HC Deb 30 June 1959 vol 608 cc298-342
Mr. Mitchison

I beg to move, in page 2, line 17, at the end to insert: Provided that nothing in this subsection shall impose any duty on the Commission to maintain or increase the rents of their dwellings beyond what is reasonable, regard being had to rents prevailing in similar areas and neighbouring areas. Clause 2 (2) lays down the general duty of the Commission as being: …to maintain and enhance the value of the land held by them and the return obtained by them from it… It goes on to say that the Commission is to …have regard …to the convenience and welfare of persons residing, working or carrying on business there. What we desire to do is to make it perfectly clear that the duty to enhance the value of the land and the return obtained by the Commission from it is not to go so far as to lay on the Commission a duty to maintain high rents for dwellings where they already exist in the new towns or to increase the rents, and we suggest that the standard of what is reasonable in this matter of rents should be similar areas and neighbouring areas. I think we may take "similar" areas as other new towns in or about that part of the world, and in respect of "neighbouring areas" I think we may take the rents which are being charged for council houses by local authorities round about the new towns.

I doubt whether the right hon. Gentleman will suggest that something of this sort is not required. He may say that it is already sufficiently provided for by the reference to "convenience and welfare", but there can be no doubt that the rents in new towns in the past have tended to exceed the level of rents round about the new towns. There are all sorts of cases. They appear in report after report dealing with new towns. I remember cases in Peterlee, to begin with, where very large figures were given for the difference at that time. I think it is correct to say that in no new towns have the rents fallen to the level of the rents round about the new towns. In other words, the development corporation rents have been higher. In Corby, the new town in my constituency, there existed for some time, and there still exists, some discrepancy between the rents of the development corporation and the rents of the urban district council which had itself done a great deal of building in the new town for what have been, broadly speaking, new town purposes. That is how the question has arisen.

It has not only arisen in particular cases. It has arisen for two reasons. The first reason is that the development corporations conduct their operations on money borrowed from the Treasury, and borrowed at rates which have risen considerably and which at present and in recent years have been a good deal higher than the rates applying to much of the money which in the normal course of things would be borrowed by a neighbouring local authority.

One could go into detail about this. It is true to say that a great deal of money in the case of some development corporations was borrowed at an earlier stage in their history under the Labour Government when money was cheaper, and deliberately cheaper, and that the rise has taken place under the Tory Government which has, on the whole, kept to a dear money policy for reasons into which I need not now go. It is true that recently there has been a slight falling off, but, by and large, it is still true to say that any recently borrowed money has had a fairly stiff rate of interest. The development corporations themselves in their reports have attributed the high rents that they have had to charge very largely to this factor. I remember that when the chairman of the Basildon Corporation was giving evidence before the Estimates Committee or the Public Accounts Committee he was questioned about high rents and asked how far they were caused by increased costs of building and how far by increased interest rates, and he replied that the increased interest rates were the most important factor. As I see it, the Commission will take over from the development corporations and it will be in a similar position. Monetary policy rests, of course, with the Government.

The second reason for the higher rents is that it is broadly true to say that a development corporation has less opportunity of spreading its rent level over a wide area than a large local authority.

Accepting those two reasons, as I do for the moment, I see, without approving of them, the causes of these high rents. They have become a matter not merely of social justice and social expediency but also one affecting the purpose of the new towns themselves. I remember that in a recent report the Cwmbran new town stated that it was finding it difficult, because of the high rents which it had to charge, to fulfil its purpose as a development corporation, which was to house people who were working in that part of the world and to provide accommodation for people whose pay and so on were at the current level there.

There is yet another kind of case. Again I take Corby as an instance. During the recent difficulties in the steel industry when a great many people in Corby and other towns having large steel plants were either out of a job or at any rate on considerably reduced earnings, the question of the high rents naturally began to become acute. There has been an improvement which we all welcome, but these ups and downs have been a part of the history of the steel industry for a very long time now. I only took it as an instance, and it is quite obvious that there may be other cases in which employment cannot always be relied upon, and in which a rent which was possible at a higher level of earnings become exceedingly difficult or even impossible.

To put the matter very succinctly, as I do not wish to take up very much of the time of the Committee, the question of the rent of dwellings in the new towns has always been a very real one. There has tended to be a quite considerable difference between the rents of the development corporations and the rents of the local authorities, and the effect of these high rents and of that difference has been to make it more difficult for the new towns to do their work.

If I may take one final instance, I remember very well ascertaining from someone in Corby what he was paying in rent for his two-roomed house—I think it was—at the time. He was a man of mature age with a wife, still working, and he was actually paying about twice what he had paid under a local authority in Scotland, from which country he had come to Corby. These high rents really have a rather perilous effect.

I trust that the right hon. Gentleman will not take refuge in questions of verbal construction. It can do no conceivable harm to put this provision into the Bill. It is obvious that there is a good social reason for having it in the Bill, and I can only say to the right hon. Gentleman that he sought to attribute to the words "convenience and welfare" in Committee a breadth of meaning which I find rather difficult to follow. If he has to say that, by implication, they include keeping a reasonable level of rents, my answer to him is this. He may or may not be right, but it can do no harm, in a problem which is extremely important for the new towns, to have an express provision in the Bill that the duty to enhance the value of the assets and the return from them should not extend to any unreasonably high rents in relation to any neighbouring rents.

I repeat that I am referring to the rents of dwellings, because it is there that the social danger of unreasonably high rents has been shown to exist and still exists. I hope that I am not to be led off this Amendment by the question of whether or not "convenience and welfare" include it, because if they do, it could do no harm by repeating it, and if there is any doubt, or even for the purpose of emphasising the matter, it is better to have it in than to leave it out.

Mr. Bevins

I am afraid it is my task to fulfil the worst expectations of the hon. and learned Member for Kettering (Mr. Mitchison), but, at least, I will try to speak as succinctly as did the hon. and learned Gentleman in putting his case for the Amendment.

This Amendment would form part of the provisions of Clause 2 (2), and its intention is quite clear—notably that the Commission shall not be compelled to charge rents which are too high by reference to rents charged in similar areas and neighbouring areas. It seems to me that even if the principle of this Amendment were acceptable to my right hon. Friend, we should find it very difficult indeed, in relation to the new towns, to say what are similar and neighbouring areas. I do not want to make heavy weather of that point, but I think that from the point of view of construction, it would prove a very real difficulty.

As I understand it, the Amendment is an attempt to restrict the Commission in its rent policies, and I must say that if it proved to be workable, it would have the consequence of producing a yardstick of what a reasonable rent amounted to, which would be quite unacceptable to the Government as a matter of policy. It is perfectly true, as the hon. and learned Gentleman said, that house rents in the new towns are relatively high. That is so for a number of reasons. They are high because, except at Welwyn, practically all the new houses have been built since 1947 at the relatively high post-war building costs. As the hon. and learned Gentleman says, the development corporations have no stock of relatively cheap pre-war houses which they could use, if so minded, to moderate the general level of rents which they charge.

It may be the case, as the hon. and learned Gentleman said, that the interest rates which the development corporations have had to pay have again been relatively high. We all know that rates have been high during the last few years; but, speaking from memory, the average rate of interest which the corporations are paying is little more than 4 per cent. on all outstanding indebtedness. Whatever the individual effects of these factors, we all recognise that in the new towns rents are higher than the general level of local authority rents throughout the country.

6.15 p.m.

Perhaps I should say that from the start of the new towns, it has been established policy that the outgoings should be covered by rents, plus subsidies and grants. That has been followed throughout the history of the news towns, and, indeed, if the attempt had not been made quite carefully to balance outgoings by income from rents, grants and subsidies, the financial condition of the new town corporations at this moment would be deplorable.

Mr. Mitchison

I apologise for interrupting the hon. Gentleman, but he is now including the rents of industry in the new towns, as well as those of dwellings.

Mr. Bevins

That is perfectly true, but, so far as housing is concerned, what I am saying is also true. If that policy had not been followed, the financial situation of the respective corporations would not be very happy. I think it is also fair to say that, although rents are relatively high, they have not proved so high in the past as to discourage people from wishing to live in the new towns. In fact, there is no new town throughout the length of Great Britain which has any difficulty at all in securing tenants for its houses. Indeed, most new town corporations have very lengthy lists of people who would like to occupy their houses.

Here, I must fulfil the anticipation of the hon. and learned Gentleman, because, in any case, my right hon. Friend looks upon this Amendment as superfluous. As the hon. and learned Gentleman rightly said, it is one of the duties of the Commission to have regard to the welfare of the people living in the new towns, and that we feel must include the fact that they are not permitted to charge extortionate rents. That is to say, they can charge, quite clearly, rents which are something like the rents which exist at the present level, but not excessive rents in the sense of rents which will either drive people away from the new towns or inflict hardship upon them. If they were to do that, it would be inconsistent with the Commission's duty as defined in Clause 2 of the Bill.

For these reasons, this Amendment is looked upon by my right hon. Friend as unnecessary and therefore unacceptable.

Mr. G. M. Thomson (Dundee, East)

I wish to support the Amendment. The proposal it makes is particularly important for Scottish new towns. One of the difficulties about finding tenants for Scottish new towns is the wide disparity of new town rents compared with those charged by neighbouring local authorities. It may well be argued, and I would not disagree, that many local authorities charge unduly low rents, but it is important, if the new towns are to be a success in Scotland, that there should be reasonable uniformity between their rents and those of surrounding local authorities.

Mr. Martin Maddan (Hitchin)

On a point of order. I understand that the Bill relates solely to England and Wales. I cannot therefore understand the hon. Gentleman's references to Scotland.

Mr. Speaker

Perhaps the hon. Member for Dundee, East (Mr. G. M. Thomson) is basing upon Scottish experience an argument which he thinks might be of use to the House. It is, of course, a fact that this is an English Bill and therefore we must not have too much detail presented about Scotland.

Mr. Thomson

I am much obliged, Mr. Speaker. As a matter of fact, I was doing exactly that—presenting an illustration from my experience of Scottish new towns. There is another aspect of our Scottish experience which I will come to in a moment if I may. I am now speaking of the danger of pursuing a rent policy in new towns out of step with the rent policies of local authorities in the same area. It would be an improvement in that direction to have laid upon the Commission the obligation proposed in the Amendment.

I will not go into that point any further, or give details of rents being charged by Scottish development corporations and compare them with the rents charged by Scottish local authorities. I would merely remind the Minister of information that I gave him in Committee on the Bill, on the subject of the Scottish Special Housing Association. This is a Government corporation similar to the Commission being set up in the Bill.

In my constituency we have had a situation in which the Scottish Special Housing Association was landlord of about 2,000 houses while the local authority was also a very considerable landlord. Their houses were mixed up on the same estate at different rents, the corporation rents being considerably higher than those charged by the local authority. That fact caused a great deal of difficulty and a lot of unnecessary friction, and made the work of operating a sensible rent policy very much more difficult than it would otherwise have been. My experience in Scotland in both those respects leads one to believe that the proposed Commission should have laid on it the duty proposed in my hon. and learned Friend's Amendment.

From my experience in new towns I know that the rents being charged for the majority of ordinary tenants there are considerably higher than the tenants had been accustomed to pay as tenants in private, rent-controlled houses in London or other local authority areas. The Parliamentary Secretary argues that the high rents have been no obstacle to finding tenants for new-town houses. That is so, and is partly due to the desperate housing shortage in the London area. Many people find that rents now take a bigger share of their household budgets than they ought.

An additional consideration is that new towns were not supposed to be esoteric and exotic. We wanted the new towns to be normal communities which, in due course, would have a normal life and be occupied by a reasonable cross-section of the community. There is a danger that new town populations, though very excellent people, as I have every reason to know, are not typical of the community, are not a cross-section of the people, say, from the London boroughs. They tend to be a higher type of community, from the ranks of the higher technically-skilled manual workers. They make a very pleasant environment to live in, but they are not quite what was intended.

