Clause 1.—(INCREASE OF EXCHEQUER AND LOCAL AUTHORITIES' CONTRIBUTIONS IN RESPECT OF HOUSING ACCOMMODATION PROVIDED BY LOCAL AUTHORITIES.)

HC Deb 15 October 1952 vol 505 cc277-323

7.28 p.m.

Mr. Hector McNeil (Greenock)

I beg to move, in page 2, line 38, to leave out "half," and to insert "third."

The Chairman

It will probably be for the convenience of the Committee if this Amendment and the next Amendment in the name of the right hon. Gentleman, in line 44, to leave out "the sum of nine pounds." and to insert: a sum equal to one-third of such contribution. are discussed together, and, if desired, divided on separately.

Mr. McNeil

We are very anxious to accept your suggestion, Sir Charles, which I am sure will help the Committee.

The Amendments draw attention to a subject which did not receive any discussion at the earlier stage of the Bill. These matters are of great importance to local authorities and also, I have no doubt, to the Committee. The two Amendments seek to give a decided turn to two paragraphs on page 2 of the Bill which provide that, besides to the contribution set forth in the principal Act, additional contributions for certain types of dwellings are offered in part from the Chancellor of the Exchequer and in part from the local authorities.

The first Amendment refers to the additional contribution provisions relating to high cost houses erected on clearance sites and the second refer to the respective provisions offered in relation to the construction of hostels. The necessity for these types of dwellings is, of course, easily understood by the Committee. In the first great surge of rehousing after the end of the First World War local authorities, with encouragement, naturally took the easiest sites and these housing developments in most of our big towns, certainly in our cities, were to be found on the perimeters of those communities.

There was at that time a prejudice, quite easily understood, though I have my own reservations about its validity, against flatted dwellings and in favour of separate and semi-separate houses. I must confess that from time to time I have wondered whether, if this tendency were not arrested, local authorities, together with the Ministry of Transport and perhaps more particularly with the Air Ministry, might gobble up land at such a rate that other sectors of our economy, particularly agriculture, might be threatened.

At all events the Committee will also understand that that tendency left in those towns and cities sad and desolate areas, sometimes deserted tenements, sometimes badly-filled sites. In more recent times one has seen up and down the country that local authorities have addressed themselves to the problem displayed in the centre of the cities and on the perimeters. Glasgow has made a notable contribution. My own burgh has made its effort, too, and many small towns and all the large cities have, in part, addressed themselves to the problem.

That special kind of building effort had to be treated separately. These sites were very expensive to develop, and the principle had been accepted that special contributions would be made in respect of that type of construction. That principle has been accepted, and I am sure will not be challenged in any part of the Committee. My hon. Friends and I, however, feel that the amount of the contribution must be challenged, and our first Amendment suggests that instead of the contribution being left as a half it should be reckoned as a third.

The Committee may ask why we should have chosen this figure. I do not think there is any difficulty in explaining that. The Committee will have noted that in the subsidy set forth in the Bill the almost exact proportion of three to one is observed throughout the Schedule. The Committee will also have noted, though it is not quite relevant, that in paragraph 8 of the Memorandum, the respective contributions are calculated at approximately £5,900 to £19,900. So, there again, we have a three to one contribution accepted; indeed, it is a little better than that.

The Minister of Housing and Local Government has in recent months made certain speeches in which he expressed, with great acceptance to local authorities and equal acceptance on the part of hon. and right hon. Gentlemen on his side of the Committee his determination to maintain the three to one contribution in favour of local authorities. I do not pretend that I know of any comparable quotation attributable to the Secretary of State for Scotland, but I imagine that this must be one of the subjects on which the Government might speak with one voice and that he will not depart from this principle. I very much hope, therefore, that the right hon. Gentleman will accept these two Amendments.

It is not only that it will be a considerable hardship to local authorities if in this respect they are asked to accept the lesser proportion of three to one. From a national point of view also it will probably mean that local authorities will once more be forced out towards the easier sites which I have somewhat loosely called the perimeter sites, which will be an extravagance, as I am sure the right hon. Gentleman will agree, as far as the country as a whole is concerned.

We have to assist local authorities to develop those sites which are meantime yielding nothing in terms of value to the local authorities or to the community. The change we propose is not a big one. The principle of the additional contribution is and has been accepted. The principle of a three to one contribution has been initiated by the Government, and the right hon. Gentleman seems anxious not to depart from that principle. If, therefore, the Government are in earnest and mean to follow through their calculations, they will have no difficulty in accepting the Amendment which I have moved.

Mr. Thomas Fraser (Hamilton)

I sincerely hope that the Government will accept this Amendment. All of us have been perturbed in recent years at the extent of the encroachment on good agricultural land of new housing development. No one wants for a moment, however, to discourage housing development.

All of us are aware that in the centre of our large towns and cities there are many sites that badly need developing. Also, in considering the need for building all possible additional houses and for conserving agricultural land to the best of our ability, we would agree that our local authorities in these big cities who are seeking to provide for the needs of people who wish to live in cottage type homes with gardens on the one hand, and people who are happy to live in fiats without gardens on the other, should be given every possible encouragement to provide a fair proportion of the housing needs in the big cities on these city sites.

That kind of development is always more costly. The Government appreciate that and provide for additional subsidies to be paid in respect of that kind of development. It seems to me, however, that the Government give inadequate or insufficient financial inducement to the local authorities to go in for the kind of development which all of us would like.

If the Government are able to accept and approve of this principle of paying three times the contribution paid by the local authorities in respect of the ordinary house, it seems to me that the Government really are obliged at the present time to give at least that kind of contribution in respect of the building of more costly houses. I should have thought there is much to be said for the Government, which must be much more concerned with the conservation of good agricultural land than a large city authority, being excused if they gave much more generous contributions towards the provision of these more costly flats in central development than in respect of houses on the perimeters of our towns.

During the Summer Recess some of us have had an opportunity of going into these matters—and, indeed, into all the matters raised in this Bill—at some length with representatives of the local authorities. Representatives of the city authorities have impressed upon me the financial difficulties facing the local authorities at the present time; difficulties in the way of big city authorities giving effect to the policy which has been declared from Government statements from time to time, namely, the building of flats on the old sites and the vacant sites in the city centres.

They have said it is impossible to go ahead with any considerable programme of providing flats or housing accommodation of this kind, because of the extent of the subsidy just now, and having in mind the considerable rate increases which most rate payers have had to bear and of the impossibility of asking much higher rents from the people obliged to occupy these houses when they are built. In all the circumstances, I think that the case is made out for a more generous contribution towards that kind of development than is provided in this Bill.

As my right hon. Friend the Member for Greenock (Mr. McNeil) has said, Government spokesmen have, from time to time, since the Government took the foolish and unjustifiable decision to increase interest rates some months ago—and followed that with the increased subsidies—argued this principle which has been embodied in the housing statutes for a long time, that the Government pay three times for every contribution made by the local authorities. This three to one ratio, laboured by Government spokesmen in recent months with regard to the normal housing subsidies, seems to me to be the least that the Government should agree to undertake with regard to the additional cost of providing houses on these central sites. I wish I could argue that they should go even further than that, but I beg the Government to go that far.

7.45 p.m.

The Joint Under-Secretary of State for Scotland (Commander T. D. Galbraith)

As the right hon. Member for Greenock (Mr. McNeil) has said, this subsection of Clause 1 of the Bill lays down the statutory contributions which have to be paid by local authorities in regard to houses of various sizes. The principal Act, as the right hon. Gentleman has reminded us, allows the Exchequer to give additional assistance up to a maximum of £20 for clearance areas, and a contribution of £7 towards the cost of installing lifts where these are required. Where these additional sums are granted by the Exchequer the local authority is called upon for an additional contribution equal to one-half of the Exchequer contribution.

The Amendment proposes to reduce that additional contribution to one-third of the Exchequer contribution; and the argument of the right hon. Gentleman was that that is the proportion which the local authority is called upon to bear in relation to the basic subsidy.

I wish to make it clear to the Committee that this is not a basic or a standard subsidy. It is, in fact, an additional subsidy, and ever since 1938 successive Governments have insisted on a two-to-one ratio. Indeed, as the right hon. Gentleman will recollect, that was actually contained in the Act of 1946, when I think the main arguments of the right hon. Gentleman might equally have been applicable.

We suggest that it is not unreasonable, where the Exchequer has already paid a standard subsidy of three times the amount asked for from the local authority, to suggest that any addition made to that subsidy should be borne by the ratepayer in a higher proportion than the one-third which now exists. I can only assume, from the fact that we have no representations whatsoever, so far as I know, from the local authorities associations in regard to this matter, that they at least must hold the view that it is a reasonable assumption for us to make. For that reason I am unable to accept the first Amendment, and I will ask the Committee to resist it.

The second Amendment deals with that part of the Clause which relates to the local authorities contribution with reference to the provision of hostel accommodation for single people. I would point out to the Committee that the Government have increased their contribution from £11 to £20 and we are asking in this Clause that the local authority contribution should be increased from £5 to £11. The Committee will observe that we are maintaining the exact ratio which has hitherto existed—

Mr. James McInnes (Glasgow, Central)

It is from £5 to £9, not £11.

Commander Galbraith

I beg the Committee's pardon. We are increasing it from £5 to £9—I got the figures wrong—which is exactly maintaining the ratio laid down in the 1946 Act.

The Amendment proposes to alter that ratio, and to reduce the contribution from local authorities to one-third of the Government contribution. Here, I must say, I found that there is considerable logic in the Amendment, because this happens to be a basic or a standard subsidy; it is not an additional subsidy, it is a basic subsidy in relation to hostels for single people. Therefore, it seems reasonable that we should keep it in line with the other basic subsidies where the one-to-three ratio applies.

The Committee will know that my right hon. Friend approaches all these matters with an open mind and is always willing to be guided by reason and logic. Therefore I am glad to be able to announce that the Government will accept the second Amendment, and so place the contributions from the local authorities with regard to hostels in the same position as the other basic subsidies.

Mr. McInnes

We seem to be proceeding on the basis that the subsidies today are in the ratio of three-to-one. That probably was the ratio many years ago, but anyone with a knowledge of housing subsidies must realise that today that ratio no longer exists. Indeed, the basic subsidies today are working out in the ratio not of three proportions by the Government to one, but of two proportions by the local authority to one by the Government.

