Clause 1.—(EXTENSION OF PERIOD AND INCREASE IN AGGREGATE OF HOUSING LOANS.)

HC Deb 25 February 1965 vol 707 cc699-743

7.40 p.m.

Dame Joan Vickers (Plymouth, Devonport)

I beg to move, in page 2, line 1, to leave out subsection (2).

The Deputy-Chairman

I think that it will be convenient for the Committee to discuss, at the same time, the Amendment to the Schedule, in page 3, line 13, leave out subsection (c).

Dame Joan Vickers

That will be convenient, Sir Samuel.

I should like to pay tribute to the hon. Lady the Joint Under-Secretary of State for Education and Science who I am sorry cannot be here today. As was stated in an evening paper today, she has thrown herself into her job with an enthusiasm which has impressed the stolid Ministry. In the previous debate the hon. Lady took a great deal of interest in the subject. I am fortified somewhat today in the knowledge that the new Parliamentary Secretary asked some very pertinent questions about this matter when he sat on this side of the Committee. Further, it is interesting to note that the right hon. Gentleman the Minister of Public Building and Works said: … anyone who thinks that we intend to unscramble the scrambled eggs should think again."—[OFFICIAL REPORT, 10th February, 1965; Vol. 706, c. 502–3.] That was a disappointing remark, coming from the right hon. Gentleman, because it seems that the Socialists on so many occasions merely follow what the Conservatives started. I have always understood that they wished to be independent and put their own views into practice. I thought that the right hon. Gentleman, when he was on these benches, was particularly independent in the line he usually took.

I should have thought that in his Ministry he already has sufficient to do in the care of Government public buildings at home and overseas—he has embassies to deal with, High Commission offices in the various countries to look after, co-ordination and research in regard to buildings, the building programme itself, ancient monuments and the giving of grants to historic buildings.

All these things are far removed from the matter we are discussing today, which is the practical, everyday need of housing for the Armed Forces. I am sure that the right hon. Gentleman would be only too delighted to allow these activities in his Ministry to be handed over to the Ministry of Defence. I say that because the Ministry of Defence is now a really co-ordinated body. The three Services come under the same roof, and I should have thought that it would have been easier for the Ministry of Defence to handle the housing problems of the forces than the Ministry of Public Building and Works. After all, the Ministry of Defence knows the needs of the forces and the types of buildings required. It would be interesting to know why the right hon. Gentleman considers that his Ministry can undertake this work.

When the right hon. Gentleman discussed this aspect of housing in the recent debate we were told, for example, that officers were to have four-bedroomed houses while the other ranks would have three-bedroomed ones. I should have thought that experience of the Services' needs showed that it is the other ranks which need the four-bedroomed houses because the families in that group have younger children. Officers' children are probably older, have grown up and left home. It is the officers who need the smaller houses. In any case, I believe that to build houses or flats of three bedrooms these days is a far too costly business.

Nothing was said in the right hon. Gentleman's reply about the people discribed in the Bill as those … employed in connection with, the armed forces … This is an important subject from my point of view, because we must consider the dockyard personnel. At present, officers in the dockyard are invariably provided with accommodation, but up to a short time ago there was some accommodation for dockyard people returning from overseas. However, this accommodation has been done away with in the Plymouth area.

7.45 p.m.

It seems odd that when a dockyard man and his family go overseas, to Malta, Gibraltar, Singapore or other parts of the world, perhaps only temporarily, they receive accommodation. However, when they return to this country it appears that everybody wipes their hands of responsibility for their welfare. This causes considerable hardship, because the housing situation in most of the naval ports is difficult. These areas are in demand by the civilian population and, for this reason, I should have thought that it was most important to let people who go overseas know—remembering that they do an extremely valuable job in overseas dockyards—that they will receive accommodation when they return home. If they do not have this assurance it will be more and more difficult to persuade people to take jobs overseas. It is interesting to note that the right hon. Gentleman said: … the Ministry of Defence, my Department and the Treasury … look three years ahead."—[OFFICIAL REPORT, 10th February 1965; Vol. 706, c. 503.] Can we be told how it is possible to plan estates in such a short time? Is the right hon. Gentleman aware that the planning of estates is a lengthy business? First, the land must be obtained, the layout must be arranged, all the architects' work done and the houses constructed.

In this connection, I hope that we will have some better designs from the right hon. Gentleman's Ministry than we have had in the past. That work having been done, the accommodation must be furnished, the gardens seen to and so on. As things stand, it would appear that we have only three years in which all this work must be done and I fear that the programme will not be fulfilled and houses erected in that time.

How much co-operation is there between the right hon. Gentleman's Department and the Ministry of Housing and Local Government, as well as with the local authorities concerned in the areas where houses are to be built? In the last debate we were told that there was consultation with the Ministry of Housing and Local Government, but the right hon. Gentleman did not mention consultation with the local authorities concerned.

We now have a number of Departments concerned with this type of housing. I presume that we begin with the Ministry of Defence, in which there are three separate Departments—for the Royal Navy, the Army and the Royal Air Force, each stating its requirements—the requests from which go to the Minister, who must make his plans and layout. He, presumably, then consults his right hon. Friend the Minister of Housing and Local Government who, in turn, consults the local authorities concerned—at least, I hope he does—in the areas in which houses are to be built.

What concerns me very much is whether these houses will be built in areas decided upon by the Ministry or in the areas where the Services want them. One of the difficulties now is that when sailors return to this country from overseas they must often travel long distances to find suitable accommodation. This causes considerable disruption. It is one reason for the bad re-engagement rate, because I have seen letters in my local Press stating how, for example, sailors arriving back in Portsmouth have had to live in Plymouth, while those arriving home in Plymouth have had to take accommodation in Portsmouth. Being shuffled back and forth in this way does not help our re-engagement efforts, let alone the sailors and their families. I hope that the Minister will find out from the various Service Departments where they desire houses to be built.

In the last debate we were told the number of houses to be built, but not the districts in which they are to be built. Some difficulty arises here and I will give one example. I gather that Raglan Barracks, in my constituency, now comes under the Ministry of Public Building and Works. There is some land there, and although the Royal Navy has been longing to have that piece of land—because it would complete a housing unit in the area—it is to be given to the local authority for housing purposes. There seems to be a complete lack of co-operation in certain respects and I should like to know whether it was the Ministry of Public Building and Works which decided that the land should be given to the local authority. It is a very great disappointment to the Services locally that they have not got this land.

We learned on Second Reading that over the next few years £10 million, £12½ million, £16 million and £18 million is to be spent. I do not see from the figures how the houses are to be built, because costs are rising all the time. If a house which is to be built in the period in which £10 million is to be spent, costs more than has been allowed for, could some money be taken from the next allocation so as to finish a certain estate? We do not want estates to be half planned and half finished because there is not sufficient money. I mention this point because it has happened previously in regard to other Service buildings. My hon. Friend the Member for Sutton and Cheam (Mr. Sharples), when he was at the Ministry, kindly came down to my area to straighten out difficulties such as this. All the work was held up because it was not time for the next allocation of money. If it had not been for my hon. Friend's kind intervention, we should have been left with the buildings half finished.

I hope that the Minister will consider the Amendment sympathetically, in order perhaps to give himself a little less work—I am sure that we should all like to have a little less work—and also because I personally think that my proposal would be far more satisfactory. I know that it is difficult to change things once a decision has been made, but this has been going on for only 14 or 15 months and is not too settled in his Department.

I am glad to see the new Parliamentary Secretary in his place. I started my speech by congratulating him on his new appointment and saying that I remembered that when he was in Opposition he asked some quite pertinent Parliamentary Questions about the changeover. Perhaps he will be sympathetic to my case today. Perhaps he will have some influence on his right hon. Friend. I foresee that with so many Ministries charged with this there will be a time lag. I suggest that the right hon. Gentleman, with all his manifold responsibilities in much grander work, would be wise to get rid of this small section of his work and give it to people who are in direct contact with their own needs. This would be a far more satisfactory procedure.

Mr. Simon Wingfield Digby (Dorset, West)

I congratulate the new Parliamentary Secretary, who has not had very long to study this question. I, too, remember the Questions he asked in the last Parliament. I thought that they were well-informed. I certainly welcome him to his new Department, but it is not on account of the fact that he has come there that I raise this issue.

I agree with my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) that the Department has plenty enough to do without this. I believe that there is a strong case for looking at the matter again. The works services were removed from the Service Departments and given to the Ministry of Works, now the Ministry of Public Building and Works, before this great plan for the integration of the defence services had got very far. Now that it has gone a good deal further, I believe that the time has come to reconsider the matter.

During the last day or two we have had the Statement on the Defence Estimates, 1965, paragraph 41 of which shows what claims are made for the integration of the Services and their support into a single building. At this stage it should be remembered that even the Ministry of Aviation has been put under the same single roof, presumably because it is believed that there should be co-ordination under one roof for all the requirements of the Services.

