Clause 5.—(POWER TO INCREASE SUBSIDIES IN CERTAIN CIRCUMSTANCES.) (Hansard, 2 February 1956)

§ Mr. G. Lindgren (Wellingborough)
Discussion of this Clause has not been as extensive as we would have liked, but, accepting the fact that this is a very controversial Bill—we might almost say a vicious piece of class legislation—we must perhaps discipline ourselves in our discussion of it.
The Bill is unfair throughout. When attention has been called to the unfairness and hardship which is created by Clauses 1, 2 and 3, the invariable reply of the Minister or the Parliamentary Secretary has been that such cases could be dealt with under the powers given to the Minister in Clause 5.
The power to make grants is a smokescreen behind which the Minister and the Parliamentary Secretary have hidden when attention has been called to the failings of the Bill, which has been done both inside and outside the House. The Minister's attention has been called on a number of occasions to the conference of the Urban District Councils' Association which ruthlessly criticised the Bill and demanded its withdrawal. With, no doubt, a brief from the Tory Party Central Office, the good Tories who were delegates at the conference tried to defend the Government against the criticism by using practically the same argument as that used by the Minister and the Parliamentary Secretary.

§ Sir Robert Grimston (Westbury)
I should like to say, from the point of view of accuracy, as the hon. Gentleman and I were both at the conference, that so far as I know none of the vice-presidents of the (Conservative Party made a speech there. The speeches which were made by myself did not deal with the merits of the Bill, and the hon. Gentleman will recollect that 1092 when he spoke at the conference he referred to the fact that I had been non-controversial. I think that that should be said in order to get it right on the record.

§ Mr. Lindgren
Most certainly. It was never my intention to infer that any Tory Member of the House of Commons associated with the Urban District Councils' Association made a statement. I was referring to the Tory delegates—those councillors attending the conference who were obviously of Tory persuasion. They, at least, were talking from Tory Central Office briefs. They defended the Government's action against the criticism of various delegates on the ground that all the failings in the Bill to which various delegates had called attention could be dealt with under the provisions of Clause 5.
We have had discussion on various Amendments to Clause 5. When we have tried to pin down the Minister with actual examples of what has been happening, or was likely to happen, in various constituencies, he has always evaded the subject and given no definite reply. An outstanding example of that was when the right hon. and learned Member for Montgomery (Mr. C. Davies) called attention to the difficulties likely to arise in his own constituency, and particularly in the sparsely populated rural areas of Wales. Similar difficulties arise in many other constituencies.
The right hon. and learned Gentleman received no answer from the Minister as to whether the difficulties of the sparsely populated rural areas were likely to be met by grants payable under Clause 5. My view is—and unless it is corrected it will at least be on record as a view expressed during the Committee stage of the Bill—that rural areas such as those represented by the right hon. and learned Gentleman and other hon. Members will not receive any help under this Clause.
4.0 p.m.
The Clause is so drawn that there is no yardstick at all. No local authority, even one with a learned clerk who is a lawyer, will be able to study Clause 5 and say that under its conditions the circumstances obtaining in its district, rural, urban, or small borough, are such that they will receive consideration from the Minister. The Minister cannot complain 1093 if we insinuate that the Clause is a smokescreen behind which the Minister can hide from the criticisms about the harsh working of other Clauses. The Clause refers to urgent need for houses. I know of no area in which the need for houses for ordinary folk does not exist.
Another qualification is that the houses have to be provided by the authority. In the Second Reading debate I called attention to the fact that it is because of the failure and inability of private enterprise to provide housing for ordinary people that local authorities undertook the task. Practically no houses have been provided for the working class on an investment basis since the Public Health Act, 1875.
Another qualification is that the Minister wants to be satisfied that the new housing scheme will not lead to an unreasonable rate burden in the area, or unreasonably high rents, taking into account the rent subsidies of all the houses in the area, for the burden of the new houses will be spread over all. To put it into simple language, before any local authority can receive any assistance on any scheme it will have greatly to increase rates. If the Minister does not think those rates are sufficiently high, he will tell the authority to raise the money it needs through rates, and if he does not think the rents are high enough, he will tell the authority to raise its rents. The two factors that emerge from Clause 5 are higher rates and higher rents.
As I have just suggested in referring to the right hon. and learned Member for Montgomery, the areas which will be hardest hit because of scarceness of population, low rateable value and the spread of the population within the area, will be the rural areas, which will certainly not have a pool of houses over which to spread the extra burden. I expect that the Minister's excuse for the lack of houses provided in the rural areas is that there will be no likelihood of any urgent need. The Tory Party's policy being to run down agriculture and depopulate the rural areas, the houses would not be needed.
None of the worth-while Amendments—apart from those which are purely drafting in character—has been accepted during the Committee stage of the Bill. We think that Clause 5 will not be used by the Minister and that local authorities, to whose responsibility for housing the 1094 Minister often refers, will not be able to expect any help from the Clause.

§ Mr. Ellis Smith (Stoke-on-Trent, South)
My right hon. and hon. Friends have made critical speeches during the course of our debates on various Amendments. The observations which I am about to make I do not make only on my own behalf, although I readily associate myself with them. I have been instructed on behalf of the city which I and two of my hon. Friends have the privilege to represent in the House of Commons to find out from the Minister how the Clause will be interpreted. It would, therefore, have been wrong for us to have allowed this opportunity to pass without carrying out the desires of the city which we represent.
To lead up to the questions which I want to put, it will be necessary to sketch a short background of the great record of that city and to plead with the Minister that there should be placed upon the Clause the most generous interpretation possible, having regard to the limitations which will be imposed upon him by the Bill. Relatively, Stoke-on-Trent has the greatest housing record in the country—and I emphasise the word "relatively." Other authorities in the area are delighted with the record. But the city now finds that it is having to carry out a great slum clearance plan. Superimposed upon that is the development proposal and other proposals to which I shall be bound to refer if I am to do justice to the questions which I have been asked to put.
I propose to quote one or two concrete cases, so that the Minister may give specific replies. However, the difficulty in which the city council finds itself is that it prepared a plan for the rebuilding of the whole of the city. That took some time. The next step in the procedure was a public inquiry. I attended that inquiry and those of us who have been brought up in productive industry could not help but look with indignation on the large number of representatives of the legal profession who were there to defeat plans at which the city council had democratically arrived.
The inquiry went on for days. The plan was then submitted to the Ministry, but to date the Ministry has not sanctioned it. Because of the urgency of its problems, the city has, therefore, been forced to carry out the plan in accordance 1095 with what Clause 5 will allow. That brings me to the concrete example which I want to quote.
In the centre of my division is the Heathcote Road, Longton, clearance area. The people who live in that area, as did their forefathers for generations, have torn out mountains of wealth, very little of which has been spent in the area, but which has gone towards making this country grow. Certain sections of the country in particular have benefited as a result of that toil. As a result of ruthless private enterprise this area stands as a black picture blitzed by that enterprise. The city urgently desires to carry out a programme of slum clearance, but there is the difficulty created by mining subsidence and of carrying out the plan as a whole.
In the Heathcote area, notices have been given to property owners regarding slum clearance. Straight away, of course, there has been legal quibbling. Those of us who remember the days of discussion on workmen's compensation here will know what that means. The indigation arising from it is reflected on the city council. I cannot do justice to that indignation in this Committee because of the limitations imposed on me by the Standing Orders. But I have done my duty by referring to it. As I have said, there is the additional difficulty of mining subsidence. Some houses should be pulled down because the walls are cracking. There are also houses which ought to be pulled down because they are substandard.
My first plea is that we may have a definite answer on this matter. I wish to know whether property in the whole of that area will be eligible for a subsidy and whether it will be treated in the same way as I understood the Minister to say that the Worsley area would be dealt with. I admit that they are not parallel cases. In the city plan——

§ The Minister of Housing and Local Government (Mr. Duncan Sandys)
Has the hon. Member now finished discussing that point? I wish to be clear about exactly what it is he is asking, because I wish to give him a clear answer.