It also seems to be an accepted premise when arguing the Amendment here that the subsidies are three-to-one. But the Under-Secretary of State is conscious today that in the City of Glasgow multi-storey flats are being built as part of the central development and in keeping with the general policy annunciated by various Governments.

These flats today are costing 50 per cent. more than the ordinary type of house. Indeed, the cost is estimated to work out at somewhere in the region of £2,600 per house, and the inevitable consequence of that is that the people in Glasgow—the homeless people who qualify for occupation of these flats—are being asked to pay a rental, which, of course, includes central heating, in the region of £2 10s. per week, which is an intolerable burden for any working-class family.

I am glad that the Government have thought fit to accept the second Amendment, but I feel that they ought also to accept the first, because this situation will have even more serious consequences in our large industrial cities such as Glasgow, Edinburgh, Aberdeen and Dundee, because of the intolerable burdens which these local authorities are being asked to face. The hon. and gallant Gentleman is aware that, in the past five years, Scottish local authorities have had to find an additional £5,500,000 in order to meet the deficits in their housing revenue accounts.

Because of these circumstances, I ask the Under-Secretary to reconsider the position in the light of the existing circumstances and to give some encouragement to local authorities who are proceeding with the development of flats in multi-storey buildings such as hostels and buildings of that kind.

Mr. A. C. Manuel (Central Ayrshire)

I wish to underline this particular problem of development in built-up areas so far as our Scottish cities are concerned. If I understood the Under-Secretary aright, he has conceded the second Amendment, which applies to a special type of building, such as hostels for old people, single persons and people in categories of that kind.

I want to put to him this question. Does he not agree that development in built-up areas, in which the old buildings have been cleared away, is a special type of development only applicable to our larger cities and towns, and that it is not the normal type of building operation so far as Scotland as a whole is concerned?

My hon. Friend the Member for Glasgow, Central (Mr. McInnes) has dealt with the additional cost of multi-storey flats in built-up areas. I think we are all agreed that we are reaching the position in which it is suitable, when we have old property which has been condemned and demolition and site clearance is taking place, that we should utilise that site, not for building so many houses, but for the development of multi-storey flats. If, however, the on-cost charge to the local authority is to be left as it is, we are certainly going to have this Government curbing building operations in these central areas of our cities.

I therefore appeal for reconsideration of this matter. It does not apply very much to my constituency, but I am in touch with the housing problem as it affects city centres, and I can reiterate and reinforce the arguments which have been advanced by my hon. Friend the Member for Glasgow, Central. In Glasgow, it is a burning question, and the Corporation have been faced with great difficulties. Their costs will be augmented very considerably if no relief is given, and I therefore ask the Under-Secretary if he will reconsider the matter and have another look at the position and at the facts, which would be submitted to him by the Glasgow Corporation.

Commander Galbraith

I would like to thank the two hon. Gentlemen who have just spoken for their contributions, and to say that I welcome the desire which has been expressed from the other side of the Committee for the redevelopment of the more central areas in our cities.

I think that, perhaps, if the hon. Member for Glasgow, Central (Mr. McInnes) will check up on the latest figures, he will find that the figure of £2,600 which he quoted is not in accordance with the latest technique and the latest designs for building multi-storey flats, but that it has been very much reduced, and that, today, it is not very much greater than that of building ordinary houses. Therefore, I feel that the additional £20 which the Exchequer is at liberty to administer in these cases may well be found sufficient to meet the situation.

I hope that those great local authorities which are more concerned than others in the rebuilding of the centres of our cities will see that the very latest technique is employed in the building of these large multi-storey flats. I understand that we are shortly to have an experimental block in Clydebank. There was to be one in Glasgow, but the project is held up at the moment, though I hope it will go ahead.

Mr. Manuel

When the hon. and gallant Gentleman says that he hopes that a cheaper technique will be adopted by the local authorities, what exactly does he mean? Is it cheaper building, or simplification of design? Is it smaller rooms?

Commander Galbraith

No; I did not refer to that. If the hon. Gentleman reads what I said tomorrow, he will find that I did not refer to cheaper techniques, but to more modern techniques. In fact, we are progressing in building, as in other directions.

Mr. T. Fraser

One might well think, after having had an opportunity of reading what some of us have been saying in the last half-hour, that the contribution being made by the local authorities for the provision of new houses is only one-third of that made by the central Government in the case of ordinary houses, and that, where we have this additional cost of houses in Scotland, at the present time, the local authorities only make a contribution equal to one-half of that made by the Government. That is not so. The local authorities' statutory contribution in the one case is one-third of that made by the Exchequer, and the additional contribution in respect of expensive flats is only one-half of the statutory contribution made by the Exchequer.

These figures have ceased to have any meaning with the local authorities. Indeed, very many of them are having to find a greater sum from the local rates than the Exchequer is contributing to keep the houses within the reach of the people whom they are seeking to accommodate. The reason why we are concerned about this particular type of building is that we cannot at this stage amend the Bill as it affects ordinary houses and the subsidies for them, but we have very much in mind the very heavy burdens which are falling on the great city authorities at this time in seeking to carry out the central development for which spokesmen of successive Governments have been asking for very many years.

The Government have conceded the second Amendment, and I am grateful to them for doing so, but let none of us think that they have gone anything like 50 per cent. of the way to meet us. The provision of additional subsidies may not necessitate the payment of more money out of Government funds. In any case, the total amount of money made available from public funds is very small compared with the cost of developing housing in the central areas of our cities.

I regret that the Under-Secretary has not been more forthcoming, but I want to make it perfectly clear that none of us on this side is under any illusion as to the size of the financial burden that is being borne by the local authorities of Scotland at the present time in the provision of multi-storey flats in our big cities.

8.0 p.m.

Mr. McNeil

May I repeat the thanks of the Committee to the right hon. Gentleman and his hon. and gallant Friend for this concession in relation to the second Amendment? I do not disguise the fact that it is an important concession. The whole Committee are aware of the need for this type of housing and I need not stress the matter, but I hope I shall not be thought ungrateful if I say that we realise, however good the motives may have been—and I am sure they are of the best—that this is not a very considerable extension by the Government. However, I do not want to be ungrateful, particularly at the outset of what I hope will be an agreeable and fruitful discussion.

However, I would plead with the right hon. Gentleman to think again about our first Amendment because it really is a figure of speech to pretend that the contribution is of the ratio of three-to-one. I think, Mr. Colegate, you were happily spared our earlier proceedings on this subject, but it may be in your recollection that there was a violent difference between us as to the basis upon which this calculation was made. Some £273,000 lay between the calculations of the Government and those of the local authorities and from our point of view those £273,000 were on the wrong side of the account. The Exchequer was going to escape and the local authorities were going to carry this burden.

Both my hon. Friend the Member for Glasgow, Central (Mr. McInnes) and my hon. Friend the Member for Hamilton (Mr. T. Fraser), both of whom are intimately familiar with this problem, have protested on this point. Therefore, I plead with the right hon. Gentleman, not from any party point of view, but in the interests of housing in Scotland generally, to get as near to the three-to-one ratio as possible. Our Amendment offers him an opportunity of approximating to that ratio. Like my hon. Friend, I am quite certain that at the end of a year's working it would be found that the Treasury's contribution was not in the proportion of three to one.

Finally, anyone familiar with the difficulties of our authorities in the big cities of Scotland—and I know that the Under-Secretary is very familiar with this problem—knows it would be a disaster to halt the development of the multi-storey flat in these cleared central areas. It offers one of the few systematic methods of getting large scale operations going. The whole Committee are very anxious that the experiments being conducted in Clydebank should be a great success. Indeed, I am confident they will be a considerable success.

The Committee are indebted to the officials of the Department and to all the architects in Scotland who have contributed their ideas to the furtherance of these new conceptions in multi-storey building, but I cannot believe that any reductions they may effect in costs—I think there will be some, and I hope they will be substantial—will make any substantial contribution to establishing the ratio of three to one.

The Joint Under-Secretary was quite right and fair in saying that under the 1946 Act this contribution had been three to one. But the situation has changed a great deal. The local authorities are on the spot. Do no let anyone in this Committee doubt that. The right hon. Gentleman will, I think, have to admit to himself, if not publicly, that unless he accepts something like our Amendment he will run a great danger of halting this essential development.

I wish to repeat my thanks for the Government's acceptance of our second Amendment, and I would ask the right hon. Gentleman, even at this stage, to say that he will reconsider the matter of the first Amendment in which case we shall be very glad to co-operate in withdrawing the Amendment. This is not a party question; this is a subject of concern to everyone familiar with and anxious about the development of housing in our cities.

The Temporary Chairman (Mr. Arthur Colegate)

Do I understand that the right hon. Gentleman wishes to withdraw the first Amendment?

Mr. McNeil

No. I hope that the Secretary of State for Scotland will at least agree to consider the point involved.

The Secretary of State for Scotland (Mr. James Stuart)

I cannot give an undertaking to reconsider the Amendment. I would be wasting the time of hon. Members on the Report stage by saying so.

Question put, "That 'half' stand part of the Clause."

The Committee divided: Ayes, 170; Noes, 154.

