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Housing

Volume 930: debated on Thursday 21 April 1977

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4.18 p.m.

I beg to move,

That Subhead A1(1) (Salaries of Ministers) be reduced by £4,750.

I shall issue a Press notice.

The background to today's debate on housing is clear: it is the total failure of the Government's housing policy, it is the exposure of the promises which the Labour Government put before the country in the two elections of 1974, and it is now the Government's apparent bankruptcy of thought about how to cope with the housing crisis which that failure has created.

In moving to halve the salary of the Minister for Housing I can think of no more effective way of pleading the case than quoting from the first paragraph of the last Press release on the subject to come from his Department. It said:
"Taking three month totals to reduce the effect of month-to-month fluctuations, and discounting the normal seasonal movements, total starts in November to January were down 20 per cent. on the previous three months, August to October, and 33 per cent. lower than November to January last year. Total completions were down 9 per cent. on the previous three months and 10 per cent. lower than a year ago. In the public sector, making similar comparisons. starts were down 21 per cent. on the previous three months and 39 per cent. lower than a year ago, while completions were 11 per cent. down both on the previous three months and a year earlier. Private sector starts were 20 per cent. down on the previous three months and 26 per cent. lower than a year earlier, while completions were 7 per cent. down and 9 per cent. down respectively."
The House will appreciate that not even in the best year under this Labour Government has the level of either starts or completions equalled the total in the worst year of the last Conservative Government. I am sad that that comes as such a surprise to the two Ministers responsible. I should have thought that they would at least have understood the dramatic decline in the housing programme for which they are responsible.

The Press release that was sent out by their Department—I am sure that their officials can provide a copy of it so that the figures can be checked against what I want to say—goes on to deal with house renovation grants and the slum clearance situation. Exactly the same situation is to be found there. In 1976 slum clearance figures were worse than in 1975, and both those years were worse than either the last two years of the Conservative Government. In the past two years this Government have cleared 97,000 houses. In 1972 and 1973 the Conservatives cleared a total of 129,000 slum houses.

House improvement grants reveal a consistently depressing picture. From November 1976 to January 1977 the number was 3,000 fewer than the previous year. The overall national figure shows that although the Conservatives approved 360,000 grants in 1973, that figure under this Government fell to 125,000 in 1976.

It might seem to the House that, against a calamitous record of this sort it is charitable of us that we should seek only to halve the salary of the Minister for Housing and Construction. This factual statement of the Government's record is seen in an even more reprehensible light when it is compared with the promises in the Labour manifestos of February and October 1974. In that February we were told that the serious decline in the then Conservative Government's housing programme was to be reversed. We were promised that land was to be freely and cheaply available. By October, the tone of the manifesto had assumed an even more strident pitch. The disastrous fall in house building was to be reversed. We were also told that the "lump" was to be attacked so that the Government would create a stable and permanent work force in the industry.

What the Government omitted to say was that it would be a stable and permanent unemployed work force in the construction industry. Today's figures for the construction industry, published by the National Council of Building Material Producers, forecast that in 1977 that stable and permanent work force, already containing a quarter of a million unemployed, could look forward to yet a further reduction in orders in 1977 of 7·5 per cent. There will be, moreover, a further reduction in 1978 of 2·5 per cent.

The explanation for the Government's failure is apparent. They have, as one would expect from a Socialist Government, pursued policies that placed the responsibility for the success of the housing programme on an increasingly complex, slow-moving and expensive State machine. They have consistently pursued public sector policies and destroyed the ability of the private sector to contribute to the housing programme.

The profitability of the house-building companies has deteriorated sharply over three years. Savory and Milln's building book, published last month, shows that over the three years 1974, 1975 and 1976, the 20 private estate developing companies listed have seen their profits decline from 22 per cent. to 16·9 per cent. to 12·7 per cent. At the same time the tax percentage on those reducing profits taken by the Government rose over the same period from 52·5 per cent. to 56·4 per cent.

The second and, of course, coincidental factor has been the chaotic interest rate movement consequent upon the Government's management of the national economy. Since this Government came to power, there have been some 40 changes in interest rates, including, of course, periods of unprecedentedly high interest rates. As everyone knows, the effect of that has been profound throughout the national economy, but nowhere more so than in the house building industry.

The Labour Party is now trying to divert attention away from its housing crisis by blaming the building societies for the level of interest rates. The first task of the building societies is to protect the deposits of those who save with them. Once the depositors' confidence is lost, home buyers will not receive mortgages. It is worth remembering that there are approximately four times as many depositors placing their savings in the building societies as there are borrowers using funds for home purchases.

It is interesting to watch the way in which the Government compete with the building societies and make their work unpredictable and difficult. For example, only a few weeks ago the sixteenth issue of national savings certificates offered 8·78 per cent. per annum, specifically designed for high tax payers. The calculations are that perhaps something like £150 million was thus diverted towards a Government savings scheme and away from the building societies.

We have seen a Budget introduced in the last few weeks which fails to establish an income tax rate for the coming year, with the consequence that the composite tax rate of building societies cannot yet be predicted with certainty. The Labour Party is trying to use its familiar technique of diverting attention from its own failures by turning it on to somebody else. The fact that building societies must view with increasing concern is that the rates of inflation go on moving up. Every hon. Member wants to see lower rates, but for this Government of all Governments to advise anyone, particularly building societies, on the prudent management of financial affairs flies in the face of the experience of the past three years.

Is my hon. Friend aware that the Prime Minister in particular should avoid that course of action, because in 1965 when, as Chancellor of the Exchequer, he last tried to jawbone building societies on their interest rates, there was an immediate mortgage famine?

My hon. Friend draws the House's attention to the heart of the dilemma. It is particularly ill-suited for this Prime Minister, whose record as Chancellor was among the most disastrous of the post-war period, to attack other people over their methods and judgments in financial matters.

The third reason for the failure of this Government's housing programme is the Community Land Act and the punitive tax rates associated with it. There is no greater deterrent to the free flow of land for housing than these two instruments introduced by the Labour Government. The harm done has been apparent. The one certain result is that it has not produced the free and cheap flow of land which was promised in the manifestoes upon which the Government were elected.

But the benefit is harder to find. Two parliamentary answers to my hon. Friend the Member for Daventry (Mr. Jones) gave the cost of administering the development land tax for 1976–77 as £1,095,000. The total revenue from the tax was £1 million. So all the vast gains that we were led to expect would flow from that legislation have led, as always in Socialist practice, to a net loss of £95,000 in cash. Far worse, they have led to an incalculable loss in potential building land on which houses might now be going up.

Against that background it would be very surprising if the Government remained wholly inactive. That they are not. They are conducting a housing review. Of course, they have been conducting the same housing review for the past three years. In March 1976. the Minister of Housing said:
"The recommendations of the Review are expected to be published in the Spring or early Summer of this year."
At that time the private house starts were 15,000 a month. Three months later, the Minister of Housing said:
"The work (on the Review) is well advanced. My right hon. Friend expects to publish the results in the Autumn."
By then, private house starts had reduced to 13,800.

A month later, the Minister's right hon. Friend the Secretary of State was in on the act. He said:
"The Review is still in progress. I expect to have the conclusions later in the year … I very much wish to complete the study at the earliest possible moment."
By then, the figures for private house starts had drifted to 13,200 a month.

Four months later, the focus of attention was back to the Minister of Housing, who told us:
"The Review started work in February 1975. I hope that it will be completed by the end of the year."
The figures for private house starts in that month went down to 10,500.

Three months later, tucked away in an obscure paragraph 46 of an appendix to a Government response to the NEDC representations, it was stated:
"The Government intend to publish later this year a Green Paper on the outcome of the Housing Finance Review."
By this time private house starts were down to 9,200. The longer it went on, the worse the figures became. Plans, talk, exhortation—all of that in plenty: just no houses. The housing review is at the heart of the Government's dilemma, for they placed their political reliance on the ability of national and local government to solve the national housing problems independently of the private house-building sector.

All the evidence before the housing review, much of which has been leaked, confirms the error of that narrow party judgment. The conclusions for the Labour Party are so unpalatable that it has now wasted years agonising over that political dilemma. On the one hand, Labour activist supporters clamour to reduce incentives to people whom we wish to help to buy their own houses. Such people want, above all else, an opportunity to buy their own homes. All the policy requirements needed are to stimulate private building and private ownership, to give help to young couples who want to accumulate a deposit to buy their own homes, and to give council tenants a statutory right to buy their own homes. Yet the Government cannot throw off the dogma that weds them to State housing.

The difference between our determination to give special help to encourage ownership among council tenants and the Labour Party's approach is at the heart of the difference between Labour and Conservative attitudes.

I wish to draw to the attention of the House a recently published book called "The Politics of Power." Joe Haines knew a thing or two about the Labour movement. He tried to persuade the former Prime Minister, the right hon. Member for Huyton (Sir H. Wilson), to introduce a home-purchase scheme for council tenants. In some not-so-publicised passages in that book Joe Haines describes his experiences when working in the Cabinet Office at No. 10 under a Labour Government. He said that such opposition as there was to the scheme to help council tenants join the property-owning democracy came
"from the politicians, the Secretary of State and his special advisers within the Department. They were terrified of any scheme to 'sell' council houses, being denounced by Labour councillors in revolt. They feared, too, a similar revolt from the National Executive of the Labour Party."
Joe Haines continues:
"Overwhelmingly, and partonisingly, the 'political' advice was for caution … If we went ahead there would be 'the most appalling demoralisation' among Labour Party activists as we approached the local council elections of May 1976. If we did decide to proceed, then we ought to conceal the fact from the electors before the votes were cast."
Joe Haines had not finished with the Labour Government. He continued:
"it was also apparent that the reason was the prevarication of the Department flowing from the refusal at the top even to examine the schemes with an open mind … the 'selling' of council houses was gravely equated with the famous Clause 4 of the Labour Party's constitution which aims at securing 'for the workers by hand or by brain the full fruits of their industry' upon the basis of 'the common ownership of the means of production, distribution and exchange'."
Joe Haines concludes:
"We were entering the realm of the farcical, where the question of whether or not we gave greater freedom to the council tenant was being incorporated into the theology of the movement. To compare our schemes with a breach of Clause 4 was to liken a chihuahua to an elephant because they both have four legs and a small tail."
The treatment of council tenants by the Labour Party is, as Joe Haines reveals, a shameful piece of political expediency. The motivation is not the interests of the council tenant, but the protection of the power base of the Labour Party on council estates.

The Labour Party relishes a situation where for every tiny change a tenant wishes to make a decision is needed by the local town hall. It believes in the attitude that individual choice and decision are secondary to the bureaucracy with which it is seeking to engulf us. The attitudes of the Labour Party are clearly exposed on the question of the leasehold enfranchisement and sale of council houses. Under the Leasehold Reform Act 1967 the then Labour Government gave rights to tenants that enabled some tenants living in freehold houses worth £10,000 to buy them for only £4,000. Yet the Labour Government resent any sort of incentive to council tenants who wish to enjoy similar opportunities.

Does the hon. Gentleman accept that most working people are dependent on obtaining a council house if they are to find a home at all, and that his proposals would deprive more than half of the population of their hopes? Secondly, is not what he said about owner-occupation quite untrue, because he knows that local authorities have lent millions of pounds to people to buy their own homes when they could not obtain mortgages from building societies?

If the hon. Gentleman is right, why was it necessary for the Secretary of State for the Environment to send a circular to local councils seeking to stop them selling council houses?

If they are Conservative councils, presumably they were directly elected by a majority of Conservative votes in the area. Why not allow local democracy to deal with these profound political issues?

The hon. Gentleman is so engaged in history that all he can do is to mouth the platitude "landlord". I want to make landlords of millions of council tenants. It is the Labour Party and its members who wish to prevent that coming about.

I have not only the leasehold enfranchisement argument on my side. Ownership of homes has spread over the last 20 years—the single greatest accretion of personal wealth to millions of citizens ever known. The price of the average house in 1957 was £2,250. That same house today is worth £13,000. Millions of families were encouraged by the Conservative Party to buy those houses, and they gained immeasurably. However, the council tenant who has paid the average rent over that same period of 20 years has paid almost as much to the local authority in rent as the owner has paid in mortgage repayments. Yet the freeholder who has had that advantage now owns a house worth £13,000 and the council tenant has nothing.

I fully accept the facts given by the hon. Gentleman, but does he not agree that by selling council houses which will escalate in value the subsidy paid by the public will increase in future in terms of the mortgage relief given year after year to those householders? Therefore, we shall have an open-ended subsidy which will grow more onerous as the years go by, whereas council houses in a 15-year period show a profit.

There is no way in which a new council house which has a building cost of £1,300 a year will show a profit over 15 years. The hon. Gentleman is taking an historical case based on a period of 20 to 30 years. We are now in a different ball game. We are seeking to provide new homes for the public sector, and the council housing sector is costing £1,300 for each house in each year. That cannot be the basis of a reasonable housing strategy.

We need a shift of emphasis in the Labour Party. That is the reason the Government have run out of reserves, namely, by continuing to impose that policy in terms of a contracting private sector. We are seeking to open up the private sector.

Earlier in his remarks the hon. Gentleman sought to obtain some credit for home ownership. Does he not agree that the number of houses built in the private sector for home ownership was very much greater in the years 1965–70 than in the years for which the Conservative Government were responsible? The hon. Gentleman should not seek to take ill-founded credit from the present situation.

There was a switch in the emphasis in the years after 1964 in favour of council house building, but the fact is that the momentum of the house-building programme in the public sector still increased as against the level in the private sector. But that does not invalidate the argument that the spread of home ownership should have been more extensive if council tenants were given more opportunity to become property owners. What the hon. Gentleman forgets is that in the early 1970s tens of thousands of council houses were sold to the private sector, but under the present régime that has been frittered away to a tiny number as a direct result of Labour politicians seeking to put an end to the process which we at that time encouraged.

We seek to remedy the injustice that over the last 20 years the property owner has gained immeasurably and the council tenant has not. We wish to redress that imbalance by giving the council tenant the opportunity over the next 20 years to share in the gains that the property owner has made over the previous 20 years.

The strategy of the Government's housing policy was based on the public sector. Every day the figures prove that the mounting costs of the subsidies to sustain it are leading to the construction of fewer new houses in both the public and private sectors. The House is now entitled to a clear answer to the question that we have been putting to the previous Secretary of State, to this Secretary of State, and to the Minister for Housing and Construction for three years. When will the new approach, so desperately needed and long overdue, be published? What is the present position of the housing finance review? When can we expect a clear public debate based on its early publication?

The Conservative Party is convinced that the only realistic housing policy which it would wish to support depends on the introduction and extension of incentives to enable people to buy the homes that they want to own. It will not only help those people to buy, but it will release resources to help the genuine cases of need and stress. The Government's policies are leading to a contraction not only of ownership, but in the provision of housing in stress areas. We need incentives to back the success of the property-owning democracy. The inhibitions to that success, particularly the Community Land Act, must be removed.

Will the hon. Gentleman explain how, if a person living in a council house or flat in a stress area is able to buy that house or flat under his proposal, that will relieve somebody in housing need?

Because it will release extra cash to the local authority by the sale of the council house. If the council tenant buys his home with the help of outside finance by way of mortgage, that will release resources to the local authority. Secondly, he takes from the local authority the burden of maintenance and repair costs. Above all else, it is what the people want, given the choice.

The hon. Gentleman has made an interesting point. Is he saying that in his approach to the sale of council houses, sales should be conditional upon the local authority concerned then using the additional money that has become available to build further accommodation for rent?

No, I am not saying that. I am glad to have the opportunity to add to the speech that I am making by making an observation about the new block grant concept that the Secretary of State is introducing in housing.

The Secretary of State is proposing to give a greater degree of discretion to local authorities to spend their housing resources as they wish, but he is compartmentalising it into four categories so there is still central control over what the authorities do with the money. I believe in the process of moving towards local government support on a wider basis by giving a greater degree of discretion to local authorities. My criticism of the block grant scheme is that the right hon. Gentleman has decided to keep the four compartments. It would have been better to give a greater degree of discretion to local authorities in this area. The answer to the question is that it would add to the resources available to local government not necessarily to build more houses for rent, but for general purposes.

The hon. Gentleman made the point. He said that if those living in council properties were allowed to buy their homes, they would be helping people in stress. I asked whether he believed that and how it would be done. Now he has said that he agrees that the money so obtained by the local authority will not necessarily be available to build houses for people in a desperate plight at the bottom end of the scale. Therefore, I ask the straight question again: how do we deal with people in stress?

I greatly respect the right hon. Gentleman's knowledge of this subject. I want to be sure that he understands my point. There is no reason why the resources coming from the sale of a council house backed by outside mortgage finance should not be used for the purpose that he has in mind. It would be an option, but the option in my scheme would be exercised by the local authority concerned. It would be for the local authority to decide where to spend the resources which would flow into its hands.

Surely the hon. Gentleman does not suggest that such moneys released could be made available for rate reduction, for example. If he is taking housing need seriously, he must be asserting that the money be spent on the relief of housing need in one form or another.

It will be an additional source of funds to finance local authority capital expenditure.

It does not necessarily need to be on housing. It is apparent that Labour Members are not following the trend of thinking of the Secretary of State, The right hon. Gentleman's trend of thinking on local government finance is to move towards the block grant system. The right hon. Gentleman is trying—[Interruption.] The record of the Minister for Housing and Construction is not that good. I am happy to give way to his right hon. and hon. Friends and to answer their questions without sedentary interruptions from the Minister for Housing and Construction, who can make his own speech later.

The Secretary of State is moving towards giving greater discretion to local authorities to spend the resources available to them according to their own judgment. Specifically in housing the right hon. Gentleman is proposing to give them much greater flexibility. In his speeches—I agree broadly with the trend of his speeches, subject to detailed comments—he has suggested extending that discretion. If council tenants buy their own homes and money flows from outside mortgage finance into the hands of local authorities, it is reasonable, if I follow the logic of the Secretary of State's thinking, to allow local authorities a greater degree of discretion as to where they spend that finance. That is the total answer to the question.

The hon. Lady must forgive me. I have dealt with this issue at length and I must go on.

The hon. Gentleman said that he would allow questions from Labour Members. Does he seriously believe that such resources as are released, on the assumption of his argument about housing need, will in any way go towards replacement housing, if that is the object that he has in mind?

I am trying to explain that it must be in the best interests of local democracy to allow a greater degree of discretion to the local authorities. If a local authority, having obtained extra finance in the way that I have described, decides to use that money for home improvement because it gets three or four housing units in that way as opposed to building one unit at a greater cost, it is wise to do so. If that is right, it is reasonable to question whether local authorities should be allowed wider discretion as to where they spend the money. For example, it might be better, in the judgment of a local authority, to spend some of the money on social provision of one kind or another. Therefore, it might be wise to give local authorities extra discretion.

The tendency over the last 20 or 30 years has been to lay down national standards in Whitehall, which removes all experimentation and flexibility locally. Indeed, local democracy has been stifled by top-heavy bureaucracy. The Secretary of State is moving away from that tendency and it makes a great deal of sense. I am delighted to have had the opportunity to explain it to Labour Back Benchers who have not read the Secretary of State's speeches.

I shall not give way again. Many hon. Members want to speak in this debate.

As an additional source of revenue we should encourage new towns and housing associations to look more to the private sector for their funds. We should encourage the sale of assets by new towns. We should encourage housing associations to look to outside mortgage facilities in order to draw the savings of the institutions into their work. We should stop the spread of municipalisation. except in rare instances where there is an unanswerable and most pressing need.

We need a determined attack on land hoarding by local authorities and nationalised industries. We need to streamline planning procedures which, particularly in times of high interest rates, often make the difference between profit and loss. Above all, we need a new personal commitment from Ministers in the Department, who have failed to realise that the pious hopes that they have put before the House during the last three years do not lay bricks and mortar.

4.50 p.m.

I greatly welcome the opportunity to debate housing policy, although not necessarily upon the Opposition's motion. Housing is always a matter of great importance to our people and to the House. It is a subject of considerable and legitimate controversy and one on which there is a great deal of serious and hard thinking to be done, not only by hon. Members on both sides of the House but in the country generally. The debate gives the House the opportunity to judge what this Government have achieved in housing and to hear, as we have done from the hon. Member for Henley (Mr. Heseltine), the different prospects that the Opposition have put forward for housing policy.

I shall not at this stage comment in detail on the speech by the hon. Member for Henley, because I shall answer many of his points in the course of my remarks. During the last five or 10 minutes of his speech we had an interesting exchange, and we shall certainly study his words with care. In particular, we shall study what he said in reply to the pertinent questions put to him by my hon. Friends.

There is something in the argument that if additional resources can be released via council house tenants they can then be used to increase the supply of housing for people in need. But that is a different proposition from that put forward by the hon. Member for Henley. He simply revealed that his party has come to the conclusion that a lower priority should be given to housing and that resources should be removed from housing and be used for other sectors of local authority expenditure—perhaps for rate reduction. Housing needs are still great, and it is my aim to increase the resources available for housing as much as possible to help to deal with the housing problems. I should not be prepared to contemplate a reduction in resources on the ground that housing is no longer a great need.

The Secretary of State must know that that is a complete contradiction of what I was saying. The only way to reverse housing contraction is to encourage private resources back into house building so that we can achieve increased house building again.

My right hon. Friend has said that he might take a more benevolent look at the situation if resources obtained from the sale of council houses were made available for new house building. But even that is going too far. The best houses would be sold. That would reduce the pool available for re-lets and they would be the worst houses. That would turn council estates into ghettos. Only the good houses would be sold and not multi-storey flats, for instance.

That is a different argument. I was trying to establish that there is a problem, and it was verified during the period when there were substantial increases in sales of council houses. It is natural that the more-favoured local authority houses, particularly those with gardens, should be snapped up. One must therefore think carefully about the matter before one goes ahead with proposals for the sale of council houses on a substantial scale.

It is important to set the background against which the debate is taking place.

I shall not give way. I am conscious of having only just started my speech and I have already given way.

If the hon. Member for Chingford (Mr. Tebbit) will contain himself for a short time until I develop some of my arguments, I promise him that I shall give way later.

It is important to understand the context in which the debate is being held. For the past five years the country has faced an economic climate more difficult and hostile than any since the 1930s. We have suffered double-digit inflation and a world recession. We are still suffering from the effects of that world recession. No one in the House can or should pretend that it is possible wholly to insulate major recipients of public expenditure—such as housing—from the effects of these economic events. But the test of any Government, faced with such a cold economic climate, is how far they can manage their policies and programmes in the teeth of these difficulties.

Although the hon. Member for Henley has a singular capacity for forgetting unpleasant events, we remember only too well the real disaster which befell housing policy during the last two years of the Conservative Government. First, we had a house price explosion fuelled by uncontrolled increases in the money supply. We had a surfeit of mortgage lending. Prices of houses rose by 40 per cent. in 1972. Then, from mid-1973 the mortgage feast turned into a mortgage famine and private housing starts fell from 216,000 in 1973 to 106,000 in 1974. In the public sector, starts slumped from 154,000 in 1970 to 113,000 in 1973. That was one of the worst years in the postwar period.

One can perhaps understand why Conservative Party Members let public housing decline in this way, given their doctrinaire opposition to council housing. But the collapse which they allowed in the private sector—the heartbreak which was caused to home buyer and house builder alike—fits oddly with their claim to be members of a party concerned about the needs of the owner-occupier.