§ Mr. Smith
I appreciate that interjection by the Minister. I have finished 1096 what I wished to say about the Heathcote clearance area, but there are other questions I wish to ask.

§ Mr. Sandys
What is it for which the hon. Gentleman is asking? I understand that this is a slum clearance area inside the City of Stoke-on-Trent.

§ Mr. Smith
Yes.

§ Mr. Sandys
Is the hon. Gentleman asking what subsidy or grant will be applicable to that area?

§ Mr. Smith
No. Let us be clear. In that slum area there are sub-standard houses and properties which will have to be pulled down if the city is to do justice to the whole area. There are other houses affected by mining subsidence which should be pulled down. That is the answer. Is that satisfactory?

§ Mr. Sandys
The hon. Gentleman is asking for what?

§ Mr. Smith
That the subsidy payable to the maximum extent shall be payable for the whole of that area.

§ Mr. Sandys
Under Clause 5, or under the earlier provisions for slum clearance subsidies?

§ Mr. Smith
Under Clause 5. Is it clear now?

§ Mr. Smith
We are now in Committee and it is right that we should interrogate one another with a view to arriving at an understanding. That is the way in which Committees used to be run.
Further—I speak about this with a certain amount of pride and I wish it were being done throughout the whole country—the city also has a very fine plan. I am not allowed to say too much about that, because if I did I should be out of order. The city has made representations to the Ministry and on 7th September of last year this is what the councillors and officials who met Ministry representatives were told about this kind of case: The meeting was held to consider matters relating to slum clearance and redevelopment particularly with regard to procedure and to expedite dealing with clearance areas. 1097 Later, the following points were considered: It was also suggested that individual houses within a declared clearance area might become dangerous to the tenants and ought to be dealt with in advance of the ordinary procedure. It is possible to go into some houses and see walls that are cracked, and in others the floors are giving way. While we are doing the job of slum clearance and redevelopment, it would be bad business not to deal with the whole area at one time and also, were this not done, it would have an irritating effect upon the people living there. The Ministry stated that the corporation should, under no circumstances, endeavour to run different procedures at the same time. I should like to know whether that is still the position. It was pointed out that under individual demolition orders, the appeal was to the county court; under a clearance order the inquiry was made by the Ministry and the two things should not run simultaneously. It would be helpful to many areas in the industrial North if we could obtain a clear answer about that matter. In the case of houses becoming actually dangerous, the Ministry suggested that there should be no difficulty in coming to an agreement with the landlord in advance of the inquiry … Well, obviously, the Ministry officials do not know the landlords or they would not have said a thing like that to the city officials. The Ministry said they were not in favour of this proposal and it would not be considered unless the council is unable to clear slums in five years. This is further complicated by the fact that the mineral valuers and the surveyors have recently made a survey in that area and under this city, from which have been taken millions of tons of coal in the past. There are still millions of tons left; and with the adoption of modern methods of mining, the city will suffer even more.
Stoke has already built some fine houses, something like those in the Wythenshawe scheme, but on a smaller scale, which are the pride of all who see them. But we must deal with the slum clearance areas in order to house people as near the centre of the city as possible. Local shopkeepers are having a great deal to say about this. If the Minister cannot give a satisfactory reply today, a statement should be made as soon as possible 1098 so that responsible city aldermen, councillors and officials will know where they stand. They desire to proceed with the work of slum clearance and redevelopment as quickly as possible.

§ Mr. Clement Davies (Montgomery)
I make no apologies to the Committee for intervening in the debate, because the whole future of housing in both the urban and rural areas of my county will depend upon the interpretation which is put upon the Clause. The question whether not only the future but the present programme can or can not be continued will depend upon the Clause being given a narrow or a generous interpretation.
The hon. Member for Wellingborough (Mr. Lindgren) and the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) represent large industrial areas. My county is really a rural area. But I do not wish to confine myself entirely to conditions in my county; similar conditions are to be found in the other non-industrial counties in Wales. A 1d. rate produces roughly the same amount in Anglesey, Merioneth, Montgomery, Radnor, and Cardigan and a little more in Caernarvon—namely, between £700 and £800. My county is a complete rural unit. The only other which is in exactly the same position is Radnor, and I am sorry that the hon. Member for Brecon and Radnor (Mr. Watkins) is not here to speak for his small county.
It is right that I should give the background of these rural areas. The Minister is given an administrative discretion in this matter, and the way in which he interprets the Clause now will largely influence the interpretation given to it by those who succeed him. What is more, that interpretation will either encourage or discourage the smaller and poorer councils. My county is one of the most productive, agriculturally, in the whole of Britain. Its agricultural production is greater than that of any other county in Wales, although it is not the largest in area. Yet its 1d. rate produces only about £730.
The administration is carried on by eleven councils—the county council, four rural councils and six urban councils, of which four are boroughs. Building costs are abnormally high. Bricks, mortar and timber have to be carried long distances, and workers have to travel long distances from their homes to the sites of their 1099 work. Costs are much higher than they are in more compact areas and industrial districts.
Rates are also abnormally high. These little boroughs have no industries to support them—except in the case of Newtown and Llanidloes. Even in the urban areas the rates vary from 24s. 6d. in the case of Welshpool to 31s. 8d. in the case of my own borough, Llanfyllin.

§ Mr. Aneurin Bevan (Ebbw Vale)
Is the right hon. and learned Gentleman able to say how the level of rateable value has been affected by the revaluation?

