HOUSING (REVIEW OF CONTRIBUTIONS)

HC Deb 21 October 1954 vol 531 cc1386-459

3.38 p.m.

The Minister of Housing and Local Government (Mr. Duncan Sandys)

I beg to move, That the Draft Housing (Review of Contributions) Order, 1954, a copy of which was laid before this House on 12th July, be approved. The House will, I feel, have some sympathy with me in following at the Ministry of Housing and Local Government my right hon. Friend who, by his brilliant and successful handling of housing policy, has, I believe, won the respect of hon. Members in all parts of this House and the gratitude of millions outside it, As Minister of Works in the war-time Coalition Government, and subsequently in the so-called Care-taker Government, I was actively concerned with the launching of the temporary housing programme—until my tenure of office was, to me, somewhat abruptly and unexpectedly ended in July, 1945. I am therefore particularly glad to find myself once again actively concerned with this great human problem of housing.

Mr. George Chetwynd (Stockton-on-Tees)

For about the same length of time.

Mr. Sandys

This Order has been before the House since 12th July, and we are now asking that it be approved. The Order reduces the subsidy on local authority houses which are completed after 31st March next. As the House knows, this rate of subsidy is reviewed once a year. The reductions proposed in this Order are the outcome of the review made last June. As my predecessor explained in a White Paper, these reductions are justified by the change in conditions which has taken place since the present rate of subsidy was fixed in 1952.

The principles on which the subsidy is calculated are now well established, and I think that they are pretty well known to hon. Members. The subsidy is determined in the light of four main factors. The first is the capital cost of building; the second is the interest charges for its amortisation over a period of 60 years; the third is the cost of repairs and management; and the fourth is what is known as the notional rent, that is to say, the amount of rent which a local authority can reasonably charge its tenants having regard to the current level of earnings.

The proposals contained in this Order must be viewed against the background of the policy which has been pursued by Governments of both parties since the end of the war. By the Act of 1946 the late Government fixed the standard Exchequer subsidy at £16 10s. In arriving at that figure, they estimated that the average cost of a standard three-bedroom house of 950 square feet was £1,100. The annual cost of repairs and management was then reckoned to be £7 8s. and the notional weekly rent was estimated to be 10s.

In the years which followed, the cost of building materials and labour went up continuously, and with it, of course, the cost of house building. To meet these increased costs the late Government might well have increased the subsidy, but instead—and I think quite properly—they decided to assume an increase in the notional rent while keeping the subsidies unchanged. The figure which they assumed for rent was raised successively from 10s. in 1946 to 16s. in 1951. They justified these increases in the assumed notional rent on the ground that they did no more than reflect the increase which had taken place in the level of earnings.

With the change of Government at the end of 1951, the Bank rate was put up, and in consequence the interest rate charged to local authorities by the Public Works Loan Board was raised from 3 per cent. to 3¾ per cent. and a few months afterwards to 4¼ per cent. This had the effect of substantially increasing the cost of local authority house building—which, I remember, was pointed out by the right hon. Gentleman who was Financial Secretary to the Treasury at the time—and this rise in the cost of house building—

Mr. Charles Pannell (Leeds, West)

The right hon. Gentleman has made an error. My right hon. Friend the Member for Battersea, North (Mr. Jay) was speaking from the Opposition benches. The Financial Secretary at that time was the present Minister of Transport.

Mr. Sandys

The hon. Member is quite right. I meant the previous Financial Secretary and I referred to him in that way because I could not remember the name of his constituency.

This substantial increase in the cost of house building made it necessary to review the whole basis of the housing subsidy. As a result of this review, which took place at the end of 1951 and the beginning of 1952, the standard Exchequer subsidy was raised from £16 10s. to £26 14s., and the various special subsidies were raised proportionately. That was done by the Housing Act of 1952. In introducing the Bill, my predecessor explained in some detail how the revised figure of £26 14s. had been arrived at.

It was estimated that during the six years from 1946 to 1952 the capital cost per house had gone up by £475. The cost of repairs and management was then estimated to be £12, which represented an increase of £4 12s. over the 1946 figure. Following the same principles as had been adopted by the previous Government, the notional rent was raised from 16s. to 18s. to reflect the general increase in earnings. This revised rate of subsidy based on these figures was fixed in agreement with the local authorities, and was, I think, generally accepted as fair and reasonable in the circumstances which existed in 1952.

At the annual review in June, 1953, no alteration was made, but since then a major change has taken place in one of the main factors of the subsidy calculation, namely, in the rate of interest payable on loans from the Public Works Loan Board. This has gone down from 4¼ per cent. to 3¾ per cent. If all the other factors in the subsidy calculation had remained unchanged since 1952, this reduction of ½ per cent. in the interest rate would have made it possible to reduce the Exchequer subsidy from £26 10s. to £21 18s. However, the other factors have not remained entirely unchanged. Wages in the building industry have continued to go up, but to a large extent this has been offset by some drop in the prices of building materials, and also, I am glad to say, by some increase in productivity due to a number of reasons, and in part, I am sure, to the freer flow of building materials.

Mr. Leslie Hale (Oldham, West)

There has been another change. It is in the standards of housing which now vary very considerably. Will the right hon. Gentleman explain how he estimates the capital cost today? Does he take all the houses built and divide the capital cost? I am told that in Oldham the figure he presumes is £1,560, but that the actual cost is £1,683 per house.

Mr. Sandys

Is the hon. Member talking about the size of houses?

Mr. Hale

I am talking about the capital cost. Is it being based on the smaller house or the average house?

Mr. Sandys

It is based upon the average kind of house that is being built by local authorities, and it is true that the average size of that house is somewhat smaller than it was some years ago. I think that is very satisfactory. The plans have been improved in many ways, with the result that it is possible to get, for rather smaller floor space, equally satisfactory amenities. In any case, I would point out to the hon. Member that the decision as to what kind of houses they build rests with local authorities. The right hon. Member for Bishop Auckland (Mr. Dalton) conceived the idea of the house which was subsequently delivered and christened by my right hon. Friend—perhaps with his rather more popular touch—the "People's House." The ideas embodied in that type of house, originally put forward by the last Government, are now being adopted to an ever greater extent by local authorities, and the subsidy is based upon the type of house which local authorities in general have decided to build.

Mr. C. W. Gibson (Clapham)

This is the crux of the whole matter. Is it not a fact that the assumed capital cost is a purely notional figure, arrived at by persons in the Ministry of Housing and the Treasury, in a way which nobody in local Government has yet accepted? Is it not a fact that it is and has been, even under the previous Government, a notionally accepted cost of house building which in fact is a long way from the actual realities of the situation?

Mr. Sandys

The figures taken for the building of houses are based not upon some notion but upon an examination of the tender prices and actual costs throughout the country. The notional rent figure to which the hon. Member referred is, as the expression indicates, a notional rent. I hope that we need not make this subject controversial beyond the differences of opinion that may exist upon the broad issues; there is no party issue involved in this aspect of the matter. What we have adopted is a long-standing practice—I hope that the hon. Member for Clapham (Mr. Gibson) will listen to me. I notice that he is in conversation with the hon. Member for Peckham (Mrs. Corbet).

Mr. Gibson

It is upon the same point.

Mr. Sandys

Then I shall leave the matter there. All I am saying is that the notional rent is a basic factor in the calculation of the housing subsidy and has been accepted as such by successive Governments. The increases which the previous Government made in the notional rent year after year were based upon the increase in average earnings as shown by official statistics, and we have adopted exactly the same principle. I am still talking now only about the principles which were adopted in the fixing of the 1952 subsidy.

Since then, as I have said, wages have gone up, but to some extent that has been offset by the drop in the price of certain building materials and by the very satisfactory increase in productivity. Balancing these factors one against the other, it is estimated that during the last two and a half years the cost of house building has risen by a little over 3½ per cent. The effect of this—and this may to some extent answer the hon. Member's point—is to increase the cost per house by about £58 above the 1952 figure. On the other hand, this slightly increased capital cost can now be amortised at an interest rate which is one-half per cent. lower than it was before. The net result is that the annual cost to the local authority has gone down by about £4.

The only other change which has been made in the factors governing the subsidy calculation is in respect of rent. I was talking just now about the notional rent in the 1952 subsidy calculation; now I come to the present subsidy calculation embodied in this Order. In reviewing the notional rent on this occasion, we have once again followed the same principles as those adopted by the late Government. The average earnings have continued to rise and the notional rent has been assumed to have risen by 1s. from 18s. to 19s. This 1s. increase in the notional rent is less than the increase in earnings would warrant. In April last the statistics showed that the average weekly earnings had gone up by £1 11s. 8d. above the level upon which the last subsidy was based. This represents an increase of 19 per cent., which would justify an increase of 1s. 8d. in the notional rent, but, as I have said, we have assumed an increase of not more than 1s.

Based on these calculations, the Order provides for a standard Exchequer subsidy of a round figure of £22 1s. In this world of housing subsidies, round figures are figures which are divisible by three. That is why the odd shilling has been added. This figure of £22 1s. compares with £26 14s. at present, and £16 10s. in 1951.

I have explained in some detail what we are doing by this Order, but so that there shall be no misunderstanding I should like, in a few words, to draw attention to what we are not doing. First, we are not proposing any reduction in the three-to-one ratio between the Exchequer subsidy and the local authority contribution, although power to do so is given to the Government in the 1946 Act. Secondly, we are not assuming as great an increase in the notional rent as the increase in average earnings would warrant.

Mr. J. A. Sparks (Acton)

What about the cost of living?

Mr. Sandys

Thirdly, we are not bringing into operation the subsidy reduction envisaged in this Order until the end of March, although the changed factors which justify it are already operating.

In moving the Second Reading of the Housing (Financial and Miscellaneous Provisions) Bill in 1946, the right hon. Member for Poplar (Mr. Key)—whom I am glad to see here today—expressed views with which I think Members in all parts of the House can agree. He said: …high subsidies must not be an incentive to maintaining high costs, and, since we are determined that high costs shall be temporary, high subsidies must be temporary too. He went on to say: For this reason I wish to make it quite clear that the subsidies now proposed … are maxima, and it is the intention of the Government that they shall be reduced at the earliest opportunity."—[OFFICIAL, REPORT, 6th March, 1946; Vol. 420, cc. 342–3.] It must, I think, be a matter for satisfaction by hon. Members in all quarters that now, for the first time, it has become possible to make some reduction in housing subsidies, while at the same time scrupulously adhering to the principles which have governed the policy of Governments of both parties on this question since the war.

4.1 p.m.

Mr. Hugh Dalton (Bishop Auckland)

We now see this important Government Department under new management, and this causes speculation as to how the new management will compare with the old. We shall watch the position with interest and attention. We shall, as we did with the right hon. Gentleman's predecessor, give him our support when he is proceeding along the right lines, but we shall equally seek to guide and stimulate his steps when we think that a quicker pace or an altered direction would be in the public interest.

With regard to the proposals which the right hon. Gentleman has brought before us, I am inclined to think that since he has only just come to his present office, and since he has not yet had an opportunity of consulting the local authorities it would be advisable that he should do so before pressing these proposals through the House. They were put forward by his predecessor some considerable time ago, and in July discussions took place, I am told, between the representatives of the local authorities and the present Minister of Defence. But the local authorities were not wholly satisfied with those discussions, and they suggested that there should be further consideration and some postponement of this Order. I think that the A.M.C., in particular, pressed for that.

Now that we have a new Minister who is going to confront the housing problem afresh, I should have thought it would be better for him to get into consultation now with the local authorities to see whether he can produce, not only on this point but on other matters relating to housing, a new programme—not necessarily a revolutionary change—based upon up-to-date considerations and statistics, and that today we should not be required to accept this Order. It would cost him nothing. In any case, he is not proposing to operate this except on houses completed as from 1st April next, and therefore there is plenty of time. That is my suggestion which I hope that the new Parliamentary Secretary will be authorised to accept if and when he speaks later.

Mr. Harmar Nicholls (Peterborough)

Before the right hon. Gentleman leaves that point, I think it would help the debate later on if he would repeat at once that the calculations which have brought about the suggested reduction are made upon precisely the same premises and upon the same basis as were the calculations, when the right hon. Gentleman was the Minister responsible, that brought about the increases, and that the same argument which justified an increase at that time now justifies a decrease.

Mr. Dalton

If I may be allowed to continue my argument, perhaps I shall throw up some of the thoughts which the hon. Gentleman wishes, but let me continue in my own sequence.

I was coming to the interest rates, which are one of the important points in the argument. We have been told that the Public Works Loan Board interest rate has been reduced from 4¼ per cent. in February, 1952, to 3¾ per cent. at the present time. That is quite true. The rate of 4¼ per cent. was a very high rate —the highest we have had for a long time.

When I was responsible for these things, the local authorities borrowed at 2½ per cent., and, on the whole, those were good days from the point of view of housing costs. If local authorities were asked which they preferred, the rate which I gave or the rate which they are now getting, I know what their answer would be. The 4¼ per cent. was, for recent times, a very high rate, and it was high time that it should be reduced as from June, 1954.

I want to bring the argument up to date and to ask the right hon. Gentleman, first of all—and this is another reason why the matter needs a little further consideration—whether he thinks that the present rate of 3¾ per cent. is one that can be counted upon to remain stable for any length of time in the future. Perhaps he has already had discussions with the Chancellor of the Exchequer about this.

Supposing that his figures are all perfectly correct, but that then, very soon, the rate is put up again. Where, then, do we stand? The right hon. Gentleman is looking a little puzzled. Supposing that the rate of 3¾ per cent. is put up to 4, 4¾ or 4½ per cent. in the near future, where, then, do we stand in regard to the housing subsidy? Has the right hon. Gentleman got an assurance from the Chancellor of the Exchequer either that the Public Works Loan Board rate will not be put up again in the near future, or that, if it is, the right hon. Gentleman will then come forward with another Order raising the subsidy again so as to take account of any future increase in the rate?

Mr. Sandys

The right hon. Gentleman said just now that I was looking a little puzzled. He has held the same office and knows the position. As I understand it, the interest rate at which the loan is contracted continues for 60 years. That is the period for which the loan is amortised. Therefore, if there is an increase in the rate, it will not in any way affect the position, because in that case as on the previous occasion, the subsidy position would have to be considered. It is now being reduced because of a change in the interest rate. On the last occasion, it was increased because of an increase in the interest rate. The right hon. Gentleman can, of course, assume that that will be the position.

Mr. Dalton

I think that we are quite clear about the incidence of the change in the subsidy, either up or down. It applies in the present case only to houses completed after a due date in the near future —to houses completed after 1st April next. It then runs for 60 years. That is the period of the amortisation.

The assurance for which I am asking the right hon. Gentleman is that, if the rate is put up again, the subsidy will not merely be considered. Can he give an assurance that if the subsidy is being reduced because the rate of interest has fallen, it will be put up again if the rate goes up? I do not think that the right hon. Gentleman has been able to give me that assurance.

Mr. Sandys

The position will be reviewed once a year.

Mr. Dalton

It may be reviewed, but I am asking whether the adjustment will be made. Quite clearly this has a great bearing on our attitude towards this proposal. It might well be that consideration might lead to saying, "We cannot for the moment readjust the subsidy." Some of us think, watching what went on, that the right hon. Gentleman's predecessor was, on the whole, very successful in his battles with the Treasury. Whether the right hon. Gentleman is going to be equally successful remains to be seen. Upon his influence with the Chancellor much in this field depends.

As to the possibility of the rate going up again, I was reading the speeches made last night at the Mansion House. We always look to these annual statements as pointers to the financial policy of the Government in the future. The Chancellor of the Exchequer, looking back to the previous annual occasion, recalled that he had then said that we had been steering a course between the primrose path and the wasteland; that is to say, between inflation and deflation. He added: This year the primroses are a little bit nearer. This is a very agreeable simile, but it certainly points towards the possibility of still dearer money, because it is an accepted proposition in orthodox financial circles, if one is threatened with a little inflation, that one should put up the rates of interest, and in the same way, when there is a deflationary situation one should put rates of interest down.