Division No. 234.]	AYES	[8.10 p.m.
Alport, C. J. M.	Grimston, Sir Robert (Westbury)	Orr-Ewing, Ian L. (Weston super-Mare)
Anstruther-Gray, Major W. J.	Hare, Hon. J. H.	Osborne, C.
Arbuthnot, John	Harrison, Col. J. H. (Eye)	Perkins, W. R. D.
Ashton, H. (Chelmsford)	Hay, John	Peto, Brig. C. H. M.
Baldock, Lt.-Cmdr. J. M.	Heath, Edward	Peyton, J. W. W.
Baldwin, A. E.	Higgs, J. M. C.	Price, Henry (Lewisham, W)
Banks, Col. C.	Hill, Dr. Charles (Luton)	Raikes, H. V.
Barlow, Sir John	Hill, Mrs. E. (Wythenshawe)	Rayner, Brig R.
Baxter, A. B.	Hirst, Geoffrey	Roberts, Peter (Heeley)
Bell, Philip (Bolton, E.)	Holland-Martin, C. J.	Robertson, Sir David
Bennett, Sir Peter (Edgbaston)	Holmes, Sir Stanley (Harwich)	Robinson, Roland (Blackpool, S.)
Bennett, Dr. Reginald (Gosport)	Holt, A. F.	Rodgers, John (Sevenoaks)
Bennett, William (Woodside)	Hope, Lord John	Roper, Sir Harold
Bevins, J. R. (Toxteth)	Hornsby-Smith, Miss M. P.	Ropner, Col. Sir Leonard
Birch, Nigel	Horobin, I. M.	Ryder, Capt. R. E. D.
Boothby, R. J. G.	Howard, Gerald (Cambridgeshire)	Scott, R. Donald
Boyd-Carpenter, J. A.	Howard, Greville (St. Ives)	Scott-Miller, Cmdr. R.
Boyle, Sir Edward	Hudson, Sir Austin (Lewisham, N.)	Shepherd, William
Braine, B. R.	Hurd, A. R.	Simon, J. E. S. (Middlesbrough, W)
Bromley-Davenport, Lt.-Col. W. H.	Hutchinson, Sir Geoffrey (Ilford, N.)	Smithers, Peter (Winchester)
Brooman-White, R. C.	Hutchison, Lt.-Com. Clark (E'b'rgh W.)	Snadden, W. McN.
Browne, Jack (Govan)	Hylton Foster, H. B. H.	Speir, R. M.
Buchan-Hepburn, Rt. Hon. P. G. T.	Johnson, Eric (Blackley)	Spence, H. R. (Aberdeenshire, W.)
Bullard, D. G.	Kerr, H. W. (Cambridge)	Stanley, Capt. Hon. Richard
Butcher, H. W.	Lambert, Hon. G.	Stevens, G. P.
Carr, Robert (Mitcham)	Langford-Holt, J. A.	Steward, W. A. (Woolwich, W.)
Carson, Hon. E.	Legge-Bourke, Maj. E. A. H.	Stewart, Henderson (Fife, E.)
Channon, H.	Legh, P. R. (Petersfield)	Storey, S.
Clarke, Col. Ralph (East Grinstead)	Linstead, H. N.	Strauss, Henry (Norwich, S.)
Clarke, Brig, Terence (Portsmouth, W.)	Longden, Gilbert (Herts, S.W.)	Stuart, Rt. Hon. James (Moray)
Clyde, Rt. Hon. J. L.	Low, A. R. W.	Studholme, H. G.
Conant, Maj. R. J. E.	Lucas, Sir Jocelyn (Portsmouth, S.)	Summers, G. S.
Crouch, R. F.	Lucas-Tooth, Sir Hugh	Sutcliffe, H.
Deedes, W. F.	McCallum, Major D.	Teeling, W.
Digby, S. Wingfield	McKibbin, A. J.	Thomas, Rt. Hon. J. P. L. (Hereford)
Dodds-Parker, A. D.	McKie, J. H. (Galloway)	Thornton-Kemsley, Col. C. N.
Donaldson, Cmdr. C. E. McA	Maclay, Rt. Hon. John	Tilney, John
Donner, P. W.	Macleod, Rt. Hon. Iain (Enfield, W.)	Touche, Sir Gordon
Drewe, G.	MacLeod, John (Ross and Cromarty)	Turner, H. F. L.
Duncan, Capt. J. A. L.	Macpherson, Maj. Niall (Dumfries)	Turton, R. H.
Duthie, W. S.	Maitland, Comdr. J. F. W. (Horncastle)	Tweedsmuir, Lady
Elliot, Rt. Hon. W. E.	Maitland, Patrick (Lanark)	Vosper, D. F.
Fell, A.	Manningham-Buller, Sir R. E.	Walker-Smith, D. C.
Finlay, Graeme	Markham, Major S. F.	Ward, Hon. George (Worcester)
Fleetwood-Hesketh, R. F.	Marshall, Douglas (Bodmin)	Ward, Miss I. (Tynemouth)
Fraser, Sir Ian (Morecambe & Lonsdale)	Maudling, R.	Waterhouse, Capt. Rt. Hon. C.
Fyfe, Rt. Hon. Sir David Maxwell	Maydon, Lt.-Comdr. S. L. C.	Watkinson, H. A.
Galbraith, Cmdr. T. D. (Pollok)	Medlicott, Brig. F.	Wellwood, W.
Galbraith, T. G. D. (Hillhead)	Mellor, Sir John	White, Baker (Canterbury)
Garner-Evans, E. H.	Molson, A. H. E.	Williams, Rt. Hon. Charles (Torquay)
Godber, J. B.	Moore, Lt.-Col. Sir Thomas	Williams, Sir Herbert (Croydon, E.)
Gomme-Duncan, Col. A.	Morrison, John (Salisbury)	Williams, R. Dudley (Exeter)
Gough, C. F. H.	Mott-Radclyffe, C. E.	Wills, G.
Gower, H. R.	Nicolson, Nigel (Bournemouth, E.)	Wilson, Geoffrey (Truro)
Graham, Sir Fergus	Noble, Cmdr. A. H. P.
Gridley, Sir Arnold	Nugent, G. R. H.	TELLERS FOR THE AYES:
Grimond, J.	Nutting, Anthony	Mr. Redmayne and Mr. Kaberry.
Grimston, Hon. John (St. Albans)	Oakshott, H. D.
NOES
Adams, Richard	Hardy, E. A.	Padley, W. E.
Allen, Arthur (Bosworth)	Hargreaves, A.	Paling, Rt. Hon. W. (Dearne Valley)
Anderson, Alexander (Motherwell)	Harrison, J. (Nottingham, E.)	Pargiter, G. A.
Awbery, S. S.	Hayman, F. H.	Parker, J.
Bacon, Mist Alice	Hobson, C. R.	Paton, J.
Balfour, A.	Holmes, Horace (Hemsworth)	Poole, C. C.
Bartley, P.	Houghton, Douglas	Popplewell, E.
Bence, C. R.	Hubbard, T. F.	Porter, G.
Benson, G.	Hudson, James (Ealing, N.)	Price, Joseph T. (Westhoughton)
Bevan, Rt. Hon. A. (Ebbw Vale)	Hughes, Cledwyn (Anglesey)	Proctor, W. T.
Bing, G. H. C.	Hughes, Emrys (S. Ayrshire)	Pryde, D. J.
Blackburn, F.	Hynd, H. (Accrington)	Pursey, Cmdr. H.
Boardman, H.	Hynd, J. B. (Attercliffe)	Reid, William (Camlachie)
Bowden, H. W.	Janner, B.	Rhodes, H.
Braddock, Mrs. Elizabeth	Jeger, Dr. Santo (St. Pancras, S.)	Roberts, Albert (Normanton)
Brown, Rt. Hon. George (Belper)	Johnston, Douglas (Paisley)	Roberts, Goronwy (Caernarvonshire)
Burke, W. A.	Jones, David (Hartlepool)	Robinson, Kenneth (St. Pancras, N.)
Butler, Herbert (Hackney, S.)	Jones, Jack (Rotherham)	Ross, William
Callaghan, L. J.	Jones, T. W. (Merioneth)	Royle, C.
Carmichael, J.	Keenan, W.	Shackleton, E. A. A.
Champion, A. J.	Kenyon, C.	Short, E. W.
Chetwynd, G. R.	King, Dr. H. M.	Shurmer, P. L. E.
Clunie, J.	Kinley, J.	Silverman, Sydney (Nelson)
Collick, P. H.	Lever, Leslie (Ardwick)	Simmons, C. J. (Brierley Hill)
Craddock, George (Bradford, S.)	Lindgren, G. S.	Slater, J.
Cullen, Mrs. A.	Logan, D. G.	Soskice, Rt. Hon. Sir Frank
Davies, Ernest (Enfield, E.)	MacColl, J. E.	Steele, T.
de Freitas, Geoffrey	McGhee, H. G.	Taylor, Bernard (Mansfield)
Deer, G.	McInnes, J.	Taylor, John (West Lothian)
Delargy, H. J.	McKay, John (Wallsend)	Taylor, Rt. Hon. Robert (Morpeth)
Donnelly, D. L.	McLeavy, F.	Thomas, David (Aberdare)
Dugdale, Rt. Hon. John (W. Bromwich)	MacMillan, M. K. (Western Isles)	Thomas, Iorwerth (Rhondda, W.)
Ede, Rt. Hon. J. C.	McNeil, Rt. Hon. H.	Thomas, Ivor Owen (Wrekin)
Edwards, Rt. Hon. Ness (Caerphilly)	MacPherson, Malcolm (Stirling)	Thomson, George (Dundee, E.)
Edwards, W. J. (Stepney)	Mallalieu, J. P. W. (Huddersfield, E.)	Timmons, J.
Fernyhough, E.	Mann, Mrs. Jean	Watkins, T. E.
Finch, H. J.	Manuel, A. C.	Webb, Rt. Hon. M. (Bradford, C.)
Foot, M. M.	Mellish, R. J.	Wells, Percy (Faversham)
Forman, J. C.	Mikardo, Ian	Wells, William (Walsall)
Fraser, Thomas (Hamilton)	Mitchison, G. R.	West, D. G.
Freeman, John (Watford)	Monslow, W.	Wheatley, Rt. Hon. John
Gibson, C. W.	Moody, A. S.	Whiteley, Rt. Hon. W.
Gooch, E. G.	Morley, R.	Wilkins, W. A.
Grenfell, Rt. Hon. D. R.	Morris, Percy (Swansea, W.)	Williams, David (Neath)
Grey, C. F.	Mort, D. L.	Williams, Rev. Llywelyn (Abertillery)
Griffiths, David (Rother Valley)	Moyle, A.	Williams, Ronald (Wigan)
Griffiths, Rt. Hon. James (Llanelly)	Mulley, F. W.	Williams, W. R. (Droylsden)
Griffiths, William (Exchange)	Murray, J. D.	Winterbottom, Richard (Brightside)
Hale, Leslie (Oldham, W.)	Nally, W.	Woodburn, Rt. Hon. A.
Hall, Rt. Hon. Glenvil (Colne Valley)	Neal, Harold (Bolsover)	Yates, V. F.
Hall, John (Gateshead, W.)	Orbach, M.
Hamilton, W. W.	Oswald, T.	TELLERS FOR THE NOES:
		Mr. Pearson and Mr. Hannan.

Question put, and agreed to.

