LOCAL GOVERNMENT (FINANCIAL PROVISIONS) (SCOTLAND) BILL

HC Deb 13 December 1962 vol 669 cc593-652

Order for Second Reading read.

3.56 p.m.

The Secretary of State for Scotland (Mr. Michael Noble)

I beg to move, That the Bill be now read a Second time.

I am very glad to rise to move the Second Reading of a Bill which provides for the continuance of the Exchequer equalisation grant to Scottish local authorities and improves its distribution, and, at the same time, sets a limit to the extent to which the Exchequer—that is, of course, the taxpayer in general—has to make up the uncontrolled deficit on housing accounts which many Scottish local authorities incur. Without this Bill, the payment of Exchequer equalisation grant in Scotland would have to cease from 15th May next year. With the Bill, we shall be able to go on paying it according to principles long established, and, so far as I know, accepted by local authorities.

For some years after the principle of Exchequer contribution towards the rating resources of the poorer authorities was established in 1948, successive Governments had to cast around for a fair distribution of the grant available, as between England and Wales on the one hand, and Scotland on the other. In 1956, we arrived at a formula which I believe has commanded general acceptance ever since. This fixes the total grant at such a figure that if the expenditure per head of weighted population in Scotland were the same as in England and Wales, the amount to be paid out of rates after grant has been paid would be the same per head of population in both countries. We thereby ensure that local authorities in Scotland and in England and Wales with similar financial resources and responsibilities get the same amount of grant.

Let me make it quite clear that the Exchequer does not set out to equalise the actual amount of rates levied by local authorities in the two countries; this, under the system of local government, which we all wish to maintain, is a matter for each local authority to decide for itself in the light of local circumstances, under any guidance or limitations that may be imposed by Statute. And this is where the problem arises. Once the percentage of grant which a local authority is to receive has been determined under the agreed formula, be it 5 per cent. or 55 per cent. the Exchequer at present contributes to all the authority's finances in that proportion, Thus the Exchequer pays part of the cost of housing deficits as well as all other services. Where a local authority's housing deficit is magnified by the charging of rents well below what their tenants are able to pay, it is entirely unreasonable that the general taxpayer, through the Exchequer, should be expected to contribute in the same proportion as he contributes towards the cost of the rent of the local authority's services.

This seems to me a perfectly fair proposal. It reduces the grant income of local authorities by much less than the figures given in the P.A.C. report—in-deed by £900,000 in 1963–64. But we must draw a line where the contribution is swollen by unduly high deficits arising out of a misguided rent policy.

This is the situation which was examined by the Committee of Public Accounts in Session 1960–61. In plain language its Report observes that, if rents are unduly low, housing deficits and expenditure ranking for grant are correspondingly greater, and that rental income in Scotland, as a proportion of housing costs, is less than half that in England and Wales, while the rate contribution is more than double. In consequence, and notwithstanding the very considerable total of regular housing subsidies paid by the Exchequer, a substantial proportion of equalisation grant reflects housing deficits. In 1958–59 some £2.4 million out of grants totalling £13.7 million paid to 78 major authorities arose in this way.

The House may be interested to know that in 1961–62 the corresponding figures were £2.7 million out of the grant of £14.4 million which these 78 authorities received. Finally, the Committee came to a conclusion which is sufficiently brief and straightforward to quote in full. It said: Your Committee are concerned at the extent to which housing revenue deficits resulting from low rents are met by the Exchequer under the present statutory formula for calculating Equalisation Grant. The formula is due to be reviewed before May, 1963, and they accordingly recommend that early consideration should be given to the exclusion from the calculation of Exchequer Equalisation Grant of housing deficits which are due to the charge of unreasonably low rents. This is the Report of a Committee of this House. It is not a Report with any political bias. If the Government had failed to bring in a Bill to meet the recommendations of the Committee, the House would have been entitled to ask the reason. In accepting the recommendation, and giving effect to it in the present Bill, the Government have in mind that the question of the proper level of council house rents is not a question of rich against poor—

Mr. Thomas Fraser (Hamilton)

The right hon. Gentleman says that he is giving effect to a recommendation of a Committee of the House, but, in the Bill, is it not he who is construing what is meant in the recommendation by the expression "unreasonably low rents"?

Mr. Noble

If the hon. Member will wait for a minute, I will come to that point

In general, council houses are not allocated on the grounds of the tenants' income. It therefore by no means follows that the ratepayer and taxpayer, who have to make up any deficit in the cost of housing so far as it is not met by rent, are better able to bear the burden than the tenants. In fact, the reverse is frequently true. I fail to understand why maintaining rents at an artificially low level is regarded as a measure of social justice. In reality, it is the subsidisation of one fortunate section of the population by the remainder, without regard to their ability to contribute.

It is not, however, the purpose of this Bill to fix rents. What we have to do is to fix a point beyond which deficits due to low rents will not be partly met by the taxpayer, who has no direct control over the local authority's rent policy, but by the citizens of the area. What standard do we set for this purpose? The Public Accounts Committee did not regard it as its function to suggest precisely what standard should be applied—and this is, I think, the hon. Gentleman's point—but it did note that if housing deficits for the purpose of calculating Exchequer equalisation grant were restricted to one-third of housing subsidies, the grant would have been reduced by approximately £1.6 million in 1959–60.

We have not, in the Bill, adopted this method of defining what proportion of housing deficits rank for grant. This is because the amount of housing subsidies received by a local authority depends not only on the number of houses, but also on the years in which they were built, and it would, therefore, be quite arbitrary to limit the deficit to a given proportion of the subsidies. Instead, in the Bill we propose a standard based on the new valuations, which must be regarded as the best current estimate of the fair rental value of houses in Scotland.

The Bill provides that equalisation grant is ultimately to be restricted to what would have been payable if net rent income—that is, rents less rebates—had averaged 95 per cent. of the gross value of the houses. In the first and second years, however, the assumed average will be 85 per cent. and 90 per cent., respectively. I cannot regard this in any sense as a deduction from the amount of grant which is properly due to Scotland. The Public Accounts Committee has pointed out that certain Scottish local authorities are obtaining more grant than they are reasonably entitled to, and to restrict them to what they ought to get cannot, I suggest, be considered a deprivation. If, in fact, rents are raised to the minimum level embodied in the Bill, there will be no loss of grant under Clause 3.

I agree, of course, that with higher rent incomes there will be smaller deficits, attracting grant in the ordinary way. But the loss of grant on this score is a relatively small part of the increased rent income. An authority with substandard rents and 25 per cent. equalisation grant, for example, keeps three-quarters of the proceeds of the rent increases.

For Scotland as a whole, where the average grant is 20 per cent., local authorities would gain four times as much as the Exchequer. Since the object is to prevent local authorities obtaining more grant than they are reasonably entitled to, the Government could not, I think, entertain the suggestion that the amount of grant recovered from them should be redistributed to Scottish authorities as a whole, for by that means Scottish authorities as a whole would be obtaining extra grant due to the low rent policies of some of them a state of affairs which, surely, no one could defend.

The local authorities which might have stood to gain under such an arrangement will, under the Bill, still get the full amount of grant to which they are entitled under the agreed formula. Under the Bill we are restoring the position to what it would always have been if all local authorities in Scotland had been willing to adopt a rent policy which more equitably distributed the cost of housing between tenants on the one hand, and ratepayers and taxpayers on the other—

Mr. Hector Hughes (Aberdeen, North)

The Secretary of State far Scotland has talked about equitable distribution, but is not the following the effect of the Bill? Certain contracts of tenancy were entered into by local authorities with certain tenants, charging certain rents. The Bill proposes to break those tenancies, reject those tenants, and substitute new rents. In effect, is not the Bill an outrage on the existing law of contract?

Mr. Noble

The hon. and learned Gentleman raised this same point in the Scottish Grand Committee, but I do not accept his idea on this matter—

Mr. Hughes

Answer it, answer it.

Mr. Noble

But for this, the provisions in the Bill limiting grant contribution due to low rents would never have been necessary—

Mr. Hughes

rose—

Mr. Speaker

Order. I do not understand the Minister to be giving way. If the Minister does not give way, the hon. and learned Member must not persist in trying to speak on his feet.

Mr. Hughes

I have asked a perfectly serious and sensible question, Mr. Speaker.

Mr. Noble

I agree that the hon. and learned Gentleman has asked a perfectly serious question. He also asked it when the Scottish Grand Committee debated the principle of the Bill, and was answered by my hon. Friend.

But for this, the provisions in the Bill limiting grant contributions due to low rents would never have been necessary. To the extent that local authorities realise that unduly low rents are not in the interests of the inhabitants of their area as a whole, these provisions will cease to operate, and their purpose will have been secured.

In moving the Second Reading of the Bill, I have concentrated on the provisions which have attracted most attention, and which are the specific points covered by the reasoned Amendment, but I cannot conclude without reminding the House that there is much else in the Bill that is of importance to local authorities and ratepayers. In a number of ways, it is designed to effect improvements in the rating and valuation system of Scotland—some of them of a technical nature, but essential, none the less, in the light of experience.

For these reasons, as well as for the provisions which I have dealt with at more length, I commend the Bill to the House.

4.10 p.m.

Miss Margaret Herbison (Lanarkshire, North)

I beg to move, to leave out from "That" to the end of the Question and to add instead thereof: this House declines to give a Second Reading to a Bill the effect of which is to reduce considerably the total Exchequer Equalisation Grant paid to Scottish local authorities. It is not surprising that the Secretary of State devoted all his speech to Clause 3 of the Bill. He was right to do so, since it was because of our strong feelings about the Clause and certain other provisions that we put down our Amendment. After having two mornings on the Bill in the Scottish Grand Committee, we decided that it was imperative, for two reasons, to bring the matter to the Floor of the House.

In the first place, the Secretary of State, when introducing the Bill, gave a hopelessly inadequate explanation of it. We felt that, at least from that day until this afternoon, he would have an opportunity to get to know his own Bill in order to give us a clear explanation. As regards the Clause with which he dealt, his explanation was certainly clearer, but it has done nothing whatever to convince us that our opposition its not justly founded. In the second place, we have brought the matter to the Floor of the House because we opposed so strongly certain provisions of the Bill that we felt we ought to register by vote our protest against it.

The Bill is called the Local Government (Financial Provisions) (Scotland) Bill. Its effect will be to put local authorities in far worse financial straits than ever before. Indeed, many of them do not know now how they are to finance all the projects which they must carry out because of the duties already put on them by legislation.

The rubric to Clause 3 reads: Reduction of Exchequer Equalisation Grants in respect of low rent income. If I heard the Secretary of State aright, he said that this would amount to £934,000, almost £1 million, in one year.

Mr. Noble

To keep the record straight, it is £900,000.

Miss Herbison

It is close on £1 million by which the local authorities will be worse off compared with their position today, which is difficult enough.

The right hon. Gentleman said that he could not understand how we on this side could regard unreasonably low rents as social justice. We have never said that unreasonably low rents had anything to do with social justice. It is wrong for the right hon. Gentleman, after our view was made clear in Committee, again to trot out that old "red herring". Does the Secretary of State regard the high interest rates imposed on local authorities for housing, for school building, and for all other purposes, as social justice? Does he regard as social justice the heavy burden which many ill-off people in Scotland have to carry in rates because of high interest charges? We have a right to ask him to answer that question.

I tell him again, as he was told in Committee, that few, if any, hon. Members on this side are opposed to the payment of reasonable rents. It all depends on what is meant by reasonable or unreasonable rents. The right hon. Gentleman tells us that the recommendation of the Public Accounts Committee was against unreasonably low rents. Is he sure that the rent which he will require under the provisions of Clause 3—85 per cent. of gross annual value, 90 per cent. the following year and 95 per cent. thereafter—is reasonable, particularly when one considers the different valuations throughout Scotland? The gross annual value of a house, say, £54, in one area which he would regard as the basis for a reasonable rent might be only a little over £30 in respect of an exactly similar house in another area. How is that to be reconciled with his requirement for reasonable rents? I have said that few, if any, of my hon. Friends are against reasonable rents, but I think that I can safely say that not one of my hon. Friends is ready to accept the dictatorial methods of the Secretary of State on the subject of rents.

In Committee, on 27th November, the Secretary of State said at the beginning of his speech: A healthy system of local government is an essential part of community life today. This means that local interest, local initiative and local responsibility must be reconciled with Exchequer financial support of local authorities on a massive scale."—[OFFICIAL, REPORT, Scottish Grand Committee, 27th November, 1962; c. 5.) The Government have decided that the Exchequer financial support of local authorities shall be decreased wherever possible and as much as possible. There is no doubt about that. What the Secretary of State or any member of his Government says about local initiative and local responsibility is a farce, not only because of the provisions of this Bill but because of the provisions of previous Bills. The Government have taken from the local authorities in quite a number of fields the initiative and responsibility which they should have.

