HOUSING SUBSIDIES BILL

HC Deb 15 December 1965 vol 722 cc1284-403

Order for Second Reading read.

4.15 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Robert Mellish)

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

Housing subsidies have been paid to local authorities in one form or another since 1919. Their amount and the method of payment have varied according to the purposes thought important by the Government of the day. Under the Acts of 1919 and 1923 subsidies were paid, and are still being paid, towards the calculated loss met by local authorities providing housing at reasonable rents. In the mid-1920s the idea of a unit subsidy per house was developed, and as long ago as 1924 subsidies as high as £9 a year per house for the towns and £12 10s. in agricultural areas were being paid. But in the 1930s the unit subsidy was dropped and authorities were paid on the basis of the number of people rehoused from slums.

In 1946, the unit subsidy per dwelling was reintroduced, and it is worth remembering that Mr. Harold Macmillan, when he was Minister of Housing, increased it sharply from £16 to £26 14s. a house at the beginning of 1952 when the attainment of a target of 300,000 houses a year depended on the performance of the public sector. In 1955, the subsidy for houses provided to meet general need was reduced to £10, and in 1956 it was dropped altogether. From then until 1961 subsidies were concentrated on slum clearance, overspill and the housing of transferred workers and the elderly.

In 1961, the subsidy for housing for general needs was reintroduced. The basic subsidy was, and still is, payable at either of two rates: £8 or £24 a year, depending on the outgoings from the housing revenue account and the income which it was assumed to be capable of getting. All this is in terms of basic subsidies.

The House will not want its time taken up by my giving a detailed account of the supplements which have been introduced and varied from time to time to meet particular items of high cost, though some of them have a very long history. Subsidies for flats on expensive sites, for example, have been payable since 1930.

The broad case for the Bill is this. First, if subsidy rates were right in 1961, they certainly are not right now. They have been completely outstripped by rising costs. The average tender price of a three-bedroomed house increased from £1,700 in the first quarter of 1961 to £2,500 in the second quarter of 1965. Secondly, a flat rate unit subsidy payable irrespective of the actual cost of the house leaves too much burden on the authorities in areas where costs are especially high. Thirdly, a new system is needed to help authorities with a very heavy programme ahead of them.

Fourthly, some part of the rising cost of houses is due to rising standards. Getting on for half the houses now built by local authorities incorporate the space standards in the Parker Morris Report. It is right that the subsidies should encourage the development of these better standards in houses. Houses built now will be lived in by our grandchildren. We can aim only for the best and hope that we get them. Fifthly, an essential requirement of increased house production—especially where increased production requires industrialised building—is the forward planning of housing programmes and the placing of long-run contracts. For years, uncertainty about interest rates likely to be payable on houses yet to be built has put a curse on long-term planning. This uncertainty has to be alleviated.

Before I refer to the Bill, I want to say a few words briefly about the report of a working party consisting of Ministry officials and officers of local authorities which was appointed in May, 1963, by my right hon. Friend's predecessor to consider the cost of housing to local authorities and to collect information on the rent-paying capacity of council tenants.

The working party reported immediately before the last General Election. One of its main findings was that, although the historic purpose of housing subsidies had been to bridge the gap between the cost of housing and the rent which poorer tenants could afford to pay, local authority rent policies often spread the subsidy too thinly and rents did not often enough reflect individual needs. My right hon. Friends have accepted this view and, in paragraph 41 of their White Paper, have served notice that in association with the newer and more generous subsidies they will be looking to all authorities to adopt rent rebate schemes designed to put the benefit where it is most needed.

The working party also called attention to regional differences in local authority rents which emerge from the inability of a unit subsidy to reflect the tremendous variation of land and building costs in recent years. Although it was only a fact-finding body, the working party considered the principles on which a subsidy differentiating between areas might operate.

Two possibilities foreseen by the working party are, first, that there might be some elaboration of the 1961 system under which the basic subsidy is paid at different rates according to the state of the housing revenue account; and second, that existing subsidies might be called in, pooled with the new subsidies, and redistributed. The working party pointed out, however, that either system must be linked with a test of the rent resources of the authority and it confessed that it was unable to find a better test than a formula based upon gross values.

That was not a recommendation, but was a statement of the facts on which the experts had been invited to report. Its use as a basis for action would present any Housing Minister, whatever his political views, with two points of great difficulty. The withdrawal of existing subsidies raises a serious question of public faith, but, more importantly, the only test of resources that the experts could find was that of gross values. Experience in the 15 months since they reported has shown more and more that, used on a national scale, this is a poor test. Locally, for example, as a basis for standard rents under a rent rebate scheme, it is not unfair; it gives a comparison between the values of a stock of houses which, unlike rented housing in the private sector, are fairly similar in pattern and standard. But as between two authorities at different ends of the country, gross value too often varies for historical reasons which have no relation to the present resources of tenants.

The Government have, therefore, thought it fairer to relate the new subsidies more directly to costs. If the House will bear with me, I shall demonstrate that the main instrument for this will be a new basic subsidy which will vary with cost and give the most help with authorities which have the highest costs and the biggest programmes.

I turn now to the Bill, on which the House is entitled to have a brief account from me, stopping short of points of detail which are more appropriate for examination in Committee. Clause 1 settles the general application and timing of the subsidies. They are to be payable to local authorities, to new town authorities, to housing associations and new town corporations which provide subsidised housing by arrangement with local authorities. The new rates of subsidy will apply to housing in contracts formally approved by the authority after the publication of the White Paper.

Some authorities have complained that that will rob them of the benefit of the improved susidies on houses for which they approved the tenders before 25th November. The short answer to this is that a line has to be drawn somewhere. In 1956, when subsidies were reduced, they were reduced only for tenders approved after the due date since the then Government took the view that it would be a breach of faith to alter subsidies on tenders approved in the expectation of the old subsidies. This cuts both ways. One cannot have one rule when subsidies are being increased and another when they are being reduced.

Mr. Leslie Hale (Oldham, West)

I was grateful to my hon. Friend for looking at me with his customary benevolence, and I was encouraged by it. He has made the dreadful statement about the line having to be drawn somewhere. It should not, however, be drawn in the wrong place. Oldham, being a progressive authority with blanket approval, signed contracts for £1,350,000 worth of houses between 2nd and 18th November. The loss to Oldham will be of the order of £30,000 a year so long as the present interest rates prevail. That is monstrous, because these are contracts in which no brick will be laid until next year. Will my hon. Friend deal with this point, of which I have given him notice?

Mr. Mellish

My hon. Friend has given me notice of the point and it is a fair one. I understand the position of Oldham, but I ask my hon. Friend to look at the situation from the national level. At this moment of time, 190,000 council houses are under construction in England and Wales. At some stage, it may well be argued from either side of the House that these new subsidies should be paid on these houses when they are completed. That certainly is an argument. There will always be an argument about the date on which the subsidies are brought in.

If my hon. Friend argues the case for Oldham, it must also be argued for every other area. For houses under construction and not yet completed, the cost to the Government over and above what we are already contemplating would be another £11 million. I know that we are creating an anomaly, but this always happens when a date is introduced for something new. Nevertheless, the principle as far as we are concerned is, I think, established.

My hon. Friend will, I am sure, support me in saying that the subsidies will be a tremendous help—to Oldham and elsewhere—in the future. This is not the last that we have heard of tenders from Oldham. They will be coming forward with more tenders. They will be encouraged by my Department so to do and these subsidies will benefit them.

Mr. John M. Temple (City of Chester)

The hon. Member for Oldham (Mr. Hale) mentioned an annual figure. In his reply, the Joint Parliamentary Secretary has mentioned a total of £l1 million. Was that meant to be an annual figure?

Mr. Mellish

The point raised by my hon. Friend the Member for Oldham (Mr. Hale) is fair one. His council has already submitted tenders to my Department. They have been approved and loan sanction has been granted. My hon. Friend was saying that the tenders were only recent and that if they had been effected after 25th November, they would qualify for the new subsidies proposed in the Bill. Unfortunately, as we have written the Bill—we shall argue the case in Committee—the houses will not qualify because the tenders were already approved before that date.

I was making the simple point that if we argue about the date of introduction, we could widen the scope of the of the argument. At present, some 190,000 council houses are being built. It may well be said that every one of them when completed should qualify for the new subsidy. This was where I made the point about the £11 million of extra cost.

Mr. Temple

I am grateful to the hon. Gentleman for his reply, but my simple question was whether his figure of £11 million was an annual or a total figure.

Mr. Mellish

It is £11 million per annum. That would be the cost of the new subsidies for the 190,000 council houses which are now under construction if all were allowed to qualify.

The biggest single innovation in the Bill is the aggregate cost subsidy in Clauses 2 and 3. The Government have moved away from a basic unit subsidy where the same amount was payable on the cheap and dear dwelling alike. The new basic subsidy will bridge the gap between the actual loan charges on the houses built by the authority in the year and the loan charges it would have had to pay if it had been able to borrow at 4 per cent. If borrowing rates go down, so will the subsidy. If the rate were to go down to 4 per cent., the entire bill for basic subsidy would be wiped out. I hope that the House will not regard that as a dismal prospect. If that were to happen, it would be a spectacular sign of prosperity.

As a measure of simplification suggested by the local authority associations themselves, the higher of these two rates will not be calculated separately for every single authority. The Minister will undertake an annual fact-finding exercise and specify by order, subject to negative resolution of this House, a representative rate or rates. He needs power to specify more than one rate because the borrowing arrangements for new towns, for example, are different from the borrowing arrangements for local authorities.

Clauses 4 to 9 are all under a heading "Subsidies for individual dwellings". For the most part they continue, with or without adjustment, provisions in previous Acts for subsidies to meet special costs. In considering their value, it needs to be borne in mind that the new basic "interest-rate" subsidy will apply across the whole range of housing cost, and that the supplements in these Clauses will be superimposed on the basic subsidy.

Clause 4 relates to high flats. For blocks up to six storeys, the scale will be the same as under present legislation, but will be enhanced in value by being additional to the basic subsidy. For seven storeys or more, the increases provided in present legislation have been abolished. With the increased use of industrialised building methods, it is no longer true, as it was as recently as 1961, that building very high is very much more expensive than building to six or eight storeys. As my right hon. Friend has said publicly, he will not encourage higher building purely for its own sake. It is essential to have high building in the great cities and conurbations, but each of the applications made for higher building will be watched by my right hon. Friend.

Clause 5 covers two subsidies, in subsection (1) a subsidy for authorities whose resources are insufficient to provide houses which they urgently need to provide, and in subsection (2) an incentive subsidy for the housing of transferred workers. As to the first, the Housing Act, 1961, provides for a subsidy for authorities whose resources are small, but this turns upon an inflexible formula related to gross value, which itself has proved to be a very poor test and it is thought that a discretionary subsidy to be worked under rules yet to be worked out with the local authority associations may do better justice. As to the second, it is obviously right that, in so far as our economic prosperity depends on industrial mobility, the Government should be able to encourage the provision of the extra housing on which mobility so often depends.

Clause 6 continues a subsidy which, though small in amount, has since 1946 been very helpful to local authorities who have had to build houses on sites liable to mining subsidence.

Clause 7 continues, with an adjustment related to increased costs, the one housing subsidy which is solely and exclusively directed to the preservation of amenity. It was first introduced in 1949 by the late Aneurin Bevan with the strong support of the late Sir Stafford Cripps. It is an incentive to local authorities, where ordinary brick and tile houses would be out of character with the surroundings, to spend whatever extra cost might be involved in the use of materials or special designs to keep the new houses in harmony with their environment.

Clauses 8 and 9 revise the supplementary subsidy for overspill housing. Under the present arrangement the Minister pays £12 a year for 15 years for each dwelling provided under an approved town development scheme and may recover half from the exporting authority. Now the supplement is to be doubled, but for a period reduced to 10 years, and separated into two distinct components. The Minister will pay £12 a year for houses provided under a scheme of this kind, and if he does so the authority providing the house can claim an equal contribution from the authority from whose area the new tenant comes, subject to conditions in Clause 9 which are designed to relate this second contribution to the relief of housing need in the sending area.

One short point on that—my right hon. Friend and myself have certainly discovered that many of those who have been going into new towns have not been the sort of people for whom the new towns were decided in principle. The first principle for anybody going into a new town taking London overspill must be his need for housing; the housing need of that person must be paramount, and my right hon. Friend has decided to set up a committee to investigate how this can be taken into account. He has given me some responsibility for this. We shall be looking at this question in connection with this Clause.

Clause 10 revises the subsidy for expensive sites. Here again, the House should be reminded that under the new proposal for basic subsidy the supplement will be superimposed on a basic subsidy payable over the whole range of cost. This, with the changes in the pattern of cost, have produced three important changes. First, the "floor" has been raised by making the subsidy payable on net land costs of £4,000 an acre or more, whereas under the present arrangement it is payable on the combined cost of land and site ser- vices. Second, there is an increase in the scale of subsidy payable on land costing more than £50,000 an acre. This will be specially important in London. Third, the combination of new basic subsidy and expensive site subsidy will mean that at present borrowing rates land costing more than £20,000 an acre will attract a subsidy of more than 75 per cent. of the cost of buying it. Obviously, there is a point to be watched here. So subsections (1) and (2) provide that if the two subsidies combined exceed 75 per cent. of the cost the excess is to be payable at the Minister's discretion, depending on the likely rent or rate burden.

Clause 11 will allow the Minister to make advances recoverable later against the expensive site subsidy payable on the most expensive land. This again, will be very important to London where, whether they like it or not, local authorities often have to piece together land acquired a long time in advance.

Clause 12 contains the Minister's general power by affirmative Resolution order to alter the general levels of subsidy payable under the Bill. For 10 years after the passage of the Bill he will not be able to alter retrospectively subsidies payable on housing provided in the 10-year period.

Captain Walter Elliot (Carshalton)

May I ask a question on this Clause? The hon. Gentleman referred earlier to ascertaining that subsidies go to people who really need them. He did not say how. I suppose some local authorities may be more conscientious in doing this than others. Is Clause 12 related at all to local authorities who do or do not see that subsidy goes to people who need it?

Mr. Mellish

No. I do not think that would be the interpretation. I propose at the end of my speech to make a tremendous oration about these things if the hon. and gallant Gentleman will just let me alone, and I can assure him that as Clause 12 will be considered in Committee he will get the answers to anything which he wants to ask.

Clause 13 brings together the provisions in a number of past Housing Acts under which subsidies could either be stopped or reduced if subsidised housing was no longer being used for its original subsidised purpose or could be transferred if the housing passed on to another authority. This work of consolidation has enabled some minor anomalies to be removed, which, again, we shall explain in Committee.

Clause 14 increases a grant payable for the provision of hostels. This could be particularly important for the housing of immigrants.

The remaining Clauses are mainly technical arid interpretation.

This, I think the House will agree, is as full an account as time permits and as a Second Reading debate seems to require. Hon. Members themselves will want to scrutinise it closely in Standing Committee and I give notice that the Government themselves may wish to propose Amendments in the light of further discussions with the local authority associations, which, though they are thought to welcome the proposals in principle, obviously could not properly be consulted about t he detail.

This Bill reflects, I think, the very real shortage of rented accommodation in Britain. The Milner-Holland Report, which we debated, made it perfectly clear that there is an acute shortage of rented housing, particularly in London, and by implication, in all the other great cities. I am not going over that again now except to say that today, as we stand here debating this Bill, debating whether or not there is a need—because this is what this debate will be about—to encourage local authorities to build, in the great cities and conurbations in particular, there are 200,000 families in London who have not got a home of their own. That is a measure of the task. I think we must ask all Members of the House who get up to speak to say quite clearly whether they think that London authorities need monetary help if they are to build and build fast.

My right hon. Friend has given me special responsibility for London's housing and I have issued a London housing programme. I want to refer by way of illustration to two constituencies only, the constituency of the Leader of the Opposition, Bexley, and the constituency of the right hon. Gentleman opposite, the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). To Bexley we have given a programme for the next four years, because of its needs of 1,900 houses or flats to be built as against 773 which it built in the previous four years—an increase of 146 per cent. In Kingston they built 413 flats and houses in the last four years. We have approved a programme for next year of 1,425, which is an increase of 245 per cent. I want to give an illustration of what this subsidies Bill will mean in outer London. Bexley and Kingston will be lucky if they are able to provide family housing for less than £4,000 to £5,000 a house or flat, including land. I do not think the right hon. Gentleman can deny these figures. Under the proposals in this Bill the basic subsidy alone for Bexley and for Kingston will rise from £24 a dwelling, as it is at the moment, to nearly £90 a dwelling for a £4,000 house and for a £5,000 house from £24 to £110.

I must ask those who come to speak in this debate, and particularly from that side of the House, do they say—does the right hon. Gentleman the Member for Kingston-upon-Thames say—their constituents should not have this increased finance? Does the right hon. Gentleman say that Kingston is so running its housing list that the wrong people are on it? He had better say something of that character because, if the Bill is defeated tonight, the subsidies will be denied to two authorities in London who badly need them.

It may be that the subsidies are not liked because they are the pump primer to a massively increased local authority housing programme. But how are any Government going to be able to help the two to three million people living in slums and the five to six million people living in near-slums without rapidly increasing the number and the proportion of council houses built? How are we going to deal with the 80,000 slums in Liverpool, the 60,000 in Manchester and the 40,000 in Birmingham without giving the local authorities the go-ahead and the financial incentive to do so? Will those who say that the increases should not be in this form go to London, to Leeds, to Cardiff, to Nottingham, to Leicester and to central Hull and tell the citizens there, many of whom have never known what it is like to live in a decent house, that they are sorry but owing to their political prejudices their party is going to have to make savage cuts in their councils' programmes if they are returned to power?

Before I leave the subject of an increased local authority programme, I want to say an important word about the distribution of that programme between authorities. Nothing to my mind could be clearer than that authorities in the conurbations, the growth zone of the northern region and those building for overspill should be given an annual building programme which rises steadily as sites, staff and capacity become available. This means that authorities in the areas where the need for more council houses is relatively small, notably in the South, will have to accept far smaller programmes than they like. But, because we cannot disrupt programmes that are already in hand, it is going to take time to complete the redistribution of the housing programme. Some priority authorities who, to their credit, would like immediately to increase their programmes sharply may find that they will have to accept some rephasing over the next year or two.

My right hon. Friend has already announced massive increases in most of our conurbations and cities, and I say quite frankly to those who intend to speak in the debate that they must ask themselves how, other than by the local authorities, houses can be provided for people when the slums are cleared. Unless there is some magic formula by which private landlords building to let can solve our problems, which I have never heard of, it is only the local authorities which can deal with them. The magic formula has eluded five Conservative Ministers of Housing and nine Parliamentary Secretaries; and none of the academics who ever wrote on the subject in the 13 years of Conservative rule was able to produce a formula to say that the necessary house building could be done other than by the local authorities. We do not know of any other way in which the slums can be removed.

We cannot go on trying to solve the housing problem as the Conservatives did, by hunch, by guess and by God. The only way in which we can solve it is to make quite certain that the local authorities get the major responsibilty for clearing the slums and overcrowding and that we give them a real programme.

If authorities, particularly those in the priority areas, are to achieve their programmes, there will have to be a big increase in industrialised building, because if we try to achieve 500,000 houses a year by 1970, it cannot be done without 100,000 extra men being put into house-building. Those men are not available. Therefore, we are determined that the houses will be built faster and, in many instances, cheaper. My right hon. Friend will insist on an industrialised building content in the local authorities' programmes, and he will insist on Parker-Morris standards. He is determined that by 1970 we shall have hit our target of half a million houses every year, and, as I say, the only way in which the problem can be tackled is by the local authorities.

I move the Second Reading of the Bill, confident in the knowledge that the incentive provided to local authorities is the one incentive asked for by the Borough Treasurer of Kingston-upon-Thames when I first visited him about a year ago. He said, "You ask for an increased housebuilding programme. I ask you, in turn, as a Government to give us increased financial incentive." We are doing just that today.

4.45 p.m.

Mr. Boyd-Carpenter (Kingston-upon-Thames)

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 which fails to ensure the maximum use of all possible agencies for the building of houses, does nothing to help the prospective home buyer or to redeem the Government's pledge of lower rates on mortgage interest; and fails to secure that additional subsidies are applied so as to help those people who need them most. The House is indebted to the Joint Parliamentary Secretary first of all for a very clear and conscientious summary of the Bill, and secondly, which is always appreciated, for a very genuine and agreeable indication of the hon. Gentleman's own approach to the problems.

As regards the Bill itself, the best commentary of all was given by the right hon. Gentleman the Minister. [Interruption.] I must try to be nice to the right hon. Gentleman when I can, and I say it on the assumption that he wrote the White Paper on the Housing Programme. Paragraph 47 reads: The whole question of housing finance also needs much deeper study than this Government has yet had time to give it. That is perhaps a very odd prelude to the introduction into the House of a Bill which in four years' time, if present rates of interest continue, will be costing the taxpayer some £19 million a year. If it means anything, it means that the Government do not expect the Measure to operate for very long, and that suspicion is confirmed by the terms of Clause 12 of the Bill, with the powers which that gives to the Minister to revoke and reduce these subsidies.

It is rather interesting, in that connection, to recall that the 1961 Act contained—and here I anticipate what the right hon. Gentleman will say—a similar proposal, limited to action after 10 years. It is interesting, too, to recall what the then Opposition spokesman on Housing and Local Government said. The right hon. Gentleman is now Foreign Secretary, and I am sure that the House as a whole will want to send its best wishes to him in his recent distressing illness and wish him a rapid recovery. [HON. MEMBERS: "Hear, hear."]

The right hon. Gentleman described this provision as a most vicious principle which produces for local authorities … financial uncertainty."—[OFFICIAL REPORT, 27th March, 1961; Vol. 637, c. 987.] That provision was stigmatised by the then Opposition spokesman, whereas the Parliamentary Secretary now comes forward and says that it will give certainty to local authorities in the finance of housing, and he made it the basis of the fine emotional peroration about a great surge forward in housing, and so on.

The main issues which on Second Reading seem to us to arise do so not so much in respect of what is in the Bill but in respect of what is not and, if I may, I wish to make one or two comments on them in the light of the reasoned Amendment which I have just had the privilege of moving.

However, before I come to that, I want to make one or two quick comments on the Bill and on what the Parliamentary Secretary said, though I think that the House will agree that most of the points that he dealt with are Committee points.

I comment first of all on Clause 10, with its provision, among, other things for subsidies where the price of land required exceeds £50,000 per acre. It certainly looks from that as if the right hon. Gentleman has not very much confidence that the Land Commission of his right hon. Friend the Minister of Land and Natural Resources will reduce the price of building land.

Then there is the reduction in the extra subsidy paid in respect of the really high buildings, which I think is a mistake. If I may say so, the Parliamentary Secretary is wrong in saying that technical progress has reached the point at which there is little if any additional cost when one gets into the really higher buildings. I do not think that he will find that expert opinion is anything like unanimous, and it is a great pity in connection particularly with the problem of London, to which rightly and naturally he gave great emphasis in his speech, that the higher building which is certainly one of the methods of solving the problems of Inner London should be discriminated against in that way.

Mr. Mellish

I could have burdened the House with figures to prove that all high-rise building, where industrialised building methods are used—and this is almost certain to be applied in most of the high rise building in London—is much cheaper than it has been in the past. We shall give the figures of this at a later stage.

Mr. Boyd-Carpenter

I have no doubt that the hon. Gentleman has been so advised, otherwise he would not have said that, but that advice is very far from unanimous, and my doubts are strengthened by the fact that in the course of referring to this matter the hon. Gentleman indicated some dislike of high building. Indeed, he said that his right hon. Friend wanted to keep a specially sharp eye on it, and it seemed to me—though I am in the judgment of the House on this—that when referring to this he indicated some distaste for building high, even in exceptional circumstances.

Mr. Arthur Blenkinsop (South Shields)

I shall be interested to hear whether the right hon. Gentleman takes the view that very high building should be encouraged at the rate it was encouraged at in the past, even outside the areas where we all agree it may still be necessary.

Mr. Boyd-Carpenter

No, I do not think so. I must not be led to digress very far, but the need for very high building seems to me to be confined almost exclusively to areas in the centres of great conurbations where there are a large number of people who, for good reason, need, and want, to live near their work. I think that outside these areas the need for it would be exceptional.

The Minister of Housing and Local Government (Mr. Richard Crossman)

Has the right hon. Gentleman calculated the effect of adding a considerable supplementary subsidy, such as a high rise subsidy, to the new basic subsidy, which is a percentage one? It is a percentage subsidy, making about one-third in certain cases. If one adds too much to this, one gets 80 to 90 per cent. of the total in subsidies. Therefore, we ought to reconsider the high rise subsidy, and the expensive site subsidy, linked with a basic subsidy. I think that the right hon. Gentleman will find that the two work together. Even the right hon. Gentleman, as an ex-Chief Secretary to the Treasury, might blanch at sanctioning a larger amount than we calculated.

Mr. Boyd-Carpenter

I follow the right hon. Gentleman's point, and it plainly has some force. Indeed, the fact that this subsidy, unlike its predecessor, is attached to the actual cost of the house, is a point on which I shall have some criticisms to offer. The financial discrimination in favour of the high building which exists in the present subsidy is being abandoned, and being abandoned on what, if one takes the reasons given by the Joint Parliamentary Secretary, seem to be inadequate grounds.