At the same banquet last night the Governor of the Bank of England said that the barometer was rather more towards inflation than towards deflation. I take this as an indication that there may be dearer money in the future. That is why my question is particularly relevant when I ask whether, if we are to have dearer money, we are to have bigger subsidies. Perhaps the spokesman of the Department will think about it before the end of this debate. A consideration which will weigh heavily with us is whether there will be an equal upward movement of subsidy, if the rate of interest goes up.

There are other costs in house building besides the rate of interest. I have checked the figures given by the Gird-wood Committee, which has made three Reports, the first in 1947, the second in 1949 and the third, I think, in 1952 or 1953. The figure that the Committee gave for a traditional three-bedroom house was £1,400 in 1947, £1,515 in 1949 and, in their third Report two years ago, £1,690. I was asked by the hon. Member for Peterborough (Mr. H. Nicholls) whether I accepted all the figures given by the Minister today. I am not sure that I do. I should like to read HANSARD tomorrow and see how they all work out. I think that the Minister gave too low a cost as compared with the figures given by the Girdwood Committee.

Mr. Pannell

My memory is that a notional figure of £1,575 was based on the Girdwood Committee's Report but that there was a reduced figure on the assumption that somehow things would improve under the present Government.

Mr. Dalton

Perhaps we shall have more elucidation from the Parliamentary Secretary on these matters.

I must say a few words about the reference to me which is often made in connection with these new houses. What happened, when I held the office now held by the right hon. Gentleman, was that some ingenious architects called to see me—and I am always delighted to see architects—and showed me a number of new plans for building houses and asked whether I would prescribe these to the local authorities. I said, "No, I will not prescribe them, but I will certainly circulate them by way of information and suggestion." A number of these plans have been used, though not necessarily in the exact form in which they were circulated. They were of interest to many local authorities and in some cases they were adopted, but it is quite a mistake to father upon me any enforcement upon local authorities of smaller floor areas or smaller houses or lower ceilings or any other such device.

All I did was to indicate to the authorities that a number of architects had drawn up these different types of novel and interesting designs for building houses. I gave them a wide circulation and I believe a public exhibition of some of them was held. That was the total amount of my responsibility. Not only was I not responsible for the catchy title "People's House." which I gladly credit to the right hon. Gentleman's predecessor, but I did not bring pressure to bear on local authorities to reduce their housing standards. This is an interesting story which should be accurately recalled.

We should look carefully at this figure for the notional cost of building a traditional three-bedroom house. I think that it will be found that that cost is noticeably higher than the right hon. Gentleman indicated in his speech. I will not go into the figures now. A number of my hon. Friends no doubt will wish to say something in the light of their knowledge and of the first-hand experience of the local authorities of which they are members. We have many hon. Members on both sides of the House who have had local authority experience and I am anxious not to stand in the way of their contributions, but there is a wider aspect of this matter which is in the minds of many people at the present time to which I must refer.

Two articles have lately been published in "The Times," the first under the tendentious title, "The soaring cost of subsidies." They appeared on 28th and 29th September. They were designed to argue that subsidies were altogether too great and that steps should be taken to reduce the total amount of subsidies being paid out. They also sought to link up in one doctrine direct subsidy payments from public funds to local authorities—which we are discussing this afternoon—and what they called the subsidy from private landlords to their tenants, under rent control.

There is a school of thought, a type of opinion, which is seeking at this moment not only to reduce subsidies, as we are invited to do in this Order, but to do that as part of some general doctrine which would also get rid of rent control and give back to the landlords that which, according to these writers, is being taken from them and given to the tenants of privately-owned houses in the form of controlled rent. Therefore, some of us are a little suspicious of the larger thoughts which may lie behind this. We are not at all convinced that this may not be the thin end of the wedge to do away with the encouragement hitherto given by the previous Government and the right hon. Gentleman's predecessor to local authority house building on a large and increasing scale. We are wondering whether we are not going to see steps taken in a new direction, so that local authorities will be increasingly restricted in the future in their housing operations, which will be mainly focussed on slum clearance under the pronouncements made by the right hon. Gentleman's predecessor, and linked up with that a general movement to get rid of rent controls in respect of privately-owned houses.

It would be well if this whole matter could be taken up again and looked at rather more broadly than the right hon. Gentleman has done this afternoon. He may wish to make a general statement soon about his intentions, and I should have thought that there should be further discussions with the local authorities to obtain their agreement either to the proposals in this Order or to alternative proposals. I hope that we shall soon obtain from him a more comprehensive statement.

4.20 p.m.

Mr. Harmar Nicholls (Peterborough)

The right hon. Member for Bishop Auckland (Mr. Dalton) is one of the most adept Parliamentarians in this House. I think that is accepted on all sides. Therefore, it is quite clear that, if he found difficulty in discovering anything to criticise in this Order today, the Order must be a good one, because if there were a loophole by which he could criticise it, the right hon. Gentleman is the one who would find that loophole. I think his speech was a clear indication that there is nothing much to criticise in view of the past history of this Department.

Of course, hon. Members opposite will find it difficult to criticise the Order, because the decision announced by my right hon. Friend is based on the calculations hon. Members opposite set up. The calculations which now recommend that we reduce the subsidy by this amount are precisely the calculations and premises on which they said the subsidy should go up.

Mr. Pannell

The hon. Member is quite wrong in saying that it is the same basis. It may be remembered that when the Labour Government went out of office the rate was 3 per cent. and it went up to 3¾ per cent. It was as a result of the rate going up to 3¾ per cent. that the housing subsidies had to be put up to the present figure. The rate has not gone back to 3 per cent. but to 3¾ per cent. from 4 per cent.

Mr. Nicholls

Nor has the subsidy gone down to that extent. My right hon. Friend is not suggesting that the subsidy should be reduced to the £16 10s. level, at which it stood when hon. Members opposite were in power. It is clear that if one is to be fair in examining this matter, if one wants to criticise anything one criticises the relationship between the Government, the local authority and the subsidies, but if one criticises that basis one is criticising the very basis or formula employed by the previous Government.

Mr. M. Turner-Samuels (Gloucester)

Is that really so? It may very well be that the circumstances justify the present reduction; I do not concede that, but assuming it, what we want to know is whether, if adverse circumstances recur, the Government will give an assurance that they will raise the contribution with the same facility as they are now reducing it.

Mr. Nicholls

One step at a time. The hon. and learned Member for Gloucester (Mr. Turner-Samuels) has given all that my right hon. Friend could ask. He has said that this increase is justified as things are at the moment and has gone on to say, as his right hon. Friend did, that there may well be circumstances in the future which will call for different thinking. But he admits, as I am sure he must, that the reduction now is justified on the basis which his own Government brought into operation.

I think that any impartial reader of this debate will see that the Opposition is in difficulty in wanting to criticise the basis or formula for taking this decision, as it is the one which was used by the previous Government. The right hon. Member for Bishop Auckland, reinforced by his hon. and learned Friend, has gone into the future. I rather admire them for looking ahead; it is not one of their usual traits. They have said, "We admit that the decrease today is justified"—[HON. MEMBERS: "NO."]—Well, the hon. and learned Member said that quite plainly, and I think he was wise in saying it. He has come over to our benches now; that is what happens when hon. Members see the light. The admission is that, as things stand at present, the reduction is quite right.

Mr. Dalton

That is not what I said.

Mr. Nicholls

At the beginning of my speech I said it was what the right hon. Member ought to have said, and I think I am reinforced by the fact that his hon. and learned Friend did in fact say it. I see the point which is raised. It is this: if the interest rate goes up in future, will the subsidies go up in keeping with the increased interest rate? I think the answer is that if everything else remains as it is, there would be a case in the future, if the interest rate goes up, for increasing the subsidy again; but if it can be shown that the interest rate has gone up and the cost of building has gone down because of more mechanisation, then even an increased interest may not justify a subsidy increase. I think that this reduction in cost may well mean a perpetual reduction in subsidy rates.

It would be very unfair to ask my right hon. Friend, or the Parliamentary Secretary, to say at this stage that if the interest rate goes up automatically the subsidy will go up. All they can say is that if the rate went up and none of these other things happened there would be a case which they might well think fit to put to the Treasury. That is the answer which the right hon. Member for Bishop Auckland knew that he would get. He only posed the question because he had not an argument to put in opposition to the figures contained in this Order.

On the question of the notional value, I think that the intervention of the hon. Member for Leeds, West (Mr. Pannell) was not fair. It rather suggested that the figure given by my right hon. Friend was a "phoney" one. The same basis of calculation which brought out the previous notional figure announced by his party was used for the figure which has come out today. It may be that they were worked out by precisely the same people. If the figure given today is a wrong one, again we would be saying that the very basis on which the previous Government based this scheme was a wrong one. I do not think that even by inference the hon. Member should suggest that some Minister or adviser to a Minister has deliberately set up a new basis without disclosing it to this House. I am making my speech on the basis that precisely the same calculation as settled the previous notional figure is the one which settled this notional figure and, in the absence of very real evidence to the contrary, the hon. Member ought to accept the same basis.

Mr. Pannell

The basis had to be altered in reference to the repairs allowance from £8 to £12, which was the mean figure between all local authorities in the country. I made a speech on that at the time.

Mr. Nicholls

I remember the hon. Member's speech very well. I remember him telling us that in some local authority areas the repairs were only £6 10s. and in others they were £14.

Mr. Pannell

From £12 to £16.

Mr. Nicholls

I well remember the speech. If the advice of the hon. Member was accepted and a more realistic figure was produced, that should be a matter to give him joy and not to call forth criticism. I do not think we ought to move any further in the inference that this notional figure was based on anything but precisely the same basis as was laid down by the previous Government.

The right hon. Member for Bishop Auckland was too modest. One of his great assets as a Minister was his foresight in recognising that these were better designs for houses which ought to be circulated to local authorities. I always admired him for pointing out that we were wasting material and labour in providing big houses when the overriding demand was for smaller houses. I admired him for the fact that as Minister he gave support to the new plan circulated under the title of the "People's House."

For mere reasons of party politics he conies here today and says that he did not prescribe the new plan, but merely circularised it to local authorities. Is he suggesting that he would use the power of his office to send anything to a local authority other than what he thought was good for the authority to follow? Is the right hon. Gentleman suggesting that he has used Her Majesty's Postmaster-General's deliveries of letters to send something to them other than something which was good?

Of course the fact is—and I admire him for it, although I can understand his wishing to retreat from it at this moment —that he knew at that time that here was a better design, that here was the plan of a house that could give better value for money, and he wanted to send it to the local authorities in the hope that they would follow it when giving their future contracts. I am certain that that was what the right hon. Gentleman had in his mind, and I am sure, after seeing two or three years during which these plans have been in operation, that he was right. It is rather sad to see that one of his greatest triumphs has to be apologised for when he comes to the Dispatch Box today.

Mr. Dalton

The hon. Member is labouring the point at some length. The matter is exceedingly simple. It is often the case that a Minister, who has contact with outside bodies and is anxious to co-operate with them in their work, may send them circulars inviting their attention to this or that idea or to this or that suggestion, but it is quite a different thing to put pressure on them in order to get them to adopt it.

I will just say—and if the hon. Member does not further provoke me I shall not intervene further after this—that I know a number of local authority architects and I thought it would be interesting for them to see alternative plans which had been prepared by other architects. I did not wish to intervene between one architect and another. All these things cannot be run from Whitehall; one has to leave them to local authorities to decide.

Mr. Nicholls

I would describe that intervention as a laboured defence of a very good action.

I sat as a local councillor, indeed as the head of a local authority, during the year in which the right hon. Gentleman circularised us. I have no recollection that when he sent the new designs he sent a covering letter to the effect, "I merely send these for you to look at; I do not personally recommend them." I remember the right hon. Gentleman's new design coming along, and, whatever the covering letter was, I am certain that the inference was that it had his approval. I have no doubt that it had.

I am not suggesting that the right hon. Gentleman brought pressure to bear on local authorities about it; I am sure he was far too good a Minister to have done so. He would realise that the one way not to get local authorities to follow his guidance would be to try to press them to do so. I am sure that he was using his subtle and effective tactics in first sowing the idea in their minds in the hope that later they would follow it and think that it was their own idea. One of the outstandingly successful points in the right hon. Gentleman's career was in accepting that design and circularising it, and I am sorry that he is now trying to apologise for it.

The final point which the right hon. Gentleman made was in connection with a reference in "The Times" to the soaring cost of subsidies. He went on from that to make once again a good old electioneering point—never lose a chance of making an electioneering point when an election has to come within two years. He tried to suggest that it is the object of the Tory Party to do away with the Rent Restrictions Acts—the old argument that "the Tories want to put up your rent." The truth is that the recent Act which the House passed proved that the Conservative Party, the Government today, intend to protect the small rent payer. There is no question at all of doing away with rent restriction, as was suggested by the right hon. Gentleman.

I should like to feel that what "The Times" had in mind, and what I should like my right hon. Friend and his Parliamentary Secretary to keep in their minds, was not that subsidies should be reduced in order to make it hard for ordinary working-class tenants but that we ought to encourage house purchase on every conceivable occasion because every time a person buys a house he does not require a subsidy. I have believed for a long time that between the person who builds a house for himself and the person who has to go into a house as a subsidised tenant, there is a middle group who, if they had some help at the beginning in purchasing would not be tenants but house owners. If such help were given, we should be achieving the objective which I think "The Times" had at the back of its mind of saving the nation money on subsidies.

My right hon. Friend is to be congratulated on having, as his first Measure to bring before the House in his new office, this particular Order which, from the speech we have just heard from the Opposition Front Bench, is obviously one which will be received with approbation on all sides of the House.

4.35 p.m.

Mr. Charles Pannell (Leeds, West)

The Minister deserves our sympathy in having to bring this matter of housing subsidies forward today. It is a matter of great complexity; and, of course, it has a certain impact upon our social life. The fact that the Minister is here today is a sign of the crisis in the affairs of the Government. What is really happening? The hon. Member for Peterborough (Mr. H. Nicholls) presses—I always give him credit for it—at the Tory Party conference for the building of 300,000 houses a year. The Minister of Housing and Local Government achieves the conference target and as a result he moves on to the Ministry of Defence.

In achieving the conference target he sinks the Minister of Education—[An HON. MEMBER: "Nonsense."] Oh, yes, because of the diversion of capital away from the educational programme which his housing achievement causes. Of course there is no way of kicking a lady upstairs to the House of Lords so she becomes a Dame Grand Cross of the British Empire. Today we have here as the Minister of Housing and Local Government the former Minister of Supply.

I wish to deal, if the hon. Member for Peterborough will allow me, with the question of the Minister's notional figure, which I think is £1,575. I say that that notional figure was arrived at by taking the latest Girdwood figure and adjusting the elements in the notional figure to it. I do not think I am twisting the facts in any way in saying that. I have gone into these figures at great length before and I have already mentioned the element of the repairs allowance in the notional figure. At all events, I am not trying to mislead the House.

The difficulty this afternoon—I say this with great deference and in no attempt to be patronising to the Minister—is that he has come rather new to this subject. Some of us have lived with the subject of this debate for rather a long time and there is no room for any smart tactics today. The history of this step lies in the fact that when we left office the interest rate was 3 per cent. It was put up to 3¾ per cent., and at the time I said that the increase of interest rates on local authority houses over a period of 60 years really meant, in the case of a house built under those terms, an increase of 4s. 4d. per week. That figure was generally accepted at the time.

What we are now speaking about in our references to housing subsidies is something which affects the payments of rents by council tenants. Further than that, it was on the figure of 3¾ per cent. that the Minister agreed to confer with the local authorities in order to achieve the present housing subsidy figure. The interest rate has since risen to 4¼ per cent., but it was on the basis of 3¾ per cent. that it was proposed to increase the subsidy to the present figure of £26 14s. Therefore, the hon. Member for Peterborough says that, if the Government after a period of time reduce the interest charges, it is reasonable that they should reduce the subsidies—I think that is the hon. Member's point—if everything else is equal.

We have to address ourselves today to the question whether everything else is equal, when £1,575 is given as a notional figure representing the figure at which it is assumed a local authority will be able to build a house of 900 square feet. In effect, the figure is not £1,575. The Minister himself has agreed that the figure for a house has risen by £58 since 1952. But that is not the whole picture. I represent a northern constituency, but a borough surveyor in a local authority in outer London told me the other week that the average cost per house was £1,850. That rise has been because of the rise in the cost of living.

