House of Commons Hansard Debates for 14 Feb 1989

Mr. Deputy Speaker : I very much regret that my plea for very brief speeches has fallen on deaf ears.

8.58 pm

Mr. John Battle (Leeds, West) : In the time available to me, I shall point, as other right hon. and hon. Members have done, to those parts of the Bill dealing with housing. When debating the Housing Act 1988, we warned that that landlords' charter would lead to market rents--meaning high rents. Even the Government's consultants are warning local authorities to be wary of the large-scale transfer of council estates

"because tenants do not perceive it as an improving step." The Government now have a big problem. The shift to private-sector landlords will not happen, unless this Bill results in pricing people out of council housing and into purchasing their own council property--with the benefit of a subsidy, which will be cheaper than paying rent--or into insecure private rented accommodation.

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The Bill's effects on housing finance will mean higher rents. I invite the Minister to spell out the Government's figures of the rents that people will have to pay as a result of the changes that the Bill makes. Will he confirm or deny the claim made by the Secretary of State for the Environment two years ago, that market rents for council housing ought to be at least £35 per week? If so, many council tenants will be interested to know that. The ring-fencing proposals could lead to rent rises of about 20 per cent.

The public expenditure White Paper that the House debated last week showed that the number of houses built by local authorities will drop from 15,000 this financial year to 6,000 by 1991-92. The Economist commented on the White Paper :

"Social housing will be hard to find and far more costly to rent. That is the message from the new statistics in the white paper's chapters devoted to the environment department."

I do not have time to go into as much detail as have other right hon. and hon. Members, but the proposals affecting housing benefit will mean that some tenants will, through their rents, be paying the housing benefit of other council tenants. Conservative Members suggest that there is nothing wrong with that arrangement, but why is it that only those receiving housing benefit are being denied a share of the national cake? Why are the Government not reconsidering the housing assistance that is given in the form of mortgage tax relief? It seems that tax reductions and relief are given only to the better off in our society, and that it will be the poor who are forced to rely on the local state--back to the traditions of parish relief. How will the people face up to the level of poll tax that their local authority will have to impose on them also, in order to assist the poor in their area?

I can, surprisingly, welcome one provision in the Bill, and about which I ask the Minister for more detail. I refer to clause 130 and to schedule 8(3), which contain a hint that powers to check up on houses in multiple occupancy will be included. It appears that local authority powers in respect of houses in multiple occupancy will be amended. The schedule's contents are minimal, but could provide an appropriate peg. I shall be interested to know whether the Government have any intention of writing into the Bill realistic and practical proposals for dealing with multiple occupancy housing. Six out of 10 of an estimated 334,000 houses in multiple occupancy are in a serious state of disrepair, and four out of five lack a satisfactory means of escape from fire. I invite the Government to expand further on their intentions in that regard.

The hon. Member for Langbaurgh (Mr. Holt) openly states his belief that, despite there being 50 local government Bills since 1979, there is still too much local government. I wonder how much he speaks for his right hon. and hon. Friends. I believe that the Bill's intention is to put the final cap on local government.

In an interview in Today published on 25 February 1988, the Prime Minister presented her vision of Britain in the year 2000. She envisaged that it will herald a golden age for Britain, and a new Elizabethan age of enterprise and advance. She refers with admiration to the great days when wealthy merchants built libraries, art galleries, schools and civic buildings, and to the burghers who built and ran the large cities of Britain. Perhaps she sees the re-emergence of the business man or financier, who may chair the local health authority and the city's urban development

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corporation, and serve as president of the chamber of commerce, as well as being a leading Tory in the community.

That person will hold the power that is currently held by local government. I imagine that in the year 2000 that person will arrange a dinner to which will be invited other business personalities, and on that occasion the tenders which will provide for what remains of the basic city services will be opened and divided up. That will happen once a year, and it will be the end of the road for local government.

Is that the reduction in the activities of local government that the Government want to achieve? We are bound to ask that question in view of some of the comments of Conservative Back Benchers. However benevolent those merchants and business men may be, they will be unelected and unaccountable locally.

I remind the House of what the Widdicombe committee said in chapter 3 of its report, entitled

"The role and purpose of local government."

