House of Commons Hansard Debates for 7 Nov 1989

Mr. Steinberg : My hon. Friend makes a valid point and I wanted to intervene in the Minister's speech to put that question. The Minister argued that a local authority's general rate fund should not subsidise council house tenants. He asked why the ordinary ratepayer should subsidise council tenants. But does he not also regard tax relief on mortgage interest as a subsidy from the taxpayer to the mortgage payer? If so, will he accept that a council tenant who does not have a mortgage but who pays all his other taxes is contributing to what is, in effect, a subsidy to mortgage payers? Would it not therefore be fair for ratepayers to contribute to a subsidy for council tenants?

As the Bill is drafted, the Secretary of State can dictatorially control the rents of every local authority. He can control the management functions and, by using the subsidy formula, he can control the quality and range of repairs that local authorities may carry out. There must be safeguards in the use of that power. Under the Bill as drafted, councils will have to decrease the overall service that they provide to their tenants or substantially increase rents. Common sense dictates that a further deterioration of council properties will occur unless council rents are subsidised to the necessary extent.

Does the Minister want to see the nation's local authority housing stock deteriorate? Is it, indeed, his aim to see council houses deteriorate due to lack of money to repair them? If not, and if he believes that authorities should look after their houses adequately and have the necessary funds to do so, he must amend the calculations in the Bill.

I again take my local authority of Durham as an example in considering the issue of capitalised repairs. It is not a large authority. I recall the Minister visiting Durham some years ago and meeting me and fellow councillors in the authority's hospitality room. We shared a drink, which was coffee ; because the drinks have to be paid for out of the rates and it is a prudent local authority, that is all that we are given to drink.

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It is estimated that by 1991, £2.335 million will have been channeled into the housing revenue account for capitalised repairs out of the capital receipts from the sale of council houses. But the Bill will prevent capital receipts from being used for capitalised repairs. In future, 25 per cent. of capital receipts will be available for capital work and the other 75 per cent. must go to redeem debt. In other words, 75 per cent. of the capital receipts that some local authorities were using to carry out capitalised repairs will no longer be available to them. If Durham council wants to continue its capitalised repair programme--in other words, if it wishes to do the equivalent amount of work that it planned to do--the money will have to be found from elsewhere, and the only way to raise it will be by raising the rents.

Local authorities have been forced to use their capital receipts for capitalised repairs because their HIP allocations have been cut dramatically over the years. For example, whereas in 1982 Durham received £2.85 million, this year it will receive £1.26 million. That is why Durham and other authorities took the opportunity of using capital receipts to do capitalised repairs. If Durham wishes to maintain the same programme but substitute the sum involved with a rent rise, it will have to increase rents by about £4.70 per week per tenant. Will the Minister cushion such an appalling increase and compensate for the necessary capital allocation? Will he take such matters into account when fixing management and maintenance allowances for subsidy purposes?

The Durham architects department has made substantial profits on contracts in recent years. Those profits have been made even though the department has tendered against private building companies. The department, having won those contracts, has made huge profits for the local authority. In the past, those profits had to be credited to the general rate fund. The city council then transferred it back to the credit of housing repairs in the housing revenue account. In other words, Durham was able to use its direct labour organisation profits to carry out further major housing repairs.

While the Bill was in Committee I wrote to the then Minister to ask him to clarify whether it would still be valid for DLO profits to be used in the housing revenue account. The letter that I received in reply was difficult to understand, but it seemed to say that that practice would remain legitimate after the Bill had been enacted. Having studied the Bill more closely, it appears to me that because of the ring-fencing regulations it will not be valid for those profits to be used, although that had been the impression gained by the local authority and by me.

In 1989-90 about £1.2 million went into the housing revenue account from DLO profits. If my local authority wants to continue its programme of work next year at the same level as this year, council house rents will have to increase by £2.42 per week per tenant. I hope that the Minister will clarify this. If he cannot do so tonight, I hope that he will write to me. Such clarification is vital to Durham city council and I suspect that it is equally important to many other local authorities which use their DLO profits in that way.