§ Mr. Davies
Not yet; we are still waiting to work that out. I am very anxious about it. I do not think that there is very much variation, because the position has been so difficult that the assessment authorities have been very vigilant. In the rural areas the lowest rate is 23s. 9d. It is low because the main part of the rates is paid by Liverpool Corporation. Lake Vyrnwy reservoir is there, and the Liverpool Corporation is far and away our biggest ratepayer. In the Newtown rural area the rate goes up to 29s. l0d.
A few days ago I sent the Minister a letter which I had received from the Clerk of the Newtown Rural Council, describing the position of a little village within that rural district. It is the charming little village of Llandinam, situated about eight miles from Newtown and five miles from Llanidloes. It was decided that this village would be a suitable spot at which to erect half a dozen bungalows. The authority, making its estimates in the light of the existing circumstances, concluded that the rents would be about £2 4s. a week, exclusive of rates, and of water rates, and said, "If that is to be our position we cannot possibly erect those houses, as no one can afford to rent them."
Let us consider that rent in connection with the two nearest towns. A man living in the village will have to travel eight miles to Newtown or five miles to Llanidloes. In addition, his wife will have to travel that distance to do shopping. That is the position which exists in all these rural areas. It will be recollected that I condemned the houses of most of the councils in Wales in very strong terms in 1939. Many men and women and little children living in Newtown are still housed in huts. Some are 1100 occupied by families where the father has served six years in the Services. Whether or not proper housing is provided for them in the future will depend upon the interpretation which is placed upon the Clause.
I conclude by referring again to the little borough whose name English Members find it difficult to pronounce. It is my native borough, the borough of Llanfyllin. The letter from the Clerk says: In June last the Council decided to proceed with a further instalment of 16 houses. They were led to believe that they could reasonably expect to let those with two bedrooms at an economic rent (inclusive of rates)"— which, as I have already said, are very high— of less than 30s. per week, and those with three bedrooms at a slightly higher rent. In order to be sure (as they thought) that houses with such rents could be built, they had first obtained (after prolonged and strenuous efforts) an assurance from the Ministry that the houses would attract the special subsidies under Section 3 (2) of the Housing (Financial and Miscellaneous Provisions) Act, 1946 … The Council had made it clear that they could not proceed unless the special subsidies were available and it was only after receiving the assurance on 25th May last that they entered into their contract. Within a few weeks of sealing the contract the P.W.L.B. rates of interest were raised, that applicable here being raised from 4 per cent. to 4¼ per cent. and this coupled with the wage increases, etc., raised the probable rents to 31s. 3d. and 34s. 5d. respectively. The whole effect of the special subsidies was wiped out overnight. Then came the last increase on 6th September from 4¼ per cent. to 5¾ per cent, which will entail economic rents (inclusive of rates) of 36s. 3d. and 39s. 5d. respectively. You will appreciate that the council does not take up the loan until the money is required and then only in instalments as, otherwise, they would be saddled with heavy loan charges to meet which no rents would be coming in. Further, the rate of interest charged is that prevailing when the money is taken up so that in our case the rate of interest charged on the whole £29,700 involved is 5 per cent. You will know from your personal knowledge of this locality how hopeless it will be to let the houses continuously at such inflated rents (inflated so far as this town is concerned) and with a general rate of 31s. 8d. in the £ it is unthinkable that the tenants should be further subsidised from the general rate. On the other hand, there is no doubt that houses are urgently needed here both for our own people and others anxious to come and live here. Something very definitely is required to be done to adjust rents to reasonable proportions. 1101 4.30 p.m.
I will not read any more. The letter makes plain to the Committee what our conditions are.

§ Mr. Ellis Smith
What are the main occupations?

§ Mr. Davies
The town largely depends on agriculture. Some people are engaged on farms, and others on roads, in shops and anything of that kind.
It is a little town with only 1,000 inhabitants. Very often it is said that we have no unemployment problem. That is true, because the moment our young boys and girls are ready for employment they leave the town and seek employment in the industrial areas. That is largely causing our poverty. We are the only county south of the Grampians where the population is less than it was about 155 years ago, and it is steadily decreasing. It is going down also because of the lack of amenities and of proper houses.
Unless the Clause is given a generous interpretation and effect, the conditions that have prevailed up to now will grow worse and my population will go down more rapidly than ever.

§ Mr. Bevan
Perhaps it would be for the convenience of the Committee if the Minister made his statement on the Clause as early as possible. I know that something was said about it yesterday on certain Amendments, but as the right hon. Gentleman and his Parliamentary Secretary, and some of their hon. Friends, have taken refuge in this Clause on several occasions, perhaps he would like to explain what he means by the Clause and how he will interpret it later, so that we might be put in possession of his views.

§ Mr. Charles Royle (Salford, West)
I am in complete agreement with my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), but I want to ask a question so that when the Minister replies, as my right hon. Friend has requested, he can include a reply to me.
We have just heard an impassioned appeal from the right hon. and learned Member for Montgomery (Mr. C. Davies). We can appreciate the problems he has in mind. His appeal for a more elastic interpretation should not be neglected by the Minister. We had a long discussion last evening about the area I represent, and I do not want to start it all over 1102 again because the name of Salford seemed to ring through this Committee most of the day. I want to refer to Clause 5 (1, a) which states that where there is urgent need for more housing accommodation which will only be met if that accommodation is provided by that authority the Minister will have power to grant a higher subsidy.
Will the Minister tell me exactly what "certain circumstances," in the rubric, means? Will he say, without any "ifs" and "buts," that his mind is not closed to an application from an authority like Salford in reference to the matters which were raised yesterday and which the right hon. Gentleman resisted?

§ The Temporary Chairman (Mr. Malcolm MacPherson)
The Question is, "That Clause——

§ Mr. Bevan
Does not the right hon. Gentleman intend to intervene?

§ Mr. Sandys
I intended to intervene. The hon. Member for Wellingborough (Mr. Lindgren) said that the grants under Clause 5 were no more than a smokescreen behind which the Government were sheltering. My hon. Friend the Parliamentary Secretary described them as a "net." That was perhaps a more true description. The purpose is very much the same as that of Section 7 of the 1946 Act, to pick up cases of financial difficulty.
The whole basis of the Bill is that the Government believe that local authorities can build the houses they require with a lower subsidy than has been paid hitherto, but we recognise that there will be exceptions to the rule. There will be authorities who are only just managing to get along with the existing subsidy, and who may find themselves in serious difficulty if the subsidy is reduced and no other source of finance is made available to them.
That is the purpose of the Clause. It is, to put it briefly—this is the undertaking I gave on the Second Reading, and I repeat it—to ensure that no local authority shall be prevented through financial difficulty from providing the houses which are urgently needed for its people. It is my firm intention that that purpose and undertaking shall be honourably carried out in the administration of this Measure.
1103 The hon. Member for Wellingborough reverted to the condition which governs Clause 5 (1, b)where the word "unreasonable" occurs. The word appears in many Acts of Parliament and is intended to give a fairly wide discretion to the Government of the day to administer it as they think right and fair, always subject to the accountability of Ministers to Parliament. That is how much of our legislation works. It is not drawn up in the most precise, rigid and inflexible way, but the Government of the day administer it as they think fit, subject to all the rights of censure and debate which our parliamentary system provides.
I really believe that in a Clause of this kind, which is intended to deal with all kinds of circumstances foreseeable and unforeseeable, that the only way to ensure that they can all be picked up when they arise is to make the Clause as flexible as possible. That is why, quite deliberately, I put in the word "unreasonable" rather than define too precisely what we mean. To have done so would have meant a whole page of definitions, and, at the end, we should still not have been satisfied that all the cases which ought to be picked up under this Clause would have been included.
The hon. Member for Wellingborough said that in administering this Clause the Minister would insist on rents and rates being put up before making the additional subsidy which the Clause permits. I do not think that that is a fair assumption. The rents and the rates may already, in the Minister's opinion, be high compared with those charged by comparable local authorities. The Minister may come to the conclusion that any addition to those rates or those rents would be unreasonable, and therefore that the local authority qualified for the additional subsidy under Clause 5 without any further increase in rents or rates.
The purpose of this condition in subsection (1, b)is to make sure that, before this special assistance is given, the Minister shall satisfy himself that it is really needed. This is exceptional assistance to meet exceptional cases, and the purpose of the condition is to make sure that the Minister shall satisfy himself that the circumstances really are exceptional before he authorises the special grant.
1104 The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) raised a number of very detailed points about his city. I do not think that he will want me to go into all of them. Some were a very long way from the subject matter of Clause 5.