Widdicombe suggested that the threefold purpose was pluralism, participation and the need for a responsive local government. The report said :

"The case for pluralism was again influential in the 19th century when modern local government and the popular franchise were introduced. For Lord Salisbury, whose 1886-92 administration created county councils these two phenomena were of linked significance. Salisbury's proposals for local government were based on a fear not of centralising monarchs but of the centralising tendencies of a popular franchise. In his view, the enfranchisement of the working class would make welfare politics the central electoral issue, and lead inexorably to the rise of a powerful administrative state. This could be avoided only by the creation of new local authorities whose value as counterweights would be realised by diminishing the excessive and exaggerated powers' of central government." Do the Government still agree with that basic principle of local government as set out by Lord Salisbury?

Widdicombe continued :

"More recently precisely the same arguments, if less politically stated, are to be found in the Reports of Redcliffe-Maud, Wheatley and Layfield eg By providing a large number of points where decisions are taken by people of different political persuasion' it acts as counterweight to the uniformity inherent in government decisions. It spreads political power."

Will the Minister explain how the Bill spreads political power? It centralises political power by diminishing, if not eliminating, political opposition. That is built into the measure. Are the Government taking seriously those remarks of Widdicombe in introducing the Bill? We need to be convinced that the Government are not going in the opposite direction. If we cannot be convinced on that score, then it seems that this, the 50th Bill on local government since 1979, will be read in the future as an epitaph for local government.

9.7 pm

Mr. Clive Soley (Hammersmith) : This is a centralising Bill which undermines and demoralises local government. It is yet another step by the Government in destroying local democracy as we have known it in this country for so many years. The Government do not trust local electorates and, for that reason, they seek to emasculate local authority democracy. Councillors, both Tory and Labour, will resent the broad thrust of the Bill. The Government intend to restrict the right of officers to speak or write publicly on controversial issues, to canvass or to hold

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office in a political party. The Home Secretary and the Prime Minister tell us that we should think in terms of active citizenship, but the Bill means that we cannot be active citizens in the way that they want us to be.

One of the most telling interventions by my hon. Friend the Member for City of Durham (Mr. Steinberg) was to the effect that many hon. Members, including one on the Government Front Bench--I can think of two--would not have found their way into this House in the way that they did if the Bill had been law. Nor would those two Ministers have been able to become councillors and do their job in local authorities elsewhere.

In an intervention the Minister said that the only objections that the Opposition could dig up about Tory councils related to Westminster, but he was fundamentally wrong in more than one respect. Our objections are based not merely on the amount paid to Mr. Brooke of Westminster council, but on the fact that he has been given a contract that binds him to silence--he has been bought with £1 million. The Minister knows that the document involved exists because my hon. Friend the Member for Copeland (Dr. Cunningham) has brought it to the attention of the House and of the public.

The Conservative party cannot lecture anyone on the behaviour of councillors, and the hon. Member for Langbaurgh (Mr. Holt) of all people has no right to do so. He could start lecturing Members of Parliament about some of the activities that he described, but if we start to do that, do we not also undermine this place? Suppose that we accuse Members of Parliament of not coming here, of not doing their job, of losing their tempers from time to time--of fighting and waving the Mace above their heads, indeed, for is that not a right? Are we to follow that up by saying that Members of Parliament must not be allowed to serve in this place?

Mr. Holt : Will the hon. Gentleman give way?

Mr. Soley : Perhaps I may take the argument a little further before the hon. Gentleman is so unwise as to intervene.

We are not talking only about Westminster council. Horsham council has the audacity to use an empty council house as property and office for the local Conservative party. Portsmouth councillors are stripped of their authority because they acted as estate agents dealing with planning and housing matters without the right to do so, and indeed gave preferential advantages to people which led to their being disciplined. Nottinghamshire county council is also Tory-controlled, as is Harrow council. A Harrow Member was worried about what was happening in his neighbouring authority, where a Conservative councillor accepts that he was paid a quarter of a million pounds for assisting a planning application by Sainsbury's--which was successful.

It does not stop there ; it extends as far as Bradford, and beyond into central Government. Who would think that Bernard Ingham is not paid by the taxpayer, and is used in an entirely inappropriate manner? Who has ever believed that health authorities are not stacked by the Prime Minister with her supporters? Who believes that the Ministry of Defence does not have Conservative supporters put in place at public expense? Has anyone seen the new National Health Service video, paid for by the taxpayer? The video is supposed to be shown to staff in all the hospitals--at considerable public expense--and who is

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the star of stage and screen who opens it? It is none other than the Prime Minister. That is the way in which the Government use taxpayers' money, yet some Conservative Members say that councils should not behave in a similar way.