The rent rebate subsidy takes up part of the housing revenue account. Admittedly, at the moment 97 per cent. of that subsidy is paid by the Government and only 3 per cent. comes from the general rate fund. Because of the ring-fencing regulations, however, the authority will have to find the extra 3 per cent. as it will no longer be lawful

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to take it from the general fund. That does not represent a large amount of money in Durham--it is probably chicken feed to the majority of local authorities--but it does amount to £130,000, and to raise that money in the future the council will have to increase the rent paid by council house tenants by 26p per week.

Given the possible increases that may be incurred as a result of the Bill, what will the proposed changes mean to tenants living in Durham? If the local authority wants to carry on with the work that it has undertaken for the past few years, rents will have to increase by £9.30 per week--and that does not take into account any increase for inflation or anything else. Rents will have to increase by 45 per cent. next year merely to allow the level of repairs to stand still. I do not believe that that is fair and I am sure that even Ministers in the present Government would not regard it as fair. One must remember that that rent rise would not take into account any general increase in rents--it would be needed just to do the work necessary to stand still. When calculating the housing revenue account subsidy the Minister must take into account the likely changes that will result from his decisions. Failure to do that will be a disaster for my local authority and for the majority of council house tenants. 6.45 pm

I doubt that local authorities will increase their rents by 50 per cent.-- tenants could not afford to pay such an increase. My hon. Friend the Member for Hammersmith has already explained what a person expects to pay for his housing out of his general income. It is simply not on to increase council house rents by 50 per cent. Without such increases, however, repair programmes will be slashed. Properties will deteriorate and fall into further disrepair. The Minister may question whether such repairs need to be done in the first place. A recent survey conducted in my local authority showed that properties needed about £66 million to be spent on them to bring them up to a reasonable standard. The amount of money that needs to be spent throughout the country to bring all local authority housing up to a reasonable standard of repair runs into billions. That money must be spent and I hope that the Government will take that into account when considering the housing revenue account calculations. The Government encouraged local authorities to use their capital receipts for repairs and, having done so, it is not right for them to leave those authorities in the lurch. Local authorities acted in good faith, they took the advice of the Government and they used their capital receipts to carry out capitalised repairs. The Government now intend to withdraw that money. The Government have said that rents will not rise as a result of the Bill, but we all know that that is a ludicrous claim. The Minister may give us the information that is passed to him from the officials' Box, but we all know that council house rents will rise steeply unless he changes the method by which he calculates the housing subsidy.

I hope that the Minister will take cognisance of a Department of the Environment consultative paper issued on 27 July 1988 which said :

"It is essential therefore that the introduction of the new system should not of itself introduce any sharp change in the level of rents or management and maintenance spending in any individual authority The effect of these proposals will be to ensure a smooth transition to the new regime. For the

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tenant, the immediate effect should be indistinguishable from what would have happened if the current system had remained in force." If the Bill goes through unamended, the new system will be far from indistinguishable from the present system. I plead with the Minister to consider the calculations to ensure that local authorities are given subsidies for their housing revenue accounts to enable them to carry out the necessary work as that will ensure that tenants do not face astronomical rent increases to pay for that work to be done.

Mr. George Howarth : I recommend that the newly appointed Ministers should look at the statements on housing policy made by their predecessors since 1979. I spent some time doing just that. It is an increasingly interesting exercise as one realises that there has been a common thread running through Government policy which brings us to what we are discussing today : what is a sensible rent to expect people to pay for their council house or flat? I want to consider what the Government's housing legislation has amounted to since 1979.

No Conservative Member would deny that the Government originally had only one housing policy. They believed in universal owner-occupation. They thought that there was only one way in which the market could resolve the problems that people faced in finding suitable housing, and that was through owner-occupation. That policy led to the Housing Act 1980, which conferred on sitting tenants the right to buy with discounts according to the length of time that they had been tenants.

The way in which the Government responded to the effects of the Housing Act 1980 was very interesting. They did not stop by giving council tenants the right to purchase their properties with discounts relating to the time that that person had been a tenant. Between 1981 and 1983, when he was a Minister, the right hon. Member for Henley (Mr. Heseltine) regularly appeared at the Dispatch Box, with other Ministers, to say that he expected local authorities to introduce rent increases of £2.50, and over three or four years that increased to more than £6. That was no accident. It occurred because the Government regressively withdrew subsidies to local authorities which would have allowed them to cushion the effects of rent increases. For the first time we saw the carrot-and-stick approach which the Government have consistently adopted towards housing policy. Indeed, that is the only consistent thing that the Government have done in housing in their entire 10 years in office. The carrot was the opportunity to exercise the right to buy ; the stick was that if a tenant did not exercise that right, he would inevitably face increasing rent bills. As a consequence, it would eventually become sensible, to use the Minister's words, to exercise the right to buy instead of remaining a tenant.

