New Clause.—(INCOME TAX ALLOWANCE FOR IMPROVEMENTS TO RENTED PROPERTIES.) (Hansard, 30 May 1963)

§ Mr. W. Clark
I beg to move, That the Clause be read a Second time.

§ The Temporary Chairman (Sir Norman Hulbert)
I think that it would be convenient for the Committee to discuss, at the same time, the new Clause No. 63 standing in the name of the hon. Member for Crosby (Mr. Graham Page), "Income Tax: Allowances on rented dwelling-houses".

§ Mr. Clark
I do not think that there will be as much controversy over this new Clause as there was with the last one. It concerns Income Tax allowances for improvements to rented property. Between the time of tabling the Clause and today the Government have thought fit to bring out their White Paper on Housing, and without wishing to violate the rules of order I would like to point out how well that document has been received in the country.
The White Paper is a tribute to the progressive housing policy of the Conservative Party since 1951. It shows that even after twelve years of Tory rule this party still has fresh ideas on housing and that we are stepping up the annual rate of house building from 300,000 to 350,000. I appreciate that this does not come within the ambit of the Clause, but the White Paper shows that the Government have set their mind to improving and increasing the number of houses.
The Clause deals only with improvements to controlled, rented property and I would like to make this perfectly clear. We now have this position. If a landlord improves his property he gets an improvement grant of up to half of the cost of the improvements, provided the local authority in the area operates these grants. This is one of the fallacies in our law; that an improvement grant is discretionary while a standard grant is mandatory.
If the landlord happens to live within the area of a local authority which does not operate improvement grants the whole idea of improving property throughout the country is brought to nought, and I hope that that will be righted in future. 1668 Let us consider the case of a landlord who is in the area of a local authority which operates improvement grants and who gets an improvement grant on his property. Let us assume that he spends £1,000 on improving his rented, controlled property. He will get a 50 per cent. grant and he must find £500 himself, assuming that he can convince the local authority that the £500 is all improvement.
But when there is any improvement to any property the total amount paid to the builder is not necessarily the total amount allowed for improvement grant, because with any improvement one naturally catches up with the maintenance of the property. In circumstances where £1,000 is being spent for the purpose of the improvement grant, that figure is reduced to, say, £800 and, consequently, the landlord gets 50 per cent. of that, which is £400. He himself must pay £600 to improve his property.
I appreciate that with his controlled rental he can then increase his gross rent by 12½ per cent. of the amount he pays for the improvement, but we have to remember the increased additional expenses which he has on that rented property. Collection charges go up because he has improved the property. Insurance charges go up and with 7s. 9d. in the £ Income Tax which he will pay on excess rent it will be found that instead of getting 12½ per cent. an capital outlay on his increased investment it will be 6½ per cent. or 7½ per cent. One might say that that is good, but the Minister of Housing and Local Government, in his White Paper, has accepted that many houses are capable of improvement and we should give every incentive to landlords to improve them.
For this purpose, we are trying to take the amount which the landlord spends on improvement and give it to him as an allowance on gross rents over the succeeding ten years. Is my hon. Friend, in his reply, to take me up on the wording of the Clause? The spirit behind it is to give more incentive to private landlords to improve their property for ranting. That will not only improve the condition of the property, but also improve the living standards of the people who live in the property. If we could do that, I am sure that it would bring rented property into the category of an industry.
1669 I remind my hon. Friend that the Chancellor, when introducing the Budget, said that with the abolition of Schedule A on owner-occupiers and rented property he wanted to treat rents from property as any other business. If that is the premise on which he works, it is quite right to allow some percentage of improvement to that property as a deduction from gross rents.

§ Mr. Houghton
I have been following the hon. Member carefully and with some sympathy, but he has not yet mentioned the right of the landlord who improves rented property, even controlled property, to pass on to the tenant a percentage of the capital expenditure as an increase in rent. Will the hon. Member deal with that?

