Commons Sitting of 21 February 1967

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  MINISTRY OF POWER

    Fuel Policy
    Mr. Palmerasked the Minister of Power when the revised White Paper on Fuel and Power Policy will be made available to Parliament.
    Mr. Varleyasked the Minister of Power if he will now publish a White Paper setting out the studies he has made and conclusions reached to form the basis of a new fuel policy.
    The Minister of Power (Mr. Richard Marsh): I have nothing to add to the reply I gave to my hon. Friends the Members for Chesterfield (Mr. Varley) and Mansfield (Mr. Concannon) on 24th January.—[Vol. 739, c. 233.]
    Mr. Palmer: Would not my right hon. Friend agree that it is without precedent for information of this importance to be withheld from the House of Commons? Could not he say, therefore, when the White Paper setting out his future fuel policy will be available to the House?
    Mr. Marsh: No, Sir. In fact, the calculations have not been made, and therefore the policy has not been determined. I think that it would be a great pity and a mistake on an issue as big as this to try to rush it. We are carrying out a very comprehensive fuel policy review, and as soon as I have some policy decisions I shall announce them to the House.
    Mr. Varley: Will my right hon. Friend take this opportunity to state categorically that in his study to produce a fuel and energy policy he will not be stampeded by any short-term considera-
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    tions, or any short-term market attractions, and will he take steps to protect the national investment in coal and electricity from nuclear energy and that sort of thing? Will he give this top priority?
    Mr. Marsh: These are the sort of considerations to be taken into account. It is precisely because I do not want to be stampeded by short-term considerations that I wish if possible to develop a comprehensive fuel policy review.
    Mr. Barber: While not wishing to stampede the right hon. Gentleman, may I ask whether he cannot at least give us some idea, even in the most generalised form, about when he will have a policy to present to the House?
    Mr. Marsh: I think that this is a continuing exercise. In the first instance, one hopes to start having something to say around about Easter, but from then on it is a question of how much further we go in producing a really sophisticated model. This is an elaborate exercise, and it is worth doing because the amount of investment in this industry is very high indeed.
    Mr. Palmerasked the Minister of Power if his estimates and proposals for reappraisal of the contributions of coal, nuclear energy, oil and natural gas to the economy of the country have been before his Energy Advisory Council; and what advice he has received.
    Mr. Marsh: I have discussed with the Energy Advisory Council a number of questions related to the fuel policy review, and shall be consulting them again as the review proceeds. Discussions in the Council are, of course, confidential.
    Mr. Palmer: Will my right hon. Friend say something about the widespread feeling that many people are being kept in the dark about the fuel and power policy, particularly the coal and electricity industries?
    Mr. Marsh: May I make the position quite clear? There is not a fuel policy as yet completed in this exercise. It is in the process of being completed. On the second point, the fuel industries are not kept in the dark in this. They are parties to the exercise, and are providing the information.

    National Steel Corporation (Remuneration of Members)
    Mr. Rowlandasked the Minister of Power if he has yet determined the level of remuneration of the members of the board of the National Steel Corporation: and if he will make a statement.
    Mr. Marsh: Not yet, Sir.
    Mr. Rowland: When the right hon. Gentleman reaches his decision in this matter, will he bear in mind that many of his hon. Friends—perhaps not the most vociferous—believe that these salaries should be fixed at a level to attract the best people, rather in the manner of Shell or I.C.I., so that the steel industry will be as well managed as they are?
    Mr. Marsh: I do not hesitate to confirm my hon. Friend's view that it is essential for an industry of this size to attract the very best people. There are, however, other factors to be taken into account, including incomes policy and the salaries structure in the nationalised industries.
    Mr. Barber: Does not the right hon. Gentleman realise that, after saying for months that it is his intention that the National Steel Corporation should be run on strictly commercial lines, it is outrageous that he cannot reach a decision on this basic issue? If the Government dither for weeks on a straightforward issue of this kind, what hope is there that the Government will be able to run the steel industry efficiently?
    Mr. Marsh: There is no question of the Government's dithering on this issue. Salaries will be set for the Corporation. It must be remembered that salaries in outside commercial industries vary very much.
    Mr. Shinwell: Can my right hon. Friend tell me who are the best people? Are we to select them only from a collection of industrial tycoons?
    Mr. Marsh: I would have thought that the word "tycoon" has rather emotive fringes. We want to get into the industry people with the experience and the ability to undertake large-scale industrial management. To be able to do that we must offer them appropriate salaries. The only point at issue between myself and
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    hon. Members opposite is that they fail to recognise that there are wide divergences of salaries in outside industries, and also that we have been able to attract into nationalised industries some first-rate people.
    Mr. Alison: Can the Minister assure us that the best men will be selected, irrespective of their political views and their political utterances?
    Mr. Manuel: As long as they are Tories.
    Mr. Marsh: Everyone agrees that the right men should be selected, but there tend to be different views about the actual people.

    Spray Steel Making
    Mr. Martenasked the Minister of Power what official assistance he is giving to the technique of spray steel making; and if he will make a statement.
    Mr. Ridleyasked the Minister of Power if, in the national interest, he will provide facilities for a pilot spray steel making plant at Millom in Cumberland.
    The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson): I cannot at present add to the reply given to my hon. Friend the Member for Whitehaven (Mr. Symonds) on 14th February.—[Vol. 741, c. 50.]
    Mr. Marten: Nevertheless, will the hon. Gentleman dissociate himself from the utterly ossifying attitude of the Iron and Steel Board in its recent decision to protect traditional steel-making methods from this new break-through of spray steel making put forward by Millom, and recognise that commercial plant for this must be got going quickly if Britain is to maintain her lead in this breakthrough?
    Mr. Freeson: Certainly this is a remarkably good break-through, and every credit is due to the people associated with it, including the British Iron and Steel Research Association, and Millom. I will not follow the adjectival phraseology that we have just had. I assure the hon Gentleman that the Board has not yet reached a decision.
    Mr. Ridley: Is the Minister aware that for the proper commercial development of our affairs it is vital that this company should be allowed to go ahead with this project? Is he further aware that

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    his right hon. Friend's intention to treat the private sector on all fours with the public sector of the steel industry is open to doubt unless, in this vital instance, he is prepared to make certain that Millom is given permission to go ahead with this development?
    Mr. Freeson: It would be quite wrong for me to enter into a discussion on something on which we are awaiting recommendations from the Board.
    Mr. Tinn: Will my hon. Friend assure us that in considering future proposals for the reorganisation of the industry he will bear in mind the possibly revolutionary implications of this process for small and medium-sized plant?
    Mr. Freeson: Yes, Sir.
    Mr. Ridley: Due to the unsatisfactory nature of that Answer, I beg to give notice that I shall raise the matter on the Adjournment at the earliest opportunity.

    Steel Output
    Sir G. Nabarroasked the Minister of Power whether he is aware that steel output for 1967 based on present prospects is 70 per cent. of capacity or 22 million ingot tons compared with 27 million ingot tons in 1965; and, as this represents wasted resources of £70 million approximately in 1967, what steps he is taking to restore the position.
    Mr. Marsh: Steel output has always fluctuated more widely than economic activity generally.
    I am examining with those concerned what measures might be taken to secure a more even utilisation of steel capacity. As Members are aware this problem is not confined to the United Kingdom.
    Sir G. Nabarro: Is it not a fact that since the 1930s the steel industry has never bumped along the bottom at 70 per cent. of its capacity, representing a vast waste of resources? Is the Minister prepared to allow this disgraceful Socialist policy to continue indefinitely?
    Mr. Marsh: I am certainly not prepared to allow the situation which has been with us so far to continue. That is one reason why the Government decided, seeing that the problem could not
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    be solved by others, to nationalise the industry and deal with it ourselves.
    Mr. O'Malley: In order to improve the level of output in the industry and to assist the steel-using industries in export markets, will my right hon. Friend consider giving the steel industry a subsidy for coking coal on lines similar to that operated by the European Iron and Steel Community? If not, what will he do to assist the industry in the export market?
    Mr. Marsh: The point which my hon. Friend raises hopefully is the subject of another Question. I do not think that this would, of itself, solve the question of surplus capacity. It is a European problem.

    Central Electricity Generating Board (Development and Capital Expenditure)
    Mr. Gwilym Robertsasked the Minister of Power if he will give figures for the estimated development and capital expenditure of the Central Electricity Generating Board for the next five years.
    Mr. Freeson: My right hon. Friend's predecessor approved in December, 1965, a programme then expected to require capital expenditure of £2,035 million over the five years 1966–67 to 1970–71. Since then revisions to the programme, which would reduce this total, have been discussed but are not yet settled.
    Mr. Roberts: Could my hon. Friend at least give us some idea of the number of nuclear-powered generating stations which are envisaged between now and 1970 and where they may be located?
    Mr. Freeson: That is another question and would require notice.
    Mr. Alison: Can the hon. Gentleman tell us whether the forward capital plans are governed by the cuts in investment in electricity generating announced in July as a result of the stringency measures or the increase in the 1967–68 Estimates announced as a result of the desire to prevent unemployment?
    Mr. Freeson: As I followed that question, it seems that the hon. Gentleman is asking whether there will be a catching up in any of the marginal cuts which operated earlier this year—
    Mr. Alison: I want clarification on this. We have had an announcement of cuts in electricity investment, in July, and now of an increase to compensate for the drop in private investment.
    Mr. Freeson: The hon. Gentleman is mistaken. There has been no announcement of the programme yet, but we expect to make it very soon.

    Electricity (Primary Fuels)
    Mr. Gwilym Robertsasked the Minister of Power what estimates he has made of the proportion of the different primary fuels which will be used by the electricity supply industry in 1969, 1970 and 1971.
    Mr. Freeson: The proportion will depend in part on decisions which may arise from the current review of fuel policy.
    Mr. Roberts: Would not my hon. Friend agree that these estimates and trends are urgently required if we are to get this revised fuel policy soon?
    Mr. Freeson: Of course they are required urgently, but the urgency is not confined to this industry. As has been said several times already this afternoon, we are undertaking a series of major studies in this and other fields concerning our energy requirements.
    Mr. Barber: Does not the hon. Gentlemen appreciate that his right hon. Friend and he are giving the impression in one Answer after another that they have no idea where they are going? Is it not time that they came to the House and gave a specific date by which they would have a fuel policy? Is it not incredible that we should go on drifting as we apparently are?
    Mr. Freeson: My right hon. Friend has already indicated that he hopes to make some statement on this matter in a little while prior to any major statement of policy decisions which may be made later on. In the short time that I have been at the Ministry, I have been very impressed with the studies being undertaken in this field.

    Electricity and Gas Supplies (Unpaid Bills)
    Mr. Edward Lyonsasked the Minister of Power whether he will give a general
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    direction to area electricity boards that where a medical opinion or certificate is provided stating that a sick child or old person living in an all-electric home is in need of warmth the electricity supply should be resumed or maintained notwithstanding that the householder is in arrears with payments to an area board.
    Dr. David Owenasked the Minister of Power (1) how many families had their electricity supplies disconnected because of an inability to pay the bill in 1966; and what are the comparable figures for each of the previous five years;
    (2) if he will issue general directions, in the public interest, to all electricity and gas boards to notify as a matter of course the local authority children's department of their intention to cut off supplies to families who have not paid their bills.
    Mr. Freeson: The figures are not kept centrally but they represent a very small proportion of total consumers. Electricity and Gas Boards generally treat such cases sympathetically and keep in touch where appropriate with welfare organisations. The chairman of the area electricity board concerned has already written to my hon. Friend, the hon. Member for Bradford, East (Mr. Edward Lyons) about a particular case he drew to our notice, and the need to exercise sympathetic discretion has been impressed upon the staff concerned.
    Mr. Lyons: Would my hon. Friend also direct the electricity boards throughout the country that no one wants profits made at the expense of the aged or of sick children and that they should treat all future cases with the greatest sympathy?
    Mr. Freeson: I have already said that that is general policy, but it is inevitable—regrettable as it is—that there may be incidents of human errors of judgment. This may have been the case here. On my hon. Friend's first point, it would be a little unfair to accept the precise terms of his suggestion. There was no question of the board seking to make a profit out of sickness and hardship.
    Mrs. Knight: Will the hon. Gentleman help pensioners who find it easier to pay their bills by instalments to get a better deal from the electricity boards, which

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    now demand payment before the accounts are due—as some people have the laughable notion that public ownership is intended to mean that the industry is run for the benefit of the public?
    Mr. Freeson: I did not follow the precise procedure which the hon. Lady suggested, but if she will set down her suggestions in detail I will consider them.

    Second Nuclear Power Programme
    Mr. Lubbockasked the Minister of Power what is now the planned amount of nuclear generating capacity to be installed in the second nuclear power programme; and if he will estimate the proportion this represents of the total generating capacity to he installed in the same period in the United Kingdom.
    Mr. Marsh: I told the hon. Member for Yeovil (Mr. Peyton) on 17th January that the plant programmes beyond 1970 have not yet been settled.—[Vol. 739, c. 9.] At a rough estimate, however, the 8,000 magawatts of the second nuclear power programme may cover about one-third of the total plant installed in the years 1970–75.
    Mr. Lubbock: Has the Minister had a chance to study the calculations which I sent him, which show that nuclear plant will represent only about one-fifth of the installed capacity in these years and, further, that in the United States in the first nine months of 1966, electricity authorities ordered 64,000 megawatts of nuclear power, amounting to 51 per cent. of the total plant orders in the period? Is there not a serious danger that we will fall way behind the Americans in this new technology, in which we once had a substantial lead?
    Mr. Marsh: I agree that it is essential that we should preserve the lead which we had and which we still have. I have seen the calculations which were carried out for the hon. Member. I think they are misleading, because some of the assumptions are unsound, but I intend to write to him in detail.

    North Sea Gas
    Mr. Lubbockasked the Minister of Power what price tariff has been offered by the Gas Council to North Sea gas
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    producers, following recent negotiations with the Shell-Esso consortium.
    Mr. Marsh: Negotiations are still proceeding and are confidential.
    Mr. Lubbock: Would the right hon. Gentleman agree that it would be of great value to the general public if the costs incurred by operators in the North Sea could be made public so that, when the price is finally determined, it would be clearly seen that they are getting a fair return on their money? Would he also agree that the North Sea gas operations should be considered in isolation and that the operators should not require a return which takes into account losses which they may have incurred on drilling operations elsewhere in the world?
    Mr. Marsh: The Gas Council is at present negotiating these matters and one difficulty here is that pressure to make one part of the negotiations public might lead to pressure being brought to make other parts of the negotiations public. To answer the hon. Gentleman's question about costs, it is possible at the moment only to deal with estimated costs because the final costs have not yet been incurred. Those costs are still being incurred.