By the Housing (Scotland) Act, 1962, the then Secretary of State took powers to impose on every local authority in Scotland any level of rents which he wished to impose. I put this question to the present Secretary of State. Since he already has those powers by Statute, why is he asking for the powers in Clause 3? I can make a good guess, and it will be the guess of anyone who has studied the matter. At the last General Election, Scotland showed very clearly that it wanted none of this Government. Their record since 1959 has proved disastrous for the Scottish people. If the Secretary of State were to use the power which he has under the Housing Act to increase rents, Scottish people would see clearly that it was he and his Government who were responsible for, perhaps, unreasonably high rents being charged.

Some time ago the Secretary of State was appointed as the boss of the Scottish Unionist Party, because it was hoped that he would retrieve the Conservative Party's fortunes in Scotland. There is no sign of its fortunes being retrieved in Scotland rather the opposite. Now, as Secretary of State, he realises that if he had used the powers in the Housing Act it would have been too blatant, too easily seen, where the responsibility lay. He therefore resorted to the hole-and-corner method set out in Clause 3 because he thought that it would be more difficult for local authorities in Scotland to get over to the electorate where the blame for unreasonably higher rents should lie.

The right hon. Gentleman has explained very carefully the provisions in Clause 3. If a council's net housing income is less than a certain percentage of the gross annual value of its houses, a deduction will be made. That was stated very clearly by the Under-Secretary of State when he wound up the debate upstairs. He was asked what consideration had been given to the question of rent rebates, and he said: We have allowed for rebates by not prescribing 100 per cent. of gross value as the determining figure."—[OFFICIAL REPORT, Scottish Grand Committee, 29th November, 1962; c. 104.] In three years' time the determining figure will be 95 per cent. of the gross annual value. The hon. Gentleman says that this paltry figure of 5 per cent. should take care of all rent rebates.

It is scandalous for the Government to take that line, particularly in a country like Scotland. Do not the Secretary of State and the Under-Secretary of State know about present conditions in Scotland? Do not they realise that, if every local authority in Scotland were to raise its rents to the gross annual value, it would be necessary to give many thousands of tenants a considerable rent rebate? They do not seem to be aware of that.

Mr. John Brewis (Galloway)

Would not the hon. Lady agree that many people living in council houses in Scotland could well afford to pay more than the gross annual value?

Mr. E. G. Willis (Edinburgh, East)

Why should they pay more if that is the fair rent?

Miss Herbison

The Government have said that the purpose of the Bill is to ensure that people in Scotland pay the gross annual value. That is what we are dealing with in the Bill. I am dealing not with people who might be able to pay more but with people who will definitely not be able to pay any thing like the gross annual value.

Let me say a few words about these people. Take the old people in council houses. The majority of them have to be housed by the county councils and town councils. I am very proud of what our local authorities have done in housing our odd people. It is a joy to go into their two-room houses, with modern kitchenettes and bathrooms, but very few of the old people occupying those houses could afford to pay anything like rents which will be asked for under Clause 3.

What will be the position of the 94,000 unemployed people in our country living on a miserable pittance compared with the cost of living. The Government may say, "They can go to the National Assistance Board, which will pay their rents." But not all of them get money from the Board. It is of the greatest importance that local authorities should consider what rent unemployed people can afford to pay.

We have a large majority of low-wage earners in Scotland. My hon. Friend the Member for Paisley (Mr. J. Robertson) gave some figures when we were discussing the Bill upstairs. For another occasion, I looked up the average earnings of people in the Midlands, in London and in the south of England. We are always having thrown at us the rents that people in England pay for council houses compared with the rents that people in Scotland pay for council houses, but never do the Government take into account the very big gap between the average earnings of people in England and the average earnings of people in Scotland. Earnings play a very important part in considering what a person can afford to pay in rent.

If we want a low-wage earner with a wife and family of small children to have all the benefits of living in a good council house, the only way that they will be able to enjoy those benefits will be through an adequate rent rebate scheme operated by the local authority. I am proud of what our local authorities have done in housing our old people, although it is not nearly enough because of the high interest rate policy of the Government. I am also determined that every young family in Scotland should have a decent house in which to live which they can make into a fine home. If the Government's policy as outlined in Clause 3 is carried out, it will be impossible for local authorities to operate a good rent rebate scheme. I do not know whether we shall be able to do anything about this because of the Money Resolution, but I assure the Government that we shall return to it in Committee.

We are told that if an authority does not bring its rents up to the amount that the Secretary of State thinks right, it will have a deduction made from its Exchequer equalisation grant. This is the meanest way I have ever known by which a Government enforced their policy on local authorities in Scotland. Where is the money going to? It is not being used for other purposes in Scotland. It is being sucked back into the Chancellor of the Exchequer's coffers. Every penny that local authorities can possibly get from taxation is necessary for the job that needs to be done in their areas, even to give them a facelift. I know about this in my own constituency. We have had the Toothill Report and other reports about what should be done to attract industry to Scotland. But everything that the Government do is another step towards making it impossible to achieve that object.

I now come to Clauses 8 and 9, which deal with the weighting of population. On 29th November, the Under-Secretary told us that Although these areas have heavy commitments by way of schools, water and sewerage schemes and so on, their rating resources are rising through the building of new houses and other properties. It was therefore felt that the weighting for increased population should be halved, so halving the extra grant, which would allow a special weighting to be given for the first time to certain areas of decreasing population."—[OFFICIAL REPORT, Scottish Grand Committee, 29th November, 1962; c. 101.] Surely, if the Government felt it necessary, as I think it to be, to give a special weighting—which means extra money—to those areas with a decreasing population, the Secretary of State should have found that money from the Chancellor of the Exchequer rather than use this mean and miserable method of taking it away from other local authorities in Scotland. What a reason to give, that because some areas had a decreasing population and, for that reason, they needed financial aid, the Secretary of State and the Government look around and say "Where can we get this extra money that we feel is necessary? Not from the more equitable form of taxation. We will go to other local authorities"—which, I again stress, are financially hard-pressed— "and we will take tram those local authorities the money to give to the others." So often do the Government rob Peter to pay Paul, filching much-needed finance from local authorities.

My own County of Lanark will lose £246,264, nearly £¼ million, under the provisions of the Bill and Midlothian will lose £146,137. These are two important local authorities who need to attract much more industry to their areas, local authorities who, if they are to do that job, must ensure that their areas are made as attractive as possible. Only last week, Lanark County Council decided to do a job which should be done by the Government. I am delighted, however, that Lanark had the "guts" to do it. The County Council decided to build a factory on its own. I wonder why Lanark did not apply to the Government?

Mr. James Dempsey (Coatbridge and Airdrie)

They would be wasting their time.

Miss Herbison

The reason for not coming to the Government is that if the Board of Trade gets its hands on anything, the delay is so long that the industrialists who wanted the factory might have gone elsewhere. Therefore, Lanarkshire will do the job itself. I could not praise Lanarkshire highly enough for doing it. This, however, will take more money to build something that the Government themselves should be doing, and yet it is that kind of authority which, by the provisions of the bill, will lose £¼ million. Other local authorities who are also much in need of work will be in the same position.

These two provisions of Clause 3 and Clauses 8 and 9 are miserable. They show the attitude of the Government to local authorities. They show that the Government simply do not have a clue about Scotland's needs. They show that the Government have no idea how our Scottish people are having to live. The sooner not only these Ministers disappear, but the Government disappear, the better it will be for Scotland and our Scottish people.

4.35 p.m.

Sir John Gilmour (Fife, East)

In supporting the Second Reading of the Bill, I should like to point out that to my mind any charge against the Government that they are not looking after the interests of Scottish local authorities is not well-founded. Over the last ten years, the proportion of help which the Government have given to local authorities has risen from 36 per cent. to nearly 44 per cent. That does not show that the Government are in any way unaware of the growing need for help which Scottish local authorities undoubtedly have, as do local authorities in England also.

I am certain that progress has been made over the last ten years in the amount of help from the Exchequer to local authorities. It may be that in future we have to do more. I for one would be happy, for example, to see a change so that the whole of teachers' salaries should he paid out of the Exchequer instead of being proportionately paid by the ratepayers. Undoubtedly, over the coming years, the cost of education will rise and the burden falling upon ratepayers will increase. This is something which it will be necessary for us to consider.

The Bill deals with the immediate job that was necessary of extending the Exchequer equalisation grant, as has been agreed by the working party, and that is the basis behind it.

Mr. Willis

It does not extend it, it reduces it.

Sir J. Gilmour

No. The total amount to be paid is still increasing and is likely to increase in future. It may be that in certain circumstances, under Clause 3, it could be reduced if people do not do certain things, but this is not of necessity a Measure which sets out to reduce the help that the Government are giving.

Mr. T. Fraser

Did the hon. Member not listen to his right hon. Friend, who made it abundantly clear that whether local authorities did the right thing or not, they would lose?

Sir J. Gilmour

They will not of necessity go on losing for all time.

Mr. Willis

Scotland will lose it.

Sir J. Gilmour

I certainly welcome the provision—

Mr. William Baxter (West Stirlingshire)

Apparently, the hon. Member does not understand that the local authorities' total grant will be reduced by at least £900,000. Does not this have a bearing on the logic of his argument? He seems to have based himself upon a false premise in thinking that the grant for Scotland would be increased when it will be reduced. Surely, that must considerably alter the hon. Member's point of view.

Sir J. Gilmour

The total amount by which the Government are helping local authorities is not being reduced. The proportion of the help given by the Government in general is increasing and has increased over the last years.

Mr. Ross

No. The formula is exactly the same.

Sir J. Gilmour

I agree that the formula for the Exchequer equalisation grant is being continued.

Mr. Dempsey

According to local authority budgets during the last financial year, local authorities are paying much more of the costs of local services than they were in the past while the Government's contribution is much less.

Sir J. Gilmour

I do not agree with that interpretation. I am certain that over the last ten years the proportion which the Government have paid is on the increase This point can no doubt be explained by my hon. Friend.

I also welcome Clause 2, because by transferring to the penny rate product it protects those authorities which might otherwise suffer under the mandatory relief, which we introduced last year in the Local Government (Financial Provisions, etc.) (Scotland) Act, for certain schools, charities and other things. But there is no doubt that the debate centres round Clause 3, and surely the question is not whether rents should be increased but to what level they should be increased.

One trouble is that the figures available for all the significant local authorities rents are some 9 or 10 months out of date. The figures were published last February. One can see from them wide discrepancies between rates in different parts of Scotland with comparable circumstances of employment and wages. It is for that reason that the Government's action in trying to make certain that a fair level of rents is achieved is in the interests of the ratepayers of Scotland as a whole.

We have the responsibility, as elected representatives, to look after the interests not only of those living in council houses, but of those who live in other houses whose rates are heavier because certain people are not paying their share of a burden which is not spread equitably. Clause 3 seeks to spread the burden equitably, and it should be supported.

My own county, Glenrothis, has 3,000 houses, 475 of which at the moment are subject to rebate, the rent being about £43 and the rebate £10, bringing the rent down to £33. At the same time, in the county of Fife, rents are around £18. It is this sort of discrepancy which gives rise to the argument for an equitable spread of the burden.

Mr. Ross

How much have the landlords of Fife been relieved of rates in the last few years? Who is paying their rates now for them?

Sir J. Gilmour

I do not know whether the hon. Gentleman means landlords of agricultural property, but recent changes in rates have meant that farmers are paying a higher rate burden than they used to.

Mr. Ross

I did not think that my enunciation was so very poor that any- one could think that I said farmers. I referred to landowners.

Sir J. Gilmour

Probably they all come under the same umbrella. If they own houses which were previously derated then they are now paying rates at a higher level. I myself am paying a considerably greater proportion of rates than I did 4 or 5 years ago, so that I am making a bigger contribution, as are my neighbours, than in the past.

Mr. Ross

It is not true.

Sir J. Gilmour

I can show the hon. Gentleman the figures if he is interested.

Miss Herbison

If the hon. Gentleman is ready to show those figures, it would also be interesting for him to show us how much he gets in farming subsidies to help him pay the rates.

Sir J. Gilmour

That is another question, dealing with support for the agricultural industry in general. The hon. Lady said that the local authorities will be in far greater financial straits, but I think that the ratepayers will be in far bigger financial straits unless Clause 3 is included in the Bill. This is the only way in which we can get an equitable spread of the burden among all householders, whether owner-occupiers or tenants of houses owned by local authorities or private individuals.

Clause 5 makes a reduction of, and eventually irons out altogether, the transitional grants which were given after the last review. It seems to me that there have been some very violent changes in the Exchequer equalisation grant as a result of the recent revaluation, and there is some case for cushioning for authorities which have had a very sudden change brought upon them. The second part of the Bill will perhaps not cause so much excitement in Committee as the first part.

On the other hand, it is fair to point out that Part 2 brings certain amendments to the Rating and Valuation (Scotland) Act, 1956, and that there are various points, particularly affecting Clause 18, which might have an effect not only on me as a farmer—and I declare my interest here—in the question of rate payment on agricultural houses standing empty, but also an effect on local authorities with houses standing furnished and unlet and on which they are not receiving rates.

