§ The following Written Question stood upon the Order Paper:
§ Mr. WILLEYTo ask the Minister of Housing and Local Government whether he has yet received a report from the National Board for Prices and Incomes on increases in council house rents.
§ The Minister of Housing and Local Government (Mr. Anthony Greenwood)I will, with permission, answer Written Question No. 14.
My right hon. Friend the Prime Minister announced at the time of devaluation that the Government were determined to protect the poorer sections of our people from the effects of rising prices. Rents are a large item in the family budgets of workers, and the very sharp increases in rents made by some local authorities clearly conflicted with the overriding need for restraint on prices and incomes.
The Government therefore referred to the National Board for Prices and Incomes last December the question of increases in rents of local authority housing. At the same time, we advised all authorities to moderate and phase any necessary rent increases, and also to adjust rents to the needs of tenants by means a rent rebates—that is, using subsidies to help those who need help most. The great majority of local authorities have followed this advice and have done as much as they can to keep rent increases within reasonable limits.
The Board's report has now been received by my right hon. Friends the First Secretary and the Housing Ministers associated with the reference. The Report is published today by Her Majesty's Stationery Office. Copies have been placed in the Library and are also obtainable from the Vote Office.
The Government welcome the Report, which strongly supports the advice we had already given to local authorities on the need for moderation and phasing of rent increases. The Board recommends that, where rent increases, arising from increased costs, are necessary, increases in average weekly standard rents should not exceed 7s. 6d. in any one year, subject also to moderating any increases above 487 the average, and that authorities wishing to provide for a larger average increase should be required to seek the permission of the Housing Departments.
The White Paper on Productivity, Prices and Incomes Policy in 1968 and 1969 (Cmnd. 3590) emphasised that it is the Government's intention to introduce legislation requiring all local authorities to notify Ministers of proposed rent increases and enabling Ministers to direct local authorities to moderate or phase rent increases which they regard as too high in present circumstances.
The Government propose that the new powers for which they intend to legislate should be applicable to any rent increases which took effect on or after 1st April this year and to increases referred to the National Board for Prices and Incomes. We are issuing further guidance to local authorities on these matters.
Under the legislation which the Government will propose to Parliament, Ministers will be able to give directions to any local authority proposing increases. Authorities will be advised that Ministers will not normally accept increases in average standard rents exceeding 7s. 6d. a week in any one year as the Board recommends. We shall also advise local authorities to limit the maximum weekly increase for any individual dwelling to 10s. a week in any one year.
Some authorities have made or proposed rent increases since 1st April which substantially exceed these limits. We are asking these authorities, and those referred to the National Board for Prices and Incomes, to review their increases in the light of the new advice.
In order to improve relations between local authorities and their tenants, the Board suggests the removal of the requirement to serve notice to quit at the same time as notifying rent increases—a matter already under review by the Law Commission—and the setting up by local authorities of a system for dealing with complaints from tenants.[...] We welcome these proposals, which will be discussed with the local authority associations, together with other suggestions which the Board makes on local authority housing finance.
It is important that tenants should understand that all rents at present in 488 force, including any increases, will remain payable unless and until the responsible Minister directs the local authority to revise its rents. Any such reduciton will take effect from a future date specified in the direction.
We are confident that local authorities will recognise the need to contain costs and to moderate rent increases. The Board's Report strongly endorses this policy, which the Government regard as an essential component of a successful and equitable prices and incomes policy.
§ Mr. WilleyI thank my right hon. Friend for that statement. Is he aware that it fully justifies the reference to the Board? I am sure that the statement is generally welcome to the House. What steps will be taken administratively, meanwhile, pending statutory provisions? Can he, if necessary, ensure that the statutory provisions will be retrospective to see that no increase before they are introduced is enforceable?
§ Mr. GreenwoodI am obliged to my right hon. Friend. The Report emphasises the need for moderating and phasing rent increases in the way the Government have suggested. So far as retrospection is concerned, I have made the position clear in my statement. We are issuing guidance to local authorities on how to interpret the powers for which we shall be asking Parliament in the very near future.