    Gas (New Standing Charges)
    Mr. Hugh Fraserasked the Minister of Power if he will state the numbers of small gas consumers affected by the new standing charges.
    Mr. Freeson: I understand about 65,000 using less than 50 therms a year.
    Mr. Fraser: Is the Parliamentary Secretary aware that real hardship is being caused to many old age pensioners and poor people and that since December, in Stafford alone, gas bills have gone up by 30 per cent. in spite of the so-called incomes freeze? Will the hon. Gentleman quickly look into the question of giving these people, for free. prepaid meters so that they may avoid the new standing charges?
    Mr. Freeson: As the hon. Gentleman knows, these matters are essentially for the boards concerned. As for any hardship that may have occurred, the Government, by way of the Ministry of Social Security, make provision to allay that hardship—and the hon. Gentleman is fully

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    aware of this as a result of correspondence which he has had with the Department.
    Mr. Dobson: Is not my hon. Friend aware that a large number of people living in what one might call specialist localities have been adversely affected by the new standing charges and that they have great resentment against the Minister for agreeing to these new charges and for allowing them to go on?
    Mr. Freeson: The answer to that question has been given previously. On the last occasion when the Department answered at Question Time it was pointed out that there are ways by which people can apply for special prepayment meter arrangements. [Interruption.] Some hon. Gentlemen opposite should have a little manners.

    Gas Supplies (Scotland)
    Mr. Maclennanasked the Minister of Power if he will give a direction to the Scottish Gas Board that in determining what new supplies of gas shall be made available it takes into consideration the power requirements of future industrial development.
    Mr. Marsh: In determining what new supplies of gas shall be made available, the board takes all relevant factors into account, including the cost of affording such supplies and the revenue expected.
    Mr. Maclennan: Is the Minister aware that the recent decision of the Scottish Gas Board not to increase the supply of gas to Wick and Thurso appears to run counter to the Government's expressed intention of developing that area—expressed in the Scottish Economic Plan—is frustrating the efforts of the local authorities there to attract industry to the area and appears not to have been made in consultation with the Highland Development Board, which is also involved in developing the area?
    Mr. Marsh: I will certainly look into the point raised in the last part of my hon. Friend's supplementary question. As for the rest, the board's decision not to take on additional business at Wick and Thurso has been the subject of representations to the Scottish Gas Consultative Council and to my right hon. Friend the Secretary of State for Scotland. The
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    problem is that area gas boards have a duty to provide as efficient and economical a service as possible for all their consumers. They must, therefore, consider to what extent it would be right for losses made in particular areas to be made for the generality of consumers.

    Electricity, Gas and Coal Industries (Advertising Policies)
    Dr. John Dunwoodyasked the Minister of Power whether he is satisfied with the degree of co-operation between the electricity, gas and coal industries in their advertising policies; and if he will make a statement.
    Mr. Freeson: Yes, Sir. My right hon. Friend discusses this subject from time to time with the chairmen of the three industries together. It is for them to settle reasonable plans in the light of the requirements of their industries and the general economic situation.
    Dr. Dunwoody: Would not my hon. Friend agree that it is in the interests of both the industry as a whole and consumers that there should be co-operation rather than competition in this sphere? Would he consider suggesting to the industry that in future it should undertake joint advertising campaigns for the whole of the fuel industry rather than for one part as opposed to another?
    Mr. Freeson: I believe that, in certain respects, this has been considered from time to time. My hon. Friend will be aware that I am new to the Department. However, I understand that some aspects of the matter have been studied. As for advertising policies which may be in contradiction to each other, if my hon. Friend has any information which he would care to put to the Department, I assure him that we will be glad to look into it.
    Mr. Peyton: Would the Parliamentary Secretary bear in mind that advertising is a subject about which politicians appear to have more prejudice than knowledge? Will he please advise his right hon. Friend to keep out of this sphere and leave the industries to run their own businesses?
    Mr. Freeson: Every consumer who is at the receiving end of advertising has a right to express a view on the matter.
    Mr. Nott: How can competing fuels co-operate in their advertising? Would not that be a complete contradiction? Would not the hon. Gentleman agree that the only way to make these industries more efficient is to allow them to compete with one another?
    Mr. Freeson: One possible way—I am not suggesting that this way should be adopted—would be the suggested possibility of the industries having certain common services—for example, showrooms—where there might be co-operation in point of sale advertising. I am not saying that this is the right answer, but it is a possibility.

    Nationalised Industries (House Journals)
    Mr. Robert Cookeasked the Minister of Power whether he will issue a general directive, in the public interest, to the nationalised industries for which he is responsible to cease publication of house magazines and newspapers during the present period of national economic depression.
    Mr. Freeson: No, Sir. The purpose of house journals is to keep employees and others specially interested abreast of developments in their industry and to stimulate their interest and involvement in its affairs. This seems to me an excellent objective and some of the material produced is among the best in the country.
    Mr. Cooke: While wishing in no way to destroy any corporate spirit which might exist in these industries, may I ask the hon. Gentleman to say how much is at present being spent at this rather difficult time?
    Mr. Freeson: I cannot give an exact figure, but I understand that it is a very minute traction of the industries' turnover—and I stress "industries" in the plural.

    Steel Industry Organising Committee (Mr. Niall Macdiarmid)
    Mr. Harold Walkerasked the Minister of Power if he will revoke the appointment of Mr. Niall Macdiarmid as deputy-chairman of the Government's organising committee for the steel industry, in view of his public attack on the nationalisation of the iron and steel industry on 8th February, 1967.
    Mr. Ormeasked the Minister of Power if the public statement made by Mr. Niall Macdiarmid, deputy-chairman of the Government's organising committee for the steel industry on 9th February, regarding the steel industry, was made with his authority.
    Mr. Varleyasked the Minister of Power if he will reconstitute the National Steel Corporation's organising committee ensuring that the new members he appoints will not publicly oppose public ownership of the industry.
    Mr. Gregor Mackenzieasked the Minister of Power whether the public statement of the deputy chairman of the Government's organising committee for the steel industry, on 8th February, on the subject of the nationalisation of the industry was made with his approval.
    Mr. Marsh: No, Sir. The organising committee is working well together. It will be succeeded by the National Steel Corporation shortly after Royal Assent to the Iron and Steel Bill, and changes in its composition at this late stage would not help the transfer of the steel industry to public ownership.
    Mr. Walker: Is not Mr. Macdiarmid's speech an outrageous declaration of war On the industry—[Horn. MEMBERS: "Hear, hear."]—and will my right hon. Friend make it perfectly clear that he will not tolerate any kind of sabotage by those who allow political prejudice—[Interruption.]—to override national interest?
    Mr. Marsh: My hon. Friend must draw a clear distinction between people who are employees of a State undertaking and people who are serving on voluntary bodies within the State.
    Mr. Walker: I do.
    Mr. Marsh: It would be introducing a very dangerous principle for this side of the House if we were to assume that people on voluntary bodies had to conform to the view of the Government of the day. I am perfectly satisfied that Mr. Macdiarmid's work for the organising committee has been in the interest of the nation.
    Mr. Orme: Is my right hon. Friend aware that any individual is entitled to his political point of view? However,

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    how does he justify the appointment to the board of one of the bitterest opponents of nationalisation, who has said, since being given the job of vice-chairman, that he wants to see the steel industry rise as a phoenix from the ashes of nationalisation and go into private ownership again? How does my right hon. Friend justify such remarks?
    Mr. Marsh: The first point to get clear is that nobody, apart from the chairman-designate and Mr. Ron Smith, has been appointed to the board. The organising committee is a voluntary body which is coming to a conclusion after Royal Assent has been given to the Iron and Steel Bill. As for a phoenix rising from the ashes, there seems to be some dispute about what was actually intended by the remark. I wish to make it clear personally—and it is Ministers who are responsible for the political direction of this industry—that it would be a disaster for the industry if it were plunged into denationalisation again. I will do all in my power to ensure that this is not possible.
    Mr. Varley: If my right hon. Friend will not reconstitute the organising committee, will he take this opportunity to say that the future Steel Corporation will not be set up with Mr. Macdiarmid as a member of it?
    Mr. Marsh: That question does not arise, because I am not making appointments of this kind to the Steel Corporation. As for the organising committee, this body has done really valuable work in the cause of public ownership.
    Mr. Mackenzie: Would my right hon. Friend bear in mind that there is a great deal of concern amongst steel workers, who want to co-operate with the Government on steel nationalisation, and will he remember this episode and the attitude of many of his hon. Friends when he is making appointments to the new board?
    Mr. Marsh: I frequently hear businessmen complain about politicians, but I must say that sometimes businessmen are not as good as politicians when they move into that field. I accept that very strong feeling was aroused by this statement, but I repeat that in any voluntary body one has to draw a distinction between remarks that would be intolerable if
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    made by a paid employee but which have to be looked at differently when coming from a member of the voluntary body.
    Sir G. Nabarro: Is not Mr. Macdiarmid one of the most experienced and capable executives in the steel industry, with an encyclopaedic knowledge of its affairs, and is it not better to appoint an executive of that kind rather than a broken-down trade union hack—[Interruption.]
    Mr. Speaker: Order. The hon. Member must get on with his supplementary question.
    Sir G. Nabarro: —broken-down trade union hack as a sinecure for the Socialist Party?
    Hon. Members: Answer.
    Sir C. Osborne: Will the Minister explain why it is that so many of his hon. Friends seem so bitterly dissatisfied with various aspects of Government policy?
    Mr. Marsh: Having sat on both sides of the House, I can only say "'twas ever thus".
    Mr. Barber: Will the right hon. Gentleman accept the gratitude of this side of the House for his rejection of the ludicrous requests of his hon. Friends, and for choosing the best man for the job? But if it is a prerequisite of appointment to the board of a nationalised industry that the person should have a belief in nationalisation, does not the Minister agree that a prerequisite of membership of Her Majesty's Government should be a belief in joining the Common Market?
    Mr. Marsh: It is not my task to deal with that last point. On the right hon. Gentleman's original point, I would only say that this statement did, as is obvious, cause very widespread and very understandable offence, and a great deal of feeling, and I repeat that such a statement made by a person employed by a nationalised body would be disloyal, and the difference here is that the person was not so employed.
    Mr. Shinwell: Is not my right hon. Friend aware that when someone is appointed and accepts collective responsibility in accordance with a decision of

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    Government policy, he is expected to keep his mouth shut?
    Mr. Marsh: I am sure, Mr. Speaker, that Front Bench spokesmen on both sides would regard this as a wholly admirable principle but one that they often find difficulty in keeping to.
    Mr. Moonmanasked the Minister of Power what job description was presented to the deputy chairman of the Government's organising committee for the steel industry on his appointment; and what was the collective brief given to the committee.
    Mr. Marsh: The organising committee was asked to plan the establishment of the National Steel Corporation and the the transfer of the major part of the steel industry into public ownership. Members were not given individual remits.
    Mr. Moonman: Would my right hon. Friend consider that if Mr. Macdiarmid's statement had been made by a senior executive of a board of shareholders in private industry he would have been dismissed forthwith? Would he also agree that the motivation of the men running an industry is just as important to the structure of an industry under nationalisation?
    Mr. Marsh: I agree—this is a pleasant change from some of the previous questions—with everything my hon. Friend has said. If these remarks had come from a paid executive of an organisation they would have been disloyal.

    Oil Rig "Sea Gem" (Public Inquiry)
    Mr. Alisonasked the Minister of Power why 15 months elapsed between the loss of the oil rig "Sea Gem" on 27th December, 1965, and the setting up of the inquiry into the reasons for the loss.
    Mr. Freeson: Preparations for the public inquiry, which opens on 7th March, have entailed prolonged preliminary investigations, including the recovery and examination of pieces of wreckage. The results of these investigations will be available to the inquiry and contribute to its effectiveness.
    Mr. Alison: Is the Parliamentary Secretary aware that, on the face of it, that is not a very reassuring Answer? Is he aware that the disaster that resulted in the loss of the "Sea Gem", which is to be investigated, might have occurred to any of the other rigs in the intervening 15 months? Will he publish details of the investigations that have taken place over those 15 months up to the inquiry?
    Mr. Freeson: It would not be proper to do that until we have the results of the inquiry.

  COAL

    Output
    Mr. Rowlandasked the Minister of Power what consultations he has had recently with the National Coal Board about the Board's future level of output and number of collieries required to produce it; and if he will make a statement.
    Mr. Concannonasked the Minister of Power what is his policy on the future of the coalmining industry; and if he will make a statement.
    Mr. Eadieasked the Minister of Power what consultations he has had with the National Coal Board about the future level of output in Scotland.
    Mr. Ogdenasked the Minister of Power what studies are being undertaken by his Department into the proper and efficient use of coal as part of the overall power requirements for the period 1968 to 1978; and what consideration has been given to social and economic factors in those studies.
    Mr. Freeson: My right hon. Friend is mindful of the concern of hon. Members about the outlook for the coalmining industry and can assure them that the social and economic considerations involved for the various coalfields will be given full weight in the current review of fuel policy.
    Mr. Rowland: Is my hon. Friend aware that there is some real apprehension in the coal mining communities about the likely future output of coal? Can he allay these fears by indicating whether it is likely or intended to fall

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    below about 160 million to 170 million tons of coal a year?
    Mr. Freeson: No, Sir. It is not possible to give information of that kind at this stage, for the very reasons outlined in answers to the previous Questions, namely, that there is a major study and review in progress with regard to fuel policy. One thing that one can say quite definitely is that the coal industry will remain of great economic importance to this country.
    Mr. Concannon: Can my hon. Friend tell me at what point the national interest conflicts with the viability of this industry with regard to the balance of payments?
    Mr. Freeson: I can only say that the position of the coal industry and how far it will play a part in the future pattern of fuel consumption in the country must be taken into account along with other requirements which are now being studied as part of the fuel policy review.
    Mr. Eadie: Is my hon. Friend aware that in Scotland, for example, coal production has decreased by 5 per cent.? Will he further consider the question of the selective coal price increases which will do a lot to give encouragement and stability to the mining industry in Scotland?
    Mr. Freeson: If the National Coal Board wishes to submit proposals to the Ministry on pricing structure it is always open to us to consider them, but we have not received any such suggestions at this stage.
    Mr. Ogden: Does my hon. Friend agree that it would be useful, for the confidence of the industry, if emphasis were placed on the social and economic factors involved, rather than leaving the matter to market trends?
    Mr. Freeson: I repeat the assurances that I gave earlier. We are very mindful of the social and economic consequences for the areas concerned, but these must not be taken as being the only considerations to be borne in mind in regard to the future of the industry.
    Mr. Varley: Has my hon. Friend's attention been drawn to an article in today's Financial Times suggesting that by 1970 the output of coal will be down
    1420
    to 100 million tons a year? If the fall is to be as rapid as that, does not my hon. Friend agree that the social consequences will be quite catastrophic?
    Mr. Freeson: Neither I nor any other person in my Ministry can be held responsible for any speculations in the Financial Times or any other journals. I do not know whether the use of the word "catastrophic" is accurate in this context, but I can only repeat that we are very much concerned about the future of the industry and the effect of any changes on the areas concerned.
    Mr. Patrick Jenkin: Is it not true that the energy correspondent of the Financial Times is one of the best-informed in this circle, and that the article that he wrote on the Minister of Power disclosed that he had been in closest touch with officials of the Ministry of Power? Is not a great deal of weight, therefore, to be given to the speculation in the article today?
    Mr. Freeson: I must return—[Horn. MEMBERS: "Answer."] May I be permitted to answer? I return to the point made in answer to earlier Questions, namely, that any figures concerning the future of the coal industry can be produced only as part of the fuel policy studies now in hand in the Ministry and the industry.
    Sir G. Nabarroasked the Minister of Power, in view of coal output of 174 million tons in 1966, or 26 million tons or 13 per cent. below the Coal Board target for 1966, what steps he proposes to take to restore the position in 1967; what are his estimates of coal output this year, of manpower decline, and of exports; and whether he will make a statement.
    Mr. Marsh: Coal output in 1966 at 174 million tons was 3 million tons less than consumption, including exports. I understand that output this year is expected to be sufficient to meet all market requirements.
    Sir G. Nabarro: But that does not answer any of the questions that I have asked. Will the Minister apply himself to the fact that two independent experts, in the Observer last Sunday and the Financial Times the following day, have

    1421
    reached a conclusion that the coal industry's output will be down to 100 million tons by 1970? As this would involve the displacement of more than 200,000 coal miners, what has he to say to his coal mining Friends behind him? Is he prepared to see the industry wrecked?
    Mr. Marsh: I must repeat the point made by my hon. Friend, namely, that I cannot accept responsibility for independent statements made by outside people. At the moment the Government are engaged in a major fuel policy review. We have not yet completed this and therefore are unable to say what the final figures will be. I repeat that on any set of figures there is a very good future in the coal-mining industry for anyone who is prepared to stay in it.