What effect will all those have on the tourist industry? Should Government aid be used as an encouragement to those whose premises are used only on a seasonal basis but who pay the full quota of rates over the whole year? These and many other questions will be discussed in Committee, but I welcome the Bill in general. I am certain that my right hon. Friend is right in tackling the question in Clause 3, and I support him wholeheartedly.

4.46 p.m.

Mr. William Baxter (West Stirlingshire)

Like my hon. Friend the Member for Lanarkshire, North (Miss Herbison), who spoke so eloquently, I condemn this Bill as a very foolish Measure to bring before the House at this time. In various areas of Scotland we have such terrible conditions, especially high unemployment, that to reduce the grants of an area such as Lanarkshire by approximately £250,000 can only have a terrible effect upon the outlook of the people.

Mr. John Brewis (Galloway)

The Exchequer equalisation grant for Lanarkshire in 1961 is up by £750,000.

Mr. Baxter

Under Clause 8, the position is clear that Lanarkshire will lose a considerable sum of money and that this will have a very considerable effect on the general well-being of the area. This is not the only area having a big loss put upon it. If any Act of Parliament in any way undermines or impairs the well-being of a section of the community, then hon. Members who support it are not doing a service either to themselves or to Scotland. This measure is very bad for Scotland as a whole.

Two of my colleagues, my hon. Friends the Member for Paisley (Mr. J. Robertson) and Glasgow, Craigton (Mr. Milian) made very important contributions in the Scottish Standing Committee on this subject. Their facts and figures have not been answered. I believe that they were correct. If they had not been, the Government would have denied them.

In local government we have always had great difficulty when discussing the grants that were to be paid out to local authorities. We never could find out the basis of the Goschen formula in order to forecast with any degree of certainty what the equalisation grant would be. We now have some idea of what we are to get in the not too far distant future, but that is to be based on the wrong assumption that the past is the proper basis of making the calculations.

The Government are imbued by one spirit alone, and that is to increase the rents of local authority houses, they propose to alter the fundamental grants that are to be paid to Scotland. I say to the Minister that the wrong way to legislate for a country is to be bigoted or biased against one section of the community. It may be that we should give some serious consideration to the rent structure of local authority houses, to the rent structure of privately-owned houses, and to the many excellent people who provide their own cottage or bungalow, but I think that the whole question of rents and of the valuation of property should be looked at from an unbiased point of view and not in the manner in which it is contained in the Bill.

I think everyone would agree that a reasonable rent should be paid for local authority houses. But what is the basis of a reasonable rent? Should it be based as contained in the Bill, which the hon. Member for Galloway (Mr. Brewis) seeks to support, on 100 per cent ultimately of the valuation of the property, which the district valuator, as an independent man, has decided to value at £x? The hon. Member for Galloway says that there is nothing wrong in asking the tenant of a local authority house to pay £x plus. Would any hon. Member buy a motor car knowing that the value of that car was £x and, because he is able to afford more, pay £x plus? It would be ludicrous. He would be paying cash down in all probability because he could afford to and get discount on the £x value. The hon. Member for Galloway has no right to ask or expect people to pay more than a proper valuation for their property.

Mr. Brewis

If there is a very rich man, why should he not pay an economic price for his motor car and for his house?

Mr. Baxter

There may be some justification for an economic rent, but there simply cannot be any justification for a plus on the economic rent. There may be an argument for that, and the hon. Member is entitled to produce it if he so desires, but so far as I can see the question of rents of council houses should have been taken on a different basis and taken completely outwith the ambit of party politics. I think we all agree that we are entitled to pay the proper value for any particular commodity which we buy or use.

How can we get a fair and equitable way of working this great problem of housing? I think we must do three things. We must look at council houses, special housing association houses and owner-occupied houses as one group. I do not think it is right that even the tenant of a privately-owned rented house should be called upon to pay more in rent than the actual valuation of the property. Neither do I think that the owner-occupier, in bad days, should be called upon to pay the full amount of rates or the full amount of Schedule A tax. There should be methods adopted whereby all sections of the community can get relief when it is necessary owing to their own personal circumstances.

This Bill goes along the old stereotyped way. Even in rent rebates it says that the only people who will get rent rebates and who will contribute to rent rebate schemes will be the tenants of council houses. That is fundamentally wrong. I think that all sections of the community who contribute towards the well-being of the community in rent and rates should have the right not only to contribute to rent rebate schemes but also participate in them. I do not see why an elderly woman—a widow for that matter—staying in her own private house and who falls on bad circumstances should not be able to get some relief in the same way as a local authority. Neither can I see why a person staying in a rented privately-owned house should not get something.

I would have liked the whole question of rents and valuations to be considered separately with a view to producing a scheme equitable to all sections of the community, but the Government have not sought to do that. I do not want to labour the point beyond saying that theirs is the wrong approach to a very difficult problem.

I know that many of my hon. Friends will not entirely agree with what I am now about to say. Clause 10 deals with derating. It is possible that derating will go by the board in a few years. Speaking as an individual, with some experience of business practice and procedures, I think that this is not the appropriate time for an alteration in the basis of the rating of industrial establishments.

It is fundamentally wrong to put greater obstacles in the way of industrialists setting up factories in Scotland. We will be at a great disadvantage compared with Northern Ireland where 100 per cent. derating is in operation for an indefinite period of time and where one-third of the cost of equipping a factory is paid by the Northern Ireland Government. Northern Ireland at the moment may find its unemployment figures fairly high, but at least it holds out some hope that industrialists will come to Northern Ireland. In Scotland, on the other hand, we are putting obstacles in the way. On the one hand local authorities are prepared to build factories out of the rates to get industrialists to come to their areas and on the other hand we are putting up obstacles by doing away with the system of derating.

If it were left to me, I would have no hesitation about encouraging industrialists to come to Scotland by giving them a long period free of rates and encouraging them to re-equip their factories. The lifeblood and stability of our country depend on nothing but its economic wellbeing and that we cannot have without industrial expansion. It is tragic that we should argue with two voices, one in favour of encouraging industrialists to come to Scotland and the other advocating putting obstacles in their way.

I know that my hon. Friend the Member for Glasgow, Central (Mr. McInnes) has said that he knows of no industrialist who has found himself in difficulties, or been forced out of business, by his rates. That may be so, but it is the culmination of many small things which make the great problem, and it was the straw which broke the camel's back. Many people in industry do not know clearly and precisely and in great detail why they have had to go out of business, or why they have not developed their industry in a particular area. Scotland's industrial development should not be impaired by one iota by taxation at the present time. If we are not to have industrial survival, many of the people now paying rates may be called upon to pay a greater price, a still higher rate of unemployment unless something is done, and that would be a great tragedy.

I have an interest in the farming community, which receives subsidies. Subsidies can be good or bad, but the subsidies paid for housing are very good and I would like them to be extended to include people seeking to build houses for their own occupation. The whole basis of subsidies should be reviewed on a broader and much richer basis. Those who disagree about the subsidies paid to agriculture should remember that many of our industries on which our livelihood depends receive hidden subsidies in the form of tariffs. The purpose behind the subsidy paid to agriculture—although it may be violated at times, and perhaps the system might be altered to the benefit of all—is to give the people food at reasonable cost.

Mr. Deputy-Speaker (Sir William Anstruther-Gray)

I am sorry to interrupt the hon. Member for West Stirling-shire (Mr. W. Baxter), but I feel no doubt that he is now going beyond what should be discussed on this Amendment.

Mr. Baxter

One is sometimes tempted into the greater realms of other subjects. I thought it right to put on record the purpose of subsidies and to discuss whether the Bill will make a substantial contribution to our country's wellbeing.

Mr. Willis

On a point of order. You will be aware, Mr. Deputy-Speaker, that Clause 14 deals with an extension of agricultural derating.

Mr. Deputy-Speaker

Yes, I appreciate that it deals with agricultural derating, but I thought that the hon. Member for West Stirlingshire was going too far, and I directed his attention accordingly.

Mr. Baxter

I appreciate your efforts, Mr. Deputy-Speaker, to keep me within the bounds of propriety. I am further grateful to my hon. Friend the Member for Edinburgh, East (Mr. Willis) for keeping me in order. I am between what might be called the devil and the deep blue sea. [HON. MEMBERS: "Who is the devil?"] It is for each hon. Member to make his own assessment of that.

We have paid subsidies in one form or another to industry and agriculture for a specific purpose and with our eyes open. It is true that agricultural houses are subject to full rating, but it would be a tragedy if we started to interfere with the present system of not rating land. The economic wellbeing of Scotland might be irreparably damaged if we levied rates on the land from which we get our food.

Mr. T. Fraser

I do not want to quarrel with what my hon. Friend is saying about the rating of agricultural land, but will he say what he thinks of the proposition that the rates on farm buildings should be like those on any other buildings?

Mr. Baxter

Agricultural buildings, like buildings associated with any industry or manufacturing process, should be absolutely free of rates. However, that does not go far enough in explaining the sequence of things. The tragedy is that in the Scottish Committees we are considering various aspects of local government without having a clear picture of the whole. I am not in favour of even the subsidies which are paid for houses, but I am in favour of a proper minimum income for all Scotland's people. That goes far beyond what is contained in the Bill, and I am trying, as I have tried on numerous occasions, to point out that the picture of Scotland's wellbeing is being distorted by small and insignificant Bills such as this without a proper picture of what we are trying to do.

We ought to have a clear idea from the Secretary of State about what his aims and objects are and what he wants to see established in Scotland. He should have a clear concept of the road which he seeks to travel and not a hash of bits and pieces of legislation which do not fit into one whole. Scotland's economic wellbeing is essential if Scotland is to survive the immediate future. I make the simple suggestion that the whole economic planning of Scotland should be remitted to a Committee of the House for investigation and inquiry and recommendation about its development of not only local but national government in Scotland for the years which lie ahead.

5.9 p.m.

Mr. John Brewis (Galloway)

The hon. Member for West Stirlingshire (Mr. W. Baxter), as usual, has made an interesting speech, and I found that there was much with which I could agree in his brand of Socialism.

Mr. Ross

As one farmer to another.

Mr. Brewis

Scottish industry has 50 per cent. derating for a few years yet, and we hope that the Bill will be an incentive to industry to come to Scotland.

I should like shortly to bring the discussion back to the question of rents of council houses with which Clause 3 is concerned. Here I feel that there are in a way two worlds. There is the occupier of a council house in a low-rent district who finds himself in a very advantageous position. His rent is low, and to a certain extent it is made up for him by Exchequer subsidies and by rate deficiency subsidies.

Mr. Willis

He pays higher rates.

Mr. Brewis

He pays higher rates, and it goes round and round in a circle. Then there is the occupier of a privately-owned house who has to make up by extra rates the deficiency in the rent of a person in a low-rent council house. In Stirlingshire two years ago that amounted to a rate of as much as 13s. 5d. to make up the deficit on the housing account.

Mr. John Robertson (Paisley)

Does the hon. Gentleman realise that in most of the industrial boroughs council tenants pay by far the largest proportion of rates? Perhaps I might quote Paisley as an example. Council tenants account for 50 per cent. of all households, but they pay 63 per cent. of the total rates.

Mr. Brewis

There is still a deficiency on the housing account which must be made up pro tanto by those living in other than council houses. This does not seem to me to be social justice, because it means that people are anxious to become tenants of council houses and that waiting lists become inflated as a result. Also, it severely discourages owner-occupation. Builders are not pre- pared to build new houses because they know that the level of rates is such that people are not prepared to pay the economic rent for the new houses being built. Similarly, it discourages another form of enterprise which has done very well in England, namely, housing associations which have built many houses in England. In Scotland practically none has been built under this scheme.

What we have to realise is that really there are two different rents, and that we must not confuse them, which is what the hon. Member for West Stirlingshire did. There is the economic rent which a new house needs to cover the capital cost. This might be as high as £128 a year, and taking Scotland as a whole I think that the figure is between £70 and £85 a year. Then there is the rent which is fixed under the Rating and Valuation Act by an independent assessor from the Inland Revenue.

Mr. Ross

Not in Scotland.

Mr. Brewis

I think that in Scotland he is appointed by the local authority. Under the 1956 Act he is duty-bound to fix the gross annual value at what may be said to be a reasonable rent, taking into account the district and the circumstances of the house, but not taking into account the circumstances of whether the tenant is a rich man or a very poor one. As to the amount which can be said to be a reasonable rent, we have there an independent person fixing the gross annual value.

Much has been said in comparing the rate of wages in England and Scotland. Rather less has been said in comparing the pre-war rents in Scotland with rents today. I understand that the pre-war average, taking council houses as a whole, was about 5s., and that today it is about 8s. 8d. or 9s., though perhaps the figure has risen slightly since the last review was made some months ago.