My right hon. Friend is asking for some reconsideration of this question, bearing in mind that this is a new Minister who is looking at housing policy afresh. The right hon. Gentleman's predecessor indicated a fairly sharp change in general housing policy before he left office. Having achieved the target of 300,000 houses, he was then readjusting the future allocation on the basis of a greater number of houses for sale, a greater number to be built by private builders, and rather fewer to be built by local authorities. We are considering today the local authorities, because this is their subsidy.

I do not want to go on record as being in favour of high subsidies. I want to bring them down at the earliest practicable moment—all other things being equal, to meet the point of the hon. Member for Peterborough. It is salutary to think of the average figure of the subsidy from public funds for pre-war council houses. I think the average national subsidy is about 4s. 8d. per house in cases where local authorities do not operate general pools but consider pre-war houses on their own for statistical assessment. Today many council houses are being subsidised at the rate of over 13s. a week and there are flats which are being subsidised at the rate of over £1 a week. That is the sort of crazy finance which cannot go on for very much longer.

I therefore do not want the Minister or any other hon. Member opposite to suggest that I am arguing the case for higher housing subsidies in themselves. What I am saying—and this is the crux of the argument—is that the Minister has to reconcile this reduction in subsidy with an increase in housing costs.

The hon. Member for Peterborough ranged a little wide on rents and I do not want to go as far as that, but I want to say a word or two about the social implications of a cut in subsidies. I hope that will not be inappropriate or out of order at this stage. On this side of the House we must not suffer from any cowardice on this subject. There are people in West Leeds living in back-to-back houses who will not have the amenities of council houses for a long time. I know of many thousands of people on the housing list who, in effect, are paying subsidy to the tune of 13s. a week in order to maintain other residents of West Leeds in council houses better than their own back-to-back houses.

It is no use the previous Minister bringing forward the excuse that these tenants of council houses are in the same position as the mythical tenants who are presumed to receive a subsidy from private landlords through living in rent-controlled houses. These back-to-back dens of iniquity in my constituency have been paid for over and over again and the tenants are living on nobody's back. In the main, many of them are those who could and would afford to live in a better house if we could provide enough better houses.

It is the pressure of national physical capacity against family needs which we face here, and anybody who has been on a local authority housing committee and has allocated houses knows of the different types of hardship which we have to assess. I have always considered that amongst the greatest types of hardship is one which has received very little consideration by local authorities; and it is that of the decent young married couple who have never had a home of their own and who are anxious to have a family and to bring up a family decently and in comfort. We tend to think of the big family as always having priority, as, of course, it must have priority for the sake of the children.

This sort of thing is reflected in the rents which have to be paid and the Ministers must somehow address themselves to a national rent policy in relation to the subsidy. The hon. Member for Leeds, North-West (Mr. Kaberry), who sits beside the Minister, was on the city council which is the home of the differential rents system. One of the greatest housing reformers in this country, the Rev. Charles Jenkinson, was the father of these systems. All my experience tends to make me recoil from the differential rent.

I have generally found that few people can be trusted to make an accurate return of their income where their own interests are concerned, and I am not in favour of setting up all sorts of inquisitorial methods at local level. The Income Tax man can do that sort of thing and it is far better to set a basic minimum rent where there is one income in the house—a rent which the tenant should pay. Here I am in common with many Labour local authorities who have decided that where there is more than one income in the family everyone over the age of 21 will add a figure of 2s. 6d. or 3s. to the rent. That is a simple device which obviates the necessity of a means test.

The other day I was going over a housing site and I saw motor cars parked on the green in front of a row of houses —a green which had been meant to beautify the estate. I do not say that it is a bad thing for council house tenants to own motor cars; I want to see more cars; but it makes one consider the question, for when one knows how much it costs to run a motor car one must ask whether such a person should receive a subsidy as compared with the tenant of a back-to-back house who will never get a council house in Leeds.

We can easily overcome this part of the problem. The council can compel tenants to have proper garages built and can charge such a rent on the garage as will recoup the deficiency on the house. In Leeds they are considering two possibilities. They have considered letting a piece of land alongside the house at £4 a year ground rent and allowing the tenant to build his own garage. I imagine that that is a good financial undertaking for the local authority. The new policy is to say that where a man has a car he must have a garage built by the corporation for which he will pay 10s. a week, which again is a financial benefit to the housing fund.

We must cut out the overheads and the non-producers—those who go round looking into other people's business. We must produce simple schemes which will reconcile the position of the family man who is trying to bring up his family with the position of the middle-class person who wants a house and cannot afford to purchase it. I support the theory of my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) of abolishing the idea of housing for the working classes. I take the general view that need should be the determining factor. A man may come back from abroad on a decent income and not be able to buy a house at present prices. It is a question of charging an economic rent. We should let the Income Tax deal with all the rebates for the family. Let us have simple housing schemes which will enable the local authority to obtain a contribution from the man who can pay more—a contribution which will enable the authority to create a pool by which we make available a low basic rent for the lower-income groups.

The second point which disturbs me about all this is the fact that it costs £1,800 to build a house in London. I should be out of order if I went into the various devices employed by local authorities to keep the rent down, but these debates are useful if they bring us to realise that it is not how the local authority repairs the houses, it is not even how they build the houses, which determines the rent. What determines the rent is the contribution which we pay in interest to the finances in that building. The fact that three-quarters per cent. on interest charges for the Public Works Loan Board makes a difference of 4s. 4d. a week in rents is indeed a consideration.

If I associate myself with my hon. Friends in asking the Government to take back this Order, it is not illogical. If a Labour Government came in and they reduced interest charges, there would be an obligation on them to lower subsidies. We are not only speaking about Exchequer subsidies but about the rate fund subsidy.

One factor that presses on local authorities is that with every house they build they increase the figure of the rates, and those rates are paid by the whole of the community. It is entirely bad if we organise subsidies in such a way that they, somehow or other, divide our local communities into council house tenants and private tenants. All are members of the same community. Many of the people who go into the houses are ex-Service men. We hear the claims made for ex-policemen and ex-prisoners of war, and we should remember these things. We do not want to divide our communities.

In the last resort, we can get over the business only if we deal in equity between man and man, ratepayer and ratepayer, tenant and tenant. I am afraid that the general trend of subsidies has been to drive people into one or other of two camps. Often chairmen of local finance committees have had to choose between a 6d. increase in the rates for the generality of the tenants or an increase of 4s. a week for council tenants. That is a bad thing. Many of the ideas of subsidies as between one tenant and another outrage our sense of social justice. They should be looked at against a broader background than that provided by the Order brought in by a new Minister, whom we all wish well.

This is a most complicated matter. It is necessary for a new Minister to make himself familiar with his Department. Ministers come and Ministers go. Sometimes they go because they have got fed up with their last job. I have often said to the last Minister of Housing and Local Government that local Government reform would never come under him because he was looking over a foreign field.

The new Minister has come from the Ministry of Supply. In negotiations with him on questions connected with the engineering trade I found that he was a forthright Minister who did not appear with a conglomeration of officials so that he could get information at second-hand. I think that he is a man who is prepared to look at the job and to rest on his own judgment. In this case he has inherited rather too much. He ought to have given himself a breathing space if he wants to fashion a new policy which will do credit to him and justice to the people.

4.54 p.m.

Mr. J. Enoch Powell (Wolverhampton, South-West)

The formula on which the housing subsidies contained in this Order are calculated was not merely inherited by my right hon. Friend from his immediate predecessor. It is the same formula which has been applied since housing subsidies first fell to be calculated after the late war. That formula in principle has received the agreement of both sides of the House. As recently as the debate of, I think, 22nd April, 1952, the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan), who was the responsible Minister in 1945, reaffirmed his view of the rightness of the formula in itself upon which these subsidies have been calculated since 1945 and from which the present proposals are no exception.

Therefore, the House, in deciding whether to affirm these proposals, is considering whether the elements which have been written into that formula in the present case are the right ones or not. If we can agree that the elements are rightly assessed and have not been under-or over-assessed, as the case may be, then both sides of the House who concurred in the formula must also concur in the result which it produces.

This formula is no secret and is in its essentials not very complicated. It consists in taking the current building cost of a notional house, obtaining the annual loan charges consequent upon such a cost at the ruling irate of interest charged by the Public Works Loan Board, adding the cost of maintenance from year to year, and assessing such subsidy as would result in a net rent which it is thought fair to ask the average tenant to pay.

The House will see that there are three variables in the formula. The first potential variable is the coat of the notional house; the second is the cost of maintenance; and the third is the net rent which it is reasonable to expect the average tenant to pay.

Mr. Pannell

I do not want to quarrel with the hon. Gentleman, but I wish to intervene in fairness to a good many people who at the time criticised the amended figure for maintenance of £8, which I think was brought up to £12. I think that I could convince the hon. Gentleman from documents in my possession how that figure was arrived at. We have always said that the figure of £12 was completely unrealistic.

Mr. Powell

I have not yet come to the consideration of these variables themselves, but I am sure that I have the agreement of the hon. Gentleman that those are the three variables in the application of the formula. I want to take them and to see whether the figures which my right hon. Friend has decided to write into the formula for his present purpose are right or not.

The first is the cost of the notional house. That cost was taken in 1952 as being £1,525 and it has been raised for the purposes of the Order to £1,583, an increase of 4 per cent. The first question we should ask is whether this increase is sufficient or not, whether a higher figure for the cost of the national house should have been taken. We must bear in mind that the increase in the notional cost is based on increases in average costs per foot super. It is the cost of doing a certain amount of building work which is the yardstick by which the cost of a notional house—a house of which the notion remains identical—is adjusted from time to time. But the units upon which local authorities are receiving subsidy are not feet super, but actual unit houses built.

We have to direct our minds to whether the average cost of the actual houses built by local authorities is rising or falling—rising to the extent indicated in the change in the notional figure, or falling. There are some remarkable facts here which are not open to dispute. The Girdwood Committee assessed the building costs—here I am using figures for building costs less site cost—of an average three-bedroom council house in October, 1951, as £1,450. My hon. Friend who was until lately Parliamentary Secretary to the Ministry of Housing and Local Government, in answer to a Question last March, stated that for 1953 the average building cost of a three-bedroom council house, far from increasing, had actually fallen to £1,385.

There is evidence that this downward trend in the average cost per house—in the average building cost per actual house, because the notional house, of course, does not change in size, and its cost rises as the foot super costs rise—there is evidence that this downward trend in the actual cost per house has continued. Mr. Procter, who delivered a paper on the subject to the National Housing and Town Planning Council in July, made an attempt—I think a very serious and careful attempt—to assess the figure in the first six months of 1954, and it worked out at £1,367. So that this figure of the average cost of the houses that are actually being built by local authorities, so far from rising, is in fact falling.

That was precisely what was expected in 1952 both by the Government and by the local authorities, when they agreed that a more general compliance with the suggestion made to them by the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) would have this result. There is nothing to be surprised at. My right hon. Friend, who is now Minister of Defence, estimated in April, 1952, that instead of making a £50 deduction on that account he would have been justified in making a £100 deduction from the cost of the notional house. We have seen a fall of at least £65 and, perhaps, of more than £70 in the average cost of the houses actually built by local authorities. I repeat, it is the cost of houses actually built and not the cost of the notional house which really affects the finances of the local authority. So far, therefore, from the increase in the cost of the notional house from £1,525 to £1,583 being too low, it is extremely generous because it takes no account of the fact that the real cost of building houses which local authorities are in fact building has, upon the average, fallen.

Mr. Sparks

What the hon. Gentleman is saying completely and utterly contradicts what his right hon. Friend said. It completely shatters his case.

Mr. Powell

I feel sure that the hon. Member for Acton (Mr. Sparks) is finding difficulty with this difference between the notional house, the notional house which is the basis of the formula, and the real cost of the actual houses which are being built by local authorities. That is a distinction which it is most important to grasp.

Mr. Chetwynd

Has not the real cost of the houses the Minister referred to risen by 3½ per cent.?

Mr. Powell

Yes, of course, the cost per foot super. The cost of doing a given amount of building work has risen by 4 per cent.; but, obviously, if upon the average there is less building work in the houses being built, the actual cost of the houses being built will have fallen. [HON. MEMBERS: "No."] Well, I have done my best to help hon. Members opposite, but they clearly find difficulty in making that simple distinction.

So I will ask them now to direct their minds to the second variable which is involved in this calculation, the cost of maintenance. Was it or was it not right that the figure of £12, which was accepted in discussions between the local authorities and the Minister in 1952, should have been held at the same figure? Or should, perhaps, the 4 per cent. increase, which would have been a very slight amount, have been added to it?

There is a fact, to which attention was drawn recently, that I think should be borne in mind in this connection. In "Local Government Finance," which is the organ of the Institute of Municipal Treasurers and Accountants, there is an extremely well-informed article from which I should like to quote a sentence on the subject of the maintenance factor: The writer believes the Minister has not increased the amount of £12 for maintenance and management …it must not be forgotten that several authorities have approached him with the request that they be allowed to make a smaller contribution to the repairs fund than £8 per house, on the grounds that that was too high. So we have the current experience of local authorities—and, of course, all these formulæ are averages: they have to take a kind of average of the experience of local authorities throughout the country—that, while in some areas the maintenance account may be under pressure, in other areas its size has induced them to approach the Minister for permission not to keep so high a maintenance fund as their statutory duties involved. That casts a quite different light upon the question whether my right hon. Friend should or should not have increased the maintenance variable.

Now I come to the third and last of the three variables, which, from the human point of view, is the most important, is really the crux of this whole business, namely, the average net rent to which the subsidy is designed to reduce the gross rent. The figure which underlies the subsidies proposed in this draft Order is 19s. a week. We have to make up our minds whether that figure is too high or too low, because if that figure is too high then, of course, the subsidies ought to be higher.

We have a considerable basis of agreement upon which to work. The right hon. Gentleman the Member for Ebbw Vale, who was responsible for these matters throughout most of the Administration of the party opposite, is repeatedly on record in defence of the formula which he adopted as giving a reasonable rent in 1945. I think I can best illustrate this point of view by quoting from what he said in 1949 on that subject: In 1945 I estimated that if a 10s. rent were paid …it would roughly finance the house … The position today"— in 1949— is that … it would be necessary to change the net rent to 13s. and add another 1s. for additional management costs and repairs.… But since 1945 earnings have gone up, too. It is as easy for a wage earner, on the average, to pay at the 1949 rates of earnings 13s. or 14s. net rent as it was for the wage earner in 1945 to pay 10s.…No hardship is suffered at all by virtue of the fact that the local authorities have decided to raise rents."— [OFFICIAL REPORT, 4th July, 1949; Vol. 466, c. 1821–2.] The proposition here, which I am going to assume was not individual at the time to the right hon. Gentleman but was the view of the party opposite, is that the ratio between average earnings and net rent established in the 1945 subsidies was. a fair one and that it would be right in judging any future subsidies to consider the net rent involved in that light.

Mr. Pannell

Since the hon. Gentleman keeps referring to "the party opposite"—to us on this side of the House—I would ask him whether he and the Government appreciate that at that time we were stabilising food prices. To all intents and purposes the policy of this Government is to let them rip.

Mr. Powell

I shall, before I sit down, consider the question of the relationship between earnings and prices. I quite recognise that my argument would be incomplete if I ignored it, and I shall not do so. But for the moment I am considering the ratio between net rent and average earnings. The ratio between net rent and average earnings established in 1949 was regarded as fair by the House as a whole. That ratio was between a net rent of 13s. 6d. and average earnings for a male industrial worker of 140s. per week. If we take the ratio between 13s. 6d. and 140s. and raise it to correspond with the current level of industrial male earnings we find that the corresponding figure to 197s. 8d., which is approximately the current level of earnings, is a little over 19s.—the figure assumed in calculating these subsidies.