    Bevercotes Colliery (Multi-Shift Agreement)
    Mr. Concannonasked the Minister of Power if he will give details of the general direction he has given to the National Coal Board to institute an extension of the Bevercotes colliery multi-shift agreement to other major pits.
    Mr. Marsh: I have given no such general direction to the National Coal Board, but the Board is aware of the importance for the industry and the economy of measures to increase productivity.
    Mr. Concannon: Is my right hon. Friend aware that any extension of this multi-shift agreement will greatly affect the area which I represent, both socially and economically, and that it is to that area's best advantage to know in good time? I am, of course, thinking of the ancillary workers to the coal-mining industry, plus the shops and churches in the area.
    Mr. Marsh: It is, of course, for the N.C.B. and the unions to agree on the extension of the Bevercotes kind of agreement and not for me to give formal directions. It must be in the interests of those in the industry that we should make the most intensive use of the industry's capital equipment.
    Sir J. Eden: Before seeking to extend this kind of agreement to other pits, should not the right hon. Gentleman
    1422
    exert his influence and authority to ensure that it operates effectively at Bevercotes? Even there, as he will recognise, it is not operating successfully yet. What will he do about it?
    Mr. Marsh: The hon. Gentleman, as so frequently happens, misunderstands the position. Productivity agreements are not laid down by diktat by the Government but negotiated freely between the unions and the National Coal Board. I should have thought that we would all, on both sides of the House, desire measures designed to increase efficiency.

    Mining Industry, Scotland (Manpower)
    Mr. Eadieasked the Minister of Power what estimates he has made of manpower in the mining industry in Scotland for 1967.
    Mr. Freeson: If present trends in recruitment and wastage continue it is estimated that the mining industry in Scotland will employ about 40,000 men by the end of 1967.
    Mr. Eadie: Is my hon. Friend aware that, in 1966, mining manpower in Scotland decreased by 3,500 and that there are only now 3,000 men under 25 years of age in the industry? Is he further aware that the miners do not look at entry into the Common Market with any great enthusiasm? Will he not make a categorical statement and give us a national fuel policy?
    Mr. Freeson: At the risk of repetition, I must point out that many of the Questions and Answers this afternoon have related specifically to a national fuel policy. This is in preparation. The important point regarding the coal-mining industry in Scotland—it may be of help if I tell my hon. Friend this—is that the reduction estimated for 1967 is 2,000, compared with an actual reduction of 3,584 for 1966, which is somewhat of an improvement.
    Mr. Spriggs: Does not my hon. Friend realise that the repetition to which he referred in relation to my hon. Friend's previous question shows that a sense of urgency is required? Will the Government do something about a fuel and power policy as an urgent matter?
    Mr. Freeson: If nothing else has been made clear in Questions and Answers this afternoon, I should have thought that it would be perfectly clear that major consideration is being given to this matter.
    Mr. Emrys Hughes: Has my hon. Friend any plans for attracting more miners into the industry in Scotland? Does he not think that wages will have to be increased to do so?
    Mr. Freeson: These are matters for the N.C.B.

    Exports
    Mr. Alisonasked the Minister of Power whether he will give a general direction to the National Coal Board to increase its efforts to promote coal exports.
    Mr. Freeson: No, Sir. But both the President of the Board of Trade and my right hon. Friend are ready to help the National Coal Board where they think that this would be useful.
    Mr. Alison: Does the Minister think that the rather poor coal export performance of the National Coal Board justifies the very substantial increase in investment in the Port of Immingham which Lord Robens is seeking to make, and are the Government giving a good wind to this proposal?
    Mr. Freeson: I have already indicated that if any suggestions come from the National Coal Board or from hon. Members in this connection we shall be glad to consider them.
    Mr. Edwin Wainwright: Will my hon. Friend agree that if every industry increased its productivity and efficiency as the coal-mining industry has done we should not have a balance of payments problem?
    Mr. Freeson: I would certainly endorse that this industry has one of the finest records in this country and, indeed, abroad.

    VIETNAM
    Mr. Winnickasked the Prime Minister what consultations he has had recently with President Johnson about the Vietnam war.
    The Prime Minister (Mr. Harold Wilson): As I told the House on 14th February, my contacts with President Johnson are close and must remain confidential.—[Vol 741, c. 345.]
    Mr. Winnick: While I appreciate the efforts made by the Prime Minister in the last few weeks, could he tell us whether there was any positive response at all from President Johnson while the Russian Prime Minister was here with regard to not beginning the bombing again? May I ask whether my right hon. Friend saw the B.B.C. programme "24 Hours" last night which showed that the bombing in Vietnam involves civilians?
    Mr. Speaker: I hope hon. Members will keep their questions short.
    The Prime Minister: My hon. Friend's first supplementary question falls within those questions which I said last week I did not think it would be right to answer. With regard to the second, I regret that I did not watch television last night at all.
    Mr. Frederic Harris: Will the Prime Minister rebuke and slap down his hon. Friend the Member for Croydon, South (Mr. Winnick) on these statements, which are anti-Government policy, in the same way as the Foreign Secretary did yesterday?
    The Prime Minister: This question relates to Vietnam and I think I dealt with the matter last week. I said then that I know that my hon. Friends, who take a different view of the kind of statement the Government should make, are just as keen as anyone else to get peace in Vietnam.
    Mr. Dickens: Is my right hon. Friend aware that some of the most respected British correspondents in Washington reported last weekend that there was a very considerable addition to the American arms build-up during the recent truce in Vietnam, and has he drawn President Johnson's attention to these reports?
    The Prime Minister: I am not responsible for what even the most respected British correspondents are reporting to this country, and my exchanges with President Johnson during this period, as at other times, dealt with all relevant factors.

    RHODESIA
    Mr. Biggs-Davisonasked the Prime Minister whether, in view of the policy of the Rhodesian Government further to amend the Constitution, he will make a new effort to reopen negotiations.
    The Prime Minister: I made clear the British position about a renewal of discussions in the Answers I gave to Questions on 20th December, 1966. Any move by the illegal regime to amend a Constitution which, after amendment, remained illegal would have no effect on this—
    [Vol. 738, c. 1176].
    Mr. Biggs-Davison: Would not the Prime Minister take into account the fact that sanctions and his policy are stimulating republicanism and extremism in Rhodesia? In view of certain utterances of the Commonwealth Secretary to the white settlers of Australasia, will the right hon. Gentleman now say whether the Government, being unable to take on South Africa, are contemplating the use of armed force in Rhodesia?
    The Prime Minister: Tendencies towards republicanism, extremism and apartheid in Rhodesia are not the creation of any action by Her Majesty's Government. With regard to the suggestion that I have encouraged any of these things, I am glad that I do not have the same responsibility for encouraging them as have the hon. Gentleman and some of his friends.

    MINISTER OF OVERSEAD DEVELOPMENT (SPEECH)
    Mr. Biggs-Davisonasked the Prime Minister whether the public speech of the Minister of Overseas Development at Birmingham University on 27th January, 1967 about aid for developing countries represents the policy of Her Majesty's Government.
    The Prime Minister: Yes, Sir.
    Mr. Biggs-Davison: Does the right hon. Gentleman's approval extend to his right hon. Friend's reply to a student that effective sanctions at the start—
    Mr. Speaker: Order. The hon. Gentleman cannot quote in a supplementary question.
    Mr. Biggs-Davison: I am not quoting the actual words, Mr. Speaker. I am paraphrasing the words, and asking the Prime Minister whether he also approves of what his right hon. Friend said, to the effect that effective sanctions at the start would have meant a Tory majority at the election? Does he agree with his right hon. Friend that, therefore, the majority of the electorate are against sanctions?
    The Prime Minister: Whether he paraphrased or quoted, I recognise the quotation from the Press which the hon. Member has in mind. I said that my right hon. Friend's speech was Government policy but the passage which he has in mind arose in a noisy exchange afterwards. [Interruption.] There was a great attempt—successful in the end—to stop him making the speech about aid. He was being barracked by a student and what he then said was not a statement of Government policy, or indeed a statement of policy at all, but a personal political view which I do not hold. On sanctions, the Government did what we believed to be right and necessary then and at all times. We are not diverted, despite the hon. Member's quotation, by an Opposition which is divided three ways. I am satisfied that if we had thought that a different sanctions policy was right, the General Election result would have been exactly the same.

    ROYAL MARRIAGES ACT, 1772
    Mr. Liptonasked the Prime Minister if he will introduce legislation to amend or repeal the Royal Marriages Act, 1772.
    The Prime Minister: I do not at present see a need for legislation for this purpose.
    Mr. Lipton: Is the Prime Minister aware that this outworn relic of a spiteful family feud is always liable to place the Crown in an embarrassing position of having to decide whether or not to grant permission to marry someone a long way removed from the line of succession? Is it not time to scrap this antiquated survival which restricts the freedom of individuals to marry a long way from the line of succession?
    The Prime Minister: I am not going to comment on a particular case. There

    1427
    is, of course, widespread dissatisfaction in the way in which the Act might work and I am certainly prepared to receive representations from hon. Members or anyone on this matter, but I do not intend to comment on it more widely.

    MINISTER OF HOUSING AND LOCAL GOVERNMENT (SPEECH)
    Mr. Onslowasked the Prime Minister whether the public speech of the Minister of Housing and Local Government on 13th January, 1967 to the Joint Conference of the Royal Institute of British Architects and the National Building Agency on the subject of housing represents the policy of Her Majesty's Government.
    The Prime Minister: Yes, Sir.
    Mr. Onslow: Since the Minister then reaffirmed that the target is 500,000 a year by 1970, would the Prime Minister confirm that this year's target must be over 440,000? If the steady increase is to be achieved which he mentioned in the House on 12th July last year, are we to get 440,000 built or is the 500,000 just another of those "lightly given pledges"?
    The Prime Minister: There is no target for this year related to the 500,000 target for the end of the decade, which is a firm target.

    PRIME MINISTER AND FOREIGN SECRETARY (VISIT TO BONN)
    Mr. Martenasked the Prime Minister if he will make a statement about his official visit to Bonn.
    Mr. St. John-Stevasasked the Prime Minister whether he will make a statement on his visit to Bonn.
    The Prime Minister: I would refer the hon. Member, to the Answer I gave on 16th February to a Question by the hon. Member for Haltemprice (Mr. Wall).—[Vol. 741, c. 800.]
    Mr. Marten: In spite of that Answer, does the Prime Minister realise that there is still considerable confusion on both sides of the House about the question of offset costs in Germany? Could he tell the House simply whether the Germans
    1428
    are still willing to contribute £31 million or even more to this problem at this time?
    The Prime Minister: My right hon. Friend dealt with this very fully yesterday. As I told the House last Thursday, the discussion between the German Federal Chancellor and myself—and, of course, the two foreign Ministers—referred to offset costs, but we all agreed that this is a matter to be left to the proper machinery, which is the tripartite discussions. No suggestion whatever was made to us that the Germans could not do more than the £31 million, and still less any question of withdrawing the £31 million.
    Mr. Thorpe: In view of the fact that the Prime Minister's Bonn talks will be extended to other European capitals, can he tell us if the speech of the President of the Board of Trade assisted, impeded or had no impact whatever on the course of the Common Market talks?
    The Prime Minister: The third, Sir.
    Mr. Frank Allaun: Could the Prime Minister help to clear up this little mystery? Have the Bonn Government confirmed or repudiated Saturday's Finance Minister's statement? Does the Prime Minister stand by his undertaking that if these costs are not covered he will reduce our forces in West Germany?
    The Prime Minister: The answer to the first part of that supplementary question I have already given. We have had no intimation in any shape or form on the lines of the statement that was issued on Saturday. In regard to the second part of the question, the answer is, Yes, Sir. What I said last year is the policy of the Government.
    Lord Balniel: With great respect, I do not think the Prime Minister has answered either of the two questions on support costs. When he returned from Bonn he stated clearly that the German Government were in no doubt about our position—[HON. MEMBERS: "Question."] May I ask whether in the discussions in Bonn the Prime Minister sought confirmation from the German Government that they stood by the joint communique they issued undertaking to pay £31½ million.
    The Prime Minister: I thought I had answered it, but I will try to make it

    1429
    clear. The Federal Chancellor and I agreed that the purpose of the discussions was about the Common Market. We both agreed that there were serious problems between the two Governments which would not impede then or at any other time our discussions on the Common Market. We further agreed that we would not go into the merits of the argument, and said that this was a matter for the tripartite machinery.
    Mr. Peyton: May I ask the Prime Minister if any German Ministers he met called him an "old fruit", or if, when saying goodbye, they told him he had become "part of the German way of life"?
    The Prime Minister: No, Sir. I do not recall that the phrase "old fruit", which was addressed to Mr. Kosygin—I think I am quoting the incident correctly—was made by one of Her Majesty's Ministers. It was made by a young lady at or near a factory. In regard to the second point, certainly this was not said to me. We were there for only a day, and I am not certain that if we had been there a bit longer it would have been said.