To some extent, in the Government's terms, the right-to-buy policy was a success. Perhaps against their initial inclination, many people decided that it made financial good sense to purchase their council houses. Some people in London made huge profits. On a day-to-day budgeting basis, over five or 10 years, it probably made sense for many people to cut their outgoings in rent by purchasing their council homes because their rents would inevitably overtake what they would be expending in mortgage payments had they purchased the council house with a discount.

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Mr. Pike : There is another aspect to the stick approach. In addition to direct subsidy to housing, local authorities had to consider grant-related expenditure housing factor E7. If they had not taken account of the kind of increase which the Government were advocating, they were penalised through factor E7. The stick was double edged.

Mr. Howarth : I am grateful to my hon. Friend for reminding me of that. My hon. Friend and I have both worked in local authorities. I was a chairman of a local authority housing committee and I know that such factors played a major part in assessing rent increase limits. Year after year it became depressingly repetitive having to make those calculations. Cuts in rate support grant and withdrawal of subsidies in general made it almost impossible to avoid large rent increases.

By the mid-1980s, the Government's housing policy seemed to be failing. It was not failing because they had not succeeded in selling council houses ; they succeeded in doing that on a large scale. It failed for other reasons. Economists such as Professor Mintford concluded that the lack of opportunity to rent property was acting as a brake on the mobility of labour.

That meant that young people in my constituency, where we still have a major unemployment problem, could not come to London or the south-east to find jobs because they had nowhere to stay. I will not go into Professor Mintford's recommendations to the Government in detail. Perhaps the Minister will read over those recommendations and assimilate them. The major thrust of Professor Mintford's argument was that there was a need for rented property, certainly in the south-east and London.

Professor Mintford has a peculiar brand of economics. He considered the problems of Merseyside and decided that there was too much of it. The logical solution therefore was to remove half of it. I am not sure which side of the Mersey he had in mind, but--

Mr. John Heddle (Mid-Staffordshire) : On a point of order, Madam Deputy Speaker. I am trying to follow the hon. Gentleman's arguments is so far as they relate to the Lords amendments. It is very interesting to hear his general views on the Government's housing policy. However, is not his contribution more of a Second Reading speech than one specifically related to the amendments under discussion?

Madam Deputy Speaker (Miss Betty Boothroyd) : I remind the hon. Gentleman that that is for me to judge. If the hon. Gentleman looks at this group of amendments, he will see that they cover a wide range of issues.

Mr. Howarth : As usual, the impatience of the hon. Member for Mid- Staffordshire (Mr. Heddle) overtakes his intellectual gift for following the debate. I have no difficulty in following his point of order, and I am sure that at the appropriate time he will intervene and make his own comments which, as usual, will be well wide of the mark.

Until Professor Mintford and others rode on to the housing scene, the Government had only one panacea--owner-occupation. Professor Mintford believed that the revival of the private rented sector--and he suggested direct incentives for that from central Government--was the key to providing the accommodation needed in London and the south-east to bring the unemployed down from the north from constituencies like mine to work in Wimpy bars in London and rent in the private sector.

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Professor Mintford's suggestion about developing the private rented sector led to the Housing Act 1988. Many of us spent three and a half months trying to fathom out the logic of that Act. It was obvious that the Government accepted the suggestions of Professor Mintford and others that there was a need for rented accommodation, and they decided to create that through the private rented sector. The Government embarked on a programme of privatising the housing association sector. I have given that phrase some thought ; I have not simply thrown it out. If we consider the development of Government policy towards the housing associations over the past two or three years, effectively, as the present Minister for the Environment and Countryside used to say frequently at the Dispatch Box, they are pushing what was a voluntary sector into the private sector. They are doing that through financial means.