The net rent which my right hon. Friend has used in calculating that subsidy bears exactly the same ratio—or rather, a slightly more favourable ratio—to average earnings than that established and maintained by the party opposite. More than that, these reduced subsidies do not come into effect before next April, and I give anybody one guess as to whether average male industrial earnings will be higher or lower next April than they are now. Therefore, when we take this question of the ratio between net rent and earnings, we must agree that the subsidies do not assume a rent which is too high, but are more generous in that respect than the subsidies calculated and enacted by the party opposite.

I must now fill in the detail to which the hon. Member for Leeds, West (Mr. Pannell) drew attention. The comparison here would be quite useless unless the cost of living was moving with the movement of earnings. If the cost of living was increasing faster than average male earnings, we should have to take that into account and redress the subsidies. I am not going to ask hon. Members opposite to believe anyone on this side of the House on that subject. I am only going to play for them their master's voice. Here is the report of the General Council of the Trades Union Congress—a work which will be as familiar to most of them as it is to me—which was adopted by that Congress at Brighton a month or two ago, and here is what they say on this all-important subject: On the whole, it appears that between 1950 and 1955 wage rates rose in roughly the same proportion as prices, while earnings rose slightly more. Therefore, upon the facts set out by the Trades Union Congress itself, the comparison between net rent and average earnings has been, on the whole, generous in its application to this formula.

We have thus examined the three variables which are involved in this formula. In each case, we have found good reason for thinking that, so far from erring on the side of meanness, they err—if they err at all—on the side of generosity. While I am on that point, I would not have the House forget what my right hon. Friend has already mentioned—that the local authorities since October of last year have been reaping the advantage of a quarter per cent, reduction in the rate of interest on the sums which they borrow, and, since June, the advantage of half per cent., and will continue to enjoy these advantages until April of next year.

When all these facts, therefore, are taken into account, it seems to me that, however often my right hon. Friend looked at these subsidies, he would still come to the conclusion that they were more than justly calculated—that they were generously calculated.

5.13 p.m.

Miss Elaine Burton (Coventry, South)

I should like to join with my colleague the hon. Member for Leeds, West (Mr. Pannell) in welcoming the new Minister in this particular field today, and I welcome him for three reasons. As the Minister is new to this Department, we hope that he will look with a fresh mind at the problems we have to face; secondly, in view of what I want to say, I am particularly glad that the right hon. Gentleman has come from the Ministry of Supply; and, thirdly, to be quite honest, I am glad that the right hon. Gentleman is the new Minister, because I want to get something out of him, and that, perhaps, is the most important reason of all.

Paragraph (3) of this Draft Order deals specifically with those new houses completed after 31st March, 1955, and I have been asked by the Housing Committee of the Coventry City Council to bring to the attention of the Minister one matter arising out of this Order. It seems to the Coventry Housing Committee, certainly to me, and, I think, to my hon. Friends on this side of the House, that the reduction of the subsidy, if this Order comes into effect as from next March, is likely to mean an increase in rent which the local authorities have to charge the people who will be moving into the new houses completed after that date. I should like to ask the Minister whether he would not agree, in view of that fact, that the City of Coventry should be allowed to build to the limit of its available resources before this Order comes into effect.

A recent decision of the predecessor of the present Minister means that, if this Order becomes law, 500 families in Coventry will have to pay this extra rent and need not do so as we could build the houses immediately. I suggest to both sides of the House that this Order should be discussed in relation to its effects upon the ordinary citizens of this country.

Perhaps the Minister does not know the specific case to which I am referring. Quite simply, it is this. We in the City of Coventry are in a position to complete 500 additional houses before this Order takes effect, but a decision of the right hon. Gentleman's predecessor lays down that we must not do it; in other words, we have to delay the building of these 500 additional houses until this Order comes into effect.

An hon. Friend behind me says, "An extraordinary business." I think it is, too, and I am very much hoping that, as it was not the decision of the present Minister, the right hon. Gentleman may be able to look into this matter again. I should like to give the new Minister the background to the request that was made to his predecessor. Without wishing to talk unduly about my own constituency, I think the House will know that in Coventry we have been faced with a housing problem which is probably unique. We lost more than 4,000 houses in the blitz, and it has been possible only to replace 1,432 of them. Migration to this city is heavy. Previously, in 1939, the population was 190,000. Subsequently it dropped to 150,000, but today the estimated population is approximately 264,000. The housing problem that we have in Coventry predates the war. The rate of expansion of our city has re- mained at a very high figure for many years.

The City Council approved plans for no less than 5,354 houses in 1937, and for 6,156 houses in 1938. I have said that I am glad that the new Minister has come from the Ministry of Supply. I am stressing that because it is very obvious that the housing programme, and these 500 houses affected by this Order, have a very important bearing on the country's export and defence programmes, in which the City of Coventry is playing a major part.

As long ago as September, 1950, I was able in a debate on defence to raise the question of housing priority in a town like Coventry which is playing such a big part in the defence programme. I am told that Coventry is producing—in value—two-thirds of the total British rearmament programme, while nobody realises better than the Minister the part which the city is playing in the export trade in connection with its great motor-car industry.

I want to give the figures from the Council's waiting list, in asking the Minister to say that these 500 houses may be completed before the proposed Order comes into effect. In 1947, following a review of our housing lists, there were 11,300 applicants, a further 500 who were in temporary accommodation and a further 1,500 who were in seriously unfit property, a total of 13,300. It is quite clear that we have a hard core of housing applications which remains around 10,000. We have little chance of clearing these off within a reasonable number of years, and that is why I am asking the Minister to help us by giving this additional allocation of 500 houses before the Order comes into effect.

The Minister may know that the housing problem of Coventry is more severe than in the country generally and justifies the claim for preferential treatment, if that is what it should be called. Housing in Coventry is the concern not only of the Minister of Housing and Local Government but vitally of the Minister of Defence, the President of the Board of Trade and the Minister of Supply. This draft Statutory Instrument will affect very greatly workers who are contributing to those essential aspects of the country's economy. Perhaps the Minister cannot give me a definite answer today, but I hope that he will be able to exempt these 500 houses from this Order.

My present application to the Minister to do this is the logical outcome of a plan on which the City of Coventry commenced work at least two years ago, with the encouragement of his Ministry. A regional circular of 25th August, 1952, urged the Corporation to expand their housing programme and to achieve a minimum of 1,650 units in that year. In fact, the city completed 1,715. The circular emphasised that the 1,650 units—I quote— must not be regarded as a ceiling above which the council may not go. As the result of this long-term planning, the Corporation are now in a position to undertake immediately the construction of these further 500 houses. All the necessary administrative arrangements have been made and, with the encouragement of the previous Minister of Housing and Local Government, roads and sewers are available to deal with a further 4,200 houses; ample for an extended programme for 1954 and for a substantial proportion of the 1955 programme. The Corporation have been at some pains to encourage local traditional builders to play their part in accelerating the housing programme. Apart from the serious effects of a reduction to the local builders, the Corporation have for some time also been seeking to persuade Messrs. Wimpey to bring into the city additional building labour so that the non-traditional housing programme could be expanded.

The Corporation have been so successful in this effort that all the 500 houses for Which we are now asking the Minister could and would have been built by non-traditional methods, such as those of Messrs. Wimpey. Experience has proved to us in Coventry that a serious setback in output in a large organisation like that of Messrs. Wimpey follows even any temporary restriction of the flow of work. In my constituency, Messrs. Wimpey have built the very fine neighbourhood unit called "The Tile Hill Neighbourhood Unit," and I know what recession follows any temporary setback in construction. If we are not allowed to build these houses we cannot expect Messrs. Wimpey to retain additional labour in Coventry, and that will affect very much the provision of further housing accommodation in the city.

For many years we in Coventry have been below the national average in building labour. What I am asking for today would still leave us below the average. This shortage of building labour has prevented us from making large inroads into the housing programme at an earlier stage, and today, therefore, we are in a less favourable position than some other housing authorities.

We urgently need the completion of these additional 500 houses before the Order comes into effect. We have the materials with which to build them; the roads and sewers are available for them. One thing only holds us back, and that is that the Minister's predecessor did not feel able to give us permission to go forward. Taking all these factors into consideration, I hope very much that the present Minister will agree that the 500 houses should not be affected by the Order. Will he, as everything is ready and waiting, let us go ahead and build them now?

5.26 p.m.

Mr. J. A. Sparks (Acton)

I listened with interest to the speech of the hon. Member for Wolverhampton, South-West (Mr. Powell). I was surprised at the declaration he made that the cost of building houses had fallen throughout the country and apparently is continuing to fall. Not much evidence was put forward in support of that contention, but if the hon. Member was right his statement makes utter nonsense of the case which the Minister made from that Box.

Judging between the two, I should say that the right hon. Gentleman is nearer the truth than is his hon. Friend. Building costs throughout the country have risen, taking the broad, average basis. The right hon. Gentleman put the rise at 31 per cent. It may very well be that a local authority here and there is building substandard houses and effecting small reductions by reducing housing standards, but that does not affect the average cost, on which the Minister's notional capital cost of a house is based.

I would ask the right hon. Gentleman to look into this notional figure, because I do not think that he is quite clear about its significance. It is not the actual cost to a local authority of constructing a house or flat but is completely notional and fictitious. I grant that it is based on a broad general average of tender prices, among other factors, upon which the right hon. Gentleman or anybody else must rely as a notional figure upon which subsidy should be based.

Unless we are to introduce two standard subsidies, one applying to houses of a lower value and another applying to houses of a higher value, we must arrive at one average figure. That is what the right hon. Gentleman has done. Some authorities may be able to build houses below that figure, but I think it is true to say that in the cities and great towns, and particularly in Greater London, a normal two- or three-bedroom house cannot be built for £1,575. If the right hon. Gentleman could indicate precisely where that can be done in London, I and many local authorities will be delighted. The fact is that throughout Greater London and the great cities, building costs have risen much more than 3½ per cent.

I should have been more satisfied if the right hon. Gentleman could have given us examples of how the new subsidy basis will work in, say, a rural area. an urban district and a city. We should then have a clear indication of the effects of the new basis. I say to the right hon. Gentleman that the effect of this new basis of subsidy is far different from what he seems to anticipate it will be. If the new basis of subsidy were compiled on the same basis, taking into consideration all the different elements that had operated previously, and if the right hon. Gentleman were merely operating the mechanics that had previously existed, particularly in the last Administration, then we would expect to achieve precisely the same results as obtained before the interest rates on housing loans rose.

The fact is, however, that the new basis of subsidy leaves a large number of local authorities to shoulder a much heavier burden than the right hon. Gentleman seems to realise. The Minister said that amongst other factors taken into calculation in arriving at the new basis, average earnings had increased and that, therefore, he has made an allowance in his calculations for an additional average rise in the notional rent of Is. That however does not apply anywhere in Greater London. Indeed, I should be surprised if any authority will escape with anything less than between 2s. and 2s. 6d. a week rise in rents, leaving aside entirely the fact that although average earnings may have risen, the cost of living index has gone up since the party opposite has been in power from 129 to 145. That is roughly 16 points rise in the cost of living, so that when we place increased average earnings by the side of the increased cost of living, there is little margin left to justify any increase of rent.

I shall give the right hon. Gentleman one or two examples of the result of the new basis of subsidy. I apologise for wearying the House with figures, but it is difficult to emphasise my point without doing so. This is actually the situation that would obtain in my constituency, which is typical of the whole of Greater London. I am taking a housing scheme composed of two-bedroom flats constructed in February, 1952, under the old basis of subsidy and to be constructed after April of next year under the new basis of subsidy.

The average cost of those flats in February, 1952, was £1,875. The right hon. Gentleman will realise that when tenders are invited by local authorities for the construction of housing schemes the lowest tender is always accepted. The cost of precisely the same type of two-bedroom flats today works out at £1,950. The rate of loan interest on the February, 1952, flat was 4¼ per cent. and on the new flat it will be 3¾ per cent. The loan charges on the older flat works out at £86 13s. and on the new one they will work out at £81 19s.

Supervision, management and services for the February, 1952, flat were £9 10s.; today they are £10 10s. and the right hon. Gentleman has not taken into consideration in his calculations the important fact that maintenance and repairs costs have risen in addition to building costs. Contributions to repairs account on the February, 1952, flat were £16 10s.; today the cost is working out at £17 15s.

The total outgoings per annum on the February, 1952, flat were £112 13s. under the present arrangement they will be £110 4s. The Exchequer and rate contributions which have to be deducted from these figures are as follows: On the February, 1952, flat the Exchequer and rate contributions were £72 12s.; at the new proposed rate they will fall to £63 4s., leaving a net rent required on the old flat of £40 1s. and on the new flat £47. In other words, the final weekly net rent will increase from 15s. 5d. on the February, 1952, flat to 18s. 1d. under the new scale of subsidy.

That is a correct computation of the effect of the new basis of subsidy on two-bedroom flats being developed on sites costing between £4,000 and £5,000 an acre. You will appreciate from this, Mr. Deputy-Speaker, that this does not mean an increase of Is. a week on the two-bedroom flats to be constructed under the new formula; it means an increase of 2s. 8d. a week in rents to the new tenants.

What the right hon. Gentleman does not realise in these cases by reducing the subsidy is that the reduction has been off-set by increased building costs. I feel, therefore, that the Minister ought to be prepared to look at this problem again. In my opinion, he has not taken sufficiently into consideration the rise in building costs, and in the cost of supervision, maintenance and repair of dwellings. If he makes sufficient allowance for those increases, he will find that the present basis of subsidy is not fair or adequate.

If the Minister desires to maintain the essential basis for the formulation of the notional capital cost of the house and from that to arrive at his basis of subsidy, he must, in equity, take into account not only the fact that the rate of interest on housing loans has gone down by¾per cent., or that the average weekly earnings have gone up by so much, but also the fact that building costs in the cities, and in built-up areas such as Greater London, have risen very much more than 3½ per cent. Nor do wages today buy as much as they did three years ago; so it is not fair to argue that because wages have gone up the rents of council dwellings should go up as well. That argument completely ignores the fact that the cost of living has risen considerably and very much of the increased earnings has been swallowed in increased costs of living.

To the new towns, in particular, this will be an added difficulty and an added blow to their attempt to build new houses to draw people from the congested areas Not only that. It will also add to their difficulties, because the rents which they will have to charge for their new houses will, by comparison with the local authority rents, be higher. The reason is that the new town development corporations do not receive the benefit of a local rate fund subsidy in the general sense of the term—unless they can find an authority that is prepared to pay them a rate fund subsidy for taking so many of their people off the waiting lists. Very few local authorities are doing that and development corporations are having to carry out their new housing schemes, generally speaking, without the benefit of a rate fund contribution at all. For them, therefore, the burden will be much greater than it is for my own authority and for many others in Greater London and the cities.

In my view that is bad, because if anything needs encouraging at present it is the development of the new towns, and if the new towns are to be a success then housing accommodation must be provided there at a lower rent than is now being asked. For instance, many London people just cannot afford to go to the new towns and pay, perhaps, anything from 10s., 15s. to £1 a week more rent for a house and, at the same time, to have a reduction in wages as well from the London rate to the rate applying in the new town, which is usually in a rural area.

I would therefore ask the right hon. Gentleman to realise that, although he bases his subsidy on a notional figure of £1,575 capital cost, such a rule cannot be rigidly adopted and applied to all authorities, and particularly to those where the building costs are far in advance of the figure of notional value. He cannot argue from the notional value that his proposals only mean an increase of a shilling a week in the rent of new council tenants. I can assure him that in Greater London and the great cities that is a complete fallacy. It involves a greater burden on the tenants of these dwellings than he himself appears to think at present.

I should like to say, in support of my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), that I feel it is necessary for the right hon.

Gentleman to stabilise the rate of interest at which local authorities can borrow money for housing development. The rise in interest rates and then the rise in subsidies, then the fall in interest rates and the fall in subsidies—all within a period of about three years—has caused tremendous confusion. If those rates and those subsidies are to go up again and down again, it will merely add to the confusion. The right hon. Gentleman cannot run away and say "Well, the loans are for 60 years, and, if a local authority pays 4¼ per cent., there is no question about the loan being interfered with, or, if a new housing scheme has developed at a 3½ per cent. rate of interest for a similar period of years, then it, too, cannot be interfered with for 60 years."

