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Council House Sales (Birmingham)

Volume 955: debated on Thursday 3 August 1978

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1.40 p.m.

I welcome the opportunity to take a small part of the time of the House to initiate a short debate on the sale of council houses in Birmingham. Some time ago the House had a longer debate on council house sales. There was in particular a half-day Supply Day debate in May 1976. In that debate I mentioned a few of the new forms of tenure which had been initiated by the Labour-controlled Birmingham city council. I said then that the council proposed in 1972

"the half-and-half mortgage scheme. That scheme is now followed by many towns throughout the country.
Birmingham further proposed the purchase and improvement mortgage scheme for selling what were council-owned properties built before 1919, along with an improvement grant as part of the mortgage. Both those schemes were held back by a Conservative Government, the so-called flag-wavers for owner-occupation. Both those schemes from a Labour-controlled authority would have led to more owner-occupation".
I said then that the schemes would have led to more owner-occupation, and they have led to it since.

That initiative by the Labour-controlled city council at that time fitted in well with the programme to encourage owner-occupation that has been followed under successive Labour Governments. It fits in with the mortgage option scheme, with leasehold reform and with the building society stabilisation fund. In this Session we have passed the home Purchase Assistance and Housing Corporation Guarantee Act, which will give help to first-time buyers, including buyers of council houses, and that is something that the Government have been too shy to take credit for. It will take some time the savings scheme to start, but the Bill, having received Royal Assent, is now an Act.

I also said in the 1976 debate:
"I know from personal experience that a great majority of the people who purchased during those six years"—
and I was speaking of the six years 1966–72 when the policy of selling to sitting tenants operated in Birming-ham—
"are still living in those houses today. That is irrefutable and is something no one can deny or would wish to deny. Those people purchased their houses because they had every intention of remaining in them. There is no beating about the bush on that. That is why they are still there."—[Official Report, 18th May 1976; Vol. 911, c. 1273–75.]
Now just over two years later, that basically remains the case in Birmingham following the introduction of the policy of selling to sitting tenants. It certainly remains the case for those who purchased in the early 1970s and the late 1960s.

In spite of misguided belief outside this House, I have not come here today to attack the principle of council house sales to sitting tenants in Birmingham. I emphasise "to sitting tenants". To do so would be dogmatic and would also be indirectly attacking the Cabinet, and on what will probably be the last day of this Parliament I certainly do not wish to attack my right hon. Friends. I realise, of course, Mr. Deputy Speaker, that this may be your last day here, too, occupying that Chair. I understand that you will be retiring, but I shall be seeking reelection.

Between 1966 and the middle of this year there have been 12,180 sales to sitting tenants in Birmingham. That is less than 10 per cent. of the total housing stock. That 12-year period includes two years when there were no sales, and one year when there were only 29 sales. Those figures hardly show an overwhelming demand among tenants to buy council houses. They are the most up-to-date figures we have from the city housing officer.

I do not think that people are buying to make a quick profit. The rules are so rigorous that anyone buying at 20 per cent. discount must sell the house back to the council at the original purchase price if he wishes to sell within five years. That hardly provides the opportunity for a quick and vast profit. With the 30 per cent. discount the pre-emption clause obliges purchasers to sell back to the council for any time up to eight years at the orginal purchase price. That does not give the opportunity for a quick killing. Over that 12-year period only about 200 of the houses that were sold have been bought back by the city council under the pre-emption rules.

Some of the reasons for people selling back to the council in the pre-emption period throw a revealing spotlight on the shady corner of capitalism and the operations of the fringe banks. Some people have sold back because they got into trouble with second mortgages, particularly in the late 1960s and early 1970s. Part of my constituency consists of a massive pre-war council housing estate with more than 9,000 council houses. When it became known that the policy was to sell to sitting tenants the sharks from the City, such as operators running banks like Cedar Holdings, went into such areas in the city telling people that since they were owner-occupiers they could borrow money on the basis of their ownership of property.