Mr. Crossman

It is correct to say that in the earlier subsidy there was a discrimination in favour of high rise. There was an incentive to local authorities to build high because of the rate of subsidy they got when they built high. The particular discrimination in favour of building high has in fact been removed. I think that that is a fair statement.

Mr. Boyd-Carpenter

I think that we are in agreement on the facts when comparing the two subsidies. Where we disagree is whether the application of that system in present circumstances, and in the present state of building progress, makes sense. We will probably argue this more fully during the later stages of the Bill, but I am bound to say that this is premature, and that I think it may well make the solution of the problem to which the hon. Gentleman directed a large part of his peroration—the subject of housing in such areas as Central London—more difficult, rather than less.

I come now to the main subsidy which, as I pointed out in reply to the right hon. Gentleman's intervention, is related to the cost of the building, and also is based on the rates of interest prevailing in the previous year. As was pointed out by the Economist a few days ago, it has a rather curious effect, because it offers greater inducements to local authorities to build at times when the Chancellor of the Exchequer has raised interest rates, presumably to curtail activity, and, conversely, offers less inducement to build at a time when the Chancellor of the Exchequer, with a desire to inflate the economy, has reduced rates of interest. [Interruption.] If the hon. Gentleman studies the Bill, he will find that that is what it does. This is a very curious aspect of the matter. If the local authorities build at a time when rates of interest have been high in the preceding year—and this is governed by the preceding year—they will get the higher rate of subsidy for the succeeding 60 years. This is a very odd aspect of the subsidy.

The other aspect of it is that it is related to the actual cost of the house. This is a sensible provision in respect of the special subsidies. They take into account special costs, special circumstances, the neighbourhood, and so on, but for the main subsidy it has the patent disadvantage that it does not give very much of an incentive to economy in building. Thus, in a sense, it has an element of cost plus, which the House has often criticised, and it involves no inducement to build with reasonable economy as under a subsidy like the present one which is based on specific figures of £8 or £24 a year per house.

This ties up—and I think that this throws a little light on it—with the action of the right hon. Gentleman as expressed in the now notorious Circular 50 of 1965. As the House knows, that removes from local authorities with direct works organisations the obligation to put one job out of three out to tender, and thereby removes one of the best methods of checking whether direct works organisations, some of which are notorious for their expense, are costing the ratepayers more than they need. This kind of subsidy on a cost-plus basis ties up with that approach, and for that reason is particularly unfortunate.

Where the taxpayer would be paying a substantial part of the cost by way of subsidy, there is all the more inducement for a Socialist-controlled local authority, operating a direct works organisation, to continue to give the work to that organisation, even though it is patently more expensive than putting it out to contract. Indeed, the right hon. Gentleman knows that there are severe criticisms of several direct works organisations at the moment. It is unfortunate that this feature of the subsidy should be operating at this particular moment, and it seems to be ideological in its origin.

Mr. Mellish

The right hon. Gentleman has introduced the subject of direct labour. At the moment direct labour is responsible for building only 9 per cent. of local authority houses. The remaining 91 per cent. are built by private enterprise. Does the right hon. Gentleman really believe that it is wrong to try to ensure that local authorities are encouraged where they have efficient direct works labour schemes? It should be remembered that my right hon. Friend has the final word on this, because he has to decide whether the tenders submitted are comparable to other tenders sent in for similar jobs.

Mr. Boyd-Carpenter

I think that it is absolutely wrong, because it means that direct works organisations can go on putting in proposals for work without it ever being possible to check them against competitive tenders. The hon. Gentleman must read his right hon. Friend's circular. It removes the obligation, which has existed for some time, that one job out of three must be put out to tender. That deprives the right hon. Gentleman, who of course has to approve the tenders, of the best possible check on whether the direct works organisation's price is a reasonable one. Indeed, this is borne out by the fact that Circular 50 of 1965 contains a rather feeble appeal to local authorities to do their best to keep an eye on the costs of their direct works organisations. That passage was included because the right hon. Gentleman knew that the effect of the Circular would be to remove the real safeguard, and therefore it was necessary to put in an alternative.

Mr. Eric S. Heffer (Liverpool, Walton)

Is the right hon. Gentleman aware that for 10 to 15 years the Liverpool Corporation had an agreement with the Unit Construction Company for negotiated tenders? There was, therefore, no check whatever against any other building contractor. Is the right hon. Gentleman also aware that this put the new direct works department in Liverpool into a very difficult position, because it had to go for the normal sort of tender when the Unit Construction Company never did, because of this negotiated agreement?

Mr. Boyd-Carpenter

That is all very interesting, but the fact that—according to the hon. Member—there has been inadequate provision to secure that costs are kept reasonable in Liverpool does not seem to be an argument for securing inadequate provision elsewhere.

There is a very important point connected with the timing of these proposals. All this admirably-phrased rhetoric about the development of local authority building reads a little oddly if we study Paragraph 16 of the Financial Memorandum which reads: Since in general the new subsidies will be payable only in respect of housing in tenders approved by resolution of the recipient authority on or after 25th November 1965 the effect of the proposed increases will not become substantial until the financial year 1967–68. That does not seem to be a very great incentive at the moment. The hon. Member was good enough to refer to the effort being made by the Council of the Royal Borough of Kingston-upon-Thames. When he quoted the relevant figures he must have been advised that they reflect great credit on the council, but also that they are the result of years of preparation, planning and the acquisition of land.

I doubt whether the hon. Member is entitled to share the credit, which he seemed to wish to do. He says, "Look at the extra money that this council will get as a result of the subsidies", but in saying that he is basing his argument on the assumption that over the forward four-year period the general rate of interest will remain as it is at present. That is very interesting. It means that it is not the view of the Government that the phase through which we are passing is just the temporary emergency which they allege was bequeathed to them by their predecessors.

What the Parliamentary Secretary is saying is, "Under a Socialist Government you will have such continued inflation that the Chancellor of the Exchequer of the day will have to maintain high rates of interest almost indefinitely". If the Parliamentary Secretary does not mean that, the figures that he quoted are quite meaningless.

Mr. Mellish

The right hon. Gentleman mentions that Kingston did a great deal of planning. It is extraordinary that they never did it in the 13 years of Tory rule, but that it suddenly came to light when we were in power. I said in my speech, and I repeat, that one of the great difficulties with planning is uncertainty about interest rates. What we have done in this Bill is to guarantee that the rate will not go above 4 per cent. as far as we are concerned.

Mr. Boyd-Carpenter

How the hon. Gentleman can talk about a firm guarantee with Clause 12 in the Bill is a matter that we shall probe a good deal further. He knows quite well that this will provoke uncertainty, as his right hon. Friend the Foreign Secretary said from this Dispatch Box in respect of a similar proposal not four years ago.

Mr. Crossman

The right hon. Gentleman should remember that when we are introducing an interest rate subsidy the treasurers of cities are bound to ask questions. One very reasonable question will be: what happens to the subsidy supposing the interest rates go down two or three points? They clearly want some guarantee that if interest rates sink the situation will be reconsidered, and this contingency is covered by Clause 12.

Mr. Boyd-Carpenter

So is a great deal else—the elimination of the subsidy, for instance. I assure the right hon. Gentleman that borough treasurers are as capable of reading the Measure as he is, and they will know that the particular use of the Clause to which he has referred is only one of a great many possible uses.

The reasoned Amendment is based on three propositions: first, that the Bill represents a failure to use all the agencies which can be used to help the construction of houses, and is confined to giving help in the local authority sphere; secondly, that it does nothing to help the prospective home buyer, despite the most specific pledges given by hon. and right hon. Gentlemen opposite, and, thirdly, that it provides additional rent subsidies while taking no step whatever to secure that they are applied to those who need them.

All those three propositions are plainly true. They seem to us to amount to a clear justification for telling the Minister that he should take this Bill away and bring in, instead, a Measure which will support a proper, balanced housing policy.

Mr. Mellish

What is that?

Mr. Boyd-Carpenter

What it means, first of all, is keeping pledges. Let me remind the hon. Gentleman of his own election manifesto, which says: This policy of specially favourable rates will apply both to intending owner-occupiers and to local authorities building houses to let. The Bill deals only with one category.

Mr. Mellish

That is a very good election address. I hope that the right hon. Gentleman has enjoyed the picture of my son on it. We have been in power for only one year. We intend to stay in for five, and I promise the right hon. Gentleman that that pledge will be redeemed before we go out of office.

Mr. Boyd-Carpenter

That seems a somewhat contingent promise, in the circumstances of the Government's majority. The fact remains that they are doing nothing to redeem that pledge now. Let me reassure the hon. Gentleman that this is the Labour Party election manifesto and not the document decorated with his son's portrait, which, I am sure, although no more convincing would be very much more attractive.

The Government made a clear pledge that this provision would apply to both categories. This has not been fulfilled. The House is familiar with this situation. The pledge has been given again and again by right hon. and hon. Members opposite. Let me quote the Prime Minister's election address. He said: 100 per cent. mortgage, lower interest rates and cheaper legal charges will help those who wish to buy. Nothing whatever is done in the Bill. Nothing is promised for this Session. This is an extremely serious charge against the Government. Would-be home owners are told, "No, the state of the economy is not good enough, and you must wait". There is something for local authority housing but there is nothing—for all the Government's lip service—for home owners.

Mr. Frank Allaun (Salford, East)

Not yet.

Mr. Boyd-Carpenter

The right hon. Gentleman has always refused to give a pledge that those who buy now will not be penalised, and that any Measure introduced in the future will be backdated to the beginning of the term of this Government. That casts a little light on the interjection "Not yet". The situation of "not yet" is becoming more urgent. There are hints, and more than hints, that the present rates of building society interest, which are already high, may be moving higher. There is the latest statement of the National Federation of Building Trades Employers—the report for November—which says: The latest enquiry conducted by the Federation of Registered House-Builders among its members shows the position as regards private house building at the end of November, 1965. The 465 replies analysed show that private house purchase has fallen away sharply compared with three months ago. But nothing is being done now, and nothing is to be done this Session, to redeem the pledge to those hundreds of thousands of young voters who voted Labour at the last election because they thought that the Labour Party would help them to get a house.

The argument is used that we must give priority to the local authorities because their housing was neglected under previous Governments. Yet it is a fact, derived from one of the right hon. Gentleman's Answers to Questions, that the number of local authority houses doubled under Conservative Governments. We next have the argument that, although this may be so, the need, as the Milner Holland Report said, is for homes to let and therefore we must use the local authorities. Indeed the White Paper quotes the Milner Holland Report in favour of the plain and evident proposition that there is a great need of houses to let, but what the Milner Holland Report patently does not do is say that the provision of houses to let should be undertaken only by the local authorities.

Mr. Frank Allaun

Who else?

Mr. Boyd-Carpenter

The private landlord. This is the sphere in which, as the right hon. Gentleman's Answer brings out, there has been a falling off in the provision of accommodation. It is the essence of the right hon. Gentleman's policy that for the future the local authorities should be the sole new providers of accommodation to let.

Mr. Crossman

Let me correct this. I have made it clear throughout that, in addition to local authorities, I regard housing associations as a most important element, to be given every possible encouragement. I said that, as far as I knew, when the Milner Holland Committee studied the situation in London it could not find one contractor who was actually building houses to let below the luxury level. Would the right hon. Gentleman tell the House of any houses to let at working-class levels of rent which were being built by private contractors when he left office?

Mr. Boyd-Carpenter

I accept what the right hon. Gentleman said about housing associations. I should be the more impressed by it if he had done what I asked him to do in the last housing debate—introduced legislation to loosen the legal restrictions which prevent them from playing a very much bigger part than they are able to play at present. The right hon. Gentleman by his intervention reminds me that he has done nothing in the Bill to do that. After all his praise of the housing associations, he might have done so.

He referred me to the Milner Holland Report, and I will refer him to that Report. It is of the essence of the Milner Holland Report that the local authorities are not, and should not be, even with the housing associations, the sole providers of accommodation to let. I refer the right hon. Gentleman to page 225 of the Milner Holland Report, where the Committee undertakes a clear and comprehensive survey of the experience of other countries, and particularly comparable countries in Western Europe, in a passage which the right hon. Gentleman may well remember: The governments which have been most successful in surmounting these stresses and maintaining order and justice within this sector of the housing market have been those which have accepted and incorporated private rented property among the instruments to be used in meeting housing needs. If the right hon. Gentleman studies that Report he will see that it tells him how to do it. Of course the right hon. Gentleman was right in his intervention. The supply has fallen off.

Mr. Crossman

Dried up.

Mr. Boyd-Carpenter

Dried up is an exaggeration; fallen off is a fact. The Milner Holland Report explained the reasons and put forward a proposal which the right hon. Gentleman has once again rejected.

Mr. Crossman rose——

Mr. Boyd-Carpenter

I will give way to the right hon. Gentleman again in a moment. He will observe that I am giving way to him rather more freely than he gave way to me the other night.

The point is made throughout the Milner Holland Report, and, if the right hon. Gentleman looks, in particular on pages 38 and 39, that the fiscal system of this country works against the provision of accommodation from private sources to let. Figures are given in the Report which show that quite a modest provision for depreciation for those who provide accommodation to let, as is already provided under our tax system in respect of those who provide factories, would bridge the gap between present building costs and rents tolerable for the lower income groups to pay. As the right hon. Gentleman knows, it is all set out very clearly and very fully in the Milner Holland Report. But nothing has been done about it.

The right hon. Gentleman does not want to do this, because he regards it as a matter of policy that the private landlord is to be discouraged. There was a very powerful article in The Times the other day called "Housing's inflexible terms". This puts very well the argument which I want to put to the House. Faced with the need to provide accommodation generally and accommodation to let in particular, does it make sense to fly in the face of the experience of most European countries and not avail oneself of private capital and the energy that is provided by private enterprise? Right hon. Gentlemen opposite always complain that private capital goes into offices and bingo halls and all the rest of it and not into housing, but if the Minister reads the Milner Holland Report, which he is so fond of quoting, he will see the reasons for it.

Partly the reasons are fiscal treatment and, partly, let me say frankly to the right hon. Gentleman, the attack which he and his right hon. Friends always seem to make on those who provide that accommodation. The right hon. Gentleman is always talking of Rachmans and he is always trying to portray all landlords—despite the evidence of the Milner Holland Report—as Rachmans. It is no more fair to do that than it is to describe all trade union leaders as bullies because an extremely small minority of them go in for the intimidation of non-unionists. In both cases those charges are wholly unfair, but in this case the charges do more damage. If one makes it fiscally unattractive for people to go in for the provision of housing and if one insults and denounces them if they do go in for the provision of housing, it is not wholly surprising that they invest their money elsewhere.

I am asking the right hon. Gentleman to deal with this important aspect of policy. He is facing a very big decision, if he is proposing, as he has said in his numerous interventions, to abandon the use of the private sector in the provision of accommodation to let. There is a limit to what local authorities can do, with the best will in the world. They build more slowly than private enterprise. There is a limit to the speed with which they can proceed. With the best will in the world, there is a limit to their total capacity— and I say that although I have great admiration for local authorities.

In his speech of the Labour Party conference at Blackpool, the right hon. Gentleman went out of his way to remind us that in 1951 private building was limited to one house for four in the public sector. He did not remind the Conference, and he did not remind us afterwards, that this resulted in a total annual building output of 190,000 houses—and a declining output. If the right hon. Gentleman relies on only one of the four possible instruments for having houses built, he will not get the output of houses which he could get if he used all four.

In our policy document "Putting Britain Right Ahead", we say firmly that we propose to use all four—local authorities, of course; the owner-occupier, with the necessary financial help, which we spell out, because it will be necessary to get that going again after the check which the right hon. Gentleman has given it; the private landlord. with the fiscal adjustments to which I have already referred; and the housing associations, with the provision of greater freedom so that they may co-operate in a partnership which will enable them to make a much bigger contribution than they can make at present to the total of housing.

Such a policy, with its choice for the consumer and with the use of all four instruments for getting houses built, is plainly more effective than the right hon. Gentleman concentrating, just as the last Labour Government concentrated, with disastrous consequences for house building, on only one instrument, the local authority. That is why in the terms of our reasoned Amendment we criticise the right hon. Gentleman very severely for going forward only with this proposal for producing what I called a few moments ago a completely unbalanced housing programme.

Let me come to another aspect of the matter. If the right hon. Gentleman is to rely, as seems to be his intention, on local authorities as the sole providers, apart from the housing associations, of new accommodation to let, then it is all the more deplorable that he is not insisting that they should make proper use of the subsidies. If they are to be the only bodies housing people who want something to rent up to and short of the luxury level, it is surely all the more important that the subsidies should be properly applied. It argues a singular, though perhaps justifiable cynicism about the effect of Labour Party economic policies that the right hon. Gentleman seems to assume that, in this day and age, an ever larger proportion of people will require to have their rents subsidised because they cannot afford to pay the full rent.

As the Parliamentary Secretary reminded us, even in the areas of those authorities which operate rebate schemes, those with substantial incomes do not generally pay enough to scale up to the level which would make the housing account balance at that level of rent. Many authorities do not apply these schemes at all. The Parliamentary Secretary answered a Parliamentary Question on 16th November and told the House, as reported in column 44 of HANSARD, that 59 per cent. of local authorities do not operate rent rebate schemes.

It is an absolute fallacy that all council tenants are of modest means. I would ask the House to consider the statistical evidence which is available, thanks to the Ministry of Labour's Family Expenditure Survey Report for 1964, issued in 1965. This took a sample of local authority tenants and put them into different income groups. In the sample, 148 tenants proved to have incomes of less than £10 a week. I quote £10 a week, because this is the figure which the right hon. Gentleman has adopted for the purpose of defining poverty in the Housing Subsidies Bill. There are 193 in the sample—[Interruption.]—these are families grouped by tenure of dwelling and household income, table (f), page 7, of the Family Expenditure Survey. I can see that the right hon. Gentleman's advisers will be getting it for him and I am glad that he should look at it.

As I said, 148 in the sample earn £10 a week. No one would object—or should object—to their receiving a subsidy. But there are 193 in the same sample with incomes of over £30 a week, of which 64 earn over £40 a week. One can contrast that with the people who have to contribute to the subsidy through taxation and, sometimes, through rates, the tenants of private landlords. The sample there was slightly smaller, but it showed that 196 tenants of private landlords earn under £10 a week and only 126 earn over £30 a week.

Even in the category of owner-occupiers—those who are now the full owners of their houses—a smaller sample altogether none the less showed that 114 people earn under £10 a week. Faced with those figures, how can the right hon. Gentleman justify providing additional local authority housing subsidies, without insisting that they are properly applied?

As I have said, 59 per cent. of local authorities have no rent rebate scheme at all. On the figures of the Joint Parliamentary Secretary——

Mr. Albert Evans (Islington, South-West) rose——

Mr. Boyd-Carpenter

I cannot give way to the hon. Member at the moment: I am in the middle of an important argument.

It is fair to say that many council tenants with good earnings are embarrassed by the knowledge that their rents are subsidised by their fellow citizens and neighbours who may be, and often are, worse off than themselves. If it is the right hon. Gentleman's policy—as it appears to be—to use the local authorities as the sole instrument for providing accommodation to let, this entirely new situation places upon him the duty to make sure that those who obtain that accommodation and who have comfortable earnings or means are not subsidised by their worse-off fellow citizens.

The Joint Parliamentary Secretary referred us to the fact that the White Paper, in paragraph 41, contains an admirable argument in favour of what I have just said. But it makes it clear that the Government will rest content with exhortation and that they, who are taxing the taxpayer to provide this money, will still leave entirely to the discretion of local authorities the decision whether or not to apply these subsidies indiscriminately. That is not an attitude which commends itself to the great majority of people, in whatever sort of accommodation they live. It is just plain unfair.

Does the right hon. Gentleman really think that those local authorities who—despite the exhortations to which they have been subjected for years, despite the plain reason of the matter, whether for reasons of ideology or political cowardice—have not introduced rent rebate schemes will do so because of his pellucid prose in paragraph 41 of the housing programme White Paper?

Mr. Albert Evans

The right hon. Gentleman seems to assume that, if a local authority does not operate a rebate scheme, people with incomes over £10 a week do not pay an economic rent. It does not follow. I know of one council which charges an economic rent, which those who can afford it pay: but those who have an income below a certain level have a rebate, and their economic rent is reduced. Furthermore, the right hon. Gentleman seems to assume that, because a family has an income of £30 a week, it is necessarily paying a subsidised rent: that also does not follow. Many council tenants pay economic rents. The right hon. Gentleman does not seem to take that into account.

Mr. Boyd-Carpenter

I do not think that the hon. Gentleman can have followed my argument. Of course, there are local authorities—according to the Parliamentary Secretary, a proportion of 41 per cent—which apply these schemes, and in the areas of many, though not most, of those authorities, people with substantial earnings no doubt pay a reasonable and fair rent. But what the hon. Gentleman does not seem to realise is that if authorities do not apply such schemes, the great majority of people in their areas pay a subsidised rent whatever their means may be. This is the distinction between the two types of scheme. I do not want to weary either the House or the hon. Gentleman by explaining it to him at great length. This is the issue. If the hon. Gentleman would only read his right hon. Friend's admirable prose in paragraph 41, in which he urges upon local authorities what I have been urging, he will see that there is no dispute between us about this on the facts.

The dispute between us is that the right hon. Gentleman, for one reason or another, is not prepared to apply the logic of his own argument and provide the subsidies where these conditions apply and not elsewhere. That is the difference between us. We share some of the sentiments which the Parliamentary Secretary so well expressed about the need for an effective housing drive, but we want it to be effective. We do not believe that, if it is confined to local authorities, it will be effective. We call in aid the fact that, under the last Labour Government, restrictions of this sort resulted in small and falling housing programmes and that our reliance—expressed in our policy document and in our past policy—on the use of all four instruments of housing will provide a better choice and a fuller opportunity for those who want a house and, above all, more houses.

That is why we attack this Bill for its limitations and for its bias. It contains help for only one instrument, where it ought to contain help for four. It relies only on the local authorities, and, even in that respect, it does not secure that the subsidies go where they are needed. Fairness and impartiality are lacking in the Bill. In the language of the racecourse, it is by political prejudice out of political calculation: I hope that the right hon. Gentleman will take it away and think again.

5.30 p.m.

Mr. Lewis Carter-Jones (Eccles)

While I will not comment on the remarks of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), he will agree that while the two sides of the House are in disagreement on certain aspects of the Bill, it cannot be denied that 1 million homes in Britain are classified as slums and that another 2 million are classified as near-slums.

The people who occupy these homes will be able to go into alternative accommodation only if it is rented accommodation. I use the word "home" because I wish to embrace the concept of the family. Since the many thousands of people who are at present living in slum or near-slum conditions will not be able to buy their own homes, I welcome the Bill because it seeks to tackle the problem at its source.

When a schoolmaster, I taught that the essential requirements of a human being were food, clothing and housing. To a large extent food and clothing are now reasonably well provided, but nobody in his right mind could pretend that the standard of housing in Britain is good enough. It appalls me to think that despite the great technical skill at our dis- posal, so many of our people have been waiting for so long for a place of their own. I therefore welcome a Measure which is designed to tackle the real problem at its source, which is precisely what the Bill will do.

That a shortage of housing exists no one will deny, but the greatest shortage lies in the realm of rented accommodation. I was delighted when the Minister highlighted this in his remarks and said that he intends to tackle the problem at the point of greatest need. It has been said that before long a married couple will have to ask their doctor if they can have a child. Nowadays it seems that they must ask their landlord that question first. These are the people in greatest need; yet they are the people who are most denied a chance of a home of their own.

While I would like to pursue at length the question of providing more rented accommodation, I appreciate that many hon. Members wish to take part in the debate, so I will be brief. The idea seems to have got abroad in recent years that we must queue for our houses. It seems to be accepted nowadays that there should be and for ever will be a shortage of housing. We seem to take it for granted that the problem will never be solved.

I may be accused of recklessness and extravagance, but I say frankly that I will be a happier man when the time arrives when homes will be waiting for people to occupy them rather than the reverse position, which has obtained for so long. Of all the Measures brought forward in recent years, this Bill will go further towards encouraging local authorities to provide accommodation for those in greatest need. Perhaps the Opposition does not like the Bill because it reveals the shortcomings of former Conservative Administrations. After their 13 glorious years we still have 3 million substandard houses. Hon. Gentlemen opposite cannot say that a problem does not exist.

I welcome the intention to apply the recommendations of the Parker Morris Report on standards. For too long we have tended to build today the slums of tomorrow. The idea of building better quality houses in the public sector appeals to me for two major reasons: first, it will enable families to live in reasonable, and not in the present overcrowded, conditions; and, secondly—and I say this from perhaps a personal point of view—it will enable the children in a family to do their studies in peace and quiet.

A house and a home is normally a hurly-burly, warm type of edifice. The family lives in harmony and peace, but sometimes members of the family need to take themselves away somewhere quiet to do their work—studies or whatever it might be. Many hon. Members opposite probably do not appreciate how difficult it is, in a working-class home, for one of the children to pursue his or her studies because of the lack of accommodation. I want the family to be together, but also to have the ability to be dispersed from time to time so that, when peace and quiet is needed, it can be had. I therefore welcome the Minister's initiative in asking local authorities to apply the standards recommended by the Parker Morris Committee.