    SCIENCE AND TECHNOLOGY (CENTRAL ADVISORY COUNCIL)
    Mr. Hastingsasked the Prime Minister whether he will make a further statement on the terms of reference and purpose of the Central Advisory Council on Science and Technology.
    Mr. Philip Noel-Bakerasked the Prime Minister what powers the Central Advisory Council, under the chairmanship of the Chief Scientific Adviser to the Government, will have with regard to military research.
    The Prime Minister: The Advisory Council will be concerned with advising the Government on the overall distribution of our scientific and technological effort, in the private as well as the public sector and in both the defence and the civil fields.
    It will consider how our resources for research and development for defence can be used to benefit civil technology, together with the implications of any such measures for our defence programme.
    Mr. Hastings: I am grateful to the Prime Minister for that reply. Does he
    1430
    agree that too much scientific work is going on in isolation in Government establishments at the moment, and that there is a need to relate scientific work progress to markets and production methods? Will he make sure that the Central Advisory Council does not neglect this aspect?
    The Prime Minister: I am sure that the Council will not neglect it. I do not think there is much evidence of isolated work in Government establishments, but the need to relate pure scientific research and, indeed, technological research to the need of overseas markets was one of the main reasons for setting up the Ministry of Technology to see that science is applied more fruitfully to industry.
    Mr. Noel-Baker: Is my right hon. Friend aware that the cost of military research has now risen to the fantastic figure of £270 million a year? Will he ask the Central Advisory Council to consider whether the strength of Britain in the world would not be better promoted if some of this money were devoted to civil research for the export industries?
    The Prime Minister: I do not think it is the duty of the Council to go into questions quite so wide as those mentioned by my right hon. Friend, but he will have seen the figures I have given in this House of the very substantial swing of resources from defence research to civil and technological research over the last three years, which has been a continuation and intensification of the policy which was already growing before we came into office.
    Mr. Hogg: Is it not a fact that to save money on research is only to waste it on obsolete technology and useless manpower?
    The Prime Minister: This is often the case, and one of the biggest problems which came up at the Productivity Conference was that far too few firms are using in their productivity methods, policies and technology well established and applied by the best firms.
    Mr. Woodburn: Is my right hon. Friend aware that at Farnborough and many Government establishments there is a continual exchange of scientific study between private and public industry, but in some cases public industry is not aware of the great advantages to be gained from

    1431
    the research establishments of the Government? Could something be done to bring these two closer together?
    The Prime Minister: If my right hon. Friend has examples of public or private industry not knowing what facilities are available, I should be glad to have them, and so would some of my right hon. Friends who are concerned. It is certainly the case that Farnborough and other establishments for many years have undertaken much research for private firms, and private firms have taken the initiative.
    Sir H. Legge-Bourke: Would the Prime Minister consider, before this Council goes into the private sector at all, whether it would not perhaps be better employed in examining the methods adopted by Government Departments concerned with the scientific effort of the nation?
    The Prime Minister: No, I do not agree with the hon. Gentleman. I think that we all agree that, despite the fact that so many of our firms lead the world in their fields, whether in science or in the application of science, there is a very big gap which we have to overcome. This is one of the most important tasks of the Ministries concerned. What this Council is trying to do is to advise the Government on how the limited funds—and they are limited—for research—civil, defence, pure science, technological—should be best allocated in the interests of the nation.
    Mr. Hector Hughes: Will the Prime Minister say whether the purpose mention in Question No. 7 includes directing that modern scientific research should be used for the benefit of the trade, industry and commerce of this country, of which Dounreay experimental station is an example?
    The Prime Minister: Dounreay is obviously a very important part of this, though there are others as well. The Government's policy on Dounreay was stated in the House a year ago.
    Several Hon. Members rose—
    Mr. Speaker: Order. The Prime Minister, to answer Question No. 10.

THE PRESS (D NOTICES)
following Question stood upon the Order Paper:
Sir JOHN LANGFORD-HOLT: To ask the Prime Minister, what is the total number of D Notices issued to the Press in the last six months of 1966 by all Departments; and how this figure compares with the same periods in 1965 and 1964.
The Prime Minister: With permission, Mr. Speaker, I would now like to answer Question No. Q10.
No D Notice was issued by the Services, Press and Broadcasting Committee in any of the periods mentioned.
I would, however, like to add one comment. As the House knows, the system under which these notices are issued has worked well on a voluntary basis for many years, and that means on the basis of confidence and trust between the authorities concerned and the Press. The procedure is described in Chapter 9 of the Radcliffe Report (Cmnd. 1681 of 1962), which stresses that
"Its success depends upon goodwill and, in effect, upon very little else."
Unfortunately, the confidence and trust, which are the basis of the whole system, have been called into question by the action of one newspaper in initiating this morning a sensationalised and inaccurate story purporting to describe a situation in which in fact the powers and practice have not changed for well over 40 years.
Sir J. Langford-Holt: Can the right hon. Gentleman be sure, as his Answer appears to state by implication, that it is his policy and the policy of his Government to restrict to an absolute minimum, only in cases where national security is involved, the issue of D Notices?
The Prime Minister: Yes, I can confirm that. That is the policy of the present Government, as it was of previous Governments ever since this system was initiated. What I am concerned with today is a clear breach of two D Notices, despite the fact that the newspaper concerned was repeatedly warned that it would be contravening the notice. This, I think, creates a very difficult situation

1433
for the other newspapers which have honoured this arrangement throughout.
Mr. Lipton: In order to be more precise, will the Prime Minister say that what he is referring to now is the fact that there was no substance whatsoever in the alleged censorship of cables, private and business, emanating from this country?
The Prime Minister: I propose neither to add to nor subtract from my original statement about the story which some of us read in the Press this morning. All I am saying is that the powers and practice in this respect have not changed for well over 40 years.
Several Hon. Members rose——
Mr. Speaker: Order. Prime Minister to answer Question No. 16.

RHODESIA
The following Question stood upon the Order Paper:
Mr. SANDYS: To ask the Prime Minister, whether he will make a statement about the cost of sanctions against Rhodesia and the related aid to Zambia and their direct and indirect effect upon Great Britain's balance of payments.
The Prime Minister: With permission, Mr. Speaker, I will now answer Question No. Q16.
It is not possible to give a precise and reliable estimate of this kind. So far as trade sanctions are concerned, exports to Rhodesia last year fell by £29 million compared with the previous year, but this was partially offset by an increase of £13 million to Zambia and Malawi.
The cost to the Exchequer, of which only a part falls on the balance of payments, is now estimated at £15 million for the period from I.D.I. to 6th February, 1967, including payments by Her Majesty's Government in consequence of Rhodesia's defaults on World Bank loans. Forward commitments under the agreement signed in Lusaka earlier this month were £13·85 million.
The right hon. Gentleman will realise that the information I have given, as his Question asks, relates to the cost of
1434
sanctions and aid to Zambia. He will know that the wider cost of the illegal action taken by Rhodesia includes other items, one of the main ones being through the effect on copper supplies which had an effect on our balance of payments. It is impossible to quantify this or to relate it to the cost of sanctions, which forms the basis of the right hon. Gentleman's Question, since this is the consequence, not of sanctions, but of illegality, and it is, of course, impossible to say how much copper supplies would have been interfered with and copper prices raised, perhaps very much more, if Her Majesty's Government had tamely accepted the action of the illegal regime without protest and without counter-measures.
Mr. Sandys: How can the Prime Minister go on pretending that no reliable estimate is available when he has given to the Commonwealth an estimate of around £100 million? Is he not deliberately concealing the facts from Parliament?
The Prime Minister: If the right hon. Gentleman chooses to adopt that tone he will get the reply that he deserves. [HON. MEMBERS: "Answer."] I am going to answer his question. I am well aware that the right hon. Gentleman was issuing to the Press references to a document which he has got hold of. I hope that he is going to tell the House how he got hold of it. [HON. MEMBERS: "Hear, hear."] I hope, in particular, that he will confirm that he did not get it from Rhodesia House, with whom we know he is in touch—[HON. MEMBERS: "Disgraceful."]—because we know that Rhodesia House last autumn was going round trying to bribe junior members of Commonwealth delegations to let it have the set of Commonwealth documents. I hope that the right hon. Gentleman got his document by more reputable methods.
Now, the answer to the question is that there is no pretence and no misleading of the House. What I told the Commonwealth Prime Ministers was the best estimate available of the cost of the whole Rhodesian situation.
Mr. Sandys: That is what we want to know.
The Prime Minister: The right hon. Gentleman's Question relates to sanctions

1435
against Rhodesia. [HON. MEMBERS: "Oh."] Is it that the right hon. Gentleman cannot see the difference between those two? If there had been no sanctions, we would still have had to give aid to Zambia. If there had been no sanctions, my guess is that copper prices would have risen a great deal more and that our supplies would have been more difficult to get. But there is a difference between the two. The right hon. Gentleman knows enough about this situation, and has enough responsibility for it, not to confuse them.
Mr. Sandys: I have to ask this in an interrogatory form. Is the Prime Minister aware that I have received no confidential information of any kind from Rhodesia House?
Hon. Members: Withdraw.
Mr. Sandys: If the Prime Minister wishes indirectly to threaten me in any way with the Official Secrets Act, may I ask him to remember what happened to another Government about 30 years ago when they tried to do the same and got their fingers burned?
The Prime Minister: I was not responsible for the Conservative Government of 30 years ago with whom the right hon. Gentleman was then in conflict, as he is in conflict with his own Front Bench today. [HON. MEMBERS: "Withdraw."] So far—
Hon. Members: Withdraw.
The Prime Minister: Hon. Members should be sitting below the Gangway if they are cheering the right hon. Gentleman. So far as the Official Secrets Act is concerned, this is, if there were any breaches of it, not a matter for me, though my impression would be that the document the right hon. Gentleman has been hawking about, being issued—[Interruption.] I am referring to his Press statement last week. My impression is that this was issued by the Commonwealth Secretariat and, therefore, does not fall within the Official Secrets Act, anyway.
I asked the right hon. Gentleman to tell the House from where he got this confidential document. I asked him. I expressed the hope that he would say that he did not get it from Rhodesia
1436
House. I would like him to tell the House where he got it from and to confirm that it has not been directly or indirectly in connection with Rhodesia House bribery.
Hon. Members: Answer.
Mr. Heath rose——
Hon. Members: Answer.
Mr. Speaker: Order. Mr. Heath.
Mr. Heath: Will the Prime Minister tell the House what he told the Commonwealth was the cost of the complete operation?
The Prime Minister: Yes, Sir. It was not an estimate of the cost of the operation, if by "operation" the right hon. Gentleman means sanctions, but the cost to Britain, including the forward costs of aid to Zambia, was then estimated at something like £100 million. Later estimates suggest that this was too high. I have given some of the details. For example, we underestimated the position regarding exports, of which I have now given the full figures to the House since the end of the year. But the figure of £100 million, the cost to Britain of the illegality, the illegal action, is very different from the cost either to the Exchequer or to our balance of payments of the sanctions policy approved by this House. [Interruption.] If the hon. Gentleman cannot see the difference between the two, he might leave it to the rest of us who do. It is not the same as the cost of the sanctions policy, which the right hon. Gentleman the Leader of the Opposition was at pains to tell us he has always supported.
Mr. Whitaker: Is my right hon. Friend satisfied that right hon. Gentlemen opposite recollect that their Suez operation cost this country £469 million in a few days, plus worldwide condemnation, whereas what we are doing in facing the problem of Rhodesia is the minimum to comply with worldwide indignation?
The Prime Minister: It is probably a fair calculation. The other difference is that in our Rhodesia policy we have the full support of the Commonwealth, instead of having the Commonwealth against us, and the full support of the United Nations. Even more remarkable is that on that occasion the right hon.

1437
Member for Streatham (Mr. Sandys) and the then Chief Whip were in full support and agreement with the Suez policy.
Mr. Hugh Fraser: Will the right hon. Gentleman now be good enough to lay before the House the document which seems to have had a wide circulation? Second, will he say whether in his calculations he has brought into account (l) the military expenditure, (2) the loss of invisibles and (3) the cost of substitute materials, which I calculate are very large sums indeed?
The Prime Minister: On the first point, I do not think that there is any obligation on me to lay a document before the House. The document which, I understand, the right hon. Member for Streatham has got hold of represents a transcript or the minutes of an oral statement I made to the Commonwealth Conference. The fact that wholly improper means have been used in some parts of London to get that circulated instead of being treated as confidential is no reason for me to lay the document on the Table.
On the second part of the right hon. Gentleman's question, in the full computation of the cost of the Rhodesia situation, such as I tried to make in the Commonwealth Prime Minister's Conference, the effect on invisibles has to be taken into account both ways—I referred to the World Bank—and, as regards substitute materials and the high cost of copper, which are closely related, these are, as I said, part of the consequence of the illegal act. If we had tamely gone along with the illegal act, I believe that our supplies of copper from Zambia would have been gravely affected and the price rise very much more.
Sir Knox Cunningham: On a point of order, Mr. Speaker. If the Prime Minister refers to a document which sets out a speech which he has made, is it not usual to place such a document before the House when it is referred to in the House?
Mr. Speaker: If this was an official document and the right hon. Gentleman was quoting from it, it would be in order to ask for it. I understand that such is not the case.
Mr. Shinwell: In view of the doubts expressed by my right hon. Friend the
1438
Prime Minister about the integrity of the right hon. Member for Streatham (Mr. Sandys), does he think it advisable that a member of Her Majesty's Government should speak tomorrow night on the same platform with the right hon. Gentleman?
The Prime Minister: I was not casting doubts on the right hon. Gentleman's integrity. I was casting reflections on his inability to tell the House the full facts of where he got the document. I was certainly casting reflections on the unsavoury methods which are sometimes used in the fight which he is having not merely with this Front Bench but with his own.
Several Hon. Members rose——
Mr. Speaker: Order. The original Question was about Rhodesia, not about Europe. Mr. Thorpe.
Mr. Thorpe: Will the Prime Minister agree that, whatever the adverse economic effects upon Zambia have been, they have not been of Zambia's creation, and will he agree that the attempts to build a non-racial society in Zambia are well worth the support of this country, and, further, will he agree that sometimes in politics principles can be expensive but they are none the worse for that?
The Prime Minister: Yes, Sir, I agree with all three statements. As regards Zambia, these effects were not caused by any action of Zambia's, and, even if there had been no sanctions involved at all, we would have had a clear duty to help Zambia repair the damage to her economy caused by this irresponsible action.
Several Hon. Members rose——
Mr. Speaker: Order.

MALTA
Mr. Wall: Mr. Speaker, I ask leave to move the Adjournment of the House, under Standing Order No. 9, to call attention to a definite matter of urgent public importance, namely,
The position of British troops in Malta.
I submit that the matter is definite in that it concerns the future of British troops of all three Services and the

1439
whole future of Anglo-Maltese relations. It is urgent in that the latest information from Malta is that the Malta Government will announce their decision on whether they will reopen talks with the British Government in Parliament this evening and, if the decision is negative, I understand, the Third Reading of the Visiting Forces Bill will then be taken by the Malta Parliament. Today, therefore, might well be the last occasion on which the House of Commons could debate the matter because, once the Visiting Forces Bill is passed, it will be very difficult to alter the course of events.
I submit that it is a matter of public importance in that the passing and implementation of that Bill would make it impossible for British troops to be stationed in the George Cross island. This could have serious consequences for N.A.T.O. but above all, would bring to an end the long friendship between the British and Maltese peoples which has been strengthened in two world wars.
Having known the Maltese people since I was a schoolboy, I do not believe that they are bluffing. I submit that, unless the Government can inform the House that talks are immediately to be reopened, the House should debate the whole situation today, as, in my submission, even a 24 hours' delay could make any subsequent action taken by the House ineffective.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite matter of urgent public importance, namely,
The position of British forces in Malta.
I am grateful to the hon. Gentleman for informing me earlier this afternoon that he proposed to seek leave to move the Adjournment of the House under Standing Order No. 9. I appreciate his anxiety, an anxiety which is shared by us all, including the Chair. But, in the present circumstances, there are many alleged facts which are either in dispute or not yet available to the House, and in such circumstances application for leave to move the Adjournment under Standing
1440
Order No. 9 has repeatedly been refused. I am afraid that I must take the same course and I cannot put the hon. Gentleman's application to the House.
Sir J. Langford-Holt: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. I hope that the hon. Gentleman is not challenging Mr. Speaker's Ruling.
Sir J. Langford-Holt: No, Sir. I would like further guidance on the matter. This is a very difficult decision for you, Mr Speaker, and one realises that, but do we understand that, in order that leave may be given to mave the Adjournment under Standing Order No. 9, the general principle is that the thing must have become too late before it is urgent?
Mr. Speaker: Order. That is a criticism of the Chair's Ruling. I am sorry that the hon. Gentleman should make it. It has been the custom for some time that the Chair's Ruling under Standing Order No. 9 has been accepted.
Mr. Wall: Further to the point of order. May I ask, Mr. Speaker, if the queries of which you have spoken are cleared up tomorrow, whether you would be prepared to accept a similar request then?
Mr. Speaker: That is a matter which I must consider tomorrow. I cannot today commit myself for tomorrow.
Mr. Maudling: In the light of your Ruling, Mr. Speaker, would it be in order for me to ask whether a statement can be made at the earliest possible opportunity by the Government?
Mr. Speaker: That is a question not for me but for the Government, if any member of the Government wishes to answer.
The Lord President of the Council and Leader of the House of Commons (Mr. Richard Crossman): I have already given an assurance to the Leader of the Opposition on Thursday last that a statement on Malta will be made at the earliest possible moment.