What happened on the Housing Bill? Particularly nasty information has been put out by the Government and by Conservative councils, paid for by the taxpayer, which is known to be misleading and false and which has caused acute anxiety and distress to elderly people who do not want their homes to be transferred over their heads through a rigged voting system. This is the Government who try to tell people that councils are behaving badly, but if they are indeed behaving badly perhaps they are just following the Government's lead.

Mr. Holt rose Mr. Soley : I do not want to give way to the hon. Gentleman, because by making a very long speech he managed to prevent hon. Members on both sides of the House who wanted to speak from doing so.

The difference between us and the Tory party is not that we think it a good idea to swap stories about one local authority versus another, good or bad, but that we believe in leaving it to the judgment of the electorate. Let the ballot box decide at local government elections. Let the people decide. The Government do not believe that. They believe that local people are not to be trusted to exercise their judgment and vote out councillors who behave badly, whether for fighting, financial mismanagement or whatever. The Government believe that that can be achieved through centralised control. That is the difference between our approach and that of the Government.

When we are asked to restrict councillors and officers, why not restrict them from participating in the private sector? Given that there will be more privatisation why do we not take a tougher line on local government officers who serve on, take over or set up private companies? What about dual interests there? In Rochester upon Medway, where there is a Conservative council, the entire housing staff are doing a management buy- out of all council housing in the area. Who is issuing the advice leaflets? It is the housing staff who are advising people about the circumstances of the deal and how it is to their advantage to accept it. Never mind whether the deal is to their advantage--the leaflet is not neutral but a clear attempt to influence their decision and it ought not to be allowed.

Dame Peggy Fenner (Medway) : Will the hon. Gentleman give way?

Mr. Soley : I will give way to the hon. Lady in a moment. I challenge the Minister to say categorically that no local authority disposing of its property should have the officers who are taking over the property advising people about the advantages of the transfer. That should be done by independent bodies.

Dame Peggy Fenner : The hon. Gentleman recently paid a visit to my constituency. I can tell him that the tenants in my constituency will have a ballot on the proposal. I can also tell him that since the management takeover of the local bus company there has been one complaint in two years, which is far less than when the service was run by the

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National Bus Company. It is not for the hon. Gentleman to tell my constituents what to vote for. They have voted four times for a Conservative local authority and three times for a Conservative national Government.

Mr. Soley : I can tell the hon. Lady that I shall probably return to her constituency. I can also tell her that the tenants will vote against the proposal as 300 of them turned up at the meeting at which I spoke. They object to the way in which the council is ramming it down their throats with a blatantly misleading leaflet which refers to a contract that does not exist. There is no contract. The leaflet says that the contract will give tenants the same security that they had before, but there is no such contract anywhere. If the hon. Lady went to a solicitor and said, "I have been advised to sign this and to vote for it, but I have been told that the contract does not yet exist," would the solicitor advise her to sign? Of course not, but that is what the hon. Lady is advising her constituents to do. If they are so unwise as to vote for a Conservative council again--I suspect that they will not be tempted to do so next time--they will pay a high price in areas where the people have been cornered in the way that her council is trying to corner its tenants. I want a guarantee from the Minister that where council officers are involved in such deals the advice that is distributed is independent. We do not have to turn to the Labour party's views on these issues. The last time that I used the Association of District Councils as an example, I got it into trouble with the Prime Minister's office. Officials were ringing up and saying, "Don't give all that stuff to the Labour party as they keep using it against us." To the credit of the Association of District Councils, it was more interested in local government than in the Tory party, although it is controlled by the Tory party.

My next quote comes not from the ADC but from another Conservative- controlled organisation, the London Boroughs Association. The word that crops up over and over again in the LBA's briefing document about the Bill is "restrictive". It continually refers to the restrictive implications of the Bill. Talking about the balance on committees, the association says that it is

"concerned that as presently drafted independent members may not attend any meetings except full Council meetings."

It does not think that the matter is properly dealt with in the Bill.

On economic development, the document continues :

"The Association is anxious that no undue restriction should be placed upon local authorities' new powers to participate in economic development and will be represented on a working party which is being set up by the Government to explore these issues."