The White Paper "The Housing Programme 1965 to 1970" states that the main purpose of the Government is … to provide a stable financial basis for housing programmes by eliminating uncertainty about interest rates". The right hon. Member for Kingston-upon-Thames overlooked that part of the White Paper. If that aim is achieved it will stimulate local authorities into planning ahead and using all the facilities they have for building houses. It will encourage, and give security to, the building industry and construction workers to use their full resources to build more houses. It will bring joy and comfort to the homeless because it will tackle the housing shortage at its point of greatest need.

I end by stating again, at the risk of being accused of recklessness and extravagance, that houses should be waiting for people to occupy rather than for people to have to queue for ages for a place of their own.

5.40 p.m.

Mr. A. E. Cooper (Ilford, South)

I often wonder why hon. Members opposite think that hon. Members on this side of the House have no knowledge at all of working-class homes. I yield to no one in my knowledge of those homes. I have a large proportion of them in my constituency, and as I have been councillor, alderman and then Member of Parliament for Ilford for more than 30 years I claim some knowledge of what goes on in those homes. I sometimes think that it is hon. Members opposite who themselves have little knowledge of what goes on in a working-class home.

The Parliamentary Secretary spoke of the Government's idea of imposing a differential rent scheme generally. That is very good, indeed. It has taken a long time for the Labour Party to catch up with policies that have been pursued by Conservative councils for many years. We have long had a differential rent scheme in Ilford, and we have not had a burden put on the ratepayers. Our only housing subsidy is for old-age pensioners. That is how a differential rent scheme should operate. The man with the higher income should pay a proper rent for his accommodation. There is no social justice in any other approach.

The Minister has said that he discussed withdrawing some of the older subsidies, but said that, if that were done, local authorities would lose faith in Governments. I see much force in that argument, but the Minister might give some consideration to pre-war subsidies, which present a very different problem from subsidies granted post-war. Before the war, houses were built at very low cost—a mere pittance compared with the cost of a similar house today—yet subsidies are still being given in respect of those houses, though the incomes of the tenants are out of all proportion to their earnings before the war. The older house subsidy presents quite a different problem from that presented by the postwar subsidy.

The Minister cannot have it both ways. He cannot say, "We cannot withdraw subsidies because that would cause a loss of faith", and still retain Clause 12. I have never seen such a Clause in such a Bill. The Minister speaks of faith and trust: "As long as we are in power, the local authorities will have a guarantee that interest rates will not be above 4 per cent." But Clause 12 says the very opposite. It gives the Minister the right to withdraw the subsidy altogether at any time. How does the right hon. Gentleman square the two?

The extra cost of the subsidy will be borne by the taxpayer—but who is the taxpayer? Some of the taxpayers, obviously, are council house tenants, who will be paying something towards their own accommodation, but the great bulk of taxpayers are not council tenants. They are people in private rented accommodation, or young people, married people, elderly people, who are either buying or have bought their own homes without any help from any Government over the years. They will now have to find the additional subsidy and, in many cases, find it out of small incomes in order to subsidise council tenants who are earning much more than they are.

Mr. Stanley Orme (Salford, West)

The hon. Member says that these people get no contribution whatever, but who gets the greater subsidy—the owner-occupier buying a house at £3,000 and getting Income Tax relief in that respect, or the council tenant of a house equivalent to the £3,000 house, and getting a subsidy?

Mr. Cooper

If the hon. Member wants to argue it like that, he can, but the two cases are entirely different. The council tenant receives a subsidy from the Government—sometimes as much, as in this Bill, as £45 or £50 a house. But the man buying his own house is not getting Income Tax relief to anything like that extent—[HON. MEMBERS: "£70."] Of course, some of them will get £70 in relief. Some will get more—those buying big houses for about £15,000—but they are the minority, not the generality.

As I said yesterday, I have in my constituency people above the age of 65, who have bought their own homes and educated their own children, who are now living on a small pension, and who will have to find extra money out of that pension to subsidise people in council housing who, in many cases, are earning £30, £40, £50, or £60 a week. That is both amoral and socially unjust, and cannot be justified by the Minister in any way at all.

Local authorities have power to borrow the money they need for house construction over a period of 60 years——

Mr. Cyril Bence (Dunbartonshire, East)

The hon. Gentleman talks about one section of the community subsidising the other, but 90 per cent. of the people are subsidising industrialists, farmers, fishing fleets, the aircraft industry, and the lot.

Mr. Cooper

If we were to go into that aspect I could easily put the argument that industry provides more than half the country's taxation.

One cause of our present difficulties is the long period of borrowing by local authorities. I have always thought that 60 years was too long. I think that 40 years is about right or, if it is necessary to have something in between, 50 years. The total amount of interest paid over 60 years is quite astronomical. Another factor is that quite often before that period has expired the houses have been pulled down, new development has taken place, and there are new properties on the site. That has happened since the war in many areas, and I am sure that many hon. Members will know that it has happened in their constituencies as well.

If local authorities are to borrow for 60 years, the further subsidy we are now discussing is not necessary. In fact, in commending this Bill, the Minister himself made out no case for saying that unless this subsidy was provided, house-building would not continue at the level he wants. There is no evidence to support such a view. One reason why local authority building has not proceeded over the years at the same speed as the Minister would perhaps like now is that since the end of the war so many priorities have been placed upon the building industry for hospitals, schools, and the like, that it has been impossible to get all that was wanted. Even under the present Minister, local authorities are still held up in getting approval for starts for new council schemes. Taking the country as a whole, if the local authorities knew that they had to build these extra houses they would build them without the necessity for extra subsidies.

Mr. Ioan L. Evans (Birmingham, Yardley)

In the 13 years when the Tories were in power why did the local authorities get a diminishing number?

Mr. Cooper

For the simple reason that in the same period we were building more and more houses for owner occupation. In the 13 years that everybody talks about we built 4¼ million new houses. As my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said, during our period of office we doubled the number of council houses built as compared with the six years of Socialist government from 1945 to 1951. Let us not go on harking back over the years. The Conservative Government's housing record was magnificent, and hon. Members know it. What we should be seeking to do now is to give local authorities the go-ahead to build the houses they want for their own council and working class tenants. We should be subsidising—nobody would argue against this—houses or flatlets for old age pensioners. We should be subsidising, as we are doing in some measure in this Bill, special and difficult sites and also very high buildings. There is no case at present, in view of the high incomes of many council tenants, for a subsidy for general need.

The money proposed to be spent under the Bill would be better spent on the hospital service, which has taken an awful knock under this Government. We must face the fact that the Bill is another step on the road to Socialism. It is typical of the cloth cap, soup kitchen mentality of the Labour Party. Every man his own council tenant. It is a mistake to deny the ordinary man in the street the right to buy his own house. I know that the Minister will assert that we are not denying him that right, but every step the Minister is taking makes it more difficult for the man to buy his own house. There are the high interest rates. [AN HON. MEMBER: "Rating relief."] Let us not come on to that hoary chestnut. We could have a wonderful time with that.

The building industry is now at a certain level, so more council houses are to be built. The result will be that fewer houses will be built for owner occupation. My right hon. Friend read an extract from a recent survey. [Interruption.] If the Minister does not know this, he never will. There is at this moment a big falling off in the number of houses being built for owner occupation. I suggest that the Minister gets out of his Ministry and goes around talking to some of the builders. He will then find out the facts of life.

If it is right to subsidise council tenants under the Bill, why is it not right to subsidise the would-be house purchaser? Or have we ditched "Mr. Three Per Cent."? [Interruption.] If it is still Government policy, as was said during the General Election campaign, one Clause in this Bill could have dealt with the matter. It would have needed only one Clause, because exactly the same provisions as apply to home ownership apply to council building. For all their fine words, the Government have no desire to assist house ownership. We must all live in little ticky-tacky boxes and finally all get educated in a nice big comprehensive school and all come out like little lovely plastic models.

Mr. Mellish

Provided we do not come out like the hon. Gentleman.

Mr. Cooper

I have not done so badly over the years. This afternoon we have heard mention of Milner Holland. What the Minister and the Joint Parliamentary Secretary should understand is that Milner Holland was a grave indictment of Labour policy over 25 years. [Laughter.] For the whole of that period the housing authority for London was the London County Council, which was fully under the control of the Labour Party. Even today, it is still not a good housing authority.

Mr. Mellish

In defence of that body, which. is not here to speak for itself, it should be stated that in one paragraph Milner Holland paid tribute to the London County Council, said that it had done a magnificent job, and said that it was the one gleaming light in London which was to the credit of housing.

Mr. Cooper

If the hon. Gentleman is trying to say that——

Mr. Mellish

I did not say it. Milner Holland did.

Mr. Cooper

How can the hon. Gentleman square holding that up as an example with asserting that Milner Holland is an indictment of housing policy?

Mr. Mellish

This is very important. In fairness, the Milner Holland Committee was set up by a Tory Minister to investigate the problems arising from the Conservative Rent Act, 1957. The Milner Holland Committee's Report showed clearly that the 1957 Rent Act had had the completely opposite effect to that which the Government of the day had intended it to have. It had, in fact, created less private rented property. It had created the miseries which the hon. Gentleman knows as a Londoner had existed for a long time and which the local authorities had been trying to do a fair job to relieve.

Mr. Cooper

I am saying that the Labour Party was in control of the London County Council throughout all those years. It was the housing authority. It should not have needed a report by Milner Holland or anybody else to tell that authority how bad the housing was in the area it administers. That authority should have been getting on with the job. It failed to do so.

Many of the problems that local authorities are facing in housing today arise because since the war differential rent schemes have not been made mandatory. The Minister should now, as he was invited to do by my right hon. Friend, ensure that local authorities receive these new subsidies only where they have a differential rent scheme of a type which the Minister can approve. The Bill does not apply to Scotland. It is wrong that in places like Scotland rents should be so ridiculously low, thus thrusting huge burdens on the rest of the ratepayers. This is equally true in many English cities and towns. Differential rent schemes must be made mandatory. If we do not like the expression "means test", we shall just have to stomach it. People must disclose their incomes. People receiving very high incomes should be able to pay, and indeed should be forced to pay, rents applicable to their incomes. If we get our housing costs down, as I am sure we would do in this way, we should not find the necessity for the Bill.

6.0 p.m.

Mr. Frank Allaun (Salford, East)

May I tell the House of the Lancashire lad who came back from the Army on leave? He sat one Sunday evening on the back step of his slum house in Oldham, talking to his father. "Dad", he said, "we have been round the world, not living in slums like this but in proper houses with gleaming white bathrooms, shining tiles, with everything clean, hygienic and beautiful. Look at this dump—the rats, the bugs, the lice and the filth—it is terrible. And look at that place"—pointing to the rickety outside lavatory—"it's a disgrace". He grew so angry that he pulled a Mills bomb out of his pouch and tossed it on the outhouse, which went up in smoke. They sat there for another five minutes, and then the father turned to his son and said, "Son, tha shudna dun that; thi Ma were in there". [Laughter.]

Mr. Deputy Speaker (Mr. Roderic Bowen)

I hope that the hon. Gentleman will now return to the Bill.

Mr. Allaun

I am not suggesting that we should try to solve the housing problem by throwing Mills bombs about, but I do say that the housing problem should be tackled as a military emergency. I am not exactly an uncritical back-bench Member of the Government side of the House, but I put on record my warm congratulation to the Minister and his two lieutenants for this Bill. I have had differences with them in the past, and I have no doubt that I shall have differences with them in the future, but, in my view, this Bill is a real step forward. It is something which many of us have been asking for, and pressing the previous Government for, since 1956 when interest rates went up with a bang. Taken in conjunction with the other important housing reforms recently introduced, it shows that the Labour Government's housing plans are now beginning to roll.

In a nutshell, the Minister has given a great boost, a powerful shot in the arm, to the housing drive. The burden of interest, however, remains so onerous that still further financial aid will be needed if we are to reach 500,000 houses a year. The nightmare of interest charges still remains, so, like Oliver Twist, I am asking for more.

Although this Bill will be a tremendous boon to the badly hit local authorities, it will cost the Government in a full year only £8 million. My hon. Friend the Parliamentary Secretary may tell me that, in the second year, if there is no reduction in general interest charges, it will cost the Government £16 million a year and so on. That is perfectly true——

Mr. Mellish

On top of what they are already paying.

Mr. Allaun

On top of what they are already paying—but, naturally, everyone hopes that the Bank Rate of 6 per cent. and the current market rate of 6¾ per cent. for this type of housing will come down. Every Thursday, I see the announcement on the ticker tape that the Bank Rate remains at 6 per cent., but there is always a hope, and, indeed, some suggestion, that it may come down. If it does come down, the cost to the Government of the subsidies in this Bill will be little or even nil. My main plea, therefore, is that, if this happens, as we hope it will, the Government will maintain the size of their proposed subsidy and give council housing building really cheap loans.

I remind hon. Members opposite that this will be essential if councils are to extend their programmes sufficiently and not suffer both a heavy financial loss and unpopularity through constantly rising rents with each additional house they build. It is paradoxical that, as things are at present, the more houses councils build the less popular they become because they have to push up the rents for those and the previous houses. I am not asking for the moon. Under the Labour Government of 1945–51, the interest rate in respect of council houses varied between 2½ per cent. and 3⅛ per cent.; it never exceeded 3⅛ per cent.

Sums of £8 million or £16 million are small in terms of Government expenditure. If I am asked where the extra money should come from, my answer is, by cutting our colossal arms expenditure. I believe that the hundreds of millions wasted each year in that way would be better spent in providing houses. Thinking of the £60 million cost of an aircraft carrier, the £500 million a year going east of Suez, and the £190 million a year wasted in Germany, I say that we can well afford these sums of £8 million and £16 million a year to expand our housing programme.

Here is an illustration to show how intolerable the interest burden is. Take the example of a two-bedroom council flat in the provinces costing £3,677 to build, and allowing for £700 for land costs. The situation is much worse in London, where the average cost of the land for a single council flat today—not per block but per individual flat—before a single brick is laid is £1,600. Seeing my hon. Friend the Joint Parliamentary Secretary to the Ministry of Land and Natural Resources present, I express the hope that the Land Commission will look after that particular evil.

By the time my council, or the council in any hon. Member's constituency, has paid interest at 6¾ per cent. for 60 years on that two-bedroom flat costing £3,677 to build, the total cost works out at £15,193. The difference between those two figures is entirely accounted for by interest. After allowing for the existing subsidy of £24 a year, the economic rent works out at £4 18s. 0d. a week, which, with rates, comes up to £5 10s. or £6 a week.

Hon. Members opposite may think that this is not an unduly high rent, but for millions of families it is just out of this world. There are thousands of men in my constituency who earn £14 a week, less National Insurance, to keep a family on. How can they possibly afford rents of that sort? As I say, it is just out of this world.

In London, as I have said, the situation is worse. A three-bedroom house in some boroughs costs, in round figures, £4,500 to build, including land costs. My hon. Friend the Member for Bermondsey (Mr. Mellish), the Parliamentary Secretary to the Ministry, will confirm that. One borough has a deficit each year on its housing account, after the existing subsidy, of £1.5 million. This is worse than Manchester which has £600,000, Liverpool which has £1¼ million, or Salford which had £155,000 deficit on its housing account. This particular London borough's total deficit is £1.5 million this year and next year it will go up to an additional £1.6 million.

Mr. Cooper

Have any of the local authorities which the hon. Gentleman is mentioning differential rent schemes?

Mr. Allaun

The one I am mentioning has a rebate scheme. The rents would be so high, if the full interest burden were charged, that the people who need the houses most would be unable to afford them. Thus, in addition to the Government subsidy, this council pays a subsidy out of its rates to the extent of £200 per annum per house. That is £4 a week per house out of the rates, or 1s. 8d. in the £, which does not help in its struggle to keep the rates down.

I agree that this council gets 8d. from the London Equalisation Fund from other London authorities which are better placed. I agree that under this Bill, thank goodness, the £200 a year subsidy that the council must pay will be reduced to £125. The council is naturally deeply grateful for that relief. But it will still have to give a subsidy to the extent of £2 10s. a week for the next 60 years on every flat that it builds. All this adds up to the fact that the council will pay a total of £12,000 per flat in 60 years as a subsidy, quite apart from what is given by the Government as a subsidy. That is why I plead for still more help.

What most councils are doing is to spread the cost of the new flats over the old flats. So, year after year, council tenants who may have been in their houses 20 years are finding their rents going up. This is highly unpopular and, in my view, it largely explains why the council house totals for the United Kingdom, including Scotland, went down by half from 235,000 in 1954 to 120,000 in 1961, remaining at that figure until the election year, 1964.

The reduction in building did not occur because people did not need council houses. They were desperate for them. Do hon. Members opposite know that, in my constituency, the time spent on the waiting list is 19 years—unless one happens to live in that part of the city condemned for slum clearance? Yet, if the truth were told, half the city is really a slum clearance area. I know that some people do not like my talking like that, but it is no use calling a slum a rose garden, for that way it would never be cleaned up.

Many councils went ahead with council house building despite the political unpopularity which sometimes cost them dear. They built more houses because they regarded it as criminal if they did not. If the new target of 250,000 council houses and 250,000 private built houses is to be reached, these disincentives have to be removed and these new subsidies are a big step in that direction. But I repeat that they are still insufficient.

The 6¾ per cent. market rate is to be reduced to 4 per cent. Against this, however, there is the removal of the existing £24 a year subsidy which, on a £3,000 house, works out at about seven-eighths of 1 per cent. so that the net saving is not 2¾ per cent. but 1⅞ per cent. On the £3,000 flat, the interest burden will go down, I calculate, from £175 to £132 per annum, a saving of £43 a year or 16s. 6d. a week in its rent. I appreciate that very much. On the £3,677 flat mentioned earlier, the interest reduction is greater. It will fall from £210 to £158, a saving of about £1 a week.

There are other good features of the Bill. For instance, it will be left to each local authority to decide for itself whether it is to charge differential rents, give rent rebates or, as many do, leave well alone. Secondly, there are special extra subsidies for high flats, for precautions against subsidence, for expensive sites and for building in special materials. The new 4 per cent. rate will apply to houses for which tenders are accepted from 25th November onwards even though it may be several months before this legislation goes through.

The beneficial impact, however, will perhaps be less than expected because the new rate will not be paid until the houses are completed, which will he at least two years hence. There will be no appreciable effect until then. Also, the cost of new houses will naturally be pooled with the cost of old houses built under the previous régime, when interest rates were very high from 1956 onwards. Once again the impact will be less than expected.

Many local authorities are concerned that additional subsidies will not be given for each floor above six storeys. I am sure that many authorities, like mine, are building up to 20 storeys.

Mr. Mellish

They still will.

Mr. Allaun

At present there is a subsidy of £1 l5s. per annum per flat per additional storey above six storeys. This is now to go and, of course, it means that some authorities, if the general market interest rate falls, will actually get less subsidy than now. I do not know whether that sounds Irish but it is a fact.

Mr. Mellish

This is very important. I would not like it to go out from this House that somehow we are providing a disincentive to build high, particularly in the conurbations, where we must build high in order to achieve the housing target. I assure my hon. Friend that this aspect has been thought out very carefully. We are convinced that, with our new basic subsidy, the subsidy up to six storeys, and bearing in mind that the cost of building each storey above six is nothing like what it was, there will be no disincentive to any local authority building as high as it can in order to cope with its housing problem.

Mr. Allaun

I welcome that assurance. I am sure that it will bring great relief to certain local authorities which have contacted me on this point.

Clause 5 gives the Minister power to pay an additional subsidy up to £30 for special needs, but at this stage none of us knows what tests are to be applied to decide which local authorities will qualify and how much they will get. I appeal to my hon. Friend to give this permission widely and to make full use of the Clause to grant up to the maximum of £30.

Finally, clearing sites is a major expense for many local authorities. For instance, in many old towns, such as Salford, Oldham and Liverpool, the destruction of existing slum property is one of the major and most costly factors to be contended with before building new houses or flats. Strangely enough, this is not allowed for in the expensive site additional subsidy. I am not quite sure why. It is not good enough to say that it is allowed for in the general basic increase because, if general interest rates go down, it might mean less subsidy for councils than they are getting. Can the Minister tell me, perhaps at some future date, whether, in dealing with site additional subsidy, compensation charges will be included?

There have been cries from the other side of the House of "pampering the council house tenant". It ill behoves such people to make such a cry, because owner-occupiers are benefiting on a £3,000 house if they are paying the standard rate of Income Tax, to the extent of £70 a year in Income Tax relief.

I plead with both sides of the House, not to drive a wedge between council house tenant and the owner-occupier. They are both the victims of the same evil, high interest rates. This is being used as a political weapon by our opponents to try to make the electorate think that the Labour Party does not want owner-occupiers to have cheaper mortgages. That is clearly untrue, and during the next year the Government will announce their proposals. My own view is that the fairest way to deal with this would be to reduce drastically the interest rates for those not paying Income Tax at the standard rate.

It may interest hon. Members to know that in West Germany, which has made spectacular advances in housing, subsidies are far bigger than anything we give. It must be remembered by British Conservative Members of Parliament that this is under the Conservative Government in Germany. In Western Germany one pays, despite a very high general mortgage interest rate, 1 per cent, or ½ per cent. or no per cent. at all on half the cost of the house. I can assure hon. Members that I am not imagining this. I checked it very carefully with the West German Embassy and these are the facts.

Sir Eric Errington (Aldershot)

The subsidies in Germany are on a personal basis and not a household basis.

Mr. Allaun

That is true. They are given to those with an income of £18 10s. per week plus £4 10s. for every dependant. That means that a family of four earning under £30 a week receives this subsidy. I hope that Conservative Members of Parliament will pipe down on this, because I think that most of us are getting bored. This explains how the West Germans have been able to build 500,000 houses a year and how they are now going to build 600,000 houses a year. This is a country with a population almost identical to ours. It is no miracle. The explanation is simply that it devotes 1½ times the proportion of the gross national product to housing. I am overjoyed that we have now fixed the target of 500,000 houses a year and that it will be done.

The right hon. Gentleman the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who opened for the Opposition, complained that the Labour Government were not relying on private landlords to build houses to rent. Of course they are not. Private landlords have not built houses to rent since 1914. They will not do it, and the building of such houses will depend on local authorities or, alternatively on owner-occupiers. I conclude with a quotation from a letter I received this morning from the chairman of the Association of Municipal Corporation's Housing Committee, Alderman K. C. Cohen, whom many hon. Members will know. He writes: I am appalled at the conditions in such places as Birmingham, Liverpool, Manchester, Salford, Oldham, Glasgow, Sheffield, etc. If I had my way I would ask for emergency powers to centre our efforts on these areas. What concerns me more than anything is how the Minister is going to ensure that the authorities with the greatest slum problems get the necessary encouragement to quadruple their present building of homes so the slums can be cleared in the comparatively near future. To that I say Amen. This Housing Subsidies Bill is a splendid advance. It is something for which tenants, councillors and labour M.P.s have been pleading for nine years. I should like the Minister to go ahead and do even more.

6.28 p.m.

Sir Eric Errington (Aldershot)

I cannot of course, accept what the hon. Member for Salford, East (Mr. Frank Allaun) has said about private enterprise building. But if it were true that private enterprise has done nothing—which I do not admit—the blame must lie entirely on the other side of the House because they have blown up Rachman and have painted a picture of the bad private property owner which is wrong in most cases. The hon. Member for Salford, East is one of the people whom one can justifiably blame for doing that over a long period. To my astonishment I find that I am in agreement with him over the principle he raised about the taxation position of owner-occupiers. It is a nonsense that owner-occupiers who have no Income Tax from which their payments can be deducted, should have to pay the full amount while, on the other hand, those who have a reasonable income can deduct their payments from Income Tax. But this is one of the things which ought to have been dealt with in this Bill.

I am not satisfied that this Bill takes a balanced view of the housing situation. Everyone will accept that there is both now and will be in the future a rising standard of expectation. The hon. Member for Salford, East has said that a council fiat costs £3,667 to build, of which £700 is for land. I am utterly amazed that any local authority needs to pay as much money to build flats. As a private landlord I have built a series of flats which have cost substantially less. Perhaps the hon. Gentleman could tell me the name of the authority?

Mr. Frank Allaun

Yes. It is the Salford authority. The explanation for the high cost of flats which, I agree, disturbs many of us, is that if we build high, we have to dig deep; the foundations must be deep. There must be lifts. What is more, there must be a caretaker to look after the flats. This is part of the expense of flats.

Sir E. Errington

If I got a quotation for that figure, I would certainly want a second and third quotation against which to check it.

The Bill helps local authorities, but I am very unhappy about the way in which some of the money will be spent. It is all very well to say that there is more money and that it will be dealt with faithfully. But, as far as I can see, there will be no check on the way in which funds are used under the Bill. Presumably it will increase very much the number of people occupying council houses. Bearing in mind what I said about the standard of expectation, will not this escalation in price continue until such time that it may be essential to increase the subsidy even more? This matter should be examined very carefully.

The Joint Parliamentary Secretary talked about "industrialised building". We have had the benefit of industrialised building in my constituency. For large buildings like barracks it is extremely good and it is reasonably cheap provided that the central place in which the components are made is near and they can be taken without difficulty from one part of the area which is being developed to another. However, I do not think that industrialised building is likely materially to improve the ordinary dwelling-house situation.

People talk about luxury rents. I do not know what a luxury rent is. It means different things according to the way in which the expression is used. The White Paper which started the idea of the housing associations was supposed to deal with rents of between £6 and £8. I do not know whether one would call rents between those figures luxury rents. The idea of the housing associations was not meant for the ordinary working man.