Mr. J. Robertson

The hon. Gentleman really must do his homework better. Does not he realise that the pre-war rent included that part of the owner's rates which was transferred in 1956? The hon. Gentleman cannot make this comparison. He has not read the most recent report on rents which shows that in October of this year the average rent was 11s. 10d. This is a considerable increase over the figure of 8s. 9d. which he gave.

Mr. Brewis

I am glad to accept the hon. Gentleman's figures, because he is usually extremely accurate. However, the rise in rents from the pre-war figure to that of today is nothing like the rise in total incomes in Great Britain as a whole. These have risen by 394 per cent. since 1938, and wages and salaries have gone up by 443 per cent.

Mr. Ross

In Great Britain.

Mr. Brewis

Yes. I agree that wages in Scotland are considerably lower than in England. In Committee the hon. Member for Paisley gave a figure of 17 per cent., so even on that basis incomes have gone up about three and a half times while rents have risen by nothing like that amount.

Turning now to the subject of Clause 3 and the Exchequer equalisation grant which may be taken back if local authority rates do not reach the formula set out in that Clause, it must be remembered that the Exchequer equalisation grant used to be weighted population plus 25 per cent. which gave Scotland comparatively more than England. In 1955 it was altered to weighted population plus 38 per cent. I am ready to agree that for various reasons Scotland may need a bigger proportion of Exchequer equalisation grant than England and Wales. but if so I think we should put our cards on the table and say that we want a bigger proportion than we are getting, and set out our reasons. I do not think that we should try to get a bigger proportion of the grant by what I might call the back-door method of not raising the rents of our council houses to what is fixed by the assessor as a reasonable amount.

Mr. Bruce Milian (Glasgow, Craigton)

Do I understand the hon. Gentleman to say that we were getting the same Exchequer equalisation grant as England and Wales plus 38 per cent.? That is not so at all. Is that what he said?

Mr. Brewis

If the hon. Gentleman looks at the second investigation of the Exchequer equalisation grant, made in 1955, he will find that Greater London was left out of the formula, and that the weighted population of England and Wales, which previously had been 25 per cent., was put up to 38 per cent. before the Scottish proportion was worked out.

Mr. Millan

Does not the hon. Gentleman realise that the formula used at present is taken from the 1956 Act? This has nothing to do with the 1955 figures at all. The figures he quoted are completely inaccurate.

Mr. Brewis

Perhaps the hon. Gentleman will have a chance to set it right. I am saying that since the 1956 Act the Exchequer equalisation grant has gone up.

It has been said today that if council rents did not go up to the gross annual value there would be a loss of about £900,000 to Scotland, but if Scotland put rents up to the gross annual value there would be about four times as much money available to the local authorities. It is said that as a result of that the £900,000 would be lost to Scotland, but this is not necessarily so, because the housing deficits come into relevant local expenditure. If local authorities have more money, there is no reason why the relevant local expenditure on housing should not go up.

We are told in the Toothill Report that landscaping could be improved, and that repairs to council houses could be improved. For example, I understand that many council houses have side-oven fireplaces which are not very popular. These could be replaced by more modern ones. There are many ways in which council houses could be improved. Then local relevant expenditure would rise, and there would not necessarily be a loss of this money in Scotland. For this reason I support the formula laid down in Clause 4, carrying out the recommendation of the Public Accounts Committee.

Under Clause 8, Lanark and Midlothian are quite likely to lose considerable sums of money because of increasing populations, but Lanark has already gained £750,000 in Exchequer equalisation grants in 1961–62, and Midlothian gained £147,000 in the same year.

Mr. Willis

It is rather difficult to keep correcting the hon. Member, but he is forgetting that both Midlothian and Lanark are receiving a greatly increased general grant because of their large educational programmes. Incidentally, they are losing money on those programmes.

Mr. Brewis

The pamphlet on the Exchequer equalisation grant issued in 1962 shows that Lanark is up by £750,000 and Midlothian—the landward area—has gone up from £272,000 to £419,000. I support the proposal that areas with decreasing populations should receive a bigger grant. In areas where the population is increasing there will almost automatically be an increased rateable value. If a new factory is built there will be an increased rateable value—admittedly at only 50 per cent. On the other hand, the area covered does not increase. In an area of decreasing population the area is just the same. An equal number of roads has to be maintained, and the same interest repayments have to be made on funded debts. In addition, there is the decrease in rateable value.

Miss Herbison

The hon. Member has said that those areas in which there has been an increase in population provide greater facilities for local authorities to receive more from rating. Does he realise that Lanarkshire is losing about £250,000 because of the growth of population in a local new town, although the expense of providing the new schools, new roads and other amenities has placed a great burden on the county? Rather than having £250,000 taken away, it should have been given something more.

Mr. Brewis

I am sorry that I missed the point about East Kilbride. Even so, I would have thought that this would have increased the rateable value for Lanarkshire, although it will have the extra expenditure on capital works, such as roads and schools. To that extent I agree with the hon. Lady.

I hope that my hon. Friend will be able to do something about the distribution of rural water and sewerage grants. A small town of 3,000 inhabitants should not be deprived of a grant merely because it is a burgh, while a bigger village is able to receive a grant under the provisions of the Rural Water and Sewerage Act. I hope that my hon. Friend will be able to give me an answer on this point. A place does not cease to be rural merely because it has 3,000 inhabitants. Many villages in England and Scotland have well over 3,000 inhabitants, but they are still rural.

5.25 p.m.

Mr. John Robertson (Paisley)

We have had a repeat performance from the Secretary of State for Scotland. He deigns to address us—I do not know that we are very much better off for what he says, or that we have a greater understanding of the Bill—and then he disappears without listening to any part of the debate. This has happened so often that I am beginning to wonder if it is a new pattern of behaviour.

I listened attentively to the right hon. Gentleman, and I heard him say that the associations of local authorities in Scotland thought that the present method of calculating the global sum of equalisation grant was satisfactory. At any rate, that was the implication of his remarks. But I remember the associations' working party indicating that it was not content, but that it was prepared to wait until the revaluation had been carried out in England and Wales, and that was the time to take an entirely new look at the question of calculating the global amount. That revaluation has taken place, and this should have been the time for the new look.

We are told that the present formula has been framed with the intention of ensuring that the rate burden per head of population in Scotland should be the same as in England and Wales, providing that the gross expenditure per head by local authorities is the same. Strangely enough, neither of these conditions is met at the moment by the sums put at the disposal of Scottish local authorities. I do not want to go into the figures again. They are on record, and I have heard no contradiction of them. If they are wrong I would have thought that the Secretary of State would have taken the opportunity of pointing out the fact. He has not done so.

Surely it is desirable that Scottish local authorities should not be put in a less advantageous position than local authorities in the rest of Great Britain. We are told that there is a basis for dealing with them separately, but I cannot find it. The law is slightly different, but the principle is not. Consequently, the amount of money that ought to be paid out to Scottish local authorities should allow them to spend the same amount as English local authorities, at the same cost to the ratepayers.

I say this for the benefit of the hon. Member for Galloway (Mr. Brewis): it is remarkabe that the average weekly amount paid by the tenants of a council house in England, where the average council house has four-and-one-third apartments, is 9s. 9d., as against the 18s. paid by the tenant of a Scottish local authority house, who occupies three-and-one-quarter apartments.

Another exercise which the hon. Member for Galloway might care to indulge in is this: if he calculated the rent per square foot of house let he would find that the rent per square foot of council house is higher in Scotland than in England. When comparing these things we must compare like with like and remember what we are letting. Figures are bandied about here far too easily.

One does not need to look at a lot of figures to know that English local authorities are doing much more work than are local authorities in Scotland. The evidence is before our eyes. We can see the new civic centres which have been built, the new roads and the new work carried out by English local authorities—work which is not being done in Scotland. If this work were at a greater cost to the English ratepayer, to the man in a dwelling house, whether privately owned or local authority, one would not complain, but the fact is that all this extra work is being done at a lesser cost to the English tenant than to the Scottish tenant. This is where the Scottish Office has fallen down and let us down badly. It should be its job to see that we in Scotland get a fair share of Government grants, but in fact we have not been getting it.

As we have been talking about housing, it is worthwhile to point out that there are two other aspects upon which the Government should give us the result of their considerations. The first is the remarkable fact that it costs very much more to build houses whenever one crosses that imaginery boundary somewhere about Carlisle—the Border. Prices immediately jump up, and the extra subsidies which are paid in Scotland on houses do not meet the extra cost of building them. It is no small matter. It amounts to £19 or £20 a year. It costs a Scottish local authority mere than it costs an English local authority to pay for a local authority house, and the extra subsidy does not meet that additional cost.

Secondly, in the industrial areas of Scotland local authorities, faced with a terrible heritage of private enterprise houses, are building from 40 to 50 per cent. of all the dwellings in their areas. In England the figure is 16 or 17 per cent. A town like Brighton can make a profit from a local authority house with a rent of 25s. per week, but in Scotland we could never do that; 25s. a week would never meet the housing deficit. In England it gives the local authority a profit on its housing revenue account.

The hon. Member for Galloway spoke about the wealthy man and said that he should pay an economic rent. I do not know many wealthy men who stay in local authority houses, unless he does himself.

Mr. Brewis

Is the hon. Gentleman aware that in Dundee, for example, local authority tenants include headmasters, company directors, bankers, contractors, civil servants, accountants and municipal officers?

Mr. Robertson

This is quite so. In my own home town of Motherwell the 1919 houses were let to professional people because the ordinary working people could not afford the rent. This has been true from the time they were built. Rents are even higher now, and they are still the only people who can afford them.

Mr. Brewis

What is the rent in Dundee?

Mr. Robertson

I do not know. The hon. Member might have given the information.

Mr. Brewis

Will the hon. Gentleman let me give it? It is 7s. 6d. a week.

Mr. Robertson

I will look at this. I shall perhaps find that what is being said is not so.

I have again read the evidence given before the Public Accounts Committee. It is fantastic how the Committee was misled, and the information given it by the Scottish Office was fantastic. Let us say that the Scottish Office made an honest mistake, but it is still fantastic that hon. Members opposite do not recognise that wrong information was given about the level of rents.

Mr. James McInnes (Glasgow, Central)

Will my hon. Friend develop the point about the inaccuracy of the evidence submitted by the officials of the Scottish Office, because I, too, read the Report and I disagree with him.

Mr. Robertson

The Scottish Office informed the Committee that the difference in earnings was 5 per cent., despite the fact that a month previously the Secretary of State from the Box had given an Answer that it was 8 per cent. Another fact is that it was not indicated by the people from the Scottish Office when comparing rents that these were three-apartment houses which were being built in Scotland, compared with four-and five-apartment houses in England. This might not seem important, but I think it very important. If a man has a four-apartment house in Scotland, he is paying far more that the figure given as an average rent. I have quoted the figure before. In a four-apartment house in Paisley one is paying up to 35s. a week in rent and rates, which is more than the average rent and rates of a four-apartment house in England. We must be careful about this.

Let us look at the question of wages. We were told that the difference was 17 per cent. This means that the gross wage, the amount at the top of the pay packet, is about £13, and that the man takes home about £11 10s. A man in a four-apartment house, with three children, has to pay rent and rates from his £l1 10s. Any hon. Member who suggests that £2 a week in rent and rates is a reasonable amount of money for that man to pay should try it for himself. It is fantastic. What one sees is that the people in greatest need, those with low wages and large families, occupy the larger local authority houses of four or five apartments. What is the level of rent? We should ask ourselves this question. If we were doing the honest thing the smaller family would pay the higher rent and those in bigger houses would pay less money. If we are considering the question of reasonable rents, we must relate them to income. They should not be related to the housing revenue account.

Introducing a housing Bill in 1919, Lord Addison laid down some principles which I think still hold good. The idea of the Government giving subsidies to local authorities to build houses was that ordinary working people should have houses of a standard which otherwise they could not afford. For long enough they have lived in slums. If we are guided by that principle we shall see how wrong the Government are about this Bill.

5.40 p.m.

Dr. J. Dickson Mabon (Greenock)

I shall be brief and concentrate entirely on Clause 3. I am extremely disappointed that the hon. Member for Galloway (Mr. Brewis) takes the attitude he does on a matter like this.

In an intervention during the splendid speech of my hon. Friend the Member for Paisley (Mr. J. Robertson), which was just as good as the speech he made in Committee, the hon. Member for Galloway said that headmasters, civil servants, accountants, and so on, live in council houses. Hence Clause 3. Do I take it that that is the kind of argument which should be made, an argumentum ad hominem, that because headmasters and accountants live in council houses we must have Clause 3? It seems to be arguing from the particular to the general. Because the hon. Member and I may disagree with the level of rents in Dundee, should we twist the arm of every local authority in Scotland?