On discretionary spending, the association says--this is a powerful little quote :

"Moreover, the offset of money given to voluntary bodies will severely limit the ability of local authorities to support voluntary groups serving the needs of the local community".

So much for the Government's concern for the local sector. The association says of credit approvals :

"It is a matter of simple justice that an authority which generates capital receipts should have the use of them without incurring compensating reductions in its borrowing powers and this is vital to maintain the incentive for authorities to promote the Right to Buy and other disposals of stock."

On Clauses 56 to 62, the association says about companies in which local authorities have interests :

"The Association is very concerned that, as drafted, the provisions will inhibit the ability of local authorities to

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become involved in local initiatives and will restrict such companies by imposing inappropriate local authority financial procedures."

The way in which the Bill deals with housing issues--to which a number of hon. Members have referred--is catastrophic. The hon. Member for Taunton (Mr. Nicholson) was whining away about his constituency's growing housing problem. I have been saying for some time that the rural housing problem is becoming like that of the inner cities. Local people have not been able to buy or rent and are being driven out. In areas such as Taunton local people --sons and daughters who are in the economic work force--are having to take holidays lets in winter and then be made homeless in the summer because their homes are needed for holiday homes. The hon. Gentleman knows that that is happening in Taunton and in a whole swathe of places across southern Britain, yet he goes on backing the Government, blind to the fact that almost everything that they have done has made matters worse. What have the Government done recently? The Minister has issued a couple of leaflets from the Department of the Environment saying that he will help rural housing associations. The Government talked initially of the housing associations having 600 new homes or flats throughout England, but housing associations hardly exist in some areas of rural England. Another Minister became worried--one could see the panic setting in--and put out a leaflet saying that house building had taken off better than ever, but did not mention the slump of the 1908s or the fact that next year is projected to be disastrous. Everyone knows why that is so--it is because of interest rate increases this year and last.

Private sector housing will not be able to make up the gaps in the public sector. If public sector housing is cut from 70,000 units in 1979 to about 15,000 next year, the private sector will be unable to make up the difference, especially if interest rates are then banged up as well. Of course, housing will get into trouble. It is a case of too little, too late. Let the London Boroughs Association say it again, because it says it so well. [Hon. Members :-- "It is Tory."] It is a Tory authority, and I am sure that Conservative Members would agree with it if they could.

The LBA document says :

"Clause 49 stipulates that a proportion of the local authority's capital receipts must be set aside for the redemption of debt"-- even if the authority is not in debt, apparently. A private company operating like that would go bankrupt after a few years because it could not invest. The Government would not impose that on a private company, but the Secretary of State is quite prepared to impose it on local authorities.

A good Conservative organisation, the London Boroughs Association--it, too, provides an abundance of good quotes--says of capital receipts :

"In particular it is likely to curtail local authorities' capitalised repairs programmes and make it harder for them to bring empty sub-standard dwellings back into letting."

The Conservative party keeps going on about empty council houses, but the Audit Commission report says that the Government are culpable because they do not give local authorities enough money to deal with the problem. And the Conservative London Boroughs Association says precisely what I have just said--that it will not be able to bring back empty, sub-standard housing into use.

The association does not leave the matter there. It continues--this was the subject of my intervention in the

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Secretary of State's opening speech--by saying that local authorities have amassed an estimated £8 billion in unspent receipts. When the right to buy was introduced in 1980, councils were assured by the Tory Government that they would be able to keep the receipts which accrued from sales, but a year later the promise was broken. The spending of receipts was restricted to 50 per cent., and the controls have become progressively tighter so that now only 20 per cent. can be used. The Government propose to increase it to 25 per cent., but that is not as generous as it may seem, because it is limited to a declining amount. However, we shall return to that in Committee.

The key quote here is the following :

"The increased central direction of local authority spending is to be deplored. Local authorities should be permitted the freedom to decide their spending priorities and to use their own capital receipts for reinvestment in their stock."

I happen to disagree with the way in which most of the local councils represented in that document are running their affairs, particularly their lack of interest in housing as a whole, but we on this side defend their right to be local councillors, to stand in elections, to put their case and to win or lose. It is the Conservative party which does not believe that. That is the crucial point that many people in all political parties who seek to serve the community will remember.

