subject to an attack by the district auditor.

Mr. John Heddle (Mid-Staffordshire)

I am grateful to my hon. Friend for allowing me to intervene quickly. As he rightly said, we share the same local authority. Earlier he said that a number of people in his constituency and mine, which is adjacent, were encouraged by the Housing Act 1980 to exercise their right to buy. They did so and now find that they have an asset in which they are trapped. The properties are effectively blighted, not because the houses are inherently defective, but because they are PRC homes. They are inevitably tarred with the same brush as Airey homes—I was associated with a similar Adjournment debate in 1982—and the owners cannot sell them.

When my hon. Friend the Minister replies, will he consider the possibility of imposing on local authorities the duty to relieve people who find themselves trapped in homes which they cannot sell? Will he direct the attention of local authorities, such as the Cannock Chase district council, to cases such as that of my constituents, Mr. and Mrs. D. H. Knowles of 14 Larch Road, on the Springfield estate in Rugeley? They bought, but now cannot sell and are suffering considerable hardship because they cannot buy the property into which they wish to move. Their home, although not inherently defective, is blighted. They find themselves trapped. The Cannock Chase district council, benevolent though it is and moderate though it is in Labour party terms, finds itself unable, because my constituents have exercised the right to buy, to extend the arm of compassion in cases of hardship. When my hon. Friend the Minister replies to the excellently presented Adjournment debate of my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth), will he consider this one basic defect of definition in the Housing Defects Act?

Mr. Howarth

I am most grateful to my hon. Friend.

People who need to move face a problem and Cannock Chase district council is being slow in coming forward, partly because one of our Ministers asked it to behave in that way. Now we must ensure that the council can meet the obligations without incurring wild expenditure. I suggest that we should perhaps allow capital receipts to be released for this one specific budget area and that one alone.

10.18 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey)

Perhaps I could begin on two personal notes. First, I congratulate my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) on a success which he has achieved outside the House. I am sure that it will have been welcomed by all hon. Members. Secondly, I thank my hon. Friend for the warm tribute which he paid to my hon. Friend the Member for Ealing, Acton (Sir G. Young) who was previously Parliamentary Under-Secretary of State for the Environment and whose work we all recognise as being of a high quality. Many of us have good cause to thank him for what he has done for us in many ways.

I certainly wish to thank my hon. Friend the Member for Cannock and Burntwood for giving us this opportunity to discuss, albeit briefly, this important legislation. The interest in this matter has been shown by the interventions of my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) and the hon. Member for West Bromwich, West (Miss Boothroyd) who, unfortunately, is no longer present. We are all grateful for the hon. Lady's intervention.

We agree that this was an important piece of legislation, and my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth) and I first knew it as the Housing Defects Act 1984. It has now been consolidated into part XVI of the Housing Act 1985, but the substance of the Act remains unaltered by the consolidation.

My hon. Friend has, quite understandably, identified some problems with the operation of the Act. I should like to look briefly at the history of this measure because it is important to remind ourselves of why we put it on the statute book and, indeed, of the progress we are now making, nationally, with its implementation.

The story really began in 1983 when our Building Research Establishment discovered serious, and quite unexpected, problems with Airey houses. The BRE then discovered that all prefabricated reinforced concrete houses designed before 1960 faced the same type of defect. These properties therefore became unmortgageable and the owners, who had bought in good faith and with no knowledge of inherent defects, were left in a very difficult position. The Government could simply have rested on the old "caveat emptor" principle but we did not. We recognised that the Government had a responsibility to owners who had bought in good faith from the public sector and now found themselves in an impossible position.

So the Government introduced first the "Voluntary Airey Scheme" — an extension of the repairs grant system to Airey houses—and then, when the full extent of the problem became clear, the Housing Defects Act 1984. As my hon. Friend knows, this entitles eligible owners of designated properties either to a 90 per cent. local authority grant to reinstate the property, or 100 per cent. in financial hardship cases, or, if repair is not possible or cost effective, to repurchase at 95 per cent. of defect-free value. Owners can also apply for repurchase on hardship grounds. The authority has to decide the form of assistance—whether grant or repurchase—in each case.

That Act received all party support in the House. It is a generous measure which has given security to thousands of home owners who would otherwise be in desperate straits. It is important to remember this when we look at some of the difficulties—which I do not deny exist. I stress that the owners will get assistance, within the 10-year period laid down in the designations. That fact in itself is an enormous step forward for them, and we must not lose sight of it. The Government did the right thing in passing this measure and now we must all do all we can to help it work smoothly.