§ Mr. Clark
I am sorry if I omitted that. I rather thought that in the hypothetical example I gave I said that a landlord could increase the rent by 12½ per cent. of the amount he had spent on improvements. Obviously there is an increase in rent for improvement. The argument was based on the fact that even with an increase in rent there is an increase in expenditure.
The hon. Member will remember that I spoke about increased collection charges. They must increase if the rent increases and insurance charges must increase if the rent increases. I mentioned that if 7s. 9d. in the £ Income Tax is taken off, rather than getting 12½ per cent. on the investment it will probably work out at 6½ per cent. I want to give to the landlord, over ten years, as a deduction from his rent, one-tenth of the amount that he has spent on improving rent-controlled property.

§ Mr. Graham Page (Crosby)
I wish to address my remarks to new Clause No. 63, which is intended to achieve something of the same object as that of my hon. Friend the Member for Nottingham, South (Mr. W. Clark) in new Clause No. 44. New Clause No. 63 would concede to those constructing houses to let the same concession as is made in capital allowances to those constructing industrial buildings. Those concessions appear, as the Committee will know, in Chapter 1, Part X of the Income Tax Act, 1952, and they are two-fold—the initial allowance of 10 per cent. and the annual allowance spread over a period of years.
1670 May I dispose of one or two possible criticisms of the idea that those constructing houses to let should have capital allowances conceded to them? It might be said that if a person builds a dwelling house or a block of flats these days he will be able to sell it a short time later at an enhanced value even if it be tenanted and without vacant possession. It might be said that in being given these capital allowances, the developer or the builder would be able to pocket them twice over and that we should be handing out tax concessions to the Cottons and the Clores, as it were. But that is not really the case, because under Section 127 of the 1952 Act there are balancing charges which take care of that sort of thing.
Section 265(5) also takes care of the position if the building is not used for the purpose for which it was being built. That subsection provides that the allowance is not made if a building which is intended as an industrial building is not used eventually as one. If the new Clause of which I am speaking applied. that would be so and no relief would be given if the building were not used as a rented building in the end. Therefore, it would be quite practicable to give capital allowances in respect of the construction of rented houses and flats as it has turned out to be quite practicable to give such allowances in respect of the construction of industrial buildings.
Let us assume for a moment that a developer is contemplating constructing a single house for letting, or a block of flats. What elements of expenses and return on his money must be taken into account in deciding what rent he will be able to charge for these dwelling-houses? Certainly one element which he would take into account, if he were wise, would be the wasting nature of his assets. He may consider that his buildings could become obsolete after 60 years, 80 years or 100 years, and he will amortise over that period.
It is true that one can charge against taxable income the cost of repairs to dwelling-houses, but there is an element of capital wastage which can never be overtaken by repairs, however frequently those repairs are done. Not only will the structure decay, despite the repairs, but standards of living and the habits of living continually change and so 1671 dwelling-houses become obsolete. One has only to compare the contemporary house with the Victorian house. This obsolescence or wastage of the assets is as much an expenditure wholly and exclusively incurred in the provision of houses to let as is the periodic expenditure on repairs, and it is fair that it should be allowed in the same way as expenditure on repairs.
In his Budget speech the Chancellor of the Exchequer spoke of our taxation system depending upon fairness. I am not quoting his words accurately, but I think that that was the sense of them. If the taxation of any business is patently unfair, then people are not going into that business, or if they are in it they are coming out of it. It must be remembered that in order to go into the business of building houses to let one has to be thick-skinned enough to be regarded by one political party as some evil criminal just because one is a landlord, and one has to be optimistic enough that that political party will not take office and fix the rents according to some political convenience.
In face of those embarrassments and, indeed, in face of competition from subsidised council housing, and with an unfair tax as well, is it any wonder that in the White Paper on Housing, just published, the Government have said: Since the war there has been almost no building to lot other than by public authorities. Fear of rent control, and of the problems associated with management, maintenance and repair has discouraged private investment. The result is a gap in housing provision; and this the Government intend to see filled. I suggest that the new Clause is the way to fill it.
Capital allowances for industrial buildings were granted—and here I quote my hon. Friend the Financial Secretary on 21 st May— to encourage the expansion and modernisation and re-equipment of the premises of productive industry."—[OFFICIAL REPORT, 21st May, 1963; Vol. 678, c. 252.] Here in this White Paper on Housing the Government have admitted the grave shortage of houses to let and the need to encourage the provision of such houses, in the same way as it was necessary, when capital allowances were introduced for industrial buildings, to encourage the provision of industrial buildings.
1672 In the White Paper the Government go to such an extent in suggesting encouragement for the provision of houses to let, that they turn to the building societies to produce £200 million. They suggest making £100 million available to a Housing Corporation, to pay the administrative expenses of such a corporation, and they go to such un-Conservative lengths as to provide that nationalised housing body with compulsory acquisition powers—all in order to set up housing societies which, by present experience, people do not want very much. It is a good enough scheme for a small number of houses, but it will not produce nearly enough houses to let. I believe that if those developers and builders who are prepared to come forward and build the houses to let were given this fairness in the taxation of their business, they would provide those houses in far greater number than would be provided by any system of Housing Corporation or housing societies.
The Government, in this White Paper, have set their sights far too low in their target of 350,000 a year. We want 150,000 a year more than that and some of them at least could be provided by this sort of encouragement which I am suggesting to those who will provide houses to let, by playing fair in the matter of taxation with those who are prepared to go into the business of constructing rented dwellings.
I ask for these capital allowances for those who are prepared to carry out this construction on two grounds—on grounds of fairness to that business, and as a matter of policy to encourage that business, as the Government wish, according to their White Paper, to encourage it.