We ought to have a much more balanced population in the new towns and the rent structure ought to represent the general rent structure of the communities around the new towns. It is for that reason that my hon. and learned Friend has put forward this Amendment. We ought to have had a much more satisfactory answer from the Parliamentary Secretary.

Mr. Maddan

Following as I do the speech of the hon. Member for Dundee, East (Mr. G. M. Thomson), I am bound to reflect that the underlying spirit of the people in the new towns is not one of wishing to hire houses from bankrupt landlords any more than it is of working for employers who do not make profit. In fact, the hon. Member himself said that the people who live in the new towns are the industrial aristocracy of our time. I think that is true. If we try to build communities with great spirit in them we must be careful not to undermine the pride which they have in themselves and in their new towns.

The Amendment is wholly out of line with that idea, because it would undermine in just exactly that way. Nobody enjoys paying high rents and everybody would prefer his rent to be lower; but it all depends on what we get in return. Nobody likes paying for an expensive suite of furniture, but if it is more comfortable and of better appearance people will be willing to pay more for it. The fact is that the new towns have good appearance, good layouts, and good houses with good facilities in them. The amenities are improved, the standards of employment are high and the factories are modern for modern industries which have great hopes for future stability, and indeed for expansion.

What the hon. and learned Member for Kettering (Mr. Mitchison) wants is to undermine the whole basis of the new towns which have become an experiment of which we are proud on both sides of the House. We hope that the new towns will soon cease to be an experiment and will become part of the established life of our country, but as soon as we start putting into the Government's paw the houses in which new town residents live we shall undermine the self-respect and the spirit of the people living in those new towns.

6.30 p.m.

Mr. G. M. Thomson

The hon. Member will surely agree that that is exactly what the Bill does; it hands over the residents of the new towns to a Government Commission. He will understand what I mean if I say that I do not like aristocracies, whether they are industrial or otherwise.

Mr. Maddan

Whether he likes them or not, the hon. Gentleman lives in the midst of one, and I am certain that they are all very pleased to have him among them. As to the Bill's handing over the residents to a Government Commission, that is entirely irrelevant. The houses were built by Government corporations, and as the development ceases the landlords of the new towns will become the new Commission. This in no way undermines the spirit and self-respect of the new towns or of the individuals in them. What would undermine the self-respect of the communities and the individuals would be to put their housing on an uneconomic basis. The Amendment seeks to do just that. It intends, In fact, to extend the charity.

Mr. Speaker

Order. I thought the hon. Member had concluded his speech and was replying to a subsequent intervention. Perhaps he had only given way; I may be wrong.

Mr. Maddan

I am sorry, Mr. Speaker. I had only given way, but I was just about to conclude that the Amendment seems to seek to extend to the residents of new towns just that charity which the hon. and learned Member and his hon. Friends so much condemned earlier this afternoon.

Mr. MacColl

The Parliamentary Secretary spent half of his speech explaining that the Amendment was vicious in its essence and agreeing with the hon. Member for Hitchin (Mr. Maddan) that it ought not to be in the Bill. The other half of his speech he devoted to explaining that this Amendment was already in the Bill and was covered by the second half of the subsection, which refers to the convenience and welfare of persons residing in a new town. If we followed the logic of the hon. Member for Hitchin, we would not have the second part of the subsection in at all because it limits the discretion of the Commission and does not allow it a free hand. That is what the hon. Member is objecting to. The Amendment does not impose a duty on the Commission and does not narrow its discretion but widens it. Subsection (2) places a general duty on the Commission to enhance the value of the land. That means that someone has to spend more money in getting a return from the land. It does not mean that the Commission has just to break even with normal expenses, but that there is a duty to get the maximum that can be got out of the land.

That is recognised by including in the second part of the subsection the qualification about having regard to the "welfare of persons residing" in the new towns. The Amendment seeks to add to that general protection of tenants and to make absolutely clear, not that the Commission cannot raise rents if it wants to or if it finds itself in the red but that it does not have to raise rents in order to carry out its duty to enhance the value of the land In other words, the situation we are envisaging is what happens where a profit is being made. Is the Commission to go on getting a bigger and bigger profit in order to carry out the duty of enhancing the value of the land, or is it to be enabled to have regard to the general needs of the community and to reduce rents? This Amendment merely enables the Commission to do that if it wants to. That is very reasonable, and there should be no objection to it taking account of the welfare of the tenants.

Mr. Mitchison

I shall not keep the House for long, but there are two points I want to make. The first was mentioned by my hon. Friend the Member for Dundee, East (Mr. G. M. Thomson). The object of the new towns, near London certainly, includes some contribution to the solution of London's housing problem. If the new towns are to have unreasonably high rents, or rents which are only fit for an aristocracy of some sort, they will not be able to carry out one of their primary purposes, which is to help towards the solving of London's housing problem.

The second point is that it seems complete nonsense to hope that the new towns will contain some sort of aristocracy and nothing else and to do so on the ground that we must not have subsidised housing. Subsidised housing is, of course, what we have always had in the new towns, and this Bill continues it. There is no question whatever about the actual subsidies. I should not take the point from the hon. Member for Hitchin (Mr. Maddan), but for the fact that there have been rather ominous signs of a similar point of view among other hon. Members opposite. It seems now to be a considered point of the Tory Party that the community which it wants to see in the new towns is not to be one generally representative of the whole country nor of the whole neighbourhood of a new town, but one simply limited to those who can afford to pay what, from the point of view of lower-paid workers, are unreasonably high rents. I cannot believe that that is a reasoned conclusion. If we want people who are getting ordinary unskilled wages to come from London or elsewhere to live in the new towns, there should be some provision to prevent unreasonably high rents.

I think that the Parliamentary Secretary himself recognised that. He sought to import into the general words "convenience and welfare" such an artificial and remarkable description of unreasonable rents that he convinced me of the necessity of putting something more explicit into the Bill. If "convenience and welfare" can have the sort of meaning which he and his right hon. Friend

sometimes attribute to that phrase, I completely fail to see how reference to similar areas and neighbouring areas will cause any difficulty at all. I went out of my way when moving the Amendment to give instances of similar areas in relation to new towns round London, and "neighbouring areas" means what it says—neighbouring areas to those new areas round London itself.

It is true that the development corporations have had to balance their accounts and that part of their income is in rent. There has always been the question, in every one of these new towns, of how to keep a balance between industrial and commercial rents, on the one hand, and house rents on the other. Quite deliberately, this Amendment is intended to prevent development corporations putting up dwelling rents to an unreasonably high level while, at the same time, not making any corresponding increase, or making a decrease, in industrial and commercial rents. If the expenses of the development corporation—or, in this instance, of the Commission, which will be carrying on the work of the corporations—is to involve an increase of some sort, on the whole history of the new towns, and having regard to their social purpose, that increase ought to be in industrial and commercial rents and not in dwelling rents, which ought to be at a reasonable level. Stevenage must be a very remarkable place. I have never before heard of a place where anyone's dignity was wounded and one's pride hurt because one was not forced to pay an unreasonably high rent.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 200, Noes 220.