A further big step forward is the progress that we are now making on approved repair methods. When the Act came into operation on 1 December 1984 there were none. Now, thanks especially to the builders and designers and, of course, to the National House Building Council and its subsidiary PRC Homes Ltd., there are 21, covering seven of the designated PRC types — Airey, Cornish unit, Unity, Wates, Woolaway, Orlit and Parkinson. Some 31 more schemes are in the pipeline, including one for Reema and one for the Smith houses type, which the Government designated earlier this year. These approved methods cover two thirds of all designated houses in private ownership—and progress is continuing. My hon. Friend will also recall that we have just made, on 25 September, adjustments to the grant expenditure limits for those types, like Wates, which have been shown to cost more to repair than the original across-the-board figure of £14,000. I know that my hon. Friend is concerned that builders should not "bid up" to the new limits, and we are monitoring the position carefully. Obviously, competition on repair methods will help.

This demonstrates that the Government are committed to making the Act work —and it is now getting under way. Up to 31 March 1986, there had been over 2,000 repurchases, and only 200 or so grants. For the current year local authorities estimate that they will be able to give well over 2,000 grants, so a lot more repairs are now getting under way. In other words, what we all wanted to see—Government, local authorities and owners—repairs rather than repurchase, is beginning to happen, and we can rightly be pleased at that. I fully accept that we must not be complacent, especially about the position of those authorities, and their owners, who face particular pressures.

Dr. John G. Blackburn (Dudley, West)

In my constituency, there are over 300 of these properties, and I am sure that my hon. Friend will be encouraged to know that the local authority has commenced the repurchase of properties of those who can prove that they are in financial difficulties.

Mr. Tracey

I am grateful for my hon. Friend's intervention, and I congratulate the local authority.

I know that resources are an issue that concerns my hon. Friend, and indeed other hon. Members. The first point on which we can all agree is that the precise pattern of expenditure under the Act is not easy to predict. Owners have 10 years in which to seek assistance; and, even if large numbers apply, the cases, quite understandably, do not necessarily crystallise for quite some time. That is why my Department encourages authorities to talk with their owners to try to reach a good understanding on a likely timetable. Owners' needs, especially in hardship cases, the existence of repair methods—and possible new ones—and overall resource availability all come into this. With good will all round, sensible programmes are attainable, and beneficial both to the authority and the owners.

Of course, certain authorities face particularly heavy obligations. We do all that we can, within the housing investment programme system, to allocate resources sensibly, reflecting those needs and others. We have been flexible beyond that. Last year, certain authorities came to us and said that they simply could not cope within existing allocations. We announced, in circular 9/85, that we would provide extra resources to authorities definitely in that position. We made available an extra £37 million. In the event, for the reasons that I have described, only some £5 million was taken up. For the current year we took £30 million out of the normal generalised needs index and distributed it directly to the regional level to reflect the problems of particularly hard-hit authorities. The West Midlands received £2 million on that basis— plus the money distributed in the normal way through HIP, where we also revised the GNI indicators, to focus better on HDA obligations. We are continuing to monitor the position—the present HIP round of meetings has given my Department's regional offices a valuable update. We shall continue to do all we can.

My hon. Friend made other specific points. We have received and studied his recent letters. First is the National Coal Board estate. I understand the concerns felt by many hon. Gentlemen about this. Local authorities are responsible under the Act for providing assistance on privately owned properties. I know that this has caused concern because authorities often had no previous involvement in those estates. But a local authority has responsibility for all the residents in its area. It is not unreasonable, therefore, for the authority to be responsible for administering the housing defects scheme in the same spirit as it handles the normal improvement and repairs grants.

The Government have a part to play. That is why the Exchequer makes an increased financial contribution in these cases — 100 per cent. of the difference between price paid and defective value, rather than the usual 75 per cent. The rest of the cost will of course attract housing subsidy, in the normal way, if the authority is still eligible for that.

As my hon. Friend has said, there are some difficulties for owners of Cornish unit properties situated on shale foundations. The shale can cost £2,000 to £3,000 to repair and is not normally eligible for grant under the housing defects legislation. This is because it is a defect quite separate from the designated one of inadequate protection of the steel reinforcement in the concrete panels. I know that certain authorities have considered giving improvement grants towards these costs. Obviously, it will be for each authority to make up its mind about giving such grants for this work. There is an alternative, if the owner's circumstances warrant it, of 100 per cent. grant assistance towards eligible works under the housing defects legislation. That could go some way towards evening up the position.

Because of the brief nature of the debate and the excellent contributions from my hon. Friends, time is limited. I hope that what I have said has been helpful. I am prepared to reply further by way of letter to any points that I have not answered. On the matter of resources mentioned by my hon. Friend—

The Question having been proposed at Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.