Amendment made: In page 2, line 44, leave out "the sum of nine pounds," and insert: a sum equal to one-third of such contribution."—[Mr. McNeil.]

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

Mr. Thomas Hubbard (Kirkcaldy Burghs)

I think it would be very bad indeed if we passed this Clause without a further word being said about the basic subsidies mentioned in it. I am very glad indeed that during the Second Reading debate I complained that the rise in costs was approaching a stage at which it would be almost impossible for the lower-paid wage earners even to consider accepting a house; and at the same time I suggested to the Government that sufficient consideration of this matter had not been given as between the local authorities and the Government.

Since the Second Reading of the Bill we have had opportunity for a further word with the local authorities, and in almost every case we have found that the position has worsened as I had said. In spite of the no doubt honest intention of the Government to build houses, this Clause of this Bill will ultimately defeat its own purpose, because it is increasing the costs to local authorities—and the refusal of the Government to accept our Amendment adds to the difficulty. We are rapidly reaching the stage now at which the local authorities cannot go much farther, and at which those who are waiting and have for many years waited for houses find they have to give serious consideration to whether they can accept them or not. It is a very bad beginning to find in the very first Clause that the basic subsidy defeats the purpose of the Bill. With such a beginning we cannot hope to gain from it what is expected.

I ask the Government to consider this most seriously, so that further consultation will be held with local authorities in tackling the drive to get houses at rents which people can afford to pay. It is all very well to enact legislation; the local authorities have to erect the houses and fix the rents, and the people living there, with the many calls made upon their pockets today, with a rapidly increasing cost of living, find that unless they belong to the higher wage earning class it is impossible to undertake the responsibility of a house. I hope very much that before we part with this Clause we shall hear a further word from the Government about the low subsidy rate suggested in the Clause.

Mr. David J. Pryde (Midlothian and Peebles)

On Second Reading I appealed to the Minister to withdraw the Bill because it was rotten to the core, and the core was finance. If he could not withdraw the Bill, I appealed to him to carry the local authorities with him because without them there is no hope of success. Close study of local government legislation gives me no encouragement in believing that it was ever intended that those bodies should assume the Hurculean task of housing our people—a task on which private enterprise had fallen down. It was apparent to everybody in the early 1900's that unless someone took the job in hand the country would be in a parlous state.

Although the 1919 Act gave us very sparse financial assistance, the 1924 Act was an improvement, and the 1931 Act was also a great improvement. Under the 1935 Act it was possible to build large numbers of houses because costs were low. A cheaper technique, which has already been mentioned tonight, has been the hope of the Department since at least 1945. Unfortunately, no cheaper technique has materialised. Indeed, the opposite has been the case, and the finance of this Bill clearly demonstrates that we in Scotland will be faced with a parlous position in local government finance.

Did the Department take the local authorities with them on this? The reverse has been the case. The Convention of Border Burghs met at Peebles quite recently, and no one can accuse the burghs in the south of Scotland with having any political prejudice, because not one of them has a Labour majority; in fact, Labour members are very few and far between—

The Temporary Chairman

I do not like to interrupt the hon. Gentleman, but these remarks are quite outside the scope of Clause 1. The hon. Gentleman must confine himself to the Clause under discussion.

Mr. Pryde

The Convention of Border Burghs is a very important body, and they have clearly indicated that under this Bill they cannot continue to build houses. Every burgh council in Midlothian is faced with the same problem. Although they have raised their rents—in Peebles county to the tune of £11 per house, and in Midlothian, with a Labour-dominated council, £1 per room—they have made it quite evident that if this Bill becomes law housebuilding by local authorities in Scotland must come to an end.

Recently, at the Conference of Housing and Town Planning, the Town Chamberlain of Glasgow pointed out that it would be impossible for our people to finance the building of houses. The June issue of "Local Government Finance" gives us a very fine exposition of the position entitled "The Labyrinth of Local Government Loans." If this Bill becomes law it is evident that the Government will be faced with a major problem in regard to local government finance. I therefore ask the Minister seriously to consider the financing of housing in Scotland.

Although it is true to say that subsidies have been increased, examination of the first page of the Explanatory Memorandum shows that, while the local government contribution has been more than doubled in each case the Government contribution has not been increased to the same extent. As my hon. Friend the Member for Glasgow, Central (Mr. McInnes) has already pointed out, in the last five years a number of local authorities in Scotland have an accumulated deficit of £5½ million in their housing revenue account, and it is essential to consider very carefully any legislation affecting housebuilding in Scotland.

I appeal to the Government to take steps now to put the Bill in order so that local government bodies in Scotland will be able to carry on the work of re-housing the people—a job which no other body or power can tackle.

Mr. William Ross (Kilmarnock)

On first reading of the new rates embodied in this Clause, it would seem that the Government might claim that they have been very generous to local authorities in Scotland and to those requiring houses. But we must also look at the genesis of this increased subsidy, and the genesis is in the action of the Chancellor of the Exchequer in raising the interest rate. It is out of that that we got, probably rather rashly, a promise that the increase would be met by increased subsidies.

From that point of view these increased subsidies only meet the consequence of the increased cost of housing to local authorities caused by the action of the Government. There was already an outcry from local authorities that the subsidies were not enough because of the increased cost of building, but the Government have done nothing to reduce that cost of building and therefore to reduce the cost of housing to local authorities.

I believe that the Government themselves have already recognised the possibility of the danger of which my hon. Friend the Member for Midlothian and Peebles (Mr. Pryde) spoke. The Government have almost given a carte blanche for private building, because with the present subsidies and the present cost of building, even with these new subsidies rents will be such that local authorities need not bother to build because they will be far too high, and the only building going on in Scotland will be private building, and in the worst possible way.

8.30 p.m.

The Government, very unwisely in my opinion, have raised the "ceiling." There is no "ceiling" now for private building, with the result that there is an extension of private building, and local authorities sympathetic to the claims put forward of the cost of houses for private building will again force up the price of local authority building. I think that the Government had better face the situation. We shall have a position in which the local authorities will not be able to afford to meet the housing needs of the people. I sincerely hope that the Joint Under-Secretary of State for Scotland has been studying the various reports put out during the past month by all the borough treasurers and county treasurers in presenting their estimates to their local authorities. There is hardly one who has not emphasised the serious position of housing finances.

The actual point is that, although seemingly generous, these new rates, which will increase by over 100 per cent. the statutory contributions of the local authorities and only by about 80 per cent. or 90 per cent. the contributions by the Government, will not in any way meet the situation. I sincerely hope that the Government will look at this matter again quickly, and I suggest that what we shall probably require is a commission to go into the whole question of housing finances in Scotland.

Mr. McInnes

When on the Second Reading of this Bill I indicated that there was something "phoney" in connection with the costs of building, I described the subsidy calculations under the Bill as unrealistic. I think that as the days have passed since the Second Reading every word I uttered then has been amply justified. Despite the silence of hon. Members opposite, there is not one Member of Parliament representing a Scottish constituency who has not received a protest from a Scottish local authority with regard to the inadequacy of these subsidies.

As the hon. Member for Kilmarnock (Mr. Ross) has indicated, it is no mere coincidence that the increased subsidy is, within a shilling or so, the same as the increase in interest charges which local authorities have to face in consequence of the Government's policy of increasing the Bank rate. I want to deal with the fantastic figure which the Joint Under-Secretary of State referred to during the Second Reading debate with regard to the notional rent.

The subsidy calculation is based on a notional rent of £42. I indicated then that the figure was fantastic. Since the Second Reading debate all hon. Members have been placed in possession of a document issued by the Department of Health which gives the rents of houses owned by local authorities in Scotland in 1951. What do we find in that document? We find that the rental of houses today—post-war permanent houses in 1951—is an average of £29 12s. 11d. Indeed, it is remarkable that out of 365,000 municipally owned houses in Scotland only 4,600 have a rental of over £40. Yet the Government have the audacity to suggest that the average rent throughout. Scotland is £42. That was the figure contained in their calculations in arriving at the subsidy.

There is also the unrealistic calculation with regard to building costs. I can never understand why the Department of Health are unable to get together with the local authorities and arrive at some amiable understanding on what is the real capital cost of building houses today. It is preposterous to suggest that the Department of Health rigidly adhere to their figure of £1,635 while the local authorities, with all the evidence in their favour, categorically assert that the price today is in the region of £1,900. But, ignoring all these considerations and disregarding the weight of evidence submitted by the local authorities, the Government still adhere to the £1,635 figure.

It is because of the unrealistic nature of the figure of building costs, the "phoney" figure about rentals, that I hope whoever replies for the Government will deal specifically with the question of a notional rent of £42 in the light of the information contained in the document the Government have issued.

As my hon. Friend the Member for Kilmarnock indicated, this has become an intolerable burden for the local authorities. When one adds to housing the problems of education, the unfairness of the equalisation grants and all the other financial arrangements with which local authorities have to contend, I think it can be asserted quite safely that there is grave danger of the financial structure of local authorities in Scotland breaking down completely. Therefore, I hope that the Government will have some satisfactory answer to give us.

Mr. Malcolm MacMillan (Western Isles)

I am afraid, like some of my hon. Friends, that one effect of the failure to give more generous treatment in respect of borrowing will be that while we shall not solve the housing problem we may very well shorten the housing queues because of the fear of working-class people that they will not be able to face increasing rents and rates.

We may shorten queues in the way in which we have shortened the dentists' lists, the opticians' queues and, now, the doctors' queues, or, if it be in commodities, by putting up the price and making it impossible for people to pay for those goods. When it comes to housing the queue can be reduced without reducing the human misery created by bad housing or lack of housing. But that will not have the effect that perhaps at first sight of the figures local authorities thought it might have.

I wish to ask the Under-Secretary of State if it is the case, as he seemed to state, that the Association of County Councils in Scotland, for example, did not make any protest about these proposed figures of assistance? I think the hon. and gallant Gentleman said that they must be satisfied with the Bill because they had not protested against it. Is that correct?

Commander Galbraith

No, what I said was that they had not raised any objections to the particular point which I was discussing and I assumed from that that they found there was some reason in it.

Mr. MacMillan

Was it only on that point?

Commander Galbraith

Only on that one.