The Minister must realise that many local authorities do not work on that basis at all. These subsidies and rate fund contributions are pooled. In many cases the rents charged for council dwellings are averaged and equated over the whole of the local authority's housing schemes. Not all, but a good many, local authorities try to balance their low-rented pre-war property with their higher-rented post-war property so as to arrive at a general average of rents. That helps very considerably. It is not then necessary to charge as high a rent for a new house or flat constructed today as otherwise would be the case. That is because it has been equated with the rents of all other dwellings.

By raising and lowering the rate of interest and the rate of subsidy, the right hon. Gentleman is throwing the housing revenue accounts of local authorities into complete confusion. It is absolutely necessary, in their interests, especially as we hope that they will continue the good work of building more and more dwellings until the needs of the people are met, that the local authorities should have some assurance that interest rates on housing loans are more or less stabilised for a reasonable time. They can then get on with their schemes and develop on a proper and sensible basis, knowing quite well what their commitments are likely to be for some period in advance.

I hope after all that has been said and will be said in this debate the Minister will not run away thinking that everything in the garden is lovely. It is far from that. He may think he is just putting the subsidy back to where it was before the interest charges rose. I ask him to take into consideration what I have said. He has not given sufficient attention to the increases in building costs, supervision, maintenance and repair. I hope that on reflection he will be able to provide a better basis of subsidy for the local authorities so that they may get on with their job.

Mr. John Hall (Wycombe)

As I understand it, the hon. Gentleman's case was largely based on the assumption that the average cost of building council houses is greater than it was in 1952. The Girdwood Report states that in 1951 the average cost of a three-bedroom council house was £1,450, the average cost in 1953 was £1,385 and this year it is estimated that it may be a little less. If that is so, does not the last part of the hon. Gentleman's case fall to the ground?

Mr. Sparks

I would not be prepared to accept at its face value the hon. Gentleman's statement as applying to all local authorities' housing construction. I do not say that there are not cases in which what the hon. Gentleman has said is applicable, but the general trend of building costs is definitely rising. After all, we cannot consider the question of houses in isolation. In fact, a very important part of the housing schemes of the authorities in London is based on the fact that there is not the land on which to build houses and, therefore, flats have to be built on expensive sites. Although I will concede what the hon. Gentleman has said with regard to certain types of dwellings, I doubt whether he will find that the average costs of flat construction in Greater London have fallen. All experience is quite the opposite.

5.52 p.m.

Squadron Leader A. E. Cooper (Ilford, South)

The case which has been put forward by the hon. Member for Acton (Mr. Sparks) would appear to rest on two assumptions—first, that building costs have increased substantially, and secondly, that the cost of living has also increased to such an extent that, instead of any reduction in subsidy being justified, there is a case for an occasional increase in the subsidy. Since that would appear to be the main burden of the arguments of hon. Members opposite, it is fair to address ourselves to those two points.

I believe that everything points to the fact that neither of those two arguments can be sustained. It may be true that there has been a slight increase in building costs, and I use the word "slight" because I do not think any evidence can be adduced to show that the increase has been substantial. I am not aware of any local authority in or around London whose building costs are heavier and which has been forced to increase its rents in the past two years as a result of any increase in building costs alone.

So far as the cost of living is concerned, this must be related to earnings, and the Ministry of Labour statistics show quite clearly that earnings in this country in the last two years have exceeded the increase in the cost of living. There is no doubt about that whatever. One hon. Member suggested that during the six years in which the Labour Party was in power the Government were concerned with controlling prices, whereas we on this side of the House had let things rip. Quite the reverse is true. During the six years that the Labour Party was in power the cost of living was allowed to run and rise very substantially indeed from 1945, whereas in the last two years when we have been responsible for the government of this country the cost of living has risen very slowly indeed, and over the past two months there has, in fact, been a reduction of two points.

Mr. Sparks

Would the hon. and gallant Gentleman deny the figures which have been issued from Government sources, from which it appears that at the time the present Government came into office the index figure was 129, and that until recently it has been 147?

Squadron Leader Cooper

As in so many things, the hon. Gentleman is quite incorrect. The figure has never reached 147 while we have been in power. The highest at which it has stood has been 143, and it is now down to 141. It was 129 when we came into power, but one must bear in mind that the 129 should be set against the figure of 100 which it was in 1947 when the index was set up by the Labour Government who were then in power. It is a simple matter of arithmetic to discover in what period the sharpest increase took place.

It is no use arguing these facts, because it is well known to anyone who is nonpartisan that the cost of living rose much more sharply in the six years between 1945 and 1951 than in the past three years. Earnings in this country have exceeded the increase in the cost of living. That fact is shown by the Ministry of Labour statistics. It would seem that very heavy weather is being made of a very simple matter.

Surely we are not now debating the merits or otherwise of the formula. That surely is not in dispute. All that we are debating today is whether the reduction in interest rates justifies a reduction in the subsidy, in the same way as in the proceedings on the Housing Bill, 1952, we debated whether an increase in interest rates would justify an increase in subsidy. Surely that is the simple issue which the House has to face.

In the debate on the Housing Bill in 1952, the hon. Member for Clapham (Mr. Gibson) said: The criticism I want to make about this Bill is this. No one really wants to oppose it, but it ought never to have been necessary and had we not had this rather silly increase in the rate of interest it would not have been necessary…."—[OFFICIAL REPORT, 22nd April, 1952; Vol. 499, c. 276.] If the hon. Gentleman's argument was sound then, in order that he may vote against us tonight on this matter he has got to prove beyond doubt to the satisfaction not only of himself but of his hon. Friends, that the facts which I have stated as the main burden of the argument of the Opposition are fully justified, namely, that building costs have risen substantially and that the cost of living has increased at a faster rate than earnings. I do not believe it is possible for the Opposition to prove those points.

It is perhaps proper at this time that the House should examine the workings of the subsidy, and I think there is much that could be done to improve the position. The hon. Member for Acton suggested that it was normal for local authorities to pool their subsidies and to equate their rents. That has not been my experience, nor do I think it is the experience generally of local authorities. Indeed, they could do no such thing in practice.

For houses built in 1945 there was a certain set of costs and they would obtain a certain rent. Next year another set of houses was built, and in the meantime the costs had increased. It is not normal for local authorities to say that houses built in 1945 and 1946 should have their rents adjusted to provide a fair average of the two years building. What happens, generally speaking, is that housing estates are developed as a whole and the rents are fixed for those estates. I can assure the hon. Gentleman that most local authorities outside the London County Council, which I admit is a law unto itself, operate in the way that I have suggested.

Mr. Sparks

The hon. and gallant Gentleman may be right when he says "most," but I would say that a substantial minority operate in that way.

Squadron Leader Cooper

I am not going to be so dogmatic as to suggest that every council operates in the way that I have suggested, but I do say that most of them do. There may be a number who do not, but the circumstances are such that most of them operate in some such manner. Ilford is a case in point. In a couple of years we shall have no more land on which we can build. Therefore, our housing position over the years will become stable and it will be possible to organise the housing estates on a system of uniformity. But, so long as the houses are being built year by year at different costs, it is not practicable, and local authorities generally do not equate their rates over the whole.

I think we have got to give local authorities far greater latitude in the use to which they can put the subsidies. I am sorry I did not hear the whole of the speech of the hon. Member for Leeds, West (Mr. Pannell), but this question of differential rents is something which must be looked at very closely. The question of people with small incomes paying rates and subsidising people in council houses who are earning substantial weekly sums is something of which we have got to take cognisance.

We must recognise that housing subsidies were created in order to help people who were in the greatest need and that the present system, whereby anyone irrespective of income can get into a council house and be subsidised by the rest of the community, is not the purpose for which housing subsidies were originally intended.

Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)

The hon. and gallant Member says that local authorities should have greater latitude. In what respect? They already can use subsidies in any way they wish.

Squadron Leader Cooper

So far as rented property is concerned, of course the hon. Gentleman is correct. But this Government have made it possible for local authorities to sell houses to existing tenants. It can also happen, and, indeed, does happen, that where an individual takes on the burden of buying a house circumstances may arise where he cannot continue his payments, and he may want to go back into rented property, giving up the responsibility of trying to buy his own home. The council may take that house back, but as a council it loses its right to subsidy upon it, and that affects the general subsidy position of the council. I think we have got to correct that sort of thing. It so happens that my local authority is in dispute with the Ministry on this very point.

I welcome this Statutory Instrument tonight because it is the realisation that the financial position of the country has improved and in consequence we are able to give certain benefits to the local authorities. I welcome it not only for that, but because it will reduce very substantially the very heavy costs of subsidies on, the general body of taxpayers and the ratepayers.

6.4 p.m.

Mr. James MacColl (Widnes)

The hon. and gallant Gentleman the Member for Ilford, South (Squadron Leader Cooper) has approached this whole subject with a certain amount of complacency. That is understandable, because I believe that Ilford is one of the very few housing authorities which has a balance in its housing revenue account. I think that the hon. and gallant Gentleman, starting from that background, is not likely to see this problem with quite the same seriousness as those hon. Members on either side of the House who are aware of the very difficult financial situation in which their own local authorities are placed.

The hon. and gallant Member ought to try to make the effort, because that is an important weakness in his approach to this problem, which has also been shown by other Members on that side of the House today and indeed by the Ministry in its general attitude. In many parts of the country this problem was very acute and serious before this proposed change. It will become a very much more serious one as a result of the change. The point was made with great skill by my hon. Friend the Member for Acton (Mr. Sparks), and it must be admitted that goes against the formula developed by the late Government.

It may well be that the subsidy is calculated with such niceness that the average figures taken over the whole country balance out evenly, but that does not in the least mean that a particular local authority, faced with a particular situation, will find that its own housing revenue is balanced. It may be out of balance for two very different and often contradictory reasons. It may be out of balance because it is an area where building costs are high, where the cost of living is high, and therefore the charges are much greater than the notional charges in the formula. It may also be out of balance because the area is poor and it is impossible to get rents which are as high as those of an average, taking the country as a whole. It is worth emphasising that of the county boroughs in 1952–53, 41 failed to balance their housing revenue account and had to pay in an extra subsidy.

One of the things that the right hon. Gentleman ought to look at is whether it is possible to go on treating this problem as a national problem. I suggest that he should look at it from the point of view of the regional differences as seen from area to area in costs of building and in the rents that can be charged. That is the first major complaint that one can make against the proposals in this Order.

The next point I want to make has been mentioned in the debate and that is to criticise the figures which are the basis for the Minister's calculations. There has been a good deal of discussion about what has happened to building costs, whether they have gone up or whether they have gone down. People have been talking about the price of building a three-bedroom house for £1,300, but the returns of the Institute of Municipal Treasurers and Accountants for 1952–53 shows that the cheapest average cost for a three-bedroom house was £1,300, whereas the maximum is as high as £2,787. That not only shows an enormous disparity in building costs in different places but shows that the figures mentioned in our debate today are, in fact, quite remote from the real situation.

In a paper to the Institute of Municipal Treasurers and Accountants, the Borough Treasurer of Acton, Mr. W. O. Atkinson, who is an expert on this matter, pointed out that, in the year which I have mentioned, of the county boroughs only six out of 80 managed to get below the notional figure upon which the Minister's subsidy was based. The Borough Treasurer of Acton stated in his paper that he had taken his figures from the survey by the Institute and that the average cost was not a figure of £1,525, £1,575 or whatever it might be, but as much as £1,700, and that is looking at it dispassionately as a statistician and financial expert, not as a politician. I think the right hon. Gentleman ought to keep this figure in mind. It is said that the figure of £1,700 quoted to the Institute is a reasonable estimate on the current cost of building a three-bedroom house. If that be the figure, it completely throws out the whole of the right hon. Gentleman's calculations.

The Acton Borough Treasurer also takes a figure of £14 for repairs and management, £4 being the estimate of the cost of management and £10 being the payment into the repairs fund. His comment on the repairs figure is that the figures published in Housing Statistics leave little doubt that on the most modest assumptions at least £10 per annum ought to be allowed for repairs. The hon. Member for Wolverhampton, South-West (Mr. Powell) told us with a certain amount of pleasure that some authorities were agitating to get a reduction of the amount which they have to pay into the repairs fund. It seems obvious that they were agitating for that not because they wanted to cut down the amount to be paid in but because they wanted to balance their housing revenue accounts artificially by paying less into the fund than was a fair estimate of what should be allowed.

The right hon. Gentleman ought to make it clear whether it is his policy to discourage housing authorities from paying adequate amounts into their housing repairs funds. If he suggests to housing authorities that they ought to make their accounts balance by being parsimonious about their payments into the housing repairs funds, he is encouraging them not to build up adequate reserves with which to keep the houses in repair, and, in view of the wasting assets which houses represent, I cannot imagine a more foolish policy for a housing authority to adopt. The right hon. Gentleman should make it clear that he is allowing for adequate payments into the funds. According to the figures which I have quoted, he is not allowing enough to be paid into the funds but is letting local authorities eat into their capital, which I should have thought was about as mischievous a thing as he could do.

The net effect of the figures given by the Acton Borough Treasurer with the new subsidy is a weekly rent not of 19s., as quoted by the right hon. Gentleman, but of 22s. 10d. In other words, unless the housing authority provides an extra rate subsidy beyond the statutory one, the average rent to be paid should be 22s. 10d. and not 19s. Not only is there a considerable difference between those figures, but the 22s. 10d. is an average to be taken over all the houses. It has to take into account not merely the few people who may have substantial incomes but also the large number who, through ill-health, having large families or being old-age pensioners are not earning a full income and cannot afford to pay a full rent.

I want the right hon. Gentleman to consider my next point with great care. Is it fair today to use the arguments which were put forward in defence of the subsidy by the last Government? The character of the housing problem and the housing priorities has changed considerably since five or six years ago. In those days the emphasis in house building was upon meeting the housing shortage. There was a basis of need. The people on the housing lists were there, not primarily because of poverty, but because, for one reason or another, they just could not get a house by any other means, and it was then reasonable to take an average sample of the population for calculating the notional rent that people could afford to pay.

Now, however— the right hon. Gentleman's predecessor has made great play about this—the character of the housing policy has changed and the emphasis is on slum clearance. That change will have a significant effect on the notional rent which the average person who is being rehoused can afford to pay. Although some of those living in slums may have large family incomes, most of the people living in such conditions have low incomes. The tendency has been for people with low incomes to gravitate to the cheap, bad property in the slums or not to move out of the slums as they would if their financial situation improved.

Therefore, if a housing authority is taking the right hon. Gentleman seriously and making slum clearance its most urgent task, it will find that it is rehousing people with low incomes who, ex hypothesi, cannot afford to pay the notional rent. Consequently, it is fallacious for the right hon. Gentleman today to base the subsidy on the kind of calculation which was used—I doubt that it worked well then, but there was a case for it—five or six years ago.

These are all complicated problems, and it is obviously unfair to ask the right hon. Gentleman to make up his mind about them straight away, but it is most unfortunate that at the very beginning of his tenure of office he should find himself introducing a proposal dealing with the thorniest, most technical and most controversial problem in the field of social service— the basis for the calculation of housing subsidies against the general background of housing finance.

The right hon. Gentleman would have been better employed if he had today gone to the conference of the Association of Municipal Corporations and discussed with the delegates what their real problems were, instead of coming here to present what on the face of it is a very slapdash and ill-thought-out argument which fails to appreciate the real significance of these problems. That is the real criticism against the right hon. Gentleman; he is not responsible for the present situation, but he has not availed himself of the opportunity to take time to think about the problems as a whole and to determine how the financial side of his policy ought to be linked up with the general deployment of his housing policy so that he might later come to the House with a mature judgment on the problems.

It will not do for the right hon. Gentleman to say that the argument is the same as that used five or six years ago. In undertaking his very grave responsibilities, he would not only have been more courteous to the House but would have shown greater appreciation of the mood and temper of local authorities if he had taken time to consult them and think about their difficulties instead of coming forward in this rather casual way with an ill-thought-out proposal.

6.19 p.m.

Mr. C. W. Gibson (Clapham)

I lend my voice to the appeal which has been made to the Minister to take back the Order and reconsider the matter. I do so with some sense of logic, because I have never been satisfied that the formula on which the subsidy is paid is either a good one or is working out fairly to the local authorities and the ratepayers.