ORDERS OF THE DAY
  HOUSING (FINANCIAL PROVISIONS, &c.) (SCOTLAND) BILL
  As amended (in the Standing Committee), considered.
  HOUSING (FINANCIAL PROVISIONS, &c.) (SCOTLAND) BILL

    Clause 1.—(FINANCIAL ASSISTANCE TOWARDS PROVISION OF NEW HOUSES.)
    3.52 p.m.
    Mr. Gordon Campbell: I beg to move Amendment No. 1, in page 2, line 18, to leave out from beginning to end of line 26 and to insert:
    and falling within one of the two following categories—

    (i) houses which would have been eligible for an Exchequer subsidy calculated in accordance with section 2, or paragraph (a) or (b) of section 3(4) of the Housing (Scotland) Act 1962 had this Act not been passed, and which are or have been completed on or after 25th November 1965.

    (ii) houses for which proposals for their provision were or are submitted to the Secretary of State for his approval on or after 25th November 1965'.

    The reason for our putting down the Amendment is that the Scottish Housing Bill, which we are now considering, was published soon after the Summer Recess and it was considered in the Scottish Grand Committee and later in the Scottish Standing Committee during November and December. The similar English Housing Bill, the Housing Subsidies Bill, did not appear until about 5th December.
    We had understood from the appearance in the previous Session of Parliament of similar Bills, which were cut short by the General Election, that there would be similarity in the two Measures, Scottish and English, concerning basic subsidies. But in the Scottish Standing Committee we had already considered all the relevant Clauses of the Scottish Bill before the English Bill was published and we could see what it contained.
    We understood that the reason for the delay in the appearance of the English Bill was the intention to add a United Kingdom provision for the new option mortgage scheme. There was clearly substance in that rumour, because when the English Housing Subsidies Bill appeared it contained a Part II covering the option mortgage scheme.
    We also noticed, however, as soon as the English Bill appeared that there was
    1442
    a major difference between the two Bills. Both Bills contained arrangements for basic subsidies, which are to be on a new basis related to interest rates. In both Bills, however—and this was a provision which had been added to both Bills since their predecessors of the last Parliament were introduced—there were also arrangements whereby some local authorities, which were defined in each Bill, would be able to have certain houses back-dated for the purpose of the basic subsidy. In the Scottish Bill, for example, houses in general would become eligible for the basic subsidy if approval had been requested from the Secretary of State on or after 25th November, 1965, but for certain local authorities the date was to go back to 1st January, 1965. Those are the provisions in the Scottish Bill.
    When we saw the English Bill, however, we noticed that there was a different arrangement. In the English Bill, it is houses which have been completed on or after 25th November, 1965, which in the special local authority category are to have back-dating. The difference is that that special category in the Scottish Bill consists of houses for which applications have been made after 1st January, 1965, but that in the English Bill it is houses completed on or after 25th November, 1965, a difference of about 11 months.
    Hon. Members on both sides will appreciate that for most houses a period of longer than 11 months is usual between application for approval and completion. Therefore, under the English Bill, there are bound to be a considerable number more houses which were applied for well before 1st January, 1965, which will be eligible for this special treatment.
    In Committee, the Minister of State told us that the building of houses in Scotland averages about 15 months. When we asked him about multi-storey buildings, he said that it was about 21 months. It is clear, therefore, that with the 11 months' difference—and, on the one hand, the question of submission for approval and, on the other hand, actual completions—there is a considerable advantage to England in the way that the English Bill is drafted. With the English provision, many more houses would be eligible.

    1443
    The vital point in this matter is that it covers a known period in the past when interest rates were very high. Under the new system of relating the basic subsidy directly to interest rates, there will clearly be uncertainty. If the Chancellor of the Exchequer, after his conference at Chequers with the Finance Ministers of other countries, is successful in bringing down interest rates, there will be considerable uncertainty about the amounts of the basic subsidy in the future.
    It can be said that the local authorities nevertheless had the safeguard that the subsidy is tied to the interest rate, but we are talking about a known period in the past when interest rates were very high and, therefore, large subsidies were payable. It therefore appears to be a discrimination, which is quite inexplicable, against Scotland that this provision should be contained in the English Bill and not in the Scottish Bill, particularly as we had no opportunity to see this when we considered the Bill in Committee, the English Bill having come out only on 5th December when we were completing the Committee stage of the Scottish Bill.
    I recognise that there may be technical imperfection in our Amendment, but its meaning is clear. Its intention, which should be clear beyond doubt to the Government, is that Scotland should in this respect receive as good treatment as England is receiving under the English Bill. I hope that even if they see fault in the drafting of the Amendment, the Government will state clearly whether they agree to the change which we suggest. I hope that the Minister will be able to say that he will correct this anomaly.
    Mr. Edward M. Taylor: The purpose of the Amendment is retrospectively to give local authorities in Scotland some kind of safeguard and protection from a period during which interest rates were extremely high. This had a devastating effect upon the finances of local authorities. The Amendment does not ask for special treatment. We are merely asking for similar treatment for Scotland as was included in the English Bill.
    It is alarming to have the situation that the Scottish Bill is less advantageous than
    1444
    that for the rest of the country. In recent weeks, we have seen a number of examples of discrimination against Scotland by the Government. They are far too many and it is time that we had a clear indication from the Government that this kind of policy will not be pursued.
    There are a number of facts which the Minister is under an obligation to give if he rejects the Amendment. The first and most obvious fact which should interest us is the time lag which is entailed between the two principles involved in the English and Scottish Bills.
    Mr. A. Woodburn: Since the hon. Mem- ber thinks that there is discrimination against Scotland, is he advocating that the Scottish local authorities should get simply the same subsidy for houses as the English local authorities are to get?
    4.0 p.m.
    Mr. Taylor: The right hon. Gentleman knows perfectly well that the pattern of local authority house building in Scotland, particularly of multi-storey building, is such that to have the same subsidies would be intolerable because obviously the circumstances differ considerably.
    Mr. G. Campbell: My hon. Friend will have noticed that the basic subsidies are to be the same for Scotland as they are for England, which is a change. There has always been a differential in the basic subsidy before.
    Mr. Taylor: My hon. Friend is right. The basic subsidy is to be on exactly the same principle. But I thought that the point which the right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) made was about the pattern of housing. He knows very well that there is a very substantial difference in the pattern of housing.
    We want to know, on the time lag, how long on average it takes to complete a house from the date when it is proposed. From the figures, it would seem that the difference is very substantial. In Scotland we have about 50,000 houses under construction. Last year, we completed, unfortunately, a relative small number—about 36,000. It would appear from this that it takes a period considerably in excess of one year to build an

    1445
    average house. If we take into account also the time spent in getting the plans approved, in changing them, and so on, clearly the time lag will be very considerable.
    Secondly, we wish to know what this will mean in figures. If the Amendment were accepted, and if the principle of starting on the same dates were accepted by the Government, what would this mean to Scottish local authorities? I am sure that in preparing the arguments in reply to the Amendment the Government have made a calculation, and I think that we are entitled to know what it is.
    The main argument which the Minister of State used in Committee against Amendments of this sort was the difficulty of calculation. When we suggested in an Amendment that the subsidy should be no less than it was under the 1962 Act, he said that it would be very difficult to estimate. He stated:
    "I do not want people to spend all their time doing actuarial accounts … and having arguments with my officials … they have enough to do".—[OFFICIAL REPORT, Scottish Standing Committee, 17th November, 1966; c. 60.]
    I am sure that that is correct.
    But we are not asking the Government to make a hypothetical assessment of what interest rates will be. The facts are all known. The calculations can be made, and I hope that the Government will have made them on the basis of the Clause as it stands and as it would read if it were amended by the Amendment. We are entitled to know the figures.
    I am very surprised at the general argument which the Minister of State uses about the difficulty of making calculations. He almost tries to imply that sums are not his strong point. We all know to our cost in Scotland that sums, statistics and figures are a very strong point of the hon. Gentleman. He has almost invented a new brand of statistics which are inclusive, exclusive and flexible which can be taken to prove anything, to prove that our housing programme is booming ahead, and that the houses are tumbling out of the Dover House cornucopia when they are not. We are asking for a simple calculation.
    There are three questions which must be answered. First, what is the reason
    1446
    for this differential in dates? It is not enough to say that the pattern is different. Secondly, we want an indication of the time lag involved between a house being approved and a house being completed. Thirdly, we want to know the cost involved. How much will this mean in cash? The Minister of State has an obligation t 3 answer these three questions. If we do not get answers to them the implications for Scottish housing will be clear.
    The Minister of State, Scottish Office (Dr. J. Dickson Mabon): I welcome this opportunity to make clear a number of points on the application to Scotland which are difficult because of the procedural nature of the timing and the sequence of events, and so on. This is a very important matter for Scotland. The decision taken by the Secretary of State was very wise, and I hope that it will have the endorsement of the House.
    I do not wish to go over the history of this matter. It was decided shortly after the Bill was presented in the last Parliament to make a special retrospective payment to those authorities which have done very well in a year when they had had no mere incentive than the previous housing subsidies. The suggestion in the Amendment is to apply the English solution to the distribution of that money. I do not quarrel with the fact that the Opposition may think that there is some merit in his application. It is quite remarkable—in fact, I think that it is quite urip-rcedented—for any Government to be willing to make a gesture to local authorities in addition to what was in a White Paper changing the housing subsidies. Usually housing subsidies are related to the date of the publication of the White Paper.
    In this case, the special retrospective subsidy was made in respect of England on the basis of slum statistics. Those of us acquainted with the Scottish housing problem l now that one thing which it lacks remarkably badly is statistics. We know that many authorities in Scotland do not mace comprehensive slum returns. The best example is Glasgow. But if we were to apply strictly the English solution, which is to relate the retrospective subsidy to the slum returns, the result would be very awkward and, I think, unacceptable.

    1447
    The House will recall that the previous Minister of Housing and Local Government, now the Leader of the House, and the present Minister of Housing and Local Government took the view that special retrospective assistance should go to a small number of local authorities in England and Wales. They defined those authorities as those with more than 12½ per cent. slums or at least 10 per cent. excess of households over dwellings and with a large current house building programme. On this restricted basis the Minister was able to make additional assistance available in England and Wales for all houses completed on and after 25th November, 1965. Only 54 English and Welsh authorities qualified under that definition.
    I do not quarrel with the solution in England. If I were an English Minister, I should think it perfectly sound. But I invite the House to consider how we could apply it to Scotland. First, the figures are not available on the same scale that they are available in England. When the Secretary of State considered the English formula, it was perfectly clear that if we adapted it to the Scottish situation the following communities would get nothing: Glasgow—
    Mr. G. Campbell: We do not suggest in the Amendment that the English formula for distinguishing one category of local authority from another should be adopted. We suggest that this should be done in the Scottish way in the Scottish Bill, but that the timing should be altered. Clearly there are differences between England and Scotland which are looked after by the two different formulae. But having separated the special group of local authorities which need assistance, surely the same system on timing should be adopted.
    Dr. Mabon: I do not agree. As the hon. Gentleman knows from his experience in government, when these decisions are made to give extra money, whether it be by general grant, housing subsidy, or in respect of fishing, agriculture, or anything to do with the United Kingdom—and it has to be broken up on a Scottish-English basis—if a different formula is applied in Scotland from the formula applied in England difficulties might arise.
    1448
    The English settlement stands on its own. It would not be possible to apply the English solution fairly to Scotland and to bring in those whom we felt deserved the bonus for having built houses at a time of high interest rates when there was no prospect of a change in subsidies. It was not as an incentive but as a direct reward in a period when people had no incentive.
    I do not quarrel with any of the hon. Gentleman's remarks. The Government came into office on 15th October, 1964, but they did not produce their White Paper on housing subsidies until 25th November, 1965. In that period, all that the local authorities had to rely on were the exhortations of Ministers and the promise that something would be done, but no local authority had the experience of being told that it would get subsidy on a house which it was actually submitting. It believed that it got subsidy in most. if not in all, cases from when the White Paper was produced. In 1956, and I think in 1962. the date of the White Paper was the date of application of the subsidy, and so it was to be here. The previous Bill applied the subsidy from 25th November, 1965.
    The burden of my argument is that changing the indices of selection for the Scottish solution gives a better solution than by simply applying the straight English formula to the Scottish scene. We have also to take into account whether it should be on approvals or completions. I think that it will be seen that we chose the right solution. If we had chosen the English formula, irrespective of whether we had taken it on completed houses, Glasgow would not have come out so well. Neither would Aberdeen, Clydebank, Coatbridge, Greenock, Motherwell, Paisley, Lanark County, West Lothian and many others with serious housing problems.
    This might be called an Oliver Twist Amendment, in that it wants even more than the English are getting. In other words, it wants the Scottish formula with the English timing. But that cannot be done. We have been fortunate in getting a splendid retrospective change. It is the first time in housing legislation that that has been done. Given that we have to distribute it on some basis, I hope that the Opposition will agree with me that it would be wrong to distribute it on the English basis.

    1449
    I should not like to give the names of authorities which would have benefited, but certainly they could not include such authorities as Glasgow, Aberdeen, Clydebank, Coatbridge, Greenock, Motherwell, Paisley, Lanark County and West Lothian which ought to benefit. If those were excluded by the formula, it would have been quite intolerable and the subject of a heated debate in the House.
    4.15 p.m.
    Given the fact that we have the formula as we have it in the Bill, the application had to be for houses approved as at 1st January, 1965. I admit that we are taking the formula which was laid down by hon. Gentlemen opposite in the 1962 Act on the question of need. The party opposite laid down a perfectly fair criterion which operated well in 1962 and which created the so-called £12 and £32 authorities. We have taken it that those who qualify under that assessment as a £32 authority and those who come within the formula in other respects will have subsidy paid, and we have been thanked by many local authorities and congratulated for doing something quite remarkable in that regard.
    I do not want to get into a party argument, but I stress that the special retrospective subsidy is unusual. There was no indication from hon. Gentlemen opposite that they intended to support these retrospective subsidies. They did not oppose the Bill on Second Reading in the last Parliament, and therefore it is fair for them to say that they would probably welcome them in this Parliament, but they cannot claim that they would have introduced these retrospective subsidies. I have looked through quite a number of pronouncements by the hon. Gentleman and others about this, and it is clear that they had no other solution than that which we propose, or that they felt that they would extend the Scottish proposals along the lines of the timing of the English provision.
    If hon. Gentlemen opposite are using this Amendment as a probing exercise, it is a tolerable one. If not, it would be received with cynicism that we should be considering such an Amendment at this stage.