One constituent of mine lost his family home. He had three second mortgages on his house from two fringe banks. They totalled £3,000. He was in a mess because the banks were threatening to foreclose, and he was unable to keep up his original mortgage payments to the city council on the house or those on the subsequent three mortgages.

He clearly had not spent the money on the property, and he told me that he was a car worker and that for a hobby he was a pigeon fancier. Using his house as collateral he had borrowed the £3,000 to further his hobby.

That might seem incredible to my hon. Friend the Under-Secretary, and maybe there is a funny side to the story. However, the man lost his family home because he had been unwisely encouraged by these murky fringe banks. They had not encouraged him to spend the money on the property, and he had used it to travel all over the country with his pigeons so that they could fly great distances back to Birmingham. That is an extreme example, but it is well known that in Birmingham many people were persuaded to borrow money in this unwise fashion.

Many people have bought their council homes with an eye to the future, perhaps with the intention of moving when they retire. They may have family reasons for returning, say, to Wales. Many people in Birmingham, particularly among the elderly population, are of Welsh extraction. People came from Wales to Birmingham before and during the war seeking work. Other tenants who have purchased may have done so because they may know in advance that their job moves them around the country and they may need flexibility in housing.

I think that it is well recognised in the House and outside it, in the Department of Employment and certainly the Manpower Services Commission, that local authority housing rules, in which respect Birmingham is not strange, are usually so tight and rigorous that they are a major factor in holding up personal mobility, especially concerning employment oppor- tunities. That is why we have had to introduce schemes to enable people to move around the country to places where there are vacancies for jobs for which they have a skill when no one else with that skill is in the area. Such people have trouble in regard to housing mobility.

I have with me the latest figures for Birmingham. I have a constant problem advising my constituents who want to move out of Birmingham because of a job vacancy and people who write in to Birmingham having found a job there. Since January 1976, roughly two and a half years ago, there have been only 57 transfers into the city of Birmingham and 37 transfers out of the city. The housing officer gave me those figures a couple of weeks ago. On that basis, Birmingham city housing authority is owed 20 moves by various housing authorities around the country.

People have to find their own move, anyway, and then get permission for the exchange to go through the relevant housing authority. I just do not believe that those figures—57 into the city and 37 out of it—are a true reflection of the need for mobility in a city of 1 million people with 140,000 council-owned dwellings. The same picture can be painted in many other parts of the country, particularly the large cities.

Following publication in April 1975 by the Catholic Housing Aid Society of a pamphlet by Frank Field entitled "Do we need council houses?", there was quite a rumpus up and down the land because this paragon of Socialism dared to question the need for council houses in the traditional form that we understand. Frank Field is the director of the Child Poverty Action Group and the Low Pay Unit.

In an interview published in Labour Weekly of 16th April 1976 following the rumpus over his pamphlet, Frank Field made this very important point about mobility. I quote one short paragraph:
"On the Left we are not as forceful as we should be about extending the individual freedom of the majority of people: freedom from the restrictions imposed by bureaucrats and freedom to move about the country."
Frank Field went on at length to elaborate on many of the cases that had come to the notice of the poverty lobby of housing difficulties which sometimes could have been solved by people being able to move to a different job but being prevented from doing so through problems of moving house.

Both major parties are talking about tenants' charters at great length. We are constantly hearing about what the Conservative Party will offer the people. We know from the press what the Labour Party's proposals are, although they are still being shaped. An announcement has been made this week. We also know from statements in the House and outside it—and we shall find out again today—the Government's policy on this matter. It is something that needs clarifying, even if the Government only set it out clearly for the record so that we cannot, later in the year or early next year, be misunderstood by our political opponents or by the citizens concerning the Labour Government's position.

But why are both major parties concerned with tenants' charters and tenants' rights? I just do not believe that it can be a symptom of both parties suddenly deciding that people are not getting a fair crack of the whip in regard to the deplorable quality of some of the repairs from which tenants suffer, or the lack of repairs. After discussing this matter with some of my colleagues—mainly in private, for many reasons that will be obvious— I honestly believe that one of the reasons is the point that Frank Field mentioned in his interview.