It is true that if one goes into a dark corner and indulges in a mathematical exercise one can make something of the formula, but not a local authority in the country will admit that a reasonable house can be built for anything like the figure which the Ministry take as the notional building cost. The figure is completely false.

Time after time we have made efforts to persuade the Ministry to find some better method of calculating the cost of building on which subsidies should be paid, but ever since we have had these housing subsidies the idea has persisted that we must try to calculate what we call a notional figure of building costs and pay the subsidies on that. That would be all right if it worked, but in fact it does not work. It has meant either very heavy losses on house building by housing authorities or an increase in rents to a figure higher than that which the average workman can pay.

That is what is happening now. Some borough councils in the London area are raising their rents in order to avoid a supplemental rate charge for housing. As a result, in the borough which I represent old-age pensioners are being asked to pay 23s. a week for a one-room flat. That is absolutely outrageous and it is no answer to say to these people, as is said in the district, "All you have to do is to go to the public assistance board and they will meet the rent charge for you." That is only transferring the charge from one department of State to another. In any case, it puts the old-age pensioners in a very uncomfortable position. Many of them will not go to the public assistance board. I know some in Clapham who will not do it and who are paying these excessive rents for new flats. These are very comfortable flats but, as a result of the high rents, the pensioners are suffering in the amount of food and in the quality and quantity of clothes which they can buy. We see this month after month as we meet them.

This Order should be taken back and new consideration given to the basis of the system. The subsidy which is being paid at the moment is not excessive. In London we have had to impose a supplemental rate subsidy of about 8d. in the £ in order to keep rents down to a figure which the average workman can afford to pay. It is clear, therefore, that the local authorities, at any rate in the South of England, are not making a lot of money out of this subsidy. My information is that scarcely a local authority in the country will agree that, on the present basis of subsidy and with present costs, it is possible to make the housing accounts balance without raising rents to a level which is higher than it should be. These rents are, of course, far away from the notional 18s. or 19s. which is assumed in this proposal.

I cannot understand why the Minister has brought forward this proposal, because on 29th June his predecessor issued a document called "Housing (Financial and Miscellaneous Provisions) Act, 1946" which dealt with the question of whether there should be increased subsidies. Paragraph 4 of that document reads: The most important of these alterations is the recent reduction in the rate of interest on loans from the Public Works Loan Board. This is the second which has been made since the present subsidies were fixed. The rate is, therefore, now one-half of 1 per cent. below that which then ruled. Costs of building and of maintenance have somewhat increased"— Hon. Members will observe that the costs have not decreased, which is contrary to the impression which we have been given today. The paragraph continues: Costs of building and of maintenance have somewhat increased, but economies in design without any reduction of the room standards have been made. The paragraph adds that it is hoped that more economies will be made.

I am tempted to say what I think of the so-called "People's House." I told my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) when he first looked at it that some of us would never agree that it is a reasonable standard of working-class housing to build a house in which the staircase comes out of the kitchen or the living room. Thousands of us had to live in such houses in London when we were boys. In due time they were condemned as unfit to live in. The "People's House" has insufficient space behind the front door for two people to stand together, and there is no place to keep a perambulator. In any case, these houses do not appear to be very much cheaper than the normal, decent three-bedroom house which has plenty of circulating space, as the architects call it, on the landing and behind the front door. Nevertheless, this house is apparently one of the ways in which the Government hope to save on the cost of houses.

This document goes on to say, "Average earnings have increased." In no Housing Act since the first Act passed by this House have the rents of working-class properties built by local authorities been related to the wages earned by the workers. The Acts themselves—certainly the 1936 Act—say that the rents should be related to those of comparable properties in the district, having made all the necessary adjustments for improvements which have been made.

The rents were not related to earnings. Why should they be? Why should rents be increased because temporarily there is an increase in the average earnings of the workers, secured through trade union pressure arising out of the increased cost of food? That is the only reason for the increased earnings. Why should we expect the workers to meet the increased cost of food and at the same time say, "We shall knock a bit off the subsidy and you will meet that by an increased rent"? This is hitting them twice in a very sore spot, and, if we are not careful, one result of a reduction in housing subsidies might easily be another cycle of wage demands all over the country in order to meet the increased rents.

The Government should take the whole problem back and consider it again. I have a feeling that it would pay to get rid of subsidies altogether and to let the housing authorities have their capital on interest-free conditions. It is difficult for anyone to work out figures without the assistance which the Minister has, but the present system is beginning to cost us an enormous sum of money.

As my hon. Friend the Member for Leeds, West (Mr. Pannell) said, the position is becoming absurd in some directions. The subsidy which the London County Council receives for certain types of flats which it builds is ridiculous. It comes to much more than £1 a week. We are obviously reaching an absurd financial position. The whole problem should be reconsidered and some other method found of financing local authority house building. I put in a plea for the Government to consider adopting the policy which is used by them in other matters—that of allowing the housing authority to have its capital from the Public Works Loan Board free of interest.

I do not suggest that that will not be a subsidy, but it will not be such an obvious subsidy as we have now, and I believe that it would cost the State less, would relieve local housing authorities of a very great burden and would tend to reduce rent levels rather than push them up. Nothing will cause more trouble in the back streets of our large towns and in our villages than a substantial increase in rents.

We have to remember that already some authorities have found that the rent which they charge is as much as 20 to 25 per cent. of the earnings of the tenants. That is wrong and it is asking for trouble. The percentage was nothing like as high as that before the war. Moreover, it is quite false to assume that the average income of the workers in this country is about £10 a week. The examination of London rates by the Ministry of Labour some months ago showed a different figure. There are tens of thousands of people in London who are getting £7 or less per week. On that figure it is quite impossible for people with one or two children to meet the rent charges which will have to be borne if the housing subsidy is reduced merely because, at the moment, there is a one-half of one per cent. cut in interest rates.

I join with others in congratulating the Minister on his appointment. I think that he has an even tougher proposition than that of managing the Ministry of Supply, and one which will get him even more brickbats. I think that it would be a good thing if he would take back this draft Order —because there is no immediate hurry for it—and see whether a completely new approach could not be made to the method of financing local government houses, so that it would become not only a simpler proposition but one that would enable rents to be prevented from rising, as they are now doing all over the country, and confined to a level which the average working man with his present earnings can afford to pay.

6.31 p.m.

Mr. George Chetwynd (Stockton-on-Tees)

I want to get away from the mathematics of this debate, because it seems to me that figures have been used in this matter very much as the drunkard uses a lamp-post—more for support than illumination. I want to consider, not the mathematical background, but the political background to this draft Order.

The hon. and gallant Member for Ilford, South (Squadron Leader Cooper) gave some indication of why he is supporting the Order. It is part of the economy campaign of the present Conservative Government against the social services. There was pressure at the Blackpool conference and throughout their local activities to minimise what they call the heavy and increasing burden of housing subsidies placed upon rates and taxes. This is part of their campaign of pressure to reduce subsidies.

Of course, it is also part of the campaign, which we have seen in operation during the past year, to limit the activities of the municipal authorities in the sphere of house building. This is a two-fold policy, by a reduction in the amount of subsidy and consequent increase in rents, first to make it more expensive for people to live in corporation houses; and secondly, when they have to meet a rent increase, not of 1s. as has been put in the figures but of 2s. 6d. or more, they are going to find it more difficult to live there, and consequently those wishing to go on the waiting lists will not be quite so anxious to move into corporation houses. So it is hoped that the demand for corporation houses will be reduced. That, in turn, would reduce the number of houses that the corporations would be required to build, and consequently less would have to be paid in subsidy.

The other side of this move is contained in the departure in housing policy by this Government, which is to change the emphasis on housing from need to those who can afford to pay. Whereas in 1953 some 235,000 houses were built for letting and only some 60,000 for sale, in 1954 some 210,000 were built for letting and some 90,000 for sale. The ex-Minister expressed the hope that in 1955 the proportion for letting would be 160,000, and for sale 150,000. So the most he is contemplating having to pay a subsidy on in this year is 160,000 houses. Therefore, by reducing the number of houses available for subsidy he is able to reduce what is looked upon as the burden of the subsidy upon taxes and rates.

In doing this, and in encouraging people to purchase their own houses because of the high cost of living in corporation houses or difficulty in getting corporation houses, he is putting considerable pressure on people to buy these houses, which they really cannot afford to do. It would have been better to maintain the level of houses for letting, even if it had meant an increased amount payable in subsidy, than to put this burden on people.

It is hoped that by this transaction the reduction in subsidy will save the Government something like £750,000 in the year, and the whole of this burden will fall upon the tenant. It is quite nonsensical to expect a notional rent increase of 1s. I think that it has been completely accepted in the debate so far that the actual figures show that it will not be an increase of is. in rent which the tenant living in the new 1955 house will have to bear but that it will be something in the nature of 2s. 6d. or even more.

This is a change away from housing by need to housing by ability to pay. If there is real pressure on the party opposite to abolish subsidies, they had better turn their attention from that to abolishing the need for them by doing more to take the profits out of building and reducing the high interest rates. We could make a greater saving in housing costs than £750,000 if we tackled seriously building costs and monopolies in the building industry, and brought interest rates down considerably. Let us set about the component parts which go to make up the subsidy policy.

We have had arguments about the capital costs of building—whether they are up or down. The Minister agreed with most of us on this side of the House that they are up. Some of his hon. Friends seem to think that they are down. Surely, in these circumstances, it would be in the Minister's own interests to give us detailed figures and prices, and to say, "This is exactly what is happening in building materials, labour and so on." Instead of doing that, he comes along with a vague 3½ per cent. increase in housing costs in this last period, and has not sought to give in detail the application of them. We know that interest charges are down; we know that he is maintaining the same repairs and management ratio; and we know that he is putting up the notional rent by 1s. It is argued that the result of all this manipulation will be a reduction in the subsidy. I hope that he will at least attempt to convince us beyond all doubt that this is so, and that he will take this Order back and bring us the results of some detailed investigation and examination of the different housing aspects.

This is the real test and the fair test. Will the tenant going to live in one of these new council houses built after 1st April, 1955, be as well off after paying his rent as the tenant living in a corporation house now? If this arrangement goes through, and rents go up to the figure to which I think they will go up, the tenant of a house in 1955 will be worse off—and appreciably worse off—than his neighbour going into a corporation house this year, for the simple reason that this notional rent takes no account whatever of the increase in the cost of living and the particular items in which that increase has taken place.

Before the war, in many areas, people in corporation houses had to pay a high rent for a corporation house and spent very little on food, with the result that many people living in corporation houses with high rents were suffering from malnutrition. I do not want to see people living in corporation houses in 1955 having to decide how much money they have to spend on rent—which is an absolute necessity or else they can be put out—leaving them the remainder for food, with a possible increase again of malnutrition.

We have seen throughout the debate a complete conflict of figures on what the increase is likely to be. We have had no evidence of the actual building costs and how they have gone up or gone down, and I would have thought that at this stage the Minister would have saved himself a lot of unnecessary work later on if he took back this Order and had another look at it. His predecessor, speaking on the Second Reading of the Housing Bill in 1952, said: The purpose of the subsidy is a simple one. It is that houses should be provided for these new tenants at rents they can afford to pay and which may be regarded as reasonable in the prevailing conditions."—[OFFICIAL REPORT, 22nd April, 1952; Vol. 499, c. 229.] I am convinced that the rents which under this Draft Order the new tenants will be asked to pay in 1955, in the light of rising costs, which the Government have done very little to check, cannot by any stretch of the imagination be regarded as reasonable and will be rents which many of them will not be able to afford.

6.40 p.m.

Mr. Frederick Elwyn Jones (West Ham, South)

The Minister has conceded that one of the vital questions in considering the equity of his proposals, which the House is considering tonight, is whether the capital cost of a house at £1,583, which I understand is the basis of. the proposed subsidy, is a fair and realistic estimate. My information, based on the experience of the Borough of West Ham, of which I have the honour to be one of the representatives, is that it is not a fair or realistic estimate.

I am told that the all-in cost of a house in West Ham now is £1,840—that is to say, about £260 above the Minister's figure. It may be said in criticism that this figure is too high. The local authority informs me that it now proposes to erect a group of houses designed, in accordance with the latest recommenda tions of the Ministry, to achieve the maximum of economy in land and building effort. Yet the tenders for these new houses show that the all-in cost is likely to be about £1,730—again, over £150 above the Minister's basic figure.

The consequence of that miscalculation, which is the basis of the proposed subsidy, will be very grave in the blitzed area of West Ham. I am told that an addition of £200 to the capital cost represents an annual burden in loan charges of about £8 8s., which by itself would require an addition of 3s. 3d. to the weekly rent. The weekly rent is already very high, and if that is the consequence of the proposed subsidy it will mean great hardship to a community which already finds the greatest difficulty in making both ends meet.

The difficulty that has arisen is due probably to the fact that these subsidies for houses are based on national conditions. The calculation does not pay due regard to the special difficulties of the Metropolitan area, which is at a considerable disadvantage owing to the higher building costs, which are not in fact offset by higher rents, as the Minister has been contending.

I ask the Minister, therefore, to look at this matter again. He is new to his Department and to this problem, but it is not a new problem to a community like West Ham. It would be a tragedy if the right hon. Gentleman's entry into his Department were, by reason of the inadequacy of the housing subsidy, to start a period of even greater difficulty for a blitzed area with an inheritance of destruction and slums and where thousands of families still live in the utmost squalor.

6.44 p.m.

Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)

For some little time I had fear lest the new Minister and the Parliamentary Secretary, whom we welcome to the House this afternoon in their new positions, should feel that the general atmosphere of good will which pervades the House when it receives a new Minister would affect the issue that we are discussing or that they would have far too easy a time on it.

It should be perfectly clear both to the Minister and to the Parliamentary Secretary, after some of the speeches we have heard, that we are far from satisfied with the proposals that have been put before us this evening, and we seriously urge the Minister, as his first very proper act in the House in his new position, to take these proposals back before it is too late and to have the further discussions for which the local authorities have been asking and for which they asked his predecessor. It is only fair that, coming fresh into his office and because of the real and sincere differences of opinion about the validity of the figures presented this afternoon to the House, the Minister should accede to that request for discussions.

Here is a fair chance for the new Minister to examine the question of subsidies in relation to the wider problems of housing as a whole. As my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) said, this is only part of the wider housing problem. Surely it would be sensible for the Minister not to tie himself down to this proposal now until he has had a chance of formulating his broader housing policy.

I want to examine, as several of my hon. Friends have done, some of the assumptions upon which the figures have been presented to us and to make it clear that we do not accept them. We would not disagree with the broad argument that if the rates of interest fall we must, other things being equal, reconsider the actual level of housing subsidies; no one would doubt that that is necessary and right. As my hon. Friend the Member for Leeds, West (Mr. Pannell) rightly pointed out, we have never felt happy about the size of housing subsidies; hon. Members on all sides have very properly felt a real anxiety about the size of these subsidies; but we feel most strongly the need for their continuance as long as the conditions of today are maintained.

It is when we examine the figures for the cost of house building that we come most severely into conflict. I thought that the hon. Member for Wolverhampton, South-West (Mr. Powell) tried to prove too much. We accept that he is a great Greek scholar, but I am not sure that we accept him with quite the same good will on other subjects. I am sorry he is not now present. He attempted to prove that broadly housing authorities were achieving much lower building costs on the houses they were building.

That is not at all the experience of any of my hon. Friends on this side, who have quoted from experience of their own areas, nor is it the position as outlined with great authority by some of the municipal treasurers and, in particular, by Mr. Atkinson, the Acton Borough Treasurer, who has already been quoted. His figures, which so far have not been challenged, seem to prove completely that, far from housing costs having fallen, there have been considerable increases and the figures upon which the Ministry made its last calculations for housing subsidies in 1952 were wholly inaccurate then, and the Government have not put the matter right in their revision today.

It is argued, apparently, by the Ministry that the building cost of an average three-bedroom house is £1,583; but that is not the building cost as it is known by the great bulk of local authorities throughout the country. The experience of London borough councils has been mentioned. We know that many of them have to face a much higher building cost. But even apart from London, the position in towns and cities throughout the country proves conclusively that the figure of £1,583 used by the Minister is quite unreal.