Division No. 153.] AYES [6.39 p.m.
Abse, Leo Boyd, T. C. Craddock, George (Bradford, S.)
Ainsley, J. W Braddock, Mrs. Elizabeth Cronin, J. D.
Albu, A. H. Brockway, A. F. Darling, George (Hillsborough)
Allaun, Frank (Salford, E.) Broughton, Dr. A. D. D. Davies, Ernest (Enfield, E.)
Allen, Scholefield (Crewe) Brown, Rt. Hon. George (Belper) Davies, Harold (Leek)
Awbery, S. S. Brown, Thomas (Ince) Davies, S. O. (Merthyr)
Bacon, Miss Alice Burke, W. A. Deer, G.
Baird, J. Burton, Miss F. E. de Freitas, Geoffrey
Balfour, A. Butler, Herbert (Hackney, C.) Delargy, H. J.
Bence, C. R. (Dunbartonshire, E.) Callaghan, L. J. Diamond, John
Benson, Sir George Carmichael, J. Dodds, N. N.
Beswick, Frank Champion, A. J. Donnelly, D. L.
Bevan, Rt. Hon. A. (Ebbw Vale) Chapman, W. D. Ede, Rt. Hon. J. C.
Blackburn, F. Chetwynd, G. R. Edelman, M.
Blyton, W. R. Cliffe, Michael Edwards, Rt. Hon. John (Brighouse)
Bottomley, Rt. Hon. A. G. Clunie, J. Edwards, Robert (Bilston)
Bowden, H. W. (Leicester, S. W.) Coldrick, W. Edwards, W. J. (Stepney)
Bowles, F. G. Collick, P. H. (Birkenhead) Evans, Albert (Islington, S. W.)
Finch, H. J. (Bedwellty) McAlister, Mrs. Mary Silverman, Julius (Aston)
Fitch, A. E. (Wigan) MacColl, J. E. Skeffington A. M.
Foot, D. M. McInnes, J. Slater, Mrs. H. (Stoke, N.)
Forman, J. C. McKay, John (Wallsend) Slater, J. (Sedgefield)
Fraser, Thomas (Hamilton) MacMillan, M. K. (Western Isles) Smith, Ellis (Stoke, S.)
Gaitskell, Rt. Hon. H. T. N. Mahon, Simon Sorensen, R. W.
George, Lady Megan Lloyd (Car'then) Mallalieu, E. L. (Brigg) Sparks, J. A.
Gibson, C. W. Mann, Mrs. Jean Spriggs, Leslie
Gordon Walker, Rt. Hon. P. C. Marquand, Rt. Hon. H. A. Steele, T.
Grenfell, Rt. Hon. D. R. Mason, Roy Stewart, Michael (Fulham)
Griffiths, Rt. Hon. James (Llanelly) Mendelson, J. J. Stonehouse, John
Hale, Leslie Messer, Sir F. Stones, W. (Consett)
Hall, Rt. Hn. Glenvil (Colne Valley) Mikardo, Ian Strauss, Rt. Hon. George (Vauxhall)
Hamilton, W. W. Mitchison, G. R. Stross, Dr. Barnett (Stoke-on-Trent, C.
Hannan W. Morris, Percy (Swansea, W.) Summerskill, Rt. Hon. E.
Hastings, S. Morrison, Rt. Hn. Herbert (Lewis'm, S.) Swingler, S. T.
Hayman, F. H. Mort, D. L. Sylvester, G. O.
Healey, Denis Moss, R. Symonds, J. B.
Henderson, Rt. Hn. A. (Rwly Regis) Mulley, F. W. Taylor, Bernard (Mansfield)
Herbison, Miss M. Noel-Baker, Francis (Swindon) Taylor, John (West Lothian)
Hewitson, Capt. M. Noel-Baker, Rt. Hon. P. (Derby, S.) Thomas, George (Cardiff)
Hobson, C. R. (Keighley) Oliver, G. H. Thomas, Iorwerth (Rhondda, W.)
Holman, P. Orbach, M. Thomson, George (Dundee, E.)
Houghton, Douglas Oswald, T. Thornton, E.
Howell, Charles (Perry Barr) Owen, W. J. Timmons, J.
Hughes, Cledwyn (Anglesey) Paget, R. T. Viant, S. P.
Hughes, Emrys (S. Ayrshire) Parker, J. Warbey, W. N.
Hughes, Hector (Aberdeen, N.) Parkin, B. T. Watkins, T. E.
Hunter, A. E. Paton, John Weitzman, D.
Irvine, A. J. (Edge Hill) Pearson, A. Wells, Percy (Faversham)
Irving, Sydney (Dartford) Peart, T. F. Wheeldon, W. E.
Isaacs, Rt. Hon. G. A. Pentland, N. White, Mrs. Eirene (E. Flint)
Janner, B. Plummer, Sir Leslle White, Henry (Derbyshire, N. E.)
Jay, Rt. Hon. D. P. T. Popplewell, E. Wigg, George
Jones, Rt. Hon. A. Creech (Wakefield) Price, J. T. (Westhoughton) Wilcock, Group Capt. C. A. B.
Jones, David (The Hartlepools) Probert, A. R. Wilkins, W. A.
Jones, Jack (Rotherham) Proctor, W. T. Willey, Frederick
Jones, J. Idwal (Wrexham) Pursey, Cmdr. H. Williams, David (Neath)
Kenyon, C. Randall, H. E. Williams, Rt. Hon. T. (Don Valley)
Key, Rt. Hon. C. W. Rankin, John Williams, W. R. (Openshaw)
King, Dr. H. M. Redhead, E. C. Willis, Eustace (Edinburgh, E.)
Lawson, G. M. Reid, William Wilson, Rt. Hon. Harold (Huyton)
Ledger, R. J. Reynolds G. W. Winterbottom, Richard
Lee, Frederick (Newton) Robens, Rt. Hon. A. Woodburn, Rt. Hon. A.
Lee, Miss Jennie (Cannock) Roberts, Goronwy (Caernarvon) Yates, V. (Ladywood)
Lewis, Arthur Robinson, Kenneth (St. Pancras, N.) Zilliacus, K.
Lindgren, G. S. Rogers, George (Kensington, N.)
Lipton, Marcus Ross, William TELLERS FOR THE AYES:
Logan, D. G. Royle, C. Mr. Holmes and Mr. Simmons.
Mabon, Dr. J. Dickson Shinwell, Rt. Hon. E.
Agnew, Sir Peter Bullus, Wing Commander E. E. Galbraith, Hon. T. G. D.
Altken, W. T. Burden, F. F. A. Gammans, Lady
Allan, R. A. (Paddington, s.) Butcher, Sir Herbert Garner-Evans, E. H.
Alport, C. J. M. Campbell, Sir David Gibson-Watt, D.
Arbuthnot, John Chichester-Clark, R. Glover, D.
Ashton, Sir Hubert Clarke, Brig. Terence (Portsm'th, W.) Glyn, Col. Richard H.
Atkins, H. E. Conant, Maj. Sir Roger Godber, J. B.
Baldock, Lt.-Cmdr. J. M. Cooke, Robert Goodhart, Philip
Baldwin, Sir Archer Cordeaux, Lt.-Col. J. K. Gough, C. F. H.
Balniel, Lord Corfield, F. V. Gower, H. R.
Barlow, Sir John Courtney, Cdr. Anthony Graham, Sir Fergus
Batsford, Brian Craddock, Beresford (Spelthorne) Grant, Rt. Hon. W. (Woodside)
Baxter, Sir Beverley Crosthwaite-Eyre, Col. O. E. Grant-Ferris, Wg Cdr. R. (Nantwich)
Beamish, Col. Tufton Cunningham, Knox Green, A.
Bell, Ronald (Bucks, S.) Dance, J. C. G. Gresham Cooke, R.
Bennett, Dr. Reginald Davidson, Viscountess Grimond, J.
Bevins, J. R. (Toxteth) D'Avigdor-Goldsmid, Sir Henry Grimston, Hon. John (St. Albans)
Biggs-Davison, J. A. de Ferranti, Basil Grimston, Sir Robert (Westbury)
Bingham, R. M. Dodds-Parker, A. D. Grosvenor, Lt.-Col. R. G.
Birch, Rt. Hon. Nigel Donaldson, Cmdr. C. E. McA. Gurden, Harold
Bishop F. P. Doughty, C. J. A. Hall, John (Wycombe)
Black, Sir Cyril Drayson, G. B. Harris, Frederic (Croydon, N. W.)
Body, R. F. du Cann, E. D. L. Harris, Reader (Heston)
Bossom, Sir Alfred Duthie, Sir William Harrison, A. B. C. (Maldon)
Boyd-Carpenter, Rt. Hon. J. A. Elliott, R. W. (Ne'castle upon Tyne, N.) Harrison, Col. J. H. (Eye)
Boyle, Sir Edward Emmet, Hon. Mrs. Evelyn Harvey, Sir Arthur Vere (Macclesf'd)
Braine, B. R. Erroll, F. J. Harvey, John (Walthamstow, E.)
Brewis, John Fell, A. Head, Rt. Hon. A. H.
Brooke, Rt. Hon. Henry Finlay, Graeme Heath, Rt. Hon. E. R. G.
Brooman-White, R. C. Fisher, Nigel Henderson, John (Cathcart)
Browne, J. Nixon (Craigton) Fletcher-Cooke, C. Henderson-Stewart, Sir James
Bryan, P. Forrest, G. Hicks-Beach, Maj. W. W.
Hinchingbrooke, Viscount Maddan, Martin Ropner, Col. Sir Leonard
Hirst, Geoffrey Maitland, Hon. Patrick (Lanark) Russell, R. S.
Holt, A. F. Markham, Major Sir Frank Scott-Miller, Cmdr. R.
Hornby, R. P. Marples, Rt. Hon. A. E. Sharples, R. C.
Hornsby-Smith, Miss M. P. Marshall, Douglas Shepherd, William
Horobin, Sir Ian Mathew, R. Smithers, Peter (Winchester)
Horsbrugh, Rt. Hon. Dame Florence Mawby, R. L. Speir, R. M.
Howard, Gerald (Cambridgeshire) Medlicott, Sir Frank Stanley, Capt. Hon. Richard
Howard, John (Test) Milligan, Rt. Hon. W. R. Stevens, Geoffrey
Hughes Hallett, Vice-Admiral J. Molson, Rt. Hon. Hugh Steward, Harold (Stockport, S.)
Hutchison, Michael Clark (E'b'gh, S.) Morrison, John (Salisbury) Steward, Sir William (Woolwich, W.)
Hutchison, Sir James (Scotstoun) Nabarro, G. D. N. Storey, S.
Hylton-Foster, Rt. Hon. Sir Harry Neave, Airey Stuart, Rt. Hon. James (Moray)
Iremonger, T. L. Nicholls, Harmar Studholme, Sir Henry
Irvine, Bryant Godman (Rye) Nicholson, Sir Godfrey (Farnham) Summers, Sir Spencer
Jenkins, Robert (Dulwich) Nicolson, N. (B'n'm'th, E. & Chr'ch) Taylor, William (Bradford, N.)
Jennings, J. C. (Burton) Noble, Comdr. Rt. Hon. Sir Allan Temple, John M.
Jennings, Sir Roland (Hallam) Noble, Michael (Argyll) Thomas, Leslie (Canterbury)
Johnson, Dr. Donald (Carlisle) Nugent, Richard Thorneycroft, Rt. Hon. P.
Joseph, Sir Keith O'Neill, Hn. Phelim (Co. Antrim, N.) Thornton-Kemsley, Sir Colin
Kerr, Sir Hamilton Orr, Capt. L. P. S. Tiley, A. (Bradford, W.)
Kirk, P. M. Page, R. G. Turton, Rt. Hon. R. H.
Lambton, Viscount Pannell, N. A. (Kirkdale) Tweedsmuir, Lady
Lancaster, Col. C. G. Partridge, E. Vane, W. M. F.
Leburn, W. G. Peel, W. J. Vickers, Miss Joan
Legh, Hon. Peter (Petersfield) Peyton, J. W. W. Vosper, Rt. Hon. D. F.
Lindsay, Hon. James (Devon, N.) Pickthorn, Sir Kenneth Wakefield, Edward (Derbyshire, W.)
Linstead, Sir H. N. Pike, Miss Mervyn Wall, Patrick
Lloyd, Maj. Sir Guy (Renfrew, E.) Pilkington Capt. R. A. Ward, Dame Irene (Tynemouth)
Longden, Gilbert Pitman, I. J. Watkinson, Rt. Hon. Harold
Loveys, Walter H. Pott, H. P. Webbe, Sir H.
Low, Rt. Hon. Sir Toby Powell, J. Enoch Webster, David
Lucas, Sir Jocelyn (Portsmouth, S.) Price, David (Eastleigh) Whitelaw, W. S. I.
Lucas-Tooth, Sir Hugh Prior-Palmer, Brig. Sir Otho Williams, Paul (Sunderland, S.)
McAdden, S. J. Rawlinson, Peter Wills, Sir Gerald (Bridgwater)
Macdonald, Sir Peter Redmayne, M. Wood, Hon. R.
Mackeson, Brig. Sir Harry Rees-Davies, W. R. Woollam, John Victor
McLaughlin, Mrs. P. Remnant, Hon. P. Yates, William (The Wrekin)
Maclean, Sir Fitzroy (Lancaster) Renton, D. L. M.
McLean, Neil (Inverness) Roberts, Sir Peter (Heeley) TELLERS FOR THE NOES:
Macleod, Rt. Hn. Iain (Enfield, W.) Robertson, Sir David Mr. Hughes-Young and
MacLeod, John (Ross & Cromarty) Robinson, Sir Roland (Blackpool, S.) Mr. J. E. B. Hill
Macpherson, Niall (Dumfries) Robson Brown, Sir William
Mr. Mitchison

I beg to move, in page 3, line 20, to leave out "whether".

Mr. Speaker

Perhaps the hon. and learned Member would like to take at the same time the next two Amendments, that in line 20 to leave out "or on revenue" and that in line 21 to leave out from "allowance" to the end of the line.

Mr. Mitchison

These lines are part of a subsection which deals with capital and revenue surplus in the hands of the Commission and which enables the Minister and the Treasury between them to direct the payment of anything up to the amount of that surplus in effect into the Treasury. These three Amendments seek to leave out any reference to revenue surplus while leaving in the reference to capital surplus.

I agree at once that that leaves it open to the Commission to do something else. It is entitled to put a revenue surplus aside and, after a time, in ordinary accounting practice it may transfer it to capital and get round the matter in that way. I see no reason for an express provision for the transfer of revenue surplus out of the hands of the Commission and back into the Exchequer. I appreciate the reason in regard to capital surplus, but not in regard to revenue surplus. What is the Exchequer's position? The Exchequer has lent, in one way or another, all the money with which the new towns have been built. That has been treated for all purposes as capital, interest has been paid on it, and so on. It is right that the money so lent should in due course, and subject to the general financial position of the new town, be paid back to the Treasury. Why should a revenue surplus be put into that same pool? That appears to be the effect of the provision in the Clause.

It may be said that this is merely a matter of account; why bother about it, particularly as there is a later Amendment which would limit the total of these repayments? My answer is that one must look at the position of the Commission. The Commission is there, as we are told, to maintain and enhance the value of its assets and the return it receives from them, but subject to the qualifications we have been discussing. Those qualifications primarily are the convenience and welfare of the people living in the new towns.

If there is to be pressure—that is what I am afraid of—from the Minister, or through the Minister from the Treasury, to accumulate revenue surpluses and have them handed over in due course to the Treasury, there will be constant pressure on the Commission on the side of the maintenance and enhancement of the assets and the return from them, as against what is, in this context, the rather opposite interest of the convenience and welfare of the inhabitants.

It may be the kind of case we were discussing on the last Amendment, namely, the question of the level at which the rents of houses in the new towns are to be fixed. It may be a different question, such as the extent of the contribution towards community purposes and amenities which the Commission will make. Equally, it may be in relation to commercial and industrial rents. In the nature of the case, the Commission is a holding body. So far as its finances are concerned, it is simply its duty to maintain and enhance the capital value, but not to make and accumulate revenue surpluses. The history of the new towns in relation to things like rent levels and the provision of amenities is such that a provision for a transfer of revenue surplus in this way has dangerous implications.