Despite the Conservatives's record, the hon. Member for Henley has the impertinence to talk of a collapse in our housing policy. I shall give the House some of the basic facts about the housing situation and future prospects. I shall try not to use such carefully chosen arithmetical facts as those used by the hon. Member.

Our basic aim was to revive building in the public sector. We believe in that because it is the only way of meeting the urgent housing needs of the many hundreds of thousands who are on council waiting lists and are not in a position to buy their own homes. The number of starts, as I have said, was 113,000 in 1973. That number rose to 174,000 in 1975, and we sustained starts at that level throughout last year as well.

This year we have made provision for total starts in the public sector of about 150,000. When I say public sector "I am referring to local authority building, housing associations and new towns. For local authorities alone, in England we have planned for about 90,000 tender approvals this year, which will mean the maintenance of an average of around 100,000 local authority approvals a year during the three years 1975, 1976 and 1977.

The figures for the last three months' starts are, I accept, down. Of course they are down. The hon. Member for Henley is quite entitled to quote from the release that we put out. But these figures reflect to some considerable extent the temporary moratorium on all tender acceptances which had to be imposed last July to prevent, as we then saw it, a substantial overshoot on expenditure on the new housing programme. I do not believe that these figures will continue. I believe that there will be a restoration of the trend towards the 150,000 per annum level, which I have indicated that we had budgeted for.

Second, we have secured a significant improvement in the private sector. Starts in this sector rose from 106,000 in 1974 to 150,000 in 1975 and 155,000 in 1976. This year the total is likely to be down on that of last year but, again, it is my expectation that the lowering of the mortgage interest rate—and the prospect of a further reduction later this year, with a continued flow of mortgage funds—should help to maintain and increase activity in this sector.

We have worked hard to ensure greater stability in the supply of mortgage funds, because this is one of the keys to private sector building activity. In 1974 we provided the building societies with £500 million in short-term loans. That ended a period of very acute shortage of mortgage money, and it probably avoided an increase in the mortgage rate during that time. Subsequently we developed more durable stabilisation arrangements in the Joint Advisory Committee, in consultation with the Building Societies Association. The societies were able to build up a stabilisation fund when their rates were attractive and then to use this to maintain lending at a fairly stable rate when interest rates generally rose—as they did, enormously—during last year.

Although the building societies' inflow in late 1976 fell by 40 per cent. on the average rate for earlier that year, their average lending approvals were only slightly down. Using seasonally-adjusted figures, they were lending at £500 million a month, as compared with £520 million in the first half of that year.

If, on the other hand, we had followed the approach, apparently favoured by a number of Opposition Members, of allowing the market to go its own way without seeking, in consultation with the building societies, to build up some kind of stabilisation fund, I am quite sure that we should have seen mortgage advances dropping dramatically and the private sector facing the same precipitate decline as it experienced in house building in 1973 and 1974.

Before the right hon. Gentleman leaves that point, will he comment on local authority mortgages, because the story is rather different?

I shall be saying something about local authority mortgages in a few minutes' time.

If the hon. Member for Chingford wishes to take this opportunty to intervene, I shall be only too willing to give way.

As the right hon. Gentleman has passed the point, I am sure he will return to the question of the sale of council houses. I should like to intervene then, if I may.

In that case, I come now to the third major point about the housing situation that I want to report to the House. We have made a major contribution to counter-inflation policy, and we have had to make it by greatly increasing the amount of subsidy that we have provided to public sector housing. Total subsidies in the public sector have risen from about £1,050 million in 1973–74 to about £1,700 million in the 1976–77 financial year. I make no apologies for this. These subsidies have helped to cushion the blow of the rise in interest rates and other costs of the past three years.

Of course, council rents have risen. That has been inevitable at a time of inflation. Without the addition to the last year's subsidy, however, an intolerable burden would have been imposed upon the 6 million public sector tenants, who would have had to pay on average an increase of £1·50 per week in rent alone last year, all at a time when our counter-inflation policies have provided for a maximum wage increase of £4 a week before tax.

Does the right hon. Gentleman believe that those subsidies have been paid for in a way which has had no effect at all upon the rate of inflation? If they were paid for by taxation, has not that had an influence upon the rate of inflation and upon people's expectations? If they were paid for by borrowing, has not that had an effect upon inflation, particularly by weakening sterling and by the higher rates of interest?

That argument brings us straight away to the whole wide field of macro-economic policy. While on other occasions I should be only too anxious to follow the hon. Gentleman along those paths, I think that I had better stick to housing policy, which is the subject of this debate. However, I do not think that the council tenants who would have had to pay the extra £1·50 a week during the past year would agree with the hon. Gentleman.

The fourth point that I wish to make about general trends and policy is that the total expenditure on housing for this year and next—and this is despite the reductions in the budgets that had to be made in July and December—is still running at a level significantly higher than that under the previous Conservative Government. This year expenditure on housing will be £4,286 million and next year it will be virtually the same, £4,275 million. That is £1,000 million more—I am speaking in constant price terms—than the average of the last three years of the Conservative Government.

The effect of the spending reductions announced in July and December by my right hon. Friend the Chancellor of the Exchequer—with estimating and other changes—was to reduce the levels of planned expenditure borne by the public purse by £160 million in 1977–78 and £118 million in 1978–79. These reductions are unwelcome, but they are modest in comparison with the more than £4 billion that we shall be spending. Nor should the resource effects of these cuts be overstated. I directed a substantial part of the cuts that I had to make to activities which had a small employment consequence—such as purchasing programmes—and to activities where I was confident that private funds could be sought to take the place of public funding.

Let me illustrate. First, on local authority lending, I have, as the House knows, made firm arrangements with the building societies to help fill the gap left by the reduction in local authorities' applications. The societies are making £157 million available for this year to applicants for mortgages who are nominated by local authorities in England. These funds are intended for borrowers at the lower end of the market, especially those wishing to buy older property, who cannot easily procure a mortgage from building societies under their normal arrangements.

Nationally, the Building Societies Association has been most helpful in securing these arrangements, and I pay tribute to it. But the building society movement is one in which managers of local offices have a high degree of discretion, and it is largely on the managers of local offices that responsibility lies for making this scheme a success and for ensuring that practices such as the "red-lining" of areas or insisting on very substantial deposits on older houses—practices which have been much criticised on both sides of the House and, indeed, outside as well—are abandoned. We need, however, to monitor this scheme, and to do it closely at local levels. I am therefore asking the local authorities concerned to report on the initial workings of the new scheme up to the end of June. When I have the new information from them, I shall consider what further approaches and steps we need to take with the building societies.

I think that the hon. Gentleman had better let me proceed, otherwise my speech will be fragmented and will take too much time.

The second major point is housing associations. The allocation to the housing associations was reduced by £57 million for 1977–78. Even so—the House had better take this in—public expenditure on housing associations will still be running at £395 million for this financial year, as compared with £169 million in 1973–74. That is well over double, which is not bad going—I am talking at constant prices.

I am also pleased to be able to announce to the House today that the Housing Corporation has secured private loans of £25 million, as I have been encouraging it to do, and that I have given those loans my approval. The Corporation will also be negotiating to raise a further £25 million in due course. I think that this news will be very welcome to the housing association movement and, I hope, to both sides of the House.

Even if the right hon. Gentleman does not trust local councils to spend money properly, would he not agree that if he authorised new towns, and particularly a new town corporation, to sell new town houses and, indeed. other new town property, he would have effective control over the resources released and he would have even more at his command, which he could thereby allow to go to housing associations which operate particularly in areas of stress?

Order. I think that we should have only one intervention at a time.

I do not think that the hon. Member for Chingford has followed very closely the announcements from this Box during the past year. My right hon. Friend the then Minister for Local Government and Planning made a statement about the sale of houses by new towns.

It was a very careful, but it was a very sensible statement. My right hon. Friend made the obvious point, which appeals to men of good sense everywhere, that where there was, as expressed in terms of housing lists, a very short waiting list, he was prepared to authorise sales of new town houses. That seems to me a very commonsense point of view. As for the release of those resources and their use, that is a matter to which I shall certainly give further study, as I promised the hon. Member for Hornsey (Mr. Rossi) at Question Time yesterday.

We have had to listen today to a great deal of criticism from the hon. Member for Henley about the alleged collapse of our housing policy. I do not believe that any such thing has happened: nor do I believe that any collapse will happen However, a number of major unanswered questions remain, relating, frankly, to the hon. Gentleman's own housing policy.

The first thing that we should like to know is what the Opposition intend for local authority building programmes and whether, in lamenting the present condition of the construction industry, the Conservative Party wishes to see public sector housing activity increased, maintained at the level which we have achieved, or substantially reduced. Last April I had an exchange with the hon. Gentleman's predecessor, the hon. Member for Aylesbury (Mr. Raison). I pointed out that when he made his speech then on housing and local government, at about the same time of the year as now, he had not a word to say about new house building by local authorities. I challenged him to say whether it was his party's policy not to build more local authority houses. I paused and waited for a reply. I did not get one. My right hon. Friend the Minister for Housing and Construction, who wound up that debate, paused so long that Conservative Members alleged that he had finished his speech altogether. The point is that he did not get an answer. [HON. MEMBERS: "Pause now."] That is exactly what I am coming to, as my hon. Friends will have gathered.

However, since those events, which we all recall, we have had the hon. Member for Henley's own speech on 26th February, a long and interesting speech, when he said, among other things, that council house building was now the least efficient way of providing new houses, and went on:
"what public expenditure is available should go to renovation, grants to housing associations, local authority mortgages and incentives to purchase."
Those are all worthy headings of housing expenditure, but let me try again.

Am I correct in assuming and deducing from what he has said that the hon. Member and his party intend to wind up new house building on any substantial scale by local authorities? Is that their policy?

The Secretary of State is a member of a Government who for three years have systematically failed to produce their housing finance review. Why is it that, with all the advantages of the Civil Service, he cannot answer a single question about the future of his housing programme and publish the review that we want to see?

I think that the House can draw its own conclusions from that illuminating remark about the hon. Member's policy on one of the major aspects of housing policy—that he cannot answer the direct question whether his party is in favour of building local authority housing. That is an interesting conclusion.

I think that I can assist my hon. Friend, because I want to pursue this matter. These issues and the questions that I have put are not of merely academic and debating interest. I said earlier that we have budgeted this year for a public sector house building programme to be maintained at the rate of 150,000 this year. That is my proposal. But it is not the Government who build: it is the local authorities.

There are disturbing reports of some Conservative authorities which appear to be planning to reduce their house-building activity to a level which might impair their ability to meet housing need. This would not matter so much if they were authorities in areas where housing demand was minimal, but they are not.

Two of the authorities that I have in mind, Leicester and Nottingham, are designated as housing stress areas, a designation which they willingly accepted at the time that I described them in those terms last August. I understand that in Leicester the council has decided to review its housing programme and that it has so far approved tender acceptances for 1978 and 1979 at only half the level of last year and a third of the level of 1975. I understand that Nottingham District Council, if yesterday's Daily Telegraph is to be believed, has decided to build no further houses to let.

I should like to know, as would the hundreds of thousands of people on council waiting lists throughout the country, what advice the hon. Member for Henley would be prepared to give to his own local authorities, to his own people on authorities in areas of stress of the kind that I have just illustrated.

Now I turn to the issue of council rents, which is the second matter on which we want to get something established. There is a growing unease and anxiety about Conservative intentions on council rents. None of us forgets the 1972 Housing Finance Act and its Whitehall dictation of council rent policies. We all know that cuts in housing subsidies were one of the main targets identified for reduction last year by the Shadow Chancellor. In Chapter 5 of "The Right Approach", the Conservative Party document, there is something that confirms that again.

However, still more recently, when the hon. Member for Homsey leaked the draft of the building EDC disagreed report on housing, he said:
"Rents now bear only 43 per cent. of current housing costs and the EDC recommendations would increase this to about 75 per cent. with significant savings in public expenditure. Even the Labour Government now admits that rents must go up."
Yes, by 60p.
"But has it the political will to carry this policy through?"
If by that question the hon. Gentleman means, do we intend suddenly to push rents up so that they bear 75 per cent. of current housing costs, the answer is a firm "No". We have neither the wish nor the intention to do so, so the question of will does not arise.

But there are still unanswered questions. For instance, may we assume that the Conservative Party does intend to do that, that it has the will to raise rents to 75 per cent. of current costs and in present circumstances? There are 6 million council tenants who will be interested to learn that if the Conservatives come to power they can expect their rents to increase to a 75 per cent. coverage of costs, by an average of £3 a week, and that if they live in London the rise will be over £6 a week.

How does the right hon. Gentleman square all this with the statement in the 1976 White Paper on Public Expenditure that it is the Government's intention that the proportion of current housing costs met by rents, after rebates, should rise from 43 per cent. to over 50 per cent. by the end of this decade?

I find that statement somewhat less disturbing than what I had been referring to. We have to go into the whole context of what the assumptions are about interest rates at the end of the decade. I advise the hon. Member for Henley to come off it and to say instead whether he and his hon. Friends believe that rents ought to be pushed up by 75 per cent. in the present situation. Is his answer yes or no?

Obviously, no one wishes to impose undue hardship on any section of the community and of course if there were increases all at once at the level that the Secretary of State has mentioned, there would be unacceptable hardship, and no one wishes to see that happen. Nevertheless, we are faced with very severe problems with public expenditure, and the burden of subsidies of this nature on taxpayers and ratepayers.

Our policy on the sale of council houses is related particularly to reducing this burden. One does not resile from that statement. A Treasury Minister has confirmed in a statement in November that the Government have contemplated and must contemplate a reduction in council rent subsidies so that the proportion of current costs met by rents should rise from 43 per cent. to at least 50 per cent. in the near future.

I think that we can leave that point. I am glad to have the assurance of the hon. Member for Hornsey that no hasty and ill-considered moves are contemplated by the Conservatives. I am sure that that will give some assurance, and I hope that that view will be communicated to those councils where the Conservatives hold the power of decision.

Finally, dealing with the policies of the Opposition, there is the question of the sale of council houses. I shall not go again over the ground that we have covered already, but I draw attention to the odd spectacle of Mr. Horace Cutler putting his hand on his heart one minute to pledge that he will not try to bribe ratepayers with their own money while offering what he describes as "the sale of the century" to council tenants the next minute. Mr. Cutler knows, and I think that the Opposition know, that there can be no sale of the century if that means sales at absurd or knockdown prices. That would be an irresponsible use of ratepayers' and taxpayers' money.

Nor will there be a sale of the century in terms of the number of council houses sold. As Conservative councils elsewhere have discovered, many to their embarrassment, the market situation has changed markedly since the last time they held power in town halls. There are simply not the takers that there were.

The Government's approach on the question of the sale of council houses is pragmatic, and throughout the lifetime of this Government we have maintained a general consent to sales on certain conditions. But local councils, and above all large ones, such as the GLC, in housing stress areas—London is the worst stress area in the country—must act responsibly in the way in which they use their housing stock. We shall be monitoring very closely the consequence of sales upon the ability of authorities to meet housing needs in their areas.

I now turn to some more serious matters. We have been guided in our policy by a strong desire to ensure that help goes to those people and to those areas which need it most. We have, as the House knows, actively supported the Housing (Homeless Persons) Bill which is sponsored by the hon. Member for the Isle of Wight (Mr. Ross), and we aim to meet a greater proportion of the need for small households, particularly for the disabled and the elderly.

In terms of directing help to the areas which need it most we have established housing stress areas, where the programmes of the authorities are broadly being protected. By looking at various indicators of housing need we initially selected 62 authorities—including the GLC and the London boroughs—which we thought were in greatest need. We added a further 13 authorities to the list on the basis of representations made to us in our examination of the case which was put.

Looking into the future, we see the need for a steady and substantial level of investment in both new house building and in the modernisation and improvement of older houses. There is now, it is true, a crude surplus of houses in England and Wales. We have about half a million more houses than households according to the up-to-date census reports.

But this figure conceals rather than illuminates the true housing situation. It conceals the number of houses which, though standing, are in desperate need of modernisation, or are simply unfit, and it conceals the large number of houses which are not of the right size, of the right price, or in the right place. In other words, statements about a "crude" housing surplus conceal the fact that there is still a deficit of housing of good stan- dard in many places, including most of our major urban areas.

I am most interested in the surplus of houses. Does the Secretary of State agree that the Rent Acts, particularly on furnished accommodation, have exacerbated the shortage of housing? Many flats and other units of accommodation are available, but the owner or tenant is not prepared to let them because he cannot later get possession for his own family.

I am not convinced that this is so, although I have put out a document and I am seeking to get up-to-date views about how the Rent Acts are working. But there is a danger in taking an over-simplistic position.

More than 20 years ago the Conservative Political Centre produced a pamphlet called "Houses to Let" when the 1957 Rent Act was being produced. The Act was designed to solve the housing problem by letting the forces of the market readjust and reallocate houses according to need and demand. That was the basis and philosophy. It concluded with the words:
"Over the country as a whole housing demand and supply ought to be in balance by the end of this year".
That was in 1956. It was written by a gentleman then called Mr. Geoffrey Howe, who is now the Shadow Chancellor and from whom we hear so often. It was most fortunate for those hundreds of thousands on council waiting lists that the right hon and learned Gentleman's conclusions about the equation of supply and demand were ignored. We on this side of the House are concerned with individual families and their future, not just with the impersonal sweep of generalised statistics.

Crude national figures tell a very incomplete story. The truth is that there are different problems in different areas of a great differing intensity, and they require a different mix of solutions, spreading across new building, conversions and rehabilitation to repair and better management and use of the housing stock.

That is why I have already taken steps to get more flexibility into public sector housing investment in this financial year and will he introducing the new system of "housing investment programmes" next year. The more that housing needs vary from one area to another, the more it must be for the borough and district councils to monitor the local situation and make the plans to meet their local needs. But I point out to Opposition Members that while I am very anxious that there should be greater freedom for local housing authorities to decide the mix of their housing expenditure—I am keen on this—I also want them to draw up housing investment programmes based on a careful assessment of the real needs of their areas. It is to that picture and profile of the needs as they develop over a period of time that we shall seek to match the actual sums that we have available from the Exchequer.

I know that the Secretary of State is quoting directly from the opening paragraph of Circular 18/77, dated 13th April, in which he says that housing investment programmes would require comprehensive assessments by local authorities of the housing need. Does the Secretary of State see any contradiction in basing the Government's programme on the information given by local authorities and the remark that he made a few moments ago when he was very critical of two cities in the East Midlands about which he was complaining? Does not the right hon. Gentleman see a contradiction? How does he expect to create harmony between the housing authority locally and his judgment as the Secretary of State?

The answer is the one I have already given. Local and central authorities will be able to have a meaningful guide about the actual housing need when we draw up together the housing investment programmes. But I do not believe that this has yet been done in many areas, indeed, in any areas. When that is done and when we have had an agreed exchange and established the facts, the situation will be different.

The right hon. Gentleman must find some common ground between the Department and the authorities, and I cannot see him going the right way about it.

There has to be a proper examination of the Government, as the provider of a large sum of money, must enter into relationships with the local authorities so that we can reach an agreement on an assessment of the needs.

Surely it does not matter what is the estimate of housing need. At the end of the day much depends on the political initiative and desire of the local authority. Let us suppose that Leicester, which has now become Conservative-controlled, does not believe politically in providing council housing, but believes that such provision should be the responsibility of private enterprise. If that is so, my right hon. Friend is absolutely right to say that in a matter of that kind the Government must have a view, and a very strong view.

We shall be able to develop a new and much better relationship with the local authorities.

For this year, as a lead into the new system, I have agreed much more flexible financial arrangements for local authorities. Up till now they have received separate capital allocations for some blocks of expenditure—for example, rehabilitation, municipalisation and home purchase loans—within which they had only limited authority to switch money between those separate compartments to take account of changing local requirements. Now, within their overall allocations they will have much greater flexibility for the purpose of switching expenditure. We have rolled up seven blocks into four enabling freedom of movement from one type of activity to another within each block. Authorities will be able to transfer up to a quarter in or out of any one block to another. I hope further to develop this system for 1978–79, and I shall be entering into discussion with the local authorities as soon as we know how the arrangements are working out in practice.

Since the right hon. Gentleman is to agree the apportionment and allocation of funds within these four blocks, why have four blocks at all? Why not just have one block grant for the entire housing programme?

In this initial period I shall see what problems are thrown up. There is not all that much freedom of movement in the first year for local authorities anyway, because they are planning from previous programmes. However, I shall enter into discussions with them to see what their reactions are, and if I think it is right to reduce the blocks I shall make such proposals.

I want to take up one point raised by the hon. Member for Henley. He demonstrated the emphasis that he places on home ownership. We, too, place a strong emphasis on that. In view of the leasehold enfranchisement measure of 1967 and the option mortgage scheme introduced by a Labour Minister at that time, I believe that our record in encouraging owner-occupation in this country is a very good one. We are as anxious as the hon. Gentleman is to help the first-time purchaser and generally to assist the owner-occupier. But, unlike him, we also wish to ensure that the tenant, whether he be of a local authority, a housing association, or of a private landlord, gets a fair deal as well.

Our policy is a balanced one. We favour a twin approach based upon encouraging owner-occupation, and providing public rented accommodation for those who cannot afford to buy, I shall have more to say about this in the housing policy review Green Paper, but let me say two things now. First, in contemplating any policy change we must remember that there are about 20 million households in Britain, the long-term plans and family budgets of which have been laid in the reasonable expectation that the traditional arrangements will broadly continue. This Government have no intention breaking faith, of bankrupting families by sudden changes in pursuit of academic or political dogma. We have no intention of forcing council rents through the roof, as Conservative Members give the impression that they wish to do. Nor have we any intention of wreaking havoc with the family budgets of those who are buying their own homes.

Since the right hon. Gentleman has now firmly claimed that he has no intention of wrecking family budgets, may I take it that that will be shown in his Government's determination not to change the mortgage interest relief provisions?

The hon. Member is aware that we are approaching the period in which we shall be able to have a full and sensible discussion on the basis of the housing finance review—

I have given the answer in quite strong terms. We have no intention of wreaking havoc with the family budgets of those who are buying their own homes. I do not think that even the Chancellor of the Exchequer could make a more reassuring and responsible reply.

While we are ready to consider any serious proposals designed to help home buyers and first-time purchasers in particular, we are not prepared to engage in a Dutch auction for electoral support. Nor do we intend to be panicked into reducing the security of tenure of private sector tenants, as some hon. Members opposite would appear to wish us to do. We have set up a full review of the Rent Acts to see how the present system can be improved, but the basic principle of security must be maintained.

Too often in this Chamber—and outside—do we hear of the alleged failure of social policy, of ways in which other countries have achieved, as it is claimed, a better result differently. I would not conceal for a moment, and it would be a folly for me to do so—why should I, since I have had the job for only one year?—that mistakes have been made in housing policy. However, I believe that housing policy since the war has had more successes than failures. We have built, under Governments of both parties, 7 million new houses in the last 25 years, and we have improved another 4·5 million. The average family in Britain is today better housed than he has ever been, and better housed than the average family in many countries in Western Europe.

These are real achievements brought about by the combined efforts of the private and public sectors of housing, each complementing the other. But because housing needs change we have not reached a situation in which we can begin to claim to have solved the housing problem. There are still many hundreds of thousands living in accommodation which none of us in the House would willingly accept for our own families—and that must be the test. We know that from our postbags. We know what misery can still be caused if families are not decently housed.