§ Mr, Ellis Smith
Part of it.

§ Mr. Sandys
A lot of things can be indirectly related to almost anything of this kind in the field of housing and town planning.
The hon. Gentleman referred to the delay in approving the Stoke-on-Trent development plan. As he will know, we are in the first round of these development plans. They all came in more or less simultaneously, and it is, naturally, taking a considerable time to work through them. I think the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan), who had the same problem, will know that a very great deal of work is involved in studying these plans, going into the objections, holding public inquiries, discussing modifications with the local authority concerned and eventually approving the plan. Short of expanding to an inordinate extent for a short period the staff that deal with those problems and then dismissing them, there is bound to be a queue of these development plans which have to be worked through.
The same difficulty will not arise on the second round, when the plans come to be revised after the five-year period. The revisions will obviously be very much smaller and will not involve these very difficult negotiations and discussions. I can assure the hon. Member that the main problems arising from the Stoke-on-Trent plan have now been resolved. There are still a number of minor modifications to be discussed, but I hope it will not be too long before the plan can be approved.
The hon. Member raised a particular issue with reference to a slum clearance area in his constituency, and also to another area which, he said, was subject to mining subsidence. I hope that he will not expect me to go into the question of mining subsidence today because that really is outside the scope of this Bill. He knows that I have taken considerable personal interest in this problem, that I have visited some of the areas affected, and that the Government are undertaking 1105 a comprehensive review of local government finance, in the course of which the problem of mining subsidence is being examined. At the same time, I have said that if it is not possible to deal comprehensively with the Turner Report we shall look at the more limited problem of some assistance to local authorities. I say that without any commitment. I am merely repeating an earlier statement which I have made on that subject.

§ Mr. Smith
It would not have been fair for me to have raised the wide issue of mining subsidence, and I should like to make clearer what I said before. I was speaking of a slum clearance area, in which there may be houses which may have suffered from mining subsidence but do not necessarily come within the slum clearance. Would the Minister take a generous view of that in order to include all the houses in that slum clearance?

§ Mr. Sandys
I do not want to get drawn too much into this question. Some of the houses I have seen which have suffered from mining subsidence would certainly, I think, appear to qualify as unfit, but if, on examination, they are not unfit and are easily repairable, then they clearly would not come within that category.
The hon. Gentleman asked whether Stoke-on-Trent would get the special grant under Clause 5 in respect of this slum clearance area. The conditions in which Clause 5 grants are payable are clearly defined, and it will depend entirely on whether those conditions are fulfilled. I should have thought it most unlikely that a city like Stoke-on-Trent would be in a position in which it could not build additional houses without having to impose unreasonably high rents or unreasonably high rates. Of course, the houses built to replace houses included in this slum clearance area, even though a proportion of the latter may be fit houses, will all qualify for the full £22 subsidy for slum clearance. The hon. Gentleman also asked about houses subject to demolition orders. Again, I can assure him that houses built to accommodate persons displaced from those houses will qualify for the full £22 subsidy for slum clearance.
The right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies) referred to difficult cases which 1106 he thought likely to arise in small rural districts in Montgomeryshire and other parts of Wales, and perhaps in other parts of the United Kingdom. He said that these were the poor districts, mainly dependent upon agriculture, with most of the inhabitants not drawing exceptionally high wages and having more or less the same level of earnings—districts with low rateable value, with little industry apart from agriculture, and with high building costs because of the difficulty of transporting labour and materials to the building sites. The right hon. and learned Gentleman said that if the local authorities were to carry out the further house building programmes which they would like to undertake and which were necessary it would result in the rents and rates being abnormally and unreasonably high. He asked whether I could assure him that such programmes would qualify for the special Clause 5 grant.
With his long experience of Parliamentary proceedings, the right hon. and learned Gentleman knows, of course, that if a Minister makes a statement it very quickly becomes a commitment, and he will not expect me, without examining each of these cases in detail, to say categorically whether these authorities will or will not qualify for the grant. All 1 would say to him is that the authorities which he has described constitute precisely the kind of case which I had in mind when I introduced this provision for the special grant under Clause 5. It is just the kind of situation which I envisaged might arise, particularly in the small rural areas.
Therefore, while I cannot give the right hon. and learned Gentleman a categorical assurance about some of these areas with unpronounceable names, I would say to him that he may be sure I will look at all applications from all quarters, but particularly from areas of that kind, with the utmost sympathy. The right hon. and learned Gentleman may be sure that there will be no desire on my part to try to restrict the application of the Clause in an ungenerous manner.
The new Clause 5 really replaces Section 7 of the 1946 Act, but I think that when we come to deal with cases such as those mentioned by the right hon. and learned Gentleman he will find that the provisions and conditions of the Clause are more helpful to authorities 1107 such as those he has in mind than the provisions of Section 7 of the 1946 Act. The 1946 Act laid down that to qualify for this special assistance, a local authority had to show that its general rate was, I think, 25 per cent. higher than the average general rate for other local authorities of the same class and that its housing rate, as distinct from the general rate, was 50 per cent. higher than the housing rate of other authorities of the same class.
There is no provision of this kind in the Clause, and it may well be that an authority such as the one which the right hon. and learned Gentleman mentioned might not have rates, either the general rate or the housing rate, enormously higher than those of other authorities yet, owing to its circumstances, it might be unreasonable to expect it to have a general rate 25 per cent. higher or a housing rate 50 per cent. higher than others before qualifying for assistance. The right hon. and learned Gentleman will find that, in the main, these provisions give to authorities such as those he mentioned a better prospect of special assistance than they enjoy at present under Section 7 of the 1946 Act.

§ Mr. Bevan
This Clause has, as I said earlier, been pleaded in aid on several occasions in the course of the proceedings on the Bill. The Minister takes up a position now with which I flatly disagree. To defend his Clause, he has fallen back upon a doctrine which I mentioned in a previous debate, a pernicious doctrine, a really bad one, entirely against the British genius and wholly opposed to the traditions of the House of Commons.
The Minister appears to imagine that that legislation is best which gives most Ministerial freedom of action.