I shall not repeat what has been said about high rents or the admission by the Government that rents in the new towns, as is the fact, have been distinctly higher than elsewhere. Up to date, the provision of amenities, which is provided for in the Bill, has been distinctly on the scanty side, and the Government recognise that in some Clauses of the Bill to which I need not refer in detail.

There is again a real danger when one comes to the question of industrial and commercial rents. I should not be in order if I went into it in any detail, but it is clear that one of the major problems confronting the new towns, and therefore confronting the Commission as and when it takes them over, is the provision of sufficient employment, particularly for the young people who are growing up in these new towns. If sufficient employment is to be provided, industry, new factories, new offices, etc., must be attracted to the new towns. I would sooner see any surplus that there was "ploughed back into the business", to use a phrase perhaps more appropriate to yesterday's debate, than handed back to the Treasury as a revenue surplus.

Mr. Maddan

What the hon. and learned Member for Kettering (Mr. Mitchison) has just said seems to be a complete contradiction of what he said several minutes ago, when he concluded his speech on the previous Amendment by saying that perhaps under certain circumstances the rents of factories, offices and the like should be increased at the expense of house rents.

Mr. Mitchison

I am glad that the hon. Member for Hitchin (Mr. Maddan) has given me the opportunity to explain what I said. I said that, if the value of the assets and the return from them are to be enhanced, it is very much better that that should be done out of the rents of factories and offices rather than out of the rents of dwellings, which seem to me to be already too high for the social purposes of the new towns. If employment, especially youth employment, is to be attracted to these new towns, further factories and offices must be provided. That is a matter which I cannot go into at length on this Amendment, but I am sure that we all recognise the need for it. The hon. Gentleman particularly will recognise the need, because he represents a new town and he knows how threatening and potentially acute the whole problem of youth employment is there.

I do not want money to be accumulated as a revenue surplus when it might be much better used to reduce rents of dwellings, if that is the right thing to do having regard to their level, or, if it is thought better to do so, the rents of offices and factories to provide additional employment. I need not go into the distribution between one and another. I simply say that, having regard to what it is doing and what it has to do, the Commission and its Committees will not be in any position to accumulate a revenue surplus, that it ought not to be encouraged to do so and that, so far as there is a revenue surplus and it is not desired to plough it back into the undertaking, it can after a time be transferred to capital and moved over in that way.

The broad question raised by the Amendment is whether the object of the Commission should be to make the revenue received, principally from rents, such that there will be a surplus of such an order that it might be transferred to the Exchequer under the provisions of subsection (7). My answer is that it is not, and should not be, the function of the Commission to accumulate a revenue surplus of that order. I am not for a moment contesting that it should pay its way as it goes. I am not on that point. We know enough of what is going on in the new towns and of what is probable in their immediate future to say, with confidence, that any revenue surplus ought to be used to reduce rents, to provide more amenities and for various other purposes which will no doubt be known to hon. Members representing new towns. It ought not to be used to pay back to the Treasury what was originally a capital advance, and what will in due course be repaid as a capital advance.

7.0 p.m.

Mr. A. Evans

I beg to second the Amendment.

I am sure that neither the Minister nor the Treasury regards this Bill as a means by which the Treasury can make a profit out of the growth of the new towns. The Amendment embodies that principle. The Treasury is entitled to be repaid such sums as have been advanced to the new town corporations in the past. Those sums are the liabilities of the corporations and we all agree that they must be met by the Commission, when it becomes possessed of the assets and liabilities of the new towns, and that payment by the Commission to the Treasury must be assured.

The Amendment says that if a surplus accrues to the Commission as a result of the further growth and prosperity of the new towns it should go, not to the Treasury but to the provision of the amenities and the further consolidation of the societies in each of the new towns. We all want to see the new towns grow further in community spirit and consciousness, and to develop that consciousness the Commission will need money. The Commission must have the funds necessary to carry out the duties laid on it by Clause 2.

In effect, the Amendment says that the funds required by the Commission to carry out those duties shall be any surpluses accruing to the Commission as the years go by. It is a simple Amendment, and one which I would have thought the Minister could approve in principle. He might also agree that any surplus should be ploughed back into the new towns to be used by the Commission for their betterment—

Mr. Frederic Harris (Croydon, North-West)

Surely, such revenue should be capitalised before it is spent on capital expenditure, if it cannot be spent just at the moment?

Mr. Evans

I do not quite understand that. If this enterprise shows a surplus on its working, that is money that any private firm would devote to dividends or capital development. Here it would be money that was surplus to current liabilities and, therefore, available for further capital development; in this case, for the improvement of the facilities and amenities of the new towns.

Mr. H. Brooke

The subsection that it is now sought to amend is designed for the simple purpose of providing for what may happen when there is a revenue surplus. The hon. and learned Member for Kettering (Mr. Mitchison) seemed to me to be reading into the subsection some emotional or hortatory content that is not there.

The way in which the Commission shall carry on its business is set out in earlier parts of the Clause, and we are all familiar now, especially those of us who have been on the Standing Committee, with the Commission's duty to maintain and enhance the value of the land, and also with its power to serve the convenience or welfare of people residing, working or carrying on business in the new towns.

Up to the present, the new towns have not, collectively, thrown up a surplus of revenue account. Indeed, as I said on Second Reading, in the last year for which we have the accounts—1957–58—there was an aggregate net deficit of some £900,000, and at 31st March, 1958, the twelve new towns in England and Wales, of which I now speak, were carrying forward an accumulated deficit totalling some £4½ million.

That position has improved, and we all hope that over the 60-year period of the loans the new towns as a whole will break even, but, as I also told the Standing Committee, Crawley, which is most likely to be the first new town to be completed and, therefore, the first to be transferred to the new Commission, is at present running at a deficit, so to speak, and he would certainly be a bold man who would say that Crawley would be out of the red in the financial sense by the time development was completed.

I can, therefore, assure the House that the Commission is not likely to start off with a revenue surplus in the first year but, quite clearly, in this legislation we must envisage that revenue surpluses may arise—we have to look ahead for a number of years—and there may be legislation at some time, although I do not know about that. We were certainly assuming in Standing Committee that we were making provisions for the next 10, 15 or 20 years—the stage of settling down—and that Parliament might then have to look again at the matter.

If revenue surpluses are thrown up, what is to happen to them? Either they must accumulate and lie idly in the bank—and I do not think that anybody would seriously maintain that to be the right use for public money—or be ploughed back into the new towns in some way. The hon. and learned Gentleman mentioned a third possibility; that, unless the subsection is amended, they might be transferred to capital account and then paid over to the Treasury.

At this stage, I must say that I think we had better not provide for capital and revenue to be used interchangeably. It is better to recognise that surpluses may arise on either revenue or capital account. The responsibilities of the Commission for the convenience and welfare of people living in the towns has already been indicated in the Bill, so that there is no question of the Commission, when considering its financial position, simply forgetting about those people. It is one of their responsibilities to have regard to them.

At the same time, I would put it to the House that it would be unreasonable if we were to envisage that the only two possibilities for the disposal of a revenue surplus would be either to keep it idle in the bank indefinitely or to plough it back into the new towns. This is public money. The surplus has been earned by the wise administration of public money, and it would seem that its disposal ought to be determined in the widest public interest rather than that it should be automatically hypothecated for the benefit of people living in the towns. This £300 million or £400 million of capital expenditure from which the revenue surplus would accrue has been provided not only by the people living in Stevenage, Harlow, Crawley and elsewhere but by the whole population of the country. It is the investment of the nation as a whole, and the nation as a whole should receive some consideration in the disposal of any surplus if a surplus should arise.

I am aware of the views that have been expressed not only in this House but outside by the Town and Country Planning Association bearing on this point, that if there is a true surplus it should either be ploughed back into the towns or be used to finance further overspill operations elsewhere. Frankly, I do not think that sort of argument has ever commended itself to Parliament in relation to any other public undertakings. For a number of years when I was Financial Secretary to the Treasury, I watched the financial outcome of the transactions of the Carlisle State management scheme, but I cannot recollect anybody suggesting that the profits made on that scheme should necessarily be ploughed back into bigger and better public houses in Carlisle. Yet that seems to me to be a fairly close parallel with what is suggested in this case.

The Government of the day must retain freedom to decide in the broadest interests how a revenue surplus should be disposed of according to the circumstances and needs of the time, and I do not think any responsible Government could bind itself by Statute, as it appears to me that these Amendments would so bind it, to earmark that part of public funds for particular services for all time.

Those are the reasons why I could not advise the House to accept these Amendments. It is not the case that any revenue surplus will automatically get paid over to the Treasury. There have got to be consultations. Consideration has to be given, as laid down here, to the future requirements of the Commission, including—and we introduced this Amendment in Committee—any contributions that may fall to be made to providing amenities under subsection (4, b), and also consideration has to be given to the possible needs of transfer to reserve.

Indeed, as I explained in Committee, there could be no question of the Minister directing the Commission to hand over a revenue surplus to the Treasury when it was quite clear that perhaps the next year or the year after, or the year after that, the Commission was likely to run into deficit. One must be sensible about all these things. But it seems to the Government common sense to provide specifically in this Bill for what may happen if a revenue surplus is thrown up. We ought not to let the Bill go from the House in a position so that if a revenue surplus does emerge only two things can be done with it—either that it should be ploughed back into the towns or that it should lie idle.

It may well be that, in the circumstances of the time, a revenue surplus which has emerged from the use of public funds should be paid into the national Exchequer and used in some other way for the benefit of the people as a whole. We are not saying that always will happen, but we are saying that it is right that the Bill should provide for that as a third possibility.

7.15 p.m.

Mr. G. M. Thomson

I followed with fascination the speech which has been made by the right hon. Gentleman. I could not make up my mind whether he was speaking in his present capacity as Minister of Housing and Local Government and for new towns, or in his past capacity as Financial Secretary to the Treasury. When he said to us, in such characteristic tones with which we who were in the Committee have become so familiar, that we must be sensible in this matter, he was meaning that we must be sensible from the point of view of the Financial Secretary to the Treasury and not, as far as I could understand, sensible from the point of view of the Minister responsible for one of the greatest social experiments that have ever taken place in this country.

The question at issue here is what sort of share the new towns and the communities which exist there are going to enjoy of the revenues that they themselves will play a considerable part in creating. I thought that the right hon. Gentleman's analogy between the new towns and the pubs in Carlisle was singularly inappropriate and ill-chosen. The reasons for passing the public houses of Carlisle into public ownership date back many years, and they were very different from the reasons for setting up the new towns. Whatever may be the merits or demerits of passing over the revenues of the Carlisle pubs to the Treasury—and, not being a drinker of beer in Carlisle pubs I do not know, but I should guess that there are two points of view on that—they do not seem to apply to the new towns. The State-owned pubs are business undertakings, nationally owned, and they ought to be run, I take it, as business propositions.

Is the Minister saying to us, as the Minister responsible for this great social experiment, that the new towns are to be treated simply as a commercial proposition to which one should apply commercial standards of accounting? It does not seem to me to be the proper way to approach the matter. Certainly the taxpayers of this country, who have put up the investment in the new towns and who provided the capital which allowed the new towns to be built, should have serious consideration in the financial running of the new towns. We must make sure that the money that the nation as a whole has put up is properly looked after. If there is a surplus on it, we must deal with that surplus in the national interest as well as in the interests of the new towns.