Paragraph 41 begins in this way: The reorganisation of the Defence Departments into a unified Ministry of Defence has been carried through successfully. Responsibility for the main aspects of defence policy, namely plans and operations, the defence programme and budget and the research and development programme, is now concentrated within the new Department. Paragraph 42 says this: Unified control of policy and management has made it possible to consider new initiatives for the rationalisation of Services' administration both in the Ministry of Defence and in the field. The aim is the most efficient organisation for the support of the Services in peace and war in the most economical way. I do not think any of us would quarrel with that. … Any changes in the pattern of the support organisation must take full account of the differences in the need and circumstances or the Services. All this makes one wonder, if it is true that the Ministry of Aviation and the three Service Ministries must be in one building so that there can be centralised control, whether it is any longer wise to keep the works responsibilities outside it. It must be an extra anxiety for the Minister and his officials. He must be having a build-up at this moment in staff in new areas.

When I was at the Admiralty, in certain cases of outlying Admiralty establishments we used the Ministry of Works as agents to acquire certain buildings. We did not find this an altogether happy arrangement, with an extra Department to work through. I do not want to cast any aspersions on the Ministry of Public Building and Works, but I do say that we did not find it a very satisfactory arrangement, any more than we found having the control of the Admiralty building itself as a headquarters under the Ministry of Works to be a very satisfactory arrangement.

This is not a one-sided argument. I recognise that there is something to be said on either side. However, I believe that in this connection there are three limitations to the Ministry of Public Building and Works. First, it is a predominantly civilian organisation without any Service slant, and it would be very difficult to make a new departure and give it a Service slant. Secondly, I do not believe that there is an analogy between most of the work which the Ministry does and the work of the Service Departments. There is no real analogy between building Government offices and building barracks, or between building embassies and building airfields, or between caring for historic buildings and caring for dockyard shops, which are immense things, or jetties in a dockyard. There are limitations to the work that can be performed.

The passage I read from the White Paper talked about the organisation of defence "in peace and war". Though we very much hope that there will not be another war, we must not overlook the fact that there might be one, even if it is a small one. This is what the defence services are for. I do not believe that the Ministry of Public Building and Works organisation, with its ramification of officials over the country and over the world, would be as adaptable to war as Departments which came under the Services.

I am not advocating a return to three separate Works Departments for the Services. I am advocating a unified service Works department which, in effect, would probably have very much the same personnel as have already been transferred to the Ministry. It would have its headquarters at the same place as the three Services and the Ministry of Aviation.

I must concede at once that there are, or certainly should be, advantages for the Ministry of Public Building and Works over the same work done under the auspices of the Service organisations. I believe that the Ministry of Public Building and Works is very much better off for architects. I believe that it has some good architects. These were lacking in the Service Ministries. I know that there has always been a lot of worry about the design of married quarters in particular and, to a lesser extent, of other things.

There was a practice—for instance, when the new buildings were erected at Dartmouth—to call in an outside architect. So the Service Departments would remain free to call in outside architects. However, I imagine that the Ministry of Public Building and Works has an advantage in the design field.

8.0 p.m.

The Ministry of Public Building and Works is a large-scale enterprise. It is doing things in a big way throughout the country and, presumably, can get uniform designs and long runs even for barrack buildings, although Service practice differs considerably. I recognise that this is an important factor, the Ministry is used to dealing with big contractors, although I do not suggest that the service Departments have not had experience of this. The Ministry, however, must have had a great deal more. It is, of course, difficult to get the right sites, whether in Devonport, Portsmouth, or the London area. But I understand that under present arrangements the sites are obtained by the Lands Department of the Ministry of Defence and, therefore, two operations, one by that Department and the other by the right hon. Gentleman's Ministry are involved, instead of one.

I do not know how far direct labour is being employed. I should be grateful for information on this point. I know that it was the practice of the Service Departments, in their day, to employ direct labour and that was costed against contractors' work with no very satisfactory result in the long run. It may be, however, that the Ministry of Public Building and Works has the practice of direct labour better taped than the Service Departments have had it in the past.

It is suggested that there is an advantage in that Ministry in the matter of design. Have we got down to a really good design for married quarters in each of the categories for senior officers, junior officers, and ratings? This has always been difficult. It must not be one design. Some of these married quarters are built in blocks of up to 1,000, and I can imagine nothing more horrible than 500 or more houses all exactly alike. I can understand why many people would not wish to live in them. I should like to know what progress has been made in designing married quarters. I did not like many of those I saw put up for the Admiralty. I cannot help feeling that, sooner or later, this work will go back to the Ministry of Defence, but in the meantime there is a danger that there will be a certain amount of duplication and a lack of co-ordination. The Ministry of Public Building and Works has a tremendous job to do in other respects and in that sense it would not miss this work if it were transferred elsewhere.

Sir Eric Errington (Aldershot)

I should like to congratulate the Parliamentary Secretary on his appointment. I believe that he had a great deal of interest, as I had, in the collapse of one of our buildings in Aldershot. I hope that the hon. Gentleman will consider that one of his tasks in the future is to make sure that that kind of thing does not happen again. I should also like to thank the Minister for an interesting and helpful letter which I have received in connection with matters which I raised on Second Reading.

I am unhappy that the building of married quarters is not proceeding alongside the erection of other buildings, such as barracks and messes. I see that according to the Defence White Paper four unit barracks will be completed. The building of these barracks has been going ahead fairly quickly and I cannot see why the building of married quarters cannot proceed at the same time. I am informed, and no doubt I shall be corrected if I am wrong, that the barracks are up to time as a result of using industrialised building methods, which means that by the use of concrete blocks these buildings can be erected very quickly.

The argument in the Amendment is that this is not the case with married quarters. I have aesthetic ideas and I confess that neither the barracks nor the married quarters which are being built fulfil them, but if the barracks are being erected I see no reason why the married quarters should not be built at the same time by the same contractors using the same methods. I understand that the programme of building married quarters is behindhand. I do not know what the cost situation is—

The Deputy-Chairman

Order. The hon. Gentleman should relate this to the Amendment before us.

Sir E. Errington

I am relating it, in that my view is that this building is not being done in the most economical way as a result of the fact that the Ministry of Public Building and Works is dealing with the matter. If that is not in order, no doubt I shall be told.

I am disturbed about what my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) has said about the rate at which the married quarters are being built. Unless a considerable drive is put into this work by the Ministry, someone else ought to build them. Why are they so much behindhand when the barracks are more or less up to date? The two should go together. I would imagine that there would be a substantial saving on costs if that were done. Industrialised building is not beautiful, but it is speedy, and it is speed that is wanted. As my hon. Friend has said, great difficulties are being experienced over re-engagement because houses are not available for Service men.

It means that someone coming back to this country from abroad has nowhere to go. We must have the houses, and it is not unreasonable to say that if the Ministry of Public Building and Works cannot produce the houses at the same time as it is producing the barracks it is falling down on the job.

Mr. Anthony Kershaw (Stroud)

I agree that the Ministry of Public Building and Works is, under the reorganisation, better adapted to carry out the plans for building for the Forces than, perhaps, it has been in the past. Certainly, from the point of view of economy and special organisation, one supposes that a central organisation, as the Ministry is, would be better able to meet the needs of the Services in many ways. There is, however, one point which I hope that the right hon. Gentleman and his successors will always keep in mind.

It was raised in the first place by my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby), when he asked whether the Ministry was fully adapted to its dual purpose in time of war abroad. In the home country, whatever the conditions, it is the best organisation we have, but my mind goes back to what happened overseas during the last war.

The Administrations of territories organised by us were overrun by the enemy, for example, in Burma, and they were not organised for a period of conflict. The headquarters which the generals were trying to use was, in effect, a miniature war office, and it is almost too laughable to imagine the War Office going to war. It is impossible for an organisation geared entirely to peacetime work to transform itself, at a moment's notice, into the type of organisation which can effectively take over control during a period of crisis and, perhaps, invasion during war.

Any system which has at its heart an instantaneous change on the outbreak of hostilities must be a weak one. One must have one's organisation as one may want to use it at the worst time and make sure that it is running smoothly. If the plans depend upon a sudden change in the type of organisation at a moment of crisis, then it is right to question whether this is the best organisation for the purpose.

The Minister of Public Building and Works (Mr. Charles Pannell)

It seems to me that most of the fire from hon. Gentlemen opposite should be directed against their own Front Bench. This is something I inherited. I am not trying to make a party point about it. As we talk about these things in this context, I remind hon. Members that the Ministry of Public Building and Works is a technocratic Ministry. It is the fact that, about two years ago, all sorts of people all over the world, in the Army, the Royal Air Force and the Navy, people who had served in their Service for a long time, woke up and found that they were employees of this Ministry.

There was a sudden Cabinet decision. I have done a great deal of research in the Library to find out how it came about. I have never fully understood it, and I have not bothered very much about it since, but there were a lot of ragged ends as a result of what was a sudden decision. The merger received a good deal of quite rough treatment in the Estimates Committee, as anyone who has read its proceedings knows.