§ Mr. Bevan
That is precisely the nature of the reply we have received. The Minister said, in effect, that the Clause was far better than Section 7 of the 1946 Act because it gave him more elbow room; that was his defence. I, on the other hand, hold it to be bad that legislation should be so drawn as to envisage so many exceptions that the Minister has to seek from the House of Commons powers of this sort.
1108 The less these powers are asked and the less Parliament gives them the better the legislation. Indeed, it is because these powers are unusual, however impeccable Ministers may be in their standards of public conduct and in their administration, that wherever they ask for powers of this sort it is almost invariable that there is added to the Clause the proviso that we have here in subsection (2): In exercising his powers under this section the Minister shall have regard to any conditions which may be laid down by the Treasury." The Treasury is perfectly content to allow Clauses to go through without that stipulation where its obligations are ascertainable, where it knows beforehand what will be the cost; but wherever a Minister seeks to obtain from the House powers for dishing out public money to certain individuals or authorities, the Treasury says, "If you are going to put your fingers in the till, we are going to see that we are with you at the same time." So the Treasury says, "We will see what conditions you apply here." I do not object to it. All I am saying is that in my opinion—I hope the Minister would agree—it would be much more desirable if we could have legislation which did not rely for its attractiveness upon these wide administrative powers. I should not have thought that any hon. Member, in any part of the Committee, could challenge that doctrine.
It would be desirable, for example, if we could have general housing legislation which would be able to embrace in its principles the circumstances described by the right hon. and learned Member for Montgomery (Mr. C. Davies); but, of course, we know that it is not possible to make the cloth fit every part of the body corporate, and so we have to have some exceptional parts. I repeat, the less we have them, the better the legislation is, precisely because, being purely subjective and there being no objective tests, all kinds of expectations are aroused. If it were possible to calculate, possible to measure or—to use the phrase of the Parliamentary Secretary last evening—to quantify the circumstances, of course we could put them into the legislation. The considerations at this stage are purely subjective. They depend more upon emotional expectations than calculable circumstances and, therefore, all sorts of local authorities try to take shelter under them.
1109 5.0 p.m.
I will give an illustration. The right hon. Gentleman has mentioned Section 7 of the 1946 Act, for which I was responsible. Does he know what was the first deputation I received under that Section? It was from Ebbw Vale. The local authority of Ebbw Vale said, "Now this is fine, our Member is in a position to give us some exceptional assistance," and it sent me a deputation. Of course it did not get any exceptional assistance because Ebbw Vale would not qualify. I mention that as an illustration to show that where you have Ministerial power of this sort at once you get the possibility of lobbying, the possibility of seeking favours and attempting to get governmental power used for certain authorities against others. That is why I lay it down here and now, subject to the intervention of any hon. Member, that it is not a good argument for the Minister's Bill to say, "Ah, but I have taken wider powers of administrative caprice than did my predecessor."
The Minister today is creating circumstances in which he proposes to give some alleviation where the hurt is too great because he is reducing the subsidies. He is reducing the subsidies at a time of mounting housing costs. He says, "It does not matter, I know you will be hurt, but I am preparing some ointment for you. I am adding to the amount of ointment I shall spread over your wounds. I know I shall wound you, but I shall administer a little anodyne.' That is what he is saying in this Clause to local authorities all over the country. When they start squealing and rush up for the anodyne, his right hon. Friend at the Treasury will say," I am going to keep it under lock and key; you cannot be trusted with too much of this."
Here is not a Minister of Housing and Local Government faced with exceptional circumstances over which he has no control, pioneering in new paths, facing unpredictable circumstances, but here is a Minister creating difficulties by his own legislation, producing the very hurts and agonies he is going to try to sooth later. Those are not the circumstances in which I had to face housing in 1945. Therefore, when the right hon. Gentleman pleads in aid Section 7 of the 1946 Act, I must reply to him that in 1945, as he knows, we faced a situation without precedent.
1110 There had been six and a half years of war in which one-third of the houses of Great Britain had either been damaged or destroyed and there had been no housing of any sort except for houses built near airfields during the war. Full employment then revealed what had been wickedly happening before the war when it was thought that slum clearance could go ahead because general housing needs had been met. In fact the Government of which the right hon. Gentleman was a member at the time, and in which he had a significant place, had estimated a figure which I have used before and use now to show that the right hon. Gentleman cannot argue this in aid this afternoon. I was told (by his Government that they had made an estimate that if 750,000 additional houses were provided the general housing needs of the nation would be met.

§ Mr. Sandys
Any figures to which the right hon. Member is referring were figures published by the Coalition Government——

§ Mr. Bevan
Yes.

§ Mr. Sandys
—not by a purely Conservative Government, but by a Coalition Government. Therefore, he and his party must take equal responsibility for them.