So our effort has to continue. I accept and we need to review both the sweep and detail of our housing policies. This we are doing in the context of the housing policy review which I hope and intend to publish very soon. The Green Paper has been delayed, but I do not apologise for that or for the time which I have spent on the subject. It is of crucial importance to every family in the land. It is my hope that this review will put housing on a durable footing for many years to come. I hope that it will achieve a wider agreement about the facts of the housing situation, will create a broad framework for policy which can be held steady for a number of years, and can create the stability so important for the individual householder, the local authority and the housebuilder, and will contribute to the well-being and greater satisfaction of many millions of our fellow citizens.

5.40 p.m.

I represent a constituency in an urban area where housing is still one of the greatest problems, and 50 per cent. of all the cases that come to my advice bureau are about housing.

At the end of his speech the Minister outlined some of the problems that we face nationally. We have a surplus of housing overall, but many of our houses are in the wrong places. A lot of our housing is of poor quality, too much is standing empty, and much is being knocked down or is falling down of its own volition. This problem must be dealt with urgently.

I was appalled by the fact that we have had, once again, this dialogue of figures. It seems that everyone on the political scene feels obliged to deal with figures of housing starts. Everybody wants to quote the number of starts. That is no good at all if, at the other end of the line, the same number of houses are falling down. We must get this into perspective, and not continually make propaganda about the number of starts.

Since the war we have had too much emphasis on large council estates. This has been the main motivation—building large council estates. We have also had too much rent control. It is an indictment of the whole rent control situation that in the Government's own paper—paragraph 2 on page 1—criticism of rent control is outlined. It says:
"There can be no doubt that the complexity and obscurity of the Acts are a source of frustration and anxiety to landlords, tenants and those responsible for administering and interpreting the legislation."
Here in the Government's own consultative document is an indictment of the Rent Acts. It is time to sort out the whole question of the Rent Acts, particularly the 1974 Rent Act, which has created one of the major problems.

There has been a constant attack on the private landlord. I notice that we have shifted away from that a little now, but it has been a most unfortunate trend. This attack has left the young couple getting married with three choices: they can try to buy a house of their own, which is very difficult; they can live with their parents and produce children as fast as possible in order to get sufficient points on the housing list to enable them to jump the queue; or they can look for some sort of furnished accommodation, and in my area this is practically impossible. That is the simple choice for young married couples who want a home.

Let us look at these three categories one by one. First, there is the private owner-occupier. We have heard that there has been an increase of well over 50 per cent. in owner occupation. That is a great step forward, but there are still tremendous problems in this field. Young couples still find it very difficult to get mortgages for older type properties, and then there is the question of the deposit, the legal fees and setting up the home. These are major problems for young people entering the housing market, and we still have not got an answer to them. There have been serious cuts in local government mortgages. Young couples could get a high rate of mortgage—up to 99 per cent. and it is a pity that the Government have cut back here. I feel very strongly about that. We have seen an increase in the number of housing associations and this is a useful step forward and one which we want to encourage even more.

Secondly, there is private rented accommodation, and this has decreased and decreased. The 1974 Rent Act in itself was almost the death knell of private rented accommodation. In my area accommodation for the single person and for the student is very scarce. I have raised this matter with the Housing Minister on several occasions. There is a very serious problem of accommodation for students at Reading University because of shortages in the private rented sector. It is a pity that the Minister does not take up the Private Member's Bill introduced by my hon. Friend the Member for Kensington (Sir B. Rhys Williams) and look at it seriously. I have just seen a letter that the Minister sent to my hon. Friend which seemed to push aside this small, but worthwhile piece of legislation. Short-term lets would be very valuable in the private rented sector.

Thirdly, there is the public rented sector, which is almost the worst. We have so concentrated on the number of starts and on building large estates that we have created a large number of unhappy people who are living in concrete jungles on the fringe of towns, cut off from the rest of the population, and with poor communications and facilities. As a result, people have great stresses and worries.

Recently I attended a violent meeting of those living in high rise flats in my constituency. On this estate there was vandalism, fire, noise and every stress and strain imaginable. The residents were young couples with small children and old people living on the 14th floor and suffering tremendous anxiety as a result. High rise blocks are not the place to put these people. We must look at this question urgently. It is now the general policy of both major parties not to build more of these high rise flats, and the time may come when we should consider pulling them down. However, I accept that that is some time off.

We must encourage—and the Housing Minister has mentioned this in previous debates—the growth of residents' associations. We must encourage people to get together to run their own estates and improve the concrete jungles in which they live. The Minister should advise local authorities to provide back-up societies for these residents' associations. Many of us live in areas where people are prepared to get up and go and where there is someone who is prepared to be the secretary and send out notices and book halls for meetings and so on. But in some areas people have not got the skills to do that. Many residents' associations which appeared to have all the enthusiasm and energy collapsed because the secretary was not the person required to run the association. Local authorities can assist here and make sure that the associations are kept going.

I spoke on the question of high rise flats when my hon. Friend the Member for Ealing, Acton (Sir G. Young) raised the matter in a debate in 1974. The Minister said then that a survey was being undertaken to examine the problems of high rise accommodation. We have not seen the results of that survey and we would be grateful if the Minister could tell us what has happened to it, and if the Government have looked at the sort of people they should be putting into high rise flats.

My hon. Friend the Member for Chelsea (Mr. Scott) wants to catch your eye, Mr. Deputy Speaker, because he is a supporter of the tenants' charter. Too much stress has been put on new estates—on bulldozing everything down and rebuilding. I remember the television programme "Coronation Street". At the beginning of it we see high rise flats before the camera pans down on Coronation Street, and I always feel that I would want to live down there. I would have no desire at all to live in a tower block—

The hon. Member should try living in Coronation Street.

Hon. Members must not make particular pleas for particular housing in a particular area.

The fact is that people do want to live in two-up, two-down houses, as long as they have modern facilities and a toilet and bathroom. This is the sort of accommodation that young couples particularly want when they are starting out.

I was in Leeds for five years and I know the type of housing that the hon. Member has there. It was built by the Liberals when they were in office in that area, but we shall not go into that now. Leeds has a particularly bad housing problem.

Can the hon. Gentleman tell us who built the high-rise flats in his constituency?

I am not sure. Control of the authority keeps changing, but I think that it was a combination of Labour and Conservative decisions, with one party responsible for one area and the other responsible for another area.

I have liked a great deal of what the hon. Gentleman has said, but is he aware that the opening shots in "Coronation Street" are taken in my constituency and that we have now decided to build no more multi-storey flats?

I had not seen the hon. Gentleman at the start of "Coronation Street". I shall look for him next time.

I am concerned that planners in local authorities often get ahead of the money and the will to develop certain areas. When plans for a development are drawn up, properties are purchased and boarded up. They start to deteriorate and are then often left because of a change of policy. Whole tracts of some towns are left as desolate, boarded-up areas.

We must ensure that planners do not move too fast with their plans and thereby cause social problems. People are often moved out of houses that could be occupied for some time and I so should like this problem to be considered in the review of housing. In such areas dereliction starts in the middle, spreads to the fringes, and so it goes on.

I am sorry that the Government have cut back on improvement grants, because they have been one of the best developments since the war. We need many more grants. Housing action areas have been introduced and I welcome the fact that my constituency has been designated a housing stress area.

We want far more housing improvement areas and we should cut the subsidies on the building of monster estates. I do not want to see any more such estates. It would be better to have in-filling of groups of 20 or so houses here and there. That may cost more, but at least we should not have to provide the back-up facilities—new roads and the rest—because they would already exist.

Is my hon. Friend aware that it is not just a question of cost? With the policy that he is suggesting we could help the small builders, who are in peril, all over the country, of being put out of business because they cannot get the sort of small jobs that he is advocating.

I thank my hon. and learned Friend for his intervention. My suggestion would help small builders and would reduce the cost of providing amenities and extra facilities in new developments.

Our fundamental message must be that we want to encourage more people to own their homes. Council tenants are becoming the serfs of the 1970s and are constantly under the wing of their landlords, the local authorities, who run council estates from their plush council offices and often know nothing about individual problems. One of the most shocking things that I have heard was from one official—I shall not give his name—who said to me that a case was so serious that he might have to go and look at it himself. That was an indictment of the whole outlook of the officials who run housing.

The Government attack the private sector so often, but perhaps they are now having fresh thoughts. They should be looking for opportunities for a more enlightened policy to get away from the Socialist serfdom of the 1970s.

5.44 p.m.

I found little to quarrel with in what the hon. Member for Reading, North (Mr. Durant) said, although he was a bit out of date because many of the things for which he was asking are now the order of the day.

I recognise that the high-rise flats and vast estates were mistakes, but they were built by Tory and Labour councils for what seemed very good reasons. They replaced the appalling conditions and slum houses in urban areas. My constituency is a typical example.

It is a bit much for the Conservatives to put down a motion of censure on the Government over housing, especially when one considers their record in Government. We tend to make housing a party political issue, but things have come to a sorry pass when we hear the sort of scandalous speech that was made by the hon. Member for Henley (Mr. Heseltine). Attacking the Government and saying that what they are doing is wrong or that they should be doing something else is one thing, but the sort of rubbish that we heard from the hon. Gentleman is something else.

The Opposition give the impression that all Labour Members are council tenants while the Tories are on the side of the property-owning democrats. That is not and never has been the truth. Let us get the facts on the record.

In February 1974, when the Conservatives were in power, the building societies announced for the first time in their history that they had paid out more than they were receiving and that there would therefore be no more mortgages. That destroyed the property-owning democracy, the private building sector and all the friends of hon. Member's opposite almost overnight. I remember that one of the first things that the succeeding Labour Government had to do was to find £500 million to bolster the building societies and virtually get them started again.

I would not have made that point today but for the fact that the Tories have put down such a motion and tried to indicate that they believe in a property-owning democracy while we are concerned only about council tenants.

Does my right hon. Friend recall that when the Labour Government came to office they also had to make available considerable sums for local authorities to buy houses in the private sector that were standing empty because of the collapse of the private market brought on by the policies of the Conservative Party?

The right hon. Gentleman is claiming that we are not attacking the Government on the basis of facts, but the plain, hard fact is that in the past three years the Government have caused more than 250,000 fewer private houses to be built than were built in the last three years of the Conservative Government.

I dispute those figures. I am a friend of the private sector and I believe in a property-owning democracy. I should like to see some of the policies of my party changed, but does the hon. and learned Gentleman believe that it was a deliberate policy of the Government to say to the private sector "Thou shalt not build?" The problems were economic and financial. My right hon. Friend the Secretary of State explained it, although he was sneered at by some Conservative Members who claimed that these facts were irrelevant. The fact is that the money was just not available.

Does the right hon. Gentleman agree with the recent statement issued by Mr. George Smith of UCATT? He said:

"Our meeting with the Prime Minister and Peter Shore on April 4th made the Government's attitude towards the construction industry painfully clear. The construction industry has been singled out unfairly and unwisely to bear the brunt of the Government's public expenditure cuts.
The Treasury is deaf to appeals from the industry for a reversion of the cuts and an injection of funds into housebuilding, industrial installations, rehabilitation work, and other construction projects."

I respect Mr. Smith and I understand what he is saying. I do not deny that when there are cuts in Government expenditure, under every Government in history, the construction industry is the first to be hurt, because it is always building that is stopped. If a Government cannot stop present building, they can certainly stop future building plans. There is nothing unique about this. This has always been the tragedy of the stop-and-start procedures which we have had since the last war. I have no doubt that Mr. Smith feels very aggrieved and has every right to be, but the hon. Member for Hornsey (Mr. Rossi) has a cheek in putting the argument in this sort of form, as though it had never happened before.

I became a junior Minister in 1964 under the lively character Dick Crossman. We faced an appalling problem at that time, and we built 430,000 houses—more than had ever been built in a similar period in the history of our nation. In our desire to build houses, one of the mistakes we made was that we did not give enough attention to quality. The hon. Member for Reading, North is right in this respect.

With regard to council mortgages, it is a great pity that they have been cut back, because this is one of the ways in which housing can be provided to people who cannot get ordinary mortgages from the building societies. This is an area in which a great deal of help can be given.

As to the sale of council houses, I am sorry that one or two hon. Members who had so much to say about this, including the hon. Member for Henley, who opened the debate for the Conservative Party are not here to listen to what I have to say. Let me put on record how I see this argument. We are talking about two separate things. In my view, the sale of existing council houses in the urban areas is a disaster. The one solution to many of the human problems in housing in the urban areas today is based on transfers. Does the hon. Member for Reading, North deny that very many constituents who come to see us about housing, and who want a better standard of living, are dealt with more often than not by transfers?

What has bothered me sick about the sale of existing council property is that the moment a council house is sold it is lost from the point of view of future leting. That is the biggest argument against the sale of council houses in urban areas.

On the other hand, I do not believe that it is so immoral for a local authority to build some brand new council property for sale. I have never understood why this is considered immoral or why people get so twisted about it. I have said before and I repeat that when democracy really starts to do some work instead of merely talking, and we start to build in the London dockland. I want to see a percentage of people living in new houses made available to them for sale by the local authority. I ask my hon. Friends to listen to my trend of thought on this question.

What am I after here? First, I want to see 100 per cent. mortgages provided by the local authority. I do not want to see any of this wretched lawyer racket. Out with that, and I also want to see the estate agents out. We do not need all these hindrances to a property-owning democrat. I want to see a local authority building and selling council houses with a 100 per cent. mortgage, and with a covenant stating that the house shall not be sold within five years except to the local authority. But after five years the person concerned should he permitted to do what he likes with the house.

I agree with critics on the other side that of course it is true that with every house purchased in this way, in the form I am advocating, there would be less expenditure on maintenance and the rest. We must not identify ourselves with the theory that somehow we are only in favour of council tenancies. I am therefore arguing—

I am in the middle of my argument. The truth, therefore, is that there is a balance of argument here both ways. Had it not been for the local authority in my constituency, the vast majority of people there would still be living in the most appalling squalor. The council incurred unbearable debts in the course of removing slum after slum. This was property that no one in private enterprise would look at. In this area over 80 per cent. of the entire population is housed in local authority property. That in itself produces new problems.

I believe in decentralisation and in the district office. When people go into an office they should be given all the aid they need. I also believe in an efficient transfer system. I want to see housing come to life. What I do not want is to have a section of the community singled out as getting far too much money from the State when it is the poor people who are buying their own homes who really ought to have more. [Interruption.] If that is not Tory Party policy, the Opposition should say so tonight.

Of course we want to help the tenants and to give them an equal opportunity to buy their homes.

I have just explained why I think that that is a disastrous policy. The hon. Gentleman is not even listening to my argument. The vast majority of housing problems in my constituency are dealt with today by transfers. In my area we have gone in for a massive policy of modernisation, and the Government have not stopped us. Some of the irony concerning the arguments about modernisation figures is extraordinary. My council asked for £9 million and was told by the Department that it could not have £9 million but could have only £6 million. I naturally wished to help, and I discovered that only £1 million had been spent in the year before. What sort of a cut was that? Who is kidding whom? I asked one simple question—whether I could have a guarantee that we could spend the £6 million. I have not yet had an answer to that question.

The truth is that the local authority has undertaken a massive modernisation programme, which is to its everlasting credit. The hon. Member for Hornsey wants people to be able to buy these properties. In the sort of area from which I come, this is nonsensical rubbish. How can we have a policy enabling people to buy council property in blocks of flats three storeys high, so that, for example, we have No. 17 privately owned and Nos. 19 and 21 owned by the council?

The hon. Gentleman should know all this. The fact is that local authorities have problems with very difficult tenants. I suppose it does not matter what sort of noise some of them make. The hon. Gentleman is bursting to say something. I hope it will be intelligent.

There is not a great deal between us on this, but I suggest that before the right hon. Gentleman pontificates upon our policy he should take the trouble to read "The Right Approach". There is not such a great divergence. When we talk of sales of council houses, we are not talking of compelling tenants to buy. We want them to have the right to buy if they wish to do so. We want to give them all the help we can in order that they may do so. We also want to see a tenants' charter for those who decide not to buy, in order that their conditions may be improved. It is all set out in "The Right Approach", and there is little difference between us.

I am aware of all that. I also know that the Tory GLC applied such a policy. It did not have much success, though, did it? Will the hon. Gentleman answer that?

I did not know whether it was a rhetorical question or an invitation to me to speak.

The hon. Gentleman should act as though he did not hear the invitation.

The Tories won the GLC election and established the policy that council tenants could buy their own homes. The response to that policy was nothing like what was expected. It is an overstated argument.

I come to what I see as the positive approach. My right hon. Friend and I agree, and I hope that most hon. Members will agree—though I know that those on the Tory Front Bench will not, because they do not agree on anything—that housing, the right to have a roof over one's head, is a social need. Government involvement in housing is absolutely essential if we are to deal with some of the worst aspects. Here I am not refering to the odd case that comes to hon. Members. What breaks my heart is homelessness, the plight of the single-parent family, the youngsters who want to get married and cannot find accommodation in their locality. As a London Member my right hon. Friend is aware of what I am talking about, although I am trying to avoid a purely London argument when I say that I want Government involvement.

I am sad that only four or five London boroughs are taking on the main burden. Boroughs such as Bromley know nothing about homelessness, squatters or single-parent families. They do not want to know and they make sure that they do not know. They do not believe in local authorities building homes for sale or rent. The hon. Member for Ravensbourne (Mr. Hunt), whom I like as a Member, will agree that the council's policy is to favour privately-owned dwellings. It is not concerned with the problems of which I am speaking.

At some stage there must be Government involvement to remove the problem from some of the hard-pressed areas such as mine which have taken on so much in the past few decades that they can hardly take on any more. We have other social problems on top of the housing problems, and it is not fair for us to have to tackle them all. The load must be spread.

Local authorities that build have a great need for stability of programming. They need to know not only this year's programme but the programme for 1978, 1979 and 1980. Whitehall's main job should be to have progress-chasers to make sure that local authorities keep to their targets.

The building industry also needs stability. It cries out for it, whether under Tory or Labour Governments. Mr. Smith, of the builders' union, was right to complain about the stops and starts. He has lived through it all. We go stark raving mad when we start a boom and ask why the sand, cement and bricks are not ready. The reason is that we have had a slump, and then there is a long delay in getting everything under way again. Supplies must be built up. There is also something to be said for a close look at the way in which the Rent Acts apply today, which is not always as intended. I have been in the House for 30 years. I used to sit on the Opposition Back Benches with Ben Parkin, who is now dead, when we used to lead campaigns about Rachman and exploitation by certain other landlords. We used to attack the present Lord Brooke, author of the 1957 Rent Act, and we tore the hide off him. We kept the Tories up night after night. We then brought in Acts of our own, and there were very good reasons for them, but I am not so sure about them now. There must be some atitude if we are to have a private rented sector for the young executives, young school-teachers and so on for the population that floats.

It is a waste of time talking to the Tory Front Bench, but I ask my right hon. Friends to be a little more elastic in their attitude. Let us not be so rigid. I say to my hon. Friend the Member for Salford, East (Mr. Allaun) "You cannot write theses about housing until you have cleared your own slums. Do not tell others what to do until you do it at your own local level." This I have done. One cannot suddenly say that there is a complete answer. There must be give and take.

The Tory Party has a cheek and a lot of nerve to put down a motion condemning this Government for their housing policy. I know why the Tories have done it. There happen to be local elections coming up.

6.15 p.m.

I warmly welcome the point made by the right hon. Member for Bermondsey (Mr. Mellish) about the Rent Acts. It was a very significant point. I have not had the good fortune to follow the right hon. Gentleman in a housing debate before. I cannot resist telling him that there are only two tower blocks in my constituency, and one is called "Mellish Court".

That tower block suffered for many years the grave defect that when a chain was pulled on one floor it flushed on the floor below. I often wonder whether that was what the right hon. Gentleman meant by standing housing policy on its head.

A motion such as the one before us is one of the few ways open to an Opposition to bring to public attention a matter of great importance, and it is right that it should be moved as it has been, but I say quite frankly that I find debates of this nature, as a discussion of housing policy, an extremely barren practice. I have been in the House for seven years and have attended nearly all the housing debates. We hear exactly the same arguments repeated from both sides of the Chamber, yet the position does not improve; it gets steadily worse.

Why is it that we have made so little progress? Why is it that other countries in the Western world have done so much better than we have in providing what is essentially a basic commodity for people? Television sets and motor cars are freely available, and no one questions paying high rates of interest on hire-purchase agreements to acquire them, but if anyone suggests securing even a 5 per cent. return in rent on the capital value of a house everybody is up in arms. The reason for our being in this bad housing position is well known to every hon. Member who is honest with himself. There is no need for a housing review or anything like that to decide it.

The reason is that the market in housing, unlike the market in television sets or motor cars, has been thoroughly distorted ever since the First World War. No party can stand in a white sheet and say "We are innocent of getting into this muddle". The political decisions needed to put this distorted situation right are very painful, and Government after Government have avoided taking them. Although the Secretary of State talked about rent increases and chided us, he did not say whether the Chief Secretary to the Treasury had meant what he said on the subject. The long and the short of the matter is that people must pay more for their housing in all sectors and at all levels. The only person who tried to tackle the matter properly in the recent past was my hon. Friend the Member for Southend, West (Mr. Channon), with the Housing Finance Act, which was an attempt to put the balance right. My hon. Friend was roundly abused for what he did.

This whole disortion of the market over all these years has produced both a lack of resources and a lack of confidence. The lack of resources is not all this Government's fault. The nation as a whole has not spent a proper proportion of its resources on housing ever since the First World War. The present lack of confidence is the Labour Party's responsibility. By its very nature, housing is a long-term business. If people are looking over their shoulders for reasons of politics, let alone of economics, nothing radical will happen.

I wish to confine the rest of my remarks to the private rented sector, in which I declare a personal interest. I welcome the consultation paper issued by the Secretary of State, but I believe that the Minister for Housing and Construction is the only person who could overnight release a large amount of extra accommodation on to the market.

As my hon. Friend the Member for Reading, North (Mr. Durant) has already said, he could, first, adopt the idea of short-life tenancies put forward by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). I cite in aid the relative success of the North Wiltshire scheme. Hon. Members who study these matters will know what the North Wiltshire scheme entails. It means that the owner lets his house to the local authority which fills it with a tenant and undertakes to give it back to the owner on six months' notice. It is a cumbersome scheme. It is not an attractive scheme financially to the owner because he gets a lower rent than the fair rent. It has only taken off in areas where owners have confidence in the local authority concerned.

If that scheme can be successful, in spite of its defects, because the return of the propery is guaranteed, surely a wider scheme such as that envisaged by my hon. Friend the Member for Kensington would have very much greater success. If the Minister is frightened of bringing in this scheme, why does he not do it on a selective basis? Why does he not take one experimental area in the country and bring in the necessary legislation? We would back it straight away. The Minister should take one particular area to see whether the scheme works.

I know that resident landlords of private rented property have the right to obtain possession if they so want. My experience tells me that there is a vast amount of extra accommodation, both furnished and unfurnished, which could benefit from such a scheme.