The point about the growth of the corporate State and individual freedom has got home. It has got home to a section of the population that does not look at matters in that way. It is certainly not the way in which the Conservatives look at them, because they put forward this particular policy in a very indiscriminate way, as I shall be pointing out shortly, which is morally indefensible. The Conservatives do not argue the growth of the corporate state and the problems that have been raised in the House during the last four years as a reason for that policy.

It was certainly argued in that way by the influential columnist of the Daily Mail, Keith Waterhouse. He wrote a column on this subject after there had been a rumpus and some problem in Birmingham, and there had been a big debate in the House. His column was entitled "Square Deal for Serfs." It said:
"My belief is that when people do buy their council houses, it is not as a rule because they have any great urge to join the property-owning democracy"
—I have pointed out some of the pitfalls that at least one of my constituents encountered in that respect—
"Their main incentive is to get out from under the council's thumb. They want to paint the front door any colour they like, grow the privet hedge higher than the regulation three feet, hang out the washing on Sundays, and other heady freedoms".
That was a fair point.

On the concept of the corporate State and the erosion of the liberty of the individual, my own party is on record in very similar language. I know that I shall be charged with quoting out of context, but there is no way in which that charge can be substantiated. In "Labour's Programme for 1976", the basic policy document from which many of our policy pronouncements are drawn, there appear the following two sentences:
"There is a growing danger in this age of bureaucracy that the rights and freedoms of citizens will be infringed by large and powerful organisations with which we have increasing contact. We believe there is a need to tip the scales away from public and private concentrations of power back in favour of the individual."
That was a general comment on the particular issue of individuals and the growth of the corporate State. It can be set against many of the policy options. I have severely berated the Government over the issue of open government and the growth of outside bodies that are not properly responsible to the elected representatives. That comment can equally be applied to social policy. If that statement does not mean that there is a need to spread wealth and power throughout the community, I do not know what it means.

One sometimes has to take a gloomy view about the future, although I am an optimist by nature. I have to consider some of my constituents who are working for companies which may be State-owned enterprises that are not necessarily controlled by people who are sympathetic to the Labour Party, who are also living in tied accommodation owned by authorities which may at some time in the future not be sympathetic to the Labour Party. This put some of my constituents and those of other hon. Members in an invidious position. I wish to do anything in my power to protect the majority of my constituents from falling into the trap of being owned hook, line and sinker, because that is what could well happen.

I cannot blame my constituents for wanting a release from the serfdom of Birmingham's housing department, the officials of which have sometimes treated my constituents with utter contempt when they have complained about simple matters such as the quality of housing repairs or the lack of repairs. I receive, as do my councillor colleagues, many complaints from constituents who say that they have been threatened with being put at the bottom of the list for repairs because they went to see their councillor or Member of Parliament.

It is very difficult to prove these things. Sometimes the complaint is lodged in the name of the tenant and sometimes the complaint has to be made as a general complaint because people are fearful of their name going on to the lists of the little Hitlers who man some of the repairs depots and offices. This point worries many hon. Members. It worries many councillors in Birmingham.

My hon. Friends and I certainly wish to see the end of private landlordism. I make no bones about that. But I do not want to see the great sins of private landlordism translated into what one might term public landlordism in its worst and most objectionable form.

That is why I thoroughly applaud the growth of co-ownership movements and housing associations. Even Birmingham city council, under its present leadership, deserves the credit for opening in my constituency the first co-operative organised by tenants. The city's housing department has actually set up a co-ownership co-operative in Bardfield Close, off the Walsall Road. I applaud that, even from the present leadership. It has been accepted by people of my party because it fits in with the new forms of tenure introduced by the council when it was under Labour control.

I know from private conversations with colleagues, both Members of Parliament and councillors, that many people—not all, I admit—will agree with much of what I have said so far. They would also agree with my distinguishing between sales to sitting tenants and sales to those who are not sitting tenants, as happens in Birmingham. That is the main basis of my argument with the present policy.

