I should inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.
I beg to move,
When the Government came to office in May 1979, the average council house rent stood at £6·40 a week. Two years later, by April this year, that rent had risen to £11·39—an increase of 78 per cent. Two weeks ago the Chancellor of the Exchequer gave the House to understand that in the coming financial year rents would rise by a further £2·50 a week. That would mean that they would go up to £13·59 a week—an increase since the Government came to power of 117 per cent. However, it is certain that rents next year will rise much more that that, because the Chancellor took care to specify that the £2·50 average rent increase related only to what he called housing subsidy purposes. On the same day as the right hon. and learned Gentleman made his statement, the Secretary of State for the Environment issued what he described as a consultation document dealing with council house rents. As usual, the Secretary of State's use of the English language was idiosyncratic. His consultations with local authorities about rent increases is as genuine and meaningful as a consultation between Mr. Bumble and Oliver Twist about the size of the gruel ration. It is significant that the Secretary of State's document emphasises, with underlined words, that the figure of £2·50That this House condemns Her Majesty's Government for more than doubling council house rents since coming to power.
A draft letter attached as an annex to the consultation paper blurts out the truth. It says:"relates exclusively to calculation of housing subsidy."
The Secretary of State has not yet come clean about that additional figure, and the debate gives the Government the opportunity to do so. Last year the Secretary of State told us that the additional rent increase not reckonable for subsidy would be 30p a week on top of the £2·95 increase that related to housing subsidy. In fact, that supplementary rent rise turned out to be not 30p, but 73p. If it works out the same this year, rents will rise not by the £2·50 a week that the Chancellor pretended, but by £3·20, to £14·59 a week. That will mean that in the first three years of this Government, council house rents will have been forced up by a monstrous 128 per cent—an average of 43 per cent. a year, compared with 11 per cent. a year in Labour's last three years of office. The Government's intervention to push up council house rents is on a scale and of an intensity unprecedented in the history of public sector housing in this country. To begin with, the Secretary of State made use of the rate support grant guideline, but he became worried that it would not provide the results that he wanted, so in last year's Housing Act he rigged the subsidy system to give him much greater power over rents than ever before. He achieved that through what the Act calls the "local contribution differential". That is a fastidious, Heseltinian euphemism. Plainly and bluntly it means "rent increase". The Secretary of State assures local authorities that they are free to raise rents by whatever amount they choose or even not to raise them at all. For his part, he retains equal freedom to deduct from their housing subsidy the precise amount per council house per week that equals the rent increase that he requires. If they exercise their freedom not to raise the rent by this amount, he assures them again that they are perfectly free to make up the difference from the general rate fund. He, in his turn, is then correspondingly free to penalise them as overspenders. So in this best of all possible subsidy systems, everyone is free to exercise his freedom, but the Secretary of State exercises more freedom than anyone else. It is the council tenant who pays more and more rent year after year. The result of all this freedom is that many councils are steadily amassing surpluses on their housing revenue accounts—or, to put it crudely, making profits out of their council tenants. Until the Housing Act 1980, it was illegal for local authorities to make profits out of their council rents, but the 1980 Act abolished Labour's no profits rule. Moreover, it allowed councils to transfer those profits to the general rate fund—or, again, to abandon the Secretary of State's discriminating use of language, to use the profits on their council rents to subsidise the rates of ratepayers who are not council tenants, and who have average household incomes 20 per cent. above those of council tenants. This year, according to the Chartered Institute of Professional Finance and Accountancy, 46 local authorities are doing precisely that, and the House will be neither surprised nor disappointed to learn that all of them are Conservative-controlled. There is, for example, the district of South Oxfordshire in the constituency of the Secretary of State. Its average council rent is £15·30 a week—34 per cent. above the national average. These huge rents provide a profit of £407,000. All of this profit is transferred to the general rate fund, and this enables the lucky 8,665 council tenants of South Oxfordshire to contribute 90p a week each to reducing the rates of the other 35,000 ratepayers. Let us take the example of Tonbridge and Mailing, in the constituency of the Minister for Housing and Construction. This year, the Tory council there put its rents up to £14·75 a week—29 per cent. above the national average. In doing this, it has accumulated a profit on council rents of over £1 million. Tonbridge and Mailing could have used that profit constructively—for example, to provide decent accommodation for homeless families. At present, the council exiles its homeless 20 miles away to Gillingham, where they are permitted to count their blessings in squalid bed and breakfast accommodation, the breakfast consisting of several days' provisions dumped outside the inmates' rooms in carrier bags. However, Tonbridge council is more prudent than to squander its profits on council rents in this improvident manner. Instead, it uses most of them to subsidise rates. The 7,000 council tenants in Tonbridge each pay £2·30 a week extra to subsidise the rates of the borough's 23,000 other householders. These repulsive practices will proliferate as the Secretary of State forces rents higher and higher and as profits grow bigger and bigger. The question is, has the Secretary of State the right to push up rents in this way, and have the councils the right to do it, even if the Secretary of State tries to make them? The Housing Act 1980 lays down the rules that the Secretary of State must observe in fixing the local contribution differential, alias the rent increase. It says that he shall have regard, among other things, to past and expected movements in incomes, costs and prices. In the last financial year, average weekly earnings rose by 13 per cent. The general index of retail prices rose by 12 per cent. However, council house rents soared by 48 per cent. So rents went up by four times as much as earnings or prices. What about the coming year? The Act requires the Secretary of State to have regard to future movements in prices and incomes as well. The Government Actuary, in the report that he published earlier this month, tells us that the Government instructed him to assume that average earnings would go up in the coming year by 7½ per cent. As for prices, the Treasury stated a fortnight ago that it forecast an increase in inflation next year of 10 per cent. However, the increase in rents, even if it is just the £2·50 a week which the Government are so far ready to admit, will be 22 per cent.—more than twice the increase in prices, and three times the increase in earnings. If rents go up 70p as they did this year, the increase will he much more—28 per cent. However, in his consultation document, the Secretary of State adds another factor which he says he will bear in mind when fixing the rent increase. This new criterion is what he calls in the document"in addition to housing contributions which are reckonable for subsidy purposes, local authorities will have to meet some further housing expenditure which is not reckonable and which will be financed by increases in rent".
The Secretary of State has got into the habit of pointing with scorn to the fact that, under the Labour Government, council house rents fell as a proportion of earnings. Personally, I believe that that is something upon which we should congratulate my right hon. Friends who were then in charge of housing. It is certainly undeniable that, when Labour came to office in February 1974, rents were 7·9 per cent. of earnings, and that by the time we left office five years later that proportion had sunk to 6·3 per cent. This year, thanks to the actions of this Government, council rents have risen to 8·1 per cent. of earnings. If rents rise next year only by the £2·50 announced by the Chancellor of the Exchequer, rents as a proportion of earnings will be well over 9 per cent.—the highest proportion since the end of the Second World War. Of course, if they go up by more than that, as they certainly will, council rents as a proportion of earnings will rise to the highest level ever recorded. These days, local authorities are increasingly, if reluctantly, tempted to have recourse to litigation. It would be an interesting experience if some local authority decided to test in the courts the validity of the Secretary of State's use of his power to raise the local contribution differential—if it accused him, in effect, of violating the very criteria which the law says that he must observe. Another question mark hangs over these massive rent increases and over the disgraceful tendency of Tory councils to use their profits on council rents to subsidise their general rate fund. The Housing Act 1957, which is still in force, lays down that rents charged by the local authorities must be reasonable. That is in section 111(1) in case the Secretary of State wishes to refer to it. Case law, for example the judgment of Mr. Justice Romer in Belcher v. Reading Corporation, has established that local authorities, in fixing their rent levels, must consider the welfare of tenants on the one hand, and the interest of the ratepayers as a whole on the other. The judgment goes on to say that it is the duty of local councils to maintain a balance between those two sections of the community—tenants and ratepayers—so far as is possible. Is Tonbridge and Mailing district council maintaining such a reasonable balance by charging rents 29 per cent. above the national average, and by using the large profits that it makes as a result to force council tenants to pay £2·30 each a week to subsidise the general rate fund? Again, it would be instructive if someone asked the courts to decide. Why is the Secretary of State sailing close to the legal wind by forcing local authorities to push up rents by the highest amounts ever to the highest level ever? The answer is, quite simply, because he is determined to make huge cuts in subsidy and rate support grant as his contribution to the Chancellor's public spending cuts. This year, the Secretary of State has cut housing subsidies by more than £600 million. Next year, he will cut them by another £400 million. Soon the subsidies will be completely abolished. Already, half the metropolitan districts and almost all of the 296 shire districts are moving out of the subsidy zone. The cuts are being achieved at the expense of the poorest sections of the community. The Minister might refer to the 22 per cent. of households which receive rent rebates and those which are helped out with their rents by the Department of Health and Social Security. He could throw in the misleading assertion that 25 per cent. of tenants have household incomes of £8,000 or more, disguising the fact that that is total household income rather than the tenant's income. However much the Secretary of State tries to conceal the truth, after allowing for rent rebates and supplementary benefits, the £2·50 rent increase alone adds up to a collective fine of £400 million a year on council tenants. The rent increases are unnecessary, punitive and vindictive. We shall vote against them tonight."the relationship between the average levels of local authority rents and earnings".
I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
The background to this debate is the total failure of the Labour Government, of which the right hon. Member for Manchester, Ardwick (Mr. Kaufman) was a member, to implement the rent policy to which they were supposedly committed—the right hon. Gentleman did not refer to that—and the absolute inevitability, as a result of that failure, of significant rent increases regardless of who won the 1979 general election. The previous Government's rent policy—from which the right hon. Gentleman is inclined to dissociate himself, although he was a Minister in that Government, and which he has tried to rewrite tonight—was clearly set out in their housing Green Paper. It stated no less than three times that"this House approves the steps that have been taken by the present Government to reverse the unrealistic and wasteful rent subsidy policy of the previous Administration, to increase rent rebates significantly and to provide very many council tenants with the opportunity of owning rather than renting their homes."
I suggest that a period of a Parliament is a reasonable run of years. Yet, over the period of the last Parliament, rents, far from keeping in line with money incomes, totally failed to do so. Money incomes rose by more than 110 per cent. while rents went up by barely more than half that—by 65 per cent. The wholly predictable result of the last Government's failure to fulfil their own rent policy was a massive increase in Exchequer housing subsidies which, in England, rocketed from £600 million in 1974–75 to more than £1,200 million in 1978–79—an increase in real terms of almost one-fifth. Equally predictably, as local authorities found new building becoming more and more financially burden-some, capital investment plummeted. Public sector starts in Britain went down year by year after 1975, and, by the time that the Labour Party left office, they were the lowest in any year since 1945. The consequences of the last Government's failure to fulfil their rent policy were equally serious at the level of the individual local authority. The fact that rents were not increasing, even in line with incomes, meant a massive financial burden being placed on ratepayers locally, as well as on taxpayers nationally. Over the period of the last Parliament, ratepayers in Lambeth, for example, found that their rate fund contributions to the housing revenue account trebled. The ratepayers of Haringey found that their rate fund contributions more than trebled. The ratepayers of Manchester, including the right hon. Gentleman's constituents, found that their rate fund contributions to the housing revenue account more than quadrupled. The right hon. Gentleman said that his rent policies were worthy of congratulation. It will be interesting to know how many Manchester ratepayers appreciate the size of their rate fund contribution. There was, of course, one member of the previous Administration who was prepared to question the good sense of this massive increase in expenditure on housing subsidies, though it seems that he was entirely ignored by his ministerial colleagues. I refer to the right hon. Member for Heywood and Royton (Mr. Barnett). Speaking on behalf of the previous Administration in November 1976, the right hon. Gentleman said:"The Government consider that over a run of years rents should keep broadly in line with changes in money incomes"
The right hon. Member for Ardwick endorsed that White Paper. Even what was described by the former Chief Secretary as a "very modest target" proved to be way beyond the will of the previous Government. Far from rents gradually rising as a percentage of costs in accordance with the Government's policy, rents in fact steadily fell as a proportion of costs. Instead of rents being 50 per cent. of costs when the previous Government left office, they were, on the same basis as in the calculation made by the former Chief Secretary, only 37 per cent. of costs. It is significant that if rents had been increased to 50 per cent. of costs, in accordance with the previous Government's policy, rents should have averaged £9·15 when the last Government left office. In fact, they averaged only £6·48—nearly one-third less. The Opposition's motion refers to a doubling of rents under the present Government. The fact is that if the previous Government had actually fulfilled their own rent policy rents this year would be only 25 per cent. higher than in April 1979. The net result was that by the time the last Government left office rents were at a lower proportion of earnings than at any time in the post-war period—at a huge cost to taxpayers and to ratepayers alike. It was, therefore inevitable that a substantial increase in rents would have to take place in this Parliament. The right hon. Gentleman's speech would have been greatly improved if he had had the candour to admit that, because it is generally recognised. Significantly, at local level, councillors of all parties have shown infinitely more realism on this point than Opposition Members. It is notable that, on the information so far available, the average increase in rents that has taken place in each of the last two years has been broadly in line with the rent assumption made by my right hon. Friend. That shows that the general body of local authorities, Labour as well as Conservative controlled, has accepted the need to increase rents by broadly the amount that my right hon. Friend has suggested. That is as true this year as it was last year. The rent increase assumed by my right hon. Friend for this year was £3·25. It is apparant that a great many authorities, of all political complexions, have decided that it is justifiable not merely to increase their rents by that amount but in many cases by an even greater amount than that assumed by my right hon. Friend. On the latest estimates derived from local authorities' own returns, rent increases in, for example, Salford, will mean an average increase for this year of £3·48 compared with last year—that is, 23p above my right hon. Friend's assumption. In Nottingham, the average increase is £4·05–80p above the assumption. In Watford, it is £4·28–£1·03 above the assumption. In Bolsover, it is £4·55–£1·30 above the assumption. In Wolverhampton it is £5·32–£2·07 above the assumption. Nothing could illustrate more vividly or more practically the general recognition in local government—among local authorities of all political complexions—that the previous Government's rent policy was totally unrealistic and unsustainable and had to be reversed."For the longer term, the Government has to make sure that all aspects of housing expenditure make the most cost effective use of limited resources. I am already on the record, for example, as questioning whether it is really the best use of resources in the longer term to subsidise council tenants to the extent of 57 per cent. of costs as we do at present. Last year's public expenditure White Paper set the very modest target of reducing this to 50 per cent. over a 5-year period."