§ Mr. RipponIs the right hon. Gentleman aware that rising rents, like all rising prices, are due to the failure of the Government's economic policy, to devaluation and to the highest rates of interest in history? Will he, therefore, agree that it is important that there should be no interference with the statutory responsibility of local authorities to balance their housing revenue accounts in accordance with the interests of the rate payers as well as of the tenants?
Will the right hon. Gentleman also confirm that the Government still adhere to the policy of charging reasonable rents in both the public and the private sector? If that is still the policy, does not it follow that reasonable rents must be determined by each authority on the merits of each case and not by reference to any arbitrary standard?
§ Mr. GreenwoodThere can be no arbitrary standard. But it is clear that 489 a number of local authorities have been increasing rents by two or three times what is reasonable in existing circumstances. The right hon. and learned Gentleman must know perfectly well that the increased costs of local authority building are partly due to improved standards for local authority accommodation and partly because of the high-rise building which became so fashionable when he was Minister of Public Building and Works.
Mr. J. T. PriceIs my right hon. Friend aware that we on this side deplore the need for the constant rises in rents just as strongly as do our constituents, but that, nevertheless, we welcome his statement as some indication that the Government are aware of the serious situation as far as the rent payers are concerned? Does not he agree that, if the Government had not already come to the aid of the local authorities by increased subsidies and by an increased drawback of 10d. in the £ on rates through additional grants from Government funds, the rent increases already complained of would have bene much more severe than today?
§ Mr. GreenwoodYes, Sir. My hon. Friend has shown his usual perspicacity. The increased subsidy means that each local authority house built last year is getting a subsidy of £83 a year as against £24 a year provided under the 1961 Act. There is, in addition, the 10d. domestic subsidy, to which he has referred, and also the rate rebates, which help the position of many poorer paid people.
§ Dr. MillerWhile welcoming in general the statement and the proposals for further action, may I ask my right hon. Friend whether he is aware that 7s. 6d. per week is a substantial amount, particularly in the development areas and especially in Scotland? Will he under-take to ensure that local authorities realise that this is a maximum and not a general amount which they should apply?
§ Mr. GreenwoodI appreciate that point. It is the wish of my right hon. Friends the Secretary of State for Scotland and the Secretary of State for Wales and myself that this figure should be a ceiling rather than a floor. But it is important, while realising what my hon. Friend has said about the size of 7s. 6d., to strike a 490 balance between keeping rents down to a reasonable level and enabling local authorities to go on increasing the number of houses available.
§ Mr. Boyd-CarpenterWhere a local authority has inherited a large deficit on its housing account and, on a Ministerial direction against an increase in rents, has to add to the burden on the ratepayers, will the Government provide additional funds to compensate the ratepayers?
§ Mr. GreenwoodThis is the sort of situation which every Minister will have to take into account in deciding how to exercise his powers. The right hon. Gentleman is much less than his usual original self in suggesting that only the general rate fund can be used to make contributions of this kind. It is possible to use existing balances in the housing revenue account and balances in the equalisation account; and to take advantage of the higher rate of accumulation on housing capital repayments, as we enabled local authorities to do last year. It is also possible to make economies in management. All these are available as well as further contribution from the general rate fund.
§ Mr. Julius SilvermanIs not my right hon. Friend aware that an addition of 7s. 6d. a week in rent can mean an increase of 30s. within four years? Does he think this consistent with the prices and incomes policy? A large number of people who are not within the range of any normal rebate schemes will find difficulties in meeting this increase. Will he review the whole question of local government housing finance and the assumptions upon which it is based? Judging by a cursory review of its Report, this has not been completely done by the Board.
§ Mr. GreenwoodMy hon. Friend is perfectly right. A long-term review of housing finance was not within the terms of reference of the National Board for Prices and Incomes. I know the point which my hon. Friend has in mind. It is one of the problems which we are studying in the Ministry of Housing and Local Government as part of our long-term review of housing finance.
§ Mr. LubbockIs the right hon. Gentleman aware that many local authorities are seeking rent increases from their 491 tenants—they may not average more than 7s. 6d. a week—because they are trying to build up too high a balance on their housing revenue accounts? Would he be prepared in these cases to use the powers of direction to which he referred? Is he aware that the setting up of machinery to enable local authority tenants to make complaints will be greatly welcomed and that it is to be hoped that that will be included in the legislation which he has promised?