I also believe that the Cabinet agrees with every word that I am saying. Its members do not exactly shout it from the roof tops, but I said this in a letter to the Prime Minister a couple of months ago, explaining the problem in Birmingham and saying what we should do to combat it:
"It is clear to me that a majority of the Cabinet are not opposed to the above policy. We have never made any general attack on the principle of Tory local authorities carrying out the policy."
We take that approach under a circular that has not been rescinded since I have been a Member. Arguments have been put from the Dispatch Box defending the application of the policy in principle but attacking it where it hits people who are disadvantaged and discriminates against the public in general. Our new Home Purchase Assistance and Housing Corporation Guarantee Bill has given help to first-time buyers to buy their own homes. That is a positive and sensible policy and we should say so. It has not been said loudly enough for me.

In his reply to me, the Prime Minister went some way to explaining part of the policy that the Minister will elaborate today. I had made the case that Birmingham is now selling to people who are not sitting tenants and had made a great point about the social disadvantages of this and some of the undesirable quirks. My right hon. Friend replied:
"In last year's Green Paper on housing policy we proposed a rational policy on sales. We acknowledged the advantages in authorities allowing their tenants to buy their homes, if they so wish. But we also made it clear that we oppose council house sales where these would impair an authority's ability to deal with pressing housing needs or to maintain a housing stock of adequate quality for renting. The new system of housing strategies and investment programmes provide the necessary opportunity to give practical expression to this approach. Indeed in the light of emerging local strategies and programmes and rates of sales Peter Shore is now looking at the form of the present Ministerial consent under which authorities normally sell. This year, he has specifically asked local authorities, in giving a detailed outline of the local housing situation in their strategy statements, to state their policy regarding the sale of council houses and its implications for the strategy as a whole."
When Birmingham answers that questionnaire, it will be in trouble over the policy of selling to non-sitting tenants.

In his most important paragraph, my right hon. Friend continued:
"In this way, it is becoming possible to make a realistic assessment area by area of the consequences of council house sales for our primary housing objective. That objective must remain a decent home for all families at a price within their means. The emerging picture suggests that in many places, both metropolitan districts and elsewhere, sales are acceptable. But there remain important areas where a serious shortage of housing accommodation still exists, and where sales would still be harmful. Unfortunately, in some of these areas, authorities are nevertheless selling council houses indiscriminately and without apparent regard to local needs as a whole."
That is exactly what is happening in Birmingham at the moment. He went on:
"I agree that we should not be shy about the benefits of council house sales, and I think that at the same time we should emphasise the local authorities' primary housing function of providing decent accommodation to rent and that in some places sales may seriously impede this. We shall be able to present this balanced approach in a way which shows up the irresponsibility of the policies of the Opposition."
When Birmingham started selling in 1966, the then Tory leader, Alderman Griffin, wrote a pamphlet, published by Tory Central Office, based on the first few months' experience. He clearly said more than once in that pamphlet that the aim was to sell to sitting tenants. At one point, he said:
"Our purpose was to sell to the sitting tenant for personal occupation."
Later, he used the words
"to sell houses to sitting tenants."
That is no longer the policy and it is this change to which I and the Labour councillors take the most fundamental objection.

It is on record that the Labour group's policy is not to sell anything. It is not the private policy of many individual Labour councillors, but it is the group policy. However, they are to a man—as I am—opposed to what is happening at present.

It is unfair and morally wrong to sell empty properties, because that means that families who have queued up and waited years living in tower blocks with their children are now prevented from having, on the basis of human need, a house with a garden. That is where the greatest damage will be done and that is what Ministers have to attack, rather than hanging this party on the hook of opposition to sales in principle.

I pointed out to the Prime Minister that selling off empty houses in this way encourages people to jump the housing queue, and it means that the disabled, the sick, even those in the medical quota scheme, are not given their rightful place in the queue.

The policy in Birmingham is to sell the lot. I am told by the city housing office that so far—the policy started only this year—96 such houses have been sold but I am informed that there are 1,000 further empty dwellings in the pipeline to be sold.