Mr. MacMillan

I think we were in some doubt and, in fairness to both of us, I am grateful for that answer to that question. I wonder to what extent the hon. and gallant Gentleman and his hon. Friends have taken into consideration the protests they presumably have received from local authorities in Scotland in respect of this assistance on which we are arguing.

I am very concerned with the matter in relation to northern areas, particularly in Inverness-shire, where the prospect is that not only in the near future will they find it increasingly difficult to provide houses for the working-class, but they will find increasingly that they will have to cut down expenditure on essential services because of the evermounting cost of housing, education, and so on—and housing is the main difficulty.

Not only does the inadequacy of the special subsidy hit housing but, obliquely, it hits almost every other essential service in these counties where costs are generally higher than they are in other parts of the country. I expect to see in the very near future the impact of these increasing costs and the inadequate assistance which is being given affecting other essential services like roads, water undertakings and various other equally important things.

I do not know whether the Secretary of State can give the matter further consideration, but that is the course I suggest to him and it is the course which local authorities are urging upon him. I cannot imagine them failing in their duty in that respect, because it is obvious to us all that the inadequacy of the subsidy has been proved by the figures which have been made available to Members of Parliament.

I am assuming that Tory-controlled local authorities as well as Labour-controlled local authorities are unitedly behind us in this matter, and I hope that the Government will find it possible to try to meet the wishes of local authorities of all political opinions as well as of the Labour Opposition in this Committee.

Mr. T. Fraser

I should like to say a word about subsidies, but before doing so would the Under-Secretary answer a question for me? The Clause with which we are dealing reads, at the beginning: For the purpose of increasing, in respect of any new house, or accommodation deemed to be a new house, … I call attention particularly to the words "deemed to be a new house," and I should like the Under-Secretary to tell us what they mean.

Some of us on this side of the Committee recall the speech of the hon. Member for Edinburgh, South (Sir W. Darling) in the last Parliament when he said that what we wanted to do was to provide shelters for the working-classes. I am wondering whether the accommodation that is here referred to are the shelters mentioned by the hon. Member for Edinburgh, South and whether they are deemed to be new houses.

Commander Galbraith

For the convenience of the Committee I think I should endeavour to answer that question now. If the hon. Member will look at subsection 4 (d) he will see that the words, "deemed to be a new house" refer to one of the houses for the old people, the hostel. There is nothing about mere camp equipment or anything like that in the Clause.

Mr. Fraser

I am indebted to the Under-Secretary for I was quite sure that the Government did not have in mind the camp equipment to which the hon. Member for Edinburgh, South referred, otherwise they would not be paying the same subsidy as they do for the normal housing accommodation.

The Government must know by now that local authorities throughout Scotland are most unhappy about the subsidies here provided, and are concerned about the reasons for having increased charges at the present time. Throughout the country in recent weeks we have seen estimates presented to local authorities by their finance officers or treasurers, and almost without exception those officials or the leaders of finance committees have called attention to the additional almost unbearable burdens which local authorities in Scotland have to shoulder as a result of the increase in the interest rates from 3 per cent. to 4¼ per cent. It is because that is so and because that is the reason for this Bill, that this Measure is just about the biggest fraud that has been perpetrated on the people of Scotland for a long time.

8.45 p.m.

Supporters of the Government have been claiming in Scotland that the housing subsidies are the most generous that have ever been. Generous to whom? Generous to the moneylenders. The people who occupy the houses have not been better treated than they were before March of this year. They are worse off. The local authorities are not better off than they were. They are worse off, and they said so in Committee rooms upstairs when they came to see us and other hon. Members representing Scottish constituencies shortly before the summer Recess.

There was a great demonstration at Scarborough last week. [An HON. MEMBER: "Great?"] Well, a lot of people were there, all representatives of the Tory Party. They were not delegates, so they could say whatever they liked. They discussed a resolution in favour of reducing housing subsidies, and they carried it. Therefore, the Secretary of State for Scotland will be obliged to us now for giving him the opportunity of speaking on the Clause and saying that, at the earliest possible moment, he will give effect to the resolution carried at Scarborough in favour of reduced subsidies. Unfortunately, the Tory Party never seem to worry at their complete inability to match their actions with their words.

They talk glibly about the need to reduce housing subsidies while they increase the cost of building houses by £20 or more per house every year for 60 years. They have put up the cost of the average municipal house in Scotland by £1,200 by the decision they took in March of this year. The additional cost of the average local authority house in Scotland will be £20 per year for 60 years, which adds up to £1,200.

Therefore, the Government have had to introduce new subsidies. They are giving the subsidies set out in the Clause. For the average four-apartment house the subsidy is now to be £42 5s. and the local rate contribution will be at least £14 5s. That will be a minimum contribution from public funds of £56 10s. per year. It is only the minimum, and not the actual contribution. It is very far short of the actual contribution.

It would be bad enough if the provision of houses for the ordinary people in Scotland were to cost the taxpayer and the ratepayer all that extra money for the reason that building trade workers had been demanding bigger wages, or that the cost of timber, bricks and cement had gone up. Not at all. Those costs have all gone up, certainly, but there is not a penny additional subsidy in respect of those additional costs. The additional subsidies provided for in the Clause are intended and calculated to make it possible for this beneficent Tory Government to make a present of hundreds of millions of pounds to their friends the moneylenders.

Nobody will stand up at the Government Despatch Box this evening or on any other day and tell us that the purpose of the new subsidies is other than to meet the additional cost of providing houses consequent upon the increase in interest rates. That is what the Chancellor of the Exchequer said. The moneylenders can get a bigger return on their investments, and if money goes into housing through increased contributions from taxpayers and ratepayers then additional earnings on investments in water supplies, schools and other services provided by local authorities will have to be found by local authorities directly.

That is why this Clause is one of the greatest frauds perpetrated on the people of Scotland. The Government ought to speak more responsibly in the country than they do about housing subsidies. Everywhere in Scotland Tories say that housing subsidies should be reduced. We would be perfectly happy if the Government would take back this Clause, give us reduced subsidies and bring the interest rates on moneys borrowed from the Public Works Loan Board down from 4¼ per cent to 3 per cent. We would be quite content to see them take £10 off the subsidy for a four-apartment house. We would reduce the subsidies if the Government would take the other decision of reducing these quite unnecessary burdens that they have imposed upon the local authorities of Scotland.

Now is perhaps the last opportunity the right hon. Gentleman will have of making a speech seeking to justify these subsidies, seeking to reconcile his action in bringing forward this Clause with the resolution passed at Scarborough and the speeches made by many of his colleagues who sit as hon. Members of this House. We shall never be happy with these subsidies. We have discussed them with the local authorities in many parts of Scotland. I shall not go into the details that some of my hon. colleagues have done, but I have been furnished with plenty of detail by local authority financial officers in Scotland in recent weeks and months.

There is no doubt that the local authorities of Scotland are up against it, and there is no doubt that they are wondering how, if building costs remain at the present level, they will be able to continue to provide houses with the present subsidy. The Government can make it much easier for the local authorities. The Government can think again about this Bill. They can, of course, provide higher subsidies. Personally, I do not think that is the way out of the difficulty. I think we could do with slightly reduced subsidies if we would only take away the need for the additional subsidy at the present time.

Let them reduce interest rates to reasonable proportions. Only last week we read in the Scottish Press as no doubt one could have read it in the English and Welsh Press, that the Government were issuing stock at 1¾ per cent. and 1⅞ per cent. short-term loans, to be paid into the Consolidated Fund, out of which the Public Works Loan Board make moneys available to local authorities at 4¼ per cent., and additional charges on top of all that.

The Government can help the local authorities if they wish, but I think they have no wish to do so. They want to make it easy for the local authorities in Scotland who are friendly towards them to bump up the rent and shorten the queue and, at the same time, to justify an ever increasing number of houses being built for sale.

That is because the burden of providing houses for letting, each using £50 or £60 of public money every year for years will be so heavy that the local authorities friendly to the Government party will increasingly and progressively minimise the buildings programme of houses to let. They will encourage to the utmost the building of houses for sale, which will not ease the problems and the worst difficulties of the majority of the working people of Scotland.

Mr. James Carmichael (Glasgow, Bridgeton)

I intervene in order to lodge a very necessary protest. I took no part in the Second Reading debate, and already sufficient figures and information have been given regarding the problem there will be in the financing of housing in Scotland if the Bill goes through. I do not want to go into details, but I think that the problem will be even much bigger if the Government allow this Measure to go through. There is a very serious social problem and a very serious democratic problem.

The problem of housing in Scotland is extremely bad. I do not like constantly to refer to the city to which I belong, but it is a dreadful city so far as housing is concerned, and the Bill makes no attempt to ease the burden. I have heard regularly from both sides of the House that housing should be taken out of the sphere of party political conflict. I have felt sometimes that there was a genuine desire on the part of many Members to do that, but I have very grave doubts now.

We have already been advised by the Chancellor of the Exchequer that, as a result of raising the Bank rate, the moneylenders and the bankers have pocketed an extra £100 million. Even if one examines that quite impartially, it is obvious that it is simply in keeping with the line taken by Tory Governments. During the last two days, all the eloquence from the other side of the Chamber has been in support of the brewers. I do not mind if it be the desire of the party opposite to help their friends, but I feel that when it comes to the problem of housing they might at least give some crumb of comfort to the thousands who are now homeless.

What surprises me in this debate is the stony silence of some of the experts on housing on the other side of the Committee. I am amazed, for instance, that the right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot), with his knowledge of this great problem, has not intervened. [An HON. MEMBER: "He does not support the Bill."] I am satisfied that he has very grave doubts about it and, therefore, that it is wise of him not to intervene at this stage.

I am bound to call attention to another Member, because he has been extremely impetuous since he arrived here after the last Election. I refer to the hon. Member for Lanark (Mr. Patrick Maitland), who has dabbled in almost every subject that has been before the House. Why he does not engage in some kind of contribution to this debate simply baffles me. I hope that he will have some contribution to make on the Clause.

Let me deal with the social problem. No Member knows better than the Joint Under-Secretary of State, the hon. and gallant Member for Pollok (Commander Galbraith), about the serious situation in the City of Glasgow. If the Bill goes through and there is an attempt to charge an economic rent for a four-apartment house, it will be in the region of about £100. The mathematical experts, I think, could make the figure even higher.