Feeling at that time was so high that all sorts of people in the Service Departments approached me and my hon. Friend, in our "shadow" capacity, with their discontents. I myself received a great deal of formidable evidence at the time, so I can assure hon. Members that I know what the case is.

Sir E. Errington

We realise that there were unsatisfactory aspects of the change. We do not need to be told that. We want to know what the right hon. Gentleman proposes to do about it now.

8.15 p.m.

Mr. Pannell

The hon. Gentleman made his speech in his own way. He is not a mealy-mouthed sort of Member, and I do not resent that, but he might allow me to make my speech in my own way. I was not replying to him; I was replying to his hon. Friend the Member for Dorset, West (Mr. Wingfield Digby), who had spoken about the merger.

I know that the hon. Gentleman is against the merger. He has a Question down to the Prime Minister about it. Within the narrow compass of the debate on this Amendment, I cannot answer a general question about whether it would be better, as I have put it before, to unscramble scrambled eggs. The merger is a fact. It was accepted by the previous Government. I have tried to impress upon everyone concerned that, after all this time, it would be better that we settled down to try to make the best of it.

The effect of the Amendment would be to continue the present position whereby the loan money is issued to three Ministry of Defence Votes, one for each of the three Services. I do not think that I should answer a lot of questions about this because it does not strictly come within the ambit of the Amendment, and we had a fairly full Second Reading debate. The money is then passed over to three Votes of the Ministry of Public Building and Works, where it again figures as receipts against the cost of the work.

The intention behind the Amendment may be to offer an opportunity to discuss whether this Ministry should continue to be responsible for building for the Services in so far as discussion of it would be in order. This is what it is all about. With great deference to you, Sir Samuel, I thought that you showed latitude in allowing a good deal of the remarks which were made, but it is not necessarily up to me to take on the responsibility of replying outside the bounds of the debate.

Perhaps I may say that, had we known that the Ministry of Defence would become an integrated Ministry as it is now, and had I been looking at the question at the time, as a Minister, I might very well have come down in favour of a Ministry of Defence Works Department. But this is no longer open. I have inherited something else. I do not want to say anything about relationships between different Departments, and there does not seem to be any possibility of alteration now. We have gone beyond that. A lot of money has been spent and there has been a great deal of reorganisation. If I may say so, there has been a great deal of good British compromise and British common sense.

The hon. Lady the Member for Plymouth, Devonport (Dame Joan Vickers), as champion of the Navy, is not really in a very good position to speak about this because the Navy seems rather to like the Ministry of Public Building and Works more than it did the old Navy Works Department. She may have spoken to people who were disadvantaged under the merger—I have had a great many such people come to me—but I think that, generally speaking, the Navy rather likes the broad idea of what is now being done for it. The hon. Lady will appreciate that, since I have held my present office, there has not been a week-end when I have not gone to some region covered by my Ministry to try to see people on the spot.

I think that I must leave the reply to the hon. Member for Dorset, West as one to come from the Prime Minister. It may be, however, that the intention behind the Amendment is simply to ensure that the situation is left open and that any possibility of transfer is not frustrated by the terms of the Bill. It is true that we could carry on as we are now, with the money payable to Ministry of Defence Votes whence it would come to us as appropriations in aid, that is to say receipts, on our Votes. But this is a cumbersome procedure.

Moreover, under the Bill as drafted, we could receive the loan money on a single Ministry of Public Building and Works Vote. This would have the advantage that funds, with Treasury agreement, could be switched from one Service to another in the course of a year if, for example, a particular programme were going more slowly and another more quickly than expected. Such flexibility is not possible under the present arrangements. Bearing in mind the present set-up, we consider it preferable that our needs should be met by putting the loan provision on a Vote of the spending Department.

Moreover, if there was a case of change of responsibility, a technical matter of this sort would be no bar. The same sort of problem was solved at the time of the merger and could be solved in reverse. How it was done would depend on what else had to be done. If a transfer of functions order was necessary, that could be the vehicle. However, it seems unnecessary to discuss details of what might be done in a hypothetical situation which is not likely to arise.

If the Amendment were carried, the Report stage of the Bill would have to be deferred, since consequential Amendments would be needed. We should have to delete, in Part I of the Schedule, paragraph 1(c) and 1(d) and it would also be necessary to make consequential Amendments to Part II.

I would like now to turn to one or two points which were not perhaps strictly within order, but which were put by hon. Members seeking information. I have already pointed out to the hon. Member for Dorset, West that it would not be right to take the whole business of the merger within the ambit of this Bill. We do not employ direct labour on building married quarters. We employ direct labour on some new work for the Navy Department, and on maintenance generally, about on the same scale as before the merger.

The hon. Member for Aldershot (Sir E. Errington) raised the question whether we are behind schedule in building new married quarters in the Aldershot area, where traditional methods are being used. Because of the general labour shortage, we shall, in future, build a large proportion of married quarters in the area by industrialised methods. The quarters now being built there were designed a few years ago.

Sir E. Errington

The right hon. Gentleman said that the Ministry was behindhand because of the shortage of labour. Is there a distinction between the labour used for barracks and the labour used for married quarters?

Mr. Pannell

The distinction the hon. Gentleman wants is surely the distinction between the labour employed on traditional methods and the labour employed on industrialised methods. There, of course, there is a distinction. In industrialised building, there is a far higher proportion of unskilled and semiskilled men. It requires a different sort of labour force.

Sir E. Errington

I was under the impression that labour used for the barracks was available. I was inquiring whether it was the sort of labour that could be used for married quarters. It seems to me that, in some way or another, the two things should be worked together even if it means building industrialised married quarters.

Mr. Pannell

I can only assume that I did not make myself clear. The point is that the married quarters being built now were designed a few years ago and are, therefore, traditional. More quarters using industrialised building methods are being designed now—part of the building process is design. I was trying to point out that a different form of labour and a different content of labour is required for industrialised building.

The hon. Lady the Member for Devonport asked about what happens to married quarters eventually. We have a liaison with the Ministry of Housing and Local Government to ensure that the location and standard of married quarters makes them suitable for local authority purposes. They can go to local authorities afterwards. There is plenty of consultation in this respect. We build houses where the Defence Department asks us to do so. We do not put them up of our own volition. The Defence Department owns the land on which the houses are built. There has been no difficulty in disposing of surplus houses, but there have been very few.

I was asked about married quarters for persons employed in connection with the Armed forces. About 400 quarters have been allocated to civilian employees, such as firemen and key maintenance staff, whose duties make it essential for them to be housed on the spot. The allocation of quarters is a matter for the Defence Department.

Mr. Wingfield Digby

The right hon. Gentleman mentioned progress in design of married quarters and I should be grateful if he would tell us more.

Mr. Pannell

It is going on all the time. I am quite prepared to write to to the hon. Gentleman on that point. However, for now, I dealt with it partly when I referred to the building at Aldershot and explained that the married quarters being built there were designed some years ago.

Sir E. Errington

Does the right hon. Gentleman expect to overtake the lag in the building of married quarters during the coming year?

Mr. Pannell

Yes. I believe that there will be a considerable break-through in building this year, and I have always expressed the view that Service men should be included in the top priority.

Mr. Kershaw

Would the right hon. Gentleman deal with the problem of whether his Ministry is fully geared to operating under extraordinary conditions, especially abroad? What system of liaison is there? Are there plans for handing over to a military commander of a theatre or something of that kind? Is there any organisation between the Defence Department and the Ministry to cope with that sort of situation?

8.30 p.m.

Mr. Richard Sharples (Sutton and Cheam)

I am sure that my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) realises that we would not be able to support her. She and I have discussed this matter very often in the past.

I was a little disappointed by the explanation given by the Minister for maintaining the status quo. He will know quite well that one of the main considerations uppermost in the minds of those who made the change was not so much the question of building for the Services, but how the whole programme of building for the Services in the United Kingdom could be co-ordinated with the construction which was going on in other projects inside the United Kingdom. That was the main purpose. The right hon. Gentleman gave the impression that if the Ministry of Defence had been in being when his Ministry took over responsibility, it might equally well have gone the other way.

Mr. Pannell

What I was saying was that if it had been known that the Ministry of Defence was to come into being as an integrated Ministry, we could have considered whether it would have been better to have had a Ministry of Defence Works Department. That is still the view held in certain quarters. I did not go into detail about this, because I thought that this was not a suitable opportunity, but if there is to be a full-scale debate on the subject, I could willingly deploy all the arguments. I do not think that there is anything between us on this issue.

Mr. Sharples

I am glad to hear that and I am very reassured by what the right hon. Gentleman has said.