    Division No. 273.]

    AYES

    [4.17 p.m.

    Abse, Leo

    Allen, Scholefield

    Ashley, Jack

    Albu, Austen

    Anderson, Donald

    Atkins, Ronald (Preston, N.)

    Allaun, Frank (Salford, E.)

    Armstrong, Ernest

    Atkinson, Norman (Tottenham)

    Mr. G. Campbell: May I remind the hon. Gentleman that this is the first opportunity that we have had to discuss the point, because the English Bill had not appeared with this in it? When he says that we had not said anything about this before, it was because we had no idea of this difference when we discussed it on the last occasion.
    Dr. Mabon: I do not quarrel with that at all, and I welcome the debate because it gives the Government a chance to point out the distinction between the English formula and the Scottish formula, which we could not do in Committee. I hope that the debate will give the chance to hon. Gentlemen opposite of saying that the Government chose the right option—not the English option, but the formula devised in our own Bill.
    I hope that the Amendment is not meant literally and that it is not intended to press it and seek to get a larger subsidy than is now proposed in the Bill. Hon. Gentlemen opposite gave no indication that they wanted to give a retrospective subsidy to Scotland, never mind a bigger one than that which we propose. When they were in office, they never at any time proposed that. When one goes back to 1956 and recollects that the subsidy was virtually halved, it would seem to be too much to believe that this is a sudden burst of generosity which has swept over the Opposition.
    If I am to believe that the Amendment is literal in what is means, then hon. Gentlemen opposite will divide the House. if that is not the case and the intention is to explore the matter, I would welcome the comments of hon. Gentlemen on whether or not, given that it can be applied only to approvals on 1st January, 1965, they agree on reflection that the formula which we have adopted is much better than the English formula applied to Scotland would have been, although the English formula is fair in the context of England and Wales.
    Question put, That the words proposed to be left o it stand part of the Bill:—
    The House divided: Ayes 227, Noes 141.

    Bacon, Rt. Hn. Alice

    Haseldine, Norman

    Orme, Stanley

    Bagier, Gordon A. T.

    Hattersley, Roy

    Oswald, Thomas

    Barnett, Joel

    Hazell, Bert

    Owen, Dr. David (Plymouth, S'tn)

    Baxter, William

    Heffer, Eric S.

    Owen, Will (Morpeth)

    Bence, Cyril

    Henig, Stanley

    Padley, Walter

    Bennett, James (G'gow, Bridgeton)

    Hilton, W. S.

    Page, Derek (King's Lynn)

    Besse11, Peter

    Hobden, Dennis (Brighton, Ktown)

    Paget, R. T.

    Bidwell, Sydney

    Hobson, Rt. Hn. Sir John

    Palmer, Arthur

    Binns, John

    Hooley, Frank

    Pannell, Rt. Hn. Charles

    Bishop, E. S.

    Houghton, Rt. Hon. Douglas

    Pardoe, John

    Blackburn, F.

    Howarth, Harry (Wellingborough)

    Park, Trevor

    Blenkinsop, Arthur

    Howarth, Robert (Bolton, E.)

    Parker, John (Dagenham)

    Booth, Albert

    Howell, Denis (Small Heath)

    Parkyn, Brian (Bedford)

    Braddock, Mrs. E. M.

    Howie, W.

    Pavitt, Laurence

    Bradley, Tom

    Hoy, James

    Pentland, Norman

    Brown,Bob(N'c'tle-upon-Tyne,W.)

    Hughes, Emrys (Ayrshire, S.)

    Perry, George H. (Nottingham, S.)

    Buchanan, Richard (G'gow, Sp'burn)

    Hughes, Hector (Aberdeen, N.)

    Price, Christopher (Perry Barr)

    Carter-Jones, Lewis

    Hunter, Adam

    Price, Thomas (Westhoughton)

    Chapman, Donald

    Hynd, John

    Probert, Arthur

    Coleman, Donald

    Irvine, A. J. (Edge Hill)

    Randall, Harry

    Conlon, Bernard

    Jackson, Peter M. (High Peak)

    Rankin, John

    Corbet, Mrs. Freda

    Janner, Sir Barnett

    Redhead, Edward

    Crawshaw, Richard

    Jeger, George (Goole)

    Reynolds, G. W.

    Crossman, Rt. Hn. Richard

    Jenkins, Hugh (Putney)

    Rhodes, Geoffrey

    Dalyell, Tam

    Jenkins, Rt. Hn. Roy (Stechford)

    Richard, Ivor

    Davidson,James(Aberdeenshire,W.)

    Johnson, Carol (Lewisham, S.)

    Robertson, John (Paisley)

    Davies, Harold (Leek)

    Jones, Dan (Burnley)

    Rodgers, William (Stockton)

    Davies, Robert (Cambridge)

    Judd, Frank

    Rogers, George (Kensington, N.)

    Davies, S. O. (Merthyr)

    Kelley, Richard

    Rose, Paul

    de Freitas, Rt. Hn. Sir Geoffrey

    Kenyon, Clifford

    Ross, Rt. He. William

    Dempsey, James

    Kerr, Mrs. Anne (R'ter & Chatham)

    Rowland, Christopher (Meriden)

    Dewar, Donald

    Kerr, Dr. David (W'worth, Central)

    Sheldon, Robert

    Diamond, Rt. Hn. John

    Kerr, Russell (Feltham)

    Shinwell, Rt. Hn. E.

    Dickens, James

    Lawson, George

    Shore, Peter (Stepney)

    Dobson, Ray

    Lee, John (Reading)

    Short, Mrs. Renée(W'hampton,N.E.)

    Doig, Peter

    Lewis, Ron (Carlisle)

    Silkin, Rt. Hn. John (Deptford)

    Driberg, Tom

    Lipton, Marcus

    Silverman, Julius (Aston)

    Dunn, James A.

    Lomas, Kenneth

    Slater, Joseph

    Dunnett, Jack

    Luard, Evan

    Small, William

    Dunwoody, Dr. John (F'th & C'b'e)

    Lubbock, Eric

    Snow, Julian

    Eadie, Alex

    Lyons, Edward (Bradford, E.)

    Spriggs, Leslie

    Edelman, Maurice

    Mabon, Dr. J. Dickson

    Steel, David (Roxburgh)

    Edwards, Rt. Hn. Ness (Caerphilly)

    McBride, Neil

    Steele, Thomas (Durtbartonshire,W.)

    Edwards, Robert (Bilston)

    McCann, John

    Stewart, Rt. Hn. Michael

    Edwards, William (Merioneth)

    Macdonald, A. H.

    Swain, Thomas

    Ellis, John

    McGuire, Michael

    Symonds, J. B.

    Ensor, David

    Mackenzie,Alasdair(Ross&Crom'ty)

    Thornton, Ernest

    Evans, Albert (Islington, S.W.)

    Mackenzie, Gregor (Rutherglen)

    Thorpe, Jeremy

    Evans, loan L. (Birm'h'm, Yardley)

    Mackie, John

    Tinn, James

    Faulds, Andrew

    Mackintosh, John P.

    Urwin, T. W.

    Fernyhough, E.

    Maclennan, Robert

    Varley, Eric G.

    Fitch, Alan (Wigan)

    McNamara, J. Kevin

    Wainwright, Edwin (Dearne Valley)

    Fletcher, Raymond (likeston)

    MacPherson, Malcolm

    Wainwright, Richard (Colne Valley)

    Fletcher, Ted (Darlington)

    Mahon, Peter (Preston, S.)

    Walker, Harold (Doncaster)

    Foot, Sir Dingle (lpswich)

    Mallalieu, E. L. (Brigg)

    Watkins, David (Consett)

    Foot, Michael (Ebbw Vale)

    Manuel, Archie

    Watkins, Tudor (Brecon & Radnor)

    Ford, Ben

    Mapp, Charles

    Wellbeloved, James

    Forrester, John

    Marsh, Rt. Hn. Richard

    Wells, William (Walsall, N.)

    Fowler, Gerry

    Mayhew, Christopher

    Whitaker, Ben

    Fraser, John (Norwood)

    Mellish, Robert

    Whitlock, William

    Freeson, Reginald

    Mendelson, J. J.

    Wilkins, W. A.

    Gardner, Tony

    Millan, Bruce

    Williams, Alan Lee (Hornchurch)

    Garrett, W. E.

    Miller, Dr. M. S.

    Williams, Clifford (Abertillery)

    Ginsburg, David

    Moonman, Eric

    Winnick, David

    Gourlay, Harry

    Morgan, Elystan (Cardiganshire)

    Winstanley, Dr. M. P.

    Greenwood, Rt. Hn. Anthony

    Morris, Alfred (Wythenshawe)

    Winterbottom, R. E.

    Gregory, Arnold

    Morris, Charles R. (Openshaw)

    Woodburn, Rt. Hn. A.

    Grey, Charles (Durham)

    Neal, Harold

    Woof, Robert

    Griffiths, David (Rother Valley)

    Noel-Baker,Rt.Hn.Phllip(Derhy,S.)

    Yates, Victor

    Griffiths, Rt. Hn. James (Llanelly)

    Norwood, Christopher

    Grimond, Rt. Hn. J.

    Oakes, Gordon

    TELLERS FOR THE AYES:

    Hamilton, James (Bothwell)

    Ogden, Eric

    Mr. Joseph Harper and

    Hamling, William

    O'Malley, Brian

    Mr. Walter Harrison.

    Hannan, William

    Oram, Albert E.

    NOES

    Alison, Michael (Barkston-ASh)

    Black, Sir Cyril

    Bromley-Davenport,Lt. Col.SirWalter

    Astor, John

    Blaker, Peter

    Brown, Sir Edward (Bath)

    Baker, W. H. K.

    Bossom, Sir Clive

    Bruce-Gardyne, J.

    Balniel, Lord

    Boyd-Carpenter, Rt. Hn. John

    Buchanan-Smith,Alick(Angus,N&M)

    Batsford, Brian

    Boyle, Rt. Hn. Sir Edward

    Buck, Antony (Colchester)

    Beamish, Col. Sir Tufton

    Braine, Bernard

    Bullus, Sir Eric

    Biffen, John

    Brewis, John

    Burden, F. A.

    Biggs-Davison, John

    Brinton, Sir Tatton

    Campbell, Gordon

    1452

    1453

    Carlisle, Mark

    Hobson, Rt. Hn. Sir John

    Nicholls, Sir Harmar

    Cary, Sir Robert

    Hogg, Rt. Hn. Quintin

    Noble, Rt. Hn. Michael

    Channon, H. P. G.

    Holland, Philip

    Orr-Ewing, Sir lan

    Chichester-Clark, R.

    Hordern, Peter

    Osborn, John (Hallam)

    Clegg, Walter

    Howell, David (Guildford)

    Osborne, Sir Cyril (Louth)

    Cooke, Robert

    Hunt, John

    Pearson, Sir Frank (Clitheroe)

    Corfield, F. V.

    Hutchison, Michael Clark

    Peel, John

    Costain, A. P.

    Irvine, Bryant Godman (Rye)

    Peyton, John

    Craddock, Sir Beresford (Spelthorne)

    Jennings, J. C. (Burton)

    Pike, Miss Mervyn

    Crosthwaite-Eyre, Sir Oliver

    Jopling, Michael

    Pink, R. Bonner

    Crouch, David

    Kershaw, Anthony

    Pounder, Rafton

    Cunningham, Sir Knox

    King, Evelyn (Dorset, S.)

    Powell, Rt. Hn. J. Enoch

    Dalkeith, Earl of

    Kirk, Peter

    Renton, Rt. Hn. Sir David

    Dean, Paul (Somerset, N.)

    Kitson, Timothy

    Ridsdale, Julian

    Dodds-Parker, Douglas

    Knight, Mrs. Jill

    Roots, William

    Doughty, Charles

    Lambton, Viscount

    Rossi, Hugh (Hornsey)

    Elliot, Capt. Walter (Carshalton)

    Lancaster, Col. C. G.

    Russell, Sir Ronald

    Elliott, R.W.(N'c'tle-upon-Tyne,N.)

    Langford-Holt, Sir John

    Sharples, Richard

    Errington, Sir Eric

    Legge-Bourke, Sir Harry

    Shaw, Michael (Sc'b'gh & Whitby)

    Fortescue, Tim

    Lewis, Kenneth (Rutland)

    Sinclair, Sir George

    Gilmour, Ian (Norfolk, C.)

    Lloyd, Rt. Hn. Selwyn (Wirral)

    Smith, John

    Gilmour, Sir John (Fife, E.)

    Longden,Gilbert

    Stodart, Anthony

    Glyn, Sir Richard

    Loveys, W. H.

    Stoddart-Scott, Col. Sir M. (Ripon)

    Goodhew, Victor

    McAdden, Sir Stephen

    Taylor,Edward M.(G'gow,Cathcart)

    Grant, Anthony

    MacArthur, Ian

    Tilney, John

    Grant-Ferris, R.

    Maclean, Sir Fitzroy

    Turton, Rt. Hn. R. H.

    Gurden, Harold

    McMaster, Stanley

    Vickers, Dame Joan

    Hall, John (Wycombe)

    Maginnis John E.

    Walker, Peter (Worcester)

    Hall-Davis, A. G. F.

    Maude, Angus

    Walters, Dennis

    Hamilton, Marquess of (Fermanagh)

    Mawby, Ray

    Ward, Dame Irene

    Hamilton, Michael (Salisbury)

    Maydon, Lt.-Cmdr. S. L. C.

    Webster, David

    Harris, Frederic (Croydon, N.W.)

    Mills, Peter (Torrington)

    Whitelaw, Rt. Hn. William

    Harrison, Col. Sir Harwood (Eye)

    Mitchell, David (Basingstoke)

    Wills, Sir Gerald (Bridgwater)

    Harvey, Sir Arthur Vere

    More, Jasper

    Wilson, Geoffrey (Truro)

    Hawkins, Paul

    Morrison, Charles (Devizes)

    Wolrige-Gordon, Patrick

    Heald, Rt. Hn. Sir Lionel

    Mott-Radclyffe, Sir Charles

    Wood, Rt. Hn. Richard

    Heath, Rt. Hn. Edward

    Munro-Lucas-Tooth, Sir Hugh

    Wylie, N. R.

    Higgins, Terence L.

    Murton, Oscar

    Hiley, Joseph

    Nabarro, Sir Gerald

    TELLERS FOR THE NOES:

    Hirst, Geoffrey

    Neave, Airey

    Mr. Reginald Eyre and

    Mr. Hector Monro.