There appears to be a feeling in the Government's mind against owner-occupiers. I do not know why this should be so, because the Minister, at Stevenage, spoke very favourably of the owner-occupier. I wonder why it was not thought possible to consider ways to avoid this very large sum being taken out of our depleted finances? Why could not use be made of the funds which are flowing back from the advances made in July, 1961, for the purchase of pre-1919 houses? The House will recollect that £98 million out of £100 million made available by the Government was used by the building societies to enable people to buy the older houses. That money is coming in again. Is it not possible for help to be given by means of the use of this money again?

Cannot something be done to ease the position concerning deposits? A man and his wife came to see me at my constituency. He had £25 a week. He was willing to buy a house if he could get one, but he had not enough money to cover the deposit and the legal fees. He was of good type, and was prepared to take on the responsibility of a house, but, as you might imagine, Mr. Deputy Speaker, in view of my constituency, he had just come out of the Army and had been unable to save the necessary amount for these charges. Cannot something be done to prevent the difference, to which the hon. Member for Salford, East referred, and which might be a very important difference, between the council house occupier and the owner-occupier?

Another thing which would attract owner-occupiers would be if the Minister were prepared to make allowance for the potential of people who are in certain classes of job. He could, perhaps, make provision so that the mortgage repayment was less if a person in a short time was due to get promotion. One way in which this could be done is what is called the "balloon" way. For a time, 50 per cent. of the mortgage is paid in the ordinary way and the remaining 50 per cent. is repaid after the house has been sold. I do not know whether this possibility has been considered. Another possibility is the American system of Government guarantee. This would have to be worked out in consultation with the insurance companies.

I wish to say a few words about the possibility of the sale of council houses with a view to increasing the number of owner-occupiers and ensuring that there is not a very large block of council houses, then a block of owner-occupied houses, and so on. There is the danger, which is referred to in an article in The Times of 11 th December, that children of council house tenants, growing up in the enclave atmosphere of council house estates, and used to expecting extremely low accommodation costs, will inevitably create an additional demand for council houses. No solution to that problem can be found in increasing council house rents to an economic level. The only level of rents of any relevance to the problem is the level of free market rents which in addition to being politically impossible would also be inequitable—owner-occupiers who purchased houses 20 years ago are not paying free market prices today for their accommodation … Therefore, in effect, the price should be the "historic" cost, taking account of the fact that the house was built some years ago. The article adds that the way in which it was worked out was that in 1964 some 34 per cent. of the households in council houses had more than £25 a week and 22 per cent. of them had more than £30 a week. The proposition of council tenants becoming owner-occupiers seems not to be impossible but even desirable. Perhaps I have not put it as clearly as I might have done, but it would certainly be unfortunate if we had two nations, one of the council house occupiers and the other of owner-occupiers, even more in the future than the present.

I do not propose to go further into the question of building by private enterprise to let, though there is much to be said, but I will conclude with a word about the situation of the ex-Service man. I put down a Question to the right hon. Gentleman, and in his Answer he said that he had reason to believe that something was being done by most local authorities about ex-Service men. This is a very difficult problem, as it must be, particularly in a town in which many people leave the Service. As I indicated before, there was the difficulty of a man who came to see me and who had tried to obtain a council house but had found that there was none available. Can the Minister give a clear indication that he appreciates the importance of this problem? I am not sure whether he has power in the Bill to deal with this matter, but would he consider, in view of the number of people coming out of the Services, whether any special help could be given to them to meet their housing needs?

Mr. Crossman

I have taken a great deal of interest in this point, as has my hon. Friend the Joint Parliamentary Secretary who opened the debate. I do not think that we have power directly to help ex-Service men in this way. We have issued a circular to local authorities impressing the need on them, and I have reasoned with housing managers on the subject. I must admit that I was disappointed by the response of some local authorities. It is a question of education. Unless I am prepared to order authorities how to allocate their houses, I do not think that I can intervene except by trying to persuade them to help ex-Service men and by hoping that all hon. Members in their constituencies will try to see that local authorities recognise their obligation to give special consideration to ex-Service men, especially in respect of the one year residential qualification, which it is impossible for Service men to fulfil.

Sir E. Errington

The difficulty is that many soldiers have no fixed place of residence. They have lived all over the place. When they leave the Service they have nowhere to go. That puts a special responsibility on the town at which they are discharged. Would the Minister seriously consider whether he could again forcefully indicate this obligation to local authorities? Would he consider whether anything could be done? It would be very helpful.

6.45 p.m.

Mr. Roy Hattersley (Birmingham, Sparkbrook)

I find it impossible to discuss the substantial merits of the Bill without first, perhaps pedantically, defining what I believe is the purpose of subsidies and what I believe subsidies should do. I have no doubt that subsidies have a treble rôle in housing. First, they have the task of ensuring that houses are provided in the right quantity. Secondly, they have the task of providing those houses at a price that will enable the people who need them most to afford them. Thirdly, they have the duty of inducing local authorities and other housing agencies to build houses of the right sort and the right size.

I will try, briefly, to consider whether the proposals in the Bill fulfil those three requirements and produce those three ends. I have no doubt at all that the primary aim of Government subsidies—the production of larger quantities of houses, of a desperately needed increase in numbers—is likely to be met. My hon. Friends will rejoice in that doubly, not only because production is likely to increase but also because the disastrous trend of the last 15 years, in which subsidies have been falling from year to year, has at last been turned back.

In the White Paper the Minister is more than generous in his analysis of the subsidy pattern since 1951. It is difficult in an analysis of the situation to make any direct comparison between one year and another, because there have been so many changes. Subsidies have been divided between general need and slum clearance. Subsidies have been divided between areas of high cost and areas of low cost. But what we can say is that until 25th November of this year, most local authorities expected annually for every house that they built rather less Government subsidy than they expected annually for every house that they built in 1952. Indeed, many local authorities in the so-called low-cost areas expected annually before 25th November about one-third of the subsidy which they expected for every house which they built 13 years ago. I am sure that my hon. Friends will want to rejoice that at last that trend towards reduced subsidies has been reversed. I need no convincing that there is a direct connection between the amount of money made available in this way and the number of houses which may be built.

When one compares the housing records of nearly all our neighbours and competitors in Europe, the sad fact becomes most obvious that those who spent appreciably more of their national income on fixed capital for new housing are those who built appreciably more houses. The great fault of this nation over the last 13 years in its house-building programme is that we have not built an adequate number of houses because we have never been prepared to allocate enough of the national resources towards doing so. We have not accepted the basic fact that this is not something which can be left to private individuals making a private effort but is something in which the entire community has responsibility and in which the entire community has obligations.

Nearly three years ago I was very much concerned with a letter which the Association of Municipal Corporations sent to the then Minister of Housing—a letter which was completely unheeded, but which, I think, put the position exactly and precisely. That letter said that without an increase in the rate of subsidy, the burden"— meaning the financial burden— is already becoming such as to deter local authorities from carrying out their responsibility for providing an adequate number of new dwellings". The importance of that letter was ignored, or at least underestimated, by the then Minister. The increase in subsidy did not take place. During the 18 months which have passed since that letter, many local authorities, such as the large city which I in part represent, have found the increased burden which that letter talked about to be so great as to make them face with the greatest reluctance, the fact that there was at least the possibility of their having to abandon their housing programme altogether.

I, of course, accept that an increase in subsidies does not automatically increase the percentage of national income being spent on new houses, but I am sure that the way in which this Bill intends to increase the subsidy payment will do exactly that. It will, in fact, have two great redistributive effects. It will take from the whole of the nation and give to the least well housed, and it will take from the whole field of spending and give to the most important field of spending—the production of new and necessary houses.

I do not want to join in the argument which hon. Members opposite have promoted this afternoon about the so-called rivalry between building for private ownership and owner-occupation, and building for council house tenancy. I think that an argument on the ideal, the perfect form of tenancy and of occupation, is an entirely sterile one. I do not think one can make an assessment about one form of housing being preferable to another, but what I can say and what I must say in this debate is that only one form of financial assistance helps to provide houses which directly—I emphasise directly—do the two jobs which we need to tackle with the utmost urgency—clearing the slums and clearing the waiting lists.

I make no apology for saying, and I have no hesitation in saying, that those of us who enjoy private accommodation or owner-occupation may well have received benefit and had our needs promoted over the last 13 years at the expense of people whose needs are infinitely greater. I repeat—because I think it bears repeating—that the great social problems of the slums—and they are increasing not decreasing, they have grown over the last 13 years and the great social problem of the waiting lists, which have lengthened over the last 13 years, can only be solved by municipal housing. In the city I represent, Birmingham, and in my own home town, Sheffield, both problems have grown, not decreased, in the last 13 years.

Those two great problems can only be solved by municipal building, and if I am asked to choose between one priority and another in providing houses I have no hesitation in the choice I make. I say that municipal building must have priority because municipal building produces the most effective results in this field.

Naturally, therefore, I am delighted this afternoon to recognise that the proposals for the basic subsidy provided in this Bill are likely to increase the subsidy for new houses built by each local authority from at best some £24 per annum to an average of £60 to £70 per annum, and I have no doubt that it is going to produce more houses and produce them more quickly. It will enable those authorities to afford the new and expensive techniques which make accelerated house building possible. It is going to enable local authorities to pay the greater bills they have to pay to attract scarce labour and scarce materials away from other more remunerative but less important fields of building.

It will, in fact, facilitate additional building rate, but a greater rate of house building and a greater speed and quantity, is only one of the requirements. The second requirement must be to provide building of the right sort and to ensure it is made available to the people who need it most at rents they can afford.

I was delighted to read in the White Paper of 25th November: The Government intend that the improved subsidies should be used to raise housing standards. I believe we are fast approaching the time when the Minister should think most seriously about saying to local authorities or to their associations that houses which are not built according to Parker Morris standards, houses which will not pass the scrutiny of his Department and will not rate for the same quantity and the same volume of subsidy as other developments. My hon. Friend the Joint Parliamentary Secretary said this afternoon, quite rightly, that the houses we are building today must be acceptable by the standards of 1970 and tolerable by the standard of 2000. There are far too many corporation houses being built in this country which, because of recent financial stringency are designed at far too low a standard.

I wonder most seriously whether we can continue to subsidise those houses at the same rate as others, and also—and I say this with the greatest regret—whether there are not many local authorities which allocate their houses in such a way that they too must be subject to some pressure from the Minister. Many local authorities allocate their houses in such a way that they discriminate against, certain sections of the population and make the acquisition of their houses almost impossible for certain classes of people.

Again, I wonder whether the time has not come for the Minister to impose on them sanctions a good deal more severe than—I was going to say than they enjoy, but that is scarcely the right word—they endure at this moment; whether the time has not come for them to be told that unless the houses they build, financed by the proposals we are debating this afternoon, are allocated in a way which conforms to the simple justice and equity, financial help will not be available to them.

I have the very greatest respect and the very greatest admiration for the local authorities in this country. Indeed, for seven years before I came here I was inti- mately involved in the government of a great city and I spent three years—three years hard—as chairman of a housing committee, but, notwithstanding that, I feel that the attitudes of some local authorities are such that they require urgent guidance, precise guidance, from the Ministry. While this House, traditionally and properly, is reluctant to impose its will in detail on local authorities which are properly dealing with local matters, I wonder if the time has not come when the Minister, in two fields—the field of allocation policy and the field of rent policy—should say that unless a local authority conforms to certain basic standards the increased subsidy, the enhanced subsidy, which we are proposing and certainly will pass tonight, will not be made available to it.

I want to say two or three words about the principle of financing housing by grant based on the rate of interest. Fortuitously, I am sure,the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has just returned. Of the many things he said which astounded me the one which astounded me most was the suggestion that by basing the subsidy on the rate of interest the Minister was in some ways encouraging financial irresponsibility on the part of the local authorities.

If we accept that subsidy should vary with need, that areas of high cost should receive extra help—a principle accepted crudely in the 1961 proposals—it is inevitable that some local authorities are bound to choose to build, or occasionally be forced to build, apparently expensive houses. Some of this added cost will result from their enthusiasm for higher quality, some from the need to compete with more remunerative forms of building, but undoubtedly the Minister has safeguards he can impose to ensure there is not lack of thrift or absence of prudence.

There are two safeguards. The first is that the general approval of the Ministry of Housing must be given to any developments before they are passed for loan sanction. In my own experience, under, admittedly, a different dispensation, there was the greatest difficulty in superimposing on any basically utilitarian housing scheme something which might have been included because of overambitious architects or under-prudent treasurers.

The second and perhaps more trenchant safeguard against extravagance is that the subsidy does not meet 100 per cent. of the bill. It is true that the corporation that builds houses at £3,500 each gets larger amounts of subsidy than the corporation that builds houses at £3,250 each, but it does not get the full additional £250. Every time it increases the average cost of its building, part of that increase has to be met by the local authority itself. That is a most potent safeguard.

My hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) reminds me that when I talk about a local authority meeting bills, what I should remember and what the House should remember is that I am talking about an individual family having to meet expenditure and pay bills, and that it is an intensely human matter which should be considered in those terms rather than in the more global terms of local authority expenditure. The individual tenants of the local authority that they elect are paying more every time a council house is built at an extra cost, and that is a most potent prevention of buildings being erected in a way which does not conform to normal financial standards.

That was the second most extraordinary point which the right hon. Member for Kingston-upon-Thames made. The primary one was his suggestion that by gearing the subsidy to the rate of interest the Minister of Housing and Local Government would in some way be acting in direct conflict with budgetary policy, the theory being that when the rate of interest was increased as a national remedy for inflation, the subsidy that a corporation would be receiving would be so geared that that corporation's housing committee would be encouraged to accelerate its house building instead of reducing it. How one can advance that theory about a proposal, the basis of which is a static rate of interest remaining constant irrespective of increases or decreases in Bank Rate, defeats me.

Mr. Crossman

My hon. Friend asked the specific question whether the Minister retained powers in the Bill to see that if local authorities were extravagant or luxurious in their methods, he could correct it. The answer is "Yes". It is here, as in previous Bills, and it appears in Clause 2(1). It is carefully written in that, provided the Minister has seen that the cost has been "reasonably incurred", the subsidy shall be paid. That is the limitation that my hon. Friend talks about.

Mr. Hattersley

I am grateful to my right hon. Friend for drawing my attention to that specific point. I have suffered in the past under the requirements of similar provisions when developments which I thought were not extravagant were turned down by his predecessors. At that time, my authority, the first to develop Parker Morris standards, was developing them too quickly. I hope also that following my right hon. Friend's specific reference to that subsection, the right hon. Member for Kingston-upon-Thames will be a good deal more comforted about potential extravagance that the Bill makes possible than he appeared to be when he spoke at the beginning of this debate.

I want to turn now to some of the second subsidies and additional payments that the Bill involves. I want to express my pleasure that the high building subsidy has been changed in the way that it has. Years ago, I used to believe cynically that the then Minister of Housing confused high building with high density building and that additional subsidies were sometimes paid for no other reason than that buildings were high and expensive.

We all know of estates built on traditional lines, at the entrances of which are single point blocks which are unnecessarily expensive and usually unpopular with the tenants erected as an architectural feature. Under the old dispensation, they had only one special grace, and that was that they were expensive and for that reason they received additional subsidy. The fact remains that the Government and the Minister at the time were encouraging a type of building which was altogether undesirable.

Equally, in terms of the expensive site subsidy in Clause 10, we are still obsessed, quite rightly, with the cost of acquiring land. We have become so obsessed as a result of bitter experience. However, what we should think of more is the cost of doing things with the land once it is acquired. Having learned my initial housing experience in a local authority which tried to build houses on the foothills of the Pennines, I understand that a site can be expensive in two ways. It can be commercially expensive and geologically or geographically expensive. I hope that additional subsidy will be found for local authorities who, in the national interest and in the civic interest, choose to develop estates on land which is most difficult to build upon but which is all that they have available if other amenities are to be preserved. I hope that we can start thinking of expensive sites in geological, if that is the right word, as well as commercial terms.

Finally, I wonder if there is not a case for a more complicated second set of subsidies which include other increments for problems and disadvantages that some specific towns suffer to differing degrees. There are the problems of those towns with enormous decaying centres. In that connection, I compare the city of Sheffield with the city of Birmingham. Their housing problems are different in part as, for reasons of history and sociology, Sheffield does not have to endure an inner ring of decaying property which is not quite designatable as slums but which is certainly unpleasant to live in and something with which the Government, both local and national, have not come to grips. The problem of immigrants in those areas is secondary and subsidiary. The two things naturally go together, but they are only in part connected. I wonder if there is not a case for problems of that sort attracting a special subsidy if they are tackled with determination.

The argument against second subsidies is that which says that subsidies are already sufficiently complicated without over-complicating them. I have never understood the argument which says that housing subsidies have to be simple. The people who enjoy them do not understand what a subsidy is, and, if they get it at all, they think that it is too little. The only people required to understand it are members of local authorities, who rarely do, and city and borough treasurers, who sometimes do. [Interruption.] I am sure that it would be entirely out of order if I repeated the additional suggestion made to me, Mr. Deputy Speaker.

If one has to choose between complication and equity, I choose equity every time. I represent a constituency which has all the housing problems. It has municipal housing which is already so costly that many prosperous working men find it difficult to meet their housing bills. It includes slums which have gone on uncleared for so long that they are a local sore and a national scandal. It includes a decaying central area about which there are no development proposals and for which there is little hope.

If I had to choose between a pattern of subsidy which was so complicated that the residents did not understand it, and one which was so simple that it did not meet the aims intended, I would choose the complicated one every time.

I acknowledge that the criticisms which I have made of the Bill are essentially marginal. I also acknowledge that I may well have overstated them, but if I have I have done so for the most respectable of intellectual reasons, namely, that my general enthusiasm for the principle of the Bill might have led me to overlook the marginal defects which I have criticised, and, naturally, much as I admire what the Bill sets out to do, I would not like my criticisms to go by default. Equally, I would not like anyone here, or indeed anyone outside, to think that I have anything but admiration for the spirit and intention of the Bill.

Occasionally, after some days of taking no very positive part in the life of the House, of attending constantly in the hope of adding one's vote to the Government's majority, one feels that a single decision makes everything worthwhile. One feels that one action, one day's debate, one evening's decision, one decision on its own, makes all the hours, all the time and all the work worthwhile and proper. This is such a Bill this afternoon, and I vote for it with as much enthusiasm, in fact perhaps more enthusiasm, than for anything that has come before this House during the last 14 months.

7.11 p.m.

Sir Anthony Meyer (Eton and Slough)

I am not in the least surprised to find that I am in agreement with a good deal of what the hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) has just said. I can hardly share the enthusiasm which rather uncharacteristically animated the last part of his speech, but there was one central thesis with which I found myself strongly in agreement. The hon. Gentleman said that we would never get enough houses unless we devoted enough of our national resources to the problem. I am sure that he is right there, but it leads me to a completely opposite conclusion from the one to which he came.

The hon. Gentleman said that he did not mind very much if subsidies were so complicated that the people who got the benefit of them did not understand what they were all about. I am not sure that he himself quite saw the connection between that demand and the earlier point that he was making, because if we as a nation are going to devote enough of our resources to solving the housing problem, then, being a democratic country, we as individuals must also be prepared to devote enough of our own resources to housing, to see that the nation as a whole devotes a corresponding proportion to solving the problem. If, because of a very complicated system of subsidies, the individual is kidded into believing that he can be housed at a cost to himself well below the real cost of providing that housing, he will never vote for measures which will put aside enough of the nation's resources to solve the nations housing problem.

There is a very good phrase in a pamphlet published by my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) and Mr. Geoffrey Rippon. Talking about the high proportion of council tenants who comprised the electorate in certain local authorities, they said that council tenants would always be tempted to vote for indulgent landlords rather than for good local government. I think that that is a very penetrating phrase, because it highlights the point that, just as one may say that the nation ought to spend all this money on housing, so people should be prepared to follow it through and say, "I myself must be prepared to devote such-and-such a proportion of my income to housing myself". I do not believe that there is as much difference between the hon. Gentleman and myself as there might have appeared to be.

Unlike the hon. Gentleman, I am far from happy about the Bill. This is not so much because of what is in it. I say that because, unlike many of the Measures which we have had recently from the right hon. Gentleman, this is a Bill which is not so bad in detail as in object. It is bad in object because it misses the opportunity of making very much more selective, and therefore very much more effective, use of public money to promote an expansion of the housing programme.

Above all—and I say this as the Member for a constituency in which the main borough, under a Socialist-controlled council, refuses to introduce any kind of rent rebate scheme—the Bill fails to take the opportunity of providing a strong incentive to local authorities to introduce such schemes. To borrow a phrase used by the hon. Member for Salford, East (Mr. Frank Allaun), it fails to chuck the Mills bomb into the "loo". This is possibly the last opportunity which the party opposite will have to put pressure on local councils to adopt schemes of this sort.

I know that the right hon. Gentleman has put an exhortation to local authorities in paragraph 41 of the White Paper. For what it is worth, the chairman of the tenancy committee in my local authority indignantly denies that the Minister has even mentioned rent rebate schemes, and I derived considerable pleasure from pointing out the relevant passage in the White Paper.

Mr. Crossman

I am grateful to the hon. Gentleman.

Sir A. Meyer

I shall not hesitate to quote some very sensible words spoken by the Minister on this point a few minutes ago in an intervention, and I hope that this will induce the local authority to adopt a more reasonable attitude, because, in an area where there is a high proportion of council tenants, it is difficult to adopt policies which may mean a rise of rent for quite a sizeable proportion of the local electorate.

At the moment, it is not merely the Exchequer subsidy which is being used to keep the whole level of rents artificially low right across the board. In the case of Slough, and I think in many other local authorities, some of the yield of the rate is also being used to keep council rents low right across the board. I am not going to argue the case—because I think it has been argued sufficiently—of who does best or worst out of this bargain, the council tenant or the owner-occupier, because it is not so much that contrast with which I am concerned. I am much more concerned about the relative plight of the council tenant, and the person who at the present time is forced to seek and occupy privately rented accommodation. To my mind this is where the shoe really pinches. These are the people who come into my surgery, begging to be given somewhere to live. These are the people who are paying very high rents for completely inadequate accommodation.

The Minister may say that his Rent Act will take care of that. Maybe it will lead to those who are lucky enough to have decent accommodation having their rents reduced to somewhere near what they can afford to pay, but, if it does that, by the same token it will dry up the supply. Those who have nowhere to live, who are unauthorised lodgers in council houses, who are living in tied houses from which they can be evicted, despite the Protection from Eviction Act—there are such people; the evictions are now legal, but they take place just the same—can find themselves out in the street with nowhere to go.

One thing above all which these people must not do is to move outside the area of the local authority concerned. I had a pathetic case of a 77-year old lady who was evicted from a private dwelling within the Borough of Slough. She was put on the housing list, but, as she had nowhere to go in the meantime, she went to stay with her daughter who lived 200 yards outside the borough, on an estate managed by the borough. The daughter's family came home and she wanted the room. She therefore wanted to turn her mother out.

The mother went to the Slough Borough Council and said, "I have lived for 20 years in this borough. I am on your waiting list. Can you find me accommodation?" The borough council said, "No. Your present address is outside the borough. You cannot be considered for accommodation by us. You must address yourself to the council in whose area you are now living." That council might have a two-year qualifying period so the mother would not qualify. She is 77 years of age, and will have a long time to wait. She was told that she must find herself an address in the borough so that she would qualify.

This is a situation to which the Minister should devote his attention. It does not occur very frequently, but it can produce tragic results, and I cannot believe that there is no scope for better co-operation among local authorities in this matter. I know that it is not easy because neighbouring authorities may have entirely different systems of allocating accommodation. None the less, there could be better co-operation, and the Minister could give a lead in this respect.

These people who are evicted, and who are trying to find somewhere to live, could be forgiven if they occasionally felt that the attitude adopted towards them at their town hall could be expressed in the words "You cannot have anywhere to live until you find somewhere to live, and when you find somewhere to live you will not need anywhere to live." This seems to be the line which many housing managers are compelled to take, under great pressure. I admit that they are under great pressure. I am being very harsh with my local council for its failure to introduce a differential rent scheme, but I admit that it is an extremely difficult position.

I think that it is making its problem very much worse by keeping rents artificially low, however. People are attracted into the area because of the possibility of earning very high wages and by the promise—which may turn out to be illusory—of being able to live in a house which has a low rent, because all the rents are kept at an artificially low level. There seems to be a direct connection between a sensible rent policy and a sensible policy for the allocation of houses to people who most need them.

Here, surely, is common ground between the two sides of the House. We argue backwards and forwards with one side supporting council tenants and the other supporting owner-occupiers, but surely we both agree on the need to ensure that council house accommodation which is housing at a rate below the market rate, whether or not there is a subsidy—because even when there is a rent rebate scheme or an economic rent it is still below the market rate—goes to those in the greatest need. Most councils have a system of allocation which more or less ensures that. There may be hard cases, one way or the other, but allocation schemes generally ensure that. But does council house accommodation remain with those in the greatest need? Will a young couple with small children running about have an equal need for the same accommodation 20 years later, when the children have grown up and have left home?

Mr. Julius Silverman (Birmingham, Aston)

What does the hon. Member want the local authorities to do—throw these people out? Is that Tory policy?

Sir A. Meyer

We certainly do not want to throw them out, but if we have a situation in which the general level of rents is roughly the same throughout there is no encouragement for anybody who is living in a house which is too large for them to move into a smaller house. When there is so little difference in the rents that are paid it is not worthwhile to move out. There is a need for a more sensible rent structure so that people are encouraged to move from a house which is too large for them into a smaller house, making a saving in the process.