I hope that the right hon. Gentleman will take the opportunity to refute a story which is going about. It is that there is to be a change in the basis upon which construction for the Services is done. It is now done as an allied service and not as an agency. I hope that the right hon. Gentleman will be able to assure us that there is no question of a change, so that the Ministry will be able, through the direct contracts which it places, to ensure that modern methods are used and will be able to supervise the contracts all the way through and, what is much more important, be able to see that building for the Services is co-ordinated into the remaining building programme of the United Kingdom.

Mr. Pannell

I have heard the same sort of story although people tend to approach the Opposition about these things. This idea has come up from time to time. I can give the categorical assurance that I have heard nothing of this from the Minister of Defence. The hon. Gentleman will remember that I was recently in some trouble with one of the trade unions and that I tried to say that this matter would not be settled by any trade union agitation and that, if it had to be settled, it would be a political decision. Of course, I understand that there is still a hangover of people who had positions in the old three Service Departments and who probably still yearn for the days of yesteryear. That is probably how the story has arisen. I have given the answer.

Amendment negatived.

Mr. James Ramsden (Harrogate)

I beg to move, in page 2, line 14, to leave out subsection (4).

The Amendment is being moved to elicit an explanation which we failed to get from the Government on Second Reading. The Bill makes a change in wording which has stood in previous Statutes. In the parent Act, the Armed Forces (Housing Loans) Act, 1949, dealing with the method of the repayment of these loans, Section 1(3) says: the aggregate of the sums so issued in any financial year shall be repaid into the Exchequer, as mentioned in the next following paragraph, with interest thereon at the appropriate rate … That rate is defined at the end of the subsection as: the rate of interest applicable to a loan made, immediately before the end of that year"— that is, the financial year— out of the Local Loans Fund … In other words, the appropriate rate is defined with reference to the local loans rate. The Government now propose that it should be such as the Treasury may determine. My hon. Friends and I are interested in getting an explanation for the change.

When we asked the question during the Second Reading debate, we were given two, if not three, different and, to some extent, contradictory explanations, The Minister of Public Building and Works said in reply to my hon. Friend the Member for Sutton and Cheam (Mr. Sharples): We borrow money from the Treasury at the same rate as that at which it gets it. That is what we mean by the most favourable rates within the Act. Previously, in reply to my hon. Friend the Member for Stroud (Mr. Kershaw), the right hon. Gentleman had said: The phraseology in this Bill with regard to the rate of interest is just the same as the phraseology in all the Measures of the previous Administration."—[OFFICIAL REPORT, 10th February, 1965; Vol. 706, c. 488, 507.] These two explanations leave room for doubt about the real purpose of the subsection.

We had hoped to have an explanation from the Minister of Public Building and Works. It looks as though we may get one from the Financial Secretary to the Treasury, from which direction the right hon. Gentleman has called up reinforcements. I applaud his wisdom in so doing. This is the kind of deceptively simple-looking point which, as I found to my cost when standing at that Box, is extremely difficult to explain unless one is a party to the law of the Treasury. We look forward to hearing the Financial Secretary's explanation as to why it has been necessary to make this change. I hope that he will be able to allay some suspicions which, perhaps unworthily, have formed in my layman's mind.

Bearing in mind some of the pronouncements on the subject of interest rates made by the Government, it occurred to me that one effect of the amendment to the previous Statute might be that if hon. Members opposite had it in mind to vary the local loans rate downwards in the interest, perhaps, of producing cheaper houses, they wished through the amendment to prevent the rate of repayment for Service loans from being varied downwards and to maintain it as a special rate determined by the Treasury. The effect would be that houses for Service men would be subsidising cheaper houses for the rest of the population.

I hope that this is in unworthy suspicion on my part and that the explanation will turn out to be a great deal simpler. Perhaps the Financial Secretary could tell us what is the local loans rate—I have not the information and it would be of interest to the Committee—and indicate what, if any, differences there are likely to be between the local loans fund rate and the rate for the repayment of these loans as it may be fixed in future by the Treasury.

The Financial Secretary to the Treasury (Mr. Niall MacDermot)

These Amendments have taught me the early lesson that it is not always wise for the Financial Secretary to the Treasury to take a Ways and Means Resolution "on the nod". I was ready with a little, rather boring, speech to explain, if necessary, to the House the reason for this change in the wording relating to the rate of interest at the time when I was asking the House for the Ways and Means Resolution. As, however, nobody seemed to want to hear my little speech, I modestly refrained from making it. The result of that was to provoke, not unnaturally, a number of questions on Second Reading.

Now to the Amendment. To put it shortly, the reason for the change to the present wording, that the rate shall be such as the Treasury may determine instead of "the appropriate rate" as defined in the 1949 Act, is that the definition in the 1949 Act is no longer appropriate.

Before seeking to explain the rather technical reasons for the change, I assure the House that it does not portend any change to less favourable rates. In recent years the rates under the Armed Forces (Housing Loans) Act have been based on the rate at which local authorities have been borrowing on the market, the rate of interest being high at a time when the rates are high. The intention is that the rate in future shall be based on the rate at which the Government themselves can borrow. That was the answer quite correctly given by my right hon. Friend the Minister on Second Reading.

The reason for the change is as follows. At the time of the 1949 Act, the local authorities were the main borrowers from the Government. Therefore, it was natural to think in terms of fixing the rate under the Act in terms of the local loans rate: in other words, the Public Works Loan Board rate. Now, however, there are many borrowers from the Exchequer, including the nationalised industries, and they borrow at rates which are determined by the Treasury. It seems sensible, therefore, that the Armed Forces (Housing Loans) Act rates should be on the same basis.

An additional reason is that there are now two Public Works Loan Board rates. Until 1955, the rate on loans made by the Board was based upon the Exchequer lending rate, but from 1955 until 1st April last the Public Works Loan Board was acting only as a lender of last resort to local authorities; otherwise the local authorities were borrowing on the market. Since 1st April last, however, there have been two types of loans, namely, the quota loans, which are at a lower rate, and the last resort loans, which are at the market rate. As our intention now is to lend at the Exchequer rate, there is no point in seeking to tie the formula to the Public Works Loan Board rate.

The formula which is now used—that the rate shall be such as the Treasury may determine"— is, in effect, the same formula as has been used in a number of recent Acts passed by the previous Government. The first of two examples is the Covent Garden Market Act, in which the wording is slightly different because it is done through the Minister responsible under the Act. It states that the interest shall be paid … at such rates and at such times as he may with the approval of the Treasury, direct". The right hon. Member for Harrogate (Mr. Ramsden) will realise that that means that, in effect, the rate is determined by the Treasury. Under Section 20 of the Transport Act, 1962, there is a similar formula with regard to advances made by the Minister of Transport to various boards.

8.45 p.m.

The right hon. Gentleman asked what were the present rates for local loans. As a result of the increase in the Bank Rate, the higher rate for a 60-year loan is 6⅞ per cent., and the quota rate is 6 per cent. The answers which were given by my right hon. Friend, both of which I confess on the face of it might appear to be a contradiction, were correct, namely, that the proposal under the Bill is that his Ministry shall borrow money from the Treasury at the same rate as that at which the Exchequer gets it, and when my right hon. Friend says that the phraseology used is the same as that in Measures introduced by the previous Administration, he is not referring to previous Armed Forces (Housing Loan) Acts, but these various other Acts which have this formula, and which is common form.

The hon. Gentleman asked more general questions about the review of local authority housing finance which is being conducted by the Minister of Housing and Local Government. The Minister has said that he will consider housing loans in the context of that review, but I think it is only right to point out to the Committee that different considerations apply here, when we are dealing purely with a loan within the framework of the central Government, by the Treasury to a central Department, from those which apply when one is dealing with loans to a local authority.

The rents at which houses will be made available to the Armed Forces—they will be for renting; there is no question of their being sold—will not be influenced in any direct sense by any variations which there may be under this Act if the House passes the Bill. I think that that answers the right hon. Gentleman's questions.

Mr. Wingfield Digby

I am sure that the Committee is grateful for the hon. and learned Gentleman's explanation, but I am afraid that the position is not entirely clear to me. He spoke about the rate at which the Government can borrow, but I did not hear him say what that rate was at the moment.

We know that the P.W.L.B. rate for local authorities for special uses, and up to a limit, has been kept down, and the rest of it has been raised; but during the Second Reading, debate I made the point that about £90 million had been spent under these Acts, and that almost exactly the same amount was still outstanding from the unfortunate Service Departments. It cannot be said that after a lapse of some years the Treasury has had a bad deal out of this. The Treasury has done very well. I believe that the proceeds of this go for the reduction of the National Debt, so it is perhaps a good thing, but I do not think that we can accuse the Treasury of being very generous in this respect, and I would therefore like to hear what is the present rate of Government borrowing, as it is the same as that which they will be passing on through the Ministry of Works to the Service Departments.

Mr. MacDermot

I said that there were two rates for local authorities. The lower rate, which is the quota rate, is 6 per cent., and the higher rate, which follows the rate on the market, is 6⅞ per cent.