If, apart altogether from the local subsidy, there have to be still further borrowings from the local rates to reduce the figure to below £100, two serious financial problems are created. First, it is quite impossible for the ordinary people of Glasgow to pay a rent in the region of £2 to £2 10s. a week. A similar problem will be found in many of the Scottish counties.

This method would achieve no saving, because a further burden is being placed on the local rates by reducing the rent figure from £100 to something less. Already, as every other speaker tonight has pointed out, there is not a local authority that is not protesting against the heavy burden it is at present facing. On this issue it is not a question of, say, a Labour council being anxious to engage in propaganda against a Tory Government. Every local authority is faced with a very serious financial burden.

9.0 p.m.

Therefore, apart from the social aspect of the serious problem of the condition of the people, the Government are aiming at destroying local government. It has often been argued in this Chamber that one of the strongest foundations of our democratic government is the work of our local authorities. We are bound to protest tonight for the Government will not touch the housing problem with this financial method but will further burden the local authorities.

I am convinced that the Joint Under-Secretary of State would have protested more eloquently and vehemently than I have if he had been on this side of the Committee. I beg him to heed the remarks of my hon. Friend the Member for Hamilton (Mr. T. Fraser). This is not merely a matter of rushing a Bill through the House of Commons. The Government are making serious inroads upon the power of local government, and if this continues some emergency will arise which will require the appointment of a committee to tackle the problem much more seriously than it is being tackled now. It is not merely that the Government are handling the housing problem badly; the whole question of local government is involved.

I cannot understand why men who, while their political opinions are different from mine, have knowledge of and competence in both national and local government have tried to push through a Measure of this kind. If it is impossible to make any Amendment tonight, I beg of them, before the Bill goes to another place, to put their heads together—I do not want them to crack their heads, although when I look at the Bill I think that has already happened to them—and take stock of the very serious decision they are making, which will create a setback in social progress in Scotland and at the same time undermine democratic government.

Mr. J. Grimond (Orkney and Shetland)

There is no doubt that the finance of local authority housing is a very serious matter all over Scotland. It is particularly serious in the far north where building costs are very high. The figure of £1,900 has been mentioned as the price of a house in some parts of Scotland, but in the far north the figure is well over £2,000 in some cases.

We are assisted to some extent by the special grant for remote areas. I wish to ask the Joint Under-Secretary of State a question which he may not be able to answer now, but I shall be grateful if he will look into it. I take it that the special grant for remote areas will not be affected by the increase in the contributions with which the Clause deals, but it has been suggested—wrongly, I hope—that the remote areas grant may not be available for the cost of the preparation of sites and services.

I hope the Joint Under-Secretary will be able to deny that, for if that is the case, whether the housing is financed through the rates, the Exchequer contritions or through the rents, the very serious problem remains a most pressing one for the local authorities, and in the far north it will undoubtedly much worsen if the extra remote area grant is not available for services and site preparation.

Commander Galbraith

We are now dealing with the Clause as it stands at present, and it lays down the contributions which are to be made by the Exchequer and by the local authorities in respect of all the houses that have been completed since 28th February last. Of course, we all know that the cost of house-building has unfortunately been rising continuously since the end of the war. For example, I think that in 1946 the cost of the ordinary four-apartment house was under £1,200, and when we came to review the position towards the end of last year it had risen to about £1,750.

I cannot help observing that although that upward trend must have been perfectly apparent to the previous Government, they maintained the subsidy for a four-apartment house at £23, which was the figure fixed in 1946. I may be excused perhaps for feeling that the criticism of the proposals in the Bill, which have been so vigorously and strongly attacked by hon. and right hon. Gentlemen opposite, represents an attitude which is a little out of keeping with their own past record.

Be that as it may, I wish to dispute several things that have been said by hon. Members in the debate. The Government have in fact recognised in a practical manner in the new subsidy the increase in building costs, because it so happens that the subsidy more than meets the increase in the rate of interest; it does leave something over to go towards the increase in the cost of building.

I wonder whether the Committee would allow me, purely for purposes of argument, to assume that the figure of £1,635 which we used in relation to the subsidy calculations is actually an accurate figure? Hon. Members will remember how that figure was arrived at. We first took the average of the tenders for the last six months of last year and the first month of this year. That gave a figure of £1,765. We then deducted from that the saving which would accrue, in our opinion, from adopting what we call space-saving technique. In addition, we made a further deduction in relation to the economies to be effected by replacing concrete with wooden floors, which affects about half our houses. The figure of saving which we arrived at amounted to £130. So we reached the figure of £1,635. Naturally, we wanted to induce local authorities to adopt space-saving designs and technique.

As the increase in the subsidy is £19 5s. 0d., and increased interest charges on a £1,635 house would amount to £16 5s. 0d., an increase of £3 over 60 years was provided against the increase in the cost of building.

I am now going to assume that the correct figure was that which the local authority associations maintained—£1,900. If that were true, I quite readily admit that the new subsidy would fall short by as much as 1s. 9d. of meeting the increase in the cost of money. I put it to the Committee, however, that where reasonable people are concerned, and they find that two bodies of experts differ in the advice they tender, it is quite normal to take the mean of the two. If we do that in this case, it will be found that the subsidy does meet the increase in the interest rate and also provides something towards the increase in the cost of building.

One thing which has been absolutely obvious from the speeches of practically all Members who have spoken in this debate is the grave concern which is felt at the increased burden which the housing programme is throwing on both national and local finance. Yet I do not think there is a single hon. Member in the Committee who would think of suggesting that it would be right for us to abandon our efforts to provide adequate housing; because we are all agreed on one thing, which is that the existing situation is the cause of so much ill-health, so much distress and so much unhappiness.

But the cost to the taxpayer and the ratepayer has really reached an alarming level. I remember that the hon. and gallant Member for Berwick and East Lothian (Major Anstruther-Gray) said in the course of the Second Reading debate—and this is something I think we ought constantly to keep in mind—that there are only three sets of people who can foot the bill. One is the ratepayers, another the taxpayers, and the third is the tenants. We are concerned with the amounts which have to be provided by the two categories I first mentioned.

I do not think it would be seriously suggested that the taxpayers' contribution of £42 5s. for a four-apartment house, 16s. 3d. a week, is ungenerous. In addition to that the ratepayers are asked to contribute some 5s. 6d., and also, as has been pointed out in many speeches which we have heard, to make good any deficiency which may result from or arise out of the financial arrangements of local authorities.

The question of rent has been raised, and I would only refer the Committee to the words I used in the Second Reading debate. I pointed out that there were many local authorities who were today charging rents of £40 and more. I would also ask the Committee to be good enough to consider the situation as it exists with us and in England. Let me remind the Committee that we cannot take a notional rent of £33 when in England the local authorities accept a notional rent of £46 16s. I think that is something to be remembered.

Another point is the vast difference between the rents charged by adjacent authorities. I came across one case recently where exactly similar trades were being carried on in the area of two adjacent authorities and there was a difference of £10 in the annual rent of their houses. One must be too high or the other too low. I think it is for the local authorities to decide these matters themselves. I have discussed the question of rate subsidy with the local authorities and I have found, as every hon. Member of the Committee has found, that they are very seriously worried at the increasing amount being placed on the rates with regard to housing after the rent has been charged. I ask the Committee to recognise that we are all faced with a very difficult problem.

I do not think it is possible for any of us to envisage a larger contribution from the taxpayer. We have reached agreement that the local authorities are hard pressed. Those hon. Members interested in housing know that the architects have done their very best in space-saving techniques while maintaining the standard of living space. It seems to me—and I should like the Committee to consider this—that only two possibilities remain open to us to keep down the cost.

The first is that all local authorities should accept these space-saving designs because, as has already been demonstrated, there is a great deal that can be saved by their adoption. It was only last week that I had the privilege of opening the first block of a housing development in Paisley where, as the result of the adoption—or rather the adaptation—of these space-saving designs; as a result of the most careful organisation, and as a result of having obtained the good will and co-operation of both the employers and the men working on the site and of all others concerned with the project, there was a saving of £150 on each house.

9.15 p.m.

Mr. McNeil

How much did they cost?

Commander Galbraith

As to the actual cost of the houses, I would not like to say at the moment, but I will give the right hon. Gentleman the figure. I do not want to mislead the Committee, but I would say, subject to correction, that it was in the region of £1,450, to which, of course, has to be added the costs of site preparation and the provision of services, which might add another £200 to it. If my original figure was correct, that would bring it up to £1,650, and that is a saving of about £150 per house. I want the Committee to note that that is a saving of £20 more than we allowed for when we came to calculate the housing subsidy.

Mr. Manuel

I am sure the hon. and gallant Gentleman does not want to mislead the Committee.

Commander Galbraith

I have said so already.

Mr. Manuel

Is he not dealing with the cost of the three-apartment house, and would he not agree that the same argument is not applicable to the notional rent of the four-apartment house?

Commander Galbraith

I quite agree with the hon. Gentleman. I was speaking from memory. I said at the start that I did not want to mislead the Committee, and I hope that I may have the correct figure before I sit down. I am given to understand that the figure for the four-apartment house was, as I said, in the neighbourhood of £1,600.

I am very glad to be able to tell the Committee that more and more local authorities are beginning to adopt this space-saving technique along the lines suggested to them by the Scottish Office, and I would express the hope that soon every local authority will have done so and will therefore benefit from the reductions in cost which can be obtained from it.

The only further reduction, it seems to me, can come from the building industry itself. I have had meetings with both sides of the building industry, and I know that they share my concern and the concern of all hon. Members. In fact, they demonstrated that last week in an editorial in a building trade journal, which said: We as builders must get these costs down. I would appeal to everyone connected with the building industry to set about this task with the utmost vigour and without any delay.

From what I have said, it must be evident to the Committee that I do not believe that the answer to this rising cost of building is to be found in increasing the subsidies. In the present economic circumstances of the country, the Government have gone to the limit of prudence. Architects have done their best, and I suggest that it is now for the building industry itself to show that it is not going to be beaten, but that by the exercise of ingenuity and by getting that co-operation which we all desire, as well as by an increase in both technique and skill, it may yet achieve significant results.

I end by expressing the hope that the Committee, having discussed this Clause for a considerable period, may now see its way to agree to it.

Mr. McInnes

May I remind the hon. and gallant Gentleman that I asked him to deal with the question of the notional rent in relation to the publication which has been issued by the Department? The average rent is in the region of £29.