§ Mr. James Allason (Hemel Hempstead)
On both sides of the Committee we agree that there is an urgent need for far more rented accommodation in this country. The Labour Party pins the whole of its faith on council house building, and we on our side believe that the private landlord can make a useful contribution if only he is allowed to do so.

§ Mr. Richard Marsh (Greenwich)
I am sorry to interrupt the hon. Gentleman so early in his speech. I am grateful to him for giving way, but he must not make such statements. He must not say that the Labour Party pins the whole of its policy on council houses.

§ Mr. Allason
For rented houses.

§ Mr. Marsh
No, not even on rented houses.

§ Mr. Allason
I am glad to hear that, but I have yet to hear the slightest encouragement from the benches opposite to private landlords to build houses to let.

§ Mr. G. R. Mitchison (Kettering)
Does the hon. Gentleman remember that improvement grants were introduced by the Labour Party?

§ Mr. Allason
I shall come to improvement grants a little later. It can hardly be said that they provide new houses to let.
A council house has a subsidy. The private developer receives no subsidy whatever. We have our wonderful legacy of Victorian houses which were built in the days when it was a good propostion to provide masses of houses in which people could live at reasonable rents. This is what we need once again. We are reminded in the White Paper that there has been virtually no private house building for letting since the war.
Here I come to the matter of improvement grants. It is extremely important that these Victorian houses should be kept in use for as long as possible to provide the accommodation which is so desperately needed until the new houses can be built. at which time the old houses will he worn out and, we hope, will be replaced as a result of our building programme being well advanced.
My hon. Friend the Member for Nottingham, South (Mr. Clark) pointed out that, on his 50 per cent. contribution to the improvement grant, the landlord will probably get between 6 and 7 per cent. per annum. An improvement grant, as the Committee knows, is made only when a house has a useful life of fifteen years or more. If the life of the house is only fifteen years, consider the position of the landlord. On every £100 he spends, he will derive a net profit of only £7 for fifteen years.
It is not a very attractive proposition to put away £100 for fifteen years until, if he is lucky, he has collected it all back again, at which stage the house becomes valueless. Landlords often recognise that improvements can be made and that there is a demand for improvement 1674 grants, and they should be encouraged to go ahead. My hon. Friend's new Clause would remove the disincentive.
I turn now to new Clause No. 63, in the name of my hon. Friend the Member for Crosby (Mr. Graham Page). There are plenty of developers only too anxious to build, but, at present, they are building offices. It is an attractive proposition to build offices. Make it an attractive proposition to build houses to let at reasonable rents, and they will do it.