The points raised by the Acton Borough Treasurer about the position of the country as a whole seem to be fully borne out by our experience. My experience of the North-East of England, where I have most contacts and about which I have most knowledge, suggests that the figure used by the Minister is at least £100 short of the building cost of the actual house—not a notional house but the type which is being built today. Those houses are each costing at least £100 more than is suggested by the Minister, and I am sure that other local authorities could provide figures a great deal higher than that.

All we ask is that this matter should be properly investigated; that the Minister should take this opportunity of meeting local authorities and discussing the matter with them. We know from experience that we cannot hope always to reach agreement with local authorities on these matters, but we feel that it is only fair and right, upon the entry into office of a new Minister, that he should take the opportunity of discussing the matter with them. I was rather disap- pointed that the Minister did not take the opportunity of meeting some of the local authorities at their conference this afternoon.

This Order could very well have been postponed. As far as I can see, nothing would be lost by postponing its consideration, even until the beginning of next year. It does not affect anything in any serious way, and I can see no reason why the Minister has refused to make this gesture—as it would be—to local authorities at the opening of his period of office as Minister of Housing and Local Government.

One of my hon. Friends said that the new Minister had no experience of this work. That is not absolutely true; as he himself confessed—and I think that "confessed" is probably the right word—he had some experience of it in the Caretaker Government at the end of the war. I am not sure that we should regard that as an altogether happy augury for the future, but that makes it all the more important that he should now offer to meet the local authorities. There is still time to do so.

After the useful discussion we have had this afternoon I can see no reason why he should not say, "There are some matters which should be looked at again, and I think we should meet the local authorities and discuss these things with them." That is what we are asking. If the Parliamentary Secretary does not feel able to make that offer, we shall have to vote against this Order, although we would much rather not do so. We would much prefer that the Government should accept the suggestion I am making to them and approach the local authorities again.

I understand that many local authority associations, possibly including urban district councils, feel very strongly about what they regard as a miscalculation of the cost of house building. Some of the authorities which I have consulted argue that one of the matters which has been left out of the Ministry's calculations is the amount of the architect's fees. These amount to something like £30 per house. That may be regarded as a small matter, but if it is added to the figure of £70 or £80 which some of the smaller local authorities argue is the miscalculation of the cost of building, the total difference is something over £100. That is the amount by which local authorities claim that the calculation placed before us today is wrong. That is a sufficiently important consideration for us to argue that the Minister should discuss the matter with local authorities.

Certain questions of principle arise when one considers the whole question of housing subsidies. I must express some of the anxieties or suspicions of my hon. Friends. They may be quite unjustified, but we think it is right that the Minister, especially as he is new to the Department, ought to seek to allay them, because they are also felt very considerably by interested parties outside the House.

Is it the Government's intention to use the reduction of housing subsidies as a means of forcing local authorities to accept lower standards of house building? We have already heard the arguments about the "People's House." We are concerned about the fact that it is now very difficult—I shall not put it higher than that—for local authorities to build anything else than the "People's House." The pressure brought to bear from the Ministry and the regional officers of the Ministry to build the "People's House" or its equivalent is so strong that it is very difficult for any authority to do otherwise. My experience is that, instead of a vast saving in money which many people may have hoped would result, the cost of those houses is still a good deal higher than the average cost of houses a year or two back. We are concerned to know whether the Government are not, perhaps quite unconsciously, attempting to persuade, force or cajole local authorities into building down to standards much lower than we believe to be right.

Another very serious issue, which involves a matter of principle, is the Government's attitude concerning the kind of people who should occupy council housing estates. As far as we can gather, both from the tone of this debate and from speeches made by the previous Minister, this Government believe it to be right that those who have more than a certain very moderate income should not be found on council housing estates. We take a very different view. We believe very strongly that council housing estates should cater for a variety of tenants. We think that there should be a reasonable distribution and—as has been urged in the past by many Labour Ministers—that we should strive to create reasonably diversified communities.

We realise that if that is done we must face the problem whether it is right for an equal subsidy to be paid to each tenant. That is a matter which has been within the control of local authorities practically ever since housing subsidies were first introduced, and they have adopted various means of trying to meet this problem. We say that the important object is to avoid producing housing estates, such as were occasionally produced in the inter-war years, on a purely class-segregated basis. We must not repeat them. The horror we all know of what used to be and still are called slum clearance estates must be avoided if possible.

It was our policy to encourage a reasonable variety of tenants on housing estates, based upon an interpretation which recognised that there was need amongst people with moderate incomes as well as amongst those with low incomes. I fear that the trend of policy of this Government is to encourage local authorities to say that they will not have tenants on their council housing estates who have an income over a certain figure. We feel strongly that this is wrong, in principle, because it will deny us the kind of housing estates we want, and because we are hoping to build up a happier and more contented society.

I hope, therefore, that the Parliamentary Secretary will say something about this matter when he replies to the debate. I apologise for asking him to reply on such an issue at short notice, but it is his own fault. In many ways, having reached this point, I would prefer the debate to be adjourned, so that some of the important issues of principle which we have been raising could be answered after there has been more time for consideration. In that way we could have a more valuable termination of the debate than we are likely to get if the Government insist on pressing this Order tonight.

I have tried to explain the reasons on two main issues why I think it is right that the Government should take back this Order for further consideration and consultation with local authorities. I ask them to do this, first, because we say that the figures on which the new subsidies are based are, in our view, incorrect. They are challenged by the local authorities in great detail and so far we have had no counter-argument that has disposed adequately of the facts and figures put forward by the local authorities. On those grounds alone we think it right that this Order should be taken back.

Secondly, I am urging that the opportunity should be taken on this Order to discuss some of the wider principles of housing which are essentially bound up in it. On those grounds, too, we ask the Minister to take back the Order and reconsider it so that he can come back to the House with a fuller and more general statement of his housing policy, including these proposals for subsidy, than obviously is possible today.

It is not too late even now for the Minister to do that, and there is no real reason why he should necessarily accept what has been left on his lap by the preceding Minister. There is a good deal of truth in what some of my hon. Friends have said, that the preceding Minister had a way with him with the Treasury and was able to get a good deal of what he wanted from them, perhaps more than was altogether satisfactory to the Chancellor. I hope this has not meant that the new Minister will find himself from the start in great difficulties. We hope that his predecessor did not move on gradually towards foreign parts in order to escape the realities of certain problems that he has left behind.

I hope, therefore, that the Parliamentary Secretary will now say that the Government are willing to accept the reasonable offer made from this side of the House. If the hon. Gentleman finds it impossible to do so, the Minister will start office with an unfortunate impression being left in the minds not only of hon. Members on this side of the House but of local authorities too. That is something which he does not want. I appeal to him to do what we ask, otherwise we shall be forced to divide.

7.4 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. W. F. Deedes)

Like the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) in welcoming my right hon. Friend and myself, the hon. Gentleman for Newcastle-upon-Tyne, East (Mr. Blenkinsop) suggested that this was a good moment for a fundamental reconsideration of the factors which have led to this Order, and from their point of view that was a good tactical move. However, from the outset I should stress the general point that there is no departure in this Order from the policy pursued, or the principles accepted, by both Administrations since the Housing Act of 1946. If I may use this analogy, the foundations remain precisely the same although there have been from time to time alterations of the superstructure. This is one of them. In other words, the basis of calculation is unaltered and it should be beyond dispute.

If I may now turn to the opening speech of the right hon. Gentleman, he made two principal points. The first was to suggest the postponement of this Order, a point which has been reiterated by his hon. Friend who has just spoken. I suspect that was partly a tactical move for the benefit of my right hon. Friend the new Minister. However, the right hon. Gentleman did not say a great deal, either with facts or figures, to justify his proposition that there should be a postponement, except to say that the local authorities disagreed. If the local authorities disagree on this occasion when the subsidy is being reduced, in 1952 and 1946 when the subsidy was being increased they, perhaps not unnaturally, did not disagree. To postpone this Order now would be to abandon the whole basis, which has been agreed for eight years; and this is not the moment to do it. However, any ideas which the right hon. Gentleman has concerning the wider future will be gladly considered by my right hon. Friend.

The second point made by the right hon. Gentleman was whether the subsidy would be changed if there were a sudden or large movement in the interest rate. It is accepted that this system is subject to the annual review in June in the case of a reduction; where there is to be an increase, there is legislation. Any major change in the interest rate leading to serious hardship or its likelihood would, of course, receive the special consideration of my right hon. Friend.

Throughout this debate doubts have been cast by a number of hon. Members upon the capital cost of the notional house, and perhaps it would be a good thing if I said a general word on that subject. I agree that the agreed figure for the notional house is a very important one and is indispensable for the purpose of these calculations. Inevitably, however, it will be disputed by those whose standards or costs are above the average. There are bound to be figures above the notional figure or there would be no average. To describe it as fictitious, as did the hon. Member for Acton (Mr. Sparks), is going a little beyond the facts of the matter.

I can only say that this notional figure is most carefully calculated, and it is worth mentioning that more than one independent source comes somewhere near the figure put forward by the Ministry. For instance, there is in the basis a figure which, if anything, suggests one slightly below the figure given here today. My hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), in what all hon. Members will agree was a most lucid speech on this rather intricate subject, also indicated that there are other independent checks which suggest that the figure is not so wide of the mark as some hon. Members have suggested.

There was some confusion as to whether costs have gone up or down. The best way I can deal with the point is to put it in this way: If we compare like with like—that is to say, the 950 squarefeet house with another 950 square-feet house—there has been an increase of 3½ per cent., or £58, since 1952. If we compare the houses being built now with those being built in 1952, there has been a reduction because of the increased popularity of the "People's House" design.

Mr. A. J. Champion (Derbyshire, South-East)

A lower standard.

Mr. Deedes

I am coming to that in a moment. This design has met, and indeed has overtaken, the higher cost. I hope that clears up the point as to whether costs had risen or fallen on which there was some confusion.

I should like to interpose a word about the speech of the hon. Lady the Member for Coventry, South (Miss Burton). She spoke of 500 houses which were being held back in that city. I am sure that she will acquit my right hon. Friend and his predecessor of holding back the houses so that they might lose the subsidy, but my right hon. Friend will be glad to discuss this matter with her. Perhaps she will be satisfied with that assurance.

The hon. Member for Acton based the earlier part of his argument on the suggestion that very few local authorities in fact were building the smaller house. It is right that I should remind him what the proportions now are. Taking the second quarter of 1954, out of 13,509 houses built, 11,724 were of what I might call "People's House" design, that is, below 950 square feet. That is a percentage of 86.8 compared with about 33 per cent, in the first quarter of 1952. The other point which the hon. Member made was that there had been an increase in the cost of building flats. On the figures he gave, I calculate the increase at about 4 per cent. The figure which my right hon. Friend gave is about 3½ per cent. Therefore, I do not think that there is a wide disparity there.

The hon. Member for Widnes (Mr. MacColl) was concerned with the disparity in house-building costs. All that I maintain is that some high figures do not render the notional figure fictitious. This notional figure has always been accepted as a national figure and there has been no serious suggestion that we should treat it in a regional or any other way. That would lead to serious difficulties. I agree that, from the point of view of the Metropolis or other big authorities, this would seem to be a relevant argument, but up to now the national notional figure has been accepted.

Mr. Elwyn Jones

If the present basis is causing injustice, as I pointed out with regard to my own area, is there any reason why the present basis should be regarded as something unalterable, fixed and immutable?

Mr. Deedes

There has been no suggestion that the disparity between the big city building undertakings and the smaller ones is greater now than it was five or 10 years ago. The argument does not really justify a re-opening on a regional basis. The hon. Member for Clapham (Mr. Gibson) said that the present subsidy was not too high and that it should continue at the present rate. The subsidy in 1952 was agreed with the local authorities. Other things being equal, a decrease in interest rates obviously decreases costs, and therefore, if the subsidy were maintained now as it was then, the decrease in interest rates would really amount to putting up the subsidy.

A good deal has been said about the smaller house by practically all hon. Members who have spoken in this debate. I do not think that the history is in dispute. The right hon. Member for Bishop Auckland used three expressions. He said that he did not prescribe the "People's House." He mentioned the word "circulation" and he said that he invited the attention of the local authorities to it. It might be said, therefore, that what he circulated to the local authorities was really permissive. Would the right hon. Gentleman accept that?

Mr. Dalton

Yes.

Mr. Deedes

The same would apply to my right hon. Friend the present Minister of Defence. My right hon. Friend did nothing more than circulate with rather more energy, and more persuasively, the ideas which the right hon. Gentleman, had provided nine months earlier.

Mr. Blenkinsop

Would the hon. Gentleman deny that his regional officers pressed on local authorities the need to accept the "People's House" with such urgency that a great number of local authorities felt that they had no liberty left as to what type of house they should build?

Mr. Deedes

I do not accept that for a moment. We are only anxious that the right hon. Member for Bishop Auckland should not deny to himself the credit to which we feel he is entitled.

The reception of this design, to whomsoever it should be credited, may be judged by the figures. Whereas in the first quarter of 1952 one-third of the houses in local authority programmes were to this design, the percentage has now risen to approximately 87. Therefore, it is fair to say that that is a popular choice It has been suggested once or twice that the Ministry has driven a hard bargain with the local authorities in the course of the recent negotiations. But it is right to point out that settlement has not been reached in every particular with arithmetical exactitude. For example, if the present Public Works Loan Board rate of 3¾ per cent. had operated when the higher subsidy was fixed in 1952, the general subsidy rate would have been £21 18s.; but the proposal now before the House is in fact for £22 1s.

I do not want to make over-much of that. I merely wish to say that where there was a margin it did not necessarily go the wrong way. The sum of £50 deducted in 1952 might also well be increased in view of the wider use of the "People's House" design, but in fact that figure remains unchanged. Again, when the subsidies were increased in 1952 they were back-dated to February, 1952, but now that they are being decreased they will not take effect until next April, which is a leeway of nine months. That is a fair point.

Mr. Sparks

If in fact the average capital cost, the notional value of the average house, is to fall as a result of the development of the "People's House," does not the hon. Gentleman realise that that adversely affects those authorities which can build flats only, and therefore there will be an increasing deficiency in their subsidy?

Mr. Deedes

There is a special rate for flats. In the course of the negotiations between the present Minister of Defence and the local authorities, an adjustment was made in the rate for flats.

Again, it has been widely suggested that this Order will have the effect of raising council rents. I make once again the point which has already been made by my hon. Friend the Member for Wolverhampton, South-West. The notional rent will increase from 18s. to 19s. on houses built after April next year. It seems to me perfectly fair to relate this figure to increased earnings, and 10 per cent. of earnings is a fair proportion. On average earnings of 197s. 8d. a week the figure of 19s. is inside rather than outside the margin.

My right hon. Friend will be meeting the local authorities in the course of events, but that does not mean that there will be any postponement now of this Order, which is based upon an established and agreed formula, and fulfils the aspiration, expressed from both sides of the House, that these subsidies should be reduced at the earliest opportunity. I commend the Order to the House.

Question put.

The House divided: Ayes, 251; Noes, 230.