Mr. Julius Silverman

Who will provide the smaller house?

Sir A. Meyer

We hope that the councils, with these lavish subsidies, will produce balanced housing programmes with a proper proportion of smaller and larger accommodation. It is no good hon. Members opposite getting indignant at the idea that somebody should be encouraged to move from a house that has become too big for him.

Mr. Eric Ogden (Liverpool, West Derby)

Does the hon. Gentleman agree that in the majority of local authorities the average rent charged for two-, three-or four-bedroomed accommodation is almost the same as the weekly mortgage payments on a similar type of house, and possibly more in some circumstances? A person aged between 45 and 50 is not able to provide the capital to put down as a deposit, even if he wants to move out of corporation property, but he might still be paying more than he would be for equivalent private property.

Sir A. Meyer

That is another question. I was not saying that people should be encouraged to buy their own property—although that is also worth considering, and we should devise ways of helping them to do so—hut was thinking in terms of encouraging them to move into other subsidised council house property, smaller than that in which they are living at present.

A majority of councils operate no rent rebate schemes or economic rent schemes. This problem is becoming more and more absurd. Certainly in the South the majority of tenants of council houses are well able to afford to pay more—not always substantially more—than they are at the moment, and there is a minority who are not able to pay even those rents which they are now being charged, at the present artificially low level. It is no good saying that people who cannot afford to pay even their present low rent can go to the National Assistance Board. Very often they consist of families with one wage earner, earning about £14 a week, who has a wife and children to support, and whose wife is not earning. For a family of that kind a rent of £3 10s. a week is probably too much. That is about the level which prevails under the scheme of universally slightly depressed rents, with subsidies spread all over the place.

These families could be helped by a proper differential rent scheme, but they do not come in under the aegis of the National Assistance Board because their income is quite a long way above the level at which they could come in. The Minister is missing a first-class opportunity of bringing pressure to bear—perhaps that is the wrong word—or missing the opportunity of providing effective inducements and incentives to local authorities to adopt more sensible schemes for the distribution of subsidies.

Mr. Crossman

I have been listening carefully to the hon. Member. Does he suggest that the Minister ought to induce them to do this? What kind of pressures is he referring to?

Sir A. Meyer

I should have thought that it would be simple enough to insert a Clause providing that part or all of the main subsidy envisaged under Clause 1 or 2 would be dependent upon the adoption by the local authorities concerned of a system of rents approved by the Minister. I am not suggesting that the Ministry should lay down exactly what system should be used, because there must be elasticity, and these schemes must vary enormously from one part of the country to another and one authority to another. But the Minister should take general power to approve or disapprove of certain systems.

Mr. Crossman

Is the hon. Member suggesting that we should make the payment of the subsidy conditional upon the system of rent operated by a certain authority having been approved by the Minister?

Sir A. Meyer

Yes. I am suggesting a general approval for the type of system used.

Another point was raised rather cryptically by the hon. Member for Sparkbrook. Perhaps I can be rasher than he was and spell it out. Most local authorities have managed so to arrange their affairs that no immigrant family has yet succeeded in finding itself on a housing list—or, at any rate, at the top of a housing list. I should be very interested at the end of the debate to hear the Minister's comments on whether he thinks that all local authorities are playing perfectly fair on this, because I am sure that we all agree that by any definition the greatest hardship in housing and the worst cases of overcrowding are to be found among immigrant families, and it seems rather odd that somehow or other these families never find themselves at the top of the list.

Mr. Hattersley

The hon. Member has been kind enough to associate me with what he has just said, suggesting that 1 said more cryptically what he has spelled out. I should have made it plain that in my own local authority, the City of Birmingham, I am constantly seeing immigrants who, having met the prescribed qualifications—not all of which I agree with—and served the prescribed waiting time, are being rehoused by that local authority.

Sir A. Meyer

I am interested to hear that. I wish that I could maintain that this was the general practice throughout the country. The whole principle of a qualifying period of residence being necessary before one can get to the top of the housing list is one of the matters on which the Minister might at least give guidance, and if the reception which has been given to the guidance which he has already set out in the White Paper is anything to go by, he may have to go a little beyond guidance and to provide at least some incentive.

Most local authorities have this qualifying period of residence. I should not like to express a very firm opinion one way or another about this. It is a problem in a local authority which is an attractive area in which to live to know whether to impose a residence qualification. Certainly in Slough if we had no residence qualification we should be flooded by people coming into the area to seek the high wages available there.

It is because there is this large number of matters in which the Minister has contented himself with exhortation or which he has passed over in silence that I feel that the Bill is missing an opportunity which is unlikely to recur again to this Government. The right hon. Gentleman, who is the Stakhanovite of the Labour Party, has produced a great many Bills. Some of them, with amendment, could have become very good Bills if he had been ready to listen to suggestions.

The present Bill is in quite a different category. I do not see a great many faults with it in detail, although my hon. Friends have pointed out some of them, but to my mind the basic premise of the Bill is at fault. The basic premise of the Bill is an indiscriminate use of subsidies to authorities all over the country regardless of their need and without any attempt to enforce a discriminate use of subsidies within those authorities. It is ironic that the right hon. Gentleman, who is certainly the most brilliant, probably the most able and to my mind one of the the most likeable Ministers of the Government should be the one who is to cause the most widespread damage and the most lasting harm to his party's reputation in the country.

7.35 p.m.

Mr. Eric S. Heffer (Liverpool, Walton)

The hon. Member for Eton and Slough (Sir A. Meyer) seems to have very little knowledge of what local authorities are doing. He said that local authorities should try to persuade tenants living in large houses to move into small houses. As far as I know, that practice is followed certainly in all the Lancashire authorities and I imagine in probably every local authority in the country.

In Liverpool we have a problem the other way round. In the past we had a Conservative local authority which did not face up to the fact that this would ultimately become a problem and, as a result, we have insufficient one-bedroom and two-bedroom flats. We are faced with a very difficult problem of old people living in large family houses who want to move into smaller accommodation but we have not the accommodation into which they can move. This has presented our local authority with a very difficult problem indeed.

I want to raise one or two points in relation to the speech made by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). For example, he said that it was wrong of the Government to raise in the Bill the question of reducing the subsidy on high-rise flats. I agree with my hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) in thinking that the right hon. Member has failed to understand that high-rise flats do not of necessity mean high density flats. Anyone who has been intimately concerned with housing problems knows that the Ministry's planners have carried out a whole series of studies and have proved conclusively that it is possible to get high density without necessarily having high rise. It seems to me that this ought to be advanced a little further, because high-rise flats in themselves create more problems than they solve. What do we do if we have a large number of children living on the top floor of a 20-storey block of flats? Where do they play? May the tenants keep dogs and cats? Before the right hon. Gentleman makes statements of that kind he should look a little more closely into some of the studies which his Department, when he was running it in the past, carried out into this type of problem.

He also referred to Circular No. 50, which apparently is frightening the Conservative Party to death about direct labour work. I wonder whether they are concerned about direct labour departments being put in a better position than private enterprise—as they suggest—or about the Circular putting the direct labour department on a parity with private enterprise, as is a fact. It will create genuine competition between direct works departments, on the one side, and private enterprise firms, on the other. Why should they be afraid of that? They are being very doctrinaire about direct works departments.

I was chairman of a direct works department, and I accept that direct work in itself does not necessarily mean that it will be an efficient organisation. Nor does the fact that it is private enterprise mean necessarily that an organisation will be efficient. The number of building employers who have gone to the wall in this country because of inefficiency is legion. It is, therefore, not a question whether it is direct works or private enterprise; it is a question whether it is run efficiently. An efficiently-run direct works department not only assists the local authority to produce the houses more quickly but it can also be a norm for the two sides to judge each other on costs.

Mr. Graham Page (Crosby)

Does not the hon. Member agree that the direct labour department of a local authority should go into competition periodically by putting one project in three out to tender, in the same way as a private builder has to compete in tenders with other builders? Is not this a discipline which does no harm but a lot of good to the direct labour department?

Mr. Heffer

If private enterprise building in many local authorities went out to tender in that way there might be some merit in what the hon. Member said. But there have been local authorities who, for many years, have negotiated contracts with builders and have never gone out to competition at all. I consider that to be wholly wrong, but it has been done. All that this Circular does is put the direct works departments on a par with private enterprise firms. It still does not mean that they must not go out to tender, nor that the local authority should not look at this cost and compare it with the cost of other buildings.

In the last analysis, the Ministry decides whether or not this cost is right. We have had some examples in Liverpool, including that of the Unit Construction Company. The local authority negotiated that agreement and your Ministry, when you were in power—

Mr. Speaker

Order. If the hon. Member will turn towards the Chair, he will not drop into the bad habit of not addressing the Chair.

Mr. Heffer

I am sorry, Mr. Speaker, but direct labour is something I know and about which I feel passionately—

Mr. Mellish

I hope my hon. Friend will allow me to intervene, as he is on a very important point and he has been interrupted by the Opposition Front Bench spokesman. The other aspect of direct labour which must also be considered is that those concerned, like private enterprise firms, also need continuity, particularly in industrialised building. It is essential, if we are to ensure a good future for direct labour, that they too should feel assured of a long run, which will guarantee their position. This is a problem which must be taken into account.

Mr. Heffer

I should like to thank my hon. Friend for that comment and I will pursue this point no further.

I want to come back to the Bill. I welcome it very much. I am sure that it will be of great assistance to those authorities which have immense housing problems and large housing programmes. I represent part of a city which has one of the most serious housing problems in the country. There is not only a large number of slum dwellings, but also—this is rather interesting—a high birth rate, which creates a serious problem for us in the continuous provision of new accommodation for the coming generation.

The subsidies will help us in two ways, first because we shall be able to borrow the money at an interest rate of 4 per cent. and second because we may, under one or two other Clauses—possibly Clause 5—get some additional assistance. I am not certain about this, but I am sure that my city treasurer and the housing director will be carefully considering the effect of these Clauses. There is no question that the Bill is a great advance on anything which has gone before. It means that the Government, despite all our economic difficulties, are getting down to the problems of housing and assisting local authorities to provide the houses.

However, there are certain weaknesses in the Bill, which I hope will be eradicated in Committee. It provides that the new subsidies: … will be payable only in respect of housing in tenders approved by resolution of the recipient authority on or after 25th November, 65"— and that— … the proposed increases will not become substantial until the financial year 1967–68. That means that there will be a delay of two or three years. We must be quite honest and realistic about this: some local authorities, certainly in the large conurbations, will require some "first aid" in the meantime. They cannot wait that long before the Bill becomes effective.

My local authority—I am certain that this is true of many others—is faced with a serious deficit in the housing revenue account. This problem can be solved in two ways. Either the rents should be fairly substantially increased, or there should be an increase in the rates. That is why I hope that the Government will accept in Committee an Amendment, possibly along the lines of the suggestion of my hon. Friend the Member for Sparkbrook, to ensure their giving serious consideration to second subsidies. It is basically Liverpool's high birth rate and slum clearance problems which cause the authority immense financial difficulties.

I must emphasise that the problems which local authorities face are caused by the high interest charges they have had to pay in the past. I know the situation in my own city, so I will quote the figures for Liverpool. In 1962–63, on the permanent housing account, the Liverpool Corporation paid out £3,418,248 in interest. In 1963–64, it had increased to £3,759,276 and in 1964–65, it had again increased to £4,551,327. At the same time, because the authority intends to meet the terrible housing need, it has carried out its programme and borrowed, last year, £9,137,000 in order to do so.

This is absolutely fantastic. On the one hand, we are borrowing £9 million in order to build houses for our people and, on the other, we are paying out £4½ million in interest for money borrowed in the past. This money is taken from the pockets of those who pay the rents and rates and paid straight into the pockets of the moneylenders and big bankers. This is an unnecessary burden for the local authorities. The position is perhaps made a little clearer if I point out that the total increase on expenditure of £1,094,000 in permanent housing in 1964–65 was largely accounted for by an increase of £862,000 on loan charges in one year.

This is fantastic. This is the problem we face. There is a deficiency in Liverpool's housing revenue account at the moment of £1,110,000. As I say, this problem can be solved by an increase either of rents or of rates. I do not accept that we must increase corporation rents, nor do I like the idea of a general rate increase. In this area, which includes the Prime Minister's constituency, is the urban district of Kirby, which was built by Liverpool Corporation, which owns the houses. Rates have been increased to meet the Corporation's subsidies, and the people of Kirby do not pay a penny. The full burden is borne by the people of Liverpool.

This is grossly unfair. That is why I ask that the Government should have a close look at this to see whether some financial assistance could be provided, possibly in the form of second subsidies, to assist local authorities.

I appreciate that hon. Gentlemen opposite will ask, "Why not increase rents and charge economic rents?" Let us consider the facts. For low-rise flats, for a one-bedroomed flat costing £2,500 to build the economic rent is £3 16s. 11d. per week; for a two-bedroomed flat costing £2,900 it is £4 7s. 9d. and for a three-bedroomed flat the rent is £4 18s. 6d. For a high-rise, of course, it is worse. It goes up from £5 a week for a one-bedroomed dwelling to £6 8s. ld. for a three-bedroomed one.

It is said that we do not charge economic rents. We have a certain measure of subsidy, but even with that we have rents varying from £3 7s. 8d. to £5 2s. 10d. a week. If we increased these rents by, say, 10s. a week one would not need to be a Liverpool docker but a flaming millionaire to live in a corporation house. It is also nonsense to talk about the high wages which people are receiving in this area. A Liverpool docker, with overtime, brings home £14 to £15 a week. Without overtime it is down to £11 a week. Imagine that man having to pay £5 2s. 10d. for a corporation dwelling.

Even if we subsidise our rents to the tune of about £330,000, which is being proposed, we will still have to increase them by between 9s. ld. and 10s. 8d. a week. It must also be remembered that since 1960 we have increased our rents on two occasions, although there have been constant rises in rates. In 1960 there was an average increase of 2s. 6d. a week, while in 1962 we introduced a 'rent rebate scheme and most people were forced to pay an average increase of 14s. a week.

I have mentioned these facts and figures to show that we are already charging realistic rents—indeed, perhaps more than realistic when one considers the low income nature of the Merseyside. It is all very well to talk about Birmingham and what is being done there, but in my area we have only just got a motor car factory and only recently have some of the workers been receiving higher incomes. We have always been a low income area with a high level of unemployment.

I urge the Government to seriously consider the points I have mentioned and, if possible, introduce an Amendment in Committee to meet this difficulty. Conurbations like Merseyside face a real problem indeed and unless further action is taken I cannot see how it will he solved.

The question which is bound to be asked is this; from where will the money come? My hon. Friend the Member for Salford, East (Mr. Frank Allaun) made the position clear. We have an immense arms bill to meet at present and I should like to see that considerably reduced. The defence review is taking place and I hope that drastic reductions—even more drastic than some have suggested—will be made in our arms expenditure so that cities like Liverpool and areas like Merseyside can be given a second subsidy, for only in that way will our immense housing problem be solved.

The White Paper points out that places like Merseyside, Glasgow and Birmingham need a special effort by the nation to solve their housing problems. I fear that the Bill does not make provision for such an extra special effort. Because of this, I suggest the setting up of a building corporation. Hon. Gentlemen opposite will, no doubt, say that the work I have in mind could be done by private enterprise. If it could, then I will not argue with them. Suffice to say that such a building corporation should contain a mobile squadron of builders who would be concentrated in areas of need arid be geared to erect houses quickly using the latest industrialised methods of building. This would remove the need for long periods of apprenticeship and people could be trained for this special work.

We have talked about the sort of military operation that is needed to solve the housing problem. By concentrating our resources and manpower on the areas of need a building corporation could undertake such an operation. I hope that the Government will give serious consideration to this suggestion because something of this sail is needed if the problem is to be solved.

Although I have been somewhat critical of the Bill, I support it and will defend it throughout the country. It proves that the Government are anxious to carry out the pledges given at the last election and it contrasts favourably with the lack of enterprise during 13 years of Tory rule.

The Clerk at the Table informed the House of the unavoidable absence of Mr. SPEAKER from the remainder of this day's Sitting.

Whereupon Sir SAMUEL STOREY, The CHAIRMAN OF WAYS AND MEANS, took the Chair as DEPUTY SPEAKER, pursuant to the Standing Order.

7.57 p.m.

Mr. James Allason (Hemel Hempstead)

There are three principal problems which must be faced when framing a new system of subsidies. They are, first, the differing needs of local authorities—and the hon. Member for Liverpool, Walton (Mr. Heffer) has spoken of the difficulties of a housing authority in a low income area; I am glad to have the chance to tell him that there is another side to the coin—secondly, to ensure that the subsidy goes to those in need and not indiscriminately; and, thirdly, to ensure the economic use of our national resources.

On the first, the differing needs of local authorities, it is interesting to note that, for the first time in the debate, the hon. Member for Walton quoted statistics which illustrated what we mean when we speak about true economic rents. Hon. Members have tended to assume that an economic rent can be worked out after taking account of the subsidy involved; in other words, that this is the way to work out a rent rebate scheme.

Before proceeding further with that, it should be pointed out that some local authorities have good stocks of council houses—perhaps because the houses built years ago have been paid for or were built more cheaply and at lower interest rates —and have little need to build further. Such authorities are sitting pretty. My hon. Friend the Member for Eton and Slough (Sir A. Meyer) pointed out that a good stock of council houses provides a local authority with a hidden bonus. Thus, I do not see how one can produce a subsidy scheme which will be fair to both sides.

I would be grateful if the Government would say whether they think that council tenants, as their incomes expand, should be asked to pay higher rents into the pool in order to keep a reasonable general level of rents, rather than that some tenant occupying a pre-war subsidised house should go on paying, perhaps, 18s. a week, when the cost of a new £3,000 house at 6¾ per cent. is reflected in a rent of 86s. a week—

Mr. Julius Silverman

I can assure the hon. Gentleman that what he is saying is not so. In most large cities, the pre-war tenants, or the earlier tenants, are suffering substantial rent increases in order to meet the cost of the new expensive flats.

Mr. Allason

I agree, and I only asked whether the Government accepted the position, because not all tenants do. Tenant associations take a very dim view of their rents being increased to help pay for a substantial increase in council house building. Do the Government think that rents should be levelled out, or do they think that each house should be assessed and paid for individually according to the subsidy that has been allotted to it?

I think it right that tenants should be asked, as their incomes increase, to share in the cost of local authority housing so that the subsidy originally directed to their houses is used to help that for the more expensive newer houses. But if we continue that process over the next 60 years, it is evident that incomes will then be far higher than anything of which we now dream. I am sure that no one in 1945 thought that the average wage today would be £20 a week. As incomes rise, so it will become more possible for people to pay nearer the economic rent——

Mr. Julius Silverman

What does the hon. Gentleman mean by "economic rent"? Does he mean the market rate, or the rent based on the unsubsidised cost of the council house?

Mr. Allason

I had explained my view that the rent should be based on the unsubsidised cost of the house. The present economic rent for a £3,000 house is 86s. ——

Mr. R. W. Brown (Shoreditch and Finsbury)

In an area which the hon. Gentleman knows well and with which he has been associated, that statement is grossly inaccurate. The economic rent for the type of property being built is £8 10s.

Mr. Allason

The example I gave was of a £3,000 house with interest at 6¾ per cent. The economic rent for that house—that is, the break-even point, without taking account of subsidy—is 86s.——

Mr. Brown

But the hon. Gentleman forgets that the land has, to be bought, in the first place, and that it is the price of the land plus the price of the house that the tenant has to pay for.

Mr. Allason

It does not necessarily cost £3,000 to build a house. A fairly satisfactory house can be built for £2,500. The £3,000 allows for the cost of the site, the drains and the roads. That is the total sum. A local authority house costing £4,000 means a 33⅓ per cent. increase in costs, which brings the economic rent up to about 120s. But I am speaking of the house costing the council £3,000. I say that a very substantial subsidy over 60 years will be uneconomic, because within 25 years the council tenant may find that the economic rent is absolute chicken feed.

I notice that the Minister has included a Clause that enables him to cut off the subsidy whenever he feels like it, and that seems to me to create a great difficulty. Local authorities always want to rely on the fact that whatever the subsidy may be, they will get it over the whole period of the loan, but this Clause provides that the Minister can shut it off——

Mr. Mellish

A lot has been made about this Clause, but what it does has been done before. This was done in legislation passed by the previous Government. I understand that there was consultation with local authorities about this matter, and that there was no objection on their part. There is also the provision of a 10-year period during which no action can be taken by the Minister of the day. There is nothing sinister about this provision.

Mr. Allason

In other legislations there has been a 10-year period and that may be the case herewith when the Bill is passed. There are grounds for having a break period where there is a very substantial subsidy, and that comes a year after a very high interest rate.

The second point is to ensure that the subsidy goes to those in need. We have had quite a discussion on that aspect, but I should like to see the Bill encouraging local authorities to operate differential rent schemes and, better still, encouraging local authority tenants to want diffential rent schemes. Not many of them do, but if there were a lower subsidy when the local authority did not operate a differential rent scheme there would be a definite inducement for tenants to want such a scheme.

These tenants are very sensible, reasonable people. They understand quite a lot about housing subsidies, and they would appreciate that the operation of a scheme would be in their interest. They are equally reasonable people, who do not want to see the poorest members of the community harassed by too-high council rents. If they could be encouraged to want differential rent schemes it would be a great help to local authorities, because there is no doubt that many local authorities do not introduce these schemes because of fear of their tenants.

The third necessity is to make economic use of our national resources. Here, I want to get right away from subsidies and consider exactly what we should do about building. Should we have high-rise or low-rise building? I have tried to work out the break-even point above which, according to the cost of land, it is desirable to build high. I make the cost to be £30,000 per acre. Above that price it is cheaper to build high density and high blocks. Below that figure, it is cheaper to build low, and at a lower density. To build high at low density is quite ridiculous. Whatever the method of subsidy, it is always more expensive to the local authority to build high at low density than to build low. There is a tendency on the part of architects and town planners to produce castellations on the edge of semi-rural areas which are complete excrescences. It is right to build high only where there is a very high value on land, such as in great conurbations.

The Minister has the opportunity to make arrangements in this respect under the Bill. As I read it, it will be left to his exhortation and his decision. There is no definite statement as to when it is cheaper for a local authority to build at high density or low density. Over £4,000, nearly all the extra cost is paid by the Government, subject to the Minister's decision and to 75 per cent., which is not obligatory but purely optional.

Hon. Members opposite have made great play with the suggestion that the owner-occupier of a £3,000 house gets a £70 subsidy from the Chancellor of the Exchequer. This is not so. It is tax relief.

Mr. Julius Silverman

The hon. Member for Aldershot (Sir E. Errington) said that it was a subsidy.

Mr. Allason

I had a word with my hon. Friend the Member for Aldershot (Sir E. Errington) after he spoke. He told me that he agreed with the point of view I am about to express. An intending owner-occupier wanting to purchase a house for £3,000 may have the money in the savings bank, in which case he draws £3,000 and pays it over. What he loses is the income he was getting, less tax. Equally, he may decide to leave his money invested and to borrow £3,000. In this event, he receives the income from his investment, less tax. The interest he pays on his loan is subject to tax relief. This is not a subsidy. It is an in and out transaction.

Mr. Mellish

In my experience, the average person who buys a house is the man who puts down a small deposit and borrows the remainder from a building society. Then, quite properly, the Government of the day grant him substantial tax relief on his interest payments. Is not this the man we are talking about? We are not talking about the man who pays cash for his house.

Mr. Allason

A man who has £3,000 saved up but who chooses not to use it is in precisely that position. My hon. Friend the Member for Aldershot was discussing the position of the man who does not pay Income Tax. I agree that there is a good case for giving him a subsidy to put him in as good a position as the owner-occuper who pays the full rate of tax and receives, not a subsidy, but tax relief. In the case of a man not paying Income Tax, it would be a subsidy. There is a strong case for him getting that subsidy.

My hon. Friend the Member for Aldershot mentioned Service men. It is very important that a Service man should be allowed to put his name down while he is serving so that he can qualify. The difficulty is that he is told to put it down with the local authority where he will work. The area where he will work may not operate this scheme. He may not be able to get anywhere to live in that area. If he proposes to live in a neighbouring rural district just alongside his place of work, he is not helped because the circular refers only to place of work. As not all councils operate this scheme, it would be advisable to widen it so that Service men could be helped in this very vital way.

Mr. Mellish

I was not here when the hon. Member for Aldershot (Sir E. Errington) made his speech. As the hon. Gentleman will know, we sent out this circular. The vast majority of local authorities are responding well. As time passes I think that all local authorities —I say "all" with some confidence—will do their very best to ensure that ex-Service men are given the sort of rights they are entitled to expect.

Mr. Allason

I am very grateful to the Minister. In places of high employment the housing position is always the most difficult, but there is often an adjacent rural district where the housing position is not so difficult.

Yesterday the other Joint Parliamentary Secretary said this: … I have mentioned the three measures by which we are taking positive steps to help ratepayers.… Secondly, there is the Housing Subsidies Bill."—[OFFICIAL REPORT, 14th December, 1965; Vol. 722, c. 1125.] I should be grateful if the Government would tell us tonight exactly how the Bill will help ratepayers, so fulfilling the Labour Party's pledge to transfer a greater amount of the burden on ratepayers to taxpayers.