What is the sense of all this in relation to Greenock? We do not have inflated waiting lists. I reject that argument which was put forward by the hon. Member. I sit in my "surgery" once a month to see constituents. Half the people who come to me raise matters which are not strictly Parliamentary questions, but questions about the allocation of housing. That happens even though half the population is now housed by the council. Every one is a Socialist in relation to this matter—they all want council houses because they are the only houses they can afford. There is no division of political opinion on this apart from 1 or 2 per cent.

Mr. Millan

They may vote Tory.

Dr. Mabon

They may vote Tory at the General Election, but hon. Members opposite do not really represent them because they do not understand how these people live. They do not understand their incomes. I cannot sit and listen to the imposition of these arguments on these poor people without believing that hon. Members opposite are either basically wicked or basically ignorant. I prefer to believe the latter.

Mr. Brewis

If the rent in Greenock for a council house is approximately £28 and the rent for a non-council house is an economic one, can it be wondered that everyone wants to live in a council house and that no private houses get built?

Dr. Mabon

That may be an attractive argument from the other side, but no one could build a private house in Greenock or Gourock and be able to let it for rent to the average working man in the town. It is the highly exceptional person, someone with £1,200 a year, who could buy some of the houses being built in Greenock and Gourock at present. We have it on record from some of the best minds in the building societies that they will not take risks on mortgages for people with salaries of under £1,200 a year. Even that must be a very fierce strain for a man with a family of two or three children.

It may be true that a man with a family in a council house getting a salary like that ought to do the decent thing and rent a house elsewhere or buy one, but that is not what the Bill is about. Under the Bill, the Corporation of Greenock is not to be allowed to lay down its own level of rents without very severe monetary penalties being imposed on it by the Government. The town has been cursed by unemployment for so long and has been losing many of its people year after year.

I look at that and at the falling wages, with cuts in overtime and with short time working and unemployment going on for more than eight-week periods. At present, I am in active correspondence with the Chairman of the National Assistance Board about how scales are fixed and men who have been regraded are losing money. This is in a town where chronic unemployment lasts for so long that a man is reclassified by the Ministry of Labour and, as a consequence, a wage stop is applied.

On top of that, this is to be imposed without any right on the part of Greenock Corporation whether Conservative, Liberal or Labour, to be allowed to say that this is the amount of rent which ought to be paid. That is what we object to. The Secretary of State has no right to lay down what should be the rent in any town when he does not understand the problems of the community. Clause 3 says that the average rent in every town ought to be slightly more than the gross annual value, but what is to be the gross annual value? Who assesses it? It is almost metaphysical. The argument is that the rent should be that obtainable in a free market, all other things being equal.

The present Minister of Health said in 1956 that by 1957 we would have a mathematical equilibrium between supply and demand for houses and, therefore, the Rent Act would be a good thing. Lot us not take this too far. The gross annual value is the keystone of the Rating and Valuation Act, 1956, which should be retitled the "Crude Income Tax (Householders Only) Act." The whole valuation in Scotland has gone completely crazy. Now the Secretary of State is trying to impose this arbitrary mechanism on the lives of decent people who are struggling to earn a livelihood. Some of these are the people I represent in this House.

We do not have many headmasters, accountants or civil servants living in Greenock. We have honest working people who deserve a great deal more money than they get at present.

Mr. Millan

What about doctors?

Dr. Mabon

I embrace doctors in "honest working people". I am surprised that the savage attack on headmasters and others came from the source it did. If I asked my local council to carry out a survey of the incomes of our people, including those with cars and television sets, and so on, would that make any difference to the Government? Not at all. That has nothing to do with whether people should pay fair rents or not.

The hon. Member for Galloway talked about an economic rent, but what is an economic rent? At present, this £120 is made up of two parts. Forty pounds is the cost of building and is paid by the tenants and the local authority rate subsidy; the rest is to meet the moneylenders' charges. Thus of the £120, £80 goes in moneylenders' charges. I admit that we have not reached a state of society in which we on this side of the House could argue that there ought not to be any interest charged on publicly-provided houses. Not even Mr. Khrushchev has got to that stage, but the way in which interest rates have gone up under the Government is absolute madness.

I suggest that this is the trouble in the whole affair. It is wrong for the hon. Gentleman to support a Government which has done all this and say that we must judge the economic rent as being what the moneylenders have to be paid as well as the cost of bricks and mortar and management costs. That is an outrageous argument. I believe in imposing a fair cent and that people would be willing to pay a reasonable rent. But my idea of what constitutes a reasonable rent is not the same as the hon. Gentleman's. I feel that in this matter the Government are going too far.

I admire my hon. Friend the Member for Paisley and the way in which he has gone into this problem so deeply and revealed many things which came as a surprise to hon. Members on both sides of the House. We on this side knew that we had a good case, but we did not know that it was so strong. The most amazing tribute which my hon. Friend has received comes from the silence of the Secretary of State for Scotland.

We have not had any of these figures from the Government. One must appreciate how an hon. Member exposes himself if in this Chamber he gives figures so emphatically as did my hon. Friend the Member for Paisley. But we have had no figures or counter-arguments in answer to him. Perhaps I may repeat briefly what he said: Scottish ratepayers pay more than English ratepayers; Scottish council householders pay more than English council tenants; Scottish workers earn less, substantially less, than English workers.

These are three important statements which must be refuted by Ministers. Otherwise, they will show themselves simply to be the catspaw of a Treasury which is laying down what shall be the case. Even worse than that. They are failing to maintain to the Treasury that the evidence presented to the Public Accounts Committee was unsound and that a proper analysis of this problem has not really been made, and that this is a bad Bill.

Clause 3 is a wretched Clause. It is part of the whole process of Scottish legislation, over the last six years, which has crushed the housing programme. The queue at my political "surgery" is as long now as it was when I was elected to this House, seven years ago. That is not because the Greenock Corporation does not want to build houses. It is because, steadily, remorselessly, the Government are crushing the financial life out of the Corporation which cannot rehouse the people as speedily as it should. I shall be delighted to vote against the Bill.

5.53 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

I do not want to speak for more than seven minutes, because I have given a promise, and, as I am a member of a political party which keeps its promises, I want to keep mine. Before I say anything further I must express my feeling of bitterness at the sort of criticism of the rent structure of Scotland which has been made from the benches opposite. This is a piece of legislation which is similar to that which we pass from time to time and by which, in effect, there is distributed to all sections of the people what I choose to call the unearned increment of a social collecting effort on the part of the whole community.

We do this sort of thing from time to time. By various means we redistribute the unearned income and all sorts of people get the benefit. One section of the community which benefits is the tenants of council houses. Others include farmers, doctors and, perhaps, dentists. All sorts of people benefit from a share in the unearned increment of the association of the people in an economic effort. But the only people who are attacked for receiving that benefit are the tenants of council houses who, in general, are members of the lowest income group in Great Britain. That I strongly resent.

I wish to voice a complaint which I have received from the Burgh of Kirkintilloch. During the eleven years in which I have been a Member of this House the town council of that burgh has been noted as being an independent authority. It is independent of the Conservative Party and of the Labour Party although, fortunately, during the last five years it has become more independent of the Tory Party and less independent of the Scottish Labour Party, which is a good thing for the people of Kirkintilloch.

The burgh has complained bitterly about the effect although they accept the principle of a 1d. rate in the gross valuation. The local authority has cited cases to show that it will suffer. In neighbouring burghs the average rent is £31 and the gross annual value of property is £40. These are average figures for all property. In respect of similar properties and groups in Kirkintilloch, the average rent is £39 and the average gross valuation is £51. Obviously, Kirkintilloch will get less equalisation grant on the basis of the product of 1d. rate.

As has been said by the town clerk, the gross valuation of the burgh is no measure of the actual capacity of the people to bear the rate burden. In fact, it is a measure of the assessor's valuation of the burgh. Here we have a case—there are other cases in the county—where the assessor has not given a uniform valuation throughout. I have here a list of variations in valuation between Kirkintilloch and other areas. I have not time to quote it—and I do not think it would be fair to quote only a few of the instances—but in Kilsyth the Weir Jura houses are assessed at £45 while in Kirkintilloch they are assessed at £53. The Blackburn houses in Kirkintilloch are assessed at £62 gross value and in Kilsyth they are £50.

The Kirkintilloch authority complained that it thought that the new valuation system was designed to provide same uniformity, but here there is no uniformity. Similar instances could be quoted in respect of Falkirk, Motherwell, Rutherglen, Airdrie, Coatbridge and Kilmarnock between the Weir Jura houses and the Blackburn houses. Where is the uniformity between Kirkintilloch and other burghs when there will be a heavy reduction in the equalisation grant? Heavy obligations have been undertaken. There is an overspill agreement with Glasgow which means that a lot of development work must be done. It is admitted that grants will be given for this work but that will be nullified by the reduction in the equalisation grants. There is a lot of social work to be done in the new town of Cumbernauld and the county council will get extra in the way of a general grant to do that work. But that, again, will be offset by a reduction in the equalisation grant because of the application of the new grant.

That is the complaint which I have to make for the Burgh of Kirkintilloch. I hope that during the Committee stage this matter will be re-examined, especially the part of the Bill relating to weighted populations and the modifications of the grant on the basis of a decrease or an increase in the population figure. I am sure that these matters will be referred to again by my hon. Friend. Having taken up my seven minutes, I wish success to the Amendment.

6.0 p.m.

Mr. Bruce Millan (Glasgow, Craigton)

Like other hon. Members on this side of the House, I want to devote my remarks particularly to Clause 3. The important thing which has come out of the debate which was not in the least clear from the speeches from the Government Front Bench in the Grand Committee is that, whatever happens under the Bill and whatever local authorities do about rent policies, the total amount of grant going to Scottish local authorities will be reduced. Everyone now understands that, with the possible exception of the hon. Member for Galloway (Mr. Brewis), who is still following the speech made by the Under-Secretary of State is winding up the debate in the Committee. The hon. Member for Galloway has still not cottoned on to the fact that the Under-Secretary in that respect, as in a number of others, was completely inaccurate.

Under the Bill as a whole, the amount of money going to local authorities in Scotland will be reduced. I thought that the Secretary of State for Scotland was a little more frank with the House today than he was with the Grand Committee. One of the things which we were trying to ascertain about Clause 3 was exactly how much the reduction in local authority grants would be. We have had a figure today—£900,000. It is still reasonable to complain that we did not get that figure before. Apparently, the Government had not then even worked the figure out.

I repeat that the important thing about the Bill and the thing which justifies the Amendment is that the total grants going to local authorities in Scotland are to be reduced by £900,000. It may have been done in a certain way under Clause 3. The formula may have been related to rent levels, but the result is the same. We are losing £900,000.

The Under-Secretary of State for Scotland (Mr. Gilmour Leburn)

I want to assure the hon. Gentleman that when we discussed this in Grand Committee I had no wish in any way to mislead him. When he related it to Clause 3, the remarks I made were still appropriate. The point I should like to make now, so that there is no possible cause for misunderstanding and no possibility that anyone will accuse me of misleading the House, is this. While my right hon. Friend mentioned a figure of £900,000, he said that that was for 1963–64. That will rise to £1.3 million when the 95 per cent. applies. That will be the ultimate figure, the top figure. I should not like the House to debate this matter believing that the top figure is £900,000 when, in fact, it will become £1.3 million.

Mr. Millan

I am grateful to the Under-Secretary for that. The point that I was making was that he was completely wrong in the Grand Committee. He has admitted that he was completely wrong. It is extraordinary that he should have been wrong, because this is not an incidental feature of the Bill. This is the main feature of the Bill. It is disgraceful that Government Front Bench spokesmen should have been completely misinformed about the basis of the Bill which they were introducing and commending to us.

I made the complaint—I still make the complaint—that, assuming that the grant is to be reduced, this way of reduc- ing it is not the way in which it should be done. It would at least have been a straightforward way of doing it if the Government had said to us, "Because of the lower rents for council houses in Scotland as compared with the rents of equivalent council houses in England and Wales, the total grant going to Scotland is too high and we therefore propose to reduce it". If the Government had done that, we could then have studied the question. We could have looked at the relationship between the total rate deficiency grant going to England and Wales and the total grant going to Scotland. We could have judged whether the Government's criticisms were justified.

The basis of the Government's criticism is that Scotland is getting an unfair share of Exchequer equalisation grants. It is true that per head of population the Exchequer equalisation grants payable to Scottish local authorities, taking them in total, are higher than those being paid to England and Wales. This does not necessarily mean, on any reasonable assessment of what an equalisation grant is, that the amounts being paid to Scotland are excessive.

The Secretary of State for Scotland, in a rather obscure part of his speech today—it is always difficult for anyone who is reading a brief which he does not fully understand to prevent it being obscure—seemed to suggest that the idea of the Exchequer equalisation grants was to make Scottish local authorities have a rate burden per head of population which would be roughly equivalent to the rate burden per head of population in England and Wales. A study of the figures and the formula given to me in a Written Answer on 5th December shows that this is not so.