Mr. William Clark (Nottingham, South)

I am obliged to the Financial Secretary for what he said, but I was rather hoping that the Minister of Public Building and Works would reply to the debate in view of his remarks during the Second Reading debate. I should like to press the Financial Secretary on a few more points.

My right hon. Friend the Member for Harrogate (Mr. Ramsden) pointed out that in the previous Acts of 1949 and 1953, and, in fact, of 1958, the term "the appropriate rate" was used, and the appropriate rate is based on the local loan rate. The Bill says that the Treasury "may determine" the rate. One thing that worries me is how the Treasury is to determine this.

The Prime Minister said at Stevenage on 16th September, 1964: We shall cheapen the cost of housing by our interest rate policy", and at Swansea on 25th January, 1964, he said that if we had to use short-term rates to staunch any flow of short-term capital so as to safeguard our sterling area reserves … we should take special care by the use of the two-tier interest-rate structure we have proposed to ensure that local authorities get capital for housing, at rates which represent the power of the Government to borrow. This is what worries me. If the Treasury is going to determine the rate, how can we be certain that it will determine it at the present rate of 6⅞ per cent.?

I press the Financial Secretary for an answer on this point because at the moment we are enjoying, or suffering from, a Bank Rate of 7 per cent. I do not want to get out of order, but it is fair to say that that Bank Rate has been brought about by the action of the present Government in having painted too black a picture of the economy. If we are talking about interest rates we must remember that a two-tier system would be extremely damaging to our economy if it were to be extended. The Financial Secretary says that the borrowing rate is 6⅞ per cent. I would not mind it, but the interest rate does not look as if it will come down in the immediate future. The London County Council has recently borrowed £50 million and is paying at a rate of 6¾ per cent. Irrespective of what happens to the Bank Rate the London County Council will repay at 6¾ per cent. for the next 50 years.

What has been the appropriate rate in the previous Measures mentioned by the hon. and learned Gentleman? In 1949 the local loans rate was 3 per cent. In 1953, under the Conservative Government, the rate went up to 4 per cent. In 1958 it was 6¼ per cent. These were the rates that the Treasury had to charge for housing under those Measures. Today it is 6⅞ per cent.

This Bill will cost the taxpayer many millions of pounds. I accept the integrity of the Financial Secretary when he says that the Treasury will borrow at this rate, and lend, under the Bill, at the same rate, but there is nothing in the Bill which says so. If that is the Government's intention why not say so in the Bill? Why leave it to the Treasury to determine? Let us suppose that we have a two-tier system of interest rates and that the Government borrow at 6⅞ per cent. and lend to the Army at, say, 5 per cent. Somebody must pay the difference of 1⅞ per cent. Who will pay? The unfortunate taxpayer.

I have the relevant figures for the same years in respect of the Army Acts. In 1949 the taxpayer was subsidising local authorities to the extent of £71 million. We could have a system under which a lower rate was imposed under the Bill, and that would cost the taxpayer even more money. As I have said, in 1949, when the Labour Government introduced the first Measure of the series, the cost of local authority subsidisation was £71 million. In 1953 it was £91 million; in 1958 it was £116 million, and in 1963 it was £137 million. Although the question of local authority borrowing does not necessarily come within the ambit of the Bill it is right to point out the danger of having subsidised rates which are not shown clearly in the Bill.

The Financial Secretary has said that the Treasury will borrow at this rate and lend at the same rate. That being the case, why not say so in the Bill? The Amendment is justified, in that it draws attention to this matter. Why should the Treasury determine the rate? Does not the Treasury control our economic destiny? You would probably rule me out of order, Sir Samuel, if I continued with that argument, for the next Amendment deals with it. But this is something which we must think about when we are considering this Amendment.

I am certain that the Committee, indeed the whole country, and hon. and right hon. Members opposite, will agree that a sound economy must be based on the true cost of money. If we borrow money and propose to do something with it, we can lend only at the same rate at which we borrowed. If the money is lent at a lower rate someone would have to pay the difference, and unfortunately that someone would be the taxpayer. I accept the explanation of the Financial Secretary of the remarks made by the Minister, but I think that the Minister should look again at what he said during the Second Reading debate in answer to my hon. Friend the Member for Stroud (Mr. Kershaw). He said that the phraseology in the Bill was exactly the same as before.

With respect, so far as the appropriate rate in this Bill is concerned—I accept that the Financial Secretary spoke of transport legislation, but we are talking about housing for the Army—I think that the Minister might have withdrawn his remark. He said: Therefore, this imputation merely betokens a degree of ignorance on the part of the hon. Gentleman, and hardly deserves an answer."—[OFFICIAL REPORT, 10th February, 1965; Vol. 706, c. 488.] I do not think this showed ignorance on the part of my hon. Friend, it is a perfectly valid point. The Financial Secretary admitted to the Committee, and the Minister said: I do not think there is much in the last point. The hon. Gentleman is probably on a better point about interest rates."—[OFFICIAL REPORT, 10th February, 1965; Vol. 706, c. 488.] That was exactly the same point about which my hon. Friend had been accused of being in ignorance.

If the Treasury is to determine the rate and if the rate is to be that at which the Government borrow money, without there being any intention of having a subsidy, I wish to ask the Financial Secretary why that is not written into the Bill.

Mr. MacDermot

I found the least convincing part of the hon. Gentleman's contributions in his first sentence when he said that the Committee listens with pleasure to the Financial Secretary. It is a somewhat recherché pleasure which I do not think that many of his hon. Friends share with him but, whatever the pleasure, I am afraid that I have not succeeded in making the matter clear to the hon. Gentleman. There is still confusion in his mind.

He referred to the speech made at Swansea by my right hon. Friend the Prime Minister about a two-tier fixed rate system. We have had a two-tier fixed rate system which was introduced by the last Administration in relation to local government—the quota rate and the last resort rate. We made clear that if it was necessary—the Prime Minister made it clear in his Swansea speech—to raise the Bank Rate in the kind of situation we have recently experienced, an effort would be made to protect local authorities by this system from the impact of that rate increase, and that was done. That is why the quota rate has been held at the figure which I gave the Committee, namely, 6 per cent. With a higher Bank Rate, at the moment the current borrowing rate of the Exchequer for a 60-year loan is 6½ per cent., so if the loan were made under present conditions, the prevailing rate would be 6½ per cent. There is no intention to subsidise loans in any way under this Bill.

The hon. Gentleman asked why that is not written into the Bill. The answer is that it is unnecessary to do so. This is a formula which is adopted, and which was adopted by the previous Administration, when the intention is to borrow at the Government's borrowing rate and fix rates basically at a rate of interest matching the Exchequer rate of borrowing.

9.0 p.m.

The hon. Gentleman made some provocative remarks about the increase in the Bank Rate. It is quite true that the Bank Rate was increased by this Government. It was increased because of the situation which we found on taking office. The usual criticism which has been made against us in relation to this is that we did not raise it earlier than we did. I do not know whether the hon. Member thinks we ought to have raised it later or not, but there is no doubt about the cause of it. Let us not argue about these matters. I hope that I have reassured the hon. Gentleman that there is no intention to subsidise. The formula does not involve any question of subsidy and this is the accepted formula for providing for loans which are to be borrowed at the Exchequer borrowing rate.

Sir E. Errington

Are we to understand from that that the rate to be charged in connection with these loans will be the same as the rate which will be charged to municipalities for their housing programmes?

Mr. MacDermot

Not necessarily, because, as I have explained, there are two rates for a local authority, the lower of which has been set at 6 per cent., so the local authorities are getting the benefit of loans at 6 per cent. in this temporary situation of the high Bank Rate, but, normally speaking, the lower rate is the Exchequer borrowing rate. At the moment that is artificially, or temporarily, raised to 6½ per cent. At this moment if a loan were to be made, it would be made at 6½ per cent. As soon as conditions allow the Bank Rate to be reduced, that rate would lower automatically as a result.

Amendment negatived.

Mr. Kershaw

I beg to move, in page 2, line 15, to leave out "Treasury" and to insert: Department of Economic Affairs. I do so in order to find out what is the intention of the Government after the creation of this new Ministry. There are, after all, two Ministries now in charge of our financial affairs and they are not equal Ministries; one is superior to the other. This is inherent in the organisation. Also, it is clear that a planning Ministry has certain built-in superiorities to an executive Ministry such as the Treasury. It is clear that the Department of Economic Affairs has and must have complete freedom and the overriding influence in determining what the rate of interest should be. Therefore, I put this Amendment down in order to find out why the superior Ministry has not been given the authority which one would expect it to have and why the old formula has been used.

Has it been used merely because it is the old formula, or is it for some reason which escapes me at the moment? It was the Treasury and not the Department of Economic Affairs which in the past took the important decisions about rate of interest. It would be unnecessary to expand that. The point is a short one and I should like some elucidation.