Mr. Stan Newens (Epping)

Is it not the fact that many local authorities are obliged to resort to rate subsidies in order to lighten the housing revenue account burden? Will not these subsidies alleviate the task of local authorities in this respect?

Mr. Allason

This will take effect in 1968–69—[Interruption.]—only slightly in 1967–68. The Labour Party's manifesto contained the words "give early relief". This is a very strange way of doing that. Perhaps the Joint Parliamentary Secretary became muddled and was referring to the other promise made in the Labour manifesto, that interest rates would be reduced both for local authority housing and for owner-occupiers. I do not think this Bill fulfils that pledge either.

Mr. Ted Leadbitter (The Hartlepools)

The hon. Gentleman has stated that the promise made in our manifesto is not being fulfilled as early as he would like, but would he not agree that the Bill will provide the most generous subsidies in the whole history of municipal housing? Does not the hon. Gentleman recall that the Rating (Interim Relief) Bill, 1964, brought in by his own Administration, gave no relief at all?

Mr. Allason

Perhaps the hon. Member did not attend the Second Reading debate on the Rating Bill. If he had, he would have heard the reference by my hon. Friend the Member for Harwich (Mr. Ridsdale) to 1,700 of his constituents who had benefited. It seems to be very much a question of how Members react to that Act in helping their own constituents.

I have given the House three tests for the way this Housing Subsidies Bill should be judged, but on all three we are in the end left with the Minister's giving or withholding of approval as the sole answer. Nowhere is it provided that these tests shall be the responsibility of local authorities. We want to see subsidies going to those in need, but we are not in any way convinced that they will invariably do so under this Bill.

8.21 p.m.

Mr. Julius Silverman (Birmingham, Ashton)

The hon. Member for Hemel Hempstead (Mr. Allason), like his right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), seems to show a certain division of mind. I think that it is called schizophrenia. In the first place, they say that they will vote against the Bill, adopting a "dog in the manger" attitude and arguing that, because it does not deal with the owner-occupier, the municipal tenant should not have any benefit, and, at the same time, they complain that the Bill's benefits to municipal tenants will not be brought in early enough, because they will not come till 1967–68. It is not easy to understand this confusion.

Mr. Allason

Whenever I complain, as I frequently do, about broken election pledges, my complaint is that the electorate is deluded by pledges which are not fulfilled. I complain not about pledges which ought to be made but about pledges not fulfilled once they have been made.

Mr. Silverman

I do not understand what the hon. Gentleman is talking about. Talk of broken pledges is becoming almost a parrot cry. This Bill is a jolly good effort to redeem an election pledge, and the Government are bringing it into effect as early as they can. I wish that they could do it earlier, but it has nothing to do with broken pledges. It is part of the housing programme which is being pushed forward. I hope that, by next Session, or by the time this Bill takes financial effect, it will be possible to offer assistance to owner-occupiers as well.

The general attitude of the Opposition as evinced by the Amendment runs true to form in two different ways. In the first place, they show their malevolence towards municipal tenants, a vendetta which has been pursued by many hon. Members, including the hon. Member who is to reply tonight. In the second place, they insist on forcing differential rent schemes upon local authorities, and this also is part of their political philosophy, the "soup-kitchen" approach to social welfare.

Mr. Graham Page

Perhaps the hon. Gentleman will quote remarks of mine in which I have shown malevolence to municipal tenants.

Mr. Silverman

I can remember many occasions when the hon. Gentleman has talked of council tenants in that way. We can all remember them. I am not in a position to give exact references—

Mr. Graham Page

Quote them.

Mr. Silverman

I assure the hon. Gentleman that I can compile a list of quotations, and, if he wants me to give it on a future occasion, I shall certainly do so.

Mr. Graham Page

Why not now?

Mr. Silverman

This is all part and parcel of the Opposition's attitude today. In effect, they are saying that council tenants and local authorities ought to be deprived of this subsidy, and they intend to vote against it. Is not that malevolent? Of course it is.

Mr. Graham Page

The hon. Gentleman has not read the Amendment. We do not consider that the Bill is positive enough, and we have, therefore, put down a reasoned Amendment against it.

Mr. Silverman

I have read the Amendment several times, yesterday, the day before, and today, and I know all the points contained in it. The net result of the Amendment is that the Opposition are voting against a Measure which will afford assistance to municipal tenants and local authorities.

I wish that the Bill had gone further. In the nation's present financial difficulties, it may not be easy to go further, but I know that the homeless of Birmingham have reason to be grateful to the Minister on three grounds. One is that he has provided Birmingham with the land which is essential for the building of more houses. Second, by his Measures for building control and the control of office development, he has made it easier for Birmingham to take tenders and get the labour to build local authority houses in its area. Third, this Bill provides the finance.

The consequence is that the City of Birmingham can now acquire sites and embark upon a much greater housing programme than it would otherwise have been able to do, possibly doubling its housing programme within a short time. This is why we have reason to be grateful to the Minister.

Hon. Members opposite do not seem to realise that the hard core of the housing problem can be dealt with only by municipal housing. The people who come to see us regularly in our "surgeries", the hard cases so often referred to by hon. Members, cannot have their needs met by the private landlord. Owner-occupation is no solution. Their need can be met only by local authority housing.

Mr. Ian Lloyd (Portsmouth, Langstone)

Does the hon. Gentleman confine his observations entirely to the United Kingdom, and does he dismiss as irrelevant what is done in the United States, Western Germany and various other countries?

Mr. Silverman

We have heard that before, and the hon. Gentleman should know the answer, but I shall probably spend my time better if I confine my attention to the Bill before us. The plain fact is that the people who come to our surgeries cannot afford owner-occupation. Whatever may be the merits of private landlordism, it is a diminishing factor in the provision of housing in this country. The party opposite did its best by the Rent Act to give inducements to the landlord, inducements which we thought far too generous, to provide accommodation in rented houses. It has not worked. The amount of such provision has diminished by about 1 million homes since the Rent Act was introduced. With all respect to the Milner Holland Report, I doubt whether the fiscal reforms it suggests would add to the volume of rented houses. I am not attacking landlordism now but merely pointing out an historical fact which cannot be denied.

Mr. Ioan L. Evans

Would not my hon. Friend agree that, under the 13 years of Conservative Government, the number of new houses built by private landlords at reasonable rents was almost nonexistent?

Mr. Silverman

The number of houses, I agree, built by private landlords for rent was virtually non-existent, apart from luxury building. Even before the Rent Act, 1957, under the Landlord and Tenant Act, 1954, it was provided that newly built houses should not be subject to rent control. Nevertheless, very few have been built. Thus, the local authorities are the only people who can provide the houses to rent. Housing associations have a contribution to make but it cannot be other than small. I welcome a multiplicity of agencies but overwhelmingly the burden will be borne by the local authorities.

The burden of rent on those occupying houses built before the war has been mentioned. The situation is that new houses, and especially flats, even after Government subsidy, have cost the local authorities in rates anything from £120 to £200 a year in subsidy. In these circumstances, the local authorities, with the problem increasing from year to year, with higher costs and higher rates of interest, have had to decide how to distribute the burden. They can do so either by putting it on to the ratepayers, who do not like it, or by increasing the rents of municipal tenants, who also do not like it and resent it. That has been the dilemma of the local authorities and the consequence is that in Birmingham, Manchester and many other places there have been large increases in the rents of pre-war tenants and other tenants.

When hon. Members opposite talk about differential rents and charging economic rents, I would remind them that, in Birmingham, as in other local authorities, 60 per cent. of the tenants are already paying economic rents in relation to what their houses cost the local council. If Birmingham had stopped building council houses in the year 1947–48, its municipal housing would be self-supporting today without a subsidy. It would be making a profit. The higher costs and the heavier burdens have come particularly in the last 10 years or so from the increased cost of building and interest rates.

One cannot go on simply transferring the burden to the pre-war tenants or to the tenants of houses built just after the war. It is inequitable and, moreover, there is a limit to which it can be done. Any further increase would go upon the ratepayers, who would not like it.

Mr. Allason

I agree with what the hon. Gentleman is saying, but would he not agree that, as incomes increase, it is reasonable to argue that municipal tenants should pay a little more over the years, remembering also inflation?

Mr. Silverman

The hon. Gentleman is asking them to pay a little more. In many cases the tenants have had to pay very large increases. For instance, in Manchester and Birmingham in the past two or three years they have had to pay from 10s. to 11s. more. They had been asked to pay more and they are paying more. If this goes on, the burden will be intolerable and one cannot meet it merely by soaking the pre-war tenants.

I therefore welcome the Bill. I asked for similar provisions when Lord Hill was Minister of Housing and Local Government and I raised the matter with other Ministers of the former Government. Yet we had no relief. Now there is an attempt to meet the problem. It does not go so far as I would like but it is a great advance.

Hon. Members say that the problem should be dealt with by differential rents schemes, that there should be a means test on tenants. There are all sorts of schemes and few local authorities apply an all-out differential rent scheme. Some apply rebate schemes, as Birmingham does, which tend to assist the poorer tenants who could not otherwise afford even the rent of a municipal house. There are many objections to the overall scheme. There are grave objections including the cost of administering it, the burden which it imposes upon the housing department, through having to send inquisition forms, dealing with variations of rent, the jealousies between individual tenants and what one does about the prewar tenant who says that he is paying an economic rent already.

Mr. Costain

Would the hon. Member explain to the House what is the difference between these forms and an ordinary Income Tax form?

Mr. Silverman

I beg your pardon.

Mr. Costain

Would the hon. Gentleman explain what is the difference between these dreadful forms to which he has referred, for differential rents, and the form that every man who owns a house receives in connection with his Income Tax? Are they not, basically, the same inquiries?

Mr. Silverman

This is, generally speaking, a more objectionable form of means test and where it has been operated it has been very much resented by tenants. I know that this has been the case in one or two areas where it has been applied. Not only is it resented but jealousy arises between tenants and there are the informers who go along to the council and say "This tenant's income has increased why should he receive a subsidy?"

Mr. Godfrey Lagden (Hornchurch)

The hon. Gentleman has spoken about the iniquitous form and about the local authority inquiry into the means of a tenant. I think that he used that rather hackneyed phrase "means test". This rebate scheme to which he refers, and which he says is so undesirable, is surely exactly what the Minister is hoping will be used more and more by local authorities.

Mr. Silverman

No it is not. The Minister was suggesting that local authorities should apply rebate schemes. I believe that the rebate scheme is different in form and nature to a differential rent scheme, which applies a means test to every tenant.

Mr. Lagden rose——

Mr. Silverman

I cannot go on arguing this.

Mr. Lagden

I have only one sentence. How would the hon. Gentleman get this information if he does not send out some form of inquiry to discover the means and ability of a tenant to pay?

Mr. Silverman

I do not want to give the hon. Gentleman a lesson in elementary housing principles. Let him find out how rebate schemes work and I think he will find that it is done quite simply, without a general inquisition. The decision about the schemes should be left to the local authority. It is a democratically elected authority, and its electors can turn it out if they do not like its policy. Why should the Minister and Whitehall tell it everything which it should do? Why should they dictate its rent policy? Why should they dictate its points policy as one hon. Member suggested? Leave this to the local authority which knows what is best in its own area and what will be tolerated. If it wants a differential rent scheme let it have it, notwithstanding the financial burden which it would impose and the burden which it would impose upon the housing management scheme.

Hon. Gentlemen opposite have spoken about a means test for municipal tenants because municipal tenants are receiving subsidies to which they are not entitled. What has been happening to owner-occupiers? I am not objecting to owner-occupiers receiving subsidies, but I have made a rough calculation of what they receive by way of subsidies. It costs the Exchequer £80 million to £100 million in tax relief for owner-occupiers. There is no means test. The wealthiest owner-occupier, the villa dweller, gets the same benefit. I said that there is no means test. Perhaps I am wrong, as the hon. Member for Aldershot (Sir E. Errington) said, quite correctly, that there is a means test the wrong way round; the poorer person not paying Income Tax does not get the relief because he has no Income Tax to get the relief on.

The abatement of Schedule A was a form of tax relief. I do not object to this form of assistance to the owner-occupier. But there is no means test. The wealthiest tenant gets it as well. Take standard improvement grants which are given to owner-occupiers. I approve of them entirely. They are a very good thing. Both parties agree about them. But the owner or landlord does not undergo a means test in order to get them.

I calculate that the total amount of public money given in subsidy to owner-occupiers under these headings is about double the amount given in municipal subsidies. I do not object to these subsidies. It is a very good thing that public money should be used and that there should be an abatement of tax to assist people to live in houses which they can afford. But why do people say that there should be a means test only for municipal tenants and differential rents only for municipal tenants? I think that that is quite wrong.

Some tenants are doing quite well, but they are not among the people who are wanting houses. I do not believe that there is among tenants who in the past few years have applied for and obtained houses a large element of affluence. If they were affluent and could afford to buy an owner-occupied house they would not have lived for many years in conditions of misery. Generally, the person who can afford owner-occupation has a wife who is working and perhaps one child only. People even in Birmingham, where, for the most part, reasonably high wages are paid, cannot afford it.

I repudiate entirely the idea that people who are on the register and who are being given houses do not need the subsidy. They do. It is true that among the older tenants there is, perhaps, a short period of affluence. When the tenant obtained the house he may have had a number of small children and later the children have grown up and are bringing money into the house. Therefore, for a short time before the children leave and establish their own homes there is a period of affluence. That is no reason for carrying out a means test.

I welcome the Bill because it helps local authorities, ratepayers, tenants and the homeless. There are, however, some points which I should like to put to the Minister. The question of time has been mentioned. If the Minister can assist in bringing forward the date when these financial reliefs operate, the hard-pressed local authorities will be very grateful.

Secondly, there is the question of multistorey flats. This is, perhaps, the only point on which I have some agreement with the right hon. Member for Kingston-upon-Thames. But my authority has not found that it is as cheap to build high flats as it is to build flats of up to six storeys. The non-traditional methods are still experimental in some cases. The results are not always very satisfactory. My own local authority doubts whether it will be possible even with advanced industrial methods to bring down the cost of building. It is pointed out that if by building a 20-storey block of flats the high-storey subsidy will be lost, a very large part of the subsidy will be taken away from the local authority.

The question of land acquisition is another point which my own local authority has mentioned. The amount of money which is provided for an expensive site is given only when a site costs £20,000 an acre. If an authority buys a larger area of land at, say, £10,000 an acre which costs much more than £20,000 in total, Clause 11 does not apply. I hope that this is a matter that can be attended to by my right hon. Friend.

Those are some of the points I wanted to ask. I had a number of other queries, but time is getting short and others of my colleagues want to speak. I hope, however, that it will be possible for my right hon. Friend the Minister to deal with the queries which I have raised. Notwithstanding that I have raised them, I repeat that it is a good Bill and I hope that the House will support it.

8.46 p.m.

Mr. Peter Bessell (Bodmin)

I join other right hon. and hon. Members in congratulating the Joint Parliamentary Secretary on his opening speech. The hon. Gentleman went a long way towards answering some of the questions which had arisen in my mind when I read the Bill. Consequently, he will be relieved to know that he has at least shortened my speech.

The test which has to be applied to the Bill is, first, whether it is acceptable to and welcomed by local authorities. As far as I can judge. it is. I believe that it will go a considerable way towards helping them in the very real problems that they have faced, particularly during the last 12 months, in the provision of houses for tenants who need to rent them. For that reason if for no other, I have no hesitation in asking my right hon. and hon. Friends to support the Second Reading of the Bill.

There is no doubt whatever, as every hon. Member is aware, that the greatest source of human suffering and misery in the country today is bad housing conditions. I have seen it in my own constituency. I do not suppose that there is any hon. Member, on either side. who has not seen it at some level in his or her constituency also. Therefore, any measure, even if it has certain shortcomings, even if it falls short of the promises that were made at the time of the General Election by the party opposite, even if it does not give the incentives that we would like in the direction of owner-occupation, must, if it assists in the provision of additional housing and is a step towards slum clearance, receive the support of all sides of the House.

The points of disagreement can, in the main, be dealt with in Committee. There are three matters on which I should like to touch briefly. The hon. Member for Oldham, West (Mr. Hale) raised a real and serious issue regarding the undertakings which have been made by local authorities and the contracts which have been let but which will not benefit as a result of the scheme. I hope that there is still time for the Minister to reconsider this complaint and whether means cannot be found of assisting local authorities which may bitterly regret the action they have taken in letting contracts without knowing that the benefit of the Bill would be coming to them within a comparatively short time.

My second point concerns the doubts raised by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) on Clause 12, on which further clarification and satisfaction are needed. If it is not dealt with tonight, I hope that it will be dealt with satisfactorily in Committee.

The third point upon which I feel considerable concern is the need for an assurance that local authority housing rents will be related to the incomes of the occupiers, and to this extent I was glad to hear the Joint Parliamentary Secretary referring to the encouragement which the Government give to rent rebate systems. This is something which, I believe, is the fairest means of ensuring that occupiers of local authority houses are paying rents which are to some extent commensurate with their incomes. We have heard many exaggerated stories about the Rolls Royce outside the council house, but the fact remains that there are many instances of people who are receiving high incomes and are nevertheless paying very low rents. This is deplorable, and I thought that the right hon. Member for Kingston-upon-Thames made the most telling part of his speech in his references to this aspect of the Bill. It is upon this, I think, that we shall require considerable clarification in Committee.

I turn briefly to the Opposition Amendment. It claims, quite rightly, that the Bill does not assist home ownership. I agree that it does not. It also claims, quite rightly, that it does nothing to reduce the rate of mortgage interest. This is also true. This Bill, however, is not designed for that purpose. It is not an overall housing Bill. It is basically concerned with subsidies to local authorities to encourage them and to enable them to provide housing for rent.

As an hon. Gentleman on the other side of the House said a few moments ago, the fact is that the basic housing problem which comes to each of us in our "surgeries" in our constituencies is one which is related to the need to provide houses which can be rented. I know it from people who come to see me and who write to me. It is not because there are not houses to buy; there are plenty of houses for sale. It is because they cannot rent houses, and because their incomes are such that they have no chance of being able to find the necessary deposits to enable them to buy houses.

Therefore, I am glad that the Minister has tackled this side of the housing problem first; but, in saying that, I hope he will not neglect the other aspects of the problem which are raised in the Opposition Amendment, that he will regard those as having at least an equal priority, and that we shall see further measures during the coming year to meet and overcome the points which are raised in the Opposition Amendment.

In short, we on this bench welcome this Measure. We believe that it will satisfy, to some extent at least, the requirements of many local authorities, that it will encourage them to embark upon further building programmes, that it will go some way towards slum clearance, and that it will give assistance to those people whose housing need is greatest. We have reservations. We hope that those reservations will be carefully considered in Committee, and we hope that Amendments will be introduced to enable this Bill to become a really worthwhile and valuable piece of legislation.

8.54 p.m.

Mr. Arthur Blenkinsop (South Shields)

In the few moments which remain before the Front Bench spokes. men wish to reply to the debate I want to make one or two brief points. I welcome the contribution of the hon. Member for Bodmin (Mr. Bessell) which seemed to me to be relevant to the Bill. I must say that I do not think that I have ever seen an Amendment for the rejection of a Bill so little supported by speeches in debate. The sincerity with which the Opposition have moved their Amendment is exhibited in the amount of support they have got from Members on their own side and in this Chamber—even at this particular moment of time[HON. MEMBERS: "Where are Members on your own side?"] Indeed, so much is this Bill welcomed on this side of the House that, of course, there has not been the same number of Members wishing to intervene. It is hon. Members opposite who are trying to pretend an opposition which really is not there.

If we consider the actual wording of the Amendment we see how utterly ridiculous it is. It suggests that the Government are not utilising to the full the sources for house building that ought to be used, yet the speech of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) entirely justified that. It did not answer at all the fact that through the long 'years of Conservative Government surely every right hon. Gentleman who had office as Minister—and there were a great number of them—must have considered the matter. They took other measures to encourage private building and the private provision of rented accommodation, all of which failed. They did not attempt to do the one thing that they are now saying that the present Administration ought to do in the Bill. It is utter nonsense, and they know it. They know perfectly well that there is no likelihood of a contribution being made in that way.

My right hon. Friend the Minister of Housing and Local Government has shown his willingness to accept that there is a need for owner-occupation and private building, but he is properly insisting that the Bill has to be regarded as one of a series of measures. We welcome the fact that in the Bill we are tackling one of the most urgent issues of all which is clearly to increase the provision of local authority building, following the way in which right hon. and hon. Gentlemen opposite allowed it to deteriorate over these last years. Every independent investigation proves that it is one of the most urgent crying social problems at the moment, and although we may welcome an increased desire for owner-occupation developing in the future, the urgent problem today is to meet the crying need for rented accommodation within reasonable rental figures.

I want to take up one or two of the points that are made for the rejection of the Bill. It is apparently being said that it should be made mandatory upon local authorities that they have a differential rent scheme of some sort. That is apparently the proposal, and the hon. Member for Eton and Slough (Sir A. Meyer) spelt it out. I am not quite clear whether his right hon. and hon. Friends really support that. No doubt the hon. Member for Crosby (Mr. Graham Page) will be able to say whether he wishes the Government to include in the Bill a mandatory provision that local authorities must, as a term of any provision of subsidy at the proposed rate, operate a differential rent system.

I am opposed to a mandatory scheme of that sort. I am in favour of local authorities operating rent rebate schemes, which are a very different matter where the onus is put upon the tenant whether he applies for the rebate. That makes sense, but I say that it is a matter for local determination, because conditions vary greatly. There are some areas where the tenants' incomes are at such a relatively low level generally that it is simply not worth while undertaking a scheme of that sort, and therefore it is right that local authorities should be able to decide for themselves. Many right hon. and hon. Gentlemen complain bitterly that too much is being taken out of the hands of local authorities, but they cannot have it both ways. If it is felt that local authorities ought to be allowed a certain amount of local option, this is a matter which they are peculiarly fitted to decide.

There has been some argument about the importance of high rise building, and there are no doubt differing views. There has been a good deal of investigation recently, and I am sure that my right hon. Friend is taking note of it. It challenges the idea that either in economic terms or in social terms one is doing the right thing to proliferate the number of high rise buildings that we are getting today, even in our biggest cities. It is very doubtful whether we are getting the economic and social advantages that many people thought that we would get. In addition, the problem has been obscured by the level of subsidy in the past.

I think that my right hon. Friend is taking the right line in limiting the extra subsidy to high rise building over the six-storey level. I think that he is right also to warn authorities that he will examine very carefully proposals for high rise building. I am sure that they are really needed in extreme cases, where we all admit that there is a case for them, but high rise building seems to be becoming almost a habit with some local authorities, and I am sure it is right that we should call a halt and examine the situation carefully to see whether we can get relatively high densities in other ways which are more satisfactory for families and social needs. I am sure that the Bill is welcomed by local authorities all over the country, and especially by those who are at last getting some hope of accommodation of a decent sort, and, I hope, of a decent quality, which they have been denied in the past.

9.1 p.m

Mr. Graham Page (Crosby)

The debate on the Second Reading of the Housing Subsidies Bill must be a debate which to a great extent deals with figures—the amount of each subsidy, the total subsidy to be granted, the number of houses to be built. and so on—but in this debate hon. Members have not let the House forget the human problems behind these figures, we can perhaps only guess at the full measure of these human problems.

The White Paper, Cmnd. 2838, gives us certain figures. It says that 700,000 houses are needed to overcome shortages and provide a margin for mobility, and that 150,000 houses a year are needed to keep up with new households being formed in the rising population. That was as much as half the annual figure which a few years ago both parties thought was an adequate building programme. I do not think that those figures are exaggerated in any way. This is the problem before us. Every hon. Member knows the state of the housing waiting list in his own constituency, and the human problems in it. He knows that list not only as names and numbers, but probably knows many of the families and the individuals on it who are in desperate need of homes. When something goes wrong and a local authority cannot help, when the wives and children are packed off to Part III accommodation and the husbands have to fend for themselves, one gets the heartrending situations with which we as Members have to contend.

I do not want to be over-dramatic, or to introduce pathos into this, but I ask the right hon. Gentleman and the Government to believe that everywhere in the House, and certainly on this side of it, there is a determination to try to solve this housing problem. I think that this was shown by my hon. Friend the Member for Ilford, South (Mr. Cooper) when he quoted the figure of 4¼ million houses built during the term of Conservative Governments.

I ask the Government to believe that our opposition to the Bill is based not on any desire to deny help to local authorities in meeting the demands of those needing homes, but on the conviction that the Government are going the wrong way to work about it. The Bill will not meet those demands, but will rather hinder the objectives by concentrating the available resources on the slowest and most uneconomical measure of housebuilding, and by that means depriving the other agencies of the labour, material, and resources for building quickly and economically. A fair share of the available money would produce more houses more quickly more efficiently, and if the help has to be limited to a certain figure allowed to the right hon. Gentleman by the Treasury, it should be spread over other agencies, rather than merely being given to local authorities.

Government policy is stated in paragraph 27 of the White Paper, which says: Final responsibility for settling both the total programme and its broad division into constituent parts must be the Government's. But the carrying through of the programme depends on the local authorities, the construction industries and the financial agencies, notably the building societies; and the programme will be achieved only if all"— I stress the word "all"— concerned understand what is wanted and work within the plan". I assume that they have to understand that this Bill is what is wanted, and that one partner gets all the money and the others do not get paid at all. The Minister seems a little astonished at this, but what he is saying to the private enterprise builder who is providing accommodation for owner-occupation—and I can assure him that some are also still providing houses to let—is, "Sorry, chums, you have had it".