Commander Galbraith

All that the Scottish Office have done is to provide the figures as to the rent running at the present time, and they have given the rents charged so that hon. Members may study them and make up their minds whether they are adequate or not, but that has nothing to do with the question of a notional rent.

I was asked about the remote area subsidy by the hon. Member for Orkney and Shetland (Mr. Grimond). I am glad to be able to assure him that there is no change in the method of working that subsidy.

Mr. Manuel

I want to deal with the question of the space-saving house mentioned by the hon. and gallant Gentleman. He said, if I understood him aright, that space-saving methods had reduced costs by £150. On his own figures that brings the cost to over £1,600 to which we must add £200 for site preparation and the provision of services. Therefore, the total is £1,800 or thereabouts. On the other hand, according to the hon. and gallant Gentleman's figures, the subsidy provision is to be £1,635, which fact, I think, supports the argument put forward by this side of the Committee that the subsidy given under the Bill is totally inadequate to meet the cost of the space-saving house which, I understand, is the cheapest house to be provided in Scotland.

Commander Galbraith

I think the hon. Gentleman is confusing matters. The position is that if he takes that figure, he has to take the figure of £1,765.

Mr. Manuel

Why?

Commander Galbraith

Because the hon. Gentleman added on the £150 first.

Mr. Manuel

No.

Commander Galbraith

If I followed the hon. Gentleman aright, he did. He added on the £150 and then proceeded to add on the cost of the site. That is what I understood him to say.

Mr. McNeil

I am very anxious to understand this, but I am as puzzled as is my hon. Friend. I understood the hon. and gallant Gentleman to say that the net cost of the four-apartment house with the space-saving improvements ran out at £1,635, and, as my hon. Friend says, we have to add a figure for services which results in a gross figure of not less than £1,800. Perhaps we have got it wrong, and I am sure the Committee will be indebted to the hon. and gallant Gentleman if he will clear up the point.

Commander Galbraith

I was speaking of course, from memory, and I really cannot refresh my memory at this point. I have given the Committee the best explanation of it I can.

Mr. Manuel

I am not convinced by the explanation of the hon. and gallant Gentleman because, quite definitely, he gave the figure of £1,600. To that figure we have to add, whether we like it or not, a round £200 for site preparation and the provision of services. That is quite simple, and anybody who has had any interest in housing knows that is the position. Therefore, the cost figure is £1,800. The hon. and gallant Gentleman has indicated that the space-saving house is the lowest cost house we should adopt for Scotland.

I am amazed that we are having no speeches from the other side of the Committee. Do not hon. Members opposite represent the local authorities in Scotland? They are always prating about the local authorities not being treated properly when we were the Government, but I would point out that there is complete unanimity among the Scottish authorities about the inadequacy of the proposed subsidies outlined in Clause 1 and, whether they like it or not, the Tory-controlled local authorities are just as vehement as those controlled by Labour Party members about the proposed subsidies. Therefore, it is passing strange that we should be experiencing this silence on the part of some hon. Members opposite who are usually very vocal on the subject.

I entirely agree with my hon. Friend the Member for Hamilton (Mr. T. Fraser) when he said that the present Under-Secretary would have been much more vocal in dealing with the matter were he sitting on the opposition benches. On every occasion he could he took a very strong line in criticising the Labour Government. We are hearing a lot about groups these days. I think we have a quiet group on the other side of the Committee tonight which does not intend to be disturbed or put out no matter what we say.

The hon. and gallant Gentleman the Member for Perth and East Perthshire (Colonel Gomme-Duncan) was talking last week of Quislings in his own party. If there are Quislings in his own party I think it should be drawn to the attention of the Scottish local authorities. I think they are more than Quislings: they are people who are not prepared to speak up for the local authorities who, after all, have to pay the bill no matter what the reckoning is.

The hon. and gallant Gentleman has based his calculations on the subsidy provisions, and as my hon. Friend the Member for Glasgow, Central (Mr. McInnes) has said, the notional rent of a four-apartment house of £42. I want to ask him how he arrived at that figure. It is certainly not culled from statistics in the Scottish Office. How does he pit his knowledge against the knowledge of the local authorities and say that the building of a four-apartment house costs only £1,635, when the local authorities say quite definitely that the average figure is £1,900? After all, it is they who are paying the account. They ought to know what they are paying for it. I think we have to ask the Secretary of State, if we can bring him to the Box tonight, to tell us how they arrived at that figure.

Commander Galbraith

If the hon. Gentleman would be good enough to read the Report of the Second Reading debate he will find a complete explanation.

Mr. Manuel

The hon. and gallant Gentleman will know that I spoke in that debate and that I asked for a neutral body to be set up in order that we could have the figure examined and a proper interpretation put on it. But if the local authorities say that the building costs for a four-apartment house are £1,900, and the hon. and gallant Gentleman says the cost is £1,635, could he tell us the items he has left out of the account? Did he include architect's fees? I do not think he did.

I should like him to try to answer these points. Did he include any provision at all for under-building? It appears to me that the Government are taking this line with the local authorities who are hardest hit—and by that I mean those who are paying more for the building of their houses because of the amount of under-building because of the nature of the sites on which they have to build—they are not to be considered at all.

I am astonished at the right hon. Member for Renfrew, West (Mr. Maclay). His constituency runs adjacent to mine. I have met some local authority people who are very perturbed about the high building costs in his own constituency who feel now that the cost is such that it is going to counter building activities on the hillsides. Is the right hon. Gentleman aware that the local authorities are not getting a penny piece for that under-building, and that the Government will make no provision for that expense in his constituency? He remains mute; he refuses to represent his local authorities who are crying out about this question. I cannot understand it.

The same thing is apparent in Lanark, and in Argyll to a greater extent. Who is this Whip, I wonder, who can muzzle hon. Members opposite to the extent that they are muzzled tonight? Where is this fellow? There seems to be another Hitler arising in the Tory ranks, so we must look out.

9.30 p.m.

Commander Galbraith

Perhaps 1 can save the hon. Gentleman from becoming more excited. He has asked two very relevant questions and he is entitled to an answer. So far as architects' fees are concerned, I do not think they have ever been included. So far as under-building is concerned, it is included. Architects' fees are not included, under-building is.

Mr. Pryde

How much under-building is included?

Mr. Manuel

I rather question the statement that under-building is included. Do I take it that the under-building in West Renfrewshire is taken full cognizance of in the figures submitted by the local authority? My information is that it is not included.

I do not in any way want to detract from the possibility of the space-saving technique in the Paisley house, although my natural inclination is not to have too much space saving. I have not seen the house, and until I have examined it I do not wish to say anything that may be harmful. I thought that the space-saving technique which the hon. and gallant Gentleman tried to throw around himself tonight as a protective covering looked more like a face-saving technique for the Government. I am afraid that Scottish local authorities are not prepared to take that as the answer.

I ask the Secretary of State to consider what he is doing in Clause 1 for local authorities who want to provide more houses. Is he aware that by the inadequacy of the proposed subsidy he is condemning thousands of Scottish people in the years ahead to the certainty of not being rehoused? Undoubtedly, whether he likes it or not, local authorities will not be able to levy a much higher rate from rents in their areas, which means that they will have to cut down the provision of houses. Alternatively, is every hon. Member opposite prepared to agree with the Under-Secretary that we should take £42 as a notional rent for a four-apartment house for every working-class family? Are they going on record as agreeing with a rent of £42 per annum for every four-apartment house? If they do not speak tonight in support of what we are trying to do they will be acquiescing in that.

To meet the higher building costs, which the Government are not meeting with the proposed subsidies, local authorities are having to increase rents all round. Even the rents of the older municipal houses, some of them with no modern amenities in the kitchens and bathrooms, are being increased. We are approaching a situation in which working-class families in Scotland who accept municipal houses are condemning themselves to paying rents which will mean keeping food out of their children's stomachs and clothes off their backs. There is no doubt about it.

Do not forget that we have many thousands of railwaymen earning under £6 a week. Anyone who knows anything about a household budget is bound to recognise that the position of such a family today is extremely difficult. This is also happening at a time when in the textile industry, the paper industry and the carpet industry there is short-time working. A full wage packet was not coming into the home each week. In spite of that we were having short-time working, under-employment and, in many areas, an increase of rents paid by the municipal tenants.

I appeal to the Secretary of State for Scotland not to let his name go down in history as the Secretary of State who allowed himself to deter many thousands of Scottish people from being able to pay the rent which he is saying ought to be paid, owing to the inadequacy of the subsidies proposed in this Clause.

Mr. McInnes

I did not intend to make a further contribution to this debate, but it has become abundantly clear that the longer this debate proceeds the more we are being misled and confused by what I can only describe as an aggregation of inaccuracies.

The Joint Under-Secretary of State quite categorically asserted a moment or two ago that under-building had been provided for in the calculations of the capital cost of a house. I have in my possession a document which sets out the various items compiled by the Department of Health and by the local authority associations. In the Department of Health calculations, not a single penny is shown for under-building, while the local authorities include a figure of £150. I think that it is grossly unfair, to say the least, that we should have statements of that kind from the Government Front Bench.

Commander Galbraith

The statement which I made is perfectly correct. It may not be shown in the figures which the hon. Gentleman has in his possession. It was certainly taken into account on average.

Mr. McInnes

The position becomes more confusing than ever because this is the official document circulated by the local authority associations, and includes the Department's own figures. I do not want to weary the Committee, but I could easily make up the £1,635 upon which this subsidy is based. The first item of £1,664 is the average tender price approved. The second item is £150 for increased costs as a result of higher wages and the increased cost of building materials which had taken place up to December, 1951. It is estimated that the average cost of the non-traditional house is £1,499 and of the traditional house, £1,664. These figures, divided by two, give an average of £1,582 when we add for land £12, site surveying £131, and an addition for increased costs in the first period of 1952–53, £40—less £130 for "low cost design" houses making a figure of £1,635.

Cognisance is taken in that calculation of the low-cost house at Paisley. It is actually estimated in the capital calculations as a saving of £130 per house in respect of the low-cost design. These figures bring out precisely the figure upon which the subsidy calculations were based, £1,635.

I reiterate quite seriously that there is no provision for under-building. The Government go further and confess that no provision was made for architects' and surveyors' fees. They said it had not been done. I accept that statement, but I am very doubtful whether in all previous subsidy calculations provision was not made for what is, after all, a legitimate charge.