Ring fencing will be disastrous for rents, and the Government persistently refuse to say what a fair rent is. Here we have perhaps the most interesting aspect of today's debate--the other shift of policy by the Secretary of State. There were shifts of policy in the news releases put out by the Department of the Environment on house building and rural housing, but the most significant shift came when the Secretary of State actually said for the first time that he did not think market rents were appropriate for councils.

Mr. Ridley indicated dissent.

Mr. Soley : If the Secretary of State is saying that he is still going for market rents and that all councils are to pay market rents, he is saying that rents will go up exactly as my right hon. and hon. Friend have said.

Mr. Ridley : I have never said that council rents should go to market rent levels and have not said that today. The hon. Gentleman is quite right--I made it quite clear that they were not going to market rents.

Mr. Soley : The Secretary of State has made it very clear that in his view there must be market rents. If he wants to look at what he said, he should look at the White Paper of November 1987, which says that subsidising council tenants will push them into the dependency culture--and if he will not subsidise them, who will pay the rent? Why did he also put in the Bill that the rent assessment committee must take into account a market rent before setting a rent for the new assured tenancies? The Government have fallen into the trap of recognising--as, to be fair, the last Housing Minister, the hon. Member for Bristol, West (Mr. Waldegrave) recognised--that their housing policy was on course for disaster because they could not tackle the difficult problem of housing finance, and they keep ducking it.

What happened? Let us talk about that. The Government have actually said that rents have been set too low. They picked out the GLC and said that. I had a

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couple at a press conference in this House only a week ago--Mr. and Mrs. Green of Folkestone--who are now paying a rent of £52 per week out of joint pensions of £130 per week. Let hon. Members think about that--40 per cent. of one's net income going in rent. Forty per cent. of anyone's net income going in housing costs, whether for rent or sale, has to be a disaster. That is why in that case the wife said, "I feel like walking into the sea," and her husband said, "I suppose we shall end up in bed and breakfast." That is what I mean when I say that the Government are causing distress and anxiety to all the people. Yet the Government said that rents were too low.

The Government say that they intend to help people by means of housing benefit. I agree with the London Boroughs Association, which says :

"If council rents are required to rise to market levels,"-- that shows that the Conservative party recognised that the Secretary of State wanted market levels--

"it is essential that the Department of Social Security permits housing benefit to be paid at this level and makes available the necessary public expenditure to cover the cost."

Mr. Ridley : The hon. Gentleman is wilfully fantasising. Housing benefit covers the rent, whatever it is, provided that the person qualifies by virtue of his income. We are not moving to housing market rents and we have no intention of doing that, so the hon. Gentleman can stop saying it.

Mr. Soley : The right hon. Gentleman ought to have a few words with Conservative party members. He should say that to the London Boroughs Association, which says that council rents are required to rise to market levels. He should also change all the instructions that he has given and answer the following question. How does he intend to revive the private rented sector if he does not allow it to charge market rents? That has always been his central argument. He has always said that the private sector must be allowed to charge market rents. The Government say that they must abolish the Rent Acts, that it will be easier to evict tenants and that landlords will obtain a greater turnover. If councils or housing associations charge significantly lower rents, an enormous number of people in the private sector will try to get into the public sector, but they will find that the public sector has been cut. There will then be ghettos. That is why the Secretary of State and his hon. Friend the Member for Taunton are in trouble. The problems of the city areas will apply in rural areas as well.

Mr. David Nicholson : Will the hon. Gentleman give way?

Mr. Soley : No, I am afraid that I cannot give way. Time alone prevents me.

I am sure that the Government will want to deal with the problem and I must leave it to them. Unless the Government face up to the problem, they will be unable to solve it. The Secretary of State's muddle about whether he is in favour of market rents or whether he is against them will not and cannot be solved until he deals with the subject of housing finance.

The other problem that the Government have created is the one that they have visited on housing associations. In their panic to do something about the lack of supply of good, low-cost housing for rent or sale, they have decided

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to expand the housing associations. They spent the first half of the 1980s clobbering them, but now they want to help them. The Government have told housing associations to take over council properties and to build more properties. The housing associations are now running into management problems which they did not face initially when they were local and small. The Government are now urging them to become large and national, which means that they are further away from the people whom they represent.