The purpose of setting up the new towns was not to make a surplus. The purpose was to establish new and decent communities which would set a new standard of how people should live together in communities. If the motive in having new towns is the motive which ought to be dominant in the mind of the Minister of Housing and Local Government, and it is not, perhaps, the motive which was dominant in the mind of the Financial Secretary to the Treasury, the first charge on the surplus of the new towns ought to be to increase then-amenities and not necessarily to increase the amenities of a particular new town in which that surplus is earned.

There will be inequalities amongst the new towns. Some new towns will be in a more fortunate position than others. I should have thought that the surplus ought to be earmarked in the first instance for the same kind of operations which led to the success in the new town which has earned a surplus. There is a good deal to be said from the Town and Country Planning Association point of view that the surplus should be earmarked for further overspill operations which would help to extend the present benefits of new towns to many thousands of other people throughout the country.

The Minister, in rejecting the Amendment, is adopting the sort of attitude which we do not expect from the Minister responsible for standing up to the Treasury on behalf of good standards of town planning. He has adopted the attitude of the watch-dog of the Treasury. It is most unfortunate that he should have divested himself of his present position and reverted to his previous post in the Government.

Mr. Gough

The hon. Member for Dundee, East (Mr. G. M. Thomson) made two points to which a reply should be given. First, he spoke of the share which the people in the new towns should have out of the prosperity of the towns, that is, from the surpluses. I am very interested in this, for I represent one of the new towns. This matter is clearly mentioned in the Clause as it stands. It is provided that these revenue surpluses, should they arise, will be transferred only after making provision for suitable reserves and after providing such amenities as are mentioned in subsection (4, b).

The hon. Gentleman admitted that the nation as a whole, which has made an investment of hundreds of millions of pounds, should be properly looked after. In my view, we should go further. We have always said that not only should the taxpayer be properly looked after, but the moneys should be repaid. They will never be paid back unless, when there are any revenue surpluses over and above what is required for suitable reserves and amenities, those revenue surpluses, with the capital surpluses, go towards final repayment, as we all hope, in sixty years.

Mr. Slater

I find the attitude of the Minister and the attitude of the hon. Member for Horsham (Mr. Gough), who represents one of the new towns, very significant. I cross swords with them here. I do not know what has happened in the hon. Gentleman's constituency during the last three years. I assume that rents there have gone up tremendously as a result of Government policy, as they have in other new towns. I do not know whether it is the case in his new town that a very high proportion of the families find that it is necessary for both husband and wife to take up employment in order to meet the costs imposed upon them as a result of living in the new town. The right hon. Gentleman knows very well that in the new town in my constituency the majority of wives have to work in order to augment the family budgets in an effort to meet the increased rents.

What is to be the position of the Commission, having regard to the high rents which people are having to meet and having regard to the fact that property may deteriorate over the years? Does the Minister really think that the reserves available will be sufficient to meet any form of deficiency which may arise in respect of the property? What accommodation—

Mr. Speaker

I hardly think that this arises on the Amendment. All that the Amendment does is to seek to provide that if there is a revenue surplus it need not be paid into the Treasury. It applies only if there is a revenue surplus. There is nothing in the Amendment about how the revenue surplus arises. As I understood him, the hon. Gentleman was arguing about the causes of a possible surplus. I think that that is outside the Amendment.

Mr. Slater

My point, Mr. Speaker, relates to the use of the surplus which is bound to result from the high rents that tenants in the new towns are having to pay. I want to know what accommodation the tenants in new towns will receive under the Clause which the Minister seeks to have put in the Bill. The Amendment is designed to give better accommodation to them.

Mr. Mitchison

As one hon. Member quite rightly pointed out, this is a revenue surplus, so far as the Bill goes, after providing for future requirements. The right hon. Gentleman chooses to call it public money. That is not quite right. Public money has been lent to the development corporations and it has been used to create various assets, houses, for instance, and the revenue comes from letting the houses or from letting other assets such as factories and so forth. It is not in that sense public money at all. It is the return which the development corporation or, in this instance, the Commission will receive from the use of assets supplied out of public funds

I take leave to remind the House again that interest has been paid and is being paid on the loans. The question now is, ought the Treasury, in addition to the capital repayment of its advances and in addition to the interest paid on those advances, to have the revenue surplus as well? We say that it should not. The right hon. Gentleman asks what we would do with it; should we leave it idle in the bank? The answer to that, of course, is that one may temporarily have to do something like that with it, but, ultimately, what we want to do is what I called—he followed the phrase—plough it back into the undertaking of the new town.

The right hon. Gentleman asks us why. The answer is that one must look a little at the facts of this particular problem. I accept entirely what the right hon. Gentleman said, that there will be no question of a revenue surplus for the Commission as a whole for quite a number of years. Moreover, I assert that, when that question does arise, we shall be very near indeed to the moment when Parliament will have to look at the matter again—as the right hon. Gentleman puts it—or when some future Parliament—as I prefer to put it—will have to put into the Bill a number of things about the future of new towns which the right hon. Gentleman has been studiously anxious to leave out. Those are the answers to such questions as what is to happen to the new towns finally, and when will it happen?

For the moment, what is the position? There are rents from both houses and factories which really ought to be reduced. There are amenities which should be provided. It is possible that further advances will be made from the Treasury and used for some of those purposes, but what we are now considering is this. If there is a revenue surplus, what is the right thing to do with it? My answer is that the right thing to do with it is to let it go back to the new towns and the inhabitants of the new towns to use in lowering rents. providing amenities and so on.

There is no equity at all in allowing the Treasury to have the revenue surplus when it is not entitled to it, and when the surplus is, in fact, what has been taken from the pockets of the new town as a community. The surplus, if there is too much, is due back to the members of the new town community, not to the Treasury. On every principle of financial fairness, there ought not to be a revenue surplus for any length of time. It ought to be ploughed back, to use that expression again.

I hope that the inhabitants of the new towns will note the Treasury character of the Bill. Much of it seems to be an attempt not only to secure repayment of capital advanced by the Treasury, upon which interest is being paid, but also to make some sort of profit, a profit at the expense of the community living in the new towns. Be it remembered that people are living in the new towns, however comfortably they may be living there, at an expense much greater than the average. The difficulty is to find places in the new towns for the lower-paid people because it costs so much to live there. Be it remembered, also, that if the social purpose of the new towns is to be effected, it will not be effected by keeping those people out.

7.30 p.m.

I object to this provision, not only because I think that it ought to be ploughed back but also because a revenue surplus itself depends on what we spend before we get the surplus. With a provision of this sort, there would be constant pressure from the Treasury on the Minister and from the Minister on the Commission to accumulate a revenue surplus and to pay some of it back to the Treasury. I think that that is wrong in principle and in relation to the social purpose of the new towns.

Question put, That "whether" stand part of the Bill:—

The House divided: Ayes 210, Noes 176.