§ Mr. Marsh
At £3 a square foot?

§ Mr. Allason
No one suggests that the office level of rents should be charged for private dwellings. If the new Clause in the name of my hon. Friend the Member for Crosby were adopted, it would be an attractive proposition to landlords to build houses to let. They cannot do so now. My hon. Friend's proposal for capital allowances for this purpose fulfils a definite need. It is in no way unreasonable, and I hope that the Government will accept it.

§ Mr. Walker
I share the motives of my hon. Friends, but I do not believe that this is the correct way to achieve the object they have in mind. If landlords fail to improve their properties, I suggest that the correct way to get them to improve them is to make arrangements whereby the allowance on rents in relation to the amount spent on improvements is increased or the improvement allowance is increased. But for many years past and for the foreseeable years of the future, private dwellings are likely to have not a decreasing but an increasing capital value.
Although my hon. Friend the Member for Crosby (Mr. Graham Page) suggested that in the sale of one of these houses this is made up by the balancing charges, a public or private company owning private houses for letting to the public would retain these properties. They would have a hidden enhanced capital value in the balance sheet, but, at the same time, would be drawing substantial financial benefits from the depreciation allowance. I hope that my hon. Friend the Economic Secretary will not adopt this method of assisting this good cause.

§ Mr. du Cann
We have heard four extremely well-argued, cogent and well-informed speeches. I should like, first, 1675 to discuss the new Clauses shortly from the technical point of view and then make some general remarks about the whole problem.
I take, first, the new Clause in the name of my hon. Friend the Member for Nottingham, South (Mr. W. Clark) entitled "Income tax allowance for improvements to rented properties" which, if it were accepted, would provide that where a landlord carries out improvements to controlled rented living accommodation—I take it that that means living accommodation which for the time being at any rate is subject to the statutory rent control—an annual allowance of 10 per cent. of the cost shall be allowed for the ten years following as a deduction from gross rents received". My hon. Friend will recall the discussion that we had during the passage of last year's Finance Bill. Neither he nor the Committee would wish me to rehearse that for the arguments are familiar. But expenditure to be relieved under the Clause is capital expenditure and would not qualify for relief from Income Tax. Under Part X of the Income Tax Act, 1952—my hon. Friend will know this particularly for reasons which I will give—allowances can be given for capital expenditure on industrial buildings and for certain expenditure on agricultural works.
I said that my hon. Friend would know that particularly because his new Clause has a strong resemblance to the arrangements made for agricultural works, but the allowances given represent a counterpart in agriculture of the system of industrial buildings allowances and are given in respect of what are essentially instruments of production and not mere residences. It is very important to draw that distinction.
My hon. Friend the Member for Worcester (Mr. Walker), as one might expect of him, put his finger on what seemed to me a specially important point. He said that the value of these houses does not necessarily depreciate. It can remain static or it may appreciate, which is perhaps more likely judged by past history. That has to be borne in mind in any judgment of this situation.

§ Mr. Graham Page
Would that be an argument against capital allowances for industrial buildings if they also increased in value?