I am listening with interest to the Minister. I understood him to say that during the course of a full Parliament rents should increase roughly in line with costs. If my mental arithmetic is correct, surely, with the increases that he is suggesting this year and if Parliament runs for five years, we should then have a rent freeze for two years. Otherwise rents will be well in excess of costs.
The hon. Gentleman has misunderstood me. One of the basic reasons for the rent increases that we have had to make during this Parliament is that, during the last Parliament, the Labour Government failed to maintain rent increses in line with money incomes, despite the fact that that was their policy.The right hon. Member for Ardwick in his speech made reference to the new subsidy system. It is difficult for him to complain about the new subsidy system because, with one exceoption, the mechanics are essentially the same as those featured in the abortive Housing Bill introduced by the Labour Government just before the last election. The one respect in which there has been a material difference in the mechanism of the subsidy system in the 1980 Act from that in the 1979 Bill has been the abolition of the no-profit rule, which raised the question of what assumption should be made about the use of housing revenue account surpluses for the purposes of the rate support grant. My right hon. Friend intends to announce further details of the RSG next Monday. That question has now been resolved. As my right hon. Friend's proposals paper for the 1982–83 rate support grant settlement makes clear, we do not propose next year to make the assumption that housing revenue account surpluses will be transferred to the general rate fund with block grant being reduced accordingly. Authorities may, of course, make such a transfer if they wish, and wilt not suffer any loss of block grant if they do so. The only material point of difference now between the mechanics of the present subsidy system and that put forward by the Labour Government is in the abolition of the no-proft rule. I am in no doubt that that was the right policy decision. The Labour Government of 1966–70 did not consider it necessary to impose a no-profit rule, and no such rule existed before 1975. Its removal by the 1980 Act has given local authorities a significant increase in their financial flexibility and financial discretion, and I am not aware of any widespread demand among local authorities for the non-profit rule to be restored. Turning to the rent assumption for the coming financial year, I cannot anticipate the outcome of my right hon. Friend's statutory consultations on his proposals for the determination of reckonable income for 1982–83. I wish to make some general points. First, whatever the determination of reckonable income that my right hon. Friend finally makes for 1982–83, for almost 50 per cent. of the tenants in England and Wales the actual increase in the rent they pay will be either nil, if they are on supplementary benefit, or greatly reduced if they are on rent rebates. There are currently 1,400,000 council tenants—more than a quarter of all tenants—whose housing costs are met through the supplementary benefit system. Those tenants will, in effect, face no increase in rent next year at all. In addition, there are almost 1,200,000 council tenants—almost another quarter—who receive help with their rent through rent rebates. For that group, 60 per cent. of any increase in rent will be met through the rent rebate system. To illustrate how far up the income scale it is possible to claim rent rebate, I should point out that a married man with two dependent children paying the average rent would still be eligible for a rent rebate with earnings of £120 a week—well over £6,000 a year. The same person paying an above average rent would, of course, he eligible for a rent rebate at a still higher level of earnings. Thus, about half of all council tenants will have next year's rent increase met either in full or in part by either supplementary benefit or rent rebate. I should also point out that we have actually trebled the maximum amount of rent rebate payable and have extended eligibility for rent rebates to groups such as sharers and licensees who were not eligible for rent rebates under the Labour Government.
Surely the hon. Gentleman does not want to give the House the impression that those on rent rebates, apart from those who receive income from the DHSS, will be paying no increase at all. In fact, they will be paying a higher rent, though clearly not the full rent. The Minister should make that clear.
When the hon. Gentleman reads the Official Report he will see that I have made that extremely clear. I referred to the specific fact that those on rent rebates would have 60 per cent., not 100 per cent., of their rent increase covered by rebate.Secondly, there is no evidence that council rents are currently out of line either with other rents in the public sector or with rents in the private sector for comparable properties. Council rents are still significantly below the rents already being paid in the new towns. Comparisons with registered rents for housing associations and in the private rented sector are more difficult, but the available information suggests that in most areas council rents are still somewhat lower than for comparable properties in the private sector. Thirdly, there is an inextricable trade-off between expenditure on housing capital and expenditure on rent subsidies. It is absolutely inescapable that the greater the expenditure on rent subsidies, the less the expenditure for home improvement, new build, mortgages and so on. For the Opposition to foster the illusion that somehow rent subsidies can be allowed to soar without any consequence for housing capital is fundamentally dishonest and totally at variance with their own experience in Government. Indeed, in present circumstances, the Opposition's call for higher rent subsidies next year amounts in fact to a call for further capital cuts next year. That we wish to prevent, and I am sure that the House will welcome my right hon. and learned Friend the Chancellor of the Exchequer's statement on 2 December that next year that
Fourthly, the criticisms that the right hon. Member for Ardwick expressed about rent increases for council tenants would, I think, be distinctly more convincing if he were equally critical of the savage rate increases that Labour councils are imposing on the very same council tenants. For example, in Manchester, the average increase in domestic rates this year was 35 per cent., resulting in an average increase in domestic rates for all householders, including council tenants, of £1·54 per week. We should have heard far more from the right hon. Gentleman about the crippling rate increases that Labour councils have been imposing on their tenants and on all their other domestic and industrial ratepayers—a matter on which he was conspicuously silent. Of course, the huge rate increases that were imposed in April were not the end of the story—certainly not in the Greater London area. We now have the Labour-controlled GLC, with its supplementary precept, requiring yet further rate increases for council tenants and everybody else in London. Its latest precept represents no small financial burden for the individual ratepayer. In the 26 weeks over which the supplementary rate was planned to be spread, it would have meant a further average increase in domestic rates of £1·15 per dwelling per week in Wandsworth, £1·36 in Islington, and £2·42 in both Kensington and Chelsea and in Westminster. The way in which the Opposition have gratuitously and unnecessarily added to the burdens of council tenants as ratepayers makes it sheer humbug for them to criticise the Government's policy on council rents. Finally, the Government—unlike the Opposition—are offering council tenants an alternative to paying rent. We are giving council tenants the opportunity of ceasing to be tenants and the right to buy their homes—a right that the Opposition intend to remove from them. We are giving tenants who cannot afford to buy immediately the right to take out an option so that they can buy at a fixed price in two years' time—a contractual right that the Opposition have now, to their shame, said that they will dishonour. The Labour Party's policy is to give those thousands of tenants who want to become home owners, but who cannot afford to buy in the private sector, no housing choice at all except to go on paying rent for the rest of their lives. We are giving council tenants a genuine choice between owning and renting. More than 400,000 tenants in England and Wales have now exercised their right of choice by applying to buy their homes including, I am glad to say, the constituency agent for the hon. Member for Bolsover (Mr. Skinner). If the Opposition were genuinely concerned about helping tenants to avoid paying rent increases, they should be urging Labour councils up and down the country to process right to buy applications more quickly. They should also reverse their policy commitment to repeal the right to buy. This motion brought forward by the Opposition is riddled with inconsistency. It was the previous Labour Government's rent policies that made significant rent increases under the present Government inevitable. The Opposition are imposing unprecedented rate and supplementary rate burdens on council tenants. Their policy is to give council tenants no alternative but to go on paying rent and to take away from them their right to buy their homes. I therefore ask the House to reject this motion and to support the amendment."we hope to be able to maintain activity on public housing construction and improvement at approximately the same level as this year."—[Official Report, 2 December 1981; Vol. 14, c. 238.]
The Labour Party is here to get a fair deal for tenants. No one else will do that for them—no other party, and certainly not the media. This is what Opposition Members should press this evening. The Minister has said that there is to be a £2·50 a week rent increase this year. My right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) said that this is more likely to be £3·20 a week, on top of the £5 in the last two years. This means an increase of £8·20 in three years. The Prime Minister tells us that her heart is bleeding for these people, the poorest one-third of the community, yet she and her Government do this to them.There are three reasons why Conservative Party leaders are hostile to council tenants. First, there is an ideological objection. They hate council tenants and council housing. Secondly, they want to make working-class people, who are the main occupants of council houses, pay for the economic crisis. Thirdly, there is a deliberate attempt to force tenants who do not want to buy to purchase their own houses. Their rents will be raised so high that they become as much as the purchase price of the house. Rates are also going up, thanks to the removal of grant by the Government. Rent and rates together account for huge arrears already. I wonder whether it is necessary for me to point out that this further increase will add to the arrears that local authorities, ratepayers and taxpayers have to face. By next year, subsidies will virtually have been ended. At the same time, there has been a huge increase in the subsidy to owner-occupiers. I shall not emphasise any division between the two sectors. Both are suffering from the high interest burden. I suggest, however, that it is grossly unfair to remove entirely the subsidy from the council tenant at the same time as the owner-occupier's subsidy is raised to £1,960 million this year. This issue should be tackled not by removing the subsidy from the owner-occupier, except for those who receive 60 per cent. grant in tax relief, but by increasing the subsidy to the council tenant. The Minister's excuse is that a percentage receive rent rebates. That is true. They are not, however, complete rent rebates. They are only partial. And what about the high percentage who receive no rebate at all? The Prime Minister said a fortnight ago that there was to be only a 1½ per cent. increase in the cost of living. I do not believe that. For hundreds of thousands or, indeed, millions of council tenants, their rent increase alone will be double the 1½ per cent. increase in the cost of living. At the same time, the hopes of people getting a council house are going down. In the last three years the number of council houses started has declined from 67,000 to 47,000 and to 27,000. God knows what it will be next year. What can tenants do about this? Their job is to explain to their neighbours—this is a job for tenants' associations as well as for Labour Members—that the blame lies entirely with the Government and not with the local authorities, which are being forced to play the Government's tune. The Minister has announced an average increase of £2·50 a week, although we know that it will be much more. The Government are increasing rents by that amount and at the same time removing subsidy to the extent of £600 million this year and £400 million next year. I have discussed this matter with people in Salford. I challenge the Minister, who has spoken so complacently this evening, to visit a large council estate in Salford, Manchester or any other city affected and put the case that he has stated this evening. He would get a very rough reception, and deservedly so. One engineering shop steward in Salford said to me:
Many people share that view, but not every tenant knows the facts. They receive the rent increase notice or the rate increase notice from the council. Much of the blame will consequently be placed on the council. When councils increase rents and rates it is essential that they make it clear to the tenants and the ratepayers where the responsibility lies for the increase in rent and rates. I recognise that people will say that one has to be careful about what is sent out from the town hall, or the district auditor will be on one's track. However, I have seen statements from Sheffield and other authorities that make it clear that the blame is the Government's. I hope that other councils will make that equally clear. Ten days ago 155 Labour Members signed an early-day motion putting the blame where it belongs, on the Government and urging a rent freeze. Hardly a newspaper in the country reported this. If it had been proposed by the Social Democrats the matter would have been front page headlines but because it was the Labour Party there was hardly a mention of it. There are 6 million council tenants. With their families they amount to about 18 million people, of whom about 12 million have votes. I warn the Minister that there is not a marginal constituency in the country which could riot get the Tory Members and Tory councillors out if the facts were made known. I hope that those tenants will send deputations to their Members of Parliament when they are next in the constituency. I hope, too, that they will use their tremendous electoral power at the May elections. Finally, I repeat that Labour's job is to protect tenants. No one else will do it, and I hope that this evening's debate and vote will be reported fully throughout Britain."The Tory bastards are raising rents again."