The Government were in favour of expanding the private rented sector. Secondly, they were in favour of deregulating housing associations. Thirdly, they created a series of devices under part IV of the Act to bring about the breaking up of local authority housing. They made no bones about that--

Madam Deputy Speaker : Order. I have given the hon. Gentleman quite a lot of rope ; I do not want him to hang himself. If he came back to the housing revenue accounts, I should be much obliged.

7 pm

Mr. Howarth : I am grateful for your guidance, Madam Deputy Speaker, and I would not dream of straying from the subject.

The Government's general attitude towards housing is summed up in the proposals on ring fencing as they apply to all these matters. In the 1988 Act the Government set out, through the use of housing action trusts and the pick-a-landlord--strictly speaking, the pick-a-tenant--schemes, to give people the opportunity to opt out of local authority housing--

Madam Deputy Speaker : Order. The hon. Gentleman is now going very wide. I have asked him once to return to the point.

Mr. Howarth : I am grateful, Madam Deputy Speaker.

These provisions have universally failed--no one has opted out. I have described the carrot, which was the offer of somewhere else to go, but the stick is contained in this Bill. It is to be seen in the Government's treatment of council house rents and housing revenue accounts. Having failed with the carrot, they now introduce the stick. As in the early 1980s and subsequently, new arrangements for rents and for the way in which council house finance is treated are being introduced to make it increasingly attractive to tenants to opt out of a local authority.

The Government hope that tenants will opt either into the newly deregulated housing association sector or into some other form of housing. The Minister is nodding as I point out last year's carrot and this year's stick.

Instead of taking a sensible view of housing policy and of choice, the Government have chosen to victimise council tenants, because of their own ideological predictions, so that they can force them into a financial position in which they have no choice but to follow the Government line. If the Government were so worried

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about the situation, why did they not look into some of the points that my hon. Friend the Member for Hammersmith (Mr. Soley) mentioned? Why did they not recognise that billions of pounds are needed to put all the housing stock of all the various types of tenure in good order? Why did they not devise a new system to do that effectively? They did not even attempt to think about it. Despite their protestations, why did not the Government consider doing something through local authorities--they are responsible for homelessness--to try to resolve the problem of homelessness?

One of our amendments deals with homelessness. It is no accident, given that the Government have removed 1.2 million properties from all types of rented accommodation, that somewhere along the line something has to give. What gave is visible on the streets of London and across the country. It is not a problem that affects only London ; 43 per cent. of all the people who registered as homeless last year were outside London--in towns, rural areas and other cities. These people have nowhere to go. Even when there is surplus local authority accommodation that can be brought on to the market, the Government will so arrange the housing revenue account and other factors that affect local authorities that these people will probably not receive the right combination of benefits to support their efforts to rent a council house or flat.

The Government can pump a few million pounds here and a few million there into new schemes and claim to be a caring Government who are doing something about homelessness, but they know that the problem will get worse until more houses are built. Since 1979, 19,000 fewer council houses a year have been built and there have been 9,000 fewer housing association completions every year. Clearly no effort has been made to deal with the problems of homelessness.

The Government talk about subsidies. I served on the Standing Committee of this Bill, and it was absolutely clear to us that the way in which the rate fund contributions and housing benefit will work is that the poor will be bound to subsidise the even poorer, perhaps to the advantage of the taxpayer but definitely to the disadvantage of those who are trapped in the system.

It is worth discussing who gets what out of the housing system. Housing benefit, whether we like it or not, is the subsidy that applies to those in greatest need. Over the past two or three years the Government have been intent on reducing it. They have not had the guts or the foresight to look at mortgage income tax relief, which is the comparable system--

Madam Deputy Speaker : Order. The hon. Gentleman himself said that he was a member of the Standing Committee. As such he is familiar with this clause and with the amendments, and I must refer him to them.

Mr. Howarth : This is a wide group of amendments. I am not sure how I can talk about the subsidy system that applies to local authority tenants without comparing it with housing subsidies for others in the community. I suggest that mortgage income tax relief is directly comparable--

Madam Deputy Speaker : Order. It is not in the Bill, and it is way outside our debate this evening.

Mr. Howarth : It was worth a try.

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As my hon. Friends have said, council tenants will not benefit from all this. Those in other sorts of tenure will continue to receive other sorts of benefits.