When the first 29 of those empty council houses were offered to flat dwellers—that again seems desirable—they were examined by a councillor using his rights to look at the record. I will not quote any individual cases, because that would be wrong, but it appeared that not one of those people would have qualified for a house on the existing points system in Birmingham. Ten were not even registered for transfer, five had no housing need on the basis of the number of rooms in the flat for size of family and 10—this is even worse—had been tenants for less than a year. Several had a bad rent-paying record and some of the 29 had at some time or another received notice to quit for rent arrears.

Yet on 23rd March 1978, the city housing officer put report no. 17 to the housing committee for approval to sell off those 29 dwellings. There was a little trouble about it and I think that they were all withdrawn so that the matter could be looked at again in more detail.

They are even selling off houses in Birmingham which have been modified under the Chronically Sick and Disabled Persons Act, at great expense. I take great exception to that. This money was found out of public funds to modify these houses, and they are then sold. One assumes that when they become vacant again the housing department will try to house another disabled person with a similar disability, in conjunction with the social services department. But it does not work that way.

I put this to the housing officer a year ago and I was told:
"Where properties which have been adapted for the disabled become available for reletting there is never any certainty that the Council can in fact relet the property to someone for whom the adaptations are suitable, and in many cases it is not possible."
This is crazy. In a highly sophisticated city such as Birmingham, with highly paid officials running computer systems, I do not see why we cannot organise our affairs better than that. These houses were modified at public expense for disabled people. There are known disabled people in inadequate housing who cannot get the repairs or adaptations done because of cuts in local government expenditure. That is not a system that ensures that we get a square peg in a square hole and a round peg in a round hole.

I support the Government's policy as at present announced both in the Prime Minister's letter and in speeches in the House, even though the Government do not exactly shout about it. But we must tackle the indiscriminate way in which things are being done in Birmingham now with the selling of empty properties, that is, not to sitting tenants. This is only encouraging queue jumping and giving the whole system a bad name.

I do not have a tower block as such in my constituency. There is a block of eight storeys—hardly a tower block—which overlooks park land, and nobody is trying to get out of that. It is in a beautiful location. But there are elderly people whose children live on the other side of the city centre in tower blocks. These are people who need support and assistance, which they should be able to receive but which the social services department cannot provide. The families in those tower blocks cannot now be eligible for a property near to their parents, and the consequence is that the parents suffer in health and they suffer psychologically, too. They get very bitter about things, and rightly so.

We should assist some of our fellow citizens at least to become their own masters, not by giving them public property as some suggest—that does not actually happen in Birmingham—but according to the correct system, with strict pre-emption clauses such as apply at the moment to stop quick sales and, what is more, with a reflection in the price of some of the rent which has been paid by the tenant which has had the effect of partly purchasing the property.

The present system—a one-off lump sum for everybody, with 20 per cent. off for a five year pre-emption or 30 per cent. for an eight-year pre-emption—is totally wrong when someone may have been a tenant for only a year and someone else may have been a tenant for 30 years. People should not be classed together under the same system.

I have raised this matter because I regard the present situation as totally wrong and I am certain that it will get worse. There have been only 96 empty properties sold to date, but with 1,000 more in the pipeline, so I am told, there will be a great bitterness. That is why I have raised this matter, and I hope that my hon. Friend the Under-Secretary of State will condemn Birmingham's policy root and branch and give some hope to my elderly constituents who want their children to be able to come to live near them. They may not be able to afford to purchase anyway, but they should be given the opportunity of a fair crack of the whip under the lettings system which was being operated in Birmingham until March this year.

On a point of order, Mr. Deputy Speaker. I apologise to the Minister and to the hon. Member for Birmingham, Hall Green (Mr. Eyre), and I promise to be as brief as I can. I courteously and conscientiously waited until my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) had finished, and the consequence is that I may literally have missed the boat.

This is the matter which I wish to raise with you, Mr. Deputy Speaker. There is on the river, or there was when I came into the Chamber to raise this matter some 35 minutes ago, a boat carrying about 150 people representing animal welfare organisations—in fact, probably representing hundreds of thousands of people in the country. They are there on the river to try to protest to Parliament about the export of live animals and to raise other animal welfare matters.