I wish to destroy some of the points made by the hon. Member for Salford, East (Mr. Allaun). He said that the Conservative Government hate council tenants. That is not the case. He said that we were forcing them to buy their houses. We are trying to give them the right to buy if they so wish. I support the amendment, and I wish to point out that we are giving council tenants and new town tenants not only the opportunity but the right to buy their homes, whatever the council says.
The Government are compelling councils to sell, even those councils which do not wish to sell and said so in their election manifesto.
That is correct. What better attitude can the Government adopt? We have given the tenants the right to buy.I deal next with the record of the Conservative Government from 1970 to 1974 and the Labour Government from 1974 to 1979. I wish to refer to the Department of the Environment's housing and constniction statistics. At page 148, in table 129, one sees that between 1970 and 1974 the Exchequer subsidy stayed at about 20 per cent. of the total income and expenditure on housing. However, from 1974 to 1979 under the Labour Government the percentage of Exchequer subsidy rose from about 20 per cent. to more than 40 per cent. In those five years wages more than doubled, but in money terms the subsidy went up five times. What did that do to the housing market? It created a tremendous imbalance between council house rents and private sector rents. That sector has dwindled during the past 20 years. It has caused a differential between council house rents and housing association rents. It is only now that council house rents have come more into line with those in the voluntary housing association sector. It also created a tremendous deficit on various housing revenue accounts. Uneconomic council rents led people to continue to live in rented council housing and destroyed the private housing market. The Government intend to correct those imbalances, so first we have housing association rents in line with council rents. The number of starts in the private housing sector is growing, although not quickly, while in the public sector there has been a fall.
The hon. Gentleman says "Of course", but if we start to balance the housing revenue accounts, and in some areas to create profits, that will mean that during the coming years it will be possible to build council houses. I do not wish to see another massive programme of rented council houses, but it will be possible to build them and for them to be economic in the rental that they attract. Surely Opposition Members would agree with that.The insinuation behind the motion is that the Government have doubled council house rents during the past two and a half years. I wish to compare that with coal prices. Some of my constituents have supplied me with coal prices month by month. It is frightening that in February 1979 two bags of coal cost £4·11, whereas now similar bags cost £8·30. There has been more than a doubling of the price. Allied with that we have the high wage demands and settlements in the coal industry. Now we have local authority workers, with a Labour Party casting vote, getting more than the Government can afford and more than the 4 per cent. that the Government hope will be the guideline. We have heard this evening that not all council house tenants are hit by a rent increase. The Chancellor of the Exchequer said on 2 December:
I do not believe that, in today's market, that is out of line with what should be the position. In the general election campaign the Conservative Party made it clear that we wished to bring back market forces in housing, that we wished to give people the opportunity to buy their homes. That was and still is electorally popular. We should witness the people who live in new towns and who, despite Labour councillors, wish to buy their houses. We are helping them to do that. If council house rents are in surplus, that will have the effect of bringing down rates. In today's market, the Government must do everything possible to support industry. Therefore, if there is a positive balance on the housing revenue account that will tend to bring down rate demands for industrialists and thereby create more jobs. What better future can we expect? I have full confidence that the Government are right to follow a market policy for council house rents. That is what people in Britain wish to see. They wish to pay a fair rent. In the past they have had heavily subsidised rents, at great cost to the Exchequer and the economy. We cannot go on living with that false sense of security. I wish to see council house rents increased regularly in line with earnings. That is the policy upon which the Government have embarked, and I support fully their activities."Almost half of council house tenants receive help with their rents from rebates or supplementary benefits … the average level of council house rents today represents no more than 7 per cent. of average earnings."—[Official Report, 2 December 1981; Vol. 14, c. 243.]
It is always tempting for opposition parties to oppose tough measures taken by those in power, especially when a significant issue such as council house rents is involved, because it affects many of our constituents. The Social Democratic Party accepts that it cannot insulate council tenants against price rises in society. Most council tenants to whom I have talked understand that council rents must move in line with prices generally.If it is wrong to try to isolate council tenants from the reality of price movements, it is just as wrong to single them out for a disproportionate share of hardship. The Minister has not grasped the point about the impact of the rises that the Government are now imposing, set against a background of growing unemployment and falling living standards. The Government's action is much too sudden and severe. In April 1980 the average council rent was £7·71. By April 1981 it had risen to £11·39—an increase of 48 per cent. The growth of average manual and non-manual earnings in that period was only 13 per cent. so people paying unrebated rent are very much worse off. The average rent in Greater London in April 1980 was £10·17. By April 1981 it had risen to £13·05. If we add £2·50—the right hon. Member for Manchester, Ardwick (Mr. Kaufman) reminds us that there may be an additional increase, but let us give the Government the benefit of the doubt—it produces a national average of £13·89, which is an increase of 22 per cent. In London it produces an average rent of £15·55 or a 19 per cent. increase. The most optimistic forecast of earnings increases over the next year could not be more than 10 per cent., so again tenants paying unrebated rent will suffer a severe cut in living standards. Other prices are also rising—national insurance contributions, the general rate fund contribution and heating costs, which are important factors for council tenants. As with the constituencies of other hon. Members representing inner urban areas, in my constituency there are many problems with condensation in council properties. Nine times out of ten I find that the problem is in bedrooms. Council tenants can no longer afford to heat more than one room—the living room. Black mould, fungus and other miserable evidence of condensation is found in bedrooms. When tenants complain to the local authority the housing officer comes round and advises them to switch on the heating and open the windows. One-parent families, elderly people and young couples on low incomes might as well be told to burn pound notes to keep warm, particularly with the expensive heating systems that many council tenants are locked into. The growing problem of rent arrears will further increase as a result of the rises. Many tenants have the choice of paying their rent or having adequate heating. With rising heating costs and rents, they cannot afford both. The Minister suggested that council rents were still well below private rents. The figures provided by the Association of Metropolitan Authorities suggest that nationally the current average fair rent is £12·90 a week. Fair rents operate over a two-year period and are phased in. As we know, the average council rent is £11·39, so it is £1·50 behind, but, if we add £2·50, it becomes £13·89, increased annually and not phased in. Council rents will then be ahead of the fair rent, which is not acceptable, especially when the Minister says that council rents should be realistic. I agree with the hon. Member for Salford, East (Mr. Allaun) that Ministers should come and see for themselves. They should forget the beautiful semi-detached houses with green grass in front at Tonbridge and Malling and look at council estates in inner urban areas, with vandalised lifts, graffiti and the air of destruction that permeates many of them. With delays in repairs and so on, tenants wonder whether anyone cares about them. If Ministers had a look, they would not then say "Hard luck, lads, but it is only another £2·50 a week." That is merely adding insult to injury. The Minister paid great attention to rebates, but they are not the answer to all the problems. If 40 per cent. of a gross rent rise will disappear in rebates, we should consider where we go from here. As the Minister said, 50 per cent. of local authority tenants are in receipt of either supplementary benefit or rent rebate. In some areas the percentage is a great deal higher. Knowsley says that 74 per cent. of its tenants are in receipt of housing assistance, and in Newcastle it is 65 per cent. In Greater London, between 1980 and 1981, we saw a massive rise in rent rebates. For example, in May 1980, 104,149 GLC and London borough tenants were receiving rebates. By April 1981 the number had increased to 139,731. That 34 per cent. rise in rent rebates alone in one year shows the scale of the problem. If we can say officially that 50 per cent. of tenants cannot afford to pay their rent, there must be something wrong with the level of rents. With growing unemployment and still higher rents, many more tenants will be forced to seek means-tested help. The Minister will accept that there is a problem with take-up. Not every tenant knows what he is entitled to; nor can he fill in the forms or go through the administrative process. There are short-term problems, too. People who are sick for a few weeks or are unemployed for a month do not qualify for rent rebate. There are administrative delays in local authorities. No one is a more powerful champion of local government than I am, but I have to accept that there are delays in calculating rebates and changes in rebates. It is a mistake to suggest that rebates are the answer to all the problems, particularly when we know that more staff will be involved in administering the operation, at a time when local authorities are being urged to reduce staffing levels. I am old-fashioned enough to believe that fixing rents is a matter for local authorities. I vividly remember the right hon. Member for Bermondsey (Mr. Mellish) advising many of us in London in the late 1960s not to urge the then Labour Government to interfere to pre vent the Conservative-controlled GLC raising rents. He said that if a Labour Government stopped Conservative councils raising rents, the logical result would be that Conservative Governments would increase rents. He said that once Governments started interfering we would never get their sticky fingers off the issue of rent fixing. That is a lesson that some of us should have learnt. The fixing of rents should be considered in the light of local circumstances. I agree with the right hon. Member for Ardwick about surpluses on housing revenue accounts. Virtually all the shire districts and half the metropolitan districts are now approaching surplus, and I am informed that even two London boroughs will be moving into surplus as a result of the current increases. Why should those authorities, which receive no Government subsidy and may lose out on rate support grant, need to increase rents? One is forced to the view that surpluses that are contributed to by council tenants will be used to offset the general level of rates in those areas. Given that there is considerable evidence that the average council tenant is less well off than the average owner-occupier—I accept that there are variations to that—we have a Robin Hood in reverse position if council tenants are to subsidise owner-occupiers and other general ratepayers. I accept what the Minister said about the impact on capital. I understand that if we are to contribute more in subsidies to those who are already housed, fewer resources will be available for those who are not housed. We must always bear in mind the needs of those who do not have homes. There must be a limit to what we can reasonably expect council tenants to contribute. My colleagues and I in the SDP take the view that the Government have gone well beyond a reasonable limit over the last two years. Therefore, we shall vote against the Government's increases.
It behoves the House to discuss rents arid council housing because it is an important subject. The hon. Member for Salford, East (Mr. Allaun) spoke about the many people involved. We must realise that our rent structure is in a mess. The Rent Acts give a false impression of rents in the private sector, and the public sector is highly subsidised. The whole issue is confused and it is difficult for the citizen in he private rented sector when he compares his lot with the lot of those in the public sector.The previous Labour Government produced a document about the Rent Acts with an all-yellow cover. Whether that was symbolic or not, I am not sure, but they ran away. It was a worthwhile document on the rented sector, both private and public. We must look at the problem as a whole—as a problem of housing and housing needs. The question of rebates is vital. A tenant in work with a wife and two children, paying rent of £11·30 a week, with earnings of £80 a week now receives a rent rebate of £7·04 a week. He is therefore paying a rent of £4·26 a week. That is not an unreasonable sum for a man earning £80 a week. I am not trying to attack him; I am trying impartially to consider rents, rates and accommodation. The hon. Member for Salford, East says that the Conservative Party is attacking council tenants. I have never heard such rubbish in my life. There are many good council tenants who feel that they should pay their corner the same as everyone else. They are delighted to be in their accommodation and they feel that they should pay their corner. One should not infer that all council tenants feel that they should be subsidised.
The hon. Member for Woolwich, East (Mr. Cartwright) said that he thought that council tenants should pay increased rents to help industrialists. That would mean that they would pay more than their fair share and subsidises those who are in a much better position.