The tragedy of this Bill is that the Government had an opportunity to examine all the problems that contribute to the housing crisis, but they have refused, or were too stubborn or too stupid, to deal with the problems. Instead they have carried on with a Bill that does nothing to resolve this country's housing problems. Our amendments would go some way to alleviating the problems that the Bill will cause, and I strongly commend them to the House. Some time in the next two or three years, however, my hon. Friend the Member for Hammersmith will be at the Dispatch Box with Labour's housing Bill, and only then will we start to deal with the problems of housing.

Mr. Battle : I shall speak to Lords amendment No. 117 and amendments (a) to (f) in the name of my hon. Friends. I shall also refer to amendment No. 121 on homelessness and to the amendments dealing with capitalised repairs.

My hon. Friend the Member for Knowsley, North (Mr. Howarth) was right to deliver a wide-ranging speech because the Bill is becoming increasingly threadbare. The Government are in increasing difficulty in finding someone who is prepared to defend it. For weeks we have not been clear about who is the Minister for Housing. I gather that it is traditional for the Government to send a Minister to see the housing associations. However, they could not find one to send this year and a civil servant was sent. Obviously he cannot answer about policy.

No one on the Government Front Bench has seen the Bill through every stage of its consideration in the House and in Committee. That means that for the benefit of the Ministers who are now with us we have to go over old ground again because Ministers now give us answers that are completely different from the answers that we received from former Ministers. I shall give one practical example. In this debate the Minister decried capitalisation of repairs. I remind him that his predecessor, who is now the Minister for the Environment and Countryside, said that he felt that capitalisation was entirely legitimate. Perhaps the Minister will say whether he agrees with his colleague or whether there has been a policy change. At least the policy of the former Minister was consistent with that of the present Minister of State, Foreign and Commonwealth Affairs, the hon. Member for Bristol, West (Mr. Waldegrave), who went round the country 18 months ago encouraging local authorities to use all their capital receipts for repairs. What is that if it is not legitimate capitalisation? Perhaps the Minister will explain whether policy changes with the Minister or whether it remains according to the content of the Bill as it is discussed in the House, in Committee and in the other place.

Mr. Chope : There is a great danger that I will be traduced as a result of the hon. Gentleman's remarks. I do not know whether the hon. Gentleman was here when I spoke earlier.

Mr. Battle : I was.

Mr. Chope : If that is the case, the hon. Gentleman should recall that I specifically differentiated between true capital and capitalised repairs and captitalised repairs that are not for true capital purposes but for the purpose of, for

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example, carrying out routine decoration works which most people would regard as not an appropriate use of capital resources.

Mr. Battle : I know that the Minister has not been in post for long. He should refer to Hansard and the debate in Committee on the Bill and on the 1988 Act which was on this precise topic. I am happy to assure him that former Ministers took a different view from the subtle distinction that the Minister is now trying to draw.

Mr. Robert G. Hughes (Harrow, West) : I know that the hon. Gentleman would not want to mislead the House. Can he give us chapter and verse of any occasion when any former junior Minister or Housing Minister told the Standing Committee or the House that small matters such as outside painting should be part of the capital programme? I do not remember that, and I do not believe that it happened.

Mr. Battle : I am surprised that the hon. Gentleman intervened. I seem to remember that he was on the Committee that examined the 1988 Bill. Perhaps he was writing Christmas cards and not paying attention. If he reads the Committee report, he will see that it contains a thorough discussion on the difference between capitalised repairs and the need to use capital receipts to carry out those repairs.

7.15 pm

Mr. Robert G. Hughes : Where is it?

Mr. Battle : The hon. Gentleman should go to the Vote Office and ask for the Standing Committee documents. If he spends the next two hours going through them instead of having his meal, he may find the information there.

There is a key issue in the housing revenue account that will affect tenants. The Minister may not recall it, but I am sure that other hon. Members who took part in the debate and those who attended and listened will remember that we had a thorough discussion about the balancing of the housing revenue account. I remember pressing the Minister hard on the issue. One side of the housing revenue equation consists of income in the form of rents. The expenditure column contains the management and maintenance costs, the repair costs and the housing benefit costs. I am sure that from the briefings that he has been given the Minister will recall that at one stage the ring fencing of that account included the housing benefit to be paid to private sector tenants. That obviously caused a great loophole, because if landlords hyped up their rents the local authority would have had to use its housing revenue account to subsidise the high rents of the private landlord. That was ludicrous and was not then included in the Bill.