§ Mr. Bevan
I said, "the Government of which he was a member." That was the Coalition Government. He was at the Ministry of Works. He, with some of his immediate colleagues, were charged with the preparation of post-war housing plans. With the Ministry of Health they were in close collaboration estimating the nature of the post-war housing problem. So they had a special responsibility. I admit at once that there is always collective Cabinet responsibility, but it could hardly be that at that time Earl Attlee was being charged primarily with responsibility for assembling statistics in the Ministry of Health and the Ministry of Works. That really was one of the low-grade debating points which the right hon. Gentleman has produced.
The fact is that at that time they estimated post-war housing needs would be 750,000 houses. That amount was provided by September, 1948, but of course, as we found when we started the National Health Service, the unemployment and poverty of large numbers of people had concealed the real needs. When they 1111 emerged from their statistical darkness into the light of the national platform, we discovered that far more houses were necessary than ever was thought. Therefore, when we reached 750,000 in 1948, instead of the housing lists being less, they were greater because the demand for housing was an expression of full employment, whereas before the war the demand for housing had been an expression of 2 million normally and constantly unemployed.
Those are the figures and the circumstances of the case. Therefore we regretted that we had to postpone further slum clearance until general housing needs had been met. In those circumstances we were calling upon the local authorities in 1945 to resume housing activities in which they had not been engaged for twenty years. In the main they had been providing slum clearance houses, but ever since the end of the Wheatley schemes local authorities had not been in active partnership with the State in the provision of houses for general needs. In the main they were doing slum clearance. They were brought in and their general housing activities had to be re-assembled and re-associated. We had to enter into partnership with them in order to get it done. Because we had had no experience for so long and the circumstances were so novel, that it was not possible to predict every variation and condition, I had to take powers under Section 7 of the 1946 Act.
Nevertheless, the housing legislation was so drafted that those powers were very little exercised. They did not need to be much exercised, and I take pride and pleasure in the fact, not that they were exercised to any great extent, but that they did not need to be exercised much. Otherwise, I should have been exposed to the same argument as I am putting to the right hon. Gentleman. I take no pleasure in the fact that I had to help many, but that the legislation was so sagacious that few needed to be helped.
As soon as the local authorities were able to see their way ahead the number of exceptional cases declined. I have them before me now. In the whole of England only 16 authorities ever got assisted under Section 7 of the 1946 Act, and that ceased in 1948. In other words, 1112 we had assembled circumstances of predictability. The legislation had been framed and administered so that those exceptional powers did not need to be used after 1948. If the right hon. Gentleman is able to say the same after the same lapse of time, he can take more pride and pleasure in his legislation. I have the names of the local authorities which qualified: Bethnal Green, Poplar, Brandon and Byshottles, Conisborough, Featherstone, Felling, Heeton, Jarrow, Norwich, Rothwell, Sandy, Seaham, Worsborough, Easington and Rotherham. There was an extraordinary variation up and down up to 1948. After 1948 there were no more approvals.
In Wales 15 authorities have had their applications approved since the Act and, of these, four were approved last year. That is the general picture, and it shows that when the Minister calls in aid Section 7 of the 1946 Act he is falling back on a precedent made necessary only by his own conduct.
I come to another aspect of the matter. I am sorry I am speaking for so long on this subject, but I regard it as of very great importance, because once we have parted with the Clause we have lost sight of it and it goes back into the offices of Whitehall. From then on the discussions take place between officers of the Minister and the representatives of the local authority, with the Minister coming in now and again. We should like, first, to know a little more about how he intends to carry it out.
I am bound to tell him that when we were framing certain local government financial legislation, such as the rate equalisation scheme, we found it necessary to take many things into consideration. The right hon. and learned Member for Montgomery spoke about the circumstances of his area, and he knows that in his area the State is the principal ratepayer under the Local Government Act, 1948. Had it not been for that Act, many local authorities in Britain would have been unable to carry on their local government functions after the war.
But we could not rely upon caprice. We had to try, to use the Parliamentary Secretary's phrase, to quantify the circumstances in which money would be attracted under the Act. We could not leave it to whether the Minister awoke that morning with a headache or whether 1113 he was feeling all right; whether he was generous or morose. We had to try to give people some idea what they were entitled to, not fall back on this Byzantian attitude of mind. We had to try to do something in accordance with Western principles of law and not Eastern principles of personal justice.
What did we do? I was reminded of the very great difficulty we had in the between-the-war years of defining what was a necessitous area. I took part in conference after conference. It should have been quite easy to define an area which would be entitled to additional State assistance, but it was not. Was it the number of unemployed? Not by itself, because we found that there were areas where there was considerable unemployment but where the rate burden was comparatively low.
Was it the rate value per head? By itself, no, because, as we saw afterwards, many of the assessment committees in the necessitous areas, because they were necessitous areas, were much more generous than elsewhere in reducing rateable values. In our area, for example, where I frequently sat on an assessment committee, we reduced the rateable value of a colliery in order to keep it in production. In fact, we were conniving in the process of reducing the rateable value per head in order to keep work and in some cases in order to reduce the burden upon local cottages.
We could not take rateable value per head into account alone. In those circumstances, we had to assemble all the facts, if we could. It took many years to do it, during which the local authorities in these areas suffered. Eventually we had to quantify the problem. Eventually we had to objectivise the problem. Eventually we had to try to express it in some kind of mathematical terms which would reduce the Minister's caprice and increase the assistance given to local authorities.
It was done by taking into account the number of children under five years, the extent of roadways, the rateable value per head of the population, the unemployment rate, and so on—all together; and then the block grant was devised. When we came to the Exchequer Equalisation Grant we had again to find a formula.
It is essential that we should have a more precise idea from the Minister how we will interpret Clause 5. Is it to be on 1114 rateable value per head? It could quite easily happen that the rates of a local authority are low, or are not very high compared with the rates elsewhere, because that local authority has been unable to carry out the rest of its local government functions. It often happens that in certain areas where rates are, on the average, low, that the local population are not receiving the benefits of the widest variety of local government services. Although they may not be suffering an excessive rate, they are suffering from deficient local government services.
5.15 p.m.
We found in Wales and on the North-East coast, where the rates in the £ sometimes reached as high as 30s., that the education rate was abnormally and wickedly low, because they could not afford to spend the money on the education of the children. It was only when the Exchequer equalisation grant came into existence that the local authorities were able to exercise their educational powers in that area.
We are very much troubled by what the Minister said yesterday, because he did not make himself clear. Will he demand that the local authority pools all its houses? Does he intend to insist on it? Does he intend to insist that the more expensive houses now being built under decreased subsidies or without subsidies shall be pooled with pre-war houses?
Personally, I say at once that I do not think that local authorities should object to pooling their rents. It is perfectly reasonable that tenants of a local authority living in houses built in pre-war days should have their rents readjusted so as to try to obtain some help for post-war houses, because it is a fact that many of the houses known as Addison houses are superior to some houses built today. It is therefore reasonable in my view that the rents which the local authority tenants pay should be related to the amenities of the houses themselves and not necessarily to the individual cost of construction. I think nobody in the country disagrees with me.

§ Mr. Ellis Smith
It has been done, but they should be repaired.

§ Mr. Bevan
I agree that they should be repaired. If the houses were repaired people would think it perfectly just if the rent they paid bore relationship to the 1115 comfort or lack of comfort, amenities or lack of amenities, existing in the house occupied rather than to the mere accident of when the house was built or how much it cost to build it. I absolutely agree with that. When I was at the Ministry of Health I encouraged schemes of that sort all the time.
There was resistance in some cases, because nobody likes to pay more for anything. Nevertheless, I always found that when local authorities went to their tenants and carefully explained the situation beforehand, all was well. I regret that some local authorities have been deficient in this respect; they sometimes act arbitrarily, without telling their people. It is much better, and often they get a much better response, if they take endless pains carefully to explain beforehand what they intend to do and why they are doing it.

§ Mr. Ellis Smith
That is democracy.

§ Mr. Bevan
I will not say the same about differential rents. There is a good deal of passion about this. If a differential rents scheme is not being operated by the local authority, does the Minister consider that the local authority would not qualify for any additional assistance under Clause 5? We should have an answer to that question. If that is what he intends, then he means to take over a very important part of local government administration. Will the right hon. Gentleman be frank with the Committee? Will he tell us that he considers that a differential rent or rebate scheme should be operated before he is called upon to exercise his powers under Clause 5? I will sit down and give him the opportunity of answering if he wishes.

Hon. Members
Answer.

§ Mr. Sandys
I will answer in good time.

§ Mr. Bevan
If the right hon. Gentleman is going to answer, I am delighted. We should like to know that, otherwise he will be doing under Clause 5, because of his exceptional powers there, what he is not prepared to put in the Bill in other respects. If one local authority finds itself in difficulties and therefore comes to the Minister for help, he ought not to be able to impose differential rents on that authority when another authority not 1116 in the same circumstances did not have differential rents. It would be entirely unfair.
The differential rent scheme should be a matter for the voluntary decision of a local authority and should not in any circumstances be done by the ipse dixitof the Minister merely because the local authority is in the position of having to seek his help under Clause 5. In other words, if local authorities in Montgomeryshire, because of circumstances described by the right hon. and learned Member for Montgomery, the Leader of the Liberal Party, have to come to the Minister for additional help, they ought not to lose any of their local government rights.
They would be losing those rights if the Minister said to Newtown, for example, "No, you have no differential rent scheme, and until you have one I am not proposing to help you." That would be putting such local authorities in an inferior position, in lower status as local authorities because they needed to have the help of the Minister in building houses. I hope, therefore, that we shall have from the Minister a frank statement in that regard.
Obviously, because the Clause eases the situation where it might become intolerable, we are not proposing to oppose it. But I regard it as being in itself evidence of a bad Bill and bad legislation that the Minister finds it necessary to take refuge in a Clause which ought to be used only in very exceptional circumstances indeed and ought not to have been brought in by the Minister in order to cover up the wanton damage which he is going to do to housing in this country.