§ Mr. du Cann
No, I do not suggest that it would, but I am dealing with my hon. Friend's new Clause and saying that it is important to get the situation absolutely clear. It may or it may not be right to give an allowance, but one should not suggest that it is necessary to give an allowance simply because a landlord is in possession of a wasting asset. That is not necessarily the case.
The new Clause in the name of my hon. Friend the Member for Nottingham, South (Mr. W. Clark) entitled "Income Tax: Allowances on rented dwellinghouses", as opposed to the new Clause in the name of my hon. Friend the Member for Crosby, which has certain different flavours, so to speak, makes no provision for anything in the nature of an Income Tax balancing charge. It is important to recognise that that is a very serious defect in it which would have to be taken into account if the Clause were acceptable.
The new Clause proposed by my hon. Friend the Member for Crosby, whose words, I think, I can quote exactly, would give the same tax allowances in respect of capital expenditure on the construction of houses built to let as those given for expenditure on the construction of industrial buildings. The figures quoted by my hon. Friend for the allowances were not quite accurate, because he based them on the 1952 Act—I see that he acknowledges the point, so there is no need for me to go into it in detail—rather than on the present Bill and the improvements therein contained.
The allowances for expenditure on industrial buildings were granted to encourage the modernisation and expansion of our productive, manufacturing and processing industries, which are the foundation of our economy. They do not extend to non-industrial structures, about which there has been a good deal of discussion in the course of the Committee, such as retail shops, showrooms, hotels and offices, even though these may have an important role in commerce.
They certainly do not extend to dwelling-houses. It would be contrary to the purpose of these allowances as currently 1677 constructed to adapt them to the end proposed by the Clause. It would certainly be indefensible to grant them in respect of ordinary dwelling-houses and to refuse them for commercial buildings generally. Apart from questions of merit, the cost of extension to commercial buildings would be prohibitive.
Those were the few general remarks I wanted to make technically concerning the new Clauses. Having said that, I entirely understand, and sympathise strongly with, the view expressed by my hon. Friends, or by three of them at least—and I do not think that my hon. Friend the Member for Worcester would dissent from this view—that if it were thought right to adopt these new Clauses, there would be a substantial stimulus to landlords to build houses to let. That is unquestionably true. I also agree with my hon. Friends when they say that there is need to improve living standards and that the provision of new houses, whether to purchase or to let, and by whomsoever they are provided, is an important and appropriate step forward in that regard.
Basically, the difficulty facing the Committee and my hon. Friends in considering these matters and deciding whether to adopt these new Clauses—and it was recognised by my hon. Friend the Member for Nottingham, South in his opening remarks—is that since my lion. Friend tabled the new Clause and since the discussion last year a great deal of water has passed under the bridge. In particular, we have had publication of the White Paper to which he referred. You will not want me to go into detail. Sir William, or, indeed, in more than a sketchy fashion into the proposals involved in that White Paper—

§ Mr. Callaghan
The hon. Member would be out of order.

§ Mr. du Cann
I am obliged to the hon. Member. As usual, he is following with close attention everything that is being said and he has got the next stage absolutely right—I would be our of order. Not only that, but I would be assuming responsibilities which are not mine. These are matters for my right hon. Friend the Minister of Housing and Local Government.
Clearly, we have an entirely new situation. It is true that the new Clauses 1678 and the suggestion of my hon. Friends would have some effect. As my hon. Friend the Member for Worcester suggested, it is arguable the extent to which they would have an effect or whether this is the most desirable method to adopt. The fact is that the Government have come forward with new proposals, of which my hon. Friend the Member for Nottingham, South, quite rightly, spoke most warmly, and in those circumstances it cannot be right to put forward other proposals which, to some extent, run counter to those of the Government. It might be suggested that they are complementary. What cannot be decided at this moment is whether there is the same need for them now that we have the publication of the White Paper.
The irony, therefore, is that in the debate last year my hon. Friend was told by the then Financial Secretary that perhaps it was too early to judge the situation in the light of recent legislative developments. My hon. Friend was good enough to accept the point and to withdraw the Clause. Now we are faced with the same circumstances again. But this new situation is different in character.

§ Mr. Callaghan
Jam yesterday and jam tomorrow.

§ Mr. du Cann
The hon. Member is moralising in a most interesting way. He suggests, "Jam yesterday and jam tomorrow, but never jam today." The truth is, as you, Sir William, know, and as I and everyone else know, under the Conservatives it is jam all the time.

§ Mr. Mitchison
All these proposals about housing which come out every year or two are each of them, in the eyes of the party opposite, the cat's whiskers. The whiskers are different every time, but it is still the same old Tory cat.

§ Mr. du Cann
I really must not be led away or astray into discussion on Purchase Tax on preserves or kindness to animals. But I do claim that several million people are living in decent housing accommodation today who might not have been doing so if we had continued to have a Labour Administration. There is no question but that the rate of house building has improved and so have the grants. However, I will not pursue this matter further.
1679 As I was saying, we have come to a new situation. It is radically different from the one before. In these circumstances, my judgment is—and I hope that my hon. Friends will agree—that the appropriate thing would be to examine the developments in this new situation, which, we hope, will have the kind of result my hon. Friends desire and have attempted to achieve with these Clauses. Should they agree with my judgment, then I hope they will not press these Clauses.