I now want to outline some other constructive measures which, I believe, would revitalise the private rented sector which still amounts to more than 2 million dwellings and provides in certain parts of the country an alternative which is essential if people are to be properly housed. I would first suggest that as an experiment the Minister considers removing the provisions of the Rent Act, both with regard to security of tenure and regulated rents, in certain specified areas. These would be areas where supply and demand are broadly in balance. It might be done on a small scale to start with in order to see how it goes, so that if there are difficulties, or things are handled badly, it could be stopped. I believe one could then assess the real effects of the Rent Acts—because I suspect that during this debate a lot of accusations will be made about the effect of the Rent Acts although there is no actual supporting evidence.

That is one of the reasons why the Minister has issued the consultation document. Only by making an experiment such as this can we really assess the true effect of this particular legislation. It would also have the additional advantage of concentrating national attention and effort on those areas of true stress.

Secondly, I turn to rents. I believe there is a case—I hope this will come out in the Minister's consultations—that in periods of strong inflation such as we have at the moment the time between reviews should not be as long as three years. I think there is a case for reducing it to two years. I would also suggest, as a matter of policy, that there should be a declared intention to get nearer to a reasonable return on the capital value of the property. This cannot be done overnight. We all appreciate this, but if it were the declared intention of the Government to do this over, let us say, three reviews, confidence would be considerably restored. Even more important, there would be just a chance that private money would come back into the provision of low-cost rented housing. It is not a strong chance, but it is one that is worth taking.

Third, and most important, there is the need to retain the present private rented sector, which is rapidly diminishing. I would suggest to the Labour Party that municipalisation cannot be the answer. Whatever the political dogma attached to it, the sums of money are so great that it simply cannot be an alternative to any great extent. At the moment any owner who gets possession of a property is well advised to sell in order to obtain the capital value of his property and to avoid alienating it for another lifetime or more under the provisions of the present Rent Acts.

My solution is that landlords should be invited—not compelled—to register their property. Registration would require the landlord to keep the property let; and if he wished to sell, it should first be offered to the local authority or a housing association so that there would be no chance of the property leaving the rented sector if the local authority or housing association wished to buy. In return for doing that the owner would be able to depreciate his property against income tax and would be able to put any capital investment he made in the property against any eventual capital transfer tax. This would immediately give an incentive to owners to retain and improve their property. If this is, again, considered too radical a suggestion, let it be brought in for properties below a certain rateable value so that we can see whether it works.

I put these constructive suggestions forward with regard to the private rented sector. Leaving aside the luxury rented market in the West End of London, my fear at the moment is that there will shortly be only two forms of tenure in England—owner-occupation and rented accommodation from a local authority or housing association. This can only be inefficient, costly, and socially undesirable. It is only to be avoided by taking imaginative measures now. After hearing the right hon. Member for Bermondsey I hope that we are at the watershed and that both parties can agree on measures that are necessary and that will achieve lasting results.

6.27 p.m.

I am grateful that the hon. Member for Buckingham (Mr. Benyon) dwelt at some length on the private rented sector because I was disappointed that the Secretary of State made only a reference to the existence of that sector. There are still many properties in that sector. The hon. Member for Buckingham mentioned a figure of 2 million, but I believe it is between 2½ million and 3 million. A large number are in my constituency, which is an untypical constituency in that it has virtually no owner-occupation, a large proportion of local authority houses and a lot of property in the private sector.

My right hon. Friend the Member for Bermondsey (Mr. Mellish) referred to the work of Ben Parkin. I am sorry that my right hon. Friend is no longer with us in the Chamber because he ought to know that there are still some vestiges of Rachmanism left today and that there were aspects of this connected with furnished tenants until security of tenure was introduced.

I found the remarks of the hon. Member for Buckingham interesting. What they underline is that there may be different solutions for different parts of the country according to the housing circumstances of the district. A number of the things which the hon. Gentleman advocated have been tried within Westminster, in which my constituency falls, and have lamentably failed. A scheme on the lines of the North Wiltshire scheme hardly got off the ground. That scheme does not operate in that kind of stress area. All the matters which the hon. Gentleman referred to, like the problem of empty properties, are there in a rather concentrated form.

I want to be critical of the Government. In this sort of debate I always find that, however critical I am of my own Government, the Conservative Party would do a darned sight worse, but that is not much consolation for my constituents.

I would first say to the Secretary of State that my constituents are indeed glad that security was extended to furnished tenants. We no longer have a stream of furnished tenants subject to eviction, which was the regular weekly experience until security was extended to those people. It is perfectly true, as I have heard the hon. Member for Hornsey (Mr. Rossi) say on several occasions, that since security of tenure was given fewer furnished tenancies are being advertised as vacant. First, it follows that, if landlords are not able to kick out their tenants, there will be fewer vacant properties to advertise. Secondly, one of the reasons for the incidence of furnished tenancies was that many landlords, in order to avoid the security provision applying to unfurnished tenancies, whenever the opportunity occurred put in a few sticks of furniture and called the premises furnished. Similarly, the supply of furnished accommodation will have dried up in that sense in that there is no longer the motive for landlords to convert unfurnished tenancies into furnished ones.

It is often contended, though I have never seen evidence to substantiate it, that the major reason for the number of empty properties has to do with the extension of security of tenure. I concede that, in the case of the small, individual landlord, there is a great deal of misunderstanding about the provisions of the Act which gave security to furnished tenants. The most obvious set of exemptions about which there is considerable ignorance is the case of the resident landlord, whose tenants are not given security. The resident landlord does not have to hesitate about letting as a consequence of that legislation. The criticism of a number of us with this problem in our constituencies was that the Act had too many categories of exemption, but it is ironic that it is the small landlord who has misunderstood and assumed that a security applied which did not exist.

As for the bigger landlords of the Freshwater or Stern variety, with which my constituency is rife, those people well understand the position. One motive for leaving one or two flats empty is the sale of multiple holdings such as a multistorey block where the value of the block is enhanced as a consequence of there being one or two flats empty. The argument could be developed by saying that that has less to do with security of tenure and more to do with the consequences of inflation. It could be argued that the owners of such blocks are more concerned about achieving an appreciated capital value for their property than about losing the rent income of one or two empty flats in the block. In any event, it is quite unethical that anyone should be able to make a fat profit by selling off the roof over someone else's head.

When multi-storey blocks have come up for sale in Paddington and nearby areas Westminster Council has not wanted to intervene, and the GLC has been unable to intervene because its municipalisation scheme is inadequately funded and slowly has ground to a halt. Where private landlords have been selling off these blocks it is sad that the opportunity has been missed by the local authority to make empty flats in those blocks available to people on its waiting list. I am disappointed that we have not looked for alternative methods of funding and that local authorities have not been able to raise the necessary capital to acquire such blocks and to extend municipalisation as they would have wished.

We have come up against the same obstacle when attempts have been made to form tenants' co-operatives. There may be a stronger case with the ex-Freshwater type property for the tenants to form their own co-operative and receive some State funding. Here, I suspect that the Department of the Environment—as with all but, perhaps, one Government Department—is the prisoner of the Treasury. At one time my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) put forward a scheme by which non-redeemable bonds would be issued to a landlord rather than a capital sum, thereby giving to the former owner a compensation in terms of income which would represent rent less management costs, repairs and maintenance. I gather that one of the obstructions in the way of that is that the Treasury takes the view that it would be part of the money supply since the bonds would be transferable from one individual to another, whatever the law might say about it. I wonder whether there is room for reopening that possibility and challenging the Treasury contention, and whether this might not be a way of allowing properties which come on to the market to be taken over either by the local authority or by tenants' co-operatives.

As for empty property generally, a few months ago, in the unfortunate absence of my hon. Friend the Member for Salford, East (Mr. Allaun), I tried on a Friday to pilot through the Second Reading of his requisitioning Bill. Sadly, it was talked out, because the Under-Secretary was still on his feet at 4 o'clock. On that occasion, reference was made to the North Wiltshire scheme and to the fact that the Government were studying the problem, and I gather that in reply to a Question yesterday the Minister for Housing and Construction indicated that a pilot survey was to be undertaken.

Is the Department aware, for example, of the Westminster Empty Property Action Group? Is it aware of the all- London conference which was held only a few weeks ago? Is it aware that many organisations have undertaken studies of empty property? Do the Government feel that they are justified in delaying still further any action about the thousands of properties which remain scandalously empty? Will the Minister consult some of these voluntary organisations? I do not know where his pilot survey is to be. I can tell him that, if it is somewhere else in the country, it may not be typical of Paddington, and that, if he has it in Paddington, it may not be typical of other parts of the country.

Is not there some merit in taking up the suggestion made by the hon. Member for Buckingham and having a number of schemes for dealing with this problem of empty properties? Could not the House be invited to approve legislation giving authority for the introduction of pilot schemes, and see which of those would be most successful? This problem is crying out for attention. It is criminal that so many thousands of properties should remain empty when people are on waiting lists.

I make a passing reference to this rather sterile argument about council house sales. We have to remember that we do not add to our stock of housing simply by changing ownership. I was surprised that my right hon. Friend the Member for Bermondsey did not develop this argument. I notice that, in 1976, the Westminster Council, which has a stock of 17,250 houses and housed some 1,200 people last year, still has a waiting list of 7,200 and expects to have more than 3,000 new applicants each year. The authority built 339 new houses itself and obtained 500-odd in various ways from the GLC. However, of the 1,100 people it rehoused, nearly 700 came from voids within the city of Westminster. Those 700 voids came from a housing stock of a little more than 17,000. The most crucial argument is not the transfers to which my right hon. Friend referred. It is that the housing stock provides the voids which for many housing stress areas are the major source of rehousing other people now on waiting lists. It is not only criminal from a policy point of view but quite hypocritical from the point of view of council tenants who were themselves pleased to take advantage of the local authority housing stock when they were housed now to advocate selling off the major source of supply for rehousing other people on the waiting list.

Those are figures from a Tory council which is glad to have 700 voids. The fact is that that number of vacancies, some 4½ per cent. of the properties in stock, is lost not only for the first year in which the houses are sold but for the second, third, fourth and fifth year, and over a 10-year period the total number lost, if those houses were sold off, would represent the total present housing waiting list. It is vital for all in housing need that the local authority stock is retained.

After the housing cuts in the Chancellor's last two rounds of public expenditure cuts, supported virtually enthusiastically by the Opposition, it is sickening that in the recent Budget, after cutting back on public expenditure, including housing, to reduce the public sector borrowing requirement, the Chancellor then blandly announced that he proposed to finance his tax concessions by increasing by £1½ billion the sum by which the borrowing requirement had been reduced.

I am disappointed that I did not learn of grave arguments within the Cabinet about the restoration of public expenditure cuts rather than the provision of tax concessions, particularly for those at the higher level. Since it is recognised that the construction industry is so vulnerable in these matters, I should have looked to my right hon. Friend the Secretary of State for the Environment to be fighting to reinstate that which has been cut from housing.

The motion before us, in effect, would halve the Minister's salary. It would be a quite interesting innovation if, instead of having censure motions that halved Ministers' salaries, we related a Minister's income to the number of housing starts or completions each year. I am not fussed about whether we use completions or starts, but I think that a ratio of perhaps £1,000 a year for each 50,000 starts in either the public or the private sector would be about right. It would mean that the Minister would receive but £6,000 even if he achieved the objectives which he says he has in mind for the ensuing year.

The trouble with that proposal is that we might be penalising the wrong Minister.

If the innovation were introduced, we might extend it over the whole range of Government, which would give us some interesting possibilities.

I am disappointed also by another omission. If, for example, the Tories should win the GLC—I hope that it will not happen—and embarked upon massive rent increases, the Government do not indicate whether they would use any powers to prevent the sort of increases that the hon. Member for Hornsey has acknowledged might be excessive—that is, I think, £3 a week outside London and £6 a week inside London.

The Secretary of State has said that it is right that the extra £1·50 that might have gone on to council rents should not have been imposed because of the pay policy. I want my right hon. Friend, while keeping those words in front of him, to switch his mind to what is going on in the private rented sector. When Tony Crosland introduced the Housing Rents and Subsidies Bill, he spoke of phasing rent increases, which would have the effect of raising rents by £1 a week the first year, £2 the second year and £3 the third. I intervened to point out to him that in my constituency that would be not £1, £2 and £3 but £3, £6 and £9. I must tell the Secretary of State that those figures now need to be revised. They would be £6, £12 and £18 a week for each of the three years, because there are many increases occurring.

I come back to the point raised by the hon. Member for Buckingham when he spoke about a freer market and higher rents. There are still many empty properties in Westminster, despite the levels of rents to which I am about to refer. Quite ordinary tenants in the private sector are being faced with rent increases of £900 a year, phased over three years, paying £300 increase for each year.

I am as fed up with writing to my right hon. Friend the Minister for Housing and Construction as he is with replying to me. Over the last 18 months and more I have regularly been sending him examples of increases of that kind. He dismisses them, as his right hon. Friend the Secretary of State has in more recent correspondence, as applying only to a small number. One could say that cases of rape and murder in my constituency are small in number, but that is not an argument against intervention or protection. It is not even true that it is such a small number, as has been suggested by the two Ministers.

When the Housing Rents and Subsidies Bill went through the House and Committee, eventually there was made something which came to be known as the St. Mary's Mansions amendment. I constantly gave that as an example of excessive rent increases in my constituency. My right hon. Friend the Minister for Housing and Construction—who has had to leave the Chamber for a moment—at that time made informal inquiries—I say this to the Secretary of State who was not in that position then—and said that he understood that the kind of excessive increases about which I was complaining, of which St. Mary's Mansions was an example, arose because of general improvements in neighbourhood amenities for which the landlords were not directly responsible. After much discussion in Committee and many private meetings and negotiations the Government were good enough to introduce an amendment which instructed rent officers to leave out that factor which might be attributable to improvement in neighbourhood amenities. I was grateful that they also allowed a period of time in which appeals could be made where rents had been determined during the standstill period which had gone before.

I then found that when the tenants of St. Mary's Mansions went back to the rent tribunal and appealed on the basis of the new legislation they were told that their rent was not increased because of improvement in neighbourhood amenities and there were other factors. But they were never advised what other factors brought about the increases, and they still faced the £300, £600 and £900 a year increases. The Minister was rightly and properly concerned. He wrote to me later explaining that he had been misinformed that the rent increases were due to improvements in neighbourhood amenities, though he added that it might, perhaps, be some consolation to me to know that the new rule had been of benefit to private tenants in other parts of the country. That was cheerful and welcome news, but it did not solve the problem of the tenants of St. Mary's Mansions and many other such tenants.

I suggest that the Secretary of State and the Minister for Housing and Construction owe it to me and these tenants to try to take some action, long before the housing finance review is finally completed, to meet the difficult situation which such tenants are facing. At one time my right hon. Friend told me that it was impossible for the Department to monitor what was happening in rent matters, and this I accept, but the St. John's Wood Tenants Association, which is just outside my constituency, has sent its members along to the rent officer service at Wigmore Street and laboriously had copied every determination on appeal over a long period.

I want to present those results to the Minister now so that he may study them and discover that these are not such exceptional cases as he pretends. From correspondence I have had from other parts of London, I know that, although the problem is particularly serious in my constituency, it is not confined to Paddington, and other parts of London are being subjected to similar increases in the private sector.

What the St. John's Wood tenants found was that, of the 807 cases extracted from the register, throughout the Westminster district there were 650 where the rent officer's assessment was increased, only 53 where the figure was reduced, and 104 where the rent officer's figure was confirmed. If my hon. Friend studies that he will find that the kind of jump that occurs is not £1,500 to £6,000, about which one resident in Park Lane complained, and which he might want to dismiss as an exceptional case, but that many ordinary people, of modest and moderate means, who were paying a rent of £1,000 a year, which is not unusual in that area, have had their rents increased to £1,900.

That is typical, and I think that it requires Government action. When one considers that there has been a pay policy limiting increases to £6 and to £4, one realises that any increase received by those tenants during the period of the pay policy has been more than swallowed up by the rent increases to which they have been subjected.

I was interested to hear my right hon. Friend's description of the increases for local authority tenants, whom I am also anxious to defend because I have many of them in Paddington, of £1·50 a week on top of the 60p as intolerable. The hon. Member for Hornsey described increases of £3 and £6 as unacceptable hardship. If that is true for tenants in the public sector, what is so different about people in the private sector? The Government should give some encouragement by intervening. I hope that there will be some news tonight about what the Government intend to do, because there is here a real problem.

The whole social character of the central London area will be changed if rent levels of this kind are allowed to obtain. Ordinary people in industry, service industries and others, will find it impossible to live in the central London area. However good the housing finance review may be when it is published—I do not know whether it will be published when the present incumbents are still in office, or what the timing will be—it will still be the case that these rent increases will have taken place, and people who would otherwise have continued to live in the neighbourhood will have been forced out. There is a need for urgent emergency action.

I hope that the Government will consider using some of their powers. They can use Section 11 of the Housing Rents and Subsidies Act. They can intervene to prevent some of these excessive rent increases. I know the argument is put that if a maximum is allowed in one part of London that might become the minimum for increases in another, but cash limits are being applied to every other form of local government activity. There are ways and means of taking action. On the Secretary of State's own admission these figures are excessive for public sector tenants, and they are excessive also for private sector tenants.

I hope that the Minister will have some news to give us, even at the end of this debate, that the Government are prepared to look seriously and urgently at this problem. There are many new initiatives of policy that are needed, and I hope that the Minister will have something to say on these matters that will encourage and reassure my constituents.

6.54 p.m.

It is with enthusiasm that I add my voice in support of the motion. It seems to me that the appropriate action would be not to halve but to decimate the salaries of those who have presided over the Government's excuse of a housing policy over the past three and a half years. Their actions are best summed up in the line from the song "Argentina":

"They are an illusion; they are not the solution they promised to be."
I want to be rather more constructive than that for the remainder of my remarks.

I join my hon. Friend the Member for Buckingham (Mr. Benyon) in believing that although the regularity of these debates is increasing, and we debate housing more often than we used to do, they are not altogether satisfactory. I believe that as the debate has continued we have seen a realisation that there is more common ground than we thought. I recognise that in the past housing has suffered as much as many other areas from the chopping and changing of policies as Governments have succeeded one another.

Because so many hon. Members wish to speak in these debates, they have to truncate their remarks and are unable to go into these matters in the depth that they might wish. I ask the Secretary of State and the Minister for Housing and Construction to use their influence with the Lord President to get established a Select Committee on housing which could go into these subjects in more depth and establish precisely what degree of common ground there is. By that means we might get greater continuity of policy. I believe that it could only help Ministers if such a Committee were established.

It might be better to have a Committee that was both a Select Committee, with powers to investigate, and a Standing Committee, so that it built up its knowledge and dealt with legislation on housing when it was brought before the House.

I agree, as long as its composition, attitude and approach are those of a Select Committee rather than of a Standing Committee, so that it tended to come to agreed reports rather than to roll political issues backwards and forwards.

The first subject that I should like to see referred to such a Committee is the Government's housing review, which we can look forward to seeing soon, or shortly—I am not sure which. That review could be given to the Select Committee to be considered with urgency. We might then just begin to move towards the development of some common strands of housing policy. It could only help those who are in housing need.

I welcome the Secretary of State's announcement about funds for the voluntary housing movement. I have been involved in this movement for some time, and this is an important development, but I raise one worry. The size of many of the larger associations is becoming considerable. There is a danger that housing associations will become just another set of managers of property and that the innovatory attitude that they have brought to social housing and the management of small areas will be lost in a new bureaucracy.

Housing associations ought to be encouraged, as they get bigger, to break down the size of management units, to experiment with co-operatives, co-owner-ship, and so on, to provide the bridge from renting to owner occupation, and to retain the imaginative approach that housing associations had in their earlier days, and not become another set of managers. I believe that housing associations ought to continue to have an immensely important rôle to play in housing.

I add my two penn'orth to the debate about the sale of council houses, and perhaps raise a question with my hon. Friend the Member for Hornsey (Mr. Rossi). I am in favour of the sale of council houses. I do not believe that it is necessary to have a stock of publicly-owned houses accounting for 30 per cent. of the country's total. We ought to encourage ownership as much as possible.

I repeat that I am in favour of the sale of council houses, but I have a question mark about whether to give every council tenant the statutory right to buy the house or flat in which he happens to live at a certain time. In particular, I have a question mark about this idea because of the special conditions in central London. It would be an advantage to the vast majority of council tenants if they could afford to live in central London, to buy the flat in which they live. The value is likely to appreciate, and they could make a substantial profit. In central London there will continue to be a need for a substantial chunk of publicly-owned rented property, and if the houses that now exist are sold other properties will have to be provided at vast expense.

Although we ought to try to give local authorities an incentive to sell a percentage of their housing stock, they ought to have flexibility to decide what level of stock they wish to maintain, which flats or houses they wish to sell, and whether they wish to maintain certain blocks or estates in public ownership. The statutory right to each tenant would be likely to end up in a slightly messy situation. I hope that we shall think through the implications of that idea before making a firm policy commitment on it.

I also urge that, in advance of the next General Election, we should make clear the terms upon which tenants will be able to buy council houses. Otherwise we shall be in danger of raising among a large number of council tenants hopes which, when the terms become known, may be dashed.

I move briefly to the privately rented sector. I do not believe that there can be a substantial revival or resurgence of the privately-rented sector in any but a small number of areas or that we are making the best use of existing potential for privately-rented housing.

It was a tragedy that the Government talked out the Bill introduced by Mr. David Lane, the former Member for Cambridge. That Bill sought to put right many of the anomalies and injustices within the Rent Acts. It would not have taken away security of tenure from anybody who enjoys it now. However, it would have brought on to the market a substantial amount of property which is now empty and it would have sorted out the still somewhat dubious situation of the resident landlord. It would also have encouraged those who own flats over commercial premises, which are still left empty on a wide scale, as we know from driving round the shopping arcades of London, to bring those properties on to the market. The Lane Bill could have made a substantial contribution to maximising the use of privately-rented property. The shorthold idea proposed by my hon. Friend the Member for Kensington (Sir B. Rhys Williams) should certainly be introduced.

We should consider carefully the two taxation suggestions which have been put forward. The first was that we should stop the idea that anybody who lets off rooms in his house then has to pay capital gains tax on the percentage of the house which is let off when he eventually sells the property. That is a needless disincentive to bring property on to the market.

I would go a step further with regard to the second suggestion. I would give the resident landlord a tax incentive by relieving from income tax the first tranche of rental income that he got from letting off rooms in his house. If we could do those things, I am sure we would be surprised at the amount of property that would come on to the market and help to undo the damage that has been done by the Rent Act 1974.

The hon. Member for Paddington (Mr. Latham) has outlined the advantages which came to sitting tenants from the introduction of the Rent Act 1974. I was not in the House when that Act was passed. However, before the hon. Gentleman defeated me at the 1974 election I had given thought to the extension of control to the furnished accommodation sector. It seemed to me that the distinction was not between unfurnished and furnished property but between family accommodation and other accommodation. Any city which is to live and thrive needs a pool of privately-rented accommodation for single people who come to the city for the first time. Council accommodation is immobile. One needs residential qualifications for such accommodation or money to get into the owner-occupation market. If we freeze the whole of the privately-rented sector by controls, where will these young people, who are the life of any city, live? The Government got it wrong in the Rent Act 1974. I believe that the suggestions which I have outlined would bring forward the kind of accommodation to which young single people coming to London for the first time would be attracted.