Comparing Scotland with England and Wales on a pure population basis, so that one is comparing one with one, the appropriate rate burden would have been £80.8 million. These figures are for 1961–62. The total relevant Scottish local expenditure for that year was £108.4 million. Deducting the one figure from the other, the Exchequer equalisation grant which would have to come to Scotland to reduce the rate burden per head of population for Scotland to that which it is in England and Wales is no less than £27.6 million.

I do not accept for one moment that the Exchequer equalisation grant paid to Scotland is excessive. It is only if that can be proved that the Bill can be justified. The whole question of whether it is done through a rents adjustment or not is irrelevant in the last analysis. The important thing is the total sum of money which is eventually going to Scottish local authorities.

I admit straight away that the figures I have just quoted are affected by the fact that there is an addition to Scottish local expenditure arising out of low rent levels in Scotland. Even if an adjustment is made for that of the kind I mentioned before—about £8 million—it would still produce a figure for equalisation grant for Scotland of £19.6 million, which is still more than the figure of £18.9 million which we received in 1961–62 and considerably more than we would have got in 1961–62 if the provisions of the Bill had been operative in that year.

Therefore, comparing the figures for Scotland with those applicable for England and Wales, I do not believe that it is right to say that, given the kind of conditions which the equalisation grant is meant to remedy, Scotland is getting an exessive proportion of the equalisation grant. It would be very interesting to do this as an exercise. The Government, who have the information, might care to do it. It would be interesting to take the United Kingdom as a whole from the point of view of Exchequer equalisation grant and apply the formula which at present applies to England and Wales to the whole of the United Kingdom and see what would be paid to Scottish local authorities. My guess is that it would be substantially higher than they are being paid under the present formula.

If Scotland were treated completely separately, if we separated Scotland completely from the provisions regarding England and Wales, and if we calculated equalisation grant for Scotland on exactly the same formula as it is calculated for England and Wales, what would be the figures for Scottish local authorities? Again, my guess would be—I do not think that anyone could work out these figures, except the Government—that Scottish local authorities would get higher payments of equalisation grant than they are getting under the present formula.

It may be that at some time Scottish local authorities accepted the present formula. I know nothing about its history. However, it is clear that it is not accepted that under this formula Scotland, even under present conditions, is getting excessive payments of Exchequer equalisation grant. If that is not accepted—and my hon. Friends and I do not accept it—the whole basis for the Bill is completely gone.

I said that the Under-Secretary was completely misleading in Committee upstairs about the purposes of the Bill. We must ask ourselves why he was misleading and why the Government chose to introduce this formula in this way under Clause 3. There are only two possible answers. First, doing it under Clause 3 in this way makes the attack on the local authorities' rents policy a great deal more emphatic than it has so far been, and, secondly, the Government honed, by doing it in this way, to deliberately mislead not only us but the local authorities as to the effect of the Bill.

The Government wanted to persuade the local authorities what the Under-Secretary was trying to persuade us last week about the adjustment of their rents policy; that if the local authorities adjusted their rents they would lose no equalisation grant. If the figures given today are right, they will lose at present, under Clause 3, £900,000 rising to £1.3 million. But the Secretary of State has said that the additional Exchequer equalisation grant going under the present formula to Scotland, because of what he considers their unreasonably low rents, was about £1.6 million.

The point is that if the Scottish local authorities increase their rents to what the Government consider are reasonable levels they will stand to gain £900,000 under Clause 3, but will lose £1.6 million in the calculation of the total Exchequer equalisation grant. In other words, the local authorities cannot possibly gain under the Bill. The Amendment is absolutely accurate and I have the greatest pleasure in supporting it.

6.12 p.m.

Mr. James McInnes (Glasgow, Central)

I wish to be brief, I do not want to deal with the notional rent income, the formula, or things of that kind, but I want to know why the Government have persisted, in recent years, in introducing penalising legislation upon local authorities, penalising the work they undertake.

Earlier this year we had a Housing Bill which, in effect, related subsidies to a notional rent income. Now we have a Bill with a somewhat similar formula: a notional rent income based on a percentage of the gross annual value of the local authority houses coming within a local authority's housing revenue account. Why is it necessary to have these penalising forms of legislation? Surely the Government recognise that without any such legislation these last few years have seen local authority rents in Scotland rising all the time.

In 1956, the average rent of a local authority house in Scotland was £14 19s. per year, but by 1961 it had increased to more than £26—and I confidently anticipate that by the end of 1962 it will average nearly. £30. Thus without any penalising legislation, Scottish local authorities, of their own accord, have increased their rents in recent years by almost 100 per cent. All this has been accomplished without the need of penalising legislation.

If the Secretary of State persists in this attitude he will certainly not get the approval and co-operation of the local authorities in Scotland. I would have thought that the present Secretary of State would have been much better employed had he directed some of his attention and energy to the real problems confronting Scottish local authorities. Why, for example, does he not undertake an examination of the tremendous rent burden facing Scottish local authorities? A lot of figures have been brandished about this afternoon concerning the rate burden in this or that area. I wonder whether those who quote these figures realise that the rate burden in Scotland, which, in 1951, was £32 million has, after ten years of this Government, risen to £94 million—a tremendous increase?

It is folly to believe that this increase has in any way been due to a low rent policy. Low rents may have had some little effect on it, but it is not the main reason for the huge increase in the Scottish rate burden. If the Secretary of State examined the functions and structure of local government in Scotland he would find that local authorities today are operating services involving heavy financial commitments which the Government have passed on to them instead of retaining the financial responsibility themselves.

Over the last ten years, by this and other Bills, the Government have deliberately indulged in a policy of unloading expenditure from the taxpayer to the ratepayer. I could quote one form of legislation after another which has been introduced to this end and I cannot understand—in the circumstances of today, when local authorities, of their own accord, are continuing to increase rents—why the Government find it necessary to bring in a Bill of this kind, with its penalising implications.

It might have been better had the Secretary of State concentrated his energies on the tremendous problem of the cost of education. Local authorities spend a vast sum of money on this service and it all seems rather like the Government having "passed the buck" from the Government to the local authority. We need only look at education expenditure in, say, Glasgow—which is running at about £20 million—to see that this is so. We have only to think of the Mental Health Act. We did not mind asking the local authorities to operate that Act, but we do object to them having to bear the financial responsibilities under that Act. These are but one or two examples of passing the burden from the taxpayer to the ratepayer.

It might have paid the Secretary of State to have given some consideration to the question of high interest rates. I found this afternoon that high interest rates in 1950 and 1951 were responsible for the local authorities paying £8,676,000. What are the Scottish local authorities paying today in respect of interest rates? Not £8 million, but £73 million, because of increased interest rates. I can think of the shabby trick which the Government played on the local authorities in 1957, when industry was rerated to the extent of 50 per cent.

It was then anticipated—and we are dealing with the question of derating in this Bill—that when industry was rerated to the extent of 50 per cent., this would have yielded to the local authorities about £2,300,000. What did the Government do? They said, "Oh, no; the local authorities are not to get the benefit of industrial rerating by 50 per cent., because we must set against this sum the loss in tax revenue to the Exchequer." Therefore, about 50 per cent. of the £2 million or so went to the Exchequer, and the remainder to the local authorities.

During the Committee proceedings upstairs, I put a question to the Secretary of State asking him why he had decided to defer the full rerating of industry until 1966–67. Despite the speech of my hon. Friend the Member for West Stirlingshire (Mr. Baxter), I cannot appreciate why this is being deferred. It is not being so deferred south of the Border. Why, then, in Scotland? I did not get an answer from the Under-Secretary in Committee, but I hope that I shall get it this afternoon. I have no knowledge, and so far no hon. Member has produced any facts or figures, to show that the rerating of industry now would be a tremendous burden on industry. I do not believe that it would be a crippling burden on industry.

Mr. Brewis

What about the shipyards? Would it not put an extra burden on the shipyards?

Mr. McInnes

Speaking of industry generally, I have no knowledge and no evidence, and no one has submitted any evidence to me, that rerating would be a crippling burden on industry. We are all aware that industry gets relief in respect of the rates it pays through Income Tax. It receives an allowance through Income Tax, and to that extent that is another illustration of the reason for my belief that the rerating of industry would not place a crippling burden on industry. Why, in England and Wales, is rerating taking place next year? Why can it take place then in England and Wales, when we in Scotland must defer full rerating until 1966–67? I hope that the hon. Gentleman will deal with these points when he replies to the debate.

6.24 p.m.

Mr. William Ross (Kilmarnock)

I want, in very few words, to tell the people of Kilmarnock that they will have their rents increased as a result of what the Government are determined to do here, and that that increase will be virtually double because of the double unfairness of what the Government are doing.

First, however, I should like to congratulate the Secretary of State on his speech today. It would have been difficult for him to have been more confusing than he was on the last occasion, but we understood some of the things he said. I should be failing in my duty as a member of the Opposition if I did not castigate him for the speech which he delivered in the Grand Committee, and which, for political immaturity and Parliamentary inexperience, proclaimed how badly Scotland is being governed.

I do not see how any hon. Member who represents Scotland at all can oppose what we are doing here tonight. Scotland will lose at least £900,000 per year, rising in two or three years to £1,800,000. It will not help the hon. Member for Galloway (Mr. Brewis) or his local authority by one penny that this penalty should be made specifically upon certain authorities.

If, by reasonable rents, we had been able to distribute the burden more fairly in Scotland, I would not mind it at all, but here we are penalising some local authorities because they are taking more from the Exchequer than the Exchequer thinks they should get. We ought to be congratulating them. We are all trying to get money out of the Exchequer, and this is most unfair. I think that hon. Members opposite failed to appreciate that the flaw in their argument about this business of unduly low rents is the Government's failure to define what are reasonable rents.

We in Scotland are worried about hard times, unemployment and consumer expenditure. Surely, this is quite the wrong time at which to try to force up rents. There is one right hon. Gentleman sitting opposite who for years and years was absorbed by the same prejudice which the present Secretary of State has—one that has lingered on for so long—that, somehow or other, we must force up council rents. This was the only thing that the Government could suggest in municipal finance—to force up the scales of rents. This was their whole attitude in relation to anything else required in local municipal government, and it proved a poor spur to action.

Last Session, the Secretary of State took unprecedented powers to do what he liked to local authorities and to fix rents. Therefore, we can now say that if the rents are too low in the opinion of the Secretary of State, the fault is his. He has all the power in the world, but, no, he must come along with this Bill and try to penalise local authorities in some other way. It just does not make sense. All it does is to save the Exchequer £900,000. This is a case of forcing up rents and arbitrarily laying down new standards of rents.

Last year, the standard of rents was supposed to be the difference, or half the difference, between £60 and the average gross annual value, but now we have a new one, and it has not been justified yet, except that the Secretary of State, somehow or other, thinks that is fair for everybody. It is 85 per cent. rising to 95 per cent. of the gross annual value, and then he tells us that rent rebates have to be withdrawn from the income in respect of local authority rents.

That means that there is to go into this calculation, to be borne by what he hopes are increased rents for one section of a town, what is required to give a reduction of rent to those who most need it. It is not the right hon. Gentleman and those in his position who will pay a penny of rent rebate—and I do not suppose for a moment that he is the poorest. Those in local authority houses alone will have to meet what is requisite in respect of rent rebate. That means that the level of rent, based on figures that the local authorities are given, has to be raised.

The Bill is really unfair. The town in Scotland that is most generous in respect of rent rebate is Kilmarnock. It gives back £25,000 in rebates. I thought that an astounding figure, so I made inquiries. I found that we built a lot of the houses before the war, because we had enlightened councillors. But who are in the older houses? It is the older people, not all of whom get National Assistance. These are the people who, according to the Secretary of State, now have to be supported by other council tenants, paying for rent rebates through increased rents.

Where is our breadth of vision? This is a small, mean, miserable Measure, coming from a small, mean, miserable Government. Today, we should be arguing about something far wider than this in relation to Scotland. We have my hon. Friend the Member for Greenock (Dr. Dickson Mabon), on the one hand, and the hon. Gentleman with his private building, on the other. How many people are prepared, and are able, to build privately, and live in Greenock? They could be counted on the fingers of one hand. Who is prepared to do that in Glasgow? Private building is in no sense a possible solution for Scotland's housing needs. Those needs can be met only by the local authorities, but the Government are hamstringing the local authorities at every opportunity.

Figures have been quoted by one after another of my hon. Friends. Why should we be isolating this one item of relevant local expenditure—the housing deficiency—and say that we must make a change? What about the other items? Is this just a start? Will Ayr be told that it is not charging enough for its putting greens, or St. Andrews told that it is not charging enough for golf, or some other authority that it is not charging enough for its deck chairs; and that if they do not put up those charges they will have something taken from their equalisation grant? The whole thing is nonsense.