Division No. 154.] AYES [7.31 p.m.
Agnew, Sir Peter Grant, Rt. Hon. w. (Woodside) Milligan, Rt. Hon. W. R.
Aitken, W. T. Grant-Ferris, Wg Cdr. R. (Nantwich) Molson, Rt. Hon. Hugh
Allan, R. A. (Paddington, S.) Green, A. Morrison, John (Salisbury)
Alport, C. J. M. Gresham Cooke, R. Mott-Radclyffe, Sir Charles
Arbuthnot, John Grimond, J. Nabarro, G. D. N.
Ashton, Sir Hubert Grimston, Hon. John (St. Albans) Nairn, D. L. S.
Atkins, H. E. Grimston, Sir Robert (Westbury) Neave, Airey
Baldock, Lt.-Cmdr. J. M. Grosvenor, Lt.-Col. R. G. Nicholls, Harmar
Baldwin, Sir Archer Gurden, Harold Nicholson, Sir Godfrey (Farnham)
Balniel, Lord Harris, Frederic (Croydon, N. W.) Nicolson, N. (B'n'mth, E. & Chr'ch)
Batsford, Brian Harris, Reader (Heston) Noble, Michael (Argyll)
Baxter, Sir Beverley Harrison, A. B. C. (Maldon) Nugent, Richard
Beamish, Col. Tufton Harrison, Col. J. H. (Eye) O'Neill, Hn. Phelim (Co. Antrim, N.)
Bell, Ronald (Bucks, S.) Harvey, Sir Arthur Vere (Macclesf'd) Orr, Capt. L. P. S.
Bennett, Dr. Reginald Heald, Rt. Hon. Sir Lionel Page, R. G.
Bevins, J. R. (Toxteth) Heath, Rt. Hon. E. R. G. Pannell, N. A. (Kirkdale)
Biggs-Davison, J. A. Henderson, John (Cathcart) Partridge, E.
Bingham, R. M. Henderson-Stewart, Sir James Peel, W. J.
Birch, Rt. Hon. Nigel Hirst, Geoffrey Peyton, J. W. W.
Bishop, F. P. Hobson, John (Warwick& Leam'gt'n) Pickthorn, Sir Kenneth
Black, Sir Cyril Holt, A. F. Pike, Miss Mervyn
Body, R. F. Hornby, R. P. Pilkington, Capt. R. A.
Bossom, Sir Alfred Hornsby-Smith, Miss M. P. Pitman, I. J.
Boyd-Carpenter, Rt. Hon. J. A. Horobin, Sir lan Pitt, Miss E. M.
Boyle, Sir Edward Horsbrugh, Rt. Hon. Dame Florence Pott, H. P.
Braine, B. R. Howard, Gerald (Cambridgeshire) Powell, J. Enoch
Brewis, John Howard, John (Test) Price, David (Eastleigh)
Brooke, Rt. Hon. Henry Hughes Hallett, Vice-Admiral J. Prior-Palmer, Brig. Sir Otho
Brooman-White, R. C. Hughes-Young, M. H. C. Rawlinson, Peter
Browne, J. Nixon (Craigton) Hutchison, Sir James (Scotstoun) Redmayne, M.
Bryan, P. Hylton-Foster, Rt. Hon. Sir Harry Rees-Davies, W. R.
Bullus, Wing Commander E. E. Iremonger, T. L. Renton, D. L. M.
Burden, F. F. A. Irvine, Bryant Godman (Rye) Roberts, Sir Peter (Heeley)
Butcher, Sir Herbert Jenkins, Robert (Dulwich) Robertson, Sir David
Butler, Rt. Hn. R. A. (Saffron Walden) Jennings, J. C. (Burton) Robinson, Sir Roland (Blackpool, S.)
Carr, Robert Jennings, Sir Roland (Hallam) Robson Brown, Sir William
Chichester-Clark, R. Johnson, Dr. Donald (Carlisle) Ropner, Col. Sir Leonard
Clarke, Brig. Terence (Portsm'th. W.) Joseph, Sir Keith Russell, R. S.
Conant, Maj. Sir Roger Kaberry, D. Scott-Miller, Cmdr. R.
Cooke, Robert Kerr, Sir Hamilton Sharples, R. C.
Cordeaux, Lt.-Col. J. K. Kirk, P. M. Smithers, Peter (Winchester)
Corfleld, F. V. Lambton, Viscount Speir, R. M.
Courtney, Cdr. Anthony Lancaster, Col. C. G. Stanley, Capt. Hon. Richard
Craddock, Beresford (Spelthorne) Leburn, W. G. Stevens, Geoffrey
Crosthwaite-Eyre, Col. O. E. Legh, Hon. Peter (Petersfield) Steward, Harold (Stockport, S.)
Cunningham, Knox Lindsay, Hon. James (Devon, N.) Storey, S.
Dance, J. C. G. Linstead, Sir H. N. Stuart, Rt. Hon. James (Moray)
Deedes, W. F. Lloyd, Maj. Sir Guy (Renfrew, E.) Studholme, Sir Henry
de Ferranti, Basil Longden, Gilbert Summers, Sir Spencer
Dodds-Parker, A. D. Loveys, Walter H. Taylor, William (Bradford, N.)
Donaldson, Cmdr. C. E. McA. Lucas, Sir Jocelyn (Portsmouth, S.) Teeling, W.
Doughty, C. J. A. Lucas-Tooth, Sir Hugh Temple, John M.
Drayson, G. B. McAdden, S. J. Thomas, Leslie (Canterbury)
du Cann, E. D. L. Macdonald, Sir Peter Thorneycroft, Rt. Hon. P.
Duthie, Sir William Mackeson, Brig. Sir Harry Thornton-Kemsley, Sir Colin
Elliott, R. W. (Ne'castle upon Tyne, N.) McLaughlin, Mrs. P. Tiley, A. (Bradford, W.)
Erroll, F. J. Maclean, Sir Fitzroy (Lancaster) Turton, Rt. Hon. R. H.
Fell, A. McLean, Neil (Inverness) Tweedsmuir, Lady
Finlay, Graeme Macleod, Rt. Hn. Iain (Enfield, W.) Vosper, Rt. Hon. D. F.
Fisher, Nigel MacLeod, John (Ross & Cromarty) Wakefield, Edward (Derbyshire, W.)
Fletcher-Cooke, C. Macmillan, Rt. Hn. Harold (Bromley) Wall, Patrick
Forrest, G. Macpherson, Niall (Dumfries) Ward, Dame Irene (Tynemouth)
Galbraith, Hon. T. G. D. Maddan, Martin Webbe, Sir H.
Gammans, Lady Maitland, Hon. Patrick (Lanark) Webster, David
Gibson-Watt, D. Markham, Major Sir Frank Williams, Paul (Sunderland, S.)
Glover, D. Marlowe, A. A. H. Wills, Sir Gerald (Bridgwater)
Godber, J. B. Marples, Rt. Hon. A. E. Woollam, John Victor
Goodhart, Philip Marshall, Douglas Yates, William (The Wrekin)
Gough, C. F. H. Mathew, R.
Gower, H. R. Mawby, R. L. TELLERS FOR THE AYES:
Graham, Sir Fergus Medlicott, Sir Frank Mr. Whitelaw and
Mr. J. E. B. Hill.
Abse, Leo Bence, C. R. (Dunbartonshire, E.) Boyd, T. C.
Ainsley, J. W. Benson, Sir George Braddock, Mrs. Elizabeth
Allaun, Frank (Salford, E.) Beswick, Frank Brockway, A. F.
Allen, Scholefield (Crewe) Blackburn, F. Broughton, Dr. A. D. D.
Awbery, S. S. Blyton, W. R. Brown, Rt. Hon. George (Belper)
Bacon, Miss Alice Bottomley, Rt. Hon. A. G. Brown, Thomas (Ince)
Baird, J. Bowden, H. W. (Leicester, S. W.) Burke, W. A.
Balfour, A. Bowles, F. G. Burton, Miss F. E.
Butler, Herbert (Hackney, C.) Janner, B. Robens, Rt. Hon. A.
Callaghan, L. J. Jay, Rt. Hon. D. P. T. Roberts, Goronwy (Caernarvon)
Carmichael, J. Jones, Rt. Hon. A. Creech (Wakefield) Robinson, Kenneth (St. Pancras, N.)
Champion, A. J. Jones, David (The Hartlepools) Ross, William
Chapman, W. D. Jones, Jack (Rotherham) Royle, C.
Chetwynd, G. R. Jones, J. Idwal (Wrexham) Shinwell, Rt. Hon. E.
Clunie, J. Key, Rt. Hon. C. W. Silverman, Julius (Aston)
Coldrick, W. King, Dr. H. M. Simmons, C. J. (Brierley Hill)
Collick, P. H. (Birkenhead) Lawson, G. M. Skeffington, A. M.
Craddock, George (Bradford, S.) Ledger, R. J. Slater, Mrs. H. (Stoke, N.)
Cronin, J. D. Lee, Frederick (Newton) Slater, J. (Sedgefield)
Darling, George (Hillsborough) Lewis, Arthur Smith, Ellis (Stoke, S.)
Davies, Ernest (Enfield, E.) Lindgren, G. S. Sorensen, R. W.
Davies, Harold (Leek) Logan, D. G. Soskice, Rt. Hon. Sir Frank
Deer, G. Mabon, Dr. J. Dickson Sparks, J. A.
Delargy, H. J. McAlister, Mrs. Mary Spriggs, Leslie
Diamond, John MacColl, J. E. Steele, T.
Dodds, N. N. MacDermot, Niall Stewart, Michael (Fulham)
Ede, Rt. Hon. J. C. McInnes, J. Stonehouse, John
Edelman, M. McKay, John (Wallsend) Stones, W. (Consett)
Edwards, Rt. Hon. John (Brighouse) MacMillan, M. K. (Western Isles) Stross, Dr. Barnett (Stoke-on-Trent, C.)
Edwards, Robert (Bilston) Mahon, Simon Summerskill, Rt. Hon. E.
Edwards, W. J. (Stepney) Mallalieu, E. L. (Brigg) Swingler, S. T.
Finch, H. J. (Bedwellty) Mann, Mrs. Jean Sylvester, G. O.
Fitch, A. E. (Wigan) Marquand, Rt. Hon. H. A. Symonds, J. B.
Foot, D. M. Mason, Roy Taylor, Bernard (Mansfield)
Forman, J. C. Mendelson, J. J. Taylor, John (West Lothian)
Fraser, Thomas (Hamilton) Messer, Sir F. Thomas, George (Cardiff)
George, Lady Megan Lloyd (Car'then) Mikardo, Ian Thomas, Iorwerth (Rhondda, W.)
Gibson, C. W. Mitchison, G. R. Thomson, George (Dundee, E.)
Gordon Walker, Rt. Hon. P. C. Morris, Percy (Swansea, W.) Thornton, E.
Grenfell, Rt. Hon. D. R. Mort, D. L. Timmons, J.
Griffiths, Rt. Hon. James (Lianelly) Moss, R. Warbey, W. N.
Hale, Leslie Moyle, A. Watkins, T. E.
Hall, Rt. Hn. Glenvil (Colne Valley) Mulley, F. W. Weitzman, D.
Hamilton, W. W. Noel-Baker, Francis (Swindon) Wells, Percy (Faversham)
Hannan, W. Oliver, G. H. Wheeldon, W. E.
Hastings, S. Owen, W. J. White, Henry (Derbyshire, N. E.).
Hayman, F. H. Paget, R. T. Wilcock, Group Capt. C. A. B.
Herbison, Miss M. Parker, J. Wilkins, W. A.
Hewitson, Capt. M. Paton, John Willey, Frederick
Hobson, C. R. (Keighley) Pearson, A. Williams, David (Neath)
Holman, P. Peart, T. F. Williams, Rt. Hon. T. (Don Valley)
Houghton, Douglas Pentland, N. Williams, W. R. (Openshaw)
Howell, Charles (Perry Barr) Plummer, Sir Leslie Willis, Eustace (Edinburgh, E.)
Hughes, Cledwyn (Anglesey) Popplewell, E. Winterbottom, Richard
Hughes, Emrys (S. Ayrshire) Probert, A. R. Woodburn, Rt. Hon. A.
Hughes, Hector (Aberdeen, N.) Proctor, W. T. Yates, V. (Ladywood)
Hunter, A. E. Pursey, Cmdr. H.
Irvine, A. J. (Edge Hill) Randall, H. E. TELLERS FOR THE NOES:
Irving, Sydney (Dartford) Rankin, John Mr. Holmes and Mr. J. T. Price.
Isaacs, Rt. Hon. G. A. Redhead, E. C.
Mr. MacColl

I beg to move, in page 3, line 29, at the end to insert: Provided that the total of sums paid by the Commission under this subsection shall not at any time exceed the total of liabilities transferred to the Commission from development corporations, being liabilities properly chargeable to capital account by a development corporation. I need not detain the House very long because some of the ground has already been covered. This is a further stage in what might be called the milking operation, the taking away from the Commission of some of the liquid assets which it has managed to accumulate. I accept what the hon. Member for Horsham (Mr. Gough) said a few minutes ago, that the public who have subscribed the money to start the new towns should be paid back what they subscribe. That is common ground between us. They have certainly launched the undertaking, fairly well protected by the security of the operation. Nevertheless they have put up the money, and before there is any distribution of surpluses certainly there should be repayment. That is provided for and accepted by our suggested proviso. The case for handing over more than the Exchequer has put into the new towns, however, is not quite as strong as that. That is why we seek to limit the withdrawals to the actual cost—the capital investment represented by the new towns—put up by the Exchequer. That is a principle which the Minister accepted in the case of the sewerage undertakings that we considered in Committee. If he could accept it in that case, there should not be much difficulty in his accepting it in this instance.

A number of people are partners in the undertaking of a new town. There is certainly the Exchequer, which put up the money. There are the corporation and the people who have built the town and been responsible for its development, and there are the people who have moved into the town and settled there and the industries that have come to the town. All these people have a right to be considered.

It is an interesting point, although you would not want me to reflect on it at any length, Mr. Speaker, that the only people who get no benefit at all at present from the success of a new town are those who have put the work into building it up, namely, the staff and the corporation. They are thrown out without more than a formal word of thanks. They get nothing out of the success of the job they have done except the privilege of being unemployed. The Government are to get back the money which they invested in the new town, and that is quite right. The town itself will derive benefit from the increase in rateable value, the increase in the assets of the town and the general good will attached to the town as a pleasant and profitable place in which to live and to trade.

The future of the new towns however, is not yet decided. That was stated in the previous debate and certainly on Second Reading. We do not know what the ultimate end of the new towns will be. This is a transitional stage that they should be under the Commission as a holding body, holding the assets of the new towns until the second stage of development is finished and they are stabilised with a stable population and their problems are those of a normal town. Then, we are all agreed, the new towns should be looked at again to see what is to be done with them.

My plea is that before we reach that third stage we ought not to milk the Commission of the assets which it is holding. It may well be that a decision is taken that the new town should be handed over to the local authorities. It may be desirable that the profits of the new town should be used, as we were saying earlier, for the development of other new towns. These are all reasonable things to do with the assets.

7.45 p.m.

While we are in this state of uncertainty, however, when we are in what is purely a holding operation by the Commission and not a final answer, we ought not to allow the assets of the new town to be appropriated by the Exchequer, because the Exchequer will have it both ways. It will have the security of the position of a debenture holder or mortgagee and it has the security of the land and buildings of the new town for getting the interest payable on the debt. At the same time, it wishes to claim the equity of the new town. That seems to be quite indefensible.

Our proviso does not secure that the Exchequer would have to wait to be paid back. It would be entitled to be paid back, so there would be no question whatever about the new town continuing in debt. It would pay off its debt. Once it had done so, however, the Commission would be expected to hold the assets, or to use them or invest them in development—that is something which should be done—but to hold the surplus until a final decision is taken about what is to happen to the town.

I have only one comment on the Minister's earlier remarks, because I anticipate that he might say the same thing again. It rather shocked me when he talked about the money being left in the bank and not used. That was an odd interpretation by a retired Financial Secretary to the Treasury of what happens to money which is placed on deposit in the bank. I would have thought that if there were assets, there was no earthly reason, if they were not wanted, why they should not be used or invested and why either the bank or somebody else should not use them or see that they were put to full use. The benefit from that, however, would accrue to the assets of the Commission and not to the Exchequer.

The broad principle is not substantially different from that of the other Amendments which we have just considered, but I regard this as a reasonable proposal which, I hope, the Minister will accept.

Mr. Mitchison

I beg to second the Amendment.