Depending on what the rate of interest is, the Financial Secretary said that there is no question of disposing of any of these houses. Of course, that is wrong and ought not to be accepted by the Committee. There is sometimes an occasion for disposing of them. They are sold. I have a letter which the right hon. Gentleman the Minister of Public Building and Works kindly sent me, in which he says that occasionally they are sold. What effect will the rate of interest have on the price? How is the price to be calculated? Will it be based on a rate of interest, on the local value of houses, or the ability to pay?

The Deputy-Chairman

Order. I do not think that this arises on the Amendment.

Mr. Nigel Birch (Flint, West)

I have returned to the House at great trouble and expense to speak on this Amendment because it has very considerable constitutional interest. The Chairman of Ways and Means, in his infinite wisdom, has selected an Amendment which implies that there is more than one Minister responsible for interest rates in this country. My hon. Friend the Member for Stroud (Mr. Kershaw) said that the Department of Economic Affairs was the top dog. I do not know. It would be most interesting to hear the views of the Treasury Bench upon this. I understood that there was this great row and that they were all the same; they jugged down together and the fellow who had the loudest voice won.

But it is true to say that, as the Ministries are set up, with the actual personalities there, the back end of the pantomime horse is the Chancellor of the Exchequer and the Secretary of State for Economic Affairs is the front end; and, as the Chancellor of the Exchequer is a very light weight indeed, he is being spun around all over the place. That is one reason why our financial affairs are in such a frightful mess.

I should like to hear a firm statement from the Treasury Bench that the Secretary of State for Economic Affairs has nothing whatever to do with interest rates and never will have—and I think that that arises on this Amendment.

Mr. MacDermot

I am delighted to notice the enthusiasm of the hon. Member for Stroud (Mr. Kershaw) for the formation of the new Department of Economic Affairs. So enthusiastic is he that he wants to transfer additional functions to it.

But I must advise the House that this Amendment should be resisted for the very simple reason that rates of interest on Government loans fall within the sphere of responsibility of the Treasury. I hope that that will reassure the right hon. Member for Flint, West (Mr. Birch). We all listened to him with the greatest pleasure on this side of the Committee. Irrespective of whether we always appreciate his argument, his manner of speaking, even when he comes post haste and at great expense to the House, remains enjoyable to listen to.

But we remain the Department responsible for the management of the Consolidated Fund, and it is not the duty of the Department of Economic Affairs. For that reason, I must advise the Committee to resist the Amendment.

Amendment negatived.

Question proposed, That the Clause stand part of the Bill.

Mr. Ramsden

I take this opportunity to try to get from the Minister some answers to questions which I and my hon. Friends asked him on Second Reading and which he was not then able to answer to our satisfaction. The first question which he was asked and to which his answer was unsatisfactory, in my view and that of my hon. Friends, concerned the period of time provided in the Bill. Is the three-year extension of the loan long enough? I hope that he will elaborate today on what he said on Second Reading and either give us a more satisfactory answer or some indication of the Government's intention to alter this period.

We need to be given this reassurance because, as my hon. Friend the Member for Sutton and Cheam (Mr. Sharples) said on Second Reading, all the houses in the programme referred to by the then Parliamentary Secretary were already in the pipeline at the time of the change of Government. In passing, may I express regret at the translation of the hon. Lady the Parliamentary Secretary, while welcoming to his new post the hon. Member for Bishop Auckland (Mr. Boyden)?

I am interested in looking beyond that programme because we are not so much concerned with what may be achieved as a result of a programme determined by us when we were in office. We are satisfied that that was a good programme and that it should be within the scope of the right hon. Gentleman's Department to complete it. We are more concerned with looking beyond that programme and to finding out what the present Administration intend to do after 1966–67. It will be after this time that the present Government will be dealing with years not covered by the Bill. We want to ensure that a satisfactory rate of building of married quarters will be maintained.

To briefly recapitulate our case on this issue, my hon. Friend the Member for Sutton and Cheam said on Second Reading: Taking the figures which were given by the right hon. Gentleman in reply to a Question, the programme of the previous Government provided for the completion of 3,750 houses in the present financial year; next year the completions again under the programme provided by the previous Government, were to be 4,500; and the year after that 5,400. Yet in 1967–68, that is, the final year of the period covered by the Bill, and the first year when the present Government can have any influence upon the number of completions, there is to be a drop of 300 in those numbers."—[OFFICIAL REPORT, 10th February, 1965; Vol. 706, c. 495.] No answer was given and no contradiction was made from the Front Bench opposite of my hon. Friend's remarks.

I believe that at one point during the debate the right hon. Gentleman said that the precise determination of the figure was still under discussion. I hope that he will be able to give more information today, because he must appreciate our concern to ensure that an adequate rate of building is maintained. On the face of it there is the possibility of a slowing down in the programme.

Sir E. Errington

This is not so much a question of programme as a question of performance. In other words, we really want to know what the Government consider will be the number of buildings completed rather than the number of buildings in any programme.

Mr. Ramsden

I agree with my hon. Friend, but I understand that the figures I quoted represent the number of buildings the right hon. Gentleman expects to complete.

On the face of it, it is somewhat alarming to see that after the three years about which we have been speaking a drop is forecast for the following year in the number of completions. That is why we need some reassurances from the right hon. Gentleman. If I am wrong, and if there is not to be a drop—if the programme is to be maintained at not less than the rate which by then the right hon. Gentleman will have achieved—then the question arises whether the amount of money that he is providing under the programme. The sum of £45 million is provided for by way of loan in the Bill. In the year beginning 5th April, 1965, £16 million is due to be spent, and £18 million is due to be spent the year after, making £34 million in those years for the programme already announced by me last year and confirmed by the hon. Lady the Member for Cannock (Miss Jennie Lee). If in the following year the rate of building is to be no less, the right hon. Gentleman will need another £18 million. That totals £52 million, as against the £45 million provided in the Bill.

9.15 p.m.

This might be put in another way. Referring to the passage on Second Reading when the right hon. Gentleman talked about his success in having achieved a rolling programme over three years, one might say that it is difficult to see how the Bill can provide for a rolling programme three years ahead. I can see that were the proposal to be for a greater sum than the £45 million to be provided it might do so; but within the limits of the present sum I do not see how it can. I should welcome some further reassurance from the Government. Why does not the Bill propose to provide a greater sum of money and why does it not extend over a longer period?

Sir E. Errington

I point out to my right hon. Friend that paragraph 162 of the Statement on the Defence Estimates 1965 makes it extremely complicated and almost impossible to understand: About 1,300 married quarters are expected to be completed in 1964–65 and in 1965–66 it is planned to start construction of a further 1,500. So we are not comparing like with like. It does not matter whether one decides to give the figures of completion or the figures for the commencement of construction. They should be like figures, otherwise I do not see how the comparison can be justified.

Mr. Ramsden

I agree with my hon. Friend. I hope that in his reply the Minister will be able to elucidate this. I had noticed these figures on a quick first reading of the Defence White Paper. I confess that I was somewhat puzzled by them, but I did not introduce them into my argument for the purposes of what I am now saying because I was trying to keep the discussion on the basis of figures given in a Parliamentary answer, on which basis the discussion on Second Reading was conducted.

I want to talk about the true significance of this method of financing the building of married quarters. I asked the right hon. Gentleman about this on Second Reading. He gave this explanation: This method of financing the programme has come to be well understood by the forces. To adopt a different method might cause disquiet. The alternative method of financing out of Votes is equally acceptable now that we have established a procedure whereby the Ministry of Defence, my Department and the Treasury work jointly on a programme in which we always look three years ahead. There is no reason why capital expenditure by the Government should be met by loan rather than out of revenue."—[OFFICIAL REPORT, 10th February, 1965; Vol. 706, c. 503.] I should like that explanation to be carried a little further in relation to some queries I have. There must be some advantage in the money for financing housing programme like this coming by way of loan rather than out of a Vote. I suggested on Second Reading that if the amount of money for a programme such as this is down in black and white in a Statute, when the time comes for discussions on the defence budget—discussions such as the right hon. Gentleman referred to on Second Reading between him and his right hon. Friend the Chancellor of the Exchequer about the size of the programme for, say, 1967–68—the right hon. Gentleman is in a stronger position to resist pressure to cut down on his own programme within the context of a possible reduction of the defence budget if he can point to the House of Commons having approved sums of money of this kind being available to him by way of loan. There must be some good reason, therefore, for the right hon. Gentleman advocating this method of financing.

I should have thought that it was a good thing that the hand of the Minister of Public Building and Works for the time being should be strengthened in this way. One does not have to be a crystal gazer to be clear that in future there will be pressure to cut down the amount of the national resources allocated for defence. Anything therefore that can isolate from such pressure the building of married quarters and similar objectives is to be welcomed.

As I tried to indicate on the last occasion when we debated these matters, such expenditure is not defence expenditure comparable with the provision of guns, tanks and aircraft and should not compete with it. This is real social expenditure, because if these families did not happen to be Service families they would have to be provided with accommodation elsewhere by local authorities or through their own efforts. I am therefore all for the right hon. Gentleman's hand being strengthened by the Bill, but it does not seem to me that the Bill faces up to the question or meets the need.