I am not sure whether the presence of those people on that boat is in any way in conflict with the Sessional Order, but I understand that the authorities have agreed at least to turn a blind eye to their presence on this last day of the Session. However, a difficulty has arisen on which I should like some guidance from the Chair.

Those representatives of animal welfare organisations on the boat, which I left about three-quarters of an hour ago in order to come ashore—I was assisted by the river police, and for that I am grateful—were hoping to convey some message to Members of Parliament on the Terrace by means of a loud hailer. They were advised that that would inconvenience Members. I gather that the Serjeant at Arms gave that advice to the police, and it was accepted.

I came here with a message from the boat and hoped at least to be able to respond to the demonstrators on the boat by means of the loud hailer with which I was provided and which I brought with me. I thought that I could do that in just two or three minutes to acknowledge that the message had been received and that some of us in Parliament had taken notice of their presence.

Understandably, the police were a little diffident and worried about whether that would be in breach of the ruling given by the Serjeant at Arms, and I therefore decided that I should come into the Chamber to seek the advice of the Chair on whether it could be held to be in any way interfering with the convenience of Members on the Terrace, none of whom had objected, and whether I might be permitted on behalf of colleagues present today to acknowledge what the animal welfare organisations have been doing.

I wish to make clear that I make no complaint against the police or the Serjeant at Arms. All I am asking for is an authoritative ruling from the Chair on whether I may acknowledge receipt of the message by means of what I believe to be a directional loud hailer which may be heard on the boat but certainly would not be heard anywhere on the Terrace or in the offices above. I should be much obliged for your guidance, Mr. Deputy Speaker

I thank the hon. Gentleman for giving me due notice that he wished to raise this point of order. I am satisfied that the authorities of the House are correct in the action which they have taken, and I am satisfied also that they are correct in their view that it would be an improper use of the Terrace to address the demonstration by loud hailer as the hon. Gentleman has indicated he would wish to do.

May I thank you, Mr. Deputy Speaker, and say therefore that I have no intention, on the basis of your ruling, of making improper use of the Terrace.

2.16 p.m.

In company with the hon. Member for Birmingham, Perry Barr (Mr. Rooker), I strongly support the Birmingham council's policy for the sale of council houses to sitting tenants, and I too, have strong feelings about the many difficulties in administering Birmingham's vast council estates in a humane and understanding way.

Having introduced two council tenants' charter Bills into the House, I cannot understand why the Government blocked those Bills on each occasion and prevented proper discussion of the serious problems which affect council tenants not only in Birmingham but throughout the country. But I think that the hon. Member for Perry Barr has totally misunderstood the Birmingham council's present policy on the sale of void houses. He took a long time to come to the point on that and has left little time for me to make a reply.

On a point of order, Mr. Deputy Speaker. Basically, I came here today to have a debate with my hon. Friend the Minister. It is my hon. Friend's reply that I wish to hear, not the comments of the hon. Member for Birmingham, Hall Green (Mr. Eyre), who did not tell me that he wished to take any time in the debate. When one of his colleagues asked me about it yeste— day, I said that I should need at least half an hour for my speech and the Minister would take the other quarter of an hour.

I have heard what the hon. Member for Birmingham, Perry Barr (Mr. Rooker) has said and I take his point, but I think it right to allow the hon. Member for Birmingham, Hall Green (Mr. Eyre) an opportunity, very shortly, to make his case. I remind the hon. Gentleman, however, that the Minister requires time to reply. Although it is not a rule of order that this debate must finish at half-past two, it would be unfair to those hon. Members who have debates to follow if it were to be extended.

I was saying that the hon. Member for Perry Barr has seriously misrepresented the situation in respect of the policy on the sale of void houses. Out of the total of 150,000 council dwellings in Birmingham, 100,000 are houses, and these are preferred by tenants, for reasons which are easily understood. Of the remaining 50,000 dwellings, too high a proportion are high-rise flats unsuitable for families with small children.