Mr. H. Brooke

The principle that we are debating on the Amendment is the same as on the previous one, but this one deals with payments on capital account and the other dealt with payments of revenue surpluses. When the 1946 Act was enacted, it was laid down that the Exchequer—that is, the taxpayers as a whole—should be, as it were, the residuary legatee of the development corporations. I said in Standing Committee on this Bill that, in the view of the Government, here again the Exchequer—the general body of taxpayers—should be the residuary legatee of the Commission for the new towns.

The purpose of the Amendment is to alter that and to ensure that the people living in the new towns themselves will be the residuary legatee and that if there are capital surpluses beyond a certain figure they are not to be repaid to the Exchequer. If they are not, in words to which the hon. Member for Widnes (Mr. MacColl) objects, to lie idle—that is, to remain on deposit in the bank—presumably he contemplates that they should be ploughed back into the new towns. That appears to me to be as unacceptable as the previous Amendment.

We are dealing here with a vast undertaking that will have been financed by nearly £400 million advanced by the taxpayers all over the country. It cannot be denied that that is public money. The upshot of the Amendment would be that should things go well and should the financial outcome be so satisfactory as to produce an ultimate surplus on capital account exceeding the capital debt which the Commission takes over, the whole of that excess capital surplus should be available for putting back into the new towns. The hon. Member for Widnes argued that the Treasury, that is to say, the taxpayers, were trying to have it both ways. They were trying to be both debenture holders and equity shareholders. It is a queer sort of debenture because the debenture holder has some right of foreclosing, and what use it would be for the Exchequer to foreclose on the new towns if they were not profitable enough to repay the capital advances, I do not know.

The fact is that considerable risk is being taken with this money. We all hope that the risk will turn out well and that for the loan period of 60 years the financial outturn of the whole undertaking will be sufficiently favourable to ensure that all the obligations are met. We cannot be certain of that. Frankly, I believe that the Exchequer, that is to say the taxpayers as a whole, need to be looked at just as much in the position of equity shareholders as anything else. They are taking a risk on this; there is no doubt of it.

What the Opposition is saying is that although the taxpayers must take the risk they are not to have any of the surpluses if, in fact, things turn out well. The whole of the surplus is to accrue to those living in the new towns. As I have pointed out one of the powers and responsibilities of the Commission is to have regard to the convenience and welfare of the people living in the new towns and it has powers to make certain payments for amenities and the like and a general power of good administration. There is not the slightest chance that the interest of the people in the new towns will be overlooked.

Mr. MacColl

It is common ground that while the Commission is operating it can plough back money into the new towns. I am suggesting that until the final decision is taken about the future of the new towns as a whole the Commission should be regarded as holding the assets and the Exchequer ought not to get back more than it has put in until that final decision is taken, whichever way that decision may go in the future, which none of us know.

Mr. Brooke

That is so. This is a highly hypothetical Amendment, because it seems to me that it will be quite impossible for the limit contained in this Amendment to be reached within the kind of period which I gather the hon. Gentleman has in mind as the period which ought to elapse before Parliament has another look at the matter and decides what the ultimate future of the towns should be.

I have been studying the Amendment itself, and I thought from reading the Amendment that it was concerned that the taxpayers as a whole should never make a profit out of the new towns. I accept that the hon. Gentleman has put down the Amendment to make sure that the capital surpluses are not disposed of to the Exchequer prematurely. Frankly, I cannot see that on all the forecasts that a reasonable man could make there could be any possibility of these great repayments being made so rapidly as that.

I must look at the Amendment as it stands, and it certainly would provide that as we got to the end of the period of 60 years advances after the towns had been going on for a long time, this Amendment would preclude the taxpayers as a whole from receiving any payment beyond a certain figure and any excess beyond that would have to be ploughed back to the new towns. I am sure that the Government take a different view of this. It is not only the welfare and happiness of the people in the new towns that are at stake, but this very large amount of money which has been put up by the country as a whole. We cannot have regard to one of these and not to the other. We must provide that if the Commission has been administering its property and its assets in a proper way and with due regard to the good of the towns themselves, and if in the end an aggregate capital surplus is thrown up which is greater than the aggregate debt the Commission has taken over, at any rate, it must be for consideration whether some of that income should not accrue to the taxpayers as a whole rather than it should all go into the new towns.

Mr. G. M. Thomson

Having listened to the Minister, I thought that I was unduly generous to him on an earlier occasion when I said that I objected to his allowing his past history as Financial Secretary to the Treasury to overcome his present position as Minister of Housing and Local Government. I find now that it is not as the Financial Secretary to the Treasury that he is addressing the House. He appears to be taking up the attitude of some sort of Hugh Fraser or Mr. Clore towards the new towns. He is enunciating not a Governmental doctrine, not even a Treasury doctrine towards the new towns, but a purely capitalist, private enterprise doctrine.

The right hon. Gentleman is saying that, because the community desires to make this very spectacular and, no doubt, in some ways, speculative investment in these great experiments in town planning, the community should not be satisfied with merely getting its money back with a normal rate of interest but in addition should expect to get some surplus provided out of the operation. He is treating the taxpayers of the country in a way which I do not think they expect to be treated—as private shareholders in the new towns, who expect to have a sort of annual dividend declared on the surpluses in due course. I think that is a most unreasonable way in which to look at it.

It is not, incidentally, the way in which the Government look at their financial operations in many other respects. The Treasury has just given £50 million to Colvilles steel undertaking in Scotland. It is no doubt a risky and speculative national investment, but I am sure that it is a necessary one. In due course the taxpayer will get the £50 million back, with the normal market rate of interest—indeed, a somewhat lower rate of interest—but there is no suggestion that for years after that any further surplus as a result of this investment by the taxpayers should come back to the taxpayers.

Then there is £100 million to be invested in the Cunard liners, again by the taxpayers. The taxpayers will get the £100 million back with interest in due course, but there is no suggestion that any further surplus of profits earned by these great Cunarders should come back to the taxpayers. I should have thought that in those cases the taxpayers had a legitimate right to expect some share in the profits, because they are commercial concerns.

Here we have the taxpayer voluntarily at the elections choosing to make an investment in a great social experiment, and I am sure he does not expect this national social investment to be treated on the commercial, capitalist lines that the Minister is following. I am sure that the ordinary taxpayer, provided his interests are safeguarded and the investment is returned with normal interest, is prepared to say that the surplus earned in future years by the efforts, energy and enterprise of people in the new towns, should go back to the new towns to make them a greater success as a social experiment. If our Amendments have done nothing else, they have revealed a fundamental cleavage of philosophy in tackling the financial problems of the new towns. One of the platitudes uttered in the House is that both sides are in favour of new towns, but this proposal of the Government makes it clear that the approach to new towns is quite different on the Tory side from what it is on this side. The Government and the Minister are applying to the new towns private enterprise profit-making considerations which I am sure even Conservative voters would not support.

8.0 p.m.

Mr. Mitchison rose

Mr. Deputy-Speaker (Sir Gordon Touche)

The hon. and learned Member has exhausted his right to speak in seconding the Amendment.

Mr. Mitchison

On a point of order. I thought that that was not the case in formally seconding an Amendment. I notice that one of my hon. Friends was allowed to address the House after formally seconding a previous Amendment.

Mr. Deputy-Speaker

The rule is that in seconding an Amendment one exhausts one's right to speak.

Mr. Mitchison

In those circumstances, I have only to ask the leave of the House to make a short speech. It would have been a short one anyhow.

I agree with what my hon. Friend the Member for Dundee, East (Mr. G. M. Thomson) has said. It is quite impossible to reconcile the Government's attitude towards these advances with their attitude towards advances to commercial undertakings. This shows the Tory Party for what it really is. Not only is this impossible to reconcile, but so is something else. The right hon. Gentleman accepted in Committee an Amendment on exactly these lines in relation to a much smaller matter of sewerage undertakings. He accepted an Amendment to the effect that the total repaid should not exceed the total advanced. This is exactly the same point, and what the right hon. Gentleman is prepared to do in a small case he is not prepared to do in a large one.

This is indeed a monstrous Treasury Bill. At the end of the time, the Government want to take back not only the money which they put up for a public purpose but also the interest on that money and, in addition, anything more that they can get, and at whose expense? They will get it at the expense of the local authorities which, we believe, will finally take over these new towns. It is perfectly true that the right hon. Gentleman has persistently refused to repeat the pledges given by the Tory Party when we on this side of the House were in power and we passed Section 15 of the New Towns Act, 1946, intending by that Section to give an undertaking that the new towns should go back to the local authorities.

If they do not go back to the local authorities, to whom will they go? Will the right hon. Gentleman sell the lot to some Mr. Clore or some Mr. Hugh Fraser in future? The answer, of course, is that they must go back to the local authorities. They cannot go back to anybody else, unless we are to have in this country some form of capitalist oligarchy so far removed from Parliamentary democracy that even the Tory Party would not be prepared to face it. What will happen is that the Treasury will take not only the rights of debenture holders but also those of shareholders too, and the people from whom the Treasury will take those rights are the people who are living in the new towns. I trust that the people in the new towns will take good account of the Tory Party's attitude towards them and their future.

Mr. H. Brooke

The hon. and learned Member for Kettering (Mr. Mitchison) still has sinister suspicions. There is no question of the Commission mismanaging these assets and ruining local authorities.

Mr. Mitchison

I really never suggested anything of the sort, and the right hon. Gentleman knows that perfectly well. The point is that the terms on which these new towns must be handed over to somebody—and I say to the local authorities—will have to be settled in future, and it is to those terms that this question is relevant.

Mr. Brooke

The hon. and learned Member appears to think that by the use of this provision in the Bill some sinister action is planned against the local authorities. There is nothing of the kind in it at all. As I indicated before, we are simply saying that the taxpayers as a whole, rather than the people living in the new towns alone, must be the residuary legatees of the Commission. The hon. Member for Dundee, East (Mr. G. M. Thomson) must know that a direct comparison cannot be established between an advance to a company which will form but a small part of its liabilities and these advances from the Treasury to development corporations, and now to the Commission, which will be the whole of the liabilities. That is why I said that we must think of the Treasury in terms of the shareholder carrying the risk as well as the debenture holder.

Mr. G. M. Thomson

I am sure that the right hon. Gentleman will realise that in the case of Colvilles the taxpayers' capital is about two-thirds of the total sums provided by private shareholders who will ultimately share the profits and who are the minority shareholders.

Mr. Brooke

Whatever happens in the new towns only one body has made the advances and provided the whole of the capital, and that is the Exchequer. Therefore, the Exchequer carries a

special risk in these cases. I have no more to say than that I am not speaking now as Financial Secretary to the Treasury but as Minister of Housing and Local Government with the interests of the new towns in my mind the whole of the time. I say that the new towns could not justify themselves to the public as a whole if they were to disregard their obligations to the taxpayers as a whole, and we could not have a situation arising in which it was impossible to do anything with the eventual capital surplus except put it back into the new towns. The taxpayers as a whole must be the residuary legatees.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 175, Noes 206.