§ Mr. Houghton
I will make a preliminary intervention and reserve until a little later some more mature thoughts on this subject. Who would have thought that these innocent looking Clauses would be used from the benches opposite as a blatant political demonstration? Where would the Economic Secretary have been without the White Paper? What reply would he have given to his hon. Friends if he had not been able to wave the White Paper?
The hon. Member for Nottingham, South (Mr. W. Clark) says that the White Paper shows that the Conservative Party is still virile and progressive after 11 years of Tory rule. They have one advantage over us; they can publish their electioneering pamphlets at public expense, and this White Paper is one of them.
However, we should consider these two Clauses as a sober question of taxation and see whether they have any merit on that ground. I was going to stress the fact that there is a claim in the second of the Clauses for capital allowances for the erection of private dwellings to let which are denied to commercial buildings. As the Economic Secretary pointed out, it would be very difficult to give them to the one without giving them to the other. Indeed, the Committee has already rejected a Clause which sought to get capital allowances under Chapter I of Part X of the 1952 Act for commercial buildings in development districts.

§ Mr. Graham Page
There is also a Clause later on the Notice Paper, which might be selected, by which the hon. Gentleman could support capital allowances for retail shops apart from commercial premises.

§ Mr. Houghton
This shows that one cannot consider capital allowances in 1680 isolation. Certainly one cannot extend them to dwelling houses without becoming heavily involved in similar allowances for commercial buildings and for shops. I was a little taken aback by the political bias which the hon. Member for Crosby brought into some of his comments, because usually he makes a very objective approach to matters and is worth listening to as an expert in his own right. But when he strays into the sort of polemics which we get from other hon. Members opposite, he rather tarnishes his reputation.
If houses can be built to let at economic rentals, why are they not being built? Who is stopping the private developer from building houses or flats to let? Does the Committee think that these proposals would make all the difference? I do not think that they would. We hear of an acute shortage of houses and flats to let and of astronomical rents being demanded and paid for decontrolled accommodation which comes on the market to let. One wonders why more accommodation is not being built to let at the rents which appear to be obtainable today. Why is it? It is because it is much more profitable to build for sale, to turn over the capital and in some cases to make considerable capital gains on the way. I should like to hear from any hon. Member opposite who has any reasonable explanation why houses and flats are not being built to let when hon. Members know as well as I know that accommodation which comes on the market to rent can command very high rents indeed.

§ Mr. R. M. Bingham (Liverpool, Garston)
If the hon. Member wants an answer it can be summed up in one phrase—the Socialist threat of municipalisation.

§ Mr. Houghton
All I can say in reply to that is that there must be a great many people positively haunted by the fears of a Labour Government, who would design their policy to give reasonable protection to tenants and reasonable rewards for landlords. If houses were taken over by municipalities it would be because private landlords had failed to provide reasonable accommodation at reasonable rents.
I apologise to the hon. Member for Nottingham, South for having missed his 1681 reference to the addition to rents which can be made where a landlord improves a controlled house, but if 121 per cent. gross is not enough return on capital expenditure for improvements there is an Act of Parliament in which the remedy can be found, if it is justified. But it is not in the Finance Bill or in the system of taxation. It is in the Rent Acts that the remedy should be found. There are a great number of detailed points in the administration of Clauses of this kind which cannot be entirely overlooked.
New Clause No. 44 says: Whore the landlord carries out improvements to controlled rented living acommodation an annual allowance of 10 per cent. of such costs shall be allowed for the ten years following as a deduction from the gross rents received. But we know that if a house becomes vacant, under the Rent Act as it stands it becomes decontrolled. The landlord can then let it at an economic rental, or even at a profiteering rental, or he can sell it with vacant possession. In those circumstances, what becomes of the capital allowance which he has received and the capital allowance which he may still be receiving? That is clearly a matter of considerable importance in this connection.