The Secretary of State would do a service for Scotland if he started battling for what we really need. If he listened to my hon. Friends the Members for Paisley (Mr. J. Robertson) and for Glasgow, Craigton (Mr. Millan), he would appreciate that the formula is unsatisfactory, and that he is making it even more unsatisfactory and unfair by the way in which he is now fiddling with it.

6.33 p.m.

Mr. Thomas Fraser (Hamilton)

Those hon. Members who have sat throughout this discussion will agree that it was proper to have this debate on the Floor of the House. In the circumstances, it was wrong of the Government to try to deny the House of Commons this discussion, but let it be noted that the only possible way in which we could ensure that we got it was by the Opposition putting down a reasoned Amendment. And the speech of the Secretary of State wholly conceded the assertion contained in that reasoned Amendment.

The effect of the Bill is to reduce the total amount of Exchequer equalisation grant payable to Scottish local authorities, yet hon. Members opposite wonder why we should offer any opposition to it—

Mr. Willis

They were not here to listen.

Mr. Fraser

During most of the discussion, we have had the company of only the hon. Member for Galloway (Mr. Brewis) and the hon. Member for Fife. East (Sir J. Gilmour). Until very recently no other Scottish Tory was present—

Sir Fitzroy Maclean (Bute and North Ayrshire)

Is the hon. Member aware that I have been present during the whole of the debate?

Sir James Duncan (South Angus)

So have I.

Mr. Fraser

We will not argue who was or was not present. I have been here all the time, and I have eyes. If hon. Members opposite now want to say "I was here". I wonder why they did not venture to make little speeches just now, explaining why they intended to vote for a Bill which will reduce the Exchequer equalisation grant payable to local authorities in Scotland?

I want to deal now with one part of the Bill which did not seem to be very controversial until it was mentioned by my hon. Friend the Member for Lanarkshire, North (Miss Herbison). Under Clauses 8 and 9, Lanarkshire will lose almost £4¼ million. The hon. Member for Galloway interrupted my hon. Friend and said, "But do you not realise that Lanarkshire got £¾ million more in 1961–2 than it did in 1960–61?" Why was that? It was because of revaluation and, according to the hon. Gentleman's own logic, that only proves that Lanarkshire has been cheated of £¾ million a year for many years previously. Why is Lanarkshire to get £¼ million less next year? The answer is that the rules have been changed to do that, and they have been changed for the simple reason that the new town of East Kilbride is being built in Lanarkshire. Is that an advantage to Lanarkshire? The hon. Member for Galloway, who knows so little about this, is totally wrong in imagining that it is an advantage.

The Secretary of State knows full well that the Lanarkshire education authority cannot get ahead with building schools in other parts of the county because of the need to build schools in East Kilbride for children coming out from Glasgow. The right hon. Gentleman also knows full well that the Lanarkshire County Council cannot get on with the construction, maintenance and improvement of classified roads in the county because almost all the money available for classified roads has to be spent in East Kilbride.

We have appealed to the Secretary of State to recognise the existence of this problem. The amount of general grant is bound to be increased year by year, because the Lanarkshire County Council, with 10.5 per cent. or 10.6 per cent. of the total of general grant, us spending nearer to 15 per cent. of the amount of the capital investment in the building of schools. And where is it being spent? In East Kilbride. But while the total relevant expenditure for the calculation of general grant is increased by this heavier expenditure in Lanarkshire, the County Council of Argyll gets more general grant because schools are being built in East Kilbride, the County Councils of Kirkcudbright and Wigtown both get more general grant because schools are being built in East Kilbride, and the County Council of Perth gets more money in general grant because schools are being built in East Kilbride. We are being robbed all the time, and now we are being cheated of another £¼ million.

The right hon. Gentleman knows that most of us on this side are in favour of fair rents. I have said this, and in 1958 I had the courage of my convictions by saying it to the local authorities in their own conference. I did not go behind anybody's back to say it. But I said then, as I say now, that we cannot deal with rents in isolation. One cannot get the tenancy of a house merely by paying the rent. One pays the rent and the rates. No one advertises cigarettes at 1s. 3d. a packet if the price which one pays is 4s. 6d. One puts the duty and the real price together to get the cost. It is the same with housing: one has to put the rent and rates together to arrive at the true figure.

The Secreary of State, in his very unfair speech, bearing in mind what was said in the discussion upstairs, once again made his comparison between English and Scottish rents without comparing the rates paid in England and Scotland and without comparing the valuations in the two countries. Valuation is the basis for the change proposed in Clause 3. He did not compare these other things because he was not willing to play fair with the House of Commons. He was not willing to give us a fair and full picture.

The right hon. Gentleman knows full well that council tenants in Scotland are paying in rent and rates as much as council tenants in any other part of Great Britain. In any case, I should have thought that the time to increase rents for council tenants or for any other tenants was when the economy was expanding and when we had full employment. The local authorities under attack in Clause 3, and, indeed, in Clauses 8 and 9, are in areas with the greatest unemployment in the whole of Great Britain, and the victims of the Bill are the ordinary working people in those areas.

The Secretary of State said that rents should be based on valuations and that we must accept the assessors' valuations as fair. But what does he say when it comes to industrial rating? He said upstairs: When the results of the revaluation were studied, it was clear to the Government that the balance of valuations was not yet such that industry could fairly be fully rerated. Later, he said: We expect that the 1966 revaluation will deal fairly with industry as against other subjects without the benefit of derating."—[OFFICIAL RFPORT, Scottish Grand Committee, 27th November, 1962; c. 18.] Nevertheless, he said that if rerating was not introduced the Government would have to make some other provision. He was saying that the assessors in Scotland have not made fair valuations when it comes to the rates to be paid by the industrialists, but they have made fair valuations if they have provided a yardstick by which the Secretary of State can determine what is a fair rent for council tenants.

In the present economic difficulties, the Chancellor of the Exchequer has seen fit to make certain concessions to stimulate the economy. He has decided to make more post-war credits available. He has decided on a reduction in the Purchase Tax on cars and to give increased investment allowances. All these steps are calculated to increase spending. That is the whole object of the exercise. What is the contribution of the Secretary of State, Scotland's Cabinet Minister? The country for which he is responsible has the worst unemployment figures in Great Britain. He, by introducing this Bill, is doing quite the opposite to what the Chancellor of the Exchequer is doing. He said today, and, in effect, says in Clause 3, that it is the plain duty of councillors, be they Tory or Labour—it would be a mistake to think that only Labour councils have low rents—in those areas in industrial Scotland with low rents and very high unemployment to reduce the spending power of the people in those areas.

Every council tenant in those areas who is to have his rent increased under Clause 3 will have less money to spend on other things. Every local authority which suffers a reduction in its Exchequer equalisation grant under Clause 3 will have to take more money from the ratepayers, who will have less money to spend on other things. This applies particularly in areas of industrial Scotland with the highest unemployment figures in the whole of the United Kingdom. Yet the Chancellor of the Exchequer takes steps to increase spending power in London, the Midlands and every part of the country. He must speak with two voices, because I strongly suspect that Scotland's representative in H.M.G. always takes his advice from H.M.V. and does whatever he is told.

The time has come for Scotland to have a Minister who will look after her interests and who will speak up for her in the Cabinet here in London, someone who will help to get us out of the difficulties in which we find ourselves instead of introducing a miserable little Bill like this, which can only make matters worse.

6.46 p.m.

The Under-Secretary of State for Scotland (Mr. Gilmour Leburn)

Perhaps it would be most convenient if I were to wind up the debate by dealing with one or two specific points raised in the debate, leaving a number of others which would be best dealt with in Committee. I suggest to my hon. Friend the Member for Fife, East (Sir J. Gilmour) that his point on Clause 18 and the point which the hon. Lady the Member for Lanarkshire, North (Miss Herbison) and one other hon. Gentleman raised concerning the weighted populations under Clause 8 are best left for the Committee stage, particularly since we are dealing with an Order-making power by the Secretary of State subject to affirmative Resolution.

Having dealt with one or two specific points, I should like to come to the wider issue raised by the Opposition's Amendment dealing mainly with Clause 3. First, I wish to refer to Clause 10 concerning the rerating of industry. I should have been tempted if there had been more time to speak at some length on the speech of the hon. Member for West Stirlingshire (Mr. W. Baxter), but I would rather deal with the points raised by the hon. Members for Hamilton (Mr. T. Fraser) and Glasgow, Central (Mr. McInnes).

I am disappointed that the hon. Member have made so much criticism of the Secretary of State's decision to postpone industrial rerating until 1966, since it has been explained that rerating in 1963 would put an unreasonable burden on Scottish industry, which all of us, particularly at this time, are anxious to assist. I cannot see why hon. Members should complain so bitterly. No pledge was given that rerating would be introduced in 1963, as was suggested by the hon. Member for Glasgow, Craigton (Mr. Millan). The Secretary of State announced on 25th November, 1960, that it would be introduced in 1963 or, if that proved impracticable, as soon thereafter as possible. In July, 1962, he stated that it had been decided to postpone rerating until 1966 in the light of the new valuations.

I appreciate the concern of hon. Members opposite for the rating position of local authorities and for the interests of the other elements, such as housing and shops. But, to keep the record straight, I should say that, without rerating, Scottish industry, after the revaluation, increased its share in the rates from 7.5 per cent. to 12.9 per cent. The burden borne by householders as a result of the revaluation went down from 59.6 per cent. to 52.6 per cent. and the share of commercial and miscellaneous property went up only from 32.9 per cent. to 34.5 per cent. Industry certainly felt the draft of the revaluation, but that was not the only increase which it had to face.

In 1959–60, its 75 per cent. derating had gone down to 50 per cent. This meant that its rates virtually doubled in 1959–60 and greatly increased again in 1961–62. From 1959 to 1966, Scotland will have had in eight years' full renting and two revaluations. From 1956 to 1963, the same length of period, England will have had eight years in which to assimilate full rerating and two revaluations.

Without rerating, industry's percentage of the rate burden in Scotland is about 13 per cent., which is little below the expected English percentage after rerating of about 16 per cent. If Scottish industry were now fully rated, its share of total rate percentage would be over 22 per cent. I consider the decision taken by my right hon. Friend to be a fair and reasonable one.

I should like to turn to the main principles of the debate. The Opposition Amendment claims that the effect of the Bill will be to reduce considerably the Exchequer equalisation grant paid to Scottish local authorities. As my right hon. Friend said, the Government cannot accept that this is a fair description. [HON. MEMBERS: "It is true."] It is true, but we cannot accept that it is a fair description of the effects of the Bill. Nothing in the Bill alters the method of calculation of the Scottish total, which is still based on the Sixth Schedule to the 1956 Act. In all the consultations which we have had with local authorities, there has been no suggestion that we ought to change this method.

The calculation is not affected in any way by Clause 3. Thus, even if local authorities did not take steps to reduce their housing deficits, the housing charge on the rates would still go to swell the total of relevant Scottish expenditure ranking for grant. Clause 3 takes effect at a later stage in calculating the grant for individual authorities and then only if their rents are unduly low. In consequence, the deductions under Clause 3 would affect only particular authorities.

Hon. Members opposite have argued that if local authorities, seeing the effect that Clause 3 will have upon them, increased their rents and reduced their housing deficit, their relevant expenditure and, consequently, their grant would be reduced. Equally, it is said that the total relevant Scottish expenditure and the total Scottish grant is reduced. I accept that this will be so, but what I cannot accept is that this is either wrong or unfair. The position is no different here from any other economy in expenditure made by local authorities. Any local authority which effects a saving of any kind—say, by administrative economies, by the utilisation of more efficient types of plant or equipment or by achieving lower building costs—cuts down its claim for grant and, thus, the total of Scottish grant. Do hon. Members opposite suggest that this is wrong? If so, they are saying that grant should not be related to the cost of the services which it is intended to assist.

However, as my right hon. Friend has said, any reduction in grant is outweighed by the increase in revenue, which must always be greater unless there is such a thing as a local authority receiving 100 per cent. equalisation grant.

Mr. Millan

Will the hon. Gentleman give way?

Mr. Leburn

I must get on, if the hon. Member does not mind.

It has been argued that it is wrong to deduct rent rebates when calculating the rent income of a local authority under Clause 3. Let me make it clear that the Government regard rebates as an essential part of any rents policy. When, however, we are discussing the yardstick for equalisation grant, the Government's feeling is that it is reasonable to expect local authorities to attain an average rent of ultimately 95 per cent. of gross values after deducting rebates. I know that hon. Members opposite do not agree with this, but the Government hold the view that it is perfectly reasonable.

It is left to the discretion of local authorities as to how they should do this, whether they have high standards of rents with high rebate schemes or low standard rents with low rebate schemes. That is left largely to the discretion of the local authority. In neither case, however, would the provisions of Clause 3 take effect.

Hon. Members have suggested that the fact that the average earnings in Scotland are less than in England makes it wrong to reduce the extent to which the Exchequer helps to subsidise rents. The Exchequer subsidy is, however, paid for by taxpayers in Scotland as well as in England and since council houses are in the main allocated according to the housing need—not according to income—we have the position that private tenants or owner-occupiers with low incomes are assisting council tenants, some of whom may be better off.