Division No. 155.] AYES [8.8 p.m.
Abse, Leo Hale, Leslie Moyle, A.
Ainsley, J. W. Hall, Rt. Hn. Glenvil (Colne Valley) Mulley, F. W.
Allaun, Frank (Salford, E.) Hamilton, W. W. Noel-Baker, Francis (Swindon)
Allen, Scholefield (Crewe) Hannan, W. Oliver, G. H.
Awbery, S. S. Hastings, S. Owen, W. J.
Bacon, Miss Alice Hayman, F. H. Paget, R. T.
Bence, C. R- (Dunbartonshire, E.) Herbison, Miss M. Parker, J.
Benson, Sir George Hobson, C. R. (Keighley) Paton, John
Blackburn, F. Holman, P. Pearson, A.
Blyton, W. R. Houghton, Douglas Peart, T. F.
Bottomley, Rt. Hon. A. G. Howell, Charles (Perry Barr) Pentland, N.
Bowden, H. W. (Leicester, S. W.) Howell, Denis (All Saints) Plummer, Sir Leslie
Bowles, F. G. Hughes, Cledwyn (Anglesey) Popplewell, E.
Boyd, T. C. Hughes, Emrys (S. Ayrshire) Price, J. T. (Westhoughton)
Braddock, Mrs. Elizabeth Hughes, Hector (Aberdeen, N.) Proctor, W. T.
Brockway, A. F. Hunter, A. E. Pursey, Cmdr. H.
Broughton, Dr. A. D. D. Irvine, A. J. (Edge Hill) Randall, H. E.
Brown, Rt. Hon. George (Belper) Irving, Sydney (Dartford) Rankin, John
Brown, Thomas (Ince) Isaacs, Rt. Hon. G. A. Redhead, E. C.
Burke, W. A. Janner, B. Robens, Rt. Hon. A.
Burton, Miss F. E. Jay, Rt. Hon. D. P. T. Roberts, Goronwy (Caernarvon)
Butler, Herbert (Hackney, C.) Johnson, James (Rugby) Robinson, Kenneth (St. Pancras, N.)
Callaghan, L. J. Jones, Rt. Hon. A. Creech (Wakefield) Ross, William
Carmichael, J. Jones, David (The Hartlepools) Royle, C.
Champion, A. J. Jones, Jack (Rotherham) Shinwell, Rt. Hon. E.
Chetwynd, C. R. Jones, J. Idwal (Wrexham) Silverman, Julius (Aston)
Clunie, J. Kenyon, C. Simmons, C. J. (Brierley Hill)
Coldrick, W. Key, Rt. Hon. C. W. Skeffington, A. M.
Collick, P. H. (Birkenhead) King, Dr. H. M. Slater, Mrs. H. (Stoke, N.)
Craddock, George (Bradford, S.) Lawson, G. M. Slater, J. (Sedgefield)
Cronin, J. D. Ledger, R. J. Smith, Ellis (Stoke, S.)
Darling, George (Hillsborough) Lee, Frederick (Newton) Snow, J. W.
Davies, Ernest (Enfield, E.) Lewis, Arthur Sorensen, R. W.
Davies, Harold (Leek) Lindgren, G. S. Soskice, Rt. Hon. Sir Frank
Deer, G. Logan, D. G. Sparks, J. A.
Delargy, H. J. Mabon, Dr. J. Dickson Spriggs, Leslie
Diamond, John McAlister, Mrs. Mary Steele, T.
Dodds, N. N. MacColl, J. E. Stewart, Michael (Fulham)
Ede, Rt. Hon. J. C. MacDermot, Niall Stonehouse, John
Edwards, Rt. Hon. John (Brighouse) McInnes, J. Stones, W. (Consett)
Edwards, Robert (Bilston) McKay, John (Wallsend) Summerskill, Rt. Hon. E.
Evans, Edward (Lowestoft) MacMillan, M. K. (Western Isles) Swingler, S. T.
Finch, H. J. (Bedwellty) Mahon, Simon Sylvester, G. O.
Fitrh, A. E. (Wigan) Mallalieu, E. L. (Brigg) Symonds, J. B.
Fletcher, Eric Mann, Mrs. Jean Taylor, Bernard (Mansfield)
Foot, D. M. Marquand, Rt. Hon. H. A. Thomas, George (Cardiff)
Forman, J. C. Mason, Roy Thomas, Iorwerth (Rhondda, W.)
Fraser, Thomas (Hamilton) Mendelson, J. J. Thomson, George (Dundee, E.)
George, Lady Megan Lloyd (Car'then) Mikardo, Ian Thornton, E.
Gibson, C. W. Mitchison, G. R. Timmons, J.
Gordon Walker, Rt. Hon. P. C. Morris, Percy (Swansea, W.) Ungoed-Thomas, Sir Lynn
Grenfell, Rt. Hon. D. R. Mort, D. L. Usborne, H. C.
Griffiths, Rt. Hon. James (Lianelly) Moss, R. Viant, S. P.
Warbey, W. N. Wilcock, Group Capt. C. A. B. Willis, Eustace (Edinburgh, E.)
Watkins, T. E. Wilkins, W. A. Winterbottom, Richard
Weltzman, D. Willey, Frederick Woodburn, Rt. Hon. A.
Wells, Percy (Faversham) Williams, David (Neath) Yates, V. (Ladywood)
Wheeldon, W. E. Williams, Rt. Hon. T. (Don Valley)
White, Henry (Derbyshire, N. E.) Williams, W. R. (Openshaw) TELLERS FOR THE AYES:
Mr. John Taylor and Mr. Holmes
Agnew, Sir Peter Grant-Ferris, Wg Cdr. R.(Nantwich) Mott-Radclyffe, Sir Charles
Aitken, W. T. Green, A. Nabarro, G. D. N.
Alport, C. J. M. Gresham Cooke, R. Nairn, D. L. S.
Amory, Rt. Hn. Heathcoat (Tiverton) Grimond, J. Neave, Alrey
Arbuthnot, John Grimston, Hon. John (St. Albans) Nicholson, Sir Godfrey (Farnham)
Ashton, Sir Hubert Grimston, Sir Robert (Westbury) Noble, Michael (Argyll)
Atkins, H. E. Grosvenor, Lt.-Col. R. G. Nugent, Richard
Baldock, Lt.-Cmdr. J. M. Gurden, Harold O'Neill, Hn. Phelim (Co. Antrim, N.)
Baldwin, Sir Archer Harris, Reader (Heston) Orr, Capt. L. P. S.
Balniel, Lord Harrison, A. B. C. (Maldon) Page, R. G.
Barlow, Sir John Harvey, Sir Arthur Vere (Macclesf'd) Pannell, N. A. (Kirkdale)
Batsford, Brian Heald, Rt. Hon. Sir Lionel Partridge, E.
Baxter, Sir Beverley Heath, Rt. Hon. E. R. G. Peel, W. J.
Beamish, Col. Tufton Henderson, John (Cathcart) Peyton, J. W. W.
Bell, Ronald (Bucks, S.) Henderson-Stewart, Sir James Pickthorn, Sir Kenneth
Bennett, Dr. Reginald Hicks-Beach, Maj. W. W. Pike, Miss Mervyn
Bevins, J. R. (Toxteth) Hill, John (S. Norfolk) Pilkington, Capt. R. A.
Biggs-Davison, J. A. Hirst, Geoffrey Pitman, I. J.
Bingham, R. M. Hobson, John (Warwick & Leam'gt'n) Pitt, Miss E. M.
Birch, Rt. Hon. Nigel Holt, A. F. Pott, H. P.
Bishop, F. P. Hornby, R. P. Powell, J. Enoch
Black, Sir Cyril Hornsby-Smith, Miss M. P. Price, David (Eastlelgh)
Body, R. F. Horsbrugh, Rt. Hon. Dame Florence Price, Henry (Lewisham, W.)
Boyd-Carpenter, Rt. Hon. J. A. Howard, Gerald (Cambridgeshire) Prior-Palmer, Brig. Sir Otho
Boyle, Sir Edward Howard, John (Test) Ramsden, J. E.
Brewis, John Hughes Hallett, Vice-Admiral J. Rawlinson, Peter
Bromley-Davenport, Lt.-Col. W. H. Hughes-Young, M. H. C. Redmayne, M.
Brooke, Rt. Hon. Henry Hutchison, Sir James (Scotstoun) Rees-Davies, W. R.
Brooman-White, R. C. Hylton-Foster, Rt. Hon. Sir Harry Renton, D. L. M.
Browne, J. Nixon (Craigton) Iremonger, T. L. Roberts, Sir Peter (Heeley)
Bryan, P. Irvine, Bryant Godman (Rye) Robertson, Sir David
Bullus, Wing Commander E. E. Jenkins, Robert (Dulwich) Robinson, Sir Roland (Blackpool, S.)
Burden, F. F. A. Jennings, J. C. (Burton) Robson Brown, Sir William
Butcher, Sir Herbert Jennings, Sir Roland (Hallam) Ropner, Col. Sir Leonard
Butler, Rt. Hn. R. A. (SaffronWalden) Johnson, Dr. Donald (Carlisle) Russell, R. s.
Carr, Robert Joseph, Sir Keith Scott-Miller, Cmdr. R.
Clarke, Brig. Terence (Portsmth, W.) Kerr, Sir Hamilton Sharples, R. C.
Conant, Maj. Sir Roger Kirk, P. M. Shepherd, William
Cooke, Robert Lancaster, Col, C. G. Smithers, Peter (Winchester)
Cordeaux, Lt.-Col. J. K. Leburn, W. G. Speir, R. M.
Corfield, F. V. Legh, Hon. Peter (Petersfield) Stanley, Capt. Hon. Richard
Courtney, Cdr. Anthony Lindsay, Hon. James (Devon, N.) Stevens, Geoffrey
Crosthwaite-Eyre, Col. O. E. Linstead, Sir H. N. Steward, Harold (Stockport, S.)
Cunningham, Knox Lloyd, Maj. Sir Guy (Renfrew, E.) Storey, S.
Dance, J. C. C. Longden, Gilbert Stuart, Rt. Hon. James (Moray)
Deedes, W. F. Loveys, Walter H. Studholme, Sir Henry
de Ferranti, Basil Lucas, Sir Jocelyn (Portsmouth, S.) Summers, Sir Spencer
Dodds-Parker, A. D. Lucas-Tooth, Sir Hugh Taylor, William (Bradford, N.)
Donaldson, Cmdr. C. E. McA. McAdden, S. J. Teeling, W.
Doughty, C. J. A. Maodonald, Sir Peter Temple, John M.
Drayson, G. B. Mackeson, Brig. Sir Harry Thomas, Leslie (Canterbury)
du Cann, E. D. L. McLaughlin, Mrs. P. Thorneycroft, Ht. Hon. P.
Duthie, Sir William Maclean, Sir Fitzroy (Lancaster) Thornton-Kemsley, Sir Colin
Elliott, R. W.(Ne'castle upon Tyne, N.) McLean, Neil (Inverness) Tiley, A. (Bradford, W.)
Erroll, F. J. Macleod, Rt. Hn. Iain (Enfield, W.) Turton, Rt. Hon. R. H.
Fell, A. MacLeod, John (Ross & Cromarty) Tweedsmuir, Lady
Finlay, Graeme Macpherson, Niall (Dumfries) Vosper, Rt. Hon. D. P.
Fisher, Nigel Maddan, Martin Wakefield, Edward (Derbyshire, W.)
Forrest, G. Maitland, Hon. Patrick (Lanark) Wall, Patrick
Galbraith, Hon. T. G. D. Manningham-Buller, Rt. Hon. Sir R. Ward, Dame Irene (Tynemouth)
Gammans, Lady Markham, Major Sir Frank Webster, David
Garner-Evans, E. H. Marlowe, A. A. H. Whitelaw, W. S. I.
Gibson-Watt, D. Marples, Rt. Hon. A. E. Williams, Paul (Sunderland, S.)
Glover, D. Marshall, Douglas Wills, Sir Gerald (Bridgwater)
Godber, J. B. Mathew, R. Woollam, John Victor
Goodhart, Philip Mawby, R. L. Yates, William (The Wrekin)
Gough, C. F. H. Medlicott, Sir Frank
Gower, H. R. Milligan, Rt. Hon. W. R. TELLERS FOR THE NOES:
Graham, Sir Fergus Molson, Rt. Hon. Hugh Colonel J. H. Harrison and
Grant, Rt. Hon. W. (Woodside) Morrison, John (Salisbury) Mr. Chichester-Clark.