I should like to mention one particular aspect of owner-occupation—the problem facing young people trying to get into that market for the first time. Everyone has problems. Mortgages are difficult to obtain. Once a purchaser is on the escalator, certainly at a time of inflation, it should become comparatively easier as time goes on for him to meet his mortgage commitment. However, it has rarely been more difficult for the average wage-earner to buy the average-priced house. Therefore, we should find ways of launching people into owner-occupation.

It would be foolish for either of the major parties to consider resurrecting the idea of fixed mortgages for all borrowers at a particular level. Any help should go towards developing schemes to help first-time purchasers with deposits or with interest repayments during the first year or two of purchase.

I hope that the Government will go somewhat further and faster than they have gone in encouraging the building agencies and the Housing Corporation to look at schemes for low-cost houses for sale. I am sure that there are areas where a concerted approach in terms of both land provision and building could produce low-cost houses for first-time buyers at prices substantially below those being asked for houses provided by normal speculative building.

I welcome the somewhat Delphic utterance by the Secretary of State about the household budgets of mortgage holders. We look forward to seeing that made more specific in the housing review.

Finally, I should like to comment on London. If the Government's housing policy has been a disaster, London has had much the worst of it. In terms of starts, improvement grants and slum clearance, London is still substantially below the levels being achieved four or five years ago. Against that background, there has been a total neglect of the potential of dockland in contributing to London's housing need. Perhaps "total neglect" is not the right expression. However, there have been scandalous delays. It is small wonder that London electors should be looking forward to 5th May for the chance of beginning a totally new era.

One Labour Member thought that it would not be a good idea for housing policy to be based on dogma. However, the Minister for Housing and Construction has pursued a policy ideologicially committed to and based on a vendetta against private landlords and a pathetic belief in the success of municipalisation. All that is now in ruins. A couple of years ago somebody wrote a book called "Housing—The Great British Failure". The Minister's epitaph will be "Housing—The Greatest Socialist Failure".

If there has been so much dogma, may I ask the hon. Gentleman to advise the House or me why, under the guidance of this narrow-minded ideology, the housing association movement, with which he is closely associated, has trebled—indeed, nearly quadrupled—its activity under the sponsorship of this Government? That has been a deliberate act of policy. Many of the ideas being put forward by the hon. Gentleman are being implemented under the guidance of the Government.

Even the right hon. Gentleman has some redeeming features. His taking over of our Housing Act and its implementation was one. The consequent expansion of the housing association movement stands to the credit of successive housing Ministers.

Does my hon. Friend agree that, as the Minister has accepted credit for the housing association movement, he should accept the discredit for his failure to deal with Longfellow Road and the housing association there?

I was about to sit down when the Minister intervened. I shall leave my speech there.

7.9 p.m.

The hon. Member for Chelsea (Mr. Scott) commenced his speech on a shrill political note and ended on a shrill political note, yet between those two extremes he mentioned many matters with which I agree. Indeed, I thought that his speech was well reasoned. I suppose that in a debate of this kind he had to make the right noises at the beginning and at the end. Therefore, we can overlook them.

I welcome the moderate approach adopted by the hon. Member for Chelsea on the sale of council houses. My party's view is not that we should never sell council houses under any circumstances. We have said that in areas of stress, where there is a waiting list, it is generally wrong for councils to sell their houses. There are a number of reasons for that. The main one is that to a large extent, especially when new houses are not being built in large numbers, councils depend upon re-lets as the main source of their housing. Re-lets build up over the years, and the selling of council houses reduces the housing pool. It is not generally understood, although it is important, that the houses that are sold do not represent a fair proportion of the housing stock. For various reasons the houses that are sold are usually those that are the most desirable.

For example, during the last bonanza of council house sales in Birmingham those that were sold were mainly pre-war low-rent properties which realised between £1,700 and £2,500. The more expensive houses and the high-rise flats were not sold. The sale of council houses might be less objectionable if a fair proportion of the good and bad housing stock were sold Those that are most in demand are sold, particularly pre-war houses with gardens which have low rents in relation to other council houses.

In my own constituency there are many high-rise flats, especially in the huge new Castlevale Estate in which there are about 5,000 dwellings. Apart from homelessness, the local council has the problem of thousands of people who live in blocks of flats and who say that they have lived there too long and want a house. The houses are not available. Tenants must live nine or 10 years in a high-rise flat before they are considered for a transfer. What is the justification for saying to those people that the council cannot provide houses because they have been sold? That is unjust and unreasonable. I can appreciate the attraction that the selling of council houses has for local officials.

I have seen figures which purport to show how much would be gained every week if a council house was sold. Such gains are illusory, because if one analyses the figures of houses sold in the 1970s one finds that such gains do not exist. If there is a gain, it is that a house which formerly was owned by the council and has been sold through a mortgage attracts mortgage relief on income tax. That means that the burden which was initially borne by the housing revenue account is borne by the Exchequer. It is a gain in that sense, but it is not a gain for public expenditure.

During the last bonanza, tenants of over 80 years of age bought their council houses hoping to spend the rest of their lives in them. In some cases their relatives wanted the house as an investment for themselves and in some cases they provided the money. I do not blame the council tenants who took advantage of the situation and bought their houses fairly cheaply. But it would cost five or six times more to replace a house sold at that time, and it would probably cost even more in London. The selling of council houses makes neither economic nor social sense. More recently, Tory councils which have tried to sell their houses are having modest success in doing so and it does not seem to have any effect upon the general housing problem.

The hon. Member for Henley (Mr. Heseltine) talked about fresh incentives. I do not know what incentives he has in mind. At present the incentive is a 20 percent. discount. I commend the hon. Member for Chelsea for saying that it would be wrong to arouse expectancy among council tenants that there will be another bonanza and that they will receive large discounts if they buy their council houses. The sale of council houses does not provide a single additional house and there is no evidence that it will do so.

The private rented sector has declined in the last 20 or 25 years. There is no chance of a revival in this sector, whatever steps are taken by a new Administration. There are a number of reasons for the decline which has taken place under both Labour and Tory Governments. There are good and bad landlords, but generally one can say that private renting is not sufficiently profitable for the landlord and that it is inconvenient for the tenant.

The Tory Administration which lasted until 1964 introduced an Act in 1954 which provided that new houses could be let without control. That Act was on the statute book for 10 years. It did not result in a significant number of houses being built to let. That proves that there are other factors apart from control which determine the decline and perhaps the eventual disappearance of the private rented sector. That would be unfortunate to some extent. But if we want to retain a viable rented sector it is necessary to concentrate on other sources. That is why the construction of council houses or, for that matter, the building of housing association houses should be encouraged to the greatest possible extent.

That is why I am in favour of municipalisation. It is not merely a question of Socialist dogma. The point is that a good many of these private houses, if they are not taken over by the local authority and kept within the rented sector, will inevitably disappear from the rented sector over the years.

Exactly. They will inevitably be sold. This is one of the ways of retaining them. Therefore, I am sorry that the Government have restricted the amount of funds available for the task.

I agree with much of what has been said about local authority loans by hon. Members on both sides of the House. I am sorry that these loans have been restricted. I suggest, as I have suggested previously, that it might be a good thing if building societies were persuaded to let local authorities have money for this purpose. I know that building societies, as has been said, say at the higher level "We shall allow mortgages to be given in these particularly difficult areas", but when the matter gets down to the manager level he says "These are the sort of areas in which we are likely to have trouble with the mortgage, in which sometimes there will be difficulties in collecting it, and threats of eviction and that sort of thing, which are obviously undesirable." It is completely comprehensible that the manager may not desire to have that job, and I am not condemning him for that.

That is why I still think it desirable that these mortgages should be dealt with on a local authority basis, which would be sensible if the building society, which, after all, is lending the money for this purpose and is getting the rate of interest that will be obtained, is to help in doing this job.

I hope that it will be possible at the earliest possible stage for the Government to increase, or at any rate to accelerate, their housing programme, in relation both to new houses and to improvements and modernisation, to give employment to the building industry. That industry is in a sad position now. I should like the Government to consider whether it is desirable to keep a man on the dole, with all the expense that that involves when he is non-productive, or whether it is better, even with an increase in public expenditure, that he should be creating an asset for the nation. I think we are so obsessed with the idea of public expenditure and the public borrowing requirement that this economic situation has not been fully analysed. However, I know that that is not a matter for the Minister. The responsibility is in another quarter. All the same, I hope that this matter will be considered and that we shall make more progress in our housing programme.

7.24 p.m.

Our housing policy may not be in ruins, but it is in a pretty sorry state. We have the tragic comedy, to which reference has already been made, of surging homelessness while at the same time we have an overall housing surplus, to which the late and lamented right hon. Anthony Crosland referred in a famous comment about two years ago.

However, this is by no means all the fault of the present Government. Tory Administrations have come and gone, and they have not been particularly successful in dealing with the situation. I remind the hon. Member for Henley (Mr. Heseltine) of the situation between 1971 and 1974, when house prices virtually doubled. Many young people certainly in my constituency—I am sure that this applied throughout the United Kingdom—found themselves virtually priced out of the market. That was the situation obtaining in 1974. I think that the average wage on the Isle of Wight was about £28 to £30 a week. For them, the chance of being able to buy a £10,000 house— that was about the minimum price for a house that was any good—was virtually gone.

If we are honest about it, we must admit that that was one of the reasons why we had the very sharp increase in wages. I think that the Government probably had to give way to it, because there was such pressure upon them, later in the same year. The whole housing policy was such a disaster that there would have been riots in the streets if something had not been done to increase wages, and certainly to bring the younger generation within shooting distance of being able to purchase a home.

The situation now is that many more people in my constituency, where the average wage is now about £50 a week, are able to purchase. We have some stability in prices, and property values have dropped a little. A quite reasonable terrace house may be bought for between £7,000 and £8,000. If people can get a mortgage, even at 11 per cent. or 12 per cent. interest, they can see their way to purchasing. That was not the situation in 1974 when the Tory Government left office.

Standards of construction suffered badly under the Tory Administration. These things will take years to rectify. The designs and the planning of estates were much too uniform—I am afraid that that is still so—and they were badly set out. I suppose that both Tory and Labour Governments are to blame for high-rise flats, but certainly the previous Tory Administration were to blame for soaring land prices. In short, it is a pretty sorry tale.

I have been told by a big builder in my constituency that land which he was offered at £30,000 an acre three years ago he has just bought for £10,000 an acre. There have been sharp falls in building land prices. This means that houses can be built on that land that would previously have been probably beyond the means of ordinary people to purchase.

I agree very much with the remarks of the hon. Member for Birmingham, Erdington (Mr. Silverman) about the sale of council houses. I am really sick of the debate on this subject, because it goes on and on. However, I remind Conservative Members that Conservative-controlled local authorities were not very successful at selling council houses, even in the early 1970s. That was honestly admitted by the right hon. Member for Worcester (Mr. Walker) in a recent speech when he was praising the words of the Opposition spokesman on the environment. He pointed out that when he was in office Conservative attempts to sell, even with discount, were not proving to be very successful.

However, I am disappointed to learn, from the speech that we heard this afternoon, that the sale of council, houses seems to be almost the only policy in the Tory locker. The Tories would do well to study the report on this subject by Glasgow University. It was published only last month. It concludes with these words:
"The significance of selling council housing should not be blown up out of all proportion to its importance to overall housing policy. It is quite likely that effective demand to buy will be modest and in any case changes in ownership do little to alter the physical characteristics and inadequacies of the housing stock. But we hope that in the future policy decisions about selling council houses will be taken on the basis of less rhetoric and a greater understanding of their complex implications."
There is a great deal of information in that document.

I should also like to draw attention to the words of the late lamented Fred Pennance, who was certainly no Socialist, in a pamphlet entitled "The Marketing and Consumption of Housing". He referred in that to the apparent unthinking support for the view that owner-occupation must have advantages over renting, regardless of household income and family circumstances. He concluded that a more careful assessment might suggest that the benefits of owner-occupation for low-income families are likely to turn out to have very high opportunity cost indeed.

Unfortunately, the hon. Member for Chelsea (Mr. Scott) has left the Chamber. I supported him when he said that what is needed in this House—it has been needed ever since I have been a Member, and it was no doubt needed for a long time prior to that—is all-party agreement for a new deal in housing. We do not want a continuation of party-political packages containing gift-wrapped, giveaway council houses and subsidised mortgages which cannot be maintained.

Two-and-a-half years ago my party's housing panel, of which I am the chairman, produced a document calling for a radical review of the present Rent Act legislation so as to try to bring on to the market the vast numbers of properties which now lie empty or under-occupied. A few months later—I am doing the Opposition Front Bench a good turn in mentioning it—Messrs. Heddle and Linacre wrote a pamphlet called "A New Lease of Life: A Solution to Rent Control", published by the Conservative Political Centre, with a foreword by the hon. Member for Hornsey (Mr. Rossi). I believe that the solution to some of our worst problems lies in this area and is covered in that booklet.

Simply, I should like the Secretary of State to expedite his review of the effect of the Rent Acts. That should come first. We have been waiting long enough for the housing finance review, but we can put that aside and get on with a study of the effects of the Rent Acts. The right hon. Gentleman should come forward with proposals to enable existing occupiers of private, and particularly public—council—houses to demand fixed-term leases of up to 10 years' duration.

Their future security would then be similar to that afforded by the Landlord and Tenant Act 1954, which deals with business tenancies. Local authority tenants do not have security of tenure at the moment, but under this proposal they would have some equity and feeling of pride of ownership through having a lease. The lease would be transferable. If they wished, they could sell for gain and move.

This is one of the greatest problems at present. We have outright owner-occupation and virtually no private and very little public accommodation to rent. This means that industry suffers. In my constituency a ship repairing firm and an engineering firm are crying out for skilled labour. On the East Coast there are men out of work who would like to come and work in my constituency, but there is no housing for them. The local authority is providing none and the housing association set up by the local business association has not got off the ground. If there were a chance of getting houses to rent, those people could come to my constituency and get a good job. The same situation must apply throughout the country. Some such solution as this would inject mobility into housing.

That would also give tenants some security and private landlords some opportunity, if they wanted the property back for occupation by their family or for redevelopment, of getting possession. Under legislation like the Landlord and Tenant Act of 1954 the tenant could claim a new leave, and if agreement could not be reached the local court could provide the terms. Only in that way can real progress be made and badly-needed private capital be attracted back into housing.

I suggest also that owners of properties at present lying empty should be allowed to elect for fixed terms in the knowledge that possession is available on the termination of the lease. That is one way of bringing this empty property into use. If people do not take advantage of the right to let, I entirely agree with the hon. Member for Salford, East (Mr. Allaun) that they should be liable to have their properties requisitioned or at least double-rated.

Therefore, a start could be made by giving time to the Private Member's Bill of the hon. Member for Kensington (Sir B. Rhys Williams), the Housing (Short-hold Tenancies) Bill, which comes up for Second Reading tomorrow. I hope that the Government will not block that Bill and that they will at least let it go into Committee, so that we can have a proper debate on the whole subject. They would be blind not to give us that opportunity.

The Secretary of State will be receiving our detailed proposals in the next few weeks—

That is right. This is one thing that may work, and if we can get it to work Tory Members will have to admit it.

Does the hon. Gentleman know that the Minister for Housing and Construction has today sent a letter to my hon. Friend the Member for Kensington (Sir B. Rhys Williams) and those of us who were sponsors of his Bill saying that the Government cannot allow it to proceed? Perhaps the hon. Gentleman will try to influence the Government over this aspect of the Lib-Lab deal.

As I am also a sponsor of the Bill I am disappointed to have that news, but it is not the news that was conveyed to me by the hon. Member for Kensington himself. He was not sure when I spoke to him half an hour ago that the Bill would be blocked. I have not seen a copy of the letter to which the hon. Gentleman refers, although I gather that I am to get one. If what he says is true, it is very disappointing and I hope that the Government will have second thoughts.

As I was saying, the Secretary of State will receive our proposals shortly about the leasing of private and public property. This is an area, certainly in the council housing sector, in which people can take a much greater interest in their properties on a full repairing basis. They would also have some share in the equity if they wanted to move and sell the lease.

If we are to move from a system of fair rents to one of market rents, as eventually we must—we are being blind if we ignore this point—we shall have to help people on low incomes. That should be dealt with by the introduction of housing credits, so that subsidies go direct to the individual and are not spent on bricks and mortar. The sooner we can move to such a system, the better. I believe that that is Conservative policy, and I support it 100 per cent. At a stroke, we should achieve mobility and pride of possession, which leads to good maintenance. As for selling freeholds or long leaseholds, where circumstances are favourable that should go ahead, but not at the risk of lengthening already long waiting lists.

Why not start, if we are going to sell something in the public sector, by trying to find purchasers for some of the flats in multi-storey blocks?

I think that the hon. Member would be surprised. At a price of £4,000 or £5,000, provided that they were on long leases and maintenance was the responsibility of the landlord, I think that such properties would find buyers.

At any rate, why not try? Various suggestions have been made tonight. Let us try this one. That is an area in which we could start. We should not be selling off the better type of property. Let us put a few on the market and see how they go.

Another area in which local authorities should be cutting back on overheads is the disposal of land which they are unlikely to develop in the near future. The South Wight borough in my constituency owns some 30-odd parcels of land, all bought at high prices unfortunately, all lying undeveloped and clocking up interest at a pace of knots. It would be much better to get rid of them now, perhaps through joint schemes with private builders. As the right hon. Member for Bermondsey (Mr. Mellish) said, local authorities should really be building for sale themselves, as has been done successfully in Liverpool and elsewhere. At the moment, they are costing the country—ratepayers and particularly taxpayers—a great deal of money. Councils should be moving in that direction immediately.

Of course I want to see more tenants' co-operatives and more own management schemes. I want to see housing advice centres in all our large towns. Too often it is Members of Parliament who have to fulfil that role, because the local authorities do not see it as part of their job. Councils can play a large part in giving a lead, not only in tenants' co-operatives but in housing advice.

I have been told that it costs Blackpool £15,000 a year to run a housing advice centre. I cannot believe that it can cost anything like that figure. In my area there are no fewer than three towns which have either a housing manager or a deputy manager. I am certain that with a little training they could take on this kind of work, that people would be given a welcome and that advice could be given without costing the ratepayers a cent. I should like that to be done.

As the aim of our future housing policies, I wish to see, first, the provision of a stock of accommodation of an acceptable minimum standard to satisfy the demands of all citizens, subject only to their being prepared to devote a realistic proportion of their incomes to the cost of housing. The second aim should be to make available the choice of a variety of types of tenure so that the individual may have the one best suited to his particular circumstances and needs.

The third aim should be to enable the householder, especially if he is a tenant, to participate in the control of his environment. Fourthly, in so far as the State provides financial assistance in the provision of housing, the aim should be to ensure that it does so on the basis of equity between one individual and another according to circumstances and needs and not according to the methods of finance or the type of tenure. Finally, the ideal should be to eliminate the class divisions and barriers that have become entrenched in the whole housing field.

7.41 p.m.

I ask the hon. Member for Isle of Wight (Mr. Ross) to forgive me for not following him, but I want to mention some new issues. A few days ago we were informed that suddenly and astonishingly the public spending deficit was £2½ billion less than we were told only four months ago. It was this deficit that provided the excuse for the December cuts in housing and other vital social provision.

I believe that we have been conned by the IMF and top Treasury officials. The Government gave in to the combined pressure from these two quarters plus that of the CBI, bankers, great newspaper proprietors and Conservative Party spokesmen. The Conservative spokesmen were demanding even more serious cuts. Some Tory Members actually wanted £6 billion to be cut from social expenditure.

I ask the Government to restore the cuts in the light of the new figures. That is the way to kill two birds with one stone—bad housing and unemployment. In the construction industry and the related trades of glass, timber, bricks and furniture there are now a quarter of a million unemployed. This restoration of the public expenditure cuts is being urged on the Government by the TUC and the Labour Party. Trade unions rightly see homes and services as part of the social wage, a part that must be upheld.

I recently put the following question to my right hon. Friends the Chancellor and the Chief Secretary to the Treasury: if surprisingly, the Treasury now finds itself in a position to provide £2½ billion in tax relief, why cannot part of that money be devoted to restoring the cuts? I received two different answers, neither of which I accept.

While admitting that this option was possible, the Chancellor told me that tax relief would produce an upturn in employment more quickly than would removing the cuts. I strongly dispute that. Certainly tax relief is reflationary and is to be welcomed, especially for those on lower incomes. However, it takes longer to affect employment than, for instance, a massive programme of house improvement which could be introduced within months and which is labour intensive.

My right hon. Friend the Chief Secretary replied differently. His argument was that there ought to be a better balance between taxation and public spending. This, too, is an ill-founded reply, for the cost to the Treasury of maintaining workers and their families in unemployment is almost as great as the cost of paying them to provide valuable services.

The effect of the three series of public expenditure reductions last year, in February, July and December, has not yet been fully felt. They were wounding cuts, particularly in housing. There are six main spheres of housing cuts, and I wish to confine myself to two of them. These two cuts hurt all parts of the country, but hit the inner city areas most of all. A vital way in which the Government can help decaying inner city areas is by restoring the cuts in the amount that local authorities may lend on mortgages and spend on improving older houses.

Councils lend on houses that most building societies are unwilling to touch. They often grant 100 per cent., no-deposit, mortgages. When would-be buyers cannot obtain mortgages, houses remain empty and are quickly vandalised. They may become complete write-offs and have to be demolished. If this happens in the middle of a terrace or street, the remaining properties are usually affected. I can think of whole rows of houses that have become write-offs in this way.

The disastrous scale of the cuts in council loans for house purchase and improvement is shown by the following figures, all at constant prices. In 1974–75, only three years go, £737 million was lent.

I am sure that my hon. Friend will recall that the money supply was hopelessly out of control at that time. I hope that my hon. Friend will not begin to suggest that anything more than a small percentage of that sum was directed to the inner city areas.

I am not saying that it all went to inner city areas, but £737 million was loaned nationally in this way. The amount has fallen each year since then, so the Government estimate this year's ceiling as £116 million.

To compensate in part for this reduction the Department of the Environment devised a scheme with the building societies whereby the societies were to lend £100 million to buyers sponsored by the town halls. Although this total was eventually exceeded 15 months later, councillors were highly critical. In some cities and towns only one in four of the cases that they promoted was accepted by the societies, and most of those who were successful would have been so if they had made a direct approach to the societies themselves.

The building societies were most reluctant to lend on the older and poorer types of houses. In Salford six of the nine nationally famous building societies insisted on the properties having front and back gardens and on there being bathrooms, hot water systems and inside lavatories already installed. In some cities, such as Leeds, Liverpool, Birmingham and Leicester, whole areas have been "red-lined", in other words, excluded from consideration by the societies' surveyors, thus accelerating their decline. Only 6 per cent. of society mortgages go on houses costing less than £6,000.

I hope that hon. Members will not think that I am against helping people to buy their own houses, but I want to see the poorer half of the community receiving this aid. For the reasons that I have outlined, most councillors are not exactly bursting with confidence over the second scheme now announced, for £157 million to be lent to local authority-sponsored home buyers. There is growing support in the Labour movement for the proposal that societies should be required by Westminster to lend councils one-tenth of their annual advances for this purpose. Surely that is not too much to expect for the worse off half of the population. On last year's figures that would provide £600 million.

While the cuts I have mentioned may appease the IMF, they are wholly illogical. If a person takes a mortgage out at the town hall, that is public expenditure. If he crosses the High Street and gets one at a building society, that is not.