Paragraph 30 of the White Paper says: The Government strongly support the movement towards extended owner-occupation.… As soon as the country's economic situation allows they will publish their plans for bringing owner-occupation within the reach of more families. They will "publish their plans"; they will not even take action about it. This is shirking their duty; it is running away from both the problem and the policies. The Bill does not provide for present needs, except possibly in the first two lines of the Long Title, which describes it as a Bill to make further provision for the giving of financial assistance towards the provision of dwellings". I wish that the Minister had put a full stop there, and had gone on to do just that—to give financial assistance towards the provision of dwellings.

Mr. Crossman

I am not clear what the hon. Member's argument is. Is his criticism that we should have distributed subsidies fairly between public sector houses to let and builders building to let, or between public sector houses to let and builders building for sale? Does he want subsidies for the whole lot?

Mr. Page

I shall deal with that point in the course of my argument. The case for building houses to let by private enterprise has been argued across the Floor of the House on many occasions. I am saying that the Minister should divide the available money between assistance to local authorities and assistance to owner-occupiers. I shall refer to that in specific terms shortly. What the Minister has done is to restrict the provisions of the Bill to a hand-out of increased subsidies to local authorities, with some lavishness for those that plead poverty, with no help for those whom he promised to help, namely, the owner-occupiers.

I will take two examples from the Bill. In Clause 2 the Minister takes power to prescribe the rate of interest on which the subsidy depends. He can do this by a stroke of the pen after consultation with the recipient authorities, but not after consultation with this House. He consults local authorities, makes an order, slaps it on the Table of the House, and leaves it to the negative procedure. This is not the way to treat the House when millions of pounds of public money are being distributed.

Clause 5 deals with subsidies for urgent needs and for the transfer of industry, and there is complete freedom for the Minister or the Chancellor of the Exchequer—up to the £30 subsidy—to decide what sort of subsidies he is going to give, and on what basis. I thought that the hon. Member for Liverpool, Walton (Mr. Heffer) dealt with this point very thoroughly. He said that he did not know on what basis Liverpool might receive the special subsidy under Clause 5. As the Bill stands, nobody knows, and the Minister need not bring his decision before the House or tell the House how he arrived at his decision.

These are not just Committee points. They show the Minister's attitude of mind in favouring the council house medium for house building. As it were, he has booked his tickets for his honeymoon with the local authorities on these subsidies and it seems that he could not care less about anyone else, even about Parliament.

I still do not know what these tickets will cost. The White Paper gives some figures on page 19 which lead us to understand that for dwellings up to three storeys—I presume that this means one house and not three flats in one house—the subsidy may average £64 and for dwellings over three storeys, £81. The Joint Parliamentary Secretary mentioned £90 in respect of subsidies for houses at Kingston-on-Thames. He gave some clue of what this meant in figures when he said that 190,000 council houses are in the course of construction and if they were given the subsidy it would cost £11 million a year for the subsidies. It seems to me that on that basis the Financial Memorandum is placing the total very much too low. I suspect that the results will prove to be much larger than the figures in the Financial Memorandum.

May I put this question, and answer it? Why is it necessary to prime the pump of local authority building to this extent? Why is it necessary to prime all local authority building to this extent? This is a most important point; under the Bill all will get the basic subsidy and there is no discrimination in favour of those who are hardest hit over housing. We are told that the basic subsidy may be £60, £80 or £90 a dwelling. The wealthy authorities, those which have no real housing problems, can obtain this subsidy, instead of the Government using the available money to help those authorities with the biggest housing problem. This throws overboard the Conservative Government's scheme, which was a proper discrimination in the granting of the basic subsidy.

I refer again to what the hon. Member for Walton said, because I know the district of which he was speaking. He made an extremely good case for selective subsidies in favour of areas such as Liverpool. The hon. Member for Salford, East (Mr. Frank Allaun) said that we aught to ensure that we centred our efforts on the areas most needing help. [HON. MEMBERS: "Hear, hear"] But this is not done in the Bill. It is left to the Minister without any definite statement of how he will administer Clause 5.

I say definitely that had we had the conduct of the Bill we should frankly and openly have been selective in favour of those local authorities with the greatest problems, and we should not have left it to whether the Minister "is of the opinion "—we should not have left it to his gracious generosity. May I put a question to the Minister which I hope he will he able to answer when he concludes the debate: on what principle will he use his discretion in making grants under that Clause? The House should know, and I am glad that he nods his head to indicate that he will be able to tell us.

Mr. Heffer

I am intrigued by this point. Could the hon. Member tell the House why for so many years the Conservative Government did not carry out the policy which he is now suggesting ought to be carried out? Now that we have a Labour Government, something is being done. Will he explain that point?

Mr. Page

The hon. Member forgets the history of Conservative policy on housing subsidies. It has always been our policy to direct those subsidies where they were most needed. In 1952, when it was necessary to build houses everywhere and anywhere, we confirmed the General Needs Grant. In 1956, when it was necessary to advance slum clearance, we directed the grant to the replacement of slum clearance houses. In 1961, when it was obvious that regional selection was required, we directed it regionally to those areas where it was most needed.

As the Joint Parliamentary Secretary reminded us, the previous Minister of Housing set up a working party to advise him on the next Bill—this Bill, in fact. The working party reported in September, 1964, soon after which the Conservative Minister was unable to carry out the Report. We should have weighted this Bill in favour of the hardest-hit areas. It would also have been weighted in favour of local authorities who had adopted rent schemes. There has been some question today as to what is meant by a rent scheme or a differential scheme. My interpretation of it is that one should give the subsidy only to an authority which charged proper rents and made proper rebates, where necessary, from those rents—[An HON. MEMBER: "What is a proper rent?"]

What is a proper rent? It is a regulated rent. What is sauce for the goose is sauce for the gander. If there are regulated rents for private dwellings, let us have them for local authority dwellings too. I am saying exactly what is said by the Minister in paragraph 40 of the White Paper: Provision of more council houses must be accompanied by policies for allocating tenancies and for determining rents which ensure that the extra houses fulfil the social purpose for which the subsidies are provided. I would give the subsidies only on condition that the local authorities made that provision by approved schemes—[An HON. MEMBER: "HOW? Would write it into the Bill. There is nothing in the Bill at the moment about it. When the Parliamentary Secretary was interrupted on this earlier, he said that he would make a great oration about it at the end of his speech, but he forgot to do so. He said not a word about it—

Mr. Crossman

Leave it to me.

Mr. Page

We can leave it to the Minister. I will give him time for it.

If this party had the conduct of the Bill, the subsidies would have been conditional on the recipient authority having an approved rent scheme. If hon. Members say, "Why was this not done when the Conservative Government were in office?", my answer is that we tried persuasion over many years. It has now proved not to have worked, and this provision should be written into the Bill.

Incidentally, if this were done, it would relieve the rent subsidy for council houses, which has run at between £20 million and £30 million for the whole country. If the Minister professes to be so concerned about reducing the burden of rates, here is one substantial way of doing so. The proper use of subsidised council houses does not depend only on a proper rent.

Several hon. Members have mentioned those who occupy council houses and who do not seem to deserve to have the benefit of the subsidy. Normally, councils' points schemes do not give any points for low incomes. Those who come to the top of the housing waiting list have certain residential qualifications, relating to overcrowding and number of children and so on, but by the time they reach the top of the list, they may well be able to buy their own house.

In areas where houses are available, I should have thought that any rent scheme should include a provision for refusing accommodation to such people. I assure the hon. Member for Birmingham, Aston (Mr. Julius Silverman) that I am not advocating chucking out existing tenants. What I am advocating is that we should not admit into council houses those people who have the means —who are well enough off—to buy their own houses.

What will the Minister do in the case of local authorities which do not apply rent schemes? Will he let them take the subsidy and thumb their noses at him? He is, after all, dispensing public money and, as the White Paper states, it should be used to relieve those with the greatest social need. How will he see that it is so used? We are entitled to know what is in his mind in enforcing this.

These are some constructive proposals about subsidies to local authorities. They are that the basic subsidy should be selective—that it is not just a supplementary subsidy—that it should be given conditionally upon an approved rent scheme continuing the provision of proper rents, and continuing provision for turning down fresh applicants who are well enough off to fend for themselves——

Sir Harmar Nicholls (Peterborough) rose——

Mr. Page

I should like to complete my argument. The Minister should have gone further. That brings me to the words in the Motion: … the … Bill … does nothing to help the prospective home buyer or to redeem the Government's pledge of lower rates on mortgage interest …

Sir Harmar Nicholls

I intervene because I am not sure that my hon. Friend carries the whole House with him on the last point. When discussing the question of taking incomes into account, I think that we would agree with that proposal, provided it was made sure that a person with such an income has sufficient to pay the deposit to become a house purchaser. If my hon. Friend is saying that there should be some scheme for turning the subsidy into means of helping such people to make up the deposit, I would be with him.

Mr. Page

My hon. Friend has anticipated my argument. I was coming to that point. If £90 million is available, it should not all go to local authorities. Part of it should go to help prospective home owners, and it is not true to say that this would be of no help to those who are at present on local authority waiting lists. If we could take prospective owner-occupiers off the lists and help those with small means to buy their own houses, we would not only save the subsidy—perhaps of £90 per year for 60 years, or whatever it might be—but would save the rate subsidy as well in many areas.

Having put that proposal forward, some hon. Gentlemen opposite may be tempted to ask, "Why was it not done to help prospective owner-occupiers during the last 13 years "? They should remember that during the last 13 years owner-occupation increased from 31 per cent. to 47 per cent. Perhaps that was as much as the country and the economy could digest during that time. Now, however, we can encourage more home ownership.

There is certainly a good case for helping prospective home owners to purchase and for helping them to pay the mortgage interest. Helping them to purchase does not necessarily mean a 100 per cent. advance for a mortgage. It is right that a person should save to buy a home, but I see no reason why, this money being available for subsidies to local authorities, the Government should not show their approval of those who save to buy their own homes by adding to those savings. It might be £25 to every £100 saved. Whatever it is, it would be a form of assisting those who say to make up the deposit on buying a home.

Has the Minister considered helping prospective home owners by some such grant in aid of the deposit to purchase? A person with a low income, helped to purchase a house in this way—being in all probability a non-taxpayer—could be granted, without great expense to the Exchequer, an allowance of a percentage of his mortgage interest, similar to the tax concession to the mortgagor who is a taxpayer. Has the Minister considered that sort of assistance to the home owners?

If one looks, finally, at the principle of the Bill, one sees that the basic subsidy is to be based on interest rates. There may be an argument for some supplementary subsidy based on interest rates, but not the basic subsidy, because this Bill is not worth twopence to local authorities and to those who are waiting on their housing lists, in relation to future house building, unless interest rates remain high. Do the Government believe that interest rates will remain high if the party opposite remains in power? If not, this Bill will not only be a letdown to prospective home purchasers but a confidence trick on the prospective council tenant. We can only assume that interest rates will remain high, otherwise the Bill is useless to the local authorities.

As we have set out in our Amendment, we wanted to see in this Bill a positive policy to use all agencies for the building of houses, to help the prospective home buyer and to ensure that the subsidies go to those most in need. If one reads his White Paper, one sees that the Minister could, in fact, accept our Motion. It states what he professes he wants to do. If he does not accept it, we must divide the House.

9.27 p.m.

The Minister of Housing and Local Government (Mr. Richard Crossman)

This has been for me a very enjoyable debate, if only because the speeches have shown a very clear-cut distinction in the attitude of the two sides. Sometimes we have some blurred edges, but in this debate the difference in the attitude shown in the speeches of Opposition Members and in those of my hon. Friends and of Members of the Liberal Party has been even clearer than it was in our debates on the Rent Bill.

Every speech from this side has welcomed the Bill, and I hope that my hon. Friends have welcomed it with conviction as a Measure that genuinely and for the first time for many years creates the possibilities for an enormous surge forward in council building, and for a real and rapid attack on the problem of clearing the slums and curing overcrowding in our great conurbations. There is a real feeling on this side that this Bill provides the financial basis upon which local authorities can do what many of them have wanted to do for years, but which some had almost begun to doubt whether it was possible to do.

Since the publication of the White Paper they have known that there is now no excuse. Where the need is proven, any local authority will be able to have capacity building—to build all the houses it can in the time immediately ahead—because it is clear that the number of rented houses we need in the great conurbations is far beyond our capacity to build in, at least, the next five years, if not the next ten years. We have all felt—my hon. Friends the Members for Birmingham, Sparkbrook (Mr. Hatters-ley), for Liverpool, Walton (Mr. Heffer), for South Shields (Mr. Blenkinsop), for Salford, East (Mr. Frank Allaun) and the hon. Member for Bodmin (Mr. Bessell), among others, that this Bill actually does this.

What has been the Conservative reaction? Hon. Members opposite will not, of course, vote against the 13i11. They have only tabled a reasoned Amendment, because they are moving gradually into permanent opposition. They say, "It is dangerous to vote against such a Bill as this, so we will concoct an Amendment which says that this Bill, dealing with public sector housing subsidies, does not deal with mortgages for the private owner. We will find a reason for dividing the House because the Bill does not deal with the whole of housing policy." Well, they are advancing.

I was pleased by the end of the speech of the hon. Member for Crosby (Mr. Graham Page)—it was more precise than that of his right hon. Friend the Member for Kingston-upon-Thames (Mr. BoydCarpenter)—when he came out with a series of nice policies. In Opposition, I was responsible for formulating policies, so I can warn the hon. Gentleman, "Do not be too precise. You were close to dangerous commitments which will serve you ill when the elections come."

Mr. Graham Page

If the right hon. Gentleman reads HANSARD tomorrow, he will see that it is precise enough but that it gives a good deal of elbow room.

Mr. Crossman

A lawyer's policy. I will try to sharpen the precision by dealing with the first basic difference between the Conservative Opposition and this side of the House. The first basic difference—it is a serious one and it is fundamental—is that the Opposition still purport to believe that private enterprise and the private landlord have an important part to play in building new houses to rent at moderate rents which working class people can afford. They plead Milner Holland and they plead everything else. What they cannot plead is their own record. They had 13 years in which to give the private landlord the inducement to build new houses. They had thirteen years and six Conservative Ministers of Housing, all of whom were wedded to the notion that there was a rôle for private enterprise. If there were a rôle, I would not say them nay. If there was a possibility of getting houses built quickly in this way, getting them built well, getting them built at rents which could be afforded, I would not ideologically say nay.

But I can read. The Opposition love their Milner Holland, but on page 39 Milner Holland gives a statement of fact, not a statement of desire: We obtained no evidence that any private landlord was building flats or houses to let at net rents below £400 per annum. We did, however, obtain evidence from one company who intended to redevelop land in West London by building shops and residential flats. However they intended to sell the flats to the local authority at cost and obtain a return on their investment from the shops alone.

Sir E. Errington rose——

Mr. Crossman

Perhaps I may be allowed to come to the point first. I have tried to get evidence from other parts, outside London, to show that private enterprise and private landlords are desirous or anxious to build for profit and to let at profit at rents which can be afforded below this level. I have not the evidence.

Sir E. Errington rose——

Mr. Crossman

If the hon. Gentleman, whom I greatly respect, because he knows a lot about this, can correct me, I will gladly give way.

Sir E. Errington

I want to draw the Minister's attention to the position in Germany. Private enterprise is going ahead. Over one million more houses have been built since the war. That is private enterprise.

Mr. Crossman

The hon. Gentleman's intervention has answered itself, if we are to go back to pre-war periods. We must be serious about this. Since the war, with 13 years of a Government pledged and wedded to giving private enterprise every possible chance of building for profit and also at moderate rents, no houses were built. Therefore, a sane, sensible, person says that if we must have houses of that kind, we must have them without profit. This means that only local authorities or housing associations can build them, because nobody else can build them, without subsidy.

If the suggestion is that we should take our subsidies here and divide them between the local authorities and the housing associations who will get the subsidy and give a fair whack to private enterprise, I reply: what is the good of setting up a new lot of privately owned houses and then having to impose rent regulation on them after that? What is the sense in doing that? It makes no sense whatsoever, but it is the only sense which I can make out of the long section of the speech of the right hon. Member for Kingston-upon-Thames alleging that I had disregarded one important possibility which is available for me for building houses for rent, which is what the Bill is about.

I am aware that there is a rôle for the private landlord. I have emphasised it time after time. The rôle for the private landlord is in the old houses which he already owns. I am aware of the enormous importance of enabling those old houses to be maintained and improved. Every local authority sees the need today, not only to build new houses, but to keep the semi-blighted areas from being blighted. to save the twilight areas, to work with private enterprise to try to get those houses preserved. This business of area improvement is, I agree, of enormous importance, and there the private landlord has a key job. There, if he is a genuine and honest landlord who does his job and maintains and improves his houses, he will have a better chance under our Rent Act than under the Tory Rent Act of getting a return on his money. This I believe in. On the other hand, I face facts, and one fact is that the small private landlord sells at the first opportunity.

Wherever one turns, in Lancaster where there has been a study, in Rochdale where there has been a special Ministry study, or anywhere else, every objective observer records that the transfer from landlordism to owner-occupation is continuing with enormous speed. The old landlords simply see nothing in it, and a small landlord with two or three houses will get out at the first opportunity—often leaving the sitting tenant with a bad debt on his hands. But that is the position. The movement from the old owners to owner-occupation is proceeding.

Something else is happening as well. A tendency is growing for the private landlord also to sell out in great blocks. We read in The Times today that the Haringey Council has approved the purchase of a huge area of working-class housing for £2 million. I welcome this. Incidentally, Haringey was lucky in getting so far, because the Chancellor would have caught it fairly soon. I warn local authorities that they will not necessarily be allowed to do this for a while, but that purchase was initiated some time ago. This kind of passage into the hands of the local authority or into owner-occupation from the private landlord will be a characteristic we shall see spreading through our cities, and we shall have to deal with it. But private landlords have a rôle to play in collaboration with the local authorities, and provided that they play the game honestly, we shall not object. We shall fix fair rents, and if, under those conditions, they can still make it pay, well and good; otherwise they will sell out and, as I say, their houses will go to owner-occupation or municipal control.

The second question put to me by the Opposition related specifically to the form of the Bill. They asked.: what is the financial case for such wasteful, indiscriminate, lavish subsidies? Those were the sort of terms used. I think that it was the hon. Member for Ilford, South (Mr. Cooper), who attends for the speeches but not for the reply, who argued that we had made out no kind of case on financial ground for subsidies on this scale. Between now and 1961, when the subsidies were last laid down by my predecessor, the cost of house building has risen by 47 per cent. and this has meant that a local authority, if the State subsidy was not increased, had to face a rate subsidy or raise its rents higher and higher.

Hon. Members opposite talk as though council rents are not going up. I know very well that they are, and they are going up because of the cost of house building, part of which, I agree, is represented by high interest rates. I shall not go into detail, but I should have thought that at least the Front Bench opposite would agree that if one wants more council housing, as I do, on a big scale, and if one is to give a financial basis for it, the costs involved are such that one must insulate councils from the uncertainties of interest rates. What we have done here is not what the Economist suggested, that is, giving local authorities an incentive to build in times when the Chancellor does not want them to, but we have removed any disincentive from building at any time. It will enable them to go on building steadily year after year in the way which a Government who want housing to have top priority wish them to do. We say that, whatever else happens, we will not have the housing programme upset this time. It will go on. We shall be able to afford this programme. We have calculated it carefully. We have worked out the cost. This is something which we shall do and do properly in this way.

The hon. Member for Crosby is quite right to point out that it is a big subsidy. It is a big subsidy now because interest rates are high. If our policies are successful, if the Chancellor has his way, and interest rates sink, the subsidy value will sink. It was said that the local authorities were unhappy about it, but the fact is that local authorities understand the importance of lower interest rates very well. They will reduce housing costs. What the local authorities want to do is to build houses. If they can build them without so much State subsidy, they will do so and will tend to sacrifice the subsidy to some extent for the interest rate.

Of course I have talked to the treasurers about this. Of course they made to me the simple point that if the Chancellor has astonishing success and interest rates sink tremendously I must re-think the subsidies, and naturally one agrees with that proviso.

Mr. Graham Page

But the Bill destroys all other subsidies and relies on a basic subsidy. What is the right hon. Gentleman to do about this?

Mr. Crossman

It does not destroy all other subsidies. It replaces them for new housing.

This is a very big subsidy and it requires severe allocation. I thought that the hon. Gentleman was right in saying that, with a subsidy on this scale, the Minister must be prepared to say what parts of the country have not a clear demand for council housing and what parts do need it.

Because I want to enable Liverpool, Manchester and London to do a job of work, I am prepared to take on myself the unpopularity of saying that I shall give them enough, even though that means that I shall have to say to certain places in the South, the South-West and the South-East, "Sorry. You may want to build, but will you demonstrate that you have a slum clearance problem, that your people really prefer council houses to owner-occupation, which they may or may not be getting in your area; you will have to prove the need." On the other hand, 165 local authorities in the great conurbations without question have a crisis and will not have to prove need. They will merely have to prove their ability to build more and more houses.

That is the theory of the Bill and the White Paper taken together. The Bill enables the Minister to provide the financial basis to the local authorities where the need is great. It also gives him power to ration the other authorities where the need is not so great—and, frankly, however unpopular and difficult to do, this is the only way to get a move on without wasting a great deal of money.

Mr. Bessell

Do I take it from that that development districts in the South-West will not receive priority, even though it would mean, if they were given such assistance, spreading the population and assisting their development?

Mr. Crossman

Development areas will be given priority throughout the country. The regional principle has been established. For instance, it will mean that areas closer to my constituency will be in difficulties because, in the prosperous Midlands, we are already attracting too much industry. We shall have to say, "Of course Birmingham has to have housing, for it has 40,000 slums and we must get rid of them. But there are other places in the Midlands where so much council building is not so necessary." That is why, in the White Paper, I required local authorities to make an objective assessment of their housing needs. Some of them were a little surprised when I asked them to assess how many of their people want to be owner-occupiers and how many need council housing. I want them to make land available for owner occupation and not hog it for council houses if they do not need council houses, because their job it to provide houses that are needed—and the houses that are needed are those which, by and large, families want.

All this is written in the White Paper but it is not mentioned by the Tory Party because it does not want to believe that the Government are prepared to say that, while we want council houses for those who need them, we are also in favour of owner occupation where it is wanted and we are prepared to ask the local authorities to assess the desire for owner occupation in their areas. In any case, no local authority wants to build council houses gratuitously and therefore add to the problems of its housing revenue in the way that such building would.

In addition to the basic subsidy, there will be special subsidies. What has not been mentioned by right hon. and hon. Members opposite is that we are providing a special subsidy to encourage mobility of labour under Clause 5(2), dealing with the transfer of workers. This goes far wider than the proposals made by my right hon. Friend the Minister of Power about the coal industry, though it is true that the coal industry will help me in providing houses for the movement of several thousand mining families into the Midlands. I am hoping that this section will be used in places such as Cornwall, where I have read that the china clay industry desperately needs a special kind of worker. We will provide the housing if that helps to get the workers needed into development areas of special kinds. This is what Section 5(2) is for.

It was suggested by the right hon. Member for Kingston-upon-Thames that we were speaking from inadequate information when we suggested that a subsidy which went up for each floor to 16 floors was a terrible waste of money. We are in a curious situation; we are accused of being extravagant, rather than of saving money, yet he is telling us to waste money. He has already been replied to, in his absence, I think, by several of my hon. Friends who know the Midlands very well. I can tell him that I have been round the country a good deal and found that one of the results of the old subsidy system with the basic £24, plus this very lavish floor by floor high-rise subsidy, was that what people had said about it was quite true. People were building high-rise homes just for the fun of it, just for the architect's kudos, because the higher one built the more money one got from the Government. It is not sociologically proved that everyone likes to live in high-rise homes. There is a lot of evidence that a lot of people dislike being forbidden not only cats and dogs but children. While it is very often essential that people who live in great conurbations should live high-rise, there is no reason to put a 16-storey building plump in the middle of the suburbs of a small provincial town just because an architect felt it would be better with a high-rise building. It is getting a bit too American for my taste.

Mr. Boyd-Carpenter

Does not what the right hon. Gentleman has said in another context apply here? If a local authority wishes to build too high unnecessarily, and, broadly speaking, I agree with him that outside the central areas it is unnecessary, he can control this by loan sanction, without depriving those authorities which really need it.

Mr. Crossman

The right hon. Gentleman has not got to the exceptional condition. What I have done is greatly to improve the expensive site subsidy. I will give him a concrete example. Take the Marylebone railway yard. This has been bought by the Westminster Council, of which I am a good ratepayer, for the sum of £132,000 an acre, because otherwise there will be no housing there at all. There would only be luxury offices or luxury flats. One needs a very considerable subsidy to enable one to build on that expensive site. But when one looks at the actual storeys and at their price as they go up, one will simply find that owing to modern technological advance in system building it simply is not true that beyond the sixth floor there is any considerable rise in cost.

Having discussed this with the local authorities, including the London authorities, we came to the conclusion that by cutting off the incentives to build high over the sixth floor and sharply increasing the expensive site subsidy over £50,000, we were dealing with the important area, where otherwise one cannot get any housing done at all. Although it was an expensive thing and although I thought a lot about it before I put it to the Chancellor, I still felt that in the Central London area, Manchester or Liverpool, there is a case for having housing there for working-class people because their need is there. The great metropolis needs people who are electricians, needs char-ladies who will do the cleaning work in the office. It needs people of this kind and we have to build the houses for them, even if we have to have a very expensive social service in order to do it.