At one point the Minister suggested that there had been no changes in the rebate structure, but I suggest that there have been because clause 78(1) of the Bill quite categorically states : "In subsection (2) of section 30 of the Social Security Act 1986 (housing benefit finance), for the words total housing benefit' there shall be substituted the words relevant benefit' and there shall be added at the end the words and in this subsection "relevant benefit" means total housing benefit excluding, in the case of a local authority in England and Wales, any Housing Revenue Account rebates granted by them'."

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That illustrates the difficulty that we encountered right in the middle of the Committee. When we were in Committee discussing this Bill, another Committee on which I also had the privilege to serve was discussing the Social Security Bill. The Government had not got their act together and had not connected the proposals in the Social Security Bill to the Housing Act 1988. The reason for that is apparent because many council tenants are on housing benefit. If, as the Minister proposes, all housing rents go up in line with capital values, then the bill for social security and in particular housing benefit will increase incredibly as well. Therefore, a cut-off clause was introduced.

The Minister needs to study the interaction between the Social Security Act 1988 and the Bill. If he does that, he will find that if rents rise for council tenants they will get their personal rebate but the local authority will not get its money back from the Department of Social Security. That shortfall in the accounts will have to be met from increases in the rents of tenants who are not on social security. There is no other way. That means that the poor or people on modest incomes will have their rents increased in order to pay the deficit in the housing benefit of those who are unemployed or have low incomes. Before the Minister and Conservative Members leap up and say that this will not affect people on benefits, they should look carefully at the detail of the Bill.

There is a parallel to which I shall briefly refer. Many Conservative Members say that the poor will have the poll tax paid for them, but we all know that there is also a cut-off clause. The suggestion is that everybody will pay 20 per cent., and that means that the maximum rebate is only 80 per cent. The notion that the Government are protecting the poor from increases is false. It is quite wrong to use the Bill and housing policy as a means of sorting out income maintenance. That should be done through the social security system and not by insisting on cuts in the repair programmes of local authorities by putting pressure on the housing revenue account.

I hope that the Minister will take that on board and will withdraw the proposals in the Bill before local authority rents go up and the social security offices refuse to reimburse local authorities for the housing benefit costs. As a result, local authorities will be penalised on the repair and maintenance work that they could provide for their tenants. It will mean that local authorities will put in the rebates and that the income maintenance which should come from the tax system through the social security system at the centre will be pushed back to local level. Perhaps in line with the Government's approach to poverty we will be pushed back again in the direction of a kind of retrograde parish relief system at local level. I asked the new Minister a question earlier today. It is relevant to amendment No. 112, as it deals with the homeless. I asked him : "what is the Government's estimate of the number of homeless people under the age of 18 years."

The reply was :

"The numbers of people under the age of 18 years among the households accepted as homeless are not reported by local authorities and my Department has no estimates."

Given the new scientific age of computer calculation, and the emphasis that the Government put on collecting accurate information and statistics, I find an amazing complacency in that reply, not least because it is well known that in my city of Leeds every month 300 young

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people present themselves as being homeless or threatened with homelessness, and that at least a third of them are aged under 18. I hope that the Minister is not suggesting that he will shuffle off responsibility for the homeless by saying that, as the Department cannot keep figures of those who are under 18, they are not a problem.

The Minister should say that there will be a change of policy. The Bill, with its proposals to ring-fence the housing revenue account, will simply add to the ideological almost-addiction of the previous Secretary of State, who was hooked on the free market. He believed that the price was all--push rents up and the housing problems will be resolved. Already one of the Minister's colleagues has said that the Government will introduce no more legislation on housing, because they have "done housing".

I take the view which I am sure many others take, that the Government's housing policies have resulted in a housing disaster in terms of improvement of stock and a housing tragedy in terms of human lives for those who are homeless. I hope that this rag-bag of amendments, whose acceptance would make the Bill even more shoddy, will mean that increasingly Ministers are unprepared to defend it, with the result that, even at this late stage, they will be prepared to withdraw it.