§ Mr. Arthur Probert (Aberdare)
I hesitate to follow my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), but here is a specific point I wish to mention and which I hope the Minister will see fit to answer. In introducing the Bill, the Minister stated that one way of easing the burden of the inevitable consequences of this legislation was for local authorities to pool their rents. When I mentioned Aberdare Urban District Council in our discussion of Clause 2, I gave a series of statistics to show how nonsensical that was in the case of that authority.
I will not delay the Committee now by giving further figures, but I should like to quote the case of Mountain Ash Urban 1117 District Council. That Council built 250 houses before the war and now it is building 233, which will make its total of postwar houses approximately 750. If that Council adopts the rents pool system it means that it has not a pre-war pool to work upon. I take it, therefore, that such an authority would receive the sympathy of the Minister under the provisions of Clause 5.
The rates in Mountain Ash are 31s. in the £1. As a result of the new valuation scheme the valuation is going up by only about 48 per cent. The Minister could help the Committee if he would state as specifically as he can whether such a case would rank for sympathy under the provisions of the Clause.

§ Mr. Frank Allaun (Salford, East)
My hon. Friend the Member for Salford, West (Mr. Royle) asked an important question which was not answered. I ask the Minister to answer it now. I would not claim that Salford is in the same position as a small rural area. It is anything but that, but the district contains many terribly overcrowded houses in which it is impossible to expect parents to bring up their children properly. I have in mind the case of a father who has just returned from a tuberculosis hospital to a wife and eight children. They have two bedrooms. Theirs is not a slum clearance house, although it is a poor house. Is the Minister prepared to give special consideration in circumstances like those?

§ Mr. Sandys
I do not think that many additional points have been raised during the further course of the debate since I last spoke, but the right hon. Member for Ebbw Vale (Mr. Bevan) made two main points. First, he criticised the amount of Ministerial discretion provided in the Clause, which he described as pernicious. He has been very free in the use of his adjectives today. He talked a good deal yesterday about my using adjectives.

§ Mr. Bevan
But mine were much nicer.

§ Mr. Sandys
I do not know whether they were much nicer. The right hon. Gentleman described the Clause as pernicious and my attitude of mind as Byzantian. I am ready to take all that in the ordinary run of Parliamentary life. I cannot help referring to his own Section 7 of the Housing (Financial and Miscellaneous Provisions) Act, 1946, because 1118 the right hon. Gentleman did so at such length. There is every bit as much Ministerial discretion there as there is in this Clause.
The only difference in the matter of Ministerial discretion is that the right hon. Gentleman prevented himself from giving this assistance until the local authorities could show that their general rate was 25 per cent. more and the housing rate 50 per cent, more, whereas I have given myself this additional discretion purely in order to assist local authorities.

§ Mr. Bevan
The difficulty is that it was then 1946 and now we are in 1956. We did not create the conditions; the conditions were created for us.

§ Mr. Sandys
I do not know about that. The right hon. Gentleman was talking about constitutional principle and he said that this provision was pernicious, yet Section 7 of the 1946 Act uses words like … if the Minister thinks fit so to determine … and it provides that the Minister shall pay such amounts as the Minister thinks proper. One cannot have more discretion than that, but the right hon. Gentleman went on to sneer slightly at Clause 5 (2) which states that: In exercising his powers under this section the Minister shall have regard to any conditions which may be laid down by the Treasury. The right hon. Gentleman said that that meant the Chancellor of the Exchequer would say, "Not too much of the anodyne." I would refer the right hon. Gentleman also to Section 7 (3) of the 1946 Act, which says exactly the same thing: In exercising his powers under the preceding provisions of this section the Minister shall have regard to any conditions which may be laid down by the Treasury.

§ Mr. Bevan
The right hon. Gentleman always hopes that his speech will be heard by those who did not hear the speech of his predecessor. I specifically said that it was because these powers were considered undesirable that they were surrounded with more protection. Of course they are. The Treasury always does this and I said so.

§ Mr. Sandys
I am only saying that this Clause is not hedged around with any more Treasury restrictions than the 1119 legislation of the right hon. Gentleman, which he himself described as sagacious. I was glad to note that the right hon. Gentleman agreed it was a good thing that subsidies should in general be pooled and that rents should be related to the standard of accommodation and amenity provided, rather than to the accident of the date when the houses were built and to the cost of those houses at that time.
The right hon. Gentleman asked me a question and asked for a frank answer. I propose to give him a frank answer, because it is a pertinent point and I do not want there to be any misunderstanding about it later. The right hon. Gentleman asked, will the Minister insist on the introduction of a differential rent scheme as a condition for the grant of assistance under Clause 5? My answer is that I certainly would not propose to make this an essential condition of the grant of assistance under Clause 5. On the other hand, the existence of a differential rent scheme would obviously be a relevant point which a local authority might make in support of its contention that the building of additional houses would result in unreasonably high rents or rates.
I made it clear in my speech on Second Reading that while I was in favour of differential rent schemes, and, in particular, rent rebate schemes, this type of system was by no means applicable to all kinds of local authorities. There are some local authorities, of the type mentioned by the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies), where the level of earnings is fairly equal throughout the area and where a rent rebate scheme might be useless and inappropriate. There are other authorities where the cost and general bother of such a scheme would not bring in a reasonable return. I say frankly that I would not make it an essential condition, but I would regard the existence of such a scheme in its area as a pertinent and relevant point to which a local authority might properly point in making its case clear that there was no possible way of avoiding having unreasonably high rents or rates if the additional houses they required were to be built.

§ Mr. Bevan
The right hon. Gentleman has made a serious statement which I 1120 want the Committee to consider. The Minister said he was going to be frank, but he has taken away in one part of his sentence what he appeared to be giving at the beginning. That statement, read out in a council chamber in a council housing committee, does what? The council housing committee is asking itself whether it ought to make an application to the Minister under Clause 5. The Minister says he will not insist upon differential rent schemes as a condition for considering the application and the giving of assistance, but he says it would be a pertinent and relevant consideration which a local authority might keep in mind in determining whether the rents were high or low, and whether, therefore, they should qualify for help. Therefore, those in favour of differential rent schemes on the committee might say, "Our application to the Minister is more likely to be successful if we have a differential rent scheme."
As I said in my speech, and I wish the right hon. Gentleman would face it, this puts that local authority in those circumstances in an inferior position to other local authorities which do not have to make application for help, because the other local authorities could continue to provide houses for their general need without any differential rent scheme, and because they would not need help they would not be subject to this subtle leverage which now the Minister is exercising. What he is really saying is that his countenance would be brighter to the application of this local authority if it first had a differential rent scheme.