§ Mr. GreenwoodI agree on both points. A number of recent sweeping increases have arisen because local authorities have been looking too far ahead and have been trying to build up balances beyond what is a reasonable level. Certainly, we would use our powers, if necessary, in cases of that kind. I am grateful for the welcome given by the hon. Gentleman to our proposal to have, as it were, appeals machinery for council house tenants. I believe that this is a tremendous step forward and that it will improve the standing of local authorities with the people whom they represent.
§ Mr. BellengerCan my right hon. Friend give an indication of the general reaction of housing authorities to his suggestions about rent rebates?
§ Mr. GreenwoodThe reaction generally has been very favourable to the rent rebates circular which we issued last summer, and now about 75 per cent. of council house tenants are covered by rent rebate schemes. The schemes are not uniform and they vary in quality from one local authority to another.
Secondly, we have had a satisfactory response to our request, made in December, that local authorities should phase and moderate rent increases. Of the 300 increases notified since December of last year, about 60 would come within the terms of the proposals that we are now making.
§ Mr. RipponHas the Minister consulted the Chancellor of the Exchequer and local authority associations about his quite extraordinary proposal that local authorities should deal with this matter by just dipping their fingers into the till and drawing on their reserves? Is he aware that many Conservative local authorities have found that their Socialist predecessors have already robbed the till 492 —[HON. MEMBERS: "Oh."]—for example, in Birmingham?
§ Mr. GreenwoodI do not think that the last point made by the right hon. and learned Gentleman calls for a reply. I am in the closest touch with my right hon. Friend the Chancellor of the Exchequer. Two or three weeks ago I discussed with the local authority associations the main principles of the proposals which I have put before the House.
§ Mr. Simon MahonIs my right hon. Friend aware that one of the most important aspects of his statement is that which has rather little to do with money? Will he accept from me the gratitude of millions of people in having removed the notice to quit, something which has been an affront to millions of working-class people in Britain for very many years?
§ Mr. GreenwoodI am obliged to my hon. Friend for that comment. I know of the work which he has done in Bootle to help people in bad housing conditions in that town. The point he raised has been something which has disturbed many of us for a long time. The notice to quit can have an extremely painful effect, particularly on old people. There is no need for this practice to continue. It would, except for some authorities, need legislation to put an end to it; but in the meantime we will give guidance to local authorities about the desirability of giving adequate advice to tenants about what the notice to quit really means.
§ Mr. GoodhewBy what magic formula did the right hon. Gentleman arrive at 7s. 6d. as being a reasonable increase? Is he aware that on a rent of 15s. it represents a rise of 50 per cent., while on a rent of 75s. it represents a rise of 10 per cent.?
§ Mr. GreenwoodI congratulate the hon. Gentleman on his arithmetic. I hope that he will carefully study the Report of the National Board for Prices and Incomes, because the figure of 7s. 6d. was suggested in that Report. In fact, it fell in with my own thinking and that of my right hon. Friends on this matter. Although 7s. 6d. may represent an increase of 50 per cent. on a rent of 15s., it is a great deal less than, for example, an increase of 45s., as has been proposed in some cases recently.
Mr. Frank AllmanWould my right hon. Friend agree that he has had to intervene to stop certain big cities, now Conservative controlled, from axing their housebuilding programmes as a means of preventing rent increases, a wicked thing to do?
§ Mr. GreenwoodI am not in possession of powers to do quite what my hon. Friend has suggested, but his remarks emphasise the need for striking a balance between keeping rents reasonably low and not discouraging local authorities from getting on with their building programmes.
§ Several Hon. Members rose—
§ Mr. SpeakerOrder. We must move on.
§ Mr. Bruce-GardyneOn a point of order. Are you aware, Mr. Speaker, that when the Minister referred to the local authorities which had been referred to the National Board for Prices and Incomes, he was referring to a number in Scotland? Are you aware that, despite this, the right hon. Gentleman has not made it clear whether or not his statement applies to Scotland?
§ Mr. SpeakerEvery hon. Member whom I did not call to put a supplementary has a very good reason for being called, but I cannot call all hon. Members.