The right hon. Gentleman said that this is a technical argument, but it is more than that. The Government, having proposed only a three-year term and a sum of money of only £45 million, are paying lip-service to the principle of loan financing by bringing in a Bill of some sort and at the same time dodging what is of real value to the Services in a Bill of this kind by so limiting that period of time and amount of money that the Services will derive little benefit from it. This time-scale and this sum of money is inadequate to the amount of building in prospect. The rest of the money will have to be found from Vote, and to that extent the Services will be denied the attraction of loan financing of which they have had the benefit under past Governments and past statutes.

The right hon. Gentleman was asked last time by my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) and by me about hirings and how they would be affected by the Protection from Eviction Act. I thought that the right hon. Gentleman missed the point of our question, because he replied, quite rightly, that hirings in themselves have nothing to do with this Bill. But the point of our question, which is relevant to the figures, is this. Where the number of married quarters is inadequate to accommodate the Service families entitled, the position can be eased somewhat by approved hirings. Therefore, the availability of such hirings is relevant to the supply of married quarters.

Hirings can become available in or near garrison towns because other Service families make them available when they go overseas, on a tour of duty or for some other reason, and they make them available in these circumstances because they have hitherto always been confident of regaining possession for themselves on their return, with no question of another family remaining in illegal occupation.

Will the Protection from Eviction Act affect the position of the owner of a house which he makes available as a Service hiring? Will it make it more difficult to get such a house back when he needs it for himself? If it will, owners will be less likely to make their houses available for hirings, and this will have an effect on the married quarters situation.

Mr. Wingfield Digby

I return to the question of the amount of money and the time limit of three years. I am glad to see the Deputy Secretary of State and Minister of Defence for the Army in his place. I only wish that a representative of the Treasury were here as well. Once again, no doubt at the behest of the Treasury, a patching job has been done in the Bill. As this form of financing is to go on, it would have been far better to have set it straight ahead for 10 years or so and not to have to come back to the House of Commons for an extension of time and an extension of loan in three years. This would have been better from the point of view of the Services, and I think that it would have been better from the Treasury's point of view if it had agreed to it.

I have no doubt that the Ministry of Defence put the point to the Treasury, but, once again, the Treasury has insisted on this kind of hand-to-mouth procedure, which results in the difficulty pointed out on Second Reading, that, as it is so hard to find time to fit this kind of Bill every three years into the legislative programme, towards the end of the period, when money is running out, anxiety is caused in the Service Departments. But I quite realise that nothing can be done about it at this late stage.

I asked a question earlier about design, and I wonder whether the right hon. Gentleman will agree to put in the Library the designs for some of the new married quarters to be put up with the money we are voting so that we may look at them and see the kind of thing which is proposed.

The Deputy-Chairman

Order. There is nothing about designs in the Clause.

Mr. Digby

With respect, Sir Samuel, we are now talking about money which is to be spent over the next three years in designing the married quarters which are to be built.

The Deputy-Chairman

All we are deciding is the amount of money.

Mr. Digby

I thought that the amount of money would be sufficient to have designs of good quality.

The question of sites is, I am sure, in order because the money cannot be spent at all if there are not the sites on which to put the houses. This is quite an ambitious programme and it would be difficult to find sites near the centre of places like Devonport and Plymouth and some of the Army centres. This argument does not, perhaps, apply to the Royal Air Force to the same extent, because most airfields are in fairly isolated places. I should like some indication as to whether the land is available so that the programme we are talking about will not be held up. Obviously, it cannot be fulfilled if the land does not become available in time for building to start.

Secondly, I want to know what size these sites are to be.

9.30 p.m.

The Deputy-Chairman

Order. There is nothing about the size of sites in this Clause.

Mr. Digby

With respect, Sir Samuel, we are talking about the married quarters programme on this Clause, in which we are authorising expenditure of £45 million. Surely the design of married quarters is relevant.

The Deputy-Chairman

All we are discussing is whether the amount should be varied and the period extended.

Mr. Digby

On Second Reading, we were not told very much about how this programme is to be carried out and I hope that the Government, at some stage in our consideration of the Bill, by which we are voting £45 million of the taxpayers' money, will explain. We are entitled to know whether the land on which to build these quarters is to be available.

Sir E. Errington

I hope that I shall be in order. I shall endeavour to be. In the Statement on the Defence Estimates, 1965, emphasis is laid in paragraph 39 on the functional costing system now being studied. I wonder whether the building of these married quarters will be subjected to that. It seems from the Bill that three years ahead is about as far as is being considered. If that is the position I shall have to limit myself to that period. I ask the Minister if he will clear this up, because the heading "Service Works Programme" in the Statement is quite obscure.

Mr. Pannell

We are not discussing that.

Sir E. Errington

It is part of the programme of married quarters and I want to know how many married quarters the right hon. Gentleman proposes to build with this money.

The Deputy-Chairman

Order. I do not think that that arises on this Clause.

Sir E. Errington

With great respect, Sir Samuel, one is entitled to ask what is to be done with the money that is being loaned.

The Deputy-Chairman

The only question in the Clause concerns whether we extend the period of the Bill for three years and the amount of the loan.

Sir E. Errington

Surely, if there is to be a period of three years under the Clause, one can ask what is to be done with the money during that period and still keep in order.

The Deputy-Chairman

I understood that the hon. Gentleman was discussing design and the plans on which these buildings are to be carried out.

Sir E. Errington

With respect, Sir Samuel, it is not a question of how the buildings are to be carried out, but of how many buildings are to be built. None may be built. That would be carrying it to a ridiculous extent, but it is clear that one can surely talk about the number proposed and ask the right hon. Gentleman to explain the programme, including commencement and completion. I do not understand your ruling against me on that.

The Deputy-Chairman

The hon. Gentleman can only advance arguments as to why this period should not be extended and the loan should not be increased.

Mr. Kershaw

The White Paper on Defence, which we have had in the last two days, contains a number of paragraphs setting out various methods by which costs in connection with the Services are to be controlled. It is astonish- ing if we are to find that the right hon. Gentleman has no idea, or will not say, how many houses he is to build.

Mr. Pannell

On a point of order. It is not legitimate for the hon. Member for Stroud (Mr. Kershaw) to cast aspersions that I will not say something when I am sitting merely under the Ruling of the Chair. His complaints must be against you, Sir Samuel, and not me. I will try to reply to anything which you rule to be in order.

Mr. Kershaw

I was a little apprehensive about what information the right hon. Gentleman was about to give, because he has given a lot of information from a sitting position, not all of which I could hear. I understood that he intended not to say anything about the questions advanced by my hon. Friends. I hope that I am not doing the right hon. Gentleman a wrong and that he has the answers ready and that I am barking up the wrong tree.

The new Statement on Defence contains a great deal about the methods for the control of expenditure which are to be adopted in future. We would like to know to what extent this recent document has altered the right hon. Gentleman's thinking about the expenditure of the £45 million and how many married quarters he expects to be able to produce and how many he would have produced before he knew about the White Paper and how far he is to adopt the methods adumbrated in the White Paper and whether, having read the White Paper with the profit which, I hope, we have all gained from it, he expects to be able to build more with the £45 million and to what extent his thinking, if it is such, has been altered by the White Paper.

The right hon. Gentleman has had time to read it and we want to know to what extent these new methods of cost effectiveness are to be employed in his Ministry and to what extent they will provide more married quarters for the £45 million in the three years. The questions of my hon. Friend the Member for Aldershot (Sir E. Errington) were pertinent to this issue and I hope that the right hon. Gentleman, with all his documents before him, will be able to give us the answers.

Mr. Pannell

The right hon. Member for Harrogate (Mr. Ramsden) must not forget that he was Secretary of State for War and must not assume that I do not know what went on in his Department when he was there. If he had still been there, I doubt whether we would have had any Bill of this kind, for the whole thing would have been financed, generally speaking, out of revenue. These things do not suddenly stop when there is a new Administration.

Mr. Wingfield Digby

On a point of order. Is it in order to say what would have happened if there had been another Government when you ruled me out of order when I spoke about married quarters, Sir Samuel?

Mr. Pannell

I am replying to an argument which is based on whether we should have a three-year or five-year period, or finance out of revenue. If I was not in order on that, there would be no point in my replying.

The Deputy-Chairman

The right hon. Gentleman is correct. He is replying to the arguments limited to the two issues of whether there should be a three-year programme and to what extent the loan should be increased.

Mr. Ramsden

Perhaps I can assist the right hon. Gentleman and make sure that he keeps in order. I do not mind his speculating about what might or might not have happened about the financing of married quarters if my right hon. Friends had remained in Government. He can speculate about that as much as he likes. He has chosen the loan financing method, as I think rightly and sensibly, to provide support for his future programme of married quarters. I accept that. The question which I would ask and which my hon. Friends have asked, and which we have not had answered is whether, having accepted this method, his provision for carrying out the programme is adequate both as to time and to money.