I shall not become involved in an argument about whether council tenants are subsidising industrialists. That is not the point at issue. We are discussing the management of housing in our society, be it in the public or private sectors.The rebate system which was set up by the Labour Party has been extended and about 50 per cent. of council rents are rebated. Council tenants are assisted either by the DHSS or by rent rebates. That is a good thing and I do not attack it. It is right and proper that certain individuals should be subsidised. However, we must understand the position of widows or young married couples who are struggling because of the limited availability of accommodation and who take private rented accommodation because that is what they want. They see tenants with large incomes occupying council houses. I am not attacking council tenants with good incomes, but when widows and young married couples know that large incomes are going into council houses they feel that those tenants should make due payments in rents for the value of the properties. There is nothing wrong with that view. It seems to be the basis for a just society. We are discussing those at the top end of earnings. We are not discussing those at the lower end of earnings who are receiving subsidy either from the DHSS or from rent rebates. If it were felt that council housing should be provided only for those in greatest need, would we march people out of their homes? Will the Labour Party say to a council tenant "You cannot stay in your house because you now have a top-line job"?
No, I shall not give way; I wish to complete my argument.It seems perfectly reasonable to charge an economic rent to those who can afford it and to provide subsidies for those in need. My right hon. Friend the Member for Worcester (Mr. Walker), who is now the Minister for Agriculture, Fisheries and Food, produced an excellent Act when the previous Conservative Government were in office. It moved the subsidy away from the property to the individual. It was the fair rents Act. Unfortunately, the previous Labour Government abolished that Act as soon as they came into office. The Act attempted to deal with the problem of housing subsidy and moved that subsidy from the property to the individual. I supported that move. It was a tragedy that the Labour Government did not allow that imaginative Act to remain on the statute book. It is a tragedy that it was not followed through. The Conservative Party is in favour of the right to buy. That seems to be a crime in the eyes of Opposition Members. What is the matter with someone wishing to buy his own home? It is wrong that local authorities stop people from buying their own properties.
If the hon. Gentleman is in favour of the right to buy, is he prepared to extend that right to tenants of private landlords? Should we not treat people equally and even-handedly?
That sounds very exciting, but you and I contribute to public housing. It is not privately-owned property. It is owned by the community. It is paid for by your tax and mine. My decision is, therefore, to allow people the opportunity to buy it.
No, I shall not give way. You made a point——
Order. It should be "the hon. Gentleman".
I am sorry, Mr. Deputy Speaker. The hon. Gentleman made his point and I am now trying to answer it. In one case, an individual has put his savings or whatever it may be into buying the property. In the other case, the community has bought the property. That is the important difference.
I am most obliged to the hon. Gentleman for giving way. I wish to put two points to him.First, the private landlord in many cases purchased the property by means of a mortgage, thus receiving tax relief at the expense of the taxpayer. Secondly, as the hon. Gentleman rightly says, public money has been invested in council housing. Why should we then sell public assets at a 50 per cent. discount? Is that not stupidity?
Of course it is not, because the public asset belongs to the community. You do not own the community.
Order. I am listening with great care. I think that it might be better if the hon. Member slipped back into the third person.
I am sorry, Mr. Deputy Speaker. I do not own that property. Nor does the hon. Gentleman. Is that better? We must get the argument into balance. We seem to become confused in dealing with the right to buy.The question of surpluses on housing accounts was also raised. I am not one who believes that we should put surpluses towards the general rate fund. I have reservations about that. I believe that that money should be used to do up the houses. It is important to keep our housing stock in good condition. Far too much council housing is in a bad state. The surpluses should be used directly for the benefit of the generality of council tenants by doing up the housing stock. It has been said that 1 per cent. of council housing stock is unoccupied. This is partly due to maladministration, but it is largely because it has not been done up and is in bad condition. We should press the Government to persuade local authorities to use their housing surpluses to do up their stock, thus bringing more housing into circulation and more benefit to those on the housing list. I agree with the hon. Member for Woolwich, East (Mr. Cartwright) about the general management of council housing. Local authorities must consider whether they are really up to managing council housing. I ask that question in all sincerity. I am not sure that the job is not too big for them. They are very good with housing lists. The points system to determine who goes first and so forth is not bad. I do not deny that. In the actual management of housing estates, however, we have all heard about loos which have not been mended for weeks and problems of damp. The latter is generally known as "condensation". I battled for several years over the problems of a block in my constituency—I give the hon. Member for Swindon (Mr. Stoddart) credit for putting me right about who built it—because the council said that the problem was condensation. It was not until we brought in a surveyor that we found that there was a hole in the roof and the place was actually damp. I am no surveyor, but it was clear to me from the outset that it was damp. The House must take on board this problem of housing management. It is perhaps not a job for local authorities. I should like the whole function to be shifted gradually to the housing association movement, as in my experience it is better at management and I feel strongly about this problem. To me, the Government's proposals are not unreasonable. We are suggesting that those with higher earnings should pay a market rent for their property. That does not seem to be unreasonable, as long as we have, as we shall, the safeguard at the poorer end in the sense that those on lower incomes should get subsidy and rent rebate. We are moving, consciously or unconsciously, in the right direction, where subsidy goes to the individual rather than to the property in which he is living. That is the way all subsidies and all help in our society should go, in housing as in anything else.
The hon. Member for Reading, North (Mr. Durant) referred to council tenants paying the market rent. He has demonstrated how far the Tory Government would like to go in achieving a position where those who are not in receipt of rebate are paying the full market rent, or somewhere near it.There are few hon. Members who have not been assisted by tax relief in buying their property. Those of us who are in receipt of mortgage tax relief are subsidised. It is not right to say that it is unfair and unjust that council tenants should also be subsidised. The two groups are assisted—rightly so—and there is no reason why it should be otherwise. Today's debate is appropriate. Council tenants have been penalised and punished under the Government, and the latest proposed increase will mean that council rents will have risen during the three years of the present Administration by almost 125 per cent. That is why we say that council tenants are being penalised. There are three reasons for the massive rent increases. One is clearly to reduce the subsidy for local authority housing. There is no dispute about that and it is part and parcel of the Government's policy to reduce the amount of subsidy going from central to local government. Secondly, it is to encourage tenants to buy. If rents are constantly rising year by year, tenants will think that if they have to pay the same as they would if they bought they might as well buy. Thirdly, the increases are to justify the equally large rent increases in the private sector. The sheer hypocrisy of the increases can be illustrated. The Prime Minister, the Chancellor of the Exchequer and other members of the Cabinet constantly tell working people that the normal wage increase should be 4 per cent. In the British Leyland and other disputes the point is constantly made that anyone who wants more than a 4 per cent. wage increase is being unpatriotic and doing a disservice to the country. If people accept less than 4 per cent., the Prime Minister and the Chancellor are happy. If it is right, as the Government claim, that in the prevailing economic difficulties 4 per cent. should be the limit for wages increases, why should rents go up by at least 22 per cent. in the next financial year? What possible justification is there for the difference between the wage increase of 4 per cent. and the 22 per cent. minimum rent increase being imposed by the Government? What is more, we have read press reports that the Treasury wanted an even larger sum. It was not satisfied with the £2·50 increase. It wanted £3·50 or £4. Reference is constantly made to tenants who receive rebates. Many of them will be paying increases in rent. What about the 50 per cent. or more of council tenants who will be receiving no rebate and who will be paying rent increases? The Chancellor of the Exchequer refers to average incomes and says that council tenants will pay no more than 7 per cent. of average earnings, but all the surveys show that local authority tenants receive lower than average incomes. That is all the more reason why we should be greatly concerned about the rent increases that we are debating tonight, and the rent increases that have already occurred. If the Government were to say that, although the increases are taking place, they are doing what they can to encourage house building in the public sector, that might be regarded as some justification—although I would not agree with it—for rent increases, but house building in the public sector is the lowest since the 1920s. All over the country thousands of people are desperately waiting for accommodation, and because of Government policy they will have to wait much longer. Indeed, council house building is such a unique event these days that if one comes across it one tends to look twice. In my own local authority, in Walsall, the number of starts this year is 44, and most of it is sheltered housing. I doubt whether any Labour or Conservative Members could quote higher figures in their areas. The construction of council dwellings is virtually coming to a stop all over the country, so it cannot be argued that rent increases are necessary because of council house building. It is true that council tenants may well blame the council and not the Government for the rent increases. That is all the more reason why Labour councils should, at every opportunity, quote what the Minister has said today or what the Secretary of State has said on other occasions, to show that the responsibility for the rent increases rests with the Government. The usual reply to parliamentary questions about rent increases is that the Secretary of State is not responsible, but it is clear that the level of rent increases in the last two years has to a very large extent been determined by the Government, and as long as the Conservative Government remain in office that will be the position. Two or three weeks ago there was a fairly large lobby of council tenants. They came to the House to protest against the rent increases that had taken place, and against the increases proposed from next April. I told the people to whom I spoke that if there had been stronger pressure in the last 12 or 18 months by the tenants who are so bitterly resentful of the increases the Government might have hesitated before imposing any further increase. My advice to council tenants is that they should be prepared to organise and to demonstrate their anger in a positive way. I also reminded the tenants taking part in the lobby that the rent control and rent regulations that arose in the First World War were the direct result of protest and strikes. I think that they took the point. Council tenants have had enough of massive rent increases. The Government have shown a completely insensitive attitude to the manner in which council tenants are being penalised. The best thing that council tenants can now do is to organise their protest in the most effective way. In my own borough, some tenants have refused to pay the rent increase. That may be right or it may be wrong. The Minister is aware that tenants have decided that, although they will pay the ordinary rent, they will not pay the last rent increase. There have been many examples of rent arrears in my borough, as there have been in the constituencies of many hon. Members. When tenants rightly feel resentful of what the Government are doing, it is up to them to organise themselves, so that next year the Government will not come to the House and say that tenants are to pay yet another increase of £2·50 or £3 a week.
I have been listening to the debate. One matter which concerns me most is the Government's failure to make absolutely clear what their policy is on the level of rent increase that they are to impose on council tenants. Their failure to do so is causing great confusion among local authorities, the local authority associations, and tenants. Local councils have to plan their budgets, so they should know just what they are planning for and they should be given time to make their plans. The Government are delaying their announcements and negotiations so much that councils and borough treasurers are put in an impossible position.Council tenants have enough financial burdens to bear already and many of them are worried stiff because they hear all sorts of figures for what exactly the rent increases will be. Will the weekly rent increase be £2·50, £3·20, £4 or £5? They do not know because the Government are shilly-shallying around about the whole matter because the Cabinet is apparently split between wets and dries, and between those who want to clobber council tenants and those who have a little sympathy for them. I implore the Government to make up their mind and tell us the bad news as soon as they can so that local authorities know exactly where they stand. I have had something to do with local authorities. I was once the chairman of a housing committee. On many occasions, I had the onerous job of examining the rent account and making adjustments to rents. However, I have always believed that it is the duty of a local authority to fix rents in accordance with the circumstances and the finances available through subsidies and rents. I always found that the major reason for having to increase rents was interest charges, and but for the enormous increases in interest charges over a long time rents would not be nearly so high; nor would they have to be increased by so much and so often. We should get into our heads the fact that both council tenants and owner-occupiers pay a huge amount of their rents and repayments to the financiers, who never lay a brick, put on a roof, put in a bathroom or do anything else. The truth is that council tenants, as well as owner-occupiers, pay huge sums to the moneylenders, who may be in this country or abroad. Ordinary people—most of whom want only a roof over their heads—are forced to pay an exorbitant amount out of their weekly or monthly incomes solely and simply to provide lush pastures and lush living for those who contribute nothing to the building and provision of their homes. One of the best things we can do for council tenants and owner-occupiers is to make a real bid to bring interest rates down to a realistic level.
I am following the hon. Gentleman's argument. From where does he think that the so-called financiers, or bankers—or whatever other term he cares to use—get the money that they use? Does it not come from ordinary people's insurance policies, savings, investments, and so on? Does not the money come from the investments of ordinary people?
A good deal of it is made from underpaying for the labour of others and then expecting a big interest charge and a great profit on doing so. Some people use the system and believe that money is an end in itself. One of the great problems in Britain is that money makes money, rather than production, be it production of houses, cars or anything else. That is why Britain is in its present desperate financial situation. That is being worsened daily by the present predatory Government.I have heard some average rents being quoted. I think that the Minister for Housing and Construction mentioned 7 per cent. of average earnings. Perhaps it was 8 per cent.
I did not use the figure of 7 per cent.
I thought that I heard the Minister mention 7 per cent. I apologise to him. Someone said that it was 7 per cent.
I think that it was the Chancellor of the Exchequer.