I come to the second point, and I want to get some definite information on this issue. The subsidy calculations are based on an average rental of £42 per annum. There is no dubiety about that. On Second Reading I indicated that the local authorities had stated that their calculation was £33. I said on that occasion that even that figure was far too high, and I am reinforced in my arguments by the production of this document by the Department.

I repeat what I said earlier in the debate, that the average rental throughout Scotland for the post-war permanent house is £29 12s. 11d. I again indicate that out of 365,000 houses municipally owned in Scotland only 4,600 have a rental of more than £40. How did the Department arrive at their figure of £42 as the notional rent in determining the subsidy calculations?

I think I have made the position as clear as it is possible to make it. I am asking how the Department arrived at that figure? Surely the Department, even at this late hour, are in a position to give some indication as to how that figure was arrived at. It is a figure on which the whole of the subsidies are based. It is a fantastic and unrealistic figure and, if they confess to that tonight, they confess that the whole basis of the subsidies they have allocated to local authorities is entirely "phoney," as I have already asserted.

Mr. McNeil

I do not want to delay the Committee unduly at this stage, but I think I would be failing in my duty if I did not point out that the Government's performance has been lamentable. We have had the great courtesy of some revealing figures from the Under-Secretary. We have had the difficulties of the local authorities explained and the confidence of the Scottish people predicted, but here is an amazing collection of hon. Members opposite who cannot find a single word to defend their Government colleagues—not one.

The right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot), who has more knowledge—leave aside the question of judgment—than anyone else in the Committee, has not offered a single word in refutation of the conclusions of hon. Members on this side of the Committee representing adjacent constituencies, knowing the situation as he knows it—not one word. The hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan), usually so noisy and vehement, has not uttered a single word. The hon. Member for Lanark (Mr. Patrick Maitland) has been dealt with already. All he is to contribute to the debate, apparently, is a noisy laugh.

The Under-Secretary tried to tell us that there were only three courses that could have been taken to reduce these high costs. That is not an exhaustive analysis as I hope to show in a moment. He talked about the new methods which I hope he will be able to apply to the construction of houses. He showed, unless I do him an injustice, that with the best possible methods available he hopes to get the figure down to about £1,600 plus something like £200 for services and site preliminaries. That is why I said that this was a very revealing debate.

9.45 p.m.

The hon. and gallant Gentleman put as bold a face as possible on the proposition on Second Reading, but it will be within the recollection of hon. Members that he refused to discuss this figure in detail and he was very wise. He cannot hope to convince anyone in this Committee or any informed member of a local authority that there was any basis in fact or in equity for this figure of £1,635 as the basis of the subsidy calculation.

Moreover, the hon. and gallant Member has told us about the houses that are to be built by the best available methods, but this Committee is discussing the subsidy which must be applied to houses completed after a date in February this year, so that the great bulk of the local authorities cannot possibly have had the advantage of this new rate. They had, however, the great disadvantage of increased interest rates from November of the previous year.

Do not let there be any misunderstanding on this subject. Everyone in this Committee is anxious that the building industry, including the operative, managerial, and design sides, should bring all its weight and energy to bear on the drive for a reduction of building costs. I have never pretended otherwise, and we know that that is going to be done and we will join in any operation calculated to achieve that end. We also know that local authorities are unable to find the money to close this huge gap between the actual subsidy and the rent.

My hon. Friend the Member for Ayrshire, Central (Mr. Manuel) has produced figures showing that the most prudent people in Scotland will not be able to afford houses that are being built at this figure, and my hon. Friend the Member for Bridgeton (Mr. Carmichael), who has spent a life-time in local government, has warned us that we are forcing local authorities towards the point where they would not be able to operate.

I remember the time when the right hon. and gallant Gentleman the Member for Kelvingrove concerned himself successfully with the plight of Scottish local authorities when the burden of unemployment in 1934 and 1935 was pushing them to a point where they could not possibly honour their obligations. At the end of 1935—and I give him great credit for this—he got an Exchequer grant which permitted them to operate, but they were nearly brought to a standstill. The burden which the present Secretary of State is today content to see thrust upon local authorities overwhelms that of 1935.

The third and final point I want to make, and which cannot be made too often, is that the Government cannot come here drawing around themselves the robes of virtue and righteousness, and then parade themselves as people anxious to help the local authorities and the tenants. They are helping nobody but the bankers by this Bill. The hon. and gallant Member for Perth and East Perthshire smirks at that. Who else benefits from the Bill but the bankers? Let the Government tell us.

The design and purpose of the Bill is to try to catch up with the additional interest made available, by the deliberate design of the Government. Local authorities will not get anything extra but a few coppers towards the increased building costs—by the hon. and gallant Gentleman's own admission—which will inevitably fall upon the builders in consequence of these higher interest rates. Even then I doubt the calculation of the hon. and gallant Gentleman, although I do not doubt his honesty. Tenants who are able to afford a higher proportion of their income as rent will have to face this position within another year and a great proportion of the people who hope for houses will not be able to take them. Great developments which we hoped for in the centres of our big towns will have to come to a standstill.

We cannot vote against this Clause, for the simple reason that we must see that these miserably inadequate subsidies are made available to the impoverished local authorities as quickly as possible, but I warn the Secretary of State solemnly that although his right hon. Friend the Minister of Housing can go about making speeches now about 300,000 houses, in 12 months from now if, by misfortune, that Minister is still permitted to enjoy office, the position will be very different. I indicated six months ago that the figures for Scotland were bound to be rather good because of the preparations that we made.

I suppose it is hopeless to ask the Government to give further consideration to this subsidy. I hope that at some stage of the Bill the Minister will find an opportunity of explaining how they come to the £1,635-house proposition and how he, an expert in finance as well as in local government, can ever hope that local authorities will accept that figure.

Mr. T. Fraser

I said earlier that I regarded the Clause as a great fraud because it pretended to confer benefits upon either the local authorities or the tenants of local authority houses while rendering them worse off than they were before. The Joint Under-Secretary of State, in the course of his speech a little while ago, made it quite clear that the Clause is a fraud in another way.

He mentioned savings. I certainly want to see savings effected. The Minister told us that he had had the privilege last week of going to Paisley to open a house, that a four-apartment house at Paisley cost about £1,600, that there had been a saving of about £150 because of the techniques employed, and that that was £20 more than the savings allowed for in the subsidy provided under the Clause. He also said that the provision for site preparation and services would probably account for another £200. He said that the house on which a saving of £150 had been effected cost the local authority £1,800. But his subsidy is being paid in respect of that house under this Bill on the assumption that the house will cost not more than £1,635. Who will pay the difference? Either the local authority out of the local rates or the tenant of the house. Why do not the Government come clean and admit that they have been misleading all of us all along?

There has been some discussion about rents and the Joint Under-Secretary has told us that £42 is a notional rent. What is a notional rent?

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

It is one that does not exist.

Mr. Fraser

That is why it is notional. Is the Under-Secretary, speaking on behalf of the Government, giving instructions to the local authorities that a rent of £42 per year should be charged for a house that costs £1,635? What about the house that costs £1,800? What rent should be charged for that one? Presumably a rent much in excess of the £42.

Some of my hon. Friends have said with truth that there are many people on the housing lists who cannot afford a house at a rental of £42. I can think of the factory workers, the railway workers and many other workers in my constituency who have wages of £6, £5 10s., £5, and less per week. Is it being suggested that those workers should stay on the housing list and get a house for which they will pay a rental of £42?

Let no one think that it is just £42, because it is £42 plus rates. The rates in the county part of my constituency at the present time are 25s. 3d. to 25s. 9d. in the £. The occupier's rates are no less than 13s. in the £. If the rent were only £42—that is, if the local authority could build houses at £1,635, which they cannot—the tenant would be asked to pay £42 rent plus rates at 13s. in the £ on the £42, a total of £69 per year, or 26s. 6d. per week.

Are the Government saying that the £5 a week man should pay rent and rates at a minimum of 26s. 6d. a week? And what about those constituents of mine who have the misfortune to be sick or unemployed and are assisted by the National Assistance Board? I know that the Board will meet rents up to 14s. and 15s. a week, but will they meet rents of 26s. 6d. a week at a minimum, and if they do not, then the difference between what they pay and the 26s. 6d. will have to come out of the bellies of the children or the old people. That is what it amounts to.

This is a most serious discussion on a very serious matter. It does not say much for hon. Members of the party opposite that they have kept mum all night, that they have nothing to say. And the Government are speaking in a different tone of voice from that in which they used to speak on housing matters. They used to get hot and bothered, but tonight they are seeking to pour oil on the troubled waters. That is the "keep calm" group over there. We have no right to keep calm in this matter.

The Government spokesmen tonight have shown us that the figure of £1,635 as the cost of an average four-apartment house is a "phoney" figure. Even with the considerable economies that are being effected in house construction the figure goes far beyond the £1,635 that they estimated as the cost of a house in the buildup of the present subsidy. They have talked glibly about this notional rent of £42. Indeed, by their speeches tonight they have forfeited their right to continue to be responsible for the government of the country.

10.0 p.m.

Mr. Woodburn

The Government, having listened to the debate and to their own contribution to it, must have realised that the time is coming when some clear statement must be made both to the House and to the country as to what this is all about. I am quite sure that the figures that have been bandied about tonight must leave the local authorities and the general public in confusion as to what is the policy of the Government in this financial matter of rents. It is a desperate thing and it is reaching a situation where, as one of my hon. Friends said, something may burst.

This clear statement cannot be given tonight. It is quite obvious that the Government are not in a position to declare any policy. They are not in a position to clear up this matter, but I hope that as a result of this debate they will decide at an early moment that the Secretary of State will either place a White Paper before the House or make some statement clearing up this matter and making it quite clear how these figures are built up, where we are going, and what is to be the result of the present housing and financial policy on the local authorities, on the tenants, and on the Government themselves.

We do not propose to continue the debate, because quite clearly nothing more of any value could be said tonight. As my hon. Friend has said, we do not propose to do anything to deter these subsidies being paid to the local authorities, who are desparately waiting to receive them. Therefore, we hope that what has been said tonight will be taken into account by the Government.

Clause, as amended, ordered to stand part of the Bill.