So much for the special subsidies. The right hon. Gentleman went on to make a great fuss about direct labour and said that this was a piece of wild extravagance, that I had obliterated something that his right hon. Friends had laid down, namely, a rule that every third contract had to be given out to tender in order to test the efficiency of a direct labour department. It is not beyond the wit of man to make the third tender for 20 houses. The real trouble about this rule was that it did not prevent the bad man from evading it, and, much more important, those who were going in for system building, which requires negotiated agreements without tenders, were effectively prevented from doing so.

The contribution of the direct labour departments to system building has been crucial. The breakthrough was made at Sheffield and it was done only with the greatest difficulty because of this rule. Therefore, I thought that a rule which did not prevent the wicked from being wicked but merely prevented the efficient from being more efficient was silly, and that the way to make direct labour departments efficient was to cost them properly, and to insist that they were costed properly, and to ensure that the housing section is separated from the repair section, and so on. That is what I propose to do, because I am keen on direct labour and keen to make it more efficient. It can be, and should be tested to prove its efficiency.

I come to the main points of criticism of the Opposition. They are interesting for a party which believes in freedom and in setting the people free from Socialist control. It is said that Conservative controls should be introduced to control the councils. I am told that we have to introduce mandatory powers to control council allocations, mandatory powers on the quality of houses and mandatory powers to order councils to set their rent policies. These are being laid down by the party of freedom as prerequisites. I suspect that they must dislike councils a great deal to subject them to such Socialist controls!

The difference between us is that we just do not think that it is the right way to handle the matter. I had better qualify that. There is an area in which I am prepared to be mandatory, and that is in the quality of building. We shall expect local authorities to build houses to Parker Morris standards when the present contracts have run out. We must give them time. Loan sanctions will be much more easily obtained if the houses are built to Parker Morris standards. If I am told that this means fewer houses, of course it does. If we build better houses, that takes more energy. Harold Macmillan could build 300,000 houses by using the same number of bricks as it would take to build 200,000. I do not want to do that.

I suggest, therefore, that we should deny ourselves that targeteering passion for a figure and say to local authorities, "If we give you much better subsidies, part of the subsidy on each house is to be used to make the house worthy of being lived in in 40 years' time—to give it larger floor space, modern insulation, modern heating and modern finish, to set private enterprise in the private enterprise housing estate a standard to which it can aspire in 10 years". That is what we believe in doing. We believe in using subsidies for this very purpose—to insist on quality in council building.

The hon. Member for Eton and Slough (Sir A. Meyer) asked me whether I was prepared to intervene as a Minister and to compel councils, in their rent policy, to allocate their houses to those who needed them most. I think that it was suggested by the hon. Member for Crosby that I might even say that only poor people should go into council houses and that there should be a means test. I have thought very carefully about allocation. I have put out what I can to persuade councils that it is scandalous and mean to impose residential qualifications on people who cannot have them—for example, ex-Service men.

It is true that coloured immigrants are being unfairly discriminated against by councils which impose a five-year residential qualification. But I say in all seriousness that that is something which the elected local authority—if we believe in elections at all—must settle with local public opinion for itself. We cannot from London order people to be good; we cannot order them to be angels. We can create a breathing space, build the houses and say, "I have given you the opportunity to be an angel. Let your living standards be higher than they have been in the past". That is what I shall do. To do more would increase the racial antagonism which we desire to suppress.

I turn now to the question of rents. I was solemnly told that I should have a mandatory authority to say that no local authority should receive a subsidy if its rent rebate scheme was not to my approval. The confidence which right hon. and hon. Members opposite have in my power of direction! I think that I would modestly deny myself this power! I simply say that this is something—[Interruption.] Does the right hon. Member mean that his party would like to do it themselves?

Mr. Boyd-Carpenter

The right hon. Gentleman was regarding this as a personal compliment. I should hate to deny it to him, but we are very conscious of the fact that he will not be in office long.

Mr. Crossman

I have three things to say about council rents. First, do not let us underestimate the speed at which they have been rising. I have just worked it out and it appears that, roughly speaking, council house rents have risen by 51 per cent. in the last 10 years. That is a fairly steep rise, 51 per cent. with almost annual rises. This has been due to the increased cost of council housing.

There is something else that I should like to say. We have heard a great deal about the unfairness to poor people, and I agree. I want to see rent rebate systems by which people who can afford to pay more pay more than those who cannot. We should not, however, forget the great injustices between one town and another. I have looked to find an extreme example and the two places which I have chosen—I hope that they will not take offence—are Portsmouth and Stoke-on-Trent.

The average rents of almost identical houses are 46s. 11d. in Portsmouth and 23s. at Stoke-on-Trent. This is not because Stoke-on-Trent is more wicked from the Conservative point of view than Portsmouth. It is because the sum of historic pre-war building in Stoke-on-Trent was fairly large and the amount of pre-war building in Portsmouth was fairly small.

As rents are fixed by the historic value of a house, there is the gravest injustice between one local authority and another, in the sense that if we ask them all to rebuild the impact and the burden upon them varies from authority to authority. What I meant in the White Paper by saying that basic housing finance requires much more consideration was simply this. If hon. Members opposite—they did not say so, they did not have the guts to say it; I do not know what they did say—had said that we should consolidate all subsidies and say to ourselves, "We will pay out all local authorities, budget the whole thing up and then allocate", I would not envy the Minister who did it, but I admit that it would be more just to handle the whole of local government finance in this way and try to even it up. But in the first year of a Labour Government, when my major occupation is to get a system of subsidies which will maximise production of houses in the right places and which wins the good will of the local authorities who have to build houses, it would have been crazy to undertake that kind of drastic reform in that way.

Time allows me to say just one other thing before I conclude. It is, of course, true that the owner-occupier is unjustly treated by the tax law. On the other hand, it is also true that we still pay more per owner-occupier from the Treasury than we do per council house dweller. They are both things that we must deal with.

I conclude by saying this to the Opposition. If they think that we should divide this money between council houses and owner-occupiers, let them wait for our next proposal for owner-occupiers—[HON. MEMBERS: "When?"]—and they will find that we will be announcing it this—Session—[HON. MEMBERS: "When?"]—when we decide to announce it.

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

The House divided: Ayes 296, Noes 280.

Division No. 12.]	AYES	[9.59 p.m.
Abu, Leo	Floud, Bernard	McCann, J.
Albu, Austen	Foot, Sir Dingle (Ipswich)	MacColl, James
Allaun, Frank (Salford, E.)	Foot, Michael (Ebbw Vale)	MacDermot, Niall
Alldritt, Walter	Ford, Ben	McGuire, Michael
Armstrong, Ernest	Fraser, Rt. Hn. Tom (Hamilton)	McInnes, James
Atkinson, Norman	Freeson, Reginald	McKay, Mrs. Margaret
Bacon, Miss Alice	Galpern, Sir Myer	Mackenzie, Gregor (Rutherglen)
Bagier, Gordon A. T.	Garrett, W. E.	Mackie, John (Enfield, E.)
Barnett, Joel	Garrow, Alex	McLeavy, Frank
Beaney, Alan	Ginsburg, David	MacMillan, Malcolm
Bellenger, Rt. Hn. F. J.	Gourlay, Harry	MacPherson, Malcolm
Bence, Cyril	Greenwood, Rt. Hn. Anthony	Mahon, Peter (Preston, S.)
Benn, Rt. Hn. Anthony Wedgwood	Gregory, Arnold	Mahon, Simon (Bootle)
Bennett, J. (Glasgow, Bridgeton)	Grey, Charles	Mallalieu, E. L. (Brigg)
Bessell, Peter	Griffiths, David (Rother valley)	Mallalieu, J.P.W. (Huddersfield, E.)
Binns, John	Griffiths, Rt. Hn. James (Llanelly)	Manuel, Archie
Bishop, E. S.	Griffiths, Will (M'chester, Exchange)	Mapp, Charles
Blackburn, F.	Gunter, Rt. Hn. R. J.	Marsh, Richard
Blenkinsop, Arthur	Hale, Leslie	Mason, Roy
Boardman, H.	Hamilton, James (Bothwell)	Maxwell, Robert
Boston, Terence	Hamilton, William (West Fife)	Mayhew, Christopher
Bottomley, Rt. Hn. Arthur	Hamling, William (Woolwich, W.)	Mellish, Robert
Bowden, Rt. Hn. H. W. (Leics S.W.)	Harman, William	Mendelson, J. J.
Boyden, James	Harper, Joseph	Mikardo, Ian
Braddock, Mrs. E. M.	Harrison, Walter (Wakefield)	Millan, Bruce
Bradley, Tom	Hart, Mrs. Judith	Miller, Dr. M. S.
Bray, Dr. Jeremy	Hattersley, Roy	Milne, Edward (Blyth)
Broughton, Dr. A. D. D.	Hazell, Bert	Molloy, William
Brown, Rt. Hn. George (Belper)	Heffer, Eric S.	Monslow, Walter
Brown, Hugh D. (Glasgow, Provan)	Herbison, Rt. Hn. Margaret	Morris, Alfred (Wythenshawe)
Brown, R. W. (Shoreditch & Fbury)	Hobden, Dennis (Brighton, K'town)	Morris, Charles (Openshaw)
Buchan, Norman (Renfrewshire, W.)	Holman, Percy	Morris, John (Aberavon)
Buchanan, Richard	Homer, John	Mulley, Rt. Hn. Frederick (Sheffield Pk)
Butler, Herbert (Hackney, C.)	Houghton, Rt. Hn. Douglas	Murray, Albert
Butler, Mrs. Joyce (Wood Green)	Howarth, Harry (Wellingborough)	Neal, Harold
Carmichael, Neil	Howarth, Robert L. (Bolton, E.)	Newens, Stan
Carter-Jones, Lewis	Howell, Denis (Small Heath)	Noel-Baker, Francis (Swindon)
Chapman, Donald	Howie, w.	Noel-Baker, Rt. Hn. Philip (Derby, S.)
Coleman, Donald	Hoy, James	Norwood, Christopher
Conlan, Bernard	Hughes, Emrys (S. Ayrshire)	Oakes, Gordon
Corbet, Mrs. Freda	Hughes, Hector (Aberdeen, N.)	Ogden, Eric
Cousins, Rt. Hn. Frank	Hunter, Adam (Dunfermline)	O'Malley, Brian
Craddock, George (Bradford, S.)	Hunter, A. E. (Feltham)	Oram, Albert E. (E. Ham, S.)
Crawshaw, Richard	Hynd, H. (Accrington)	Orbach, Maurice
Cronin, John	Hynd, John (Attercliffe)	Orme, Stanley
Crosland, Rt. Hn. Anthony	Irvine, A. J. (Edge Hill)	Oswald, Thomas
Grossman, Rt. Hn. R. H. S.	Jackson, Colin	Owen, Will
Dalyell, Tam	Janner, Sir Barnett	Padley, Walter
Darling, George	Jay, Rt. Hn. Douglas	Page, Derek (King's Lynn)
Davies, G. Elfed (Rhondda, E.)	Jeger, George (Goole)	Paget, R. T.
Davies, Harold (Leek)	Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)	Palmer, Arthur
Davies, Ifor (Gower)	Jenkins, Hugh (Putney)	Pargiter, G. A.
Davies, S. O. (Merthyr)	Jenkins, Rt. Hn. Roy (Stechford)	Park, Trevor (Derbyshire, S.E.)
de Freitas, Sir Geoffrey	Johnson, Carol (Lewisham, S.)	Parker, John
Delargy, Hugh	Johnson, James (K'ston-on-Hull, W.)	Pavitt, Laurence
Dell, Edmund	Jones, Dan (Burnley)	Pearson, Arthur (Pontypridd)
Dempsey, James	Jones, Rt. Hn. SirElwyn (W. Ham, S.)	Peart, Rt. Hn. Fred
Diamond, Rt. Hn. John	Jones, J. Idwal (Wrexham)	Pentland, Norman
Doig, Peter	Jones, T. W. (Merioneth)	Perry, Ernest G.
Donnelly, Desmond	Kelley, Richard	Popplewell, Ernest
Driberg, Tom	Kenyon, Clifford	Prentice, R. E.
Duffy, Dr. A. E. P.	Kerr, Mrs. Anne (R'ter & Chatham)	Price, J. T. (Westhoughton)
Dunn, James A.	Kerr, Dr. David (W'worth, Central)	Probert, Arthur
Dunnett, Jack	Lawson, George	Pursey, Cmdr. Harry
Edelman, Maurice	Leadbitter, Ted	Randall, Harry
Edwards, Rt. Hn. Ness (Caerphilly)	Ledger, Ron	Rankin, John
Edwards, Robert (Bilston)	Lee, Rt. Hn. Frederick (Newton)	Redhead, Edward
English, Michael	Lee, Miss Jennie (Cannock)	Rees, Merlyn
Ennals, David	Lever, Harold (Cheetham)	Reynolds, G. W.
Ensor, David	Lever, L. M. (Ardwick)	Rhodes, Geoffrey
Evans, Albert (Islington, S.W.)	Lewis, Arthur (West Ham, N.)	Richard, Ivor
Evans, Ioan (Birmingham, Yardley)	Lewis, Ron (Carlisle)	Roberts, Albert (Normanton)
Fernyhough, E.	Lipton, Marcus	Roberts, Goronwy (Caernarvon)
Finch, Harold (Bedwellty)	Lomas, Kenneth	Robertson, John (Paisley)
Fitch, Alan (Wigan)	Loughlin, Charles	Robinson, Rt. Hn. K. (St. Pancras, N.)
Fletcher, Sir Eric (Islington, E.)	Lubbock, Eric	Rodgers, William (Stockton)
Fletcher, Ted (Darlington)	Mabon, Dr. J. Dickson	Rose, Paul B.
Fletcher, Raymond (Ilkeston)	McBride, Neil	Ross, Rt. Hn. William
Rowland, Christopher	Swingler, Stephen	Wells, William (Walsall, N.)
Sheldon, Robert	Symonds, J. B.	White, Mrs. Elrene
Shinwell, Rl. Hn. E.	Taverne, Dick	Whitlock, William
Shore, Peter (Stepney)	Taylor, Bernard (Mansfield)	Wigg, Rt. Hn. George
Short, Rt. Hn. E. (N'c'tle-on-Tyne, C.)	Thomas, George (Cardiff, W.)	Wilkins, W. A.
Short, Mrs. Renée (W'hampton, N.E.)	Thomas, lorwerth (Rhondda, W.)	Willey, Rt. Hn. Frederick
Silkin, John (Deptford)	Thomson, George (Dundee, E.)	Williams, Alan (Swansea, W.)
Silverman, Julius (Aston)	Thornton, Ernest	Williams, Clifford (Abertillery)
Silverman, Sydney (Nelson)	Thorpe, Jeremy	Williams, Mrs. Shirley (Hitchin)
Skeffington, Arthur	Tinn, James	Williams, W. T. (Warrington)
Slater, Mrs. Harriet (Stoke, N.)	Tomney, Frank	Willis, George (Edinburgh, E.)
Slater, Joseph (Sedgefield)	Tuck, Raphael	Wilson, William (Coventry, S.)
Small, William	Urwin, T. W.	Winterbottom, R. E.
Snow, Julian	Varley, Eric G.	Woodburn, Rt. Hn. A.
Soskice, Rt. Hn. Sir Frank	Wainwright, Edwin	Woof, Robert
Spriggs, Leslie	Warden, Brian (All Saints)	Wyatt, Woodrow
Steel, David (Roxburgh)	Walker, Harold (Doncaster)	Yates, Victor (Ladywood)
Storehouse, John	Wallace, George	Zilliacus, K.
Stones, William	Warbey, William
Strauss, Rt. Hn. G.R. (Vauxhall)	Watkins, Tudor	TELLERS FOR THE AYES:
Summerskill, Hn. Dr. Shirley	Weitzman, David	Mr. Sydney Irving and
Swain, Thomas	Wellbeloved, James	Mr. George Rogers.
NOES
Agnew, Commander Sir Peter	Crawley, Aldan	Hastings, Stephen
Alison, Michael (Barkston Ash)	Crosthwaite-Eyre, Col. Sir Oliver	Hawkins, Paul
Allan, Robert (Paddington, S.)	Crowder, F. P.	Hay, John
Allason, James (Hemel Hempstead)	Cunningham, Sir Knox	Heath, Rt. Hn. Edward
Amery, Rt. Hn. Julian	Curran, Charles	Hendry, Forbes
Anstruther-Gray, Rt. Hn. Sir W.	Currie, G. B. H.	Higgins, Terence L.
Astor, John	Dalkeith, Earl of	Hill, J. E. B. (S. Norfolk)
Atkins, Humphrey	Dance, James	Hirst, Geoffrey
Awdry, Daniel	Davies, Dr. Wyndham (Perry Barr)	Hobson, Rt. Hn. Sir John
Baker, W. H. K.	d'Avigdor-Goldsmid, Sir Henry	Hopkins, Alan
Balniel, Lord	Dean, Paul	Hordern, Peter
Barber, Rt. Hn. Anthony	Deedes, Rt. Hn. W. F.	Hornby, Richard
Barlow, Sir John	Digby, Simon Wingfield	Hornsby-Smith, Rt. Hn. Dame P.
Batsford, Brian	Dodds-Parker, Douglas	Howard, Hn. G. R. (St. Ives)
Beamish, Col. Sir Tufton	Doughty, Charles	Howe, Geoffrey (Bebington)
Bell, Ronald	Douglas-Home, Rt. Hn. Sir Alec	Hunt, John (Bromley)
Bennett, Sir Frederic (Torquay)	Drayson, G. B.	Hutchison, Michael Clark
Bennett, Dr. Reginald (Gos. & Fhm)	du Cann, Rt. Hn. Edward	Iremonger, T. L.
Berkeley, Humphry	Eden, Sir John	Irvine, Bryant Godman (Rye)
Berry, Hn. Anthony	Elliot, Capt. Walter (Carshalton)	Jenkin, Patrick (Woodford)
Bitten, John	Elliott, R. W. (N'c'tle-upon-Tyne, N.)	Jennings, J. C.
Biggs-Davison, John	Emery, Peter	Johnson Smith, G. (East Grinstead)
Bingham, R. M.	Errington, Sir Eric	Jones, Arthur (Northants, S.)
Birch, Rt. Hn. Nigel	Eyre, Reginald	Jopling, Michael
Black, Sir Cyril	Farr, John	Joseph, Rt. Hn. Sir Keith
Blaker, Peter	Fell, Anthony	Kaberry, Sir Donald
Bossom, Sir Clive	Fletcher-Cooke, Charles (Darwen)	Kerby, Capt. Henry
Box, Donald	Fletcher-Cooke, Sir John (S'pton)	Kerr, Sir Hamilton (Cambridge)
Boyd-Carpenter, Rt. Hn. J.	Foster, Sir John	Kershaw, Anthony
Boyle, Rt. Hn. Sir Edward	Fraser, Rt. Hn. Hugh (St'fford & Stone)	Kimball, Marcus
Brewis, John	Fraser, Ian (Plymouth, Sutton)	King, Evelyn (Dorset, S.)
Brinton, Sir Tatton	Gammans, Lady	Kirk, Peter
Bromley-Davenport, Lt.-Col. Sir Walter	Gardner, Edward	Kitson, Timothy
Brooke, Rt. Hn. Henry	Gibson-Watt, David	Lagden, Godfrey
Brown, Sir Edward (Bath)	Giles, Rear-Admiral Morgan	Lambton, Viscount
Bruce-Gardyne, J.	Gilmour, Ian (Norfolk, Central)	Lancaster, Col. C. G.
Bryan, Paul	Gilmour, Sir John (East Fife)	Langford-Holt, Sir John
Buchanan-Smith, Alick	Glover, Sir Douglas	Legge-Bourke, Sir Harry
Buck, Antony	Glyn, Sir Richard	Lewis, Kenneth (Rutland)
Bullus, Sir Eric	Godber, Rt. Hn. J. B.	Litchfield, Capt. John
Burden, F. A.	Goodhart, Philip	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Butcher, Sir Herbert	Goodhew, Victor	Lloyd, Ian (P'tsm'th, Langstone)
Buxton, Ronald	Gower, Raymond	Longbottom, Charles
Campbell, Gordon	Grant, Anthony	Longden, Gilbert
Carlisle, Mark	Grant-Ferris, R.	Loveys, W. H.
Carr, Rt. Hn. Robert	Gresham Cooke, R.	Lucas, Sir Jocelyn
Cary, Sir Robert	Griffiths, Eldon (Bury St. Edmunds)	McAdden, Sir Stephen
Channon, H. P. G.	Griffiths, Peter (Smethwick)	MacArthur, Ian
Chichester-Clark, R.	Gurden, Harold	Maclean, Sir Fitzroy
Clark, Henry (Antrim, N.)	Hall, John (Wycombe)	Macleod, Rt. Hn. Iain
Clark, William (Nottingham, S.)	Hall-Davis, A. G. F.	McMaster, Stanley
Clarke, Brig. Terence (Portsmth, W.)	Hamilton, Marquess of (Fermanagh)	McNair-Wilson, Patrick
Cooke, Robert	Hamilton, M. (Salisbury)	Maddan, W. F. M.
Cooper, A. E.	Harris, Frederic (Croydon, N.W.)	Maginnis, John E.
Cooper-Key, Sir Neill	Harris, Reader (Heston)	Maitland, Sir John
Cordle, John	Harrison, Brian (Maldon)	Marten, Neil
Corfield, F. V.	Harrison, Col. Sir Harwood (Eye)	Maude, Angus
Costain, A. P.	Harvey, Sir Arthur Vere (Macclesf'd)	Maudling, Rt. Hn. Reginald
Courtney, Cdr. Anthony	Harvey, John (Walthamstow, E.)	Mawby, Ray
Craddock, Sir Beresford (Spelthorne)	Harvie Anderson, Miss	Maxwell-Hyslop, R. J.

Maydon, Lt-Cmdr. S. L, C.	Ramsden, Rt. Hn. James	Temple, John M.
Meyer, Sir Anthony	Redmayne, Rt. Hn. Sir Martin	Thatcher, Mrs. Margaret
Mills, Stratton (Belfast, N.)	Rees-Davies, w. R.	Thomas, Sir Leslie (Canterbury)
Miscampbell, Norman	Renton, Rt. Hn. Sir David	Thompson, Sir Richard (Croydon, S.)
Mitchell, David	Ridley, Hn. Nicholas	Thomeycroft, Rt. Hn. Peter
Monro, Hector	Ridsdale, Julian	Tiley, Arthur (Bradford, W.)
More, Jasper	Roberts, Sir Peter (Heeley)	Tilney, John (Wavertree)
Morgan, W. G.	Robson Brown, Sir William	Turton, Rt. Hn. R. H.
Mott-Radclyffe, Sir Charles	Rodgers, Sir John (Sevenoaks)	Tweedsmuir, Lady
Munro-Lucas-Tooth, Sir Hugh	Roots, William	van Straubenzee, W. R.
Murton, Oscar	Royle, Anthony	Vickers, Dame Joan
Neave, Airey	Russell, Sir Ronald	Walder, David (High Peak)
Nicholls, Sir Harmar	St. John-Stevas, Norman	Walker, Peter (Worcester)
Nicholson, Sir Godfrey	Sandys, Rt. Hn. D.	Walker-Smith, Rt. Hn. Sir Derek
Noble, Rt. Hn. Michael	Scott-Hopkins, James	Wall, Patrick
Nugent, Rt. Hn. Sir Richard	Sharpies, Richard	Walters, Dennis
Onslow, Cranley	Shepherd, William	Ward, Dame Irene
Orr, Capt. L. P. S.	Sinclair, Sir George	Weatherill, Bernard
Orr-Ewing, Sir Ian	Smith, Dudley (Br'ntf'd & Chiswick)	Webster, David
Osborn, John (Hallam)	Smith, John	Wells, John (Maidstone)
Page, John (Harrow, W.)	Smyth, Rt. Hn. Brig. Sir John	Whitelaw, William
Page, R. Graham (Crosby)	Soames, Rt.Hn. Christopher	Williams, Sir Rolf Dudley (Exeter)
Pearson, Sir Frank (Clitheroe)	Spearman, Sir Alexander	Wills, Sir Gerald (Bridgwater)
Peel, John	Stainton, Keith	Wilson, Geoffrey (Truro)
		Wise, A. R.
Percival, Ian	Stanley, Hn. Richard	Wolrige-Gordon, Patrick
Peyton, John	Stodart, Anthony	Wood, Rt. Hn. Richard
Pickthorn, Rt. Hn. Sir Kenneth	Stoddart-Scott, Cot. Sir Malcolm	Woodhouse, Hn. Christopher
Pike, Miss Mervyn	Studholme, Sir Henry	Woodnutt, Mark
Pitt, Dame Edith	Summers, Sir Spencer	Wylie, N. R.
Pounder, Rafton	Talbot, John E.	Yates, William (The Wrekin)
Powell, Rt. Hn. J. Enoch	Taylor, Sir Charles (Eastbourne)	Vounger, Hn. George
Price, David (Eastleigh)	Taylor, Edward M. (G'gow,Cathcart)
Prior, J. M. L.	Taylor, Frank (Moss Side)	TELLERS FOR THE NOES:
Quennell, Miss J. M.	Teeling, Sir William	Mr. Martin McLaren and
		Mr. Francis Pym.

Bill read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).