Perhaps it was the Secretary of State. We could have no greater authority than the Secretary of State.I find it very difficult to understand where the 7 per cent. figure comes from. Average earnings in my constituency are probably below those for the rest of the country. I could not be sure about that, but they certainly would not be above the national average. Tenants of council houses in my area are paying between £18 and £22 a week in rent. I am not all that good at arithmetic, but I make that more like 14 per cent. or 15 per cent. of income, rather than 7 per cent. People in Swindon, anyway, are being hit very hard by the high rents that they are paying. Such rents have been imposed mainly by the present Government. That is why the people of Swindon are always urging me to get the present Government out of office at the earliest possible moment.
I apologise for intervening when I have only just entered the Chamber. However, how many council tenants in Swindon are actually paying the nominal rent, and how many are in receipt of rent rebate or, in the private sector, rent allowance?
I would imagine that it is probably about the average. The Minister has already mentioned that figure. I have said that I believe that the task of fixing rents is best left to local authorities, which can do it on the basis of local circumstances. As it happens, if we were not charging so much rent, it would not be necessary for us to pay so many rebates. That stands to reason. I should have thought that it was self-evident. The hon. Member for Huntingdonshire (Mr. Major) does not appear to think so.Most council tenants would prefer to pay the going rate if that was a reasonable rent, rather than to be recipients of what they see as a State handout, and what is often represented to them by some people as a State handout.
It would be quite unjust to accuse the Secretary of State of making a statement which he did not make. I misled my hon. Friend. It was the Chancellor, when making his statement, who said that the rent increases would be only 7 per cent. of average earnings—not that that has been repudiated by the Secretary of State.
If that figure has come from the deputy boss, it must be authentic. However, people in Swindon simply do not understand the 7 per cent. figure and following the debate I shall receive many letters from my constituents saying "What on earth are these people talking about? We know that we pay considerably more as a percentage of our income on rents than the Government claim."Other hon. Members want to contribute, but I shall say a final word about the level of rents, which has already been touched on by my hon. Friend the Member for Walsall, North (Mr. Winnick), and about the Government's policy towards rents and incomes. I simply do not know how on earth the Government can expect to impose on my and other hon. Members' constituents a 4 per cent. increase in wages or salaries and expect them to pay swingeing increases in rent. By imposing the swingeing rent increases, the Government are putting up inflation, which they say they want to cut. By that policy and others, they are imposing pressure on unions and wage earners to press for more money so that they can pay the additional charges for rents and rates. Let us make no mistake: the Government are putting the rates up and not the Labour local authorities.
That is absolute rubbish.
The Government have just cut the percentage of rate support grant from 59·1 to 56 and, therefore, they immediately imposed an across-the-board increase of 3 per cent. or 4 per cent. on all ratepayers. The Government are imposing not only rent but rate increases. By that means, they are stoking up inflation and, at the same time, expecting trade unions and working people to hold their wage demands to 4 per cent.—thus ensuring a swingeing cut in their standard of living.That policy simply cannot be made to stick and I urge the Government, even at this stage, to examine more thoroughly what they are doing to rents because they will find that, far from assisting their own position, they are worsening and exacerbating it, and causing hardship to many people.
I am a little puzzled at the glibness with which the Minister admits that, even though we shall have rent increases, 50 per cent. of those affected will not have to pay the increases because they will be paid in subsidies.My borough of Croydon has 22,000 tenants and the borough's estimates show that 7,000 will be on supplementary benefit and a further 4,130 will be receiving assistance through rebates. We should note the point made by my hon. Friend the Member for Woolwich, East (Mr. Cartwright). It seems a monumental folly to increase rents when half of them will be paid through the public purse. My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) has drawn my attention to the effects of the national regional rent facing councils which do not make a policy of increasing rents to a level that is not justified by costs. In many cases, councils have been required to increase rents beyond the level required to keep their accounts in balance. That seems to be a unique and monumental folly, because before real rent levels can be arrived at the whole rental system needs a thorough reappraisal. We have heard tonight about gross family incomes. I suggest to Conservative Members that many of those incomes are ephemeral. Parents of teenage children know that their children will live with them for a few years and that, if and when they are earning, they will contribute to the gross family income. When the children leave to marry or set up home on their own, the family income will diminish rapidly. What will the parents, left with a considerably diminished gross income, do with a rent that is based on an income that lasted for only four or five years?
Many of the teenage children will not get jobs anyway.
That is true, but I am talking more of a society that Conservative Members would like us to believe exists than of the one that actually exists. We need a thorough reappraisal of the rental system and subsidies, not just for council and private tenants, but, in certain respects, for those with mortgages.Liberals regard housing credits as a key part of proposals that would replace the present chaotic system of subsidies, rebates and means tests. The total of each person's credit would be assessed according to his or her various needs and where credits exceeded tax liability they would be paid in cash. For example, each householder paying rent to a landlord for his or her main residence would get a rent credit equal to the rent of the property let unfurnished, up to a certain ceiling. The Government intend to increase rents, to save face in many cases, to increase the general rate profit and to subsidise many ratepayers who could afford not to be subsidised. We shall pay for those increases out of the public purse, because, as the Minister admitted, 50 per cent. of those who will face rent increases will have them paid from the public purse. That is a monumental folly and that is why the Liberals will vote for the motion.
I apologise to the House and particularly to the right hon. Member for Manchester, Ardwick (Mr. Kaufman) for my absence during the earlier part of the debate. I hope that the House will accept that my previous contributions to housing debates show that I am not a conscript but a volunteer, and my absence was unavoidable.I promise to be brief, because the hon. Member for Bootle (Mr. Roberts) has been waiting for some time and I have no intention of denying the House the opportunity of listening to what he has to say.
I propose to attack the SDP.
The hon. Gentleman offers an alluring prospect when he says that. I am not sure how one can attack a policy that does not exist, but I shall speak only briefly so that the hon. Gentleman may have the opportunity to do so.Like the hon.Member for Swindon (Mr. Stoddart), I have had responsibility for both determining council rents and explaining to council tenants why it has been necessary to increase their rents. I agree with the hon. Gentleman that it is a painful business. There is no immediate advantage to anyone, in terms of political popularity, in instinctively raising rents for an ideological reason. The hon. Member for Sheffield, Heeley (Mr. Hooley) laughs. If he thinks that anyone wins votes by raising council house rents, I should be obliged if he would tell me who he has in mind. If the policy is followed through, there must be a rationale behind it and I believe that there is. The motion blandly states:
In isolation, that may seem attractive to hon. Members who wish to curry favour with council house tenants and to make a point against the Government, but if they were concerned about the needs and problems of housing over the past decade they would be better employed in condemning previous Governments and local authorities for their policy of deliberately maintaining rents at a low level, notwithstanding the rate-borne contributions which that required. It has been my experience in inner London and from observation elsewhere that the almost inevitable corollary of a low rent policy is poor maintenance and a system of council house habitation that is not acceptable to many of the tenants who suffer it. That is the reality that substantially divides the parties. The Labour Party sees a considerable advantage—more political, I suspect, than housing policy advantage—in sustaining a general and wide-ranging policy of low council house rents. I have never understood the logic of sustaining a significant differential between a house of a particular calibre owned by a local authority and a house of similar calibre owned by a private landlord. However, over the years that differential has opened up, and the net loss of rent income to the local authority has been met by ratepayers and taxpayers in terms of the taxpayers' contribution to the rate support grant. One of the certain and inevitable results of that differential has been that in almost every great city there has been an accelerated demand for local authority housing—accelerated because of the artificially low rentals—and the acceptance by tenants of standards and conditions of tenure within local authority housing that are substantially lower than they would or should be prepared to accept, and which are tolerable only because of the low rentals. In my view, that provides a vast distinction between the private and the public sectors, and between the home owner and the council tenant. It is an artificial distinction, and the sooner it is removed from the landscape of our political affairs the better. The raising of rents is an emotive matter. I understand the emotion that it raises at a time when there is, not a statutory, but certainly an implied intent by the Government to restrict wage increases to a nominal sum. Clearly, there is considerable resistance when the fixed expenditure of a family rises by more than a similar percentage. I have lived too long in places such as Brixton and inner London not to understand the resistance that follows from that. In housing, emotion often dominates the argument at the expense of logic. The logic of what needs to be done in housing is a matter of prime concern. I understand the difficulties. No one who has been involved in housing for years could doubt them. However, if we are to find a medium-term solution that will remove many of the artificial divisions between the parties from the cockpit of party political dogma, then we must aim at what is surely a desirable policy—a higher standard of housing and, for those who can afford to pay, a higher rental to meet the costs of that higher standard of housing. That is how I view the policy that the Government are now pursuing. Those who are able to pay should be prepared to pay an increase in rental, just as people in work should be prepared to pay a higher national insurance payment to assist those who are not in work and those who are in receipt of retirement pensions. There is no difference in logic there. When it comes to people who cannot pay, we should bear in mind that the purpose of the rent allowance system in the private sector and the rent rebate system in the public sector is to alleviate the most painful effects of lifting rentals from an artificially low level to a level that in logic and equity is acceptable to most people who view housing in a dispassionate manner. The new Social Security and Housing Benefits Bill, now being steered through its Committee stage by my hon. Friend the Under-Secretary of State for the Environment, introduces a beast that we should have seen on the housing scene many years ago—a unified housing benefit that will provide a system in which many low-paid people will receive no rental or rate charge whatever. One must bear in mind the reality of what is happening. People who are able to pay will be required to pay, and people who are unable to pay will continue to receive rebates or allowances according to the nature of their tenure. Then one can view the Government's policy in a more equitable light. Let us consider the practical example of a married tenant with a wife who does not work, two children and an income of £80 a week—not a vast sum by today's standards but not an insignificant sum. His rent might be fixed at £11·30. On his income he would pay only £4·26 a week. That does not seem to be artificially high. I am sure that even the right hon. Member for Ardwick will concede that. For years I have lived in areas with bad housing. I have lived adjacent to and in bad housing. I share with Labour Members the belief that the responsibility of housing authorities, the Government and the private sector is to clear away as fast as possible the slum dwellings in which so many of our citizens have lived for generations. However, I do not believe that we can sweep away those conditions when we artificially create a system that, for political or other reasons, sustains a substantial minority of the nation in houses for which artificially low rents are paid at the expense of other sections of the community. When we remove these anomalies, we shall be in a better position to direct the nation's resources to the solution of our housing problem—which we all recognise—which all hon. Members wish to see cured as soon as possible. I understand the pain and concern of many people who will have to pay higher rents in the coming year. I beg people to realise that those in genuine need will not pay increased sums. People who pay them, because they can afford to do so, will play their part in creating the pool of resources that will enable us to deal with our housing problems.That this House condemns Her Majesty's Government for more than doubling council house rents since coming to power.
The hon. Member for Huntingdonshire (Mr. Major) must have learnt his housing policies in the fun house of Blackpool if he believes that demand for council housing is the result of low rents. He obviously misunderstands the growing waiting lists, the clamour of the homeless ——
I must correct the first of the hon. Gentleman's misconceptions. I learnt my housing policies in the far-from-fun house of Lambeth. There are problems there. I lived in Lanbeth for 15 years in various properties, not all of which were salubrious, and I chaired the Lambeth housing committee for some years. I know the problems.