Mr. Ronnie Fearn (Southport) : I did not have the pleasure, if I may call it that, of serving on the Standing Committee on this, or any other, housing Bill. Therefore, like the Minister, I am new to the job. When I looked at the amendments and the Bill, this amendment dealing with ring fencing was the one that stood out. It seems to me to be a deliberate attempt to raise rents and work towards the elimination of all council housing. This may be the Government's aim.

There is no doubt that there is a terrific housing shortage. I used to think that I came from a rather affluent society in my home town of Southport, which is in Sefton. However, when Sefton was created in 1974, we gathered Bootle, Crosby, Formby, Southport and many other little parishes. Within that group, I realised that there was a big and growing housing shortage. In my own home town of Southport, 3,000 families are waiting for housing. I cannot see that the Bill will improve that by one iota.

The housing shortage is not contained merely within my Merseyside area. It stretches throughout the country, and since I live part of the time in London, I have been able to see the many homeless young people in the capital city. They are now moving out of the cardboard cities and into the concrete jungle because winter is coming. On many nights I have spoken to the police and to the homeless and they tell me that the problem continues to grow, not only in London but in other major cities, and now the towns. I cannot think that the Bill will help those homeless people.

The deterioration in property will get worse. Some authorities have not been good at looking after their housing stock, and many have come to the attention of the Association of Metropolitan Authorities. They are of many persuasions--all political parties have had that trouble. What the Minister is proposing will not help in any way to improve the housing stock, much of which now needs a great deal of money spent on it. The housing subsidy account and the housing revenue account have been able to cope with many of the repairs that need to be done to council housing, but from here on that will be much more difficult.

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It has been said that the Minister claimed that rents would not rise. He did not say that--he was misquoted. He said that rents will not be out of the reach of ordinary people. I should like to know what the term "ordinary people" means.

Mr. Battle : Those on average wages.

Mr. Fern : I do not know. I hope that the Minister will explain what he means, because this is the yardstick on which the Government will work. I should find it difficult to spotlight the ordinary person by using that yardstick. Can he guarantee that when he comes to define ordinary people, rents will not be out of the reach of those people?

It is morally wrong that better-off council tenants should be paying, through their rents, for the welfare benefits given to other tenants. Private and housing association tenants will not be put in that position. It will place council tenants in the difficult position of having to pay a little extra. This is particularly bad as better-off council tenants are a long way from being well off. There is no such thing as a well-off council tenant. A well-off person is one who owns his own property with only a small mortgage and there are few like that these days. To say that we are subsidising council tenants is untrue. It has never been true and it will not be true. It is another case of the poor subsidising the poor.

We have here greater central Government control over local authorities' housing activities, thus once more stifling local initiative--something at which Whitehall has been very good, especially since 1979. I can see that the Bill will do nothing to alleviate the growing housing shortage. If the Minister can explain one or two of those points, I for one shall have my eyes opened.

Mr. David Winnick (Walsall, North) : Rent levels are already far too high, and the Bill will continue the substantial increases in rents that have already taken place. Those increases in rents result from the elimination of housing subsidies and are not the fault of the local council, certainly not mine, which recognises that much of the rent increases has been unjustified, but has simply no alternative, like every other local authority. These substantial rent increases have been aggravated by the substantial reduction in housing benefit. The phasing out of transitional benefit--a benefit which came about only as a result of the outcry, particularly by Opposition Members--will mean that many of those who will be expected to pay full rents will not be in a position to do so.

I receive many complaints from constituents about rent levels. They come to see me at my surgeries and show me the amount of rent that they are paying out of a relatively small income. I can hardly believe that they can be paying so much in rent. As one would expect, I write to the housing department, but it is nearly all in order in most cases. Usually there has been no mistake and the responsibility falls on the Government who, since they came to office 10 years ago, have deliberately pursued the policy of making life more and more difficult for local authority tenants.

One of the reasons why rents have gone up, apart from the substantial reduction in housing subsidies, is the Government's wish for council tenants to buy. They are pressurised to buy. They are told, "Why remain a council tenant? It is easier to buy." In many cases they have no wish to buy the property in which they live. The ring fencing that is included in the Bill will ensure that tenants

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who are certainly not well off, but who are somewhat better off than others, will subsidise poorer tenants. As my hon. Friend the Member for Hammersmith (Mr. Soley) said, the poor will subsidise the very poor.