§ Mr. C. Davies
Before the right hon. Gentleman replies, may I ask him to look again at these words? I was delighted to hear the Minister say that he will not make it an essential qualification that there shall be a differential rent scheme but, I am afraid, if he looks at the words he will find that he has already stultified himself. He will find that he has not got the option. The words are so certain that we tried to take them out of this Clause last night. The Minister will remember that last night we moved an Amendment to delete the words: … and other housing accommodation provided by the authority. We did that in order to give the very discretion which the Minister now says he wants to exercise. The Minister has 1121 now said at the Box, "That is the way I read it. I want to have that discretion," but it looks as if he is depriving himself of his discretion. Will he look at the words again?

§ Mr. Sandys
I think that the right hon. and learned Gentleman is not correct in his interpretation. I think he is referring to subsection (1, b).

§ Mr. Davies
That is right.

§ Mr. Sandys
Those words have no reference to differential rents in any sense. They relate to pooling. In other words, what we want to be clear about is that a local authority will not qualify for this additional assistance—and from what he said earlier I think the right hon. Gentleman the Member for Ebbw Vale agrees—if it merely shows that the new houses will have to be let at unreasonably high rents on the assumption that only the new subsidy is devoted to subsidising the rents of those houses. In other words, this condition implies that the local authority will pool all its subsidies and spread them over its houses in a reasonable way. That is why the subsection reads: "… that and other housing accommodation." It means that all the housing accommodation in the area of the local authority must be taken into account, not merely the new houses which will carry now the reduced subsidy and in a short while may carry no subsidy at all. I can assure the right hon. Gentleman and the right hon. and learned Gentleman that these words do not in any way prejudge the issue about differential rents.

§ Mr. Bevan
I also will be frank with the right hon. Gentleman. As I said, I consider it reasonable, if a local authority comes along for help, that it should be able to say that it has managed its estates properly. The local authority is exempted from the Rent Restriction Acts partly for this purpose. Therefore the Minister is right in saying to it, "You come along and say that you cannot build these two- or three-bedroom houses under a rent of £2 a week, but you have four-bedroom houses for which you are charging a pre-war rent of 22s. 6d."
That would be a proper answer, but that is as far as the right hon. Gentleman should go. He should not spoil the picture by what he said earlier and he should be asked to withdraw it. He 1122 should not say that, in addition, the local authority ought to consider the precedence and relevance to high or low rents of the existence of a differential rent scheme because, if a local authority has not done so, it has to do two things with its tenants at the same time before it can send a delegation to Whitehall. It must have a pooled rent scheme and a differential rent scheme before it can send a delegation. The Minister is making things difficult for the local authority. The right hon. Gentleman ought to tell the Committee firmly that as far as he is concerned the existence or non-existence of a differential rent scheme would not be considered by him as a relevant element in the application, and I invite him to say so.

Mr. G. A. Parglter (Southall)
The right hon. Gentleman says, in effect, that this would be a relevant factor for an authority to put forward in support of its case. Will he equally say that any authority which did not put forward such a factor would not in any way be prejudiced by not doing so?

§ Mr. Sandys
It obviously would be a relevant factor. I cannot believe that a local authority which was making a case to show that it could not build the additional houses which it required in its area without assistance under Clause 5 would not put forward its differential rent scheme, if it had one, as evidence that it really was doing its utmost to keep down its rents. It is inconceivable to me that it would not do so. I believe it to be a relevant and proper factor for it to put forward.
The right hon. Member for Ebbw Vale presses me to be frank. He has asked me to be frank in saying what our intentions might be in certain circumstances. I have gone to the utmost length to make clear how the Clause will be administered in detail. We shall have to consider detailed cases as they arise.
I felt I had to be absolutely frank and avoid any possibility of misunderstanding in the future. Particularly when the right hon. Member for Ebbw Vale said that the Opposition was not proposing to divide against the Clause, I did not want to feel that he could say afterwards that the Clause would never have been passed but for the misunderstanding that had arisen over this point. That is why I have really gone to the utmost limits in 1123 order to make it impossible later on for it to be said that I had misled the Committee.
I do not know exactly how the Clause will be applied in individual cases, but it would be lacking in frankness if I were to accept the right hon. Gentleman's invitation and say that in no circumstances would the existence of a differential rent scheme play any part in the Government's consideration of applications by local authorities for assistance under Clause 5.

§ Mr. G. R. Mitchison (Kettering)
I apologise for interrupting the right hon. Gentleman. The point is that differential rent schemes are not suitable for some local authorities. That was recognised by the Brooke Committee and has never been disputed by the Government. When local authorities have to consider whether or not to have a differential rent scheme, they ought not to be prejudiced by the possibility that then or later they might have to apply for assistance under Clause 5. What I want the right hon. Gentleman to say, and I hope he will say it, is that, while he would regard it as a relevant circumstance if it were put forward, he would not hold it to the prejudice of a local authority that it had not done something which might be quite unsuitable in its area; in short, that he would not hold against a local authority the absence of a differential rent scheme. That is only fair. Otherwise local authorities cannot govern themselves.

§ Mr. Sandys
I can give the hon. and learned Gentleman the assurance that I certainly would not propose to hold against a local authority the fact that it had not got a differential rent scheme if, as the hon. and learned Gentleman said, the introduction of such a scheme in its area was wholly unsuitable.

§ Mr. Mitchison
We want to get this clear. The judge of whether it is suitable or unsuitable must be, as the Brooke Committee recognised, the local authority itself. If it is to be decided in Whitehall, that means the end of effective local government in this country. Will the right hon. Gentleman agree that the judge ought to be the local authority itself?

§ Mr. Sandys
I really think I have been completely frank in explaining my position in regard to this matter. I do not think I can usefully add anything to what I have already said.

§ Mr. Bevan
The right hon. Gentleman would have been much franker if he had put into Clause 5 two qualifying conditions, first, that in the opinion of the Minister the rents should be pooled, and, secondly, that there should be a differential rent scheme if he so desired. That would be frankness. He has not been frank. If he looks at his words later, he will see that, in effect, he says, "I will use this in all the circumstances where I think proper as a lever to secure differential rent schemes." Why did he not say so? The answer which he gave my hon. and learned Friend the Member for Kettering (Mr. Mitchison) just now meant precisely that. He said "I know that there will be circumstances, at which I have hinted, where differential rent schemes are not appropriate, and I accept that, but where I consider that they are appropriate they will help me to reach my decision under Clause 5."Why did not the right hon. Gentleman say that frankly and put it in the Bill? He is really saying, in effect, that the local authorities which apply to him under Clause 5 must accept beforehand that they must be regarded as inferior local authorities.

§ Mr. Sandys
I really think it is very far from the point to imagine that the Government have in any way introduced Clause 5 in order to bring pressure to bear upon local authorities to establish differential rent schemes. In my opinion, only a very small minority of authorities will find themselves in the position where they will have to apply for assistance under the Clause. My belief is that the great majority of authorities in whose areas differential rent schemes are suitable will be adopting them voluntarily and without any pressure or inducement, such as has been suggested. It is very much beside the point to suggest that this is a back-door way of introducing differential rent schemes.