That lends more weight to my argument. Anybody who has witnessed inner city problems and claims that the growing waiting lists and the demands of the homeless knocking on the doors of local authorities have anything to do with low-rent policies is living in cloud-cuckoo-land. The hon. Gentleman must not try to justify swingeing rent increases and dramatic reductions in subsidy by such tautology.Let us examine the figures. The Government are cutting dramatically subsidies to local authority housing. In 1979–80, at 1980 survey prices, £1,274 million was paid by the Government to local authority housing revenue accounts to subsidise council housing. The 1981–82 figure has been reduced dramatically to £665 million. That is a dramatic cut. Part of Government policy is to cut public expenditure in areas where it hurts most. More than 75 per cent. of the cuts in public expenditure have been in housing. That has hit new building and slum clearance, over which the hon. Member for Huntingdonshire shed crocodile tears. The cuts have hit local authority home loans, improvement schemes and every aspect of housing policy. There was an argument in the Labour Party before the last election. Some people argued that we should cut subsidies for council housing and switch resources from subsidies, which keep rents low—or lower than they are now—to funds for housing capital expenditure and to build more houses or to improve older properties. That argument no longer exists. The Government dramatically cut subsidies and increased rents in many areas so that local authorities could begin to make a profit out of their council tenants, but at the same time they dramatically reduced the amount of money available for capital building, council house building and the improvement of older properties—so that argument does not hold water. Conservative Members appear to ignore the fact that other sections of society are subsidised. Owner-occupiers are subsidised, and increasingly so, by income tax relief on their mortgage interest. I can give the comparable figure. I have already said that in 1981–82 a mere £665 million, at 1980 survey prices, will be paid in subsidies to local authority council tenants, but £1,285 million will be paid in tax relief on mortgage interest to owner-occupiers. I do not suggest that owner-occupiers should be penalised or that that figure should be reduced. However, that money could be distributed more equitably, because the method used to subsidise owner-occupiers is based on the principle that the richer one is the more help one needs with housing, and the bigger the mortgages and the more tax one pays, the bigger the tax relief that one should get. If there is nothing wrong with giving such subsidies to owner-occupiers, why should it be wrong to give subsidies to council house tenants to help them with their housing costs? As many of my hon. Friends pointed out, the lower income groups live in council housing rather than as owner-occupiers. It is sheer hypocrisy to suggest, as Conservative Members do, that there is nothing wrong with swingeing rent increases because the vast majority of council tenants, or more than 50 per cent. of them, are entitled to rent and rate rebates. The more that rents rise the more people will fall into the poverty trap and the more they will have to fill in forms to seek assistance with their rents from the DHSS or local authority housing departments. That is clear evidence that the rent increases proposed by the Government are not justified. Many people in receipt of rent rebates or supplementary payments to help with their rents are elderly. I advocate—it is a personal view and not Labour Party policy—that if we want equity between council tenants and owner-occupiers we would be justified in having rent-free council houses for people of retirement age, or for people who have lived for, say, 20 years or mote in a council house. That would put them on the same basis as owner-occupiers who, having received subsidies for 25, 30 or 40 years to help them buy their houses, now own them and live rent-free. That principle could be applied to the public sector so that council tenants would enjoy rent-free accommodation. Such a policy would destroy the main argument in support of the sale of council houses—that council tenants want to obtain the advantages of owner-occupation. The Labour Party should consider my proposal. One of the arguments put forward by Conservative Members is that subsidies should go to the individual and not to the construction of houses. We have heard talk of an economic rent and a market rent. I do not believe that subsidies in housing should go to the individual. There was nothing wrong with the subsidy system that existed before the Secretary of State repealed it. Under that system about 66 per cent. of the cost of building local authority houses or improving older houses was paid in subsidy by the Government. Of course, the system was a little more complicated than that, because of historical calculations. However, if a local authority had a major housing problem and built many new houses, or improved older houses, 66 per cent. of its capital expenditure was provided by subsidy. That was a sensible system. Charging an economic or market rent for a council house penalises people who cannot afford to pay. Those affected have to apply for a rebate and go through the means test. That is the wrong way to deal with the matter. In the owner-occupied sector, individuals—some of whom are well off—are subsidised. That is not necessarily a subsidy for the provision of new houses, because three out of every four mortgages relate to the purchase of existing houses which have increased in price because of market forces. That does not encourage the production of new houses or the improvement of older houses. There was nothing wrong with the previous system of subsidies related to the provision of new houses and the improvement of older houses, rather than to the individuals who lived in them.
I am painfully aware of the points made by my hon. Friend. Houses built before the turn of the century are in a thoroughly decrepit state. They are often lived in by elderly and sick people. The houses are often affected by intense damp. My hon. Friend was right to say that to increase the rent of those houses would be an intolerable imposition. I fully support his observations.
I am grateful to my hon. Friend for that intervention.Conservative Members do not distinguish between an economic rent and a market rent. The economic rent for many thousands of houses is far less than that paid by many tenants. Houses built pre-war or immediately post-war cost about £400 or £500 each. The outstanding debt charges on them are negligible, as is the cost of maintenance and management. Therefore, the houses cost the local authority far less than it receives in rent. In general, rents increase to keep pace with inflation, even for older houses. Rent income from older houses is put into the housing revenue account to subsidise the building of new council houses. The vast majority of council tenants who face the £2·50 a week rent increase imposed by the Government will already be paying a rent in excess of the cost of the house to the local authority. One of the advantages of the pooled rent system is that money from the older houses is used to help subsidise the building of new houses. It is wrong to penalise those who have lived in their homes and paid rent for 30, 40 or even 50 years. Indeed, Conservative members use that argument to justify their right-to-buy legislation. The tenants feel that they have already bought their houses through the rent that they have paid. Conservative Members have made a bold attempt to justify the massive rent increases that have been dictated by the Chancellor of the Exchequer, simply to cut public expenditure because of the Government's doctrinaire monetarist policies. That attempt will rebound throughout the country on council estates in such places as Merseyside, Manchester and even the more prosperous South. People will realise that the Government, not the local authorities, are raising council rents. They will protest through the ballot box. I am sorry that the hon. Member for Woolwich, East (Mr. Cartwright) has fallen into such bad company. I extend my commiserations, too, to the hon. Member for Croydon, North-West (Mr. Pitt), the new recruit, who, I am told, is on the left of the Liberal Party. Both are voting with the Opposition tonight against rent increases and against policies that Liberals in Liverpool and elsewhere are implementing.
If I were asked to set the highest social priority for this country, I would make it housing. Housing underpins education and health. Bad housing undermines both. Housing is a fundamental social need. Its social implications should have priority over all economic calculations.The Government have brought a trail of devastation through every aspect of housing policy. House building in both the private and public sectors has collapsed. The rate of improvements has gone down. Even so modest an objective as housing insulation has been attacked, and mortgage rates are at a record level. Now comes an attack on finances designed not to enable the housing revenue account to break even but to create a surplus to finance other expenditure. This is the most absurd approach to housing ever seen in this country. An increase in the level of rents will prove damaging to the standard of living of the average worker. It will also run counter to the Government's economic policies. The average worker next year will face greater insecurity because of rising unemployment. He will have to face heavier charges for national insurance and also for rates as the central Government contribution is cut, an inflation rate of 11 per cent. or 12 per cent.—the forecast of most serious economic commentators—and on top of all that a £2 or £2·50 increase in rent. In the face of those increases, the Government tell the trade unions and organised workers that they must be content with a 4 per cent. average increase in wages. The consequences of the Government's action will be to aggravate inflation and wage demands, increase industrial unrest and cause general damage to the industrial and social economy of the nation. This is an absolutely mad policy. It makes no sense in terms of social priority or in terms of economic priority. It is a policy that the Opposition are justfied in condemning. I shall certainly vote against this policy with the greatest pleasure.
This has been a brief debate on a very important subject. Under this Government and as a direct result of their policies, council tenants now face another round of massive rent increases. Those increases mean that council house rents will have more than doubled under and because of this Government. The increases are unjustified and unnecessary. They will cause a great deal of hardship to many families.We have become accustomed to general attacks from the Government on public sector housing. Over the past few years, there have been massive cuts in the housing investment programme of local authorities. On the direct instruction of the Secretary of State, local councils have had to stop virtually all new council building. Again, on the direct instruction of the Secretary of State, local authorities have been forced to sell council houses—in many cases, their best properties. If the Secretary of State has his way, we shall see, for the first time ever, a decline in the number of council properties as the Government force more sales and refuse to allow councils to build to compensate. We are used to a tax on council housing by a Conservative Government, but we are now seeing a further and, even in the Government's terms, unnecessary attack on council house tenants. We are seeing another round of massive rent increases, which are wrong not only because tenants cannot afford them but because many—eventually all—local authorities will be forced by the Government to make a profit out of their council house tenants. The increase being imposed on local authority tenants is £2·50. My right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) estimated that when the increase finally comes into operation a more likely figure will be £3·20. The Minister did not take the opportunity to correct or challenge that figure. We must assume that my right hon. Friend's calculations are correct and that council house tenants will face such an increase. If that is the case, council house rents will have increased by 128 per cent. since the Government took office. The increase this year is 28 per cent. on top of last year's 48 per cent. increase. Yet, as my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) said, the Government are asking workers to accept wage increases of only 4 per cent. If rents were going up by 4 per cent., that would be an increase of 46p instead of the massive £3.20 that the Government are proposing. The Government are fuelling inflation and hitting the worst off. They are not considering what tenants will receive for that increased rent. Will they get a better service, more improvements, more modernisation or quicker repairs? The hon. Member for Huntingdonshire (Mr. Major) mentioned the need for quicker repairs. I am sure that every hon. Member has a similar constituency experience, but under the Government there will be no improvement in the service to council house tenants. Quite the reverse, because the Government's pressure on local authorities is such that the giving is all one way—from the tenants to central Government, with local authorities being reduced to act as go-betweens which must do the work of central Government or face the penalties imposed by the Secretary of State. The Government are forcing council tenants to pay more than twice the rent of two and a half years ago and the tenants will receive no benefit from that increase. It will be interesting—because the Government have said nothing about it this evening—to see what they intend to do about rents in future. Two Conservative Back-Bench Members made their positions clear. The hon. Members for Reading, North (Mr. Durant) and Chorley (Mr. Dover) said that we should have economic or market rents and that was the direction in which the Government should go. What will rent increases be in future? Is that the path down which the Government intend to go? The Minister said, and the Government amendment implies, that rent increases do not matter because poorer tenants can receive rebates. It is true that the amount spent on rebates is increasing. It is increasing because rents are increasing and more people are entitled to rebates because they are suffering from the Government's general economic policy. They are facing more hardship, and many council tenants are falling into arrears with their rents. The Minister has not dealt with the fact that the majority of tenants still do not receive rebates. Of those who do, the majority do not have all their rent paid. People get rebates only because their income is so low compared with the rent. If the Government claim that they have a good record on rebates, they should tell the House why last month's uprating of the needs allowance, on which rent rebates are based, fell short of the rate of inflation. They do not have a good record. It is untrue that they are helping poorer tenants. In this brief debate my right hon. and hon. Friends have pointed out that the Government are happy to subsidise owner-occupiers buying their properties, yet they wish to remove all subsidies from poorer people in council housing. On average, owner-occupiers buying their houses on mortgage are nearly twice as well off as council tenants. The Government are willing to spend £2,000 million to subsidise owner-occcupiers, but by policies such as this they intend to withdraw all subsidies from council tenants. The Government's policy on council tenants and rent increases can only be described as victimisation. They are showing their contempt for council tenants just as they show it for house building in the public sector. It is necessary to protect council tenants. Therefore, we shall vote against the Government.