Many thousands of tenants wish to be transferred from the tower blocks. The fact is that too many tower block flats and other forms of ill-designed blocks of flats have been built in Birmingham, with the consequence that a thoroughly unsatisfactory state of affairs exists for Birmingham council tenants, since many thousands of dissatisfied flat dwellers cannot hope to get transfers within reasonable time to the houses which they would prefer. Any politician who pretends otherwise is only exploiting human emotions. There is a serious human problem here with which we should all like to deal.

The present leaders of the Birmingham council give priority to families with children for transfer from tower blocks and flats to houses. For obvious reasons, they have no choice but to give that priority, and it is plainly correct.

The nub of the council's policy on the sale of void houses, to which the hon. Gentleman referred in critical terms, is that these void houses are sold only to council tenants with children—in other words, the same category with priority for transfer from flats.

If the tenants are tenants of houses, those houses become available for tenants moving from flats. If they are tenants of flats, those flats also become available to people in housing need. But I emphasise that the void houses concerned are not the best houses, which are those built in recent years, with modern fittings and facilities.

The void houses offered for sale to council tenants with families are unmodernised pre-war houses built in the 1920s and 1930s. They are 40 to 50 years old. If they are sold to council tenants who are enterprising enough to take responsibility for purchase and to spend their own money and labour in doing up those older houses, that is wise administration by the council. Otherwise the cost of modernising those houses, which now averages as much as £5,000 per house, would fall upon the housing revenue account. Therefore, there is a saving of public expenditure in that respect.

If the hon. Gentleman suggests that that is unfair to people within the priority groups that I have mentioned, council tenants with children in their families—

council tenants within those priority groups, he should acknowledge that those purchasers are willing to undertake the extra responsibility and to use their savings to the benefit of the public purse. What can be wrong in working people improving their family's situation in those circumstances?

2.22 p.m.

In view of the point of order, which quite properly had to be taken during this debate, and the intervention of the hon. Member for Birmingham, Hall Green (Mr. Eyre), I hope that if I stray over the allotted time by two or three minutes the House will understand.

I welcome the opportunity of replying to this debate on the very important matter of council house sales. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) has done the House a service by raising the subject. His viewpoint is both welcome and distinctive. He has discussed both national policy and the sales policy of the Birmingham city council. I welcome and share my hon. Friend's practical and realistic approach to this matter, which is in sharp contrast to the rigid and dogmatic stance that has been taken by the Conservative Party on the sale of council houses.

My hon. Friend referred to the letter which he has received from my right hon. Friend the Prime Minister. I would not aspire to improve on that letter which explained the Government's policy on the sale of council houses and pointed out that we recognised the advantages of council house sales in appropriate circumstances. But it also made clear that we opposed sales where they hindered our primary and overriding housing objective, which is that all families should be able to obtain a decent home at a price within their means. For many people this can only mean renting from the local authority. Where there is a shortage of housing accommodation to rent, what is needed is the provision of more council homes, not the disposal of what is already potentially available.

Local authorities are best placed to judge the appropriate sales policy for local circumstances, but, as my right hon. Friend the Secretary of State pointed out in our housing debate in June, they should act responsibly in exercising their freedom to make decisions about the sale of council houses. They should formulate their proposals to sell as part of an overall strategy for housing in their areas, remembering that the need to provide an adequate supply of rented accommodation is paramount.

We are keeping a close eye on the national picture, and especially on the areas of housing stress. The new system of housing strategies and investment programmes asks local authorities amongst other things to relate their sales policy to overall needs. This year, as my hon. Friend knows, local authorities have been specifically asked to state, in giving a detailed outline of the local housing situation in their strategy statements, their policy regarding the sale of council houses and its implications for the strategy as a whole. The existing general ministerial consent means that authorities make most of those sales without any reference to my Department, but we are keeping the form of this consent under review in the light of the local authority strategy statements and investment programmes and of the rate of sales generally.

I should now like to say a few words about the sale of empty houses. In common with some other authorities, Birmingham has a policy of putting up for sale council houses which have be- come vacant and reletting them only if they fail to sell. I am told that there may soon be a crude surplus of houses over households in Birmingham, but there remains a substantial degree of substandard housing, overcrowding and sharing.