Division No. 215.]	AYES	[7.20 p.m.
Allan, R. A. (Paddington, S.)	Gomme-Duncan, Col. A.	Medlicott, Brig. F.
Alport, C. J. M.	Gower, H. R.	Mellor, Sir John
Amery, Julian (Preston, N.)	Graham, Sir Fergus	Moore, Sir Thomas
Amory, Rt. Hon. Heathcoat (Tiverton)	Gridley, Sir Arnold	Morrison, John (Salisbury)
Anstruther-Gray, Major W. J.	Grimond, J.	Mott-Radclyffe, C. E
Arbuthnot, John	Grimston, Hon. John (St. Albans)	Nabarro, G. D. N.
Ashton, H. (Chelmsford)	Grimston, Sir Robert (Westbury)	Neave, Airey
Astor, Hon. J. J.	Hall, John (Wycombe)	Nicholls, Harmar
Baldock, Lt.-Cmdr. J. M.	Harden, J. R. E.	Nicholson, Godfrey (Farnham)
Baldwin, A. E.	Hare, Hon. J. H.	Nicolson, Nigel (Bournemouth, E.)
Banks, Col. C.	Harris, Fredric (Croydon, N.)	Noble, Comdr. A. H. P.
Barber, Anthony	Harris, Reader (Heston)	Nugent, G. R. H.
Barlow, Sir John	Harrison, Col. J. H. (Eye)	Oakshott, H. D.
Beach, Maj. Hicks	Harvey, Air Cdre. A. V. (Macclesfield)	Odey, G. W.
Bell, Ronald (Bucks, S.)	Harvey, Ian (Harrow, E.)	O'Neill, Hon. Phelim (Co. Antrim, N.)
Bennett, F. M. (Reading, N.)	Heald, Rt. Hon. Sir Lionel	Orr, Capt. L. P. S.
Birch, Nigel	Heath, Edward	Orr-Ewing, Charles Ian (Hendon, N.)
Bishop, F. P.	Henderson, John (Cathcart)	Orr-Ewing, Sir Ian (Weston-super-Mare)
Black, C. W.	Higgs, J. M. C.	Osborne, C.
Boothby, Sir R. J. G.	Hinchingbrooke, Viscount	Page, R. G.
Bossom, Sir A. C.	Hirst, Geoffrey	Partridge, E.
Boyd-Carpenter, Rt. Hon. J. A.	Holland-Martin, C. J.	Peake, Rt. Hon. O.
Boyle, Sir Edward	Hope, Lord John	Perkins, Sir Robert
Braine, B. R.	Hopkinson, Rt. Hon. Henry	Peto, Brig. C. H. M.
Braithwaite, Sir Albert (Harrow, W.)	Hornsby-Smith, Miss M. P.	Peyton, J. W. W.
Braithwaite, Sir Gurney	Horobin, I. M.	Pickthorn, K. W. M.
Bromley-Davenport, Lt.-Col. W. H.	Howard, Hon. Greville (St. Ives)	Pilkington, Capt. R. A.
Brooke, Henry (Hampstead)	Hudson, Sir Austin (Lewisham, N.)	Pitt, Miss E. M.
Brooman-White, R. C.	Hudson, W. R. A. (Hull, N.)	Powell, J. Enoch
Browne, Jack (Govan)	Hughes-Hallet, Vice-Admiral J.	Profumo, J. D.
Buchan-Hepburn, Rt. Hon P. G. T.	Hurd, A. R.	Raikes, Sir Victor
Bullard, D. G.	Hutchison, Sir Ian Clark (E'b'rgh, W.)	Ramsden, J. E.
Bullus, Wing Commander E. E	Hutchison, James (Scotstoun)	Rayner, Brig. R.
Burden, F. F. A.	Hyde, Lt.-Col. H. M.	Redmayne, M.
Butcher, Sir Herbert	Hylton-Foster, Sir H. B. H.	Rees-Davies, W. R.
Butler, Rt. Hon. R. A. (Saffron Walden)	Iremonger, T. L.	Remnant, Hon. P.
Campbell, Sir David	Jenkins, Robert (Dulwich)	Renton, D. L. M.
Carr, Robert	Johnson, Eric (Blackley)	Ridsdale, J. E.
Channon, H.	Johnson, Howard (Kemptown)	Roberts, Peter (Heeley)
Churchill, Rt. Hon. Sir Winston	Jones, A. (Hall Green)	Robinson, Sir Roland (Blackpool, S)
Clarke, Col. Ralph (East Grinstead)	Kaberry, D.	Robson-Brown, W.
Clark, Brig. Terence (Portsmouth, W.)	Keeling, Sir Edward	Rodgers, John (Sevenoaks)
Cole, Norman	Kerby, Capt. H. B.	Roper, Sir Harold
Colegate, W. A.	Kerr, H. W.	Ropner, Col. Sir Leonard
Conant, Maj. Sir Roger	Lambert, Hon. G.	Russell, R. S.
Cooper, Sqn. Ldr. Albert	Lambton, Viscount	Ryder, Capt. R. E. D.
Craddock, Beresford (Spelthorne)	Lancaster, Col. C. G.	Sandys, Rt. Hon. D.
Crookshank, Capt. Rt. Hon. H. F. C.	Leather, E. H. C.	Savory, Prof. Sir Douglas
Crosthwaite-Eyre, Col. O. E.	Legge-Bourke, Maj. E. A. H.	Scott, R. Donald
Crouch, R. F.	Legh, Hon. Peter (Petersfield)	Scott-Miller, Cmdr. R.
Crowder, Petrie (Ruislip—Northwood)	Lennox-Boyd, Rt. Hon. A. T.	Shepherd, William
Darling, Sir William (Edinburgh, S.)	Lindsay, Martin	Simon, J. E. S. (Middlesbrough, W.)
Davidson, Viscountess	Linstead, Sir H. N.	Smyth, Brig. J. G. (Norwood)
Davies, Rt. Hn. Clement (Montgomery)	Lloyd, Maj. Sir Guy (Renfrew, E.)	Snadden, W. McN.
Deedes, W. F.	Lloyd, Rt. Hon. Selwyn (Wirral)	Soames, Capt. C.
Digby, S. Wingfield	Lockwood, Lt.-Col. J. C.	Spearman, A. C. M.
Dodds-Parker, A. D.	Longden, Gilbert	Speir, R. M.
Donaldson, Cmdr. C. E. McA	Lucas, Sir Jocelyn (Portsmouth, S.)	Spence, H. R. (Aberdeenshire, W.)
Doughty, C. J. A.	Lucas, P. B. (Brentford)	Spens, Rt. Hon. Sir P. (Kensington, S.)
Duncan, Capt. J. A L.	Lucas-Tooth, Sir Hugh	Stevens, Geoffrey
Duthie, W. S.	McAdden, S. J.	Steward, W. A. (Woolwich, W.)
Eccles, Rt. Hon. Sir D. M.	McCorquodale, Rt. Hon. M. S.	Stewart, Henderson (Fife, E.)
Eden, J. B. (Bournemouth, West)	Macdonald, Sir Peter	Stoddart-Scott, Col. M.
Elliot, Rt. Hon. W. E.	Mackeson, Brig. Sir Harry	Storey, S.
Erroll, F. J.	McKibbin, A. J.	Strauss, Henry (Norwich, S.)
Fell, A.	Mackie, J. H. (Galloway)	Studholme, H. G.
Fisher, Nigel	Maclay, Rt. Hon. John	Sutcliffe, Sir Harold
Fletcher-Cooke, C.	MacLeod, John (Ross and Cromarty)	Taylor, William (Bradford, N.)
Ford, Mrs. Patricia	Macpherson, Niall (Dumfries)	Teeling, W.
Fort, R.	Maitland, Cmdr. J. F. W. (Horncastle)	Thomas, Rt. Hon. J. P. L. (Herelord)
Foster, John	Manningham-Buller, Rt. Hn. Sir Reginald	Thomas, Leslie (Canterbury)
Fraser, Hon. Hugh (Stone)	Markham, Major Sir Frank	Thomas, P. J. M. (Conway)
Fraser, Sir Ian (Morecambe & Lonsdale)	Marlowe, A. A. H.	Thompson, Lt.-Cdr. R. (Croydon, W.)
Galbraith, T. G. D. (Hillhead)	Marples, A. E.	Thorneycroft, Rt. Hn. Peter (Monmouth)
Garner-Evans, E. H.	Marshall, Douglas (Bodmin)	Thornton-Kemsley, Col. C. N.
George, Rt. Hon. Maj. G. Lloyd	Maude, Angus	Touche, Sir Gordon
Glover, D.	Maudling, R.	Turner, H. F. L.
Godber, J. B.	Maydon, Lt.-Comdr S. L. C	Turton, R. H.

Tweedsmuir, Lady	Ward, Miss I. (Tynemouth)	Williams, R. Dudley (Exeter)
Vane, W. M. F.	Waterhouse, Capt. Rt. Hon. C.	Wilson, Geoffrey (Truro)
Vaughan-Morgan, J. K.	Webbe, Sir H. (London & Westminster)	Wood, Hon. R.
Vosper, D. F.	Wellwood, W.
Wakefield, Edward (Derbyshire, W.)	Williams, Rt. Hon. Charles (Torquay)	TELLERS FOR THE AYES:
Walker-Smith, D. C.	Williams, Gerald (Tonbridge)	Sir Cedric Drewe and Mr. Wills
Wall, Major Patrick	Williams, Paul (Sunderland, S.)

NOES
Acland, Sir Richard	Hamilton, W. W.	Paling, Rt. Hon. W. (Dearne Valley)
Adams, Richard	Hannan, W.	Paling, Will T. (Dewsbury)
Albu, A. H.	Hargreaves, A.	Palmer, A. M. F
Allen, Arthur (Bosworth)	Harrison, J. (Nottingham, E.)	Pargiter, G. A.
Allen, Scholefield (Crewe)	Hastings, S.	Parker, J.
Anderson, Frank (Whitehaven)	Hayman, F. H.	Paton, J.
Attlee, Rt. Hon. C. R.	Healey, Denis (Leeds, S.E.)	Pearson, A.
Awbery, S. S.	Henderson, Rt. Hon. A. (Rowley Regis)	Peart, T. F.
Bacon, Miss Alice	Herbison, Miss M.	Plummer, Sir Leslie
Balfour, A.	Hewitson, Capt. M.	Popplewell, E.
Barnes, Rt. Hon. A. J.	Hobson, C. R.	Porter, G.
Bartley, P.	Holman, P.	Price, J. T. (Westhoughton)
Bellenger, Rt. Hon. F. J.	Houghton, Douglas	Proctor, W. T.
Bence, C. R.	Hoy, J. H.	Pryde, D. J.
Benn, Hon. Wedgwood	Hubbard, T. F.	Rankin, John
Benson, G.	Hudson, James (Ealing, N.)	Reeves, J.
Beswick, F.	Hughes, Emrys (S Ayrshire)	Reid, Thomas (Swindon)
Bevan, Rt. Hon. A. (Ebbw Vale)	Hughes, Hector (Aberdeen, N.)	Reid, William (Camlachie)
Blackburn, F.	Hynd, H. (Accrington)	Rhodes, H.
Blenkinsop, A.	Hynd, J. B. (Attercliffe)	Richards, R.
Blyton, W. R.	Irving, W. J. (Wood Green)	Roberts, Albert (Normanton)
Boardman, H.	Isaacs, Rt. Hon. G. A.	Roberts, Goronwy (Caernarvon)
Bottomley, Rt. Hon. A. G.	Janner, B.	Robinson, Kenneth (St. Pancras, N.)
Bowles, F. G.	Jay, Rt. Hon. D. P. T.	Rogers, George (Kensington, N.)
Brockway, A. F.	Jeger, George (Goole)	Ross, William
Brook, Dryden (Halifax)	Jenkins, R. H. (Stechford)	Shackleton, E. A. A.
Broughton, Dr. A. D. D.	Johnson, James (Rugby)	Short, E. W.
Brown, Rt. Hon. George (Belper)	Johnston, Douglas (Paisley)	Shurmer, P. L. E.
Brown, Thomas (Ince)	Jones, David (Hartlepool)	Silverman, Julius (Erdington)
Burke, W. A.	Jones, Frederick Elwyn (West Ham, S.)	Silverman, Sydney (Nelson)
Burton, Miss F. E.	Jones, Jack (Rotherham)	Simmons, C. J. (Brierley Hill)
Butler, Herbert (Hackney, S.)	Jones, T. W. (Merioneth)	Slater, Mrs. H. (Stoke-on-Trent)
Callaghan, L. J.	Kenyon, C.	Slater, J. (Durham, Sedgefield)
Carmichael, J.	Key, Rt. Hon. C. W.	Smith, Norman (Nottingham, S.)
Champion, A. J.	King, Dr. H. M.	Snow, J. W.
Chapman, W. D.	Lawson, G. M.	Sorensen, R. W.
Chetwynd, G. R.	Lee, Frederick (Newton)	Soskice, Rt. Hon. Sir Frank
Clunie, J.	Lee, Miss Jennie (Cannook)	Sparks, J. A.
Coldrick, W.	Lever, Harold (Cheetham)	Steele, T.
Cove, W. G.	Lever, Leslie (Ardwick)	Stewart, Michael (Fulham, E.)
Craddock, George (Bradford, S.)	Lipton, Lt.-Col. M.	Strachey, Rt. Hon. J.
Crossman, R. H. S.	MacColl. J. E.	Strauss, Rt. Hon. George (Vauxhall)
Daines, P.	McGhee, H. G.	Stross, Dr. Barnett
Dalton, Rt. Hon. H.	McKay, John (Wallsend)	Summerskill, Rt. Hon. E.
Darling, George (Hillsborough)	McLeavy, F.	Swingler, S. T.
Davies, Ernest (Enfield, E.)	MacMillan, M. K. (Western Isles)	Sylvester, G. O.
Davies, Harold (Leek)	MacPherson, Malcolm (Stirling)	Taylor, Bernard (Mansfield)
Delargy, H. J.	Mallalieu, E. L. (Brigg)	Taylor, John (West Lothian)
Dugdale, Rt. Hon. John (W. Bromwich)	Mallalieu, J. P. W. (Huddersfield, E.)	Thomas Ivor Owen (Wrekin)
Ede, Rt. Hon. J. C.	Mann, Mrs. Jean	Thomson, George (Dundee, E.)
Edwards, Rt. Hon. John (Brighouse)	Manuel, A. C.	Timmons, J.
Edwards, W. J. (Stepney)	Marquand, Rt. Hon. H. A.	Tomney, F.
Evans, Albert (Islington, S.W.)	Mason, Roy	Turner-Samuels, M.
Evans, Edward (Lowestoft)	Mayhew, C. P.	Ungoed-Thomas, Sir Lynn
Fernyhough, E.	Mellish, R. J.	Viant, S. P.
Fienburgh, W.	Messer, Sir F.	Wallace, H. W.
Finch, H. J.	Mikardo, Ian	Warbey, W. N.
Fletcher, Eric (Islington, E)	Mitchison, G. R.	Webb, Rt. Hon. M. (Bradford, C.)
Follick, M.	Monslow, W.	Weitzman, D.
Foet, M. M.	Moody, A. S.	Wells, Percy (Faversham)
Forman, J. C.	Morgan, Dr. H. B. W.	Wells, William (Walsall)
Fraser, Thomas (Hamilton)	Morley, R.	West, D. G.
Freeman, Peter (Newport)	Morris, Percy (Swansea, W.)	Wheeldon, W. E.
Gaitskell, Rt. Hon. H. T. N.	Mort, D. L.	White, Mrs. Eirene (E. Flint)
Gibson, C. W.	Moyle, A.	White, Henry (Derbyshire, N. E.)
Gooch, E. G.	Mulley, F. W.	Whiteley, Rt. Hon. W.
Gordon Walker, Rt. Hon. P. C.	Murray, J. D.	Wilcock, Group Capt. C. A. B.
Greenwood, Anthony	Neal, Harold (Bolsover)	Wilkins, W. A.
Grey, C. F.	Noel-Baker, Rt. Hon. P. J.	Willey, F. T.
Griffiths, David (Rother Valley)	Oliver, G. H.	Williams, David (Neath)
Griffiths, Rt. Hon. James (Llanelly)	Orbach, M.	Williams, Rev Llywelyn (Abertillery)
Hale, Leslie	Oswald, T.	Williams, Ronald (Wigan)
Hall, Rt. Hon. Glenvil (Colne Valley)	Padley, W. E.	Williams, Rt. Hon. Thomas (Don V'll'y)
Hall, John T. (Gateshead, W.)	Paget, R. T.	Williams, W. R. (Droylsden)

Williams, W. T. (Hammersmith, S.)	Winterbottom, Richard (Brightside)
Willis, E. G.	Woodburn, Rt. Hon. A.	TELLERS FOR THE NOES:
Wilson, Rt. Hon. Harold (Huyton)	Wyatt, W. L.	Mr. Bowden and Mr. Holmes
Winterbottom, Ian (Nottingham, C.)	Yates, V. F.

Resolved, That the Draft Housing (Review of Contributions) Order, 1954, a copy of which was laid before this House on 12th July, be approved.