We have listened to predictable speeches from the Opposition, but the case that my hon. Friend the Minister for Housing and Construction made has remained unanswered.My hon. Friend the Member for Chorley (Mr. Dover) made a perceptive speech and rightly reprimanded the Opposition for not implementing the policies to which they were apparently committed when they were in government. The hon. Member for Woolwich, East (Mr. Cartwright) confirmed that at present council rents are lower than the fair rent charged by housing associations or the private sector, thereby demolishing the case that they are ahead of those of comparable properties. The hon. Gentleman also said that he would like local authorities to have the discretion to charge what rents they thought fit, but, as my hon. Friend said, many local authorities have already used the discretion to increase rents by a figure higher than that set out last year in the Government's document. My hon. Friend the Member for Reading, North (Mr. Durant) rightly pointed to the generous rent rebate scheme. It is simply not true, as the hon. Member for Bolton, West (Mrs. Taylor) said, that the increases will bring hardship to many families, given the rent rebate scheme and the resources available through the DHSS. As my hon. Friend said, local authorities are now free to use the surplus on the housing revenue account, and we would not wish to stop them. He also mentioned voids. With over 23,000 local authority properties having remained unlet for over a year, we should concentrate on making better use of existing stock. My hon. Friend also made a valid point about improving the quality of housing management. The Government are committed to doing that through the valuable work of the priority estates project, whose work we are anxious to see go from strength to strength. The hon. Member for Walsall, North (Mr. Winnick) gave his implied authority to council tenants to withhold rent increases. If that was the gist of his speech, it was disgraceful. The hon. Member for Swindon (Mr. Stoddart) seemed to want us to override the statutory consultations with local authorities by announcing here and now the HIP allocations. We do not propose to do that. We are consulting local authorities, and they would be offended if we adopted that course. My hon. Friend the Member for Huntingdonshire (Mr. Major) made a sincere speech. He and I cut our political teeth on the housing committee in Lambeth 10 years ago. The situation there appears to have become dramatically worse since we left. My hon. Friend said that there was no benefit to local authority tenants in a low rent policy, as it simply encouraged bad management and skimping on maintenance. He also mentioned the Government's unified housing benefits scheme which is now before a Standing Committee. It will replace the present system with a better one. Tenants will no longer be faced with a complex decision about which of the two methods of assistance to claim under. Bringing the two schemes together under local authorities will enable savings to be achieved in the number of civil servants. My right hon. Friend the Secretary of State for Social Services made clear on Second Reading that the savings will be used to provide an extra £10 million towards the new unified scheme. So bureaucracy will be reduced and the resulting benefit will go to claimants, including council house tenants. I say to the hon. Member for Bootle (Mr. Roberts) that the costs of owner-occupation have also increased over the last two years. He was misleading the House by implying that that was not the case. He made an implied threat to tax relief for owner-occupiers, as did the hon. Member for Bolton, West. At present, we cannot give a final figure. The figure of £2·50 is being discussed and my right hon. Friend will make a statutory determination in accordance with the legislation at the appropriate time. To suggest——
No, I shall not give way. I must make progress.To suggest that this Government or any Government can be indifferent to the problems of about 4 million families who are local authority tenants is ridiculous. No Government can overlook such an issue and we do not propose to do so. If we had the attitudes that were ascribed to us by the hon. Member for Salford, East (Mr. Allaun), we would not have introduced the tenants' charter, which was blocked by the previous Labour Government. The main benefit that we have extended to council house tenants is the right to buy. Surveys have shown that nearly 50 per cent. of council tenants would rather be owner-occupiers, and we have unlocked that door for them. The Opposition now wish to slam it back in their faces. They even want to cancel retrospectively options to purchase that were taken out legitimately under our Housing Act 1980. At the heart of the debate has been the need to strike a balance between capital investment and subsidies. Every extra penny that is provided in subsidy means that some reduction has to be made in the housing capital programme. The hon. Member for Woolwich, East had the honesty to admit that. The actions of the previous Labour Government showed all too clearly where their priorities lay. Subsidies went through the roof, while building and the improvement programme went through the floor. It is high time that that trend was halted. My right hon. and learned Friend the Chancellor of the Exchequer has already advised the House that, if the average weekly local income contribution were to be increased by £2·50, it would be possible to maintain this year's level of activity in terms of gross capital expenditure. It would be the first time that that has happened for six years. It would not only assist local authorities to make better use of their existing stock and provide new homes; it would also—I am surprised that it has not been mentioned—help stem the loss of jobs in the construction industry, which has been hard hit by the recession. In reaching a conclusion on how to strike the balance, I ask hon. Members to reflect on the representations that they receive in their postbags and at their advice bureaux. How many complaints have they received from people about rent increases, and how many from people living in appalling conditions needing an improvement grant, from people looking to housing associations for help and from families hoping that a local authority will give them a mortgage so that they can buy their own homes? Rents in my constituency are at an above average level of £14.50 a week. The whole weight of representations that I have heard on housing are from the second group of people. It is they who would be clobbered by the Opposition amendment and by the early-day motion that has been signed by Front Bench spokesmen, which would totally demolish the capital building programme. The evidence upon which the Opposition have rested their case is so flimsy that it would have been rejected instantly, even by Inspector Clouseau on an off day. Their case in a nutshell is that the relationship between council rents and economic indicators was right in May 1979, and that that magic formula should never be disturbed. We have shown that, by the criteria accepted by that Labour Government, council rents were artificially depressed by that date and that whoever won in 1979 would have had to increase rents substantially. The Opposition have not explained why, if £3·25 is an intolerable increase in the current year, over 50 Labour authorities have increased their rents voluntarily by a higher figure. What greater proof could the House need that the Government's policies on council housing are winning support from all quarters than the news that the Labour Party agent in Bolsover has now taken the plunge and has decided to buy his own home? If our policies are good enough for him, they are good enough for the House.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 235, Noes 296.
Division No. 31]
|Abse, Leo||Cunningham, G.(IslingtonS)|
|Adams,Allen||Cunningham, Dr J. (W'h'n)|
|Anderson,Donald||Davies, Ifor (Gower)|
|Archer, RtHon Peter||Davis, Clinton (Hackney C)|
|Ashley, RtHon Jack||Davis, T. (B'ham, Stechf'd)|
|Atkinson, N.(H'gey,)||Dempsey, James|
|Barnett,Guy (Greenwich)||Dewar, Donald|
|Barnett, RtHon Joel (H'wd)||Dixon,Donald|
|Beith, A. J.||Dobson,Frank|
|Booth, RtHonAlbert||Douglas-Mann, Bruce|
|Booth royd, M iss Betty||Dubs,Alfred|
|Bray, Dr Jeremy||Dunwoody, Hon Mrs G.|
|Brown, Hugh D. (Provan)||Eadie,Alex|
|Brown, R. C. (N'castle W)||Ellis, R.(NED'bysh're)|
|Brown, Ronald W.(H'ckn'yS)||Ellis, Tom (Wrexham)|
|Buchan,Norman||Ennals, RtHon David|
|Campbell,Ian||Evans, Ioan (Aberdare)|
|Campbell-Savours,Dale||Evans, John (Newton)|
|Clark, Dr David (S Shields)||Fletcher, L.R. (Ilkeston)|
|Cocks, Rt Hon M. (B'stolS)||Fletcher,Ted (Darlington)|
|Cohen,Stanley||Foot, RtHon Michael|
|Coleman, Donald||Ford, Ben|
|Cook, Robin F.||Forrester,John|
|Cowans, Harry||Foster, Derek|
|Craigen, J. M. (G'gow, M'hill)||Foulkes,George|
|Crowther,Stan||Fraser, J. (Lamb 'th, N'w'd)|
|Cryer, Bob||Garrett, John (NorwichS)|
|Gilbert, Rt Hon Dr John||Orme, Rt Hon Stanley|
|Golding,John||Owen, Rt Hon Dr David|
|Hamilton, W. W. (C'tralFife)||Parry, Robert|
|Harrison, RtHonWalter||Pavitt, Laurie|
|Hart, Rt Hon Dame Judith||Penhaligon,David|
|Hattersley, Rt Hon Roy||Pitt,William Henry|
|Healey, Rt Hon Denis||Powell, Raymond (Ogmore)|
|Hogg, N. (EDunb't'nshire)||Price, C. (Lewisham W)|
|Homewood,William||Rees, Rt Hon M (Leeds S)|
|Howell, Rt Hon D.||Roberts,Allan(Bootle)|
|Howells,Geraint||Roberts, Ernest (Hackney N)|
|Hoyle, Douglas||Roberts, Gwilym(Cannock)|
|Hughes, Mark(Durham)||Robinson, G. (CoventryNW)|
|Hughes, Robert (Aberdeen N)||Rooker, J. W.|
|Hughes, Roy (Newport)||Roper,John|
|Janner,HonGreville||Ross, Ernest (Dundee West)|
|Jay, Rt Hon Douglas||Ross, Stephen (Isle of Wight)|
|Johnson, James (Hull West)||Ryman,John|
|Johnson, Walter (DerbyS)||Sandelson,Neville|
|Johnston, Russell (Inverness)||Sever, John|
|Jones, Rt Hon Alec (Rh'dda)||Sheerman,Barry|
|Jones, Barry (East Flint)||Sheldon, Rt Hon R.|
|Jones, Dan (Burnley)||Shore, Rt Hon Peter|
|Kaufman, Rt Hon Gerald||Silkin, RtHonJ. (Deptford)|
|Kerr, Russell||Silkin, Rt Hon S. C. (Dulwich)|
|Kinnock,Neil||Smith, Rt Hon J. (N Lanark)|
|Leighton, Ronald||Stallard, A. W.|
|Lestor, Miss Joan||Steel, Rt Hon David|
|Lewis, Ron (Carlisle)||Stoddart, David|
|Lyons, Edward (Bradf'dW)||Straw,Jack|
|McDonald, DrOonagh||Taylor, Mrs Ann (Bolton W)|
|McElhone, Frank||Thomas, Dafydd (Merioneth)|
|McKay,Allen (Penistone)||Thomas, DrR.(Carmarthen)|
|McKelvey,William||Thome, Stan (PrestonSouth)|
|Magee, Bryan||Varley, Rt Hon Eric G.|
|Marshall, D(G'gowS'ton)||Wainwright.E. (DearneV)|
|Marshall, DrEdmund (Goole)||Wainwright,R.(ColneV)|
|Marshall, Jim (LeicesterS)||Walker, Rt Hon H.(D'caster)|
|Maynard, Miss Joan||Wellbeloved,James|
|Mellish,Rt Hon Robert||White, Frank R.|
|Millan,Rt Hon Bruce||Whitehead,Phillip|
|Miller, Dr M. S. (EKilbride)||Whitlock, William|
|Mitchell, R.C. (Soton Itchen)||Williams, Rt Hon A.(S'sea W)|
|Morris, Rt Hon A. (W'shawe)||Williams, Rt Hon Mrs (Crosby)|
|Morris, Rt Hon C. (O'shaw)||Wilson, Gordon (DundeeE)|
|Morris, RtHonJ. (Aberavon)||Wilson, RtHonSirH.(H'ton)|
|Morton,George||Wilson, William (C'trySE)|
|Wrigglesworth,Ian||Tellers for the Ayes:|
|Wright,Sheila||Mr. Frank Haynes and Mr. Joe Dean.|
|Alison, Rt Hon Michael||Eyre,Reginald|
|Amery, Rt Hon Julian||Fairbairn, Nicholas|
|Baker, Nicholas (N Dorset)||Finsberg,Geoffrey|
|Bendall,Vivian||Fookes, Miss Janet|
|Best, Keith||Fowler,Rt Hon Norman|
|Bevan, David Gilroy||Fox,Marcus|
|Biffen,Rt Hon John||Fraser, Rt Hon Sir Hugh|
|Biggs-Davison,SirJohn||Fraser, Peter (South Angus)|
|Blaker,Peter||Gardner, Edward (SFylde)|
|Bonsor,SirNicholas||Gilmour, Rt Hon Sir Ian|
|Bottomley, Peter (W'wichW)||Glyn, DrAlan|
|Brinton,Tim||Gower, Sir Raymond|
|Brittan, Rt. Hon. Leon||Grant, Anthony (HarrowC)|
|Brooke, Hon Peter||Gray, Hamish|
|Browne,John(Winchester)||Griffiths, E.(B'ySt. Edm'ds)|
|Bryan, Sir Paul||Grist, Ian|
|Carlisle,Kenneth(Lincoln)||Havers, Rt Hon Sir Michael|
|Carlisle, Rt Hon M. (R'c'n)||Hawkins,Paul|
|Clark, Hon A. (Plym'th, S'n)||Heseltine,Rt Hon Michael|
|Clark, Sir W. (Croydon S)||Hicks,Robert|
|Clarke, Kenneth(Rushcliffe)||Higgins, RtHon Terence L.|
|Clegg, Sir Walter||Hogg,HonDouglas(Gr'th'm)|
|Cormack,Patrick||Howe, Rt Hon Sir Geoffrey|
|Corrie,John||Howell, Rt Hon D. (G'ldf'd)|
|Costain,SirAlbert||Howell, Ralph (NNorfolk)|
|Cranborne,Viscount||Hunt, David (Wirral)|
|Dean, Paul (North Somerset)||Jenkin,Rt Hon Patrick|
|du Cann, Rt Hon Edward||Kershaw,SirAnthony|
|Eden, Rt Hon Sir John||Knox,David|
|Edwards, Rt Hon N. (P'broke)||Lamont,Norman|
|Latham,Michael||Rippon, RtHon Geoffrey|
|Lawrence, Ivan||Roberts, M. (Cardiff NW)|
|Lawson, Rt Hon Nigel||Roberts, Wyn (Conway)|
|Lester, Jim (Beeston)||Royle,SirAnthony|
|Lewis, Kenneth (Rutland)||Sainsbury,HonTimothy|
|Lloyd, Ian (Havant & W'loo)||St. John-Stevas, Rt Hon N.|
|Lloyd, Peter (Fareham)||Scott,Nicholas|
|Luce,Richard||Shaw, Giles (Pudsey)|
|MacKay, John (Argyll)||Shepherd,Richard|
|Macmillan, Rt Hon M.||Shersby,Michael|
|McNair-Wilson, P. (NewF'st)||Sims,Roger|
|McQuarrie,Albert||Skeet, T. H. H.|
|Marten, Rt Hon Neil||Squire,Robin|
|Maude, Rt Hon Sir Angus||Stevens,Martin|
|Mawby, Ray||Stewart, A.(ERenfrewshire)|
|Maxwell-Hyslop,Robin||Stewart, Ian (Hitchin)|
|Miller,Hal(B'grove)||Taylor, Teddy (S'endE)|
|Mills, Iain (Meridern)||Tebbit, RtHon Norman|
|Mills, Peter (West Devon)||Temple-Morris, Peter|
|Mitchell,David(Basingstoke)||Thatcher, Rt Hon Mrs M.|
|Moate,Roger||Thomas, Rt Hon Peter|
|Morris, M. (N'hamptonS)||Townend,John (Bridlington)|
|Morrison, HonC. (Devizes)||Townsend, Cyril D, (B'heath)|
|Morrison, Hon P. (Chester)||Trippier,David|
|Newton,Tony||Walker, Rt Hon P.(W'cester)|
|Nott, Rt Hon John||Walker, B. (Perth)|
|Onslow,Cranley||Walker-Smith, Rt Hon Sir D.|
|Oppenheim, Rt Hon Mrs S.||Wall,SirPatrick|
|Page, John (Harrow, West)||Walters,Dennis|
|Page, Richard (SWHerts)||Ward,John|
|Patten, John (Oxford)||Wheeler,John|
|Percival, Sir Ian||Wickenden,Keith|
|Prentice, Rt Hon Reg||Winterton,Nicholas|
|Proctor, K. Harvey||Young,SirGeorge(Acton)|
|Raison,Timothy||Younger, RtHon George|
|Rees-Davies, W. R.||Tellers for the Noes:|
|Rhodes James, Robert||Mr. Anthony Berry and Mr. Robert Boscawen.|
Question, That the proposed words be there added, put forthwith pursuant to standing order No. 32 (Questions on amendements).