Mr. Pannell

This is almost tedious repetition. When a Member rises to ask a question, one is entitled to ask his bona fides for putting the question. We arc responsible for everything we say here. For instance, when the right hon. Gentleman poses this question it comes rather more significantly from him because he has been Secretary of State for War and has dealt with these con- siderations. In so far as I give him credit for his interest in the Bill, I am fully entitled to criticise his motives for advancing, in opposition, arguments which he never advanced when he was a member of the Government. That is the short point which I am now making.

I do not think that if hon. Members opposite had been in power the Treasury would have decided to go on with this method. Whether the right hon. Gentleman would have prevailed, and brought in a Bill like this, I do not know. But he must not think that our standard has fallen because we have done better than he would have done if he had been on this side.

Mr. William Clark

rose—

Mr. Pannell

I have listened to a great deal this evening, and it is reasonable that—

Mr. Clark

On a point of order. Is is in order for the Minister to put forward an argument about what we on this side might have done had we been in power? Surely that is completely out of order on this Bill?

The Deputy-Chairman

It is not out of order.

Mr. Pannell

If the hon. Gentleman comes to a place like this, he should not be so thin-skinned. I do not intend to be mealy-mouthed. The right hon. Member for Harrogate put the academic argument to me as to how we should finance the building of married quarters. That is what I was dealing with. I do not think that we would have been troubled with a Bill like this had his party been sitting on this side of the Committee.

Let us assume that there was a great recession, or a general slump and a cutback in expenditure. I cannot see that it would matter which financial procedure was used. A cut could be made either way, because the money would still come out of estimates in the normal way. These sums have to be voted every year in any case, and I do not think that they are insulated. I know that the Service Departments believe that they are insulated by the Bill and I take responsibility for it here. I am putting the point forward in good faith. But could have put forward another view. However, the right hon. Gentleman must be satisfied that we are bringing the matter forward in this way.

May I deal with one or two things which have arisen. I am advised that the question of Service tenancies and hiring is strictly out of order on this Clause. I only want to say, perhaps with the indulgence of the Chair, that all Departments tend to be over-generous rather than under-generous about letting people stay on. This is tied up with the—[Interruption.] If we are to have an involved argument, we will be out of order altogether. When I answered the right hon. Gentleman last time I thought that he was referring to Service tenancies and was saying that they would be more protected under the legislation of this Administration than before. However, he is now referring to hiring as between one Service man and another. Am I right?

Mr. Ramsden

The right hon. Gentleman is quite right. I am referring to hiring, but I am not referring to the point about people being able to stay on. This was the mistake which the right hon. Gentleman made last time. The point concerns the difficulty or otherwise for the returning owner of managing to recover possession of his own house from a tenant who may be using it as a hiring. What will be the position of that returning owner under the Protection from Eviction Act? If it will be more difficult than in the past, nobody will let his house and the right hon. Gentleman will have a shortage of hirings.

Mr. Pannell

If the right hon. Gentleman is dealing with another facet of the matter, he will have to direct his question to my right hon. Friend the Minister of Housing and Local Government.

The prime matter about which the right hon. Gentleman asked was the three-year period. I have said what I have to say on this. The right hon. Gentleman has read HANSARD, but if he looks at the bottom of column 503 of the Second Reading debate he will see that I said: What is important is that a firm decision should be taken to build more married quarters and that the forward programme should look beyond the next financial year. I can assure hon. Members that we will take this matter up within the three years, in plenty of time. In this and the next two years £47 million will be spent on building married quarters in the United Kingdom, nearly double the amount spent in the preceding three years. These are the only figures that matter in this argument."—[OFFICIAL REPORT, 10th February, 1965; Vol. 706, c. 503.] 9.45 p.m.

I gave a Written Answer to the right hon. Gentleman on this very point on 8th February, when he asked me how many married quarters will be built for the three Services, respectively, in 1964–65, 1965–66, 1966–67, and 1967–68, in the United Kingdom."—[OFFICIAL REPORT, 8th February, 1965; Vol. 706, c. 27.] The whole lot is there set out, so that the right hon. Gentleman should not be short of knowledge on this point.

Mr. Ramsden

But is enough money being provided for by loan in the Bill to finance the building of all those married quarters?

Mr. Pannell

The answer is "Yes", as far as I know. I have said that it is nearly double the amount spent in the previous three years. If the right hon. Gentleman does not like my referring to his personal antecedents, at least I am entitled to refer to the vital statistics concerning housing.

Sir E. Errington

Will the Minister allow me to mention once again the question of married quarters completed or begun? The figures which are relevant to this differ entirely from what the right hon. Gentleman is saying. I refer to paragraphs 157 to 162.

Mr. Pannell

I should not be entitled to reply to that, or even to deal with an intervention of that sort. I thought that I had dealt with all the points that were raised and were in order. The amount of money that we are speaking of here is the amount provided under the Bill. I thought that the hon. Member was a little confused in his calculation which he added un to £52 million, which included other houses in Great Britain financed from ordinary Votes.

I have tried to answer all the relevant questions and I want to keep in order. This is a generous Bill. Its programme will be carried out over a period of three years instead of five years. It is a rolling programme. The right hon. Gentleman will, I hope, believe that I and my party are equally sensitive to giving priority to the serving man in providing him with the foundation of a good home, whether in married quarters or elsewhere. There is no political business here. We have done the best we can as we see it. We think that we have been generous in our provision and I hope that we can leave it there.

Mr. Kershaw

This will not do. The Minister simply has not understood my Second Reading query, which my right hon. Friend the Member for Harrogate (Mr. Ramsden) has put at least twice again. What does the Minister propose to do about the Service man who is posted abroad—

Mr. Pannell

Excuse me, Sir Samuel, but that is the matter which you have ruled out of order.

Mr. Kershaw

—the Service man who goes abroad, who lets the house which he is occupying, which has been built for him by the Service, to somebody else during the period of his posting.

The Deputy-Chairman

Order. This does not arise on the Clause.

Mr. Kershaw

If it does not arise, Sir Samuel, it has not arisen at a very late stage in our proceedings, because my right hon. Friend has posed the question twice. The Minister answered it by saying that he had not the faintest idea and he asked us to ask the Ministry of Housing and Local Government. It is not good enough, at this late stage of the proceedings, for the Minister to seek protection behind the Chair.

The Deputy-Chairman

It was in order to discuss the effect of the programme laid down in the Clause, but it is not in order to discuss the matter in detail.

Mr. Kershaw

If it affects the programme, Sir Samuel, how can it not be in order? This is important in relation to the extra amount which becomes available under the Bill and to the flexibility of the housing. We know that other legislation is coming forward which may vitally affect the number of houses available. Unfortunately, postings are becoming increasingly—

Mr. Pannell

The hon. Member is still out of order.

Mr. Deputy-Chairman

Order. We cannot discuss postings in this way.

Dame Joan Vickers

This is an important and relevant point.

Mr. Pannell

It is still out of order.

Dame Joan Vickers

The Minister might wish that he had accepted my right hon. Friend's Amendment. Perhaps he would have preferred to get rid of the whole thing and to hand it over to the Ministry of Defence, since it is so complicated. Because of the Protection from Eviction Act, fewer hirings will be available. I have tabled a Question to the Minister of Housing and Local Government on this matter. What we really want to know—

The Deputy-Chairman

Order. The Protection from Eviction Act does not come into the discussion on this Clause.

Dame Joan Vickers

Less accommodation will be available. Will the right hon. Gentleman be able to increase the number of houses to make up for those which will not be available in future? This is the point about which we are worried. Will the programme be sufficiently flexible to make up for the houses which will not be available in the future?

Mr. Pannell

If the hon. Lady reads my winding-up remarks, she will see that the amount of money that we are giving here is nearly double the amount which has been spent in the last three years. I should have thought that that gave her a degree of flexibility. These are the only figures which matter in this argument, and the only figures which it is in order to give.

Sir E. Errington

There are three periods during which this programme of providing married quarters is to be carried out. Is it possible to be told, and am I in order in asking, how many houses will be built? [HON. MEMBERS: "Answer."] It does not look as though I shall get an answer, so I leave it there.

Mr. Kershaw

We had an answer to this question during the Second Reading debate. The then Parliamentary Secretary, who has now been replaced by the hon. Member for Bishop Auckland (Mr. Boyden), whom we all wish to congratulate, intervened in my speech and gave me the answer. If we could adjourn for a short time, perhaps it would be possible for the right hon. Gentleman to look through the debate, find his answer, and give it again.

Mr. Pannell

I have given the figures. They are in HANSARD, and the hon. Gentleman does not gain anything by being gratuitously offensive to me.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Schedule agreed to.

Bill reported, without Amendment; to be read the Third time Tomorrow.