    Clause 2.—(AGGREGATE COST SUBSIDIES.)
    Mr. Michael Noble: I beg to move Amendment No. 2, in page 3, line 27, to leave out 'preceding financial year' and insert:
    'two preceding financial years in the case of houses in buildings of six storeys or more and the preceding financial year in the case of other houses'.
    The point is not of tremendous importance and is certainly not one of great principle. But it gives the Minister of State an opportunity to think again about the problems of multi-storey buildings. There was a debate on the problem in the Committee and various of my hon. Friends thought that there was a reasonable case for providing extra borrowing powers for local authorities—longer than just in the preceding financial year—when one was dealing with multi-storey houses. Some of them take a considerable time to build, and are therefore different from ordinary house building.
    The Minister of State, who is normally kind and courteous in these matters, as usual wrote a long letter to my hon. Friend the Member for Moray and Nairn (Mr. G. Campbell), after having looked
    1454
    carefully at the problems involved. I am sure that he will have no objection if I read the main points he made so that the House will be aware of them. I think that they were summed up in the last 2½ paragraphs of his letter, in which he says:
    "In larger schemes no very clear pattern of expenditure and borrowing emerges. In some schemes borrowing may be spread over the two preceding years but in others the borrowing arrangements may be quite different. In one scheme, for example, actual expenditure even as late as the date of completion of the scheme did not exceed half the total sum."
    I am certain that the Minister of State is accurate, but he is not highly informative, because there is clearly a very large variety of circumstances. As he says, in one example at the date of completion of the scheme the borrowing did not even exceed half the total sum. But apart from that, all the hon. Gentleman has to tell us is that there are very varying circumstances. Perhaps he will be able to enlarge on that so that we can judge whether his argument as a whole is sound. In the next paragraph the hon. Gentleman said:
    "On balance, therefore, I am clear that while the multi-storey point you raised is valid in some cases, it is of limited application and

    1455
    the general formula in Clause 2(3) should continue to refer to the preceding financial year only. We cannot hope to cover all exceptional possibilities and the formula is one which the local authority associations have accepted as being reasonable for subsidy purposes."
    4.30 p.m.
    I can remember very often writing that sort of sentence—or perhaps I should be more accurate and say that I remember signing letters with that sort of sentence in them. It does not take us very far if one looks at it carefully. Of course, no one can cover every exceptional possibility and the House is not asking the hon. Gentleman to do so. It is asking him to treat multi-storey buildings as one particular type of buildings which are, in general. different from ordinary houses.
    Equally, I do not think that I or the House need be too worried—I am sure that the hon. Gentleman will tell us that I am wrong, however, that there would be any difficulty with the local authorities if he said that he was able to spread the borrowing powers for over a longer period than one year, because no local authority would lose by this, if I understand the position rightly, and one or two might gain a little. So there would be no question, if he agreed to this sensible Amendment, of his finding himself in difficulty with local authorities because they had arranged something different with him.
    It is clear that this Amendment is sensible, but the very last paragraph of the hon. Gentleman's letter gives me more concern. He says:
    "You will know that this point was debated in the English Committee on 27th January (Column 156–157) and that no change was made."
    This does at least imply, if not directly suggest, that because the English Committee looked at a similar problem and decided that it could not do this, therefore, in some way the Scottish Office, which had earlier looked at the same problem, could not possibly reopen it or think again. I am doing my best not to lead any of my hon. Friends astray by quoting the very large number of cases in the last four, five or six months where there has been quite clearly a failure by the Scottish Office to stick out for particular Scottish interests.
    1456
    This paragraph is only a very minor example of it. It seems that the hon. Gentleman is trying to suggest to my hon. Friend and to the public—the letter is public—that, because an English Committee had decided that it could not do something which, on the argument in the later itself, is certainly' not absurd, therefore it was at least an added point as to why the Scottish Office could not do this for Scotland.
    Dr. Dickson Mabon Dr. Dickson Mabon indicated dissent.
    Mr. Noble: I am glad to see the hon. Gentleman shaking his head. I wish that he had shaken it a good deal more often on other occasions in the past when some of these things were happening. If this is not so, let him say so clearly and accept the Amendment, which does no harm and would at least give Scotland a very tiny lead in a very unimportant way.
    Dr. Dickson Mabon: I would prefer to reply now, if I may, in order to dispute one of the interpretations, which I find a little unpleasant, made by the right hon. Member for Argyll (Mr. Noble) of the last sentence of my letter. The right hon. Gentleman is usually very courteous and does not usually make reflections of this kind but as he has made the point I will answer him now.
    The letter was written on 6th February. I was not obliged to write it. I did so voluntarily. It refers to a debate in the English Committee on 27th January. This was at a time when our discussions in the Scottish Committee had concluded—on 13th December. I had indicated to the hon. Member for Moray and Nairn (Mr. G. Campbell) when we discussed this in Committee that there was some point in what he said and I would discuss it—as I did—with the local authority associations again. I added, however, that I did not feel that we should amend the Bill to meet the point he was making and which is made again in this Amendment.
    The argument is perfectly sound when applied to the English circumstances—that is to say, the question here of choosing the preceding year or the two preceding years is as valid in English as in Scottish experience. What we are talking about is whether or not the advice given by the financial people in the local authorities is along the lines on which we

    1457
    should make an Amendment or whether we should keep the Bill as it is.
    It is up to elected members of the local authorities and Ministers to decide which way is preferable in the working-out of the problem, commending one or the other to Parliament. When I made my reference in the last sentence of the letter, it was to the fact that the English had already discussed the main point and were exchanging their views on whether or not it should be one year or two. They were going through the same experience of argument that we had and they came to the same conclusion.
    That is why I made reference in the letter to this fact. It was not an implication that, because the English decided that they could not do it, neither would we. My hon. Friend the Member for Bermondsey (Mr. Mellish), who is Parliamentary Secretary to the Ministry of Housing and Local Government, and I have worked very closely for nearly three years now in these matters. There has not been friction between us of any great substance. We work amicably together. We have been fortunate in being able to persuade our respective bosses to assume matters in various Statutes, not only in the Rent Act but in others, including this Bill.
    Mr. Noble: Perhaps it would be better for Scotland if the hon. Gentleman was not quite so cosy with the Parliamentary Secretary to the Ministry of Housing and Local Government, because I found, at least in my time, that sometimes I had to be very rough and very rude to my English colleagues to get what I wanted.
    Dr. Mabon: I have no doubt that that would have been a remarkable and rare occurrence and I have no doubt that it happened. All I say now is that it is about as remarkable as the idea that I have to be rude to my hon. Friend. That is not our way of doing business. We have nothing to apologise for in our housing legislation, unlike the right hon. Gentleman. This is a remarkably generous Bill. What we are asking for is something which has emerged as the result of experience and of consultations between local government financial officers and Scottish Office financial officers. They have submitted their opinion to the Ministers and to the elected members of local
    1458
    authorities and I must retail those opinions to the House.
    Since we discussed this matter last, I have again raised it with the local authority associations and I am advised to tell the House that, firstly, none of them has expressed dissatisfaction with the proposal in the Bill, that the subsidy be calculated on the preceding financial year only, and secondly that calculations based on different periods for different types of construction would simply lead to additional complexities without any very good reason for so doing.
    That is not my opinion. That is the advice tendered to me by the Working Party representative of the local authority associations and of the Scottish Office. The associations have always stressed the need for simplicity in the calculation of the interest rate and for the minimum additional returns and requests for additional information. They do not want to be badgered by the Scottish Office for more information, to fill up more forms and to submit more letters. We do not want a situation where they have to make a double return when we are trying to keep this to a single return. The associations re-emphasised these factors to us during the recent discussions about the detailed working of the Bill's provisions.
    There is no party argument in this and I think that the right hon. Gentleman is seized of the point. It is a matter of administrative functioning. As I say, the hon. Member for Moray and Nairn raised this with me originally. I discussed it with the local authority associations and drew attention to what he had said. They did not say promptly that he was wrong. They said, "Very well, we shall discuss the matter again with out advisers". They went away and did so, and came back with the answer.
    When I discussed it with my hon. Friend the Parliamentary Secretary, he having had the same experience, he went back to his Committee, whose advice to him was that we should stick to what is in the Bill, namely, one year and not two years. The issue is now being raised in the Amendment, and I am giving the same advice, and the experience that we have had from the local authority associations is as I have read out.
    The last point is in relation to the matter which I raised. I think this was

    1459
    an eminently reasonable letter. It did not say that the right hon. Gentleman was wrong. It said that there were occasions when he was marginally right. There is no general pattern of borrowing for multi-storey projects which would justify this Amendment. This is a fact. This is advice given me by those involved. There is no general pattern. We give the Opposition the argument that there could be exceptional cases. The right hon. Gentleman reverted more to his own character and said that he realised that we could not legislate for particular cases. We could only concern ourselves with the general case.
    I accept that. This is the whole point here. The local authority associations have said that there is no question of the present formula unfairly benefiting or penalising local authorities. That is what they say. The right hon. Gentleman mentioned that it would do no harm, that we could adopt it because no one would lose even if no one gained. That is not quite true. Some could lose in the short term. They would not lose in the long term, but they could in the short term.
    The other point is that there would be so much work to be done, additional to the work that is being done, that it is not fair to argue that we should extend it for two years. They have said that it is possible that in the short term they could lose if they took the one-year period, but they are confident that in the subsequent period they would
    "gain from this element of swings and roundabouts in the formula".
    I put my cards quite fairly on the table and face up to the House. The local authorities prefer this overwhelmingly. They have been consulted now on several occasions. The experience of the English local authorities with the Minister is precisely the same, and I hope that we will not have to make this Amendment.
    I am perfectly willing again to ask the local authorities, before this is raised in another place, whether or not they have changed their minds, and whether or not the right hon. Gentleman is correct. I have no reason to believe that they have changed their minds.
    I do not want to mislead the House and suggest that I shall advise my noble
    1460
    Friends in another place to sponsor an Amendment to the Clause. I hope that if this offer to go back to the local authorities is considered as an assurance by the right hon. Gentleman, it will be accepted and that he will not press the Amendment.
    Mr. J. Bruce-Gardyne: The Minister of State accused my right hon. Friend the Member for Argyll (Mr. Noble) of being offensive by imputation. I must say that his remarks seemed to justify entirely the remarks that my right hon. Friend made. He assured us that he is never in conflict or disagreement with his hon. Friend his opposite number in England. This is precisely the trouble, as my right hon. Friend said. This is what we fear so much about the party opposite, that there is no constructive conflict between the English Ministries and the Scottish Office. Most of us think it is high time that there was constructive conflict.
    Mr. Alex Eadie: Does the hon. Gentleman not think that perhaps the reason why the election was lost was that his right hon. Friend was too much in conflict with his own party?
    Mr. Bruce-Gardyne: No. I think, on the contrary, that my right hon. Friend, when he was in office, stood up and was seen to stand up persistently, in the interests of Scotland. Nowadays scarcely a week passes without the interest of Scotland being trodden underfoot and disregarded by hon. Members and right hon. Members opposite. Therefore, I say that the comments of my right hon. Friend were totally justified, and the Minister of State's explanation was neither convincing nor adequate.
    4.45 p.m.
    The Minister of State made great play with the fact that all the local authorities he had consulted preferred the one-year system as introduced in the Bill. I can only say that the consultations which I have had with local authorities in my area do not support this conclusion.
    Dr. Dickson Mabon: May I ask who they are? It is news to me.
    Mr. Bruce-Gardyne: It would be improper for me to betray confidences. I was speaking to the local authorities in confidence, and I should not identify