To whom will the hon. Member for Taunton and other Back Benchers go when they find that they cannot go to their local councillors and instead have to go to the headquarters of a housing association in the north of England because the housing association in their area has been taken over? Who will hon. Members write to then? At the moment they can write to their councillors and the tenants can kick out the councillors if they do not like the job that they are doing, but they will be unable to kick out a housing association with headquarters further afield. I have a great deal of time for housing associations, but the Government have undermined some of the basic assumptions on which the success of the housing association movement was built--not least, management and rents.

The iniquitous proposal that local tenants should subsidise other local tenants through housing benefit is, as my hon. Friend the Member for Copeland said earlier, wicked. Let us consider what would happen if the same were done with mortgages. What would happen if it were said that people in one area should subsidise the mortgages of other people in that area, instead of it being done on a national basis? Hon. Members can imagine the outcry. They are prepared to do that not with housing associations or with the private sector, but only with the council sector.

What will happen to the homeless? Under clause 128 councils are not required to keep a housing stock. I presume that they will all be able to do as Horsham does--pass all empty council houses over to the Conservative party for use as offices. Perhaps that is the aim. There is no real action here. We shall want to look at this aspect more closely in Committee. I hope that there will be some movement on it from the Minister because it was a report of his own Department on houses in multiple occupation which showed the seriousness of the problem in the private sector. There is no real movement there, and we need a lot more movement before anybody outside will believe that the Government are serious about their efforts in that respect. What does Clause 132 do? Amazingly, it actually winds up the home purchase assistance scheme for the first-time buyers. The Conservative party wants to take help away from first-time buyers. If the Government are having so much trouble helping first-time buyers, why do they want to wind the scheme up now? Why do they not expand it and help those first-time buyers instead of clobbering them? There is no reason or justification for what they are doing.

The charges for local authority services are an indication of everything that is wrong with the Government's thinking. They do not believe in community. People will have to pay a charge to have their dustbins emptied, they will have to pay for their leisure and recreation, and they will have to pay for library services. They will have to pay for everything. If we go down that road, we go down the road that leads to real public squalor

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and private affluence--the road that leads to ghettos. In undermining local democracy, the Government are creating a crisis in rural and urban areas of this country--a crisis that, sooner or later, people will feel so dramatically that they will hate the Government for the legislation being brought forward today.

9.37 pm

The Minister for Local Government (Mr. John Gummer) : I thought that the reason for our having spent so much of this debate discussing the Widdicombe clauses was that the Labour party saw those as the most important clauses in the Bill, but I discovered during the speech of the hon. Member for Hammersmith (Mr. Soley) that the reason was that, when hon. Members opposite started to discuss the rest of the Bill, they could proceed only by fabrication and by misleading the House.The hon. Gentleman still failed to accept what my right hon. Friend the Secretary of State had said about market rents. He failed to understand that there is a distinction between a subsidised rent, where people are helped to meet the cost, and a market rent, which is considerably higher than that. He felt that we were taking away democracy when, in fact, what we are doing in this Bill, as part of our local government programme, is giving democracy back to local authorities--primarily, of course, through the community charge, which will provide accountability where account-ability has not existed before.

But perhaps the saddest aspect of this debate is that we have failed to hear from the Opposition why they think it proper that people whose job in life is to give advice--independent advice--should also be able to play a party political role in some other council. For the world outside, the argument is obvious. I have never heard anyone suggest that it is not reasonable to make this distinction. Indeed, the Labour party is happy to have the distinction when it relates to civil servants. There has been no proposition that civil servants should be able to represent a constituency in Parliament and at the same time advise Ministers in a Department. Why not? It is for two good reasons. The first is that it is impossible for people to be independent on the one hand and party political on the other. The second is that it is unacceptable both to the people they advise and, indeed, to the people they represent.

Dr. Cunningham rose --

Mr. Gummer : I am not going to give way.

Dr. Cunningham rose --

Mr. Speaker : Order. One at a time, please. The Minister is not giving way.

Dr. Cunningham rose --

Mr. Gummer : I will be happy to give way to the hon. Gentleman when I get to the point--

Dr. Cunningham rose --

Mr. Speaker : Order. The hon. Gentleman knows that if the Minister does not give way, he must not persist.

Mr. Gummer : The hon. Member for Hammersmith has already taken my time after promising not to--

Dr. Cunningham rose --

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