§ Mr. Allason
Is the hon. Gentleman quite certain about that? It is my impression of the law that where there is an improvement grant and the tenant then leaves, the controlled tenancy continues.

§ Mr. Houghton
The hon. Member has misunderstood me. I was not referring to the effect of an improvement grant on rented property. I was referring to the terms of new Clause No. 44, which provides for a capital allowance over a 10-year period but does not limit that in any way if the house becomes vacant, and therefore decontrolled, while the 10-year period is still current.

§ Mr. Allason
That is my point. The hon. Member says. "And therefore decontrolled", but the controlled rent still continues where an improvement grant is in existence.

§ Mr. Houghton
Yes, but the Clause is not conditioned by the landlord's having received an improvement grant. The hon. Member for Nottingham, South pointed out that in a number of districts it is very difficult for landlords to get the dis- 1682 cretionary improvement grant, and I was pointing out that the Clause makes no cross-reference to improvement grants, or to the conditions under which they are given. I concede to the hon. Member that where an improvement grant is given, there are certain conditions as to retaining the property available to let, and that is quite a proper limitation, but that is not a limitation carried into the Clause. I hope that I have made the point clear. I was saying that this was an obvious defect in the new Clause.
Those are a few thoughts on these proposals and they are clearly material to the merits of the case. Did I see the hon. Member for Nottingham, South looking at the clock? He need not worry, I am in no hurry. I can put his fears at rest at once—I have no train to catch; my home is quite near. I do not think that hon. Members should get impatient with me when I am giving a reasonable and non-political response to a highly provocative political demonstration from the benches opposite. I shall have the greatest difficulty restraining some of my hon. Friends from joining in. I can hear murmurings behind me already that I am not hitting the party opposite hard enough and my hon. Friends want to join in the fray. As the Committee knows, I like to deal with these things on an academic basis and I have endeavoured to do so.
I think that that is enough to be going on with. If the debate is continued, there may be fresh ground for asking the Committee to listen to me again.

§ Mr. W. Clark
I am grateful to the Economic Secretary for his sympathetic although not totally satisfactory reply. He rested his rejection of the Clause on the fact that the White Paper on Housing has just come out. I cannot recollect my hon. Friend's exact words, but the gist of them was that between now and the next Budget this White Paper will lead to an upsurge in housing and that if it does not my hon. Friend will accept my new Clause next year. On those grounds, I withdraw it.

§ Mr. Callaghan
It is not within the power of the hon. Gentleman to withdraw his new Clause unless it is the wish of the Committee that he should do so.

§ Mr. Clark
I am sorry. I beg to ask leave to withdraw the Clause.

§ Mr. Callaghan
I think that it would be as well for the moment to continue the discussion, because I want to make one or two points to the Treasury Bench. I am glad to see the Whips here, including the Chief Whip. I should like to address some remarks to him and to hon. Gentlemen opposite.
I think that it will be agreed that we have endeavoured to co-operate in getting these new Clauses through, and that we have done our best to get the Bill as a whole through. What we are not ready to do is to be a party to hearing a number of pre-election speeches from the Treasury Bench and from hon. Gentlemen opposite. If this is to be the basis on which the Finance Bill is to be considered, I warn hon. Gentlemen opposite that they will be here for a long time. I am glad to see that the Chancellor of the Exchequer has now arrived.
The Economic Secretary, who has been courteous and polite all the way through, lapsed in his last speech into a frank description of what he thought the Tory's election programme ought to be. I am willing to debate that on their record, but I think that we had better have an understanding about the way in which we are to deal with the remainder of the new Clauses. Hon. Gentlemen opposite can have it either way. Some of us are ready to stay here and discuss these matters all night if necessary. I am not prepared to sit here and tolerate these attacks on the late Labour Government without a reply being made. I think, therefore, that we had better decide whether we are to have a sensible discussion on the new Clauses, or whether we are to have a series of election speeches.
I could say a great deal about the Government's housing record, which I do not find wholly satisfactory, but I shall restrain myself on this occasion. I think that we must, however, decide which way we are to discuss the Bill.