It has also boon argued that where an area as a whole is depressed and suffering from unemployment, we should not insist upon average rents of 85 to 95 per cent. of gross annual value under Clause 3. Apart from the fact that low earnings and unemployment are not confined to council tenants, the condition of the area should be reflected in the valuations, which should be generally lower. I have formed the impression today that Opposition speakers have simply concentrated all their arguments on local authority council house tenants and that not one word has been said about the taxpayer or the ratepayer, who may well be less well off than the council house tenant.

If the Opposition Amendment is meant to criticise the restriction of the amount of grant paid to particular local authorities which have incurred too high a housing deficit due to their policy on rents, it is also a criticism of the recommendations of the Public Accounts Committee—

Mr. T. Fraser

Nonsense.

Mr. Leburn

—that steps should be taken to limit the Exchequer contribution to deficits.

Mr. Fraser

Rubbish.

Mr. Leburn

It is not rubbish. It is true.

Mr. Fraser

It is rubbish.

Mr. Leburn

If it is meant to imply—this is the only other meaning which I can place upon it—than the grant which is withdrawn should be contributed to other local authorities as a whole, it runs counter to the Public Accounts Committee's object of limiting Exchequer payments arising out of unreasonably low rents.

I invite the House emphatically to reject the Amendment.

Miss Herbison

Before the Minister sits down, I wish to ask him one question. Is he completely satisfied with the work of the assessor in assessing houses, but

totally dissatisfied with the work of the same assessor in assessing industry?

Mr. Leburn

I made it quite clear to the Committee upstairs, on both days when I spoke, that we cannot look behind the assessments of the assessor. I am sure that that is right. We cannot challenge these assessments.

Mr. Willis

That is no answer.

Question put, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 192, Noes 147.

Division No. 18.]	AYES	[7.0 p.m.
Agnew, Sir Peter	Fraser, Ian (Plymouth, Sutton)	Maclean, SirFitzroy (Bute & N. Ayrs.)
Aitken, W. T.	Gammans, Lady	Macleod, Rt. Hn. Iain (Enfield, W.)
Allason, James	Gardner, Edward	McMaster, Stanley R.
Arbuthnot, John	Gilmour, Ian (Norfolk Central)	Macpherson, Rt. Hn. Niall (Dumfries)
Awbery, Stan	Gilmour, Sir John	Maddan, Martin
Balniel, Lord	Goodhart, Philip	Maginnis, John E.
Barber, Anthony	Grant-Ferris, R.	Maitland, Sir John
Barlow, Sir John	Gresham Cooke, R.	Marten, Neil
Batsford, Brian	Grosvenor, Lt.-Col. R. G.	Mathew, Robert (Honiton)
Baxter, Sir Beverley (Southgate)	Gurden, Harold	Mawby, Ray
Bell, Ronald	Hall, John (Wycombe)	Maxwell-Hyslop, R. J.
Bennett, F. M. (Torquay)	Hamilton, Michael (Wellingborough)	Maydon, Lt.-Cmdr. S. L. C.
Berkeley, Humphry	Harris, Reader (Heston)	Mills, Stratton
Biffen, John	Harrison, Col. Sir Harwood (Eye)	Miscampbell, Norman
Biggs-Davison, John	Harvey, Sir Arthur Vere (Macclesf'd)	Montgomery, Fergus
Birch, Rt. Hon. Nigel	Harvey, John (Walthamstow, E.)	Noble, Rt. Hon. Michael
Bishop, F. P.	Hastings, Stephen	Osborn, John (Hallam)
Black, Sir Cyril	Hay, John	Page, Graham (Crosby)
Bossom, Clive	Heald, Rt. Hon. Sir Lionel	Page, John (Harrow, West)
	Heath, Rt. Hon. Edward
Bourne-Arton, A.	Hill, Dr. Rt. Hon. Charles (Luton)	Pearson, Frank (Clitheroe)
Box, Donald	Hill, J. E. B. (S. Norfolk)	Peel, John
Boyd-Carpenter, Rt. Hon. John	Hirst, Geoffrey	Percival, Ian
Boyle, Rt. Hon. Sir Edward	Hobson, Sir John	Pitman, Sir James
Braine, Bernard	Holland, Philip	Pitt, Dame Edith
Brewis, John	Hollingworth, John	Pott, Percivall
Brooke, Rt. Hon. Henry	Hopkins, Alan	Price, David (Eastleigh)
Brown, Alan (Tottenham)	Hornby, R. P.	Prior, J. M. L.
Browne, Percy (Torrington)	Hornsby-Smith, Rt. Hon. Dame P.	Prior-Palmer, Brig Sir Otho
Buck, Antony	Howard, John (Southampton, Test)	Pym, Francis
Burden, F. A.	Hughes-Young, Michael	Quennell, Miss J. M.
Butcher, Sir Herbert	Hurd, Sir Anthony	Redmayne, Rt. Hon. Martin
Campbell, Gordon (Moray & Nairn)	Hutchison, Michael Clark	Rees, Hugh
Carr, Robert (Mitcham)	Iremonger, T. L.	Rees-Davies, W. R.
Channon, H. P. G.	Irvine, Bryant Godman (Rye)	Ridley, Hon. Nicholas
Clark, Henry (Antrim, N.)	Jenkins, Robert (Dulwich)	Roberts, Sir Peter (Heeley)
Clark, William (Nottingham, S.)	Jennings, J. C.	Russell, Ronald
Cleaver, Leonard	Johnson, Dr. Donald (Carlisle)	Scott-Hopkins, James
Cole, Norman	Jones, Arthur (Northants, S)	Sharples, Richard
Cooper, A. E.	Kaberry, Sir Donald	Skeet, T. H. H.
Cordeaux, Lt.-Col. J. K.	Kerans, Cdr. J. S.	Smith, Dudley (Br'ntf'd & Chicwick)
Costain A. P.	Kerr, Sir Hamilton	Smyth, Rt. Hon. Brig. Sir John
Craddock, Sir Beresford	Kershaw, Anthony	Spearman, Sir Alexander
Critchley, Julian	Kirk, Peter	Speir, Rupert
Crosthwaite-Eyre, Col. Sir Oliver	Lagden, Godfrey	Steward, Harold (Stockport, S.)
Crowder, F. P.	Langford-Holt, Sir John	Storey, Sir Samuel
Cunningham, Knox	Leavey, J. A.	Studholme, Sir Henry
Curran, Charles	Leburn, Gilmour	Summers, Sir Spencer
Dalkeith, Earl of	Legge-Bourke, Sir Harry	Tapsell, Peter
d'Avigdor-Goldsmid, Sir Henry	Lindsay, Sir Martin	Taylor, Sir Charles (Eastbourne)
Deedes, Rt. Hon. W. F.	Linstead, Sir Hugh	Taylor, Frank (M'ch'st'r, Moss Side)
Digby, Simon wingfield	Litchfield, Capt. John	Teeling, Sir William
Doughty, Charles	Longbottom, Charles	Thatcher, Mrs. Margaret
du Cann, Edward	Longden, Gilbert	Thompson, Richard (Croydon, S.)
Duncan, Sir James	Loveys, Walter H.	Thornton-Kemsley, Sir Colin
Eden, John	Lucas-Tooth, Sir Hugh	Tilney, John (Wavertree)
Elliot, Capt. Walter (Carshalton)	MacArthur, Ian	Touche, Rt. Hon. Sir Gordon
Farr, John	McLaren, Martin	Turton, Rt. Hon. R. H.
Fletcher-Cooke, Charles	Maclay, Rt. Hon. John	Tweedsmuir, Lady
van Straubenzee, W. R.	Webster, David	Woodhouse, C. M.
Vane, W. M. F.	Wells, John (Maidstone)	Worsley, Marcus
Vickers, Miss Joan	Whitelaw, William	Yates, William (The Wrekin)
Walder, David	Williams, Dudley (Exeter)
Walker, Peter	Wilson, Geoffrey (Truro)	TELLERS FOR THE AYES:
Walker-Smith, Rt. Hon. Sir Derek	Wise, A. R.	Mr. Chichester-Clark and
Ward, Dame Irene	Wolrige-Gordon, Patrick	Mr. Finlay
NOES
Albu, Austen	Greenwood, Anthony	Noel-Baker, Francis (Swindon)
Baird, John	Grey, Charles	Oram, A. E.
Barnett, Guy	Grimond, Rt. Hon. J.	Oswald, Thomas
Baiter, William (Stirlingshire, W.)	Hannan, William	Owen, Will
Bence, Cyril	Harper, Joseph	Paget, R. T.
Bennett, J. (Glasgow, Bridgeton)	Hart, Mrs. Judith	Pannell, Charles (Leeds, W.)
Benson, Sir George	Hayman, F. H.	Pargiter, G. A.
Boardman, H.	Healey, Denis	Parker, John
Bottomley, Rt. Hon. A. G.	Henderson, Rt. Hn. Arthur (Rwly Regis)	Pavitt, Laurence
Bowden, Rt. Hn. H. W.(Leics, S.W.)	Herbison, Miss Margaret	Peart, Frederick
Bowles, Frank	Hill, J. (Midlothian)	Plummer, Sir Leslie
Boyden, James	Hilton, A. V.	Pursey, Cmdr. Harry
Bray, Dr. Jeremy	Holman, Percy	Rankin, John
Broughton, Dr. A. D. D.	Holt, Arthur	Reid, William
Brown, Rt. Hon. George (Belper)	Hughes, Emrys (S. Ayrshire)	Robertson, John (Paisley)
Butler, Herbert (Hackney, c.)	Hughes, Hector (Aberdeen, N.)	Rogers, G. H. R. (Kensington, N.)
Butler, Mrs. Joyce (Wood Green)	Hunter, A. E.	Ross, William
Carmichael, N. G.	Hynd, H. (Accrington)	Short, Edward
Castle, Mrs. Barbara	Hynd, John (Attercliffe)	Silverman, Julius (Aston)
Chapman, Donald	Irving, Sydney (Dartford)	Silverman, Sydney (Nelson)
Cliffe, Michael	Janner, Sir Barnett	Skeffington, Arthur
Collick, Percy	Jay, Rt. Hon. Douglas	Small, William
Corbet, Mrs. Freda	Jeger, George	Smith, Ellis (Stoke, S.)
Cronin, John	Johnson, Carol (Lewisham, S.)	Sorensen, R. W.
Crosland, Anthony	Jones, Dan (Burnley)	Soskice, Rt. Hon. Sir Frank
Crossman, R. H. S.	Jones, Elwyn (West Ham, S.)	Steele, Thomas
Cullen, Mrs. Alice	Kenyon, Clifford	Stewart, Michael (Fulham)
Dalyell, Tam	Key, Rt. Hon. C. W.	Stonehouse, John
Darling, George	King, Dr. Horace	Strauss, Rt. Hn. G. R. (Vauxhall)
Davies, S. O. (Merthyr)	Lawson, George	Stross, Dr. Barnett (Stoke-on-Trent, C.)
Deer, George	Ledger, Ron	Taverne, D,
Dempsey, James	Lee, Frederick (Newton)	Thomas, George (Cardiff, W.)
Diamond, John	Lipton, Marcus	Thomson, G. M. (Dundee, E.)
Dodds, Norman	Lubbock, Eric	Thornton, Ernest
Donnelly, Desmond	Mabon, Dr. J. Dickson	Thorpe, Jeremy
Driberg, Tom	McCann, John	Warbey, William
Dugdale, Rt. Hon. John	MacColl, James	Weitzman, David
Ede, Rt. Hon. C.	Mclnnes, James	Whitlock, William
Edelman, Maurice	Mackie, John (Enfield, East)	Wilkins, W. A.
Edwards, Walter (Stepney)	McLeavy, Frank	Williams, W. R. (Openshaw)
Evans, Albert	MacPherson, Malcolm (Stirling)	Williams, W. T. (Warrington)
Fitch, Alan	Mallalieu, J. P. W. (Huddersfield, E.)	Willis, E. G. (Edinburgh, E.)
Fletcher, Eric	Marsh, Richard	Wilson, Rt. Hon. Harold (Huyton)
Foot, Dingle (Ipswich)	Mellish, R. J.	Woodburn, Rt. Hon. A.
Foot, Michael (Ebbw Vale)	Mendelson, J. J.	Wyatt, Woodrow
Forman, J. C.	Millan, Bruce	Yates, Victor (Ladywood)
Fraser, Thomas (Hamilton)	Mitchlson, G. R.	Zilliacus, K.
Gaitskell, Rt. Hon. Hugh	Moody, A. S.
Galpern, Sir Myer	Morris, John	TELLERS FOR THE NOES:
Gordon Walker, Rt. Hon. P. C.	Moyle, Arthur	Mr. Redhead and Mr. Ifor Davies.

Bill read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).