Equally serious are the cuts in the total that local authorities are allowed to spend on improving older type houses by installing hot water systems, baths, inside WCs, and in other ways. A number of councils—Manchester, for instance—have bought up thousands of such houses with a view to repairing and improving them and then letting them to those in housing need in their areas. Drastic reductions imposed on their allocations will mean in many instances that the houses will remain empty. I can take the Minister and the Secretary of State to houses in Manchester that have been left empty as a result of this. The end result is as I described earlier.

It is true that in future the Department of the Environment will, sensibly, allow councils to decide for themselves how they use the global sum allocated, but that will not stop the rot if the global sum itself is reduced. I welcome the recent moves by the Secretary of State to assist inner city areas in five conurbations. Unfortunately they do not nearly make up for the two set-backs I have mentioned. Our Conservative opponents, who are baying for more and more savage cuts in public spending, would of course worsen the situation.

I am saying some hard things about housing. The situation is serious. But under Tory policies, national and local, it would be catastrophic. If the housing cuts are severe, they are as nothing compared with what the Conservative leadership would inflict. It is difficult for the working-class family to get a home today. Under the Conservatives, it would become almost impossible.

I am no great biblical scholar, but I know that the Bible says:
"My father hath chastised you with whips, but I will chastise you with scorpions."
I do not think that the quotation was referring to the party Whips. I, of course, am thinking of the Conservative Government, should there be one.

The heaviest Conservative blows would fall on the lower income half of the population. I do not worry overmuch about the housing problems of the very rich. If one is really wealthy, one does not have a housing problem. The problem exists for those who are not wealthy.

The frankest statement of Tory intentions is given by the right hon. Member for Leeds, North-East (Sir K. Joseph) in a recent article entitled
"Time to put our housing in order"
in the News of the World. It is hair-curling. The author was described in the headline as "Top Tory policy maker", and I think that that is a fair description in view of his recent promotion.

He wrote:
"More council housing is no help"
This ignores the fact that the majority of working-class families depend on council housing to obtain a home. Even with mortgages they cannot afford to buy their own.

Next he states that one of the prime causes of housing troubles is rent control. Does the Conservative Front Bench stand by that statement? It burkes the obvious fact that at a time of housing shortage, if controls are removed, rents will soar beyond the means of millions of families. Trade unionists regard an increase in rents as a cut in real wages and act accordingly.

Finally, the right hon. Gentleman voices the familiar demand for cuts in housing subsidies. He says that the policy must be
"you get what you pay for, and pay for what you get."
Here, too, this means higher rents—a fine way to keep down the cost of living. All this is a recipe for social disaster of which the people must be made aware before it is too late.

7.55 p.m.

As usual, I declare my interest as a director of a house building company and a director of Shelter. I wish to refer first to the Prime Minister's recent intervention on the question of mortgages. I hope that the right hon. Gentleman will keep his hands off the building societies. They do best when they are left to themselves to decide the level of interest rates. The last time that he intervened in this matter was in 1965 to ask them to hold down their rates. They did so and there was an immediate mortgage famine. I hope that he will not do that again.

I listened to the hon. Member for Salford, East (Mr. Allaun) with great interest. I was sympathetic to the opening part of his speech when he spoke of the problems of the construction industry. Those problems are extremely unsatisfactory. It is likely that by 1978 construction's contribution to the country's gross national product will have fallen by about 30 per cent. compared to 1973. It will actually have reached a level significantly below that described as danger level by the economic development committee for building in its report last June. The report said that such a level would lead to an insufficient use of resources, low productivity, short working lives, idle plant, unused material production capacity and so on. All this involves higher costs.

It is clear from the White Paper on public expenditure that by 1978–79 new construction will have been cut by some 17 per cent. on the 1975–76 level, whereas other public sectors will suffer a cut-back of only about 1⅔ per cent. New construction will have suffered more than 10 times as much from public expenditure cut-backs as the rest of industry. Part of the reason is that the Government have spent more than £1,000 million in the last few years on food subsidies, which have made an almost negligible contribution to the household budgets of our people.

Building costs are now rising more sharply at a time when builders are pessimistic about the future work load. The latest surveys show that new house prices rose by just over 9 per cent. in 1976, compared with a 14·6 per cent. rise in house building costs in the same period. That cannot go on. The only reason why the rise has been absorbed so far by the industry is that previous land profits have been able to take the strain. These land profits are not there now and will not be there in the future, so that future building costs will have to be passed on fully to the purchasers. That is a bleak outlook for them.

I know that the Secretary of State does his best for the industry, but the reply which was given by the Government to the EDC's paper on the construction industry recently was most unsatisfactory. This was what we got. First, on the provision of infrastructure by private developers, we were told:
"The Department is considering how this might be encouraged."
Secondly, on access to the private housing market, we read:
"the Government are looking at proposals for extending access to home ownership which have been made from various sources."
Thirdly, on housing procedures and building performance, we see:
"The Department is doing work to complement the studies being carried out by the EDCs on ways of improving efficiency."
On inner-city policy, where they have at least done something, the Government were
"examining the scope for action".
On exports,
"The Department is considering further ways of assisting construction exports in the light of advice from the Construction Exports Advisory Board."
At present there are 227,000 unemployed building workers, representing 17 per cent. of all unemployment. The Government should turn their minds towards this problem.

I turn now to another matter which has not been dealt with in this debate—the question of land. Land is crucial to the housing programme and to any other development. As a builder, I know that the only land coming on to the market at present is land from other builders or from receivers. My own company is buying land from receivers of good companies which have gone bankrupt because they had no work.

The Community Land Act is already proving a complete flop because it was based on three completely inaccurate premises. The first was that landowners would willingly part with their land at below the market price. They will not do so, and this land can be taken only by compulsory purchase, which takes years and years. The second premise was that local authorities were willing and able to act in a speedy, efficient and entrepreneurial capacity. In fact, their whole training is the reverse—cautious and careful. The third premise was that there was some bureaucratic substitute for private enterprise land-buying. There is none. If houses are to be built quickly, there must be a situation in which the builder seizes his opportunities, buys land, gets planning permission and gets on with building. There must not be a bureaucratic level sandwiched in the middle.

To all intents and purposes, the Government have accepted that the Act is not working properly. On 16th December last they published their famous GNLA/12. This was a letter from the Department of the Environment to local authorities about the implementation of the Act in the light of the public expenditure cuts that the Chancellor made at the time. Normally, when departmental circulars appear they are given a reasonable degree of prominence. There is usually a Press notice if the circular has something to say. There was no Press notice and no publicity for this letter. Most local councillors did not know anything about it until The Sunday Times got hold of a copy of it.

The circular has effectively killed off the whole business altogether. To begin with, it has meant the scrapping of the five-year rolling programmes which local authorities had spent months putting together. When I asked the Minister whether he would compensate local authorities for the abortive work they had done on this, I was told that he would not. Without those programmes, there is no question of forward planning under the Community Land Act.

The circular's provisions for the acquisition of housing land were most undesirable on planning grounds and directly contrary to the Government's inner cities policy. The circular says in paragraph 12(a):
"the Department will not normally approve schemes which fail to satisfy the following criteria:—Housing land, disposal within two years of acquisition for a consideration which at least recoups the total cost of purchase, any essential servicing and interest charges."
Therefore, the Community Land Act is of no use for acquiring land for housing in practice, except for green field sites. There is no hope of any sites in inner city areas fulfilling the criteria. As all the Government's policies are aimed at the inner cities, the Community Land Act is operating in a contrary direction. In practice it will not do what is needed because there is no money to implement it in any event.

In my county of Leicestershire, an amount of £759,000 was allocated last year under the loan sanctions for acquisition of land under the Community Land Act. I looked into this very carefully. After vigorous scrambling for position by the individual authorities concerned, the Leicestershire Joint Advisory Committee, representing the 10 authorities in the county, applied for loan sanction to acquire eight sites in five authority areas valued at £962,000. None of the sites was for housing. Four were turned down by the Department of the Environment. One, valued at £30,000, is still under negotiation. Three have been approved, of which two are in Leicester and were originally valued at £709,000. Now they are valued at £759, 000, which is the total allocation. Therefore, we have two sites—neither of them for housing—in the first year of operation of the Act in Leicestershire. And that was when there was more money available. Since then the amount has been cut and things are likely to become increasingly difficult.

The circular also deals with the use of commercial land under the Act. The new guidance note seems to be directly contrary to any reasonable prospect of success. Under the Act, the only way to buy land for commercial purposes is to ensure that prospective purchasers are identified and that there is assurance of disposal within 18 months. Additionally the disposal should attract a mix of premium and rental payments which recoup at least half the total cost incurred within three years of the acquisition. These requirements cut out completely any chance of speculation, and if anyone could find a named tenant prepared to do business in that manner I would be very surprised. In fact, nothing will happen.

The only way out that the Government give themselves is in paragraph 14 of the circular, in which they say:
"It is recognised also that there will be schemes which do not satisfy the criteria but which, nevertheless, have powerful planning and social arguments in favour of early local authority intervention."
I pricked up my ears when I heard that, because I thought that perhaps the Government had set aside some money in reserve for this purpose.

In a Parliamentary Question I asked the Secretary of State for the Environment
"What specific level of resources will be available to local authorities in 1977–78 for acquisitions of a planning or social nature as outlined in paragraph 14 of GNLA/12?"
The Under-Secretary replied:
"No specific figure will be laid down."—[Official Report, 15th February 1977; Vol. 926, c. 131.]
If the Government had had any specific reserves for this purpose, they would have said so. The whole thing is a charade, and the Chancellor of the Exchequer has effectively wrung the neck of the Community Land Act by not making any money available. Developers who are looking for land from that source to get on with house building will be disappointed.

The Government must cut the development land tax. This tax has a rate of 80 per cent. on the higher gains and the larger sites, and this is proving a very serious deterrent to bringing land forward. All that it needs is an amendment to the Finance Bill to reduce the development land tax to a maximum of 60 per cent. on a permanent basis. That would be the most constructive single thing that the Government could do to bring land to the market at present.

Also, the development land tax is not producing any revenue. In fact it is producing a negative revenue, with a staff of 330 involved. Even the development gains tax, which was not much of a tax, produced £3·8 million in income tax and £700,000 in corporation tax. The administrative costs of this tax were only £50,000, so it represented a better return than that which is coming from the development land tax.

The Government's land policy will never have a chance of working at all because the Community Land Act is based on a fundamentally false premise. As this is crucial to housing policy, the Minister for Housing and Construction, who does not have the direct personal commitment to the Act which the present Minister of Agriculture had, should look seriously at it, as he is now in a position to do, and removal all the obstacles placed in the way of those who want to get on with the business of building houses.

8.9 p.m.

I have some sympathy with the remarks made by the hon. Member for Melton (Mr. Latham) about the state of the construction industry and I share his anxieties about the impact of the circular on the implementation of the Community Land Act. However, I do not propose to follow him in any detail on these points, because there are other issues I want to take up in my brief time.

The most impressive feature of this debate is the extent to which, once the fireworks of the hon. Member for Henley (Mr. Heseltine) had subsided—and he demonstrated how little the Conservatives are proposing—it has been constructive and serious. That strongly reinforces the case made by the hon. Members for Chelsea (Mr. Scott) and Isle of Wight (Mr. Ross) for a Select Committee on housing. The same hon. Members always take part in housing debates and we would do better to hold our discussions upstairs where we would not take up the time of the House and might be better able to reach agreement on what needs to be done. Housing policy has changed as political control has changed, but from our discussions tonight there are traces of common strands indicating that we would be able to tackle the fundamental problems of housing.

The crux of the problem is housing finance. Last year we spent £1,000 million subsidising rents, £1,000 million subsidising mortgage payments and £2,000 million on investment. Subsidies were as great as the amount spent on investment. In 1968 we spent, at constant prices, only £477 million subsidising rents and £411 million on mortgage tax relief compared with £2,473 million on bricks and mortar.

Substantial sums are spent on housing but vastly too great a proportion is used to hold down rents and to subsidise mortgages. We leave out of account those with frequently the greatest need. The Family Expenditure Survey shows that the majority of owner-occupiers without mortgages have much lower incomes than those with mortages. We subsidise, through mortgage tax relief, those with larger incomes at the expense of the poorer owner occupiers.

I recognise that local authority rents have remained a fairly constant proportion of average manual earnings since the war, but it can be argued that we spend too small a proportion of our income on housing. I know that I am losing some of my audience on this side of the House, but I believe that it is possible to argue that proposition.

My hon. Friend the Member for Birmingham, Erdington (Mr. Silverman) said that in his area families had to live in high rise flats for nine years before they had any prospect of transferring to a council house with a garden. That is the wrong way round. Families with young children should start with houses and gardens and be offered some sort of incentive to move into high-rise blocks as their children get older. If we are not to compel people to live in high-rise blocks, we must have a higher basic rent for houses—although with higher rebates depending on income and the number of children in the family. That would provide an incentive for people to move from high-rent properties to the less popular properties, such as high-rise flats, where rents would be lower.

Even more important is the extent to which we subsidise, through mortgage tax relief, those who need help least. We pay tax relief of about £1,200 a year to someone with a mortgage of £20,000, yet the family struggling along with a £6,000 mortgage and on a much lower income gets very much less subsidy through the tax system.

When hon. Members opposite talk about selling council houses, they ignore the fact that every time a property is sold, the mortage tax relief subsidy starts all over again at a much higher level. Instead of the capital appreciation of a property accruing to the community through the local authority the gain would go to the family or the heirs—which is not a particularly desirable means of spending public money. The next purchaser would buy at an increased price and his mortgage tax relief would start all over again at the inflated price. If he sold the property 10 years later, the whole process would start all over again, because mortgage tax relief is renewed at every sale and, with the inflation of house prices, at a much higher level.

The argument that selling council houses produces a gain to public funds is illusory. My house was built in 1850 and, as I have a mortgage, a tax subsidy is still being paid on it. Most local author- ities are making profits on the houses that they built in the 1950s. It is criminal to sell public assets at a discount solely to produce an illusory gain to local authority funds.

We need to tackle the much more fundamental problem of mortgage tax relief that is paid indiscriminately. No one is suggesting that we do not need to give even greater help to many people who are buying houses. We know that there is very great hardship in the first six or eight years and that house purchase is a heavy burden at that time. However, those who bought their homes 10 or 15 years ago may have started by paying perhaps 25 per cent. of their income on the mortgage, but that will now have dwindled to a very small proportion of their income, while they are acquiring a substantial capital asset.

We need to consider a redistribution of some of the money that we pay in tax relief and to concentrate it more in the early years and on helping the elderly who do not have substantial incomes and often cannot afford house repairs. We must ensure that more of the money spent on housing is spent on bricks and mortar rather than on subsidising mortgages and rents.

The level of house prices since 1960 has risen by five and a half times. In this period the Index of Retail Prices went up by three times. Let us compare these figures with the opportunity of investing in anything else. The share prices index was 320 in 1960 and 368 last year—an increase of about 10 per cent. These figures are one of the consequences of giving such a substantial subsidy to owner-occupation. They are not the only factor affecting house prices, but they have a significant influence upon them. A person can buy an appreciating asset that is free from capital gains tax and receive a subsidy on the interest he pays.

The consequence has been that industry has been drained of investment because it is so much more advantageous to buy the biggest house one can afford, to borrow the maximum amount possible and to trade up whenever one can because there is a tax-free capital gain. These are great benefits. One's property appreciates in value and, although there are benefits accruing from the capital gain, they are not social benefits that we ought to be subsidising from public funds.

These are complex and difficult issues that are easily misrepresented. Talking about higher rents and changing the structure of mortgage tax relief leaves one open to misrepresentation and it is difficult for any Government to propose changes.

Once we have got into the habit, as the country has, of having housing for the great majority of the population subsidised out of public funds, leaving only 10 or 15 per cent. who do not get any subsidy—those in the private rented sector and owner-occupiers who have no mortgages—mostly the retired—we are creating a political situation which it is almost impossible to change, because people have a very strong vested interest in keeping that share of public money which is coming to them. Neither party is attracted to the idea of changing this situation, because it would prove extremely unpopular.

The only solution to our deteriorating housing problem is to reduce some of the subsidy going to both sectors, but the change must be gradual. There must be no sudden cessation or withdrawal of help. Any hint of the change, no matter over what period of years, is liable to attract misrepresentation and political problems for whichever party proposes it.

There is only one way of getting through a fundamental change in housing policy, and that is by ensuring that people on both sides of the House accept that such changes are necessary. We must seek to reach some agreement about things that need to be done. I believe that there is sufficient basis for agreement between a great many Conservative Members who know something about housing and those on the Government side who know about housing. I think we have a chance of reaching such an agreement.

I urge my right hon. Friend the Minister to take up the suggestion made by the hon. Member for Chelsea and by the hon. Member for Isle of Wight that we should have a Select Committee on housing policy, which would enable us to thrash out these difficult problems and seek to reach some degree of agreement between the different parties in the House, to ensure that we tackle the very desperate problems of so many people who are now waiting and hoping for housing and who are not, under present policies, likely to get it.

8.22 p.m.

The hon. Member for Mitcham and Morden (Mr. Douglas-Mann) has said that the crux of the problem is finance. I agree with him in part. But he went on, I thought rather ably, to point out that in some ways the crux is not finance but how we allocate it. In particular, I follow him in criticising the excessive amount of the available money which is spent on subsidies rather than more usefully on construction and improvement.

I also follow him in his call, echoing that already made by my hon. Friend the Member for Chelsea (Mr. Scott), for a Select Committee—perhaps a Select and a Standing Committee, as my hon. Friend the Member for Aylesbury (Mr. Raison) suggested—which could consider both the general policies and the particular housing legislation.

I find little difficulty in heartily endorsing the motion, because there are so many grounds for criticising the housing policy over which the right hon. Gentleman the Minister for Housing and Construction has presided since his Government came to power. Some of these grounds have been put very ably by my hon. Friends. We know what the right hon. Gentleman has done to the private rented sector. We know about the extravagant local authority construction programme, the land fiasco, the problems of the construction industry, and his failure to provide help to first-time buyers.

All these things have already been well documented, but I should like to follow the hon. Member for Mitcham and Morden on the subject of the misdirection of resources, because I believe that, contrary to the ministerial statements and pronouncements, there has not been the shift of resources that we ought to see into rehabilitation and improvement. I think that that is the most neglected and, equally, the most valuable area of housing progress, and it is to that that I should like to direct my remarks this evening.

There are numerous reasons why we should turn our attention to that area. In a period when we are not looking to great economic growth, nor expecting significant population growth, and when we know that there is a land shortage, particularly of good agricultural land, those are themselves very good reasons against large-scale development, but they are only just the first reasons for turning our attention from large-scale redevelopment to smaller scale development and, more importantly, to seeking to make the best use of our existing stock of housing.

Other reasons are that we ought to be concerned with what the people who live in that housing want, and what would meet the aspirations of millions of families. Rehabilitation rather than demolition helps the inner city areas. It is demolition not followed by immediate redevelopment which has contributed so much to the dereliction and other problems of those areas. It is certainly very much cheaper to create good housing units by rehabilitation rather than construction.

My hon. Friend the Member for Hampstead (Mr. Finsberg) was referring to £250,000 houses. Even the slightly less extravagant local authorities will not create new housing units at the figures at which such units could be achieved through rehabilitation. Incidentally, renovation work is more labour intensive, although it is cheaper in overall costs and it would certainly help to relieve some of the desperate and disastrous unemployment in the construction industry. It reduces rather than increases future expenditure. If we spend massive sums on the construction of housing accommodation, we are letting ourselves in for an endless run of subsidies to defray the loan costs on that construction. But if we help people to improve, for example, the insulation in their own homes and to buy their own homes, we are achieving the very reverse. At the same time, it also helps in protecting our architectural heritage.

It is not easy to encourage rehabilitation, but at least we should start to try. According to the 1971 census, 34 per cent. of our housing stock then was pre-1919. I was encouraged, therefore, to read that no less an authority than the right hon. Gentleman himself said that
"A fundamental aspect of the better use of the stock"—
that is, of housing—
"is its care, modernisation and maintenance."—[Official Report, 17th March 1976; Vol. 907, c. 1363.]
If only the right hon. Gentleman would follow up his words with action and direct the massive resources that he has available towards the programmes that he appears to care for when he makes statements such as that.

But what do we find? In 1973–74, in the last year of the Conservative Government, 32·1 per cent. of the housing expenditure went on local authority improvement work, improvement grants, assistance to housing associations, and local authority lending for purchase and improvement. Those are the programmes which are important in this area.

In the last year for which figures have just been completed, only 20·3 per cent. of the total housing expenditure went on those programmes. It was less in absolute terms by £250 million, down by one-quarter in absolute terms and down to one-fifth of the total expenditure, as compared with the figure of one-third under the Conservative Government.

There are numerous ways in which we could encourage the sort of work which I believe to be valuable. We must ensure that housing associations have sufficient money, because they carry out a great deal of the conversion work. To that extent I welcome the announcement concerning the better availability of funds.

We should look at the rules which prevent somebody who is carrying out a conversion from selling the spare accommodation afterwards. It seems odd that if two people each buy half a house needing improvement each will be eligible for an improvement grant, but if one person buys it and converts it into two units, carries out the improvements and then lives in one half and sells the other half, he must give back the improvement grant money for that half. If the property deserves conversion and improvement, surely the subsidy should be available whether or not the initial purchase is made by the two ultimate owners or by only one. The rules could easily be changed, and the change would be most useful in bringing into more effective use much of our older housing stock which is now too large for single-family occupation.

We must also consider the straightforward improvement grants. It did not take very long for the right hon. Gentleman to take the number of improvement grants back down to the unsatisfactory level at which the last Labour Government left it in 1970. In fact, he took it down to a lower level. From 453,600 in 1973 it dropped to 159,100 in 1975. In just two years there was nearly 300,000 fewer grants, a staggering record of failure, by itself enough to justify the motion.

The Government behave as if all the problems were in our inner cities, housing action areas, or general improvement areas. That is not true. One of the reasons why we should look more to improvement grants is that they are available nation-wide and are not confined to such areas. I have in my constituency an area, Brunswick Town, which would be suitable for a housing action area, and another area, the Southern Cross area of Portslade, which would make quite a good improvement area. But designation of these areas suffers three drawbacks. The first, surprisingly, is lack of public support. When my local authority carried out a survey of the public in the Southern Cross area, it found that the public did not wish the area to be declared a general improvement area. Such a declaration creates the false impression that all is bad in the area and the equally false impression that all is good outside the area.

Perhaps the most fundamental criticism of the Government's approach is that while they direct their resources towards new construction there is inevitably not enough left for the improvement and conversion work. The inner area studies report, with which the Minister is familiar, showed that in 1976 Birmingham had 81,000 houses in housing action areas and general improvement areas, and that it needed £200 million-plus to create the programmes of improvement of those houses. But of the £50 million in its housing budget 70 per cent. was devoted to new construction, so it would take at least 20 years before it could possibly make the sort of progress that would be necessary by its own definition.

A cost-effective housing programme will not only make more money available for improvement grants but should also ensure that money is directed principally to the private sector, because there is mysteriously—perhaps it is not mysterious, but is only what we should expect with the way in which local authorities carry out their work—much less efficiency in the public sector. The average grant for a local authority dwelling is £4,767, nearly three times the average grant in the private sector, which is £1,940. This detailed work, requiring much supervision, is much more likely to be done satisfactorily in the private sector.