The House divided: Ayes 290, Noes 235.
Division No. 32]
|Amery, Rt Hon Julian||Faith, Mrs Sheila|
|Atkins, RtHon H.(S'thorne)||Fenner, Mrs Peggy|
|Baker, Nicholas (N Dorset)||Fletcher, A.(Ed'nb'gh N)|
|Bendall,Vivian||Fowler, RtHon Norman|
|Best,Keith||Fraser, Rt Hon Sir Hugh|
|Bevan, David Gilroy||Fraser, Peter (South Angus)|
|Biffen, Rt Hon John||Gardiner,George(Reigate)|
|Biggs-Davison,SirJohn||Gardner, Edward (S Fylde)|
|Blaker,Peter||Gilmour, Rt Hon Sir Ian|
|Bright,Graham||Grant, Anthony (HarrowC)|
|Brittan, Rt.Hon.Leon||Green way,Harry|
|Brooke, Hon Peter||Grieve, Percy|
|Buchanan-Smith, Rt. Hon. A.||Hamilton, Hon A.|
|Cadbury,Jocelyn||Havers, Rt Hon Sir Michael|
|Carlisle, John (Luton West)||Hawkins,Paul|
|Carlisle, Rt Hon M. (R'c'n)||Hayhoe, Barney|
|Channon, Rt. Hon. Paul||Henderson,Barry|
|Clark, Hon A. (Plym'th, S'n)||Higgins, Rt Hon Terence L.|
|Clark, Sir W.(CroydonS)||Hogg, HonDouglas (Gr'th'm)|
|Clegg, Sir Walter||Hooson,Tom|
|Colvin,Michael||Howe, Rt Hon Sir Geoffrey|
|Cope,John||Howell, RtHon D. (G'ldf'd)|
|Cormack, Patrick||Howell, Ralph (NNorfolk)|
|Corrie,John||Hunt, David (Wirral)|
|Cranborne,Viscount||Jenkin, RtHon Patrick|
|Dean, Paul (NorthSomerset)||JohnsonSmith,Geoffrey|
|Dickens,Geoffrey||Jopling, RtHon Michael|
|du Cann, Rt Hon Edward||King, RtHon Tom|
|Eden, Rt Hon Sir John||Lang, Ian|
|Edwards, Rt Hon N. (P'broke)||Langford-Holt,SirJohn|
|Emery, Peter||Lawson, Rt Hon Nigel|
|Lester, Jim (Beeston)||Rossi,Hugh|
|Lewis,Kenneth (Rutland)||Rost, Peter|
|Lloyd, Ian (Havant & W'loo)||Royle, Sir Anthony|
|Lloyd, Peter (Fareham)||Sainsbury,HonTimothy|
|Luce,Richard||St. John-Stevas, Rt Hon N.|
|Lyell, Nicholas||Shaw, Giles (Pudsey)|
|Macfarlane,Neil||Shaw, Michael (Scarborough)|
|MacKay, John (Argyll)||Shepherd,Colin(Hereford)|
|McNair-Wilson, M.(N'bury)||Shersby, Michael|
|McNair-Wilson, P. (NewF'st)||Silvester,Fred|
|Madel, David||Skeet, T. H. H.|
|Marshall, Michael (Arundel)||Spence,John|
|Marten, RtHon Neil||Sproat,Iain|
|Maude, RtHon Sir Angus||Stanbrook,Ivor|
|Mellor,David||Stewart, Ian (Hitchin)|
|Mills, Peter (West Devon)||Taylor, Teddy (S'endE)|
|Mitchell, David (Basingstoke)||Tebbit, Rt Hon Norman|
|Monro,SirHector||Thatcher, Rt Hon Mrs M.|
|Montgomery,Fergus||Thomas, Rt Hon Peter|
|Morris, M. (N'hamptonS)||Thorne, Neil (IlfordSouth)|
|Morrison, Hon C. (Devizes)||Thornton,Malcolm|
|Morrison, Hon P. (Chester)||Townend,John(Bridlington)|
|Mudd, David||Townsend, CyrilD,(B'heath)|
|Oppenheim, Rt Hon Mrs S.||Walker, Rt Hon P. (W'cester)|
|Osborn,John||Walker, B. (Perth)|
|Page, John (Harrow, West)||Walker-Smith, Rt Hon Sir D.|
|Page, Richard (SWHerts)||Wall,SirPatrick|
|Parkinson, RtHon Cecil||Waller, Gary|
|Pink, R.Bonner||Whitelaw, RtHon William|
|Prentice, Rt Hon Reg||Wiggin,Jerry|
|Price, SirDavid (Eastleigh)||Wilkinson,John|
|Proctor, K. Harvey||Williams,D.(Montogomery)|
|Rees-Davies, W. R.||Young,SirGeorge(Acton)|
|RhodesJames, Robert||Younger, RtHon George|
|Rifkind,Malcolm||Tellers for the Ayes:|
|Rippon, Rt Hon Geoffrey||Mr. Anthony Berry and Mr. Robert Boscawen.|
|Roberts, M. (Cardiff NW)|
|Alton,David||Barnett, Rt Hon Joel (H'wd)|
|Archer, Rt Hon Peter||Bennett,Andrew(St'kp'tN)|
|Ashley, Rt Hon Jack||Bidwell, Sydney|
|Bottomley,RtHonA.(M'b'ro)||Howell, Rt Hon D.|
|Bray, Dr Jeremy||Howells,Geraint|
|Brown, Hugh D. (Provan)||Hoyle,Douglas|
|Brown, R. C. (N'castle W)||Huckfield,Les|
|Brown, Ronald W. (H'ckn'y S)||Hughes,Mark(Durham)|
|Brown, Ron (E'burgh,Leith)||Hughes, Robert (AberdeenN)|
|Buchan,Norman||Hughes, Roy (Newport)|
|Campbell-Savours,Dale||Jay, Rt Hon Douglas|
|Carmichael,Neil||Johnson, James (HullWest)|
|Cartwright,John||Johnson, Walter (DerbyS)|
|Clark, Dr David (S Shields)||Johnston, Russell(Inverness)|
|Cocks, Rt Hon M. (B'stol S)||Jones, Rt Hon Alec (Rh'dda)|
|Cohen,Stanley||Jones, Barry (East Flint)|
|Coleman,Donald||Jones, Dan (Burnley)|
|Cook, Robin F.||Kaufman, Rt Hon Gerald|
|Craigen, J. M. (G'gow, M'hill)||Kilfedder,JamesA.|
|Cunningham, Dr J. (W'h'n)||Lamond,James|
|Davies, Rt Hon Denzil (L'lli)||Lestor, MissJoan|
|Davies, Ifor (Gower)||Lewis, Ron (Carlisle)|
|Davis, Clinton (HackneyC)||Litherland,Robert|
|Davis, T. (B'ham, Stechf'd)||Lofthouse,Geoffrey|
|Deakins,Eric||Lyons, Edward (Bradf'dW)|
|Dean, Joseph (Leeds West)||McCartney,Hugh|
|Dempsey, James||McDonald, DrOonagh|
|Dixon, Donald||McKay, Allen(Penistone)|
|Dunwoody, Hon MrsG.||Marshall, D(G'gowS'ton)|
|Ellis, R.(NED'bysh're)||Marshall, Jim (LeicesterS)|
|Ennals, RtHon David||Maynard, MissJoan|
|Evans, Ioan (Aberdare)||Meacher,Michael|
|Evans, John (Newton)||Mellish, RtHon Robert|
|Fitch,Alan||Miller, Dr M. S. (E Kilbride)|
|Fletcher, L. R. (Ilkeston)||Mitchell, Austin(Grimsby)|
|Fletcher,Ted (Darlington)||Mitchell, R. C. (Soton Itchen)|
|Foot, RtHon Michael||Morris, Rt Hon A. (W'shawe)|
|Ford, Ben||Morris, Rt Hon C. (O'shaw)|
|Forrester,John||Morris, RtHon J. (Aberavon)|
|Fraser, J. (Lamb'th,N'w'd)||O'Neill,Martin|
|Garrett, John (NorwichS)||Orme, Rt Hon Stanley|
|George,Bruce||Owen, Rt Hon Dr David|
|Gilbert, Rt Hon Dr John||Palmer,Arthur|
|Hamilton, W. W. (C'tral Fife)||Penhaligon, David|
|Harrison, Rt Hon Walter||Pitt, William Henry|
|Hart, Rt Hon Dame Judith||Powell, Raymond (Ogmore)|
|Hattersley, Rt Hon Roy||Prescott,John|
|Haynes, Frank||Price, C. (Lewisham W)|
|Healey, Rt Hon Denis||Race, Reg|
|Heffer, Eric S.||Radice, Giles|
|Hogg, N. (EDunb't'nshire)||Rees, Rt Hon M (Leeds S)|
|Roberts, Ernest (Hackney N)||Stallard, A. W.|
|Roberts,Gwilym (Cannock)||Steel, Rt Hon David|
|Robinson, G. (CoventryNW)||Stott.Roger|
|Rooker, J. W.||Strang,Gavin|
|Ross, Ernest (Dundee West)||Summerskill,HonDrShirley|
|Ross, Stephen (Isle of Wight)||Taylor, Mrs Ann (Bolton W)|
|Rowlands,Ted||Thomas, Dafydd (Merioneth)|
|Sandelson,Neville||Thorne, Stan (PrestonSouth)|
|Shore, Rt Hon Peter||Urwin, RtHon Tom|
|Silkin, RtHon J. (Deptford)||Varley, Rt Hon Eric G.|
|Silkin, Rt Hon S. C. (Dulwich)||Wainwright, E. (Dearne V)|
|Skinner,Dennis||Walker, Rt Hon H.(D'caster)|
|Smith, RtHonJ. (NLanark)||Watkins, David|
|Spriggs, Leslie||White, Frank R.|
|Williams, Rt Hon A.(S'sea W)||Wright,Sheila|
|Williams, Rt Hon Mrs (Crosby)|
|Wilson, Gordon (DundeeE)||Tellers for the Noes:|
|Wilson, RtHon Sir H.(H'ton)||Mr. George Morton and Mr. James Tinn.|
|Wilson, William (C'trySE)|
Question accordingly agreed to.
MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to, pursuant to Standing Order No. 32 (Questions on Amendments).
That this House approves the steps that have been taken by the present Government to reverse the unrealistic and wasteful rent subsidy policy of the previous Administration, to increase rent rebates significantly and to provide very many council tenants with the opportunity of owning rather than renting their homes.