We have not heard much from the Minister about the private sector. He would be boasting if there were any justification for boasting. We know the junior Minister's record before he came to the House. He is a fanatic about the privately-rented sector. He and other Ministers told us that there would be a revival of that sector, that that would solve much of the homelessness and the difficulties experienced by so many people.

I wonder how many more rented accommodation has come about in the private sector since the new legislation was put on the statute book--not much. That demonstrates what we said at the time--that the revival would not come about for all the reasons that we gave at the time. We are confronted by an acute housing crisis, as my right hon. and hon. Friends have said.

7.30 pm

I shall give an illustration. Some constituents of mine, who are not in the worst housing plight, came to see me last Saturday. They are a young couple who have been married for two or three years and have one child. They live with the wife's mother. The situation in the household is tense. They are high on the waiting list, but every time they go to the local neighbourhood office, they find that other people are higher. That is understandable because, presumably, other people are considered to be in greater housing need.

The couple have been married for nearly three years and they have never had any accommodation of their own. They told me that, about 18 months ago, they considered buying a place but it was not possible then, let alone now. Theirs is not the worst case--far from it--but it illustrates some of the problems of people who are being punished and penalised, day in and day out, by the Government because they cannot afford a mortgage. What can they do? They can wait for years to be rehoused by the local authority. I am not exaggerating. Housing associations cannot help them, and it is a joke to mention the private rented sector to the people who come to my surgeries and who write to me about their housing problems.

Why should our fellow citizens be penalised because they do not have the income to buy? I accept that they are a minority, but they are a sizeable minority. If we leave the main building here and turn right, we will find that a vigil is taking place opposite Downing street. It is a vigil for the homeless and I understand that it has been organised by Shelter. This Christmas, there will be more homeless people than in any year since the end of the war. That is certain. There will be more families in bed-and- breakfast hostels this Christmas than ever before. Imagine what it must be like to stay in bed-and-breakfast accommodation for the Christmas holiday and not to know when one will be rehoused.

The Prime Minister likes photo-opportunities and she likes to be photographed in favourable circumstances. Will she visit a bed-and- breakfast hostel on Christmas day? Will the Secretary of State or the Under -Secretary of State go to a hostel and see their fellow citizens living in squalid conditions because of the Government's policies? Nowadays one cannot go to a main line railway or

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Underground station in central London without seeing young people with boards saying, "I am homeless". They are begging. They do not appear to me to be social victims in the sense of being drunkards. In the main they are young people who are encouraged to come to London by the Government. Once they are here, even if they find a job, they have no means of finding accommodation. That is the crisis that we have to deal with and to which the amendments refer.

Many accusations can be made against the Government. One of the worst is that they have shown a callous disregard for people who are not able to solve their housing problems by buying. They have shown a callous disregard for people who desperately require rented accommodation. Had I been told before 1979 that there would be a substantial reduction in the rented sector, I would have found it almost unbelievable. I shall not go into the argument about whether it is right for local authorities to sell houses, as it is not a part of this debate, but it is only right and proper that when accommodation is sold it should be replaced. Yesterday, in a parliamentary answer, I was told that the number of local authority starts last year was approximately 13,000 and that it is likely to be even less this year. That is disgraceful and scandalous.

I do not apologise for the fact that I have raised these issues in the House before and I shall continue to do so because the Chamber of the House of Commons is the right place to raise them. There is not much concern on the Conservative Benches. Ministers are well off. None of them has ever suffered the indignity of being without accommodation. None of them understands what it means not to be able to resolve housing difficulties. The hon. Member for Grantham (Mr. Hogg) may mutter as much as he likes-- Ministers do not understand the problems that I am trying to explain to the House.

I say again that it is scandalous that our fellow citizens should have to spend Christmas or any other time in the conditions that I have described. That is why we are right to object to the Bill. It is the duty and responsibility of Labour Members to explain what is happening at every opportunity, in the House and outside, and to point out the indifference that the Government show to the homeless and near-homeless in Britain.

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