Does my hon. Friend appreciate that the difference in cost is because the private sector does the work of conversion much more quickly? Is not that proof that the right way to get results it to allow private enterprise to operate in this sector?

I am sure that my hon. Friend is right. The private sector will be more efficient and speedier, and there will be less property hanging around unused because of the inevitably bureaucratic methods of the local authority in obtaining tenders, securing approvals and going to the committees.

The Minister should look at the level of eligible costs for improvement grants. In 1974 they were set at £3,200. even to maintain the equivalent value they should now be £5,340, and, judging by the right hon. Gentleman's normal speed of action, I suggest that the figure should be about £7,500. If he can move more quickly than usual, perhaps it could be about £6,500.

If property merits improvement, why should it not be improved whatever the rateable value limit? I hope that the right hon. Gentleman will consider emulating President Carter by adding the cost of insulation to improvement grants. It would also be sensible to add the cost of fire escapes for people in multi-occupied dwellings. The Minister could save public expenditure by scrapping re-rating of improved properties. This would save public sector manpower and irritation to the private sector. The right hon. Gentleman must also consider ways of making it easier for people to buy the improved properties.

I echo what has been said already about local authority mortgages—the most disastrous and perhaps unkindest cut of all in the Government's housing pogramme.

The right hon. Gentleman referred to public expenditure. If he scrapped municipalisation—the laughable relics of the Community Land Act—and took a mere 10 per cent. off expenditure on subsidies and local authority construction, he could add 50 per cent. to the programmes of housing associations, local authority improvement work, improvement grants and local authority mortgages, therefore taking them back from below the levels where we left them. That would be a more cost-effective programme which would improve our habitable stock by about 100,000 extra homes a year, provide about 20,000 extra jobs in the construction industry, help the inner cities, and do more to provide satisfactory homes than the more dogmatic and Socialist policies which the Minister normally adopts.

It would be helping people to help themselves, as they want to do. To my mind, the lesson of our post-war housing experience is that for real nationwide progress we should not look to direct actions of Government but rather to the millions of families who, in their various ways, seek to provide better homes for themselves. It is their efforts and aspirations that should be encouraged and aided. On that count most of all the housing policy which the right hon. Gentleman has proceeded with has most abjectly failed.

Another six hon. Members are trying to catch my eye. The Front Bench speeches start at 9.20 p.m. I am sure that the arithmetic can be worked out by those in the House.

8.42 p.m.

I shall not follow the hon. Member for Hove (Mr. Sainsbury) except to say that I find it interesting that a Conservative Member should use the phrase "cost-effective" when talking about the improvement programme, so inadequately controlled and over-financed which we saw particularly in the development and intermediate areas during 1972–73. If the hon. Gentleman had been in this House at that time he would have heard some of us offering words of caution. I am glad that the present Government shifted the balance towards actually providing decent homes.

At least the hon. Gentleman did think about housing. There was very little evidence that the hon. Member for Henley (Mr. Heseltine) has done so. The only idea which came from the hon. Gentleman's highly partisan speech was that we should sell council houses. Conservative Members in marginal constituencies can be reassured that had a General Election seemed likely this year, the hon. Gentleman would not have been saying "sell them" but would have been talking about giving them away so that they would accompany the abolition of the domestic rate which was promised by the hon. Gentleman recently.

Everyone would like to live on the basis of no rents and no rates, as has been promised from the Opposition's Front Bench. However, there is fortunately a greater degree of responsibility on their Back Benches. The hon. Member for Henley and his colleagues who advocate the sale of council houses fail to realise that the average price for a house—even allowing for the generous, if not somewhat over-generous, discounts which the Conservative Government allowed previously—which the sitting tenant would have to pay would almost certainly exceed £6,000. That would mean a weekly outgoing of £23 or £24 at least. I know that the Conservative Party is hostile to the council house tenant, but it must be aware that the vast majority of tenants could not possibly afford weekly outgoings of that size.

Many tenants are rather elderly, certainly within or past middle age, and cannot look to the possibility of a 25-year mortgage. Selling council houses is not the answer to the housing problems of this country. It is an irrelevance, particularly since no more than 20 per cent. of the houses would be purchased. I am not taking a dogmatic view of the matter. For example, during 1970–74 I asked the Minister at the time if he would be prepared to allow tenants wishing to purchase their houses to pay an annual sum to allow the maintenance and external decoration of their homes to be carried out by the local authority selling the house so that they would have a guarantee of consistent and supported repair. The Conservative Government showed their true colours by utterly and completely refusing to consider that proposal.

I am not dogmatic. The hon. Member for Reading, North (Mr. Durant) knows my constituentcy. We fought the 1970 election and he is aware that two of my Labour-controlled councils, before local government reorganisation, were selling council houses. We were able to sell them because we had largely resolved the problem in those two areas. The Conservative Party, I think prodigally and fecklessly, reorganised local government and my area, which was within sight of resolving its housing problem, was merged into another district where there was much more severe housing need for the time being, in order to provide an adequate rented sector, we had to suspend the sale of council houses.

I am under no delusions that the sale of council houses can solve our housing problem. As I say, I am not dogmatic. My own local authority was one of the first to build houses for sale. We did that, and we had to fight the Conservative Government of the day with great determination to be allowed to make that contribution to the property-owning democracy which the Labour Party has served, in terms of the numbers of houses constructed and supported, rather more decisively than has the Conservative Party.

In my constituency there are good grounds for relief and growing confidence that we are solving our housing problems. Needs are being met. Needs have been met substantially in many parts. Like all hon. Members, my mail bag is growing but, unlike most and certainly unlike most Conservative Members, the proportion of my mail coming from people concerned about their housing problems is shrinking. In recent months I have had more letters of thanks from people who have had their housing problems solved partly by my local authority with Government support than from new housing cases. That is because local authorities in my constituency over a long period have been determined to provide decent houses for our people.

I think that the hon. Member for Reading, North will confirm my view that we were among the first authorities in Britain to pioneer the proper provision of accom- modation for the elderly. The local authority on which I served pioneered this a long time ago, and it was emulated and expanded by local authorities in the Rother Valley. We decided to build warden schemes for the elderly. At the inception of this policy the former Conservative-controlled West Riding County Council announced its intention to support it. It very quickly withdrew this support. But that did not deter the housing authorities in my area, and they pressed on with that provision.

It is quite sensible. It allows the in-filling of small sites, which is highly desirable. I applaud the hon. Member for Reading, North for that suggestion. It was one of the few sensible suggestions to come from the Opposition Benches today. We now have warden schemes in almost every parish and small townships in my constituency. In many of them we have two. I have visited most of them. Many are very attractive, and all of them serve a great need. They allow proper utilisation of the housing stock, because old people move into this admirable accommodation and release the houses which they previously occupied for families. It is an entirely sensible proposal, and I cannot see why far more local authorities do not press ahead with policies of this kind. I hope that the Minister will confirm that he has no objection and that he commends the policy which we pioneered and are still pursuing.

Not all our areas are attractive. We have still a great many which have to be improved. I hope only that the quality of the improvement in the future will be better than in the private sector, engendered by the rather blind, profligate policies pursued by the last Conservative administration.

The problems which we face in housing today are very intense in certain areas. These short-term problems may prevent us looking at the longer term. This is essential. In some areas, we may have an excessive housing stock. However, the current decline in the birth rate means that the decline in housing demand which will develop after the mid-1980s will have serious implications for our housing policy. It means that we have to consider whether we need to maintain over a long period a building programme of more than 300,000 houses a year.

It also means that we have to reconsider our policy on land use. There should be no more sprawling into the green belt and occupying good farming land when we can build and concentrate in the conurbations. The problem lies in the conurbations and, therefore, it should be tackled in the cities rather than by the occupation of good green belt land which can be of great economic value for a very long time.

I hope that the Conservative Party will show in the future that it is prepared to read the documents produced by those experts who cling to the coat tails of that party. As the hon. Member for Isle of Wight (Mr. Ross) described them there is no evidence whatever that the hon. Member principally responsible for housing within his party in the House has given any serious consideration to the subject.

8.45 p.m.

I fear that the hon. Member for Rother Valley (Mr. Hardy) started off most inaccurately. He said that my right hon. and hon. Friends on the Front Bench were advocating policies of no rent and no rates.

That is utterly untrue, as the hon. Gentleman knows, and those were his words, as he will see in Hansard tomorrow. The hon. Gentleman then said that the Conservative Party was hostile to council tenants. How does he imagine that we won Woolwich, Walsall and Workington if we were hostile to council tenants? No doubt the hon. Gentleman will wake up on 6th May and realise how foolish that was.

I turn now to two non-controversial matters to which, I hope, the Minister will respond, because they present genuine worry. The first is the system of transfers within local authorities. The right hon. Gentleman will know from his constituency mailbag, as I know from mine, that the biggest grouse of council tenants is about the inability or unwillingness of a local authority, irrespective of the party controlling it, to have a sensible and humane transfer system.

I ask the Minister to think about that matter. I believe that in his Ministry there was once a body known as the Central Housing Advisory Committee. I do not know whether it has been formally wound up. I see that the Minister nods, indicating that it has been, so will he consider whether it would be worth having a small working party to consider this matter, which is a cause of great heartache to many tenants?

I can answer the hon. Gentleman straight away. We have at this moment such a study on management and allocation matters, and I hope to issue advice on the subject shortly.

I do not believe that many hon. Members knew about that, and I hope that it is not too late for us to give the Minister some advice from our constituencies. Is it too late?

I am much obliged. We shall take advantage of that.

Second, what advice does the Minister give to a local authority which has acquired a property which has now been turned down by 11 persons on the waiting list? There is a problem here. As we raise expectations, people are not prepared to come off the waiting list and go to the first, second, third or even fourth property offered. In my constituency one property has now been offered 11 times.

That sort of thing makes it a little difficult to keep one's temper when someone comes into one's advice bureau and says "I have been offered three properties and I do not really like them". Moreover, it indicates that the local authority has property which it ought not to be holding and might well get rid of.

Again, may I tell the hon. Gentleman that we have had a special examination and survey into difficult-to-let estates throughout the country? I hope that that examination will be completed within the next month or two.

Those are two extremely helpful replies, and I am grateful to the Minister. Perhaps I shall now vote only for nine-tenths of the reduction in his salary which we have proposed.

I turn now to rather more controversial matters. The words of the hon. Member for Isle of Wight (Mr. Ross) deserve much wider circulation than merely in this Chamber. He made clear his party's objection to the sale of council houses, and he confirmed the line-up between the Liberal Party and the Labour Party. I hope that voters in constituencies such as Richmond, Sutton and anywhere else where the Liberal Party at present has a tenuous grip upon council seats will remember on 5th May that there is no difference between a Labour vote and a Liberal vote for any council tenant hoping to buy his own property.

I ought to say a word now about the views of the hon. Member for Birmingham, Erdington (Mr. Silverman) on the question of selling council houses. He said that his party's policy was not against the sale of council houses. I thought that he was a member of the Labour Party. At its annual conference last year the Labour Party passed a blanket resolution against the sale of council houses. I find it difficult to equate those two positions.

Let me make this clear. After 6th May the Greater London Council will reopen its list for the sale of council houses, and no circular from the Minister will stop it. Only legislation, which the Government will have to get through both Houses of Parliament, will stop the sale of council houses in Greater London after 6th May.

When he opened the debate, my hon. Friend the Member for Henley (Mr. Heseltine) made clear—I do not think that there was disagreement from the Secretary of State—that no Government, either Conservative or Labour, build a single home. What Governments do is create a climate for the local authorities. So far, the climate has been pretty grim.

What confidence can we have, for example, in the bleatings coming from some hon. Members on the Government side about the reduction in the allocation of mortgage funds to local authorities when in the year just ended the mighty Greater London Council underspent its mortgage allocation by £11 million? At an average £11,000 per loan, that means 1,000 people were denied a loan because of the incompetence of the GLC. I referred at Question Time yesterday to the management of properties. What confidence can there be in an authority such as the GLC when, on the last count, no fewer than 1,200 of its properties had squatters in them? What confidence can one have in that authority's management abilities?

I said in an intervention during the speech of my hon. Friend the Member for Chelsea (Mr. Scott) that if the Minister wanted to take credit for what he has done for housing, he has to take the blame for the scandal of Second Genesis and the Novo Housing associations and tell the GLC to do its job properly. Has he satisfied himself that there was no corruption at County Hall? Has he given every encouragement for any documents to go to the Director of Public Prosecutions for examination, bearing in mind that the first lot of papers apparently took more than six months to get there?

I referred also at Question Time yesterday to the cost of properties being built at Branch Hill in Camden needing a cost rent exceeding £155 a week. I referred to the fact that, with rolled-up interest, the cost of a new GLC property is to be £250,000. Perhaps the Minister will tell us why he, in sharp contradistinction to his Conservative predecessor, gave permission to the borough of Camden to build 42 houses at Branch Hill which, if interest is aggregated over 60 years, will cost £500,000. They are the most expensive council houses in the world, and the Minister sits there knowing that it was his Department that gave the go ahead when the previous Conservative Government said "No. This is not right, because it is uneconomic. It is not the proper place on which to build, because of a lack of facilities for people who will live there."

The Minister shakes his head, but the documentation shows that his Department provided a subsidy, though not as much as Camden wanted. The previous Government would have none of it, because £250,000 per council house is not sensible.

I do not believe that the Government are being tough enough on local authorities to make them build at sane prices. No Government san say "Go ahead and build at £500,000 per house because price does not matter". It is no good the Minister muttering that what I am saying is stupid.

It is stupid to roll up the interest over 60 years and then talk about the property costing £500,000. Whatever other criticisms there may be, that is stupid.

The fact is that public money will be spent over 60 years. That is the period of the subsidy. The Minister may not be here in 60 years' time, but public money will be spent during that period. All I can say now is that after the Minister's last remark I withdraw my charitable comment about voting for only a nine-tenths reduction and say that I believe that my hon. Friend was far too modest and should have called for a 100 per cent. reduction in the Minister's salary.

8.54 p.m.

It is tempting to enter into a debate about the property at Branch Hill, because I was closely involved in that matter. I could tell a different story and describe the way in which the cost of that land increased because of the actions of the Conservative Government in allowing the price of land to go sky high. The land was originally purchased at a favourable figure for a large site in a desirable part of London from which the Tories were anxious to exclude council tenants.

I am much more concerned to look ahead rather than to look back, as the hon. Member for Hampstead (Mr. Finsberg) was anxious to do. I do not support the terms of the motion tabled by the Opposition, but if I were giving the Minister a report on his tenure of his office to date I should say "Could do better".

Again and again in this Chamber a number of Members who are deeply concerned about housing have said that, whatever the difficulties, whatever the costs and however much the costs have escalated, as they have done, we have not yet made the fullest possible use of all available properties. We have not used or made a sufficient effort to use the vacant properties.

It is all very well for the Tories to scoff at the municipalisation programme. The trouble is that we have not got sufficient properties back into use in Conservative-controlled areas which would have nothing to do with municipalisation. Indeed, as my hon. Friend the Member for Paddington (Mr. Latham) said, such proposals as the Tories have made to use properties in Westminster have been a complete flop. Like the hon. Member for Hampstead, I criticise the activities of the GLC, which, as the so-called strategic housing authority for London, should have taken action to ensure that the 100,000 vacant properties in Westminster were brought into use.

The tragedy today is that young families are divided into two categories: those who within the last few years have put a millstone round their necks by having had to buy at inflated prices and paying mortgages which, as soon as the young wife finds that she is unable to work, make it almost impossible for the family to have a decent standard of living; and those whose income is so low that they are unable to buy a house even though property prices have stabilised. For the second category there is no alternative but the local authority housing pool.

I asked the hon. Member for Henley (Mr. Heseltine) during his opening speech a question, in terms which I think were intelligible to him, about the sale of council houses. I wanted to know whether he realised that the resources that would become available to local authorities from the sale of council houses would be inadequate to build further similar properties. Unfortunately, the reply given to me and to other hon. Members who voiced those doubts was rather sinister. The hon. Gentleman wanted the local authorities to use those resources for any purpose. It certainly seemed from that answer as though he meant any purpose other than providing more council houses.

That is borne out in a way by the activities of the London borough of Redbridge, in which my constituency lies. Its record of housing construction is nothing short of deplorable. With 7,000 families on its housing waiting list in the first quarter of last year, it started to build only 57 new houses. That local authority has almost the worst record in London—indeed, probably the worst record of any Conservative-controlled borough.

The Minister has had proposals put before him from the London borough of Redbridge, where large areas of land are now becoming available. For example, the GLC is proposing a joint venture— part private and part local authority development—on land formerly used by the Ilford Football Club. I hope that the Minister will bear in mind the need for a large proportion of local authority housing in that area, particularly for the elderly. As I have said before in this House, the number of houses in under-occupation in my constitupency is vast and the need for small units is serious and urgent.

There is another area where a large amount of allotment land is to become available and the Minister will have to consider its use. The local authority wants it to go to private speculative developers for private house building. This is an interesting and desirable area on the edge of the green belt. But is that any reason why families who are either denied housing or are shunted miles away from their relatives should not have the opportunity to live there as opposed to those who can afford the speculative kind of development that is proposed?

Unfortunately Redbridge, in common with most other Tory local authorities in the Greater London area, has refused to take part in a scheme which would spread the burden of need from the inner urban areas to the outer areas. The Minister has an opportunity in those two schemes in Redbridge to turn the balance in the other direction.

There are many problems in housing. Many of them have been sympathetically described by hon. Members on both sides of the House. The Minister still has the opportunity to give hope to the families who are denied decent housing, but he must act quickly. The moment for action will pass completely unless he does something soon.

9.1 p.m.

The hon. Member for Mitcham and Morden (Mr. Douglas-Mann) said that our housing debates tended to involve the same few hon. Members and that we might as well sit upstairs in a Select Committee and discuss the problem in a more effective and scientific manner. There is something to be said for a Select-cum-Standing Committee on housing policy. I fear, however, that if we had a Committee of that kind we might do what we have tended to do today and look at hous- ing policy separately from economic policy as a whole.

Hon. Members have spoken about the tax relief on mortgages, particularly relief on incomes of those paying tax above the standard rate. One must remember that tax relief is a matter for the Treasury. It is misconceived to regard it as a matter solely of housing policy. The best argument for giving tax relief on higher incomes is that such people are already overtaxed in other ways. It is, therefore, desirable to give them mortgage relief. It is not fair to make judgments about that issue solely in the context of housing. Public expenditure has been discussed throughout the debate, but that can be considered only in the context of the overall economic and financial strategy.

Housing is one of the areas where we must look for reductions in public expenditure. Reductions are already taking place, despite what the Secretary of State said when he indicated that he saw the trend moving upwards. The public expenditure White Paper shows that public expenditure on housing has been reduced during any period which has any meaning. Whether one likes that or not, it is the right direction. I am not saying that there are no serious housing problems, but they are capable of being solved in ways other than those which are dominated by public expenditure.

Improvements in other social services can come only out of public money, but that is not true of housing. Improvements in health and education, for example, must be paid for by the Treasury. People should be expected to pay a larger share of the cost of housing out of their incomes. We must get away from the idea that housing is a social service. There is always a substantial social service element in housing, but we should aim for a situation where housing is bought, like any other commodity such as food, out of one's own pocket. Those will be harsh and unwelcome words to people such as the hon. Member for Ilford, North (Mrs. Miller), but unless we are prepared to say that we shall continue with a tangled economy.

One can also make the point, as other hon. Members have done today, that we really have been getting remarkably bad value for money out of the very large sums that we have been spending on housing. I shall not read out long chunks from the public expenditure White Paper. There is not sufficient time for that, and it would bore the House silly if I were to do so. However, something that the Secretary of State quoted as a tribute to himself should be regarded as a source of embarrassment. I think he showed that in 1971–72, according to the White Paper, the amount of public money going on housing was £2,730 million. By 1976–77 it had risen to £4,680 million. It has dropped a little since then.

However, that very substantial increase is nothing to boast about. For one thing, it has imposed a very heavy burden on our economy as a whole. There can be no doubt about that. Equally, however, it has not produced better housing in any way that is commensurate with this enormous increase in expenditure. That is partly because the cost of construction has risen; but I am talking about current prices.

This is fundamental, however, because more and more the money coming from public expenditure and going on housing is being used for subsidies. As the Secretary of State said, I think, and as other hon. Members have said, this in turn reflects the fact that housing subsidies have been used as an instrument of incomes policy. I do not think that it makes sense to use housing subsidies as an instrument of incomes policy. Indeed, I would rather people's incomes rose than that we used housing subsidies for that purpose. It seems to me that one is perpetuating and, indeed, making much worse the appalling distortion that has been the characteristic of housing policy ever since the First World War.

Then one must say that there are two other aspects in which the public expenditure White Paper figures make a very great condemnation of the Government's policies. The first, which was discussed by my hon. Friend the Member for Hove (Mr. Sainsbury), was the sad fall in the rate of improvement grants, and the other was the really catastrophic fall which has taken place in the money made available to local authorities to lend to would-be house purchasers. The figure bears repetition. In 1974–75, according to the latest public expenditure White Paper, loans through local authorities totalled £737 million. In 1977–78 the figure is down to £116 million. What a disastrous achievement that is!

If one is to spend those enormous sums of money, which the Government have been spending, not to be able to provide more than a rather miserable £116 million for loans for home ownership is really a tragedy.

Keeping my eye on the clock, I now make a very quick comment on the basis of a coherent housing policy. It must be much more strongly rooted in a notion of value for money rather than the policies that we have seen pursued over the last two or three years. It must, of course, stress owner-occupation, as did my hon. Friend the Member for Henley (Mr. Heseltine) and all my hon. Friends who have spoken subsequently. I believe that on this subject the essential thing is to get a stable economy. I am not particularly enamoured of certain bright ideas for bringing about more owner-occupation. They may be worth looking at or pursuing, but it is a stable economy that matters most of all.

I very much endorse the remarks of my hon. Friend the Member for Melton (Mr. Latham), who said that it is a great mistake to chivvy the building societies. During the period when I was "shadowing" the Department of the Environment, the one thing that I did—perhaps the only sensible things I did; I do not know, because I am no judge—was to come to the view that the building societies really knew better than I did how their affairs ought to be conducted. It would be a very good thing if more politicians were prepared to take that modest point of view and stop chivvying the building societies, and, incidentally, stop trying to turn them into instruments of the corporate State.

We had much fuss from the Secretary of State about how I and my hon. Friend the Member for Henley would not answer his questions, and so on. He was trying to lay an obvious trap. However, of course we still need council building in many places. Every Member who holds a surgery knows that in some parts of the country at any rate, such as in my part, there is a demand for housing that will he met only by additional council building—in the short term, anyway. However, we must get away from the notion that this should be provided on a blanket basis without regard to the circumstances in the areas that one is discussing. We must make sure that it is economically sound. I go further and say that we ought to review the Parker Morris standards.

I was asked a few months ago to open an attractive new private development, on which the cheapest two-bedroom houses cost a little over £8,000. The local authority housing manager, who was also present, told me that his cheapest two-bedroom houses cost a little over £10,000. Yet the price at which the private ones were sold provided a profit for the builder, they were attractive houses and they sold like hot cakes—four of them on the day I opened the development.