It is wrong, especially in areas of stress, to sell off council houses which are still badly needed for letting. The Government are deeply concerned about the sale, in these circumstances, not only of council houses which fall vacant but also of new developments originally intended for letting. We are watching this situation closely, especially where sales may be damaging the prospects of families getting a decent home within their means.

The hon. Gentleman has made his point, and I shall not take the time of the House by giving way to him. We are already over time.

If need be, we would consider whether we should act to curb sales, certainly of homes which become available for renting where there is still a strong unmet need.

Part of Birmingham's policy is to sell off some houses built between the wars to council tenants with families. I understand that the houses are in need of modernisation and that part of the bargain is that purchasers should themselves carry out the modernisation. That is at first sight an attractive proposition, so long as the purchasers can expect to get back what they spend in the form of an increase in the value of the house. But the fact remains that, though they need improvement, many of the inter-war council houses are basically good places in which to live—solidly built and with adequate gardens—and I seriously suggest that the council should consider again whether it should itself improve more of these houses for letting to families still in tower blocks or other unsuitable accommodation.

I turn to the subject of houses for the disabled. My hon. Friend expressed concern about the sale of council houses which have been adapted, sometimes at considerable expense, for the benefit of disabled people. It would be singularly irresponsible for an authority to sell such houses to people who did not need the special facilities. But it would be another matter for a council to allow disabled people to buy houses which had been converted for their use. The Government are, of course anxious that disabled people should have the same opportunity to own their houses as the able-bodied, and buying the council house in which they live may be the only such opportunity for some.

I understand that Birmingham has sold one or two specially equipped houses to disabled tenants. I would not see any objection to this in principle. To avoid a risk of former council houses so converted eventually being sold to those who do not need the facilities, it is open to a council to ask for special ministerial consent to sell, subject to a very long-term right of pre-emption at market value, thus helping to ensure that the house could remain available for disabled people.

My hon. Friend referred to the Home Purchase Assistance and Housing Corporation Guarantee Act, which has just been enacted. He said that it should assist first-time purchasers of council houses as well as purchasers in the private sector. Some purchasers of council houses buy at the full market value, assuming vacant possession, and are thus in no different a position from that of others buying on the same terms. But where people buy council houses at a discount it has been suggested that the Act gives such purchasers double help.

I do not accept that there is double help. Discounts are allowed on council house sales only where restrictions are imposed on early resale. Market value remains the basis of the sale, but the effect of a five-year restriction could be to reduce the market value of the house to the purchaser by up to 20 per cent. A purchaser in the private sector is not subject to such a restriction. He can benefit at once from any increase in the value of his house. The purchaser of a council house at a discount cannot do so.

In any event, it is a feature of our scheme for first-time buyers that people benefit whether or not they are getting assistance from any other quarter. We take no account of the fact that some people may get help from their families, from their employers or even, I suppose, from their landlords. Under our new scheme, first-time purchasers qualify for help by saving, not because they cannot look elsewhere for assistance.

I know very well that the practice of allowing discounts on council house sales has attracted criticism from some of the Government's supporters. In fact, as they now stand, the arrangements for this were introduced by the Labour Government in 1967. The general consent for council house sales continues to allow a discount of up to 20 per cent. where restrictions are imposed on resale within five years. One restriction is the local authority's five-year right of pre-emption at the original purchase price, which in its own right is a valuable facility for the authority.

Before 1974 it was the policy of the then Government to allow 30 per cent. discounts with eight-year restrictions. This was a reflection of their policy of everywhere encouraging sales. The present Government oppose indiscriminate selling. In our view, the 20 per cent. maximum discount remains a reasonable basis for council house sales and it is not our policy to grant consent for higher discounts. On valuation grounds, the terms providing for a discount of 20 per cent. and a pre-emptive period of five years are still realistic.

To sum up, our approach is one which is not based on dogma. We look to local authorities to act responsibly and sensibly in exercising their freedom to make decisions about sales and to do so in the light of local conditions. We shall, however, continue to keep the position under close review.