The private sector can provide housing more cheaply. This is partly because of Parker Morris but also because the private sector gets on with the job. When private builders get land, they start building, instead of sitting on it for years as local authorities do. If we take a more realistic view of council building, we can get on with the job.

All I would say about the private rented sector is that I think the Private Member's Bill of my hon. Friend the Member for Kensington (Sir B. Rhys Williams) is absolutely right. If we may ask only one thing from the Minister tonight, may we have a more sensitive and sympathetic response to that proposal than we have had so far?

9.12 p.m.

I agree with the hon. Member for Aylesbury (Mr. Raison) and others about the need for a Select Committee on this subject. I suspect that calls for a Select Committee are made in most debates. I should like that method of conducting our affairs extended. I also agree with the hon. Member that housing policy cannot be divorced from the general economic situation.

Perhaps the only respect in which I agreed with the hon. Member for Henley (Mr. Heseltine) was his reference to the level of interest rates that we have had since October. It was probably necessary to set them high initially, but they remained too high for too long. That immediately affected house building. The hon. Gentleman is entitled to criticise the Government on their interest rate policy and the effect on house building.

I would not go along with the hon. Member for Aylesbury in his suggestion that we need to cut back in house building. When we have large-scale unemployment, a building programme could help. The Keynesian multiplier effect is probably as great in building as in any other investment project because of the added expenditure created as soon as someone takes possession of a home. I should like the Minister at least to tax the Treasury on this subject.

I am concerned, particularly in the Forest of Dean in my area, about the cut-back in local authority mortgages and the supposition that the building societies would fill the gap. It has not happened in my area, where the incomes are such that building societies are not prepared to lend. I am grateful that the Minister intends to introduce a monitoring arrangement to see how effectively the system is operating. It needs to be monitored. People in my area who want to buy houses do not have the chance because of the restrictions imposed by the building societies.

I acknowledge that a Housing Minister, particularly during an economic recession, has to make some difficult choices. We all know that our movement is about the language of priorities, but I wish to put down a marker for those of us who do not live in the inner cities. I know that the inner cities are the subject of a great deal of attention at present and I am aware of the multiple deprivation from which they suffer.

I could take the Minister to my own area, the Forest of Dean, and show him deprivation there that is equal to anything that exists in London, for example. In my constituency there are more than 3,700 properties unfit for human habitation and 900 in which people are at present living but which cannot be repaired. It is important for my hon. Friend to be aware—as I am sure he is—that there are other areas outside the housing stress areas that deserve his attention.

I wish to emphasise certain aspects in which the Minister could take action and which would not necessarily involve him in large expenditure of money. To that extent they should be welcomed by my hon. Friend. They relate primarily to the public sector. It is about time that we honoured the commitment set out in the 1974 Labour manifesto to extend security of tenure to council house tenants. We know that furnished and unfurnished tenants have security of tenure, but council house tenants do not. It is a promise that we could fulfil.

It may be said that de facto all council house tenants have security of tenure, and de facto they do. Nevertheless, I know from my own experience, and I suspect that other hon. Members also know, of people who tell of their fears as a result of being served with eviction orders by the council. If a council takes a person to court, the court has to give an eviction order. In these circumstances we should seriously consider extending to council house tenants the security of tenure presently enjoyed by those living in other housing sectors. This is an important Socialist commitment and one that we should be prepared to acknowledge and honour. I do not think that it would be expensive.

The second matter that I put to the Minister is one that was raised by the hon. Member for Chelsea (Mr. Scott), namely, the tremendous differences that can exist between the conditions and terms under which tenants enter into their agreements. In certain areas there are humiliating conditions, and it is about time that we had a model set of rules that could be applied across the board. That is something that we could do for council house tenants. Again, it would not cost any money.

The third area of policy in which my hon. Friend could take action—and I know that he is enthusiastic about this—is the extension of participation generally for council house tenants. All hon. Members who have to deal with council tenants know of the tenants' frustrations and their feeling that they are not involved. Cannot we do something now and put some muscle behind the campaign to extend participation? It is vital that we maintain the council housing stock in this country. I do not think that we can afford to sell off council houses to those living in them. Let us extend some form of participation to them.

The final area concerns the point made by the hon. Member for Hampstead (Mr. Finsberg)—that the transfer arrangements for council house tenants are totally inadequate. They are difficult enough within a particular area, but there ought to be some kind of national system which would make it possible for people to move more easily throughout our whole community. We desperately need greater mobility of labour in our community. I hope that the Minister will consider these four points sympathetically.

9.19 p.m.

This debate has followed in part a predictable form, with the usual charges and countercharges about which party built more houses in the past, which party will thelp council tenants or home owners the most, and which party caused more harm to the construction industry by using it as an economic regulator in times of difficulty.

I find this kind of argument particularly sterile and counter-productive. Recriminations and counter-recriminations about the past will not help the problems of today, let alone the future: quite the reverse, because these arguments tend to force hon. Members and parties into entrenched policy decisions from which they feel they cannot shift without loss of face. The truth is that both sides share a genuine intention to better the housing of people in this country and both sides have made mistakes.

What I find refreshing about the debate is that there is in the House a genuine desire for a meeting of minds. My hon. Friend the Member for Reading, North (Mr. Durant) spoke against the past mistakes of wholesale demolition, the building of vast impersonal housing estates and high rise blocks. This was immediately taken up by the right hon. Member for Bermondsey (Mr. Mellish), who agreed with those sentiments.

All the more remarkable was that the right hon. Gentleman crossed the old party line by agreeing that in certain conditions he would agree to councils building for sale. Most remarkable, he accepted that the Rent Acts had not had the effect originally intended by the Labour Party but were now seriously damaging the supply of homes. This is a most important statement from a former Labour Cabinet Minister, especially one who was Housing Minister at the time that the 1965 Rent Act was passed.

My hon. Friend the Member for Buckingham (Mr. Benyon) made a very sensible speech oft the lack of resources and on economic factors, and on how these as much as anything had thwarted successive Governments in their intentions. My hon. Friend talked of the difficulties of the construction industry and of the ways in which it could be helped.

My hon. Friend the Member for Hove (Mr. Sainsbury) spoke of improvement grants and was perhaps a little more controversial. But on all these matters there is a genuine degree of consensus between both sides of the House, and it is significant that there is now this constant call from Members on both sides for the formation of a Select Committee so that these points of agreement can be hammered out by them together.

The Secretary of State chided us over two matters in our housing policy, and I feel that I should spend a little time on them. First, although putting the matter by way of inquiry, he seemed to suggest that we intended to divert capital resources completely away from local authority building. That is not the case and he knows it. My hon. Friend the Member for Aylesbury (Mr. Raison) indicated that quite clearly.

In any case if the right hon. Gentleman looks again at "The Right Approach" he will see that it is made clear on page 53 that we shall concentrate resources for public housing on areas of serious housing stress, principally in the inner city areas, on areas of substantial population growth and on particular needy groups such as the old and disabled through the provision of sheltered accommodation and smaller housing.

In other words, we should be highly selective in our approach to the allocation of capital resources. What we think is not right is the continual and indiscriminate expansion of the council housing stock for the generality of people, whether they can help themselves or not.

First, we do not believe that the country can afford it. The burden of between £4,000 million and £5,000 million a year is too much for both taxpayers and ratepayers alike. We cannot afford schemes such as that mentioned by my hon. Friend the Member for Hampstead (Mr. Finsberg) under which Camden is building houses which over their total life will cost, in interest charges to the Public Works Loan Board, £500,000 per house.

The Secretary of State will have noted the other day a statement by Mr. Horace Cutler that the average cost of a house being built by local authorities in London will come out at about £250,000, taking the whole expenditure period of the property concerned. We do not subscribe to that approach, and we would oppose it every time, even though that would mean that there could not be a consensus on these matters.

We believe it would be far cheaper to help people to help themselves by assisting home ownership. Depending on the economic circumstances, this could be done either by a maximum mortgage rate, to which we still adhere, or by a grant towards the deposit to help first-time buyers.

We have made all this clear in "The Right Approach". We calculate that by these methods we could house three families for the present cost of housing every one family in the public sector. Moreover, that is what the people of this country want. Our researches have shown this to our entire satisfaction. People would far rather own their own homes than be tenants of anybody.

In keeping with this we shall give council tenants the statutory right to buy their own homes if they wish to do so. We do not accept that this will bring about a dramatic reduction in the housing pool. The person who is likely to buy his house is one who would remain there as a tenant anyway, so there is no deprivation of the pool. When that person reaches retirement age or wants to move because of his job, he will have a mobility that he does not have at present, and housing will become available for families who would otherwise be in the housing queue making a further demand on the resources of the area in question.

The Secretary of State appeared to suggest that I had advocated an immediate rise in council rents from 42 per cent. to 75 per cent. of current costs. He must know that I did no such thing. That was a recommendation in the NEDC building report that I had published, and I made it quite clear that I did not agree with the report in every respect.

The report makes clear that council tenants now pay a very low proportion of current housing costs. This is apparently accepted by the Government, because last November the Chief Secretary to the Treasury said that the Government must increase this proportion from 42 per cent. to 50 per cent. of costs by the end of 1979. I urge the Minister who is winding up to tell us whether that is still Government policy. Do the Government intend to increase council rents so that they contribute 50 per cent. of the current cost of housing? The House is entitled to know, particularly in view of the reticence of the Government to publish their housing finance review, for which we are continually asking.

If it is the Government's intention to increase council rents to this extent, can the Minister say how much increase in rent this involves to the average council tenant? This is also a figure to which we are entitled.

The Minister for Housing and Construction is about to reply to this debate and tell us why we should not reduce his salary by half. I do not envy his task. From the contributions to this debate that I have heard today it seems that the motion is far too modest in leaving him with half his salary. Despite the brave words of the Secretary of State, who loyally came to his support, it is quite clear that there has been a total collapse of the housing policy with which the right hon. Member so bravely entered office three years ago.

In February 1974 he came forward with his proud manifesto on housing, which he repeated in October I974. That manifesto assured the country that the promises in it had been carefully costed to the last penny. It said that they had not been made recklessly but had been carefully calculated to ensure that they could be sustained in the economic circumstances facing the country.

Without wishing to go through the whole category of promises, I must mention his promise to reverse the fall in house building. We have seen White Papers, the Chancellor's statements saying there must be a substantial cut-back in provision to something like £300 million for new building, and in the last six months we have seen a catastrophic drop of 45 per cent. in the number of starts compared with the equivalent period last year.

There was also his promise to expand mortgage lending by local authorities. However, that has dropped from £735 million in 1973 to £116 million today. Where is the expansion there? He also promised to conserve homes with aid by way of improvement grants. These were running at 454,000 in 1973 and today they have dropped to 168,000. Where is the improvement there? There was a promise to give council tenants security of tenure. Where is that promise today? There has been a total and utter collapse of Labour policy on each of the promises made during the time that the right hon. Gentleman has been in charge of the housing Department.

Let us accept in a spirit of generosity that his failure has been, in part, clue to factors entirely outside his control and that the Chancellor of the Exchequer and the Treasury have denied him the money that he would have liked for the things that he wanted to do. That does not absolve the Government as a whole because, as my hon. Friend the Member for Aylesbury said, they are responsible for overall economic activity. However, it may absolve the right hon. Gentleman from some form of personal responsibility.

Let me put to the Minister some matters that are directly his responsibility. My hon. Friend the Member for Henley (Mr. Heseltine) mentioned that a housing finance review was announced on 14th November 1974. This review was set up to examine problems relating to resources for the housing programme as a whole. It was intended to cover local authority provision, the relationship between Exchequer grants and local authority payments, council house and mortgage subsidies and between the public and private sectors.

That was two and a half years ago and we have had six-monthly statements from the Minister to the effect that the document will be published shortly. We are still waiting for it. When shall we see it? This is the Minister's direct responsibility and his attitude is similar to that of the caterpillar in "Alice in Wonderland" who said that this year he could not do anything, but that next year he would do nothing.

There has been a repeat performance with the Rent Act review. The Minister promised us in Committee that he would institute a review immediately—he was talking in terms of 12 months—to find out the effect of the Act in the light of the representations that we were making that the legislation would inevitably dry up the supply of housing and cause a great deal of hardship, particularly for young people looking for their first home.

The Minister is in great personal difficulty because he is so philosophically biased towards a particular approach and because of his inflexible mind he cannot accept that he may have made a mistake or agree to consider what changes should be made. He said in the House in 1975:
"Extending security of tenure to most furnished tenants was an essential stop-gap until the programme of social ownership has been carried out."—[Official Report, 16th June 1975, Vol. 893; c. 1085.]
That is the betrayal, the right hon. Gentleman's give-away line. He is obsessed with this concept of social ownership. On Second Reading of the Rent Act he said:
"the future lies with the social landlords, that is, local authorities and housing associations. Since coming into office the Government have therefore gone all out to step up the activities of both.
We have introduced measures to boost local authority building programmes"—
we have seen how they have collapsed—
"to encourage the social ownership of rented property".
That is the beginning and end of the severity of our problems.

The right hon. Gentleman is obsessed with public ownership, social ownership and the need to build an increasing number of council estates, irrespective of the needs or wants of the people or the ability of our economy to sustain his original programme. He has an obsession against private landlords and a desire to drive the whole rented sector into public ownership.

I warned the right hon. Gentleman in July 1974 that the policy stated by him then would not work. I told him that he was living in a world of fantasy if he pinned all his hopes on provision by local authorities. I said that the scale of the operation was such that public resources were not available and that, whether we liked it or not, we were undergoing the most tremendous economic difficulties. I said that it would not require much of an acceleration in public expenditure to push us into national disaster. I added:
"we must recognise that in combating our housing problems we shall have to rely for many years to come on the private sector. Indeed the dire necessity is to encourage, not discourage, the private sector"—[Official Report, 8th July 1974; Vol. 876, c. 1030–75.]
Which of us was right? The RICS published a survey in February in which it said that there had been a 20 per cent. reduction of properties available for letting as a consequence of the Rent Act 1974. Des Wilson, who can hardly be considered a High Tory, has said that all the evidence coming in is that the homeless are suffering because of the Rent Acts and their effect on the supply of property.

Therefore, the right hon. Gentleman has failed in his policies. He has failed the country with his inflexibility in changing those policies to meet the circumstances of the times. He has failed the House in not presenting to us the evidence in his possession, in failing to publish the reviews that were undertaken by his Department years ago. But one can understand that someone of the right hon. Gentleman's attitude and mentality should have a deep reluctance to produce something that will show that he was completely wrong, as those documents inevitably will.

I have one other charge to make against the right hon. Gentleman, again in connection with his constant parrot cry that there is no evidence. On I4th March I asked the right hon. Gentleman whether he would
"issue guidance to local authorities in fulfilling their duty under Section 82(5) of the Housing Act 1974 to check that the payment of improvement grants is conditional on the works pertaining to the grant being carried out to their satisfaction; and whether he will make a statement."
I was referring to the circumstances of Longfellow Road, where the GLC had made payments of improvement grants to two unregistered housing associations without ensuring the application of those moneys. The right hon. Gentleman replied:
"I have at present no evidence that authorities are failing to comply with these requirements".—[Official Report, 14th March 1977; Vol. 928, c. 15.]
But that was well after the lid had been taken off the whole situation by a television programme which was clearly in the right hon. Gentleman's mind at the time.

I have found that, despite my Question he has still not asked Yorkshire Television for the documentation that it has, which is clear evidence that taxpayers' and ratepayers' money was paid to finance improvements without checking that the money was spent. The Director of Public Prosecutions, the Fraud Squad and the AI0 branch of the police have asked Yorkshire Television for the documentation and have the papers. The Minister has a duty to ask for the evidence, to take the appropriate action, and not to shelter behind the lame excuse that there is no evidence.

On all those counts the right hon. Gentleman stands condemned, and I hope that the House reduces his salary.

9.40 p.m.

I am afraid that most of the speech of the hon. Member for Hornsey (Mr. Rossi) belied the dulcet tone with which he began his remarks and his pretence of moving towards consensus on housing policy and getting together and preparing common ground. That tone lasted about one and a half minutes, perhaps a little longer, but for the rest of the speech we had the usual rising crescendo, no doubt as a result of the adrenalin pumping a little unduly. We did not get very much of a contribution to the discussion on housing policy.

Not for the first time, one of the most regrettable things about the debate is that most of the speeches from the Conservative Back Benches, as well as my own side of the House, were worth listening to and paying attention to whether one agreed with everything that was said or not. They were indeed valuable contributions to the genuine discussion of problems concerning housing policy. But the same cannot be said of either of the two Conservative Front Bench speeches that we have heard.

I believe that that view would be endorsed by most hon. Members who have sat through most, if not all, of the debate today. [Interruption.] That cannot be said of quite a number of Conservative Members who are now busy interrupting.

I shall not give way now. I have a limited amount of time, and I shall try to deal with as many of the points as I can. I shall reply to the points raised by many hon. Members who have attended the debate. I shall not have time to deal with all of them, but I give an undertaking that the record will be very carefully read and any points addressed to me that I cannot cover during the course of my remarks will be dealt with as quickly as possible following the debate.

My right hon. Friend the Secretary of State has already dealt with our record in raising the level of house building from the appalling depths to which it had plunged during the last year or so of the previous Government's term of office. We are still suffering from some of the effects of the worst collapse in housing policy that we have experienced for the past 40 years. There is no question about that. According to the situation—[Interruption.] I notice that some hon. Members have been dining and drinking a little late. According to the situation reports placed before me when I was appointed, we had the prospect of having a little more than 200,000 housing starts in total, both private and public sectors, during 1975. That was the situation report that I received when I was appointed. The Conservative Government's own White Paper on public expenditure, which we inherited, envisaged 100,000 public sector homes being built in that year. We turned that figure into more than 170,000.

We also inherited figures of expenditure for investment in improvement by public authorities, housing associations and local authorities for 1977 of £187 million in current price terms. The figures that we shall in fact be spending for improvement and rehabilitation in the public sector will be nearly £300 million. That is more than a one-third increase in real terms on the expenditure that would have been provided by the previous Administration. To this has been added 30,000 to 40,000 new homes under our municipalisation and housing association rehabilitation programmes. That means that something like 200,000 homes for rent have offset the annual loss of about 100,000 dwellings from the private rented sector to which the hon. Member for Hornsey constantly refers. That kind of figure has been going on for years.

Slum clearance accounts for about 50,000 of those properties. Municipalisation and housing association acquisitions account for about 20,000, and the rest, about 40,000, go into down-market owner-occupation—part of the movement towards lending down market which we have been encouraging building societies to go in for. More than £1,000 million a year is now being spent on pre-1919 properties by building society loans to below-average income families.

There has also been a steady and continuing increase in the amount of lending being done by building societies for improvements. In 1975, £164 million went to 140,000 applicants. In the past year, 1976, 170,000 applicants received £200 million of lending for improvement purpose from building societies—

In real terms. Despite our present economic constraints, we intend to maintain a high level of house building in the public as well as in the private sector. In 1977 we budgeted for about 180,000 homes either by new build or by rehabilitation in the public sector. That is not as high a level of investment either in new build or in rehabilitation or acquisition as I would wish to see, but it is certainly much higher than what was and would be in prospect under a Tory Administration. I say "what would be in prospect" because the Opposition Front Bench have made it perfectly clear that they intend to cut house building in the public sector and to turn it into a residual long-stop provision. This is not a question of switching resources from subsidy into investment. It is a question of cutting investment. The Opposition know that that is what they are after.

I put it to the Opposition that this is not an academic or theoretical debating point. It is actually at risk now. As my right hon. Friend said, there are ominous signs that local authorities under Conservative rule up and down the country are cutting back on their building programmes. There is evidence that the resources which we have provided will not be spent by local authorities under Conservative control. Local authority tender acceptances are well below the number provided for by our housing expenditure allocations. There is clear evidence of this, and I have asked my officials to probe the matter urgently so that I may consider whether appropriate countermeasures are necesary.

Meanwhile, I urge the Opposition to support us in maintaining at least the present level—

I shall give way to my hon. and learned Friend when I have completed making my point to the Opposition Front Bench. Will they urge their authorities to maintain the house building programmes for which we as a Government have budgeted?

Is my right hon. Friend aware that the laughter and noise coming from Opposition Members will be regarded very ill by the thousands of people in Leicester who are ill-housed, where the local authority now controlled by the Tories has cut in half council house building for the next two years, in spite of its being a stress area?

I take my hon. and learned Friend's point. It is not confined to Leicester. There are ominous signs that it is spreading elsewhere.

The occupants of the Opposition Front Bench have a responsibility to act in this matter. Do they wish to see a reduction in public sector house building in 1977? If they do not, they should turn to their colleagues in the Conservative Party up and down the country where there are serious risks of these cuts and urge them to review their intentions and adhere to the original programmes for which we have budgeted.

I am obliged to the Minister for giving way, and I think it important in the United Kingdom Parliament that a Scotsman who is not entirely involved in English housing matters should be allowed to ask a question. Is the Minister willing to accept the judgment of the voters on his Government's policies at the elections next month?

I do not think that I need have given way.

I turn now to another aspect of these matters which has been given a great deal of attention—[Interruption.] I hope that the Opposition will allow me an opportunity to answer to the best of my ability the points which they have put in the debate. A great point has been made by hon. Members opposite—the same has been done to some extent by my hon. Friends—about owner-occupation and the sale of council houses. I wish to restate the Government's position on this matter quite clearly. It is not to object to the sale of council houses but to object very strongly to indiscriminate policies being pursued such as are being advocated by the Opposition Front Bench and Tory Central Office.

Our policy was laid out perfectly clearly in April 1974. That policy is still being adhered to, and I shall now quote from it
"In areas where there are substantial needs to be met for rented dwellings, it is generally wrong for local authorities to sell council houses."
This is the policy circular put out then and still being applied.
"There may be areas where the sale of council houses into owner-occupation is appropriate in order to provide a better housing balance, but this should not be done so as to reduce the provision of rented accommodation where there is an unmet demand."
The policy statement went on:
"There may well be circumstances where in addition to municipal rented dwellings local authorities should sponsor tenants' co-operatives as well as housing associations."

I am grateful to the Minister for his clear statement of the constraints upon the purchase of council houses by council tenants in which his party believes. Let us make clear the difference between the two sides of the House. We shall give a statutory right to council tenants to buy their own homes.

If the hon. Gentleman wishes to pursue such an indiscriminate policy—[HON. MEMBERS: "Not indiscriminate. It is just."] I wish that hon. Members would control themselves. If the hon. Gentleman wishes to pursue such an indiscriminate policy, I can only say that he needs to spend a good deal of time doing some homework about housing problems, which he has signally failed to do.

I turn now to other matters which follow on from the policy statement from which I have quoted. Several Conservative Members—for example, the hon. Members for Reading, North (Mr. Durant), for Chelsea (Mr. Scott) and for Buckingham (Mr. Benyon)—have urged in their own way that there should be a greater variety of provision in housing, even accepting that there might be a continuing decline in the private sector, which is not accepted by others of their hon. Friends.

I agree fully with what hon. Members say in terms of variety of social tenure. Not only has this been a question of academic interest, but we have taken a number of active steps during our past three years in office to pursue that policy. Never before has there been such activity by local authorities, housing associations and residents' groups throughout the country in moving into housing co-operatives, tenant management schemes, co-operative management schemes and shared equity schemes, as well as leasing arrangements by loc