    1461
    them individually. That was the impression I got. It may be that the views that were expressed to me—I will not say they were very determined views or very positive, but on balance it was felt that there was a case in favour of spreading the determination of the subsidy over a longer period. This was the indication I was given.
    The Minister of State said that local authorities would suffer from this in certain circumstances. I agree that they would, but they would also benefit. There is, as he himself said, an element of swings and roundabouts. What seems to me to be important is that the calculation under this provision should correspond to the realities of the costs which local authorities meet in building houses. If the financing of house building has occurred regularly over a period which extends for longer than the previous year, then the Amendment would correspond to reality, and this is much more important than the question of swings and roundabouts.
    It may be that at the moment we are briefly—and I suspect it is only briefly—entering a period of slightly lower interest rates, so that the calculation of a subsidy element on a yearly basis would advantage local authorities who were taking more than a year to finance their house building, and the calculation over the two preceding years would disadvantage them.
    This is, I suspect, a very temporary phenomenon, because I have infinite confidence in the ability of right hon. Gentlemen opposite to get themselves into another financial pickle and find themselves forced to raise interest rates once again in the very near future. Therefore, I do not think we should be influenced in considering this Amendment by the circumstances which happen to exist at the present moment.
    Finally, the Minister of State said that on the whole what was valid in England was valid in Scotland.
    Dr. Dickson Mabon Dr. Dickson Mabon indicated dissent.
    Mr. Bruce-Gardyne: I took down those words. I will certainly study his remarks in HANSARD tomorrow.
    Dr. Mabon: Could I make it absolutely clear, since I am to be misquoted inadvertently by so many on this matter,
    1462
    that in these circumstances, where the actuarial accounting is of precisely the same nature, whether we are talking about two or one financial years, that the experience of the English authorities which are building multi-storey houses as we are is the same as ours.
    Mr. Bruce-Gardyne: That is just the point I was about to make. It depends on whether the English authorities are proceeding more swiftly, or at the same pace, or more slowly than Scottish authorities in the construction of multi-storey flats. The experience we have had under right hon. Gentlemen opposite in the last 18 months to two years suggests that the pace of house building in Scotland is slowing down. Of course, for this the present Government must bear the entire responsibility. Therefore, if this is true, and I believe that it is true, then the Sottish circumstances must necessarily be the same as the English circumstances.
    It is this which, in the last analysis, worries us about the Government's reaction to this sort of Amendment. Sometimes, we do not see what purpose the Scottish Office is serving. It might just as well be amalgamated with the English Departments for its value in speaking up for Scottish interests and for defending Scottish interests as it should be doing. It is precisely because of the way in which the Minister of State replied to my right hon. Friend's comments on this Amendment that our worries increase from day to day.
    Earl of Dalkeith: I rise very briefly to express my surprise that the Minister of State has not jumped at this Amendment which I would have thought he would have found to be irresistible. I intervene only to question him about something which he said.
    He referred to consultations which he had had with local authority associations. Relatively few local authorities in Scotland are particularly involved with multi-storey building. In fact, only a few major local authorities are concerned. The hon. Gentleman said that before the Bill went to its next stage he would have more consultations with local authorities. I wonder whether he will assure us that he will consult those particular local authorities which are most directly concerned with multi-storey building.
    Mr. Edward M. Taylor: I am sorry to come in again on this Amendment. but——
    Mr. Deputy Speaker (Mr. Sydney Irving): Do I understand the hon. Gentleman to mean that he has already spoken on this Amendment?
    Mr. Taylor: No. I put "again" in the wrong part of my sentence.
    Dr. Dickson Mabon: It only seems again.
    Mr. Taylor: I had no intention of speaking on this Amendment, nut it is only fair to give the Minister of State clear warning that if we are to have answers so wholly and completely inadequate as that which he has just given, we are in for a long day and a long night, because unless we get answers to these questions, which are very serious for local authorities, we shall not make progress.
    I have a special interest in this Amendment, because my constituency probably has more electors residing in multi-storey houses than any other constituency has. I am therefore probably more concerned than any other hon. Member who is present, although that computation is not very difficult, because not many Labour Members are in the Chamber. This is very disappointing when it is remembered that this is the Bill on which the Scottish Grand Committee was counted out, even although, as usual, the Opposition benches were full of hon. Members who wanted to participate in the discussions. I hope that there will be no repetition of that tonight on such vital matters.
    What were the arguments which the Minister of State used to justify rejecting the Amendment? First, he said that if we had a change of the sort suggested in the Amendment, some local authorities might lose in the short term. I would like him to try to explain precisely what he meant, because, clearly, if interest rates are declining—and we have had an assurance from no less a person than the Chancellor of the Exchequer that they should decline from the appalling levels which they have reached under the Labour Government—precisely how can a local authority lose in the short-term if the Amendment is accepted? How can the hon. Gentleman justify his argument, unless interest. rates are to rise again?
    1464
    Clearly, with a longer period, if interest rates decline, a local authority gains, and if they rise, it loses. Is the hon. Gentleman saying that interest rates will go up, which is the implication of what he has said? If so, even for the present Government that would be an alarming argument.
    Mr. Woodburn: The hon. Gentleman is very interesting on the subject of interest rates. Does he remember that when his party was in office it explained that interest rates did not affect the cost of housing when spread over all the charges and that alterations in interest rates were a mere bagatelle and hardly affected the cost of corporation housing?
    Mr. Taylor: The right hon. Gentleman has been in the House much longer than I have and he frequently interrupts me to tell me what was said in previous years. However, when I have checked, I have generally found that he has taken remarks a little out of context. I was not aware of what he suggests, but if he is trying to draw fire from the Minister on this matter, he will not succeed, because this is what the Minister said and I want him to explain precisely how a local authority could lose under the Amendment in the short term if interest rates are not to rise.
    Mr. Archie Manuel: Even if local authorities did lose, the subsidy would still be well in advance of anything which the Conservative Government paid out.
    Mr. Taylor: If the hon. Gentleman is tempting me into explaining all the measures which the present Government have introduced and which have demoralised and hit Scottish housing, I shall be pleased to do so. It would be out of order for me to do so now, but I am prepared to meet the hon. Gentleman in Ayrshire or Glasgow or anywhere else he likes to discuss the Government's housing record with him. I should be glad to do so, but we could not do it here.
    Mr. Manuel: I could come to Ayrshire but I would not come to Kilmarnock, so I would be quite safe.
    Mr. Deputy Speaker: I think that we had better return to the Amendment.
    Mr. Taylor: I could come to Edinburgh; that would not be near Kilmarnock.
    The Minister of State's second argument was as poor as his first. It was that there was no basic difference between Scotland and England. How sensitive he was when we tried to pin down exactly what he meant. In reply to the first question he said that there was no difference in this instance and then, when questioned again, he said that there was no difference actuarially.
    Dr. Dickson Mabon: It was not as a result of being questioned. I gave those answers voluntarily. The hon. Gentleman must not say that I gave those answers only because I was questioned. I volunteered them just as I volunteered the letter.
    Mr. Taylor: The hon. Gentleman was challenged to make his position clear and he did not succeed in doing so. First, he said that there was no difference in this instance and, secondly, he said that the difference was actuarial. He has not suggested a third difference.
    Surely the only point of considering the relevance of the English position to the Scottish is the incidence of multi-storey building in English cities and in Scottish cities and in English counties and Scottish counties. About this we had not a word from the Minister, not one indication to show whether there was any difference in the pattern. Most of us are aware from the facts which are available that, although by and large there is no major difference in the incidence of multi-storey building in Scotland and in England, the difference is that in Scotland it tends to be concentrated in a smaller number of housing authorities. It is totally inadequate for the Minister to say that the matter was discussed in the English Committee and that therefore the Amendment is not appropriate to the Scottish situation. They may be the same actuarially, but the pattern of multi-storey building in Scotland is different from the English pattern.
    The basic argument for the Amendment was clearly put by my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne). He said that we should consider interest rates in relation to a period approximately equivalent to the period of building, or to the period for
    1466
    which finance would be sought. In particular cases finance might not be required over a long period, but by and large the fair consideration is the average amount of time taken to complete a building. It might be that two and a half years would be a more appropriate time, but certainly one year is inadequate.
    A small and poor local authority experimenting with multi-storey building and indulging in major expenditure for which it had to borrow money might find with a sudden change in interest rates that it was faced with putting an enormous burden on the ratepayers, or having to charge a level of rents which local people could not afford. There should be no mistake about it—there are many people who cannot afford to pay substantial rents, and the Minister should know that that is particularly true of his own constituency and of the West of Scotland. That is an argument in favour of the Amendment to which there has been no answer.
    Under the present Government we have sudden changes in interest rates. With a Government pursuing such crazy, mad economic policies and when there is no stability and when industry cannot look to the future with any confidence, it is obvious that there will be sudden and dramatic changes in interest rate policies as in whole economic policies.
    5.0 p.m.
    If we had a sane and rational Government pursuing sane and rational economic policies, we would be happy to accept that stability of interest rates was something of which local authorities could take account. We certainly cannot do so with this Government. If the Government are asking local authorities to go forward with a two or three-year programme of building of multi-storey blocks, it should be on the clear undertaking from the Government that the subsidy will be based on money borrowed over that period.
    If the Minister of State still has doubts, will he not accept our word for it? How right we have been on this side of the House in our statements; how right has been the advice that we have given and how completely and absolutely wrong have the Minister of State and the Government been with their prophecies about house building, house——
    Mr. John Robertson: I am trying very had to follow the argument of the hon. Gentleman, but I cannot see what this has to do with the Amendment and the question of whether the subsidies should be calculated on the interest paid on the loans raised by the recipient authority in the preceding year or the two preceding years. I have some difficulty in following this.
    Mr. Deputy Speaker: I have been listening very carefully to what the hon. Gentleman has to say, and as long as he does not dwell too long on this he is in order.
    Mr. Taylor: I am responsible for many things, but I will on no account be responsible for the hon. Gentleman's lack of understanding. Here are four clear arguments in support of the case and two arguments against the very weak one put forward by the Minister of State. They have to be answered.
    If the Minister is not convinced he should accept our word, because we take housing seriously. We have thought it out and given careful consideration to how the Amendment will operate. If he does not accept the Amendment he will surely accept that our prophecies and estimates have invariably been more accurate, and that his Government's record in prophecy has been as bad as that of Mother Shipton. For that reason I hope that he will think again.
    Dr. Mabon: May I ask the hon. Gentleman two questions? He was wrong last time—I do not want to dwell on that—but does he recollect it? The second question is, can he give the names of the local authorities who are urging him to do this? It is certainly not Glasgow Corporation.
    Mr. Taylor: Briefly, I would point out to the Minister of State that in Glasgow Corporation we have a rather confused situation at present. It is almost certain that there will be a change in the controlling party. [HON. MEMBERS: "Answer."] I have discussed this with a substantial number of councillors in Glasgow and I have the support of many of them.
    Mr. John Robertson: The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) is a master of the
    1468
    half-truth and innuendo. He always runs away from the arguments and takes every opportunity to make political points where none exist. This is all in the game, of course, but the hon. Gentleman might have done the House the justice of reading the Bill, as well as the proposed Amendments. He would have seen that it has nothing to do with how long it takes to build a house. He said that he was a member of a local authority. I do not know if it was a small authority, but he said that it was building multi-storey flats. He must tell us about this small local authority. Perhaps it was in Glasgow? He is associated with Glasgow, so perhaps he knows how Glasgow raises its loans to build houses. Surely it is not over the period taken to build a house? If it does it like that, I suggest that he sends his colleagues along to Paisley so that we can teach them something about local government finance.
    I am quite sure that he absolutely misrepresents the position. He is not interested in the real question. He is here only to attempt to make a little political capital by obscuring the situation. I am surprised that the right hon. Member for Argyll (Mr. Noble) has not dissociated himself from what his hon. Friend has said. If the hon. Member for Cathcart has no recollection of some of the things which were brought to his attention by my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) I can tell him that his right hon. Friend was in charge at the Scottish Office when we were told the story about interest rates having no effect on the number of houses built. This was during a time when the previous Administration was reducing the amount of subsidy. That was not long ago. It is high time that the hon. Gentleman was made to stand up and answer for the half-truths he throws around this House, and many other places where he is accustomed to speak.
    Mr. Edward M. Taylor: Just mention one of them.
    Mr. Robertson: There are so many that it is difficult to describe one. He talked about a small authority which intended to build multi-storey flats, whereas his hon. Friend the Member for Edinburgh, North (Earl of Dalkeith) was telling us a short time ago that only a very few of the major local authorities build

    1469
    multi-storey flats. He ought to get his facts right and obtain some agreement between himself and his hon. Friends. This is a shocking position. We are dealing with the very important question of subsidies for local authority housing in Scotland. The arrangements in this Clause give the highest subsidy in the last 15 years, double the subsidy said to be adequate by the right hon. Gentleman, and argued as adequate by many of his hon. Friends. It is shocking that the hon. Member for Cathcart should come along and produce this kind of stuff.
    Mr. Michael Clark Hutchison: I very much agree with my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) that there may be some instinct in the Minister of State's mind slavishly to follow the English practice. My recommendation to him is: please look after Scotland and do not be guided by the hon. Member for Bermondsey (Mr. Mellish). Stand up for Scotland.
    The Minister is for ever talking about vague organisations in a vague way. He mentioned the Association of Local Authorities or something of that sort. That is not good enough for me. I want to know which local authorities support the two-year system and which do not, and what is their reasoning. We have heard about Glasgow, and I want to know what are the views of Edinburgh, Dundee or anywhere else. Will the Minister please be more specific in Committee and in this Chamber, and not try to fob us off with vague statements? We are legislating here and we are interested in the facts.
    Mr. Peter Doig: I was very amused by the remarks of the hon. Gentleman the Member for South Angus (Mr. Bruce-Gardyne) who told us how the previous Secretary of State stood up for Scotland in the Cabinet, and said that the present one does not. We will never know who stands up for what in the Cabinet. What we can do, what the public will do and what local authorities do, is to judge by results.
    What are the results? Let us look at the facts as they relate to this Amendment. The hon. Member for South Angus said that the subsidies should correspond to the cost of housing
    Mr. Bruce-Gardyne: What I said was that the subsidy should correspond to the change in the financing of housing, not to the cost of housing. It is a question of the interest rate at which the finance is raised.
    Mr. Doig: When the hon. Gentleman reads his speech—unless he changes it upstairs—he will find that he said that subsidies had to correspond to the cost of the house. I wrote that down as he said it. We can only decide how the Secretary of State stands up for Scotland in the Cabinet by looking at the results which he produces, and at the results which he produces in relation to this Amendment. Under the previous Secretary of State the subsidy for local authorities in Scotland got lower and lower while all the time the cost of houses went up and up—not a very good result. If this was the result when the right hon. Gentleman stood up to his Cabinet colleagues, it would have been better if he had sat down.
    What has resulted from the efforts of the present Secretary of State for Scotland? Every local authority to which I have spoken—and I have spoken to many of them—has welcomed this new form of subsidy as being a vast improvement on the previous one. This is the result that we have to go by. The end product is the clearest guide to whether the present Secretary of State for Scotland stands up for Scotland in the Cabinet, and, judged by results, there can be no doubt that my right hon. Friend has been far more successful than his predecessor with regard to housing subsidies.
    Mr. John Brewis: Does the hon. Gentleman want higher and higher interest rates, which means that subsidies go higher and higher, or does he want lower and lower interest rates, in which case subsidies go down? Will he make up his mind?
    Mr. Doig: I do not have to make up my mind. The local authorities and the Government have made up their minds. What local authorities want is a fixed, regular low rate of interest. There is no doubt about this. Any local authority will say that this is what it wants, and this is what the Government are giving them. Nothing could be clearer.
    The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) made his

    1471
    usual reference to the fall in the number of houses completed, and the hon. Member for South Angus said that the pace of housebuilding was slowing up. The fact is that last year 36,000 houses were completed. This figure was only once exceeded during the 13 years of Tory administration, and then by only a very small amount. That was the second highest number of houses ever completed in a year in Scotland.
    Mr. Ian MacArthur: Perhaps the hon. Gentleman will contrast that figure with the promises made by himself and his hon. Friends, and also by the Prime Minister, to the people in Scotland only last March that more than 40,000 houses would be completed last year. They missed the target by more than 10 per cent.
    Mr. Doig: I can understand that the Gentleman wants to side-track the issue and to draw the attention of the public away from the results by comparing what we have done, not with what they did, but with what we said.
    Mr. Deputy Speaker: Order. We cannot have a general debate on the housing programme.
    Mr. Manuel: The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) did not do so bad.
    Mr. Doig: We are constantly being told, as we were in Committee, that interest rates may come down. I hope that they do. I would very much like to see low interest rates, but the point to remember is that local authorities now do not have to worry about whether they go up or come down because they know what they will pay. The Government's good will has been demonstrated by the amount of money which they are prepared to give local authorities for housing subsidies. Interest rates fluctuate over the years, but the general trend is upwards. There is an occasional setback, when the rate falls, but it goes up again. There is a steady rise all the time, and local authorities, therefore, welcome the Amendment. Hon. Gentlemen opposite always claim that they represent local authorities and are in close touch with them
    Mr. Noble: I am sure that the hon. Gentleman heard, as I did, the Minister
    1472
    of State very courteously say that he would discuss the Amendment with local authorities, and if they felt there was a need for a change he would ask his right hon. Friend to see that it was made. This does not suggest that the position is half as clear as the hon. Gentleman is trying to make out that it is.
    Dr. Dickson Mabon: I hope that the right hon. Gentleman will forgive me, but that is not what I said, and I should like the record to be read again. I said that there was no evidence that local authorities wanted anything like what the right hon. Gentleman was proposing. On the contrary, the evidence was the other way, but if it were so, if he would withdraw the Amendment I would discuss it with them. I agree with my hon. Friend's interpretation of what I said.
    5.15 p.m.
    Mr. Doig: That is exactly what I heard my hon. Friend say. I am quite clear in my mind what he said, and it is also quite clear what my local authority thinks. If hon. Gentleman opposite were as closely in touch with their local authorities as they pretend to be, they would know this.
    From time to time hon. Gentlemen present a case put to them by local authorities, and name them, but today there has been a remarkable absence of the names of the local authorities concerned. They are reluctant to tell us about them. The simple reason for this is that all the local authorities recognise that this Government, and the present Secretary of State, have done more to alleviate the burdens on local authorities in financing house building than anyone has ever done.
    Mr. G. Campbell: In this Amendment we are considering large buildings of a kind which may well take two or three years to complete, and it has certainly led to a most interesting discussion. The Minister told us that he had looked into this matter since the Committee stage, when he indicated that clearly there was something which needed looking into, and he assured us that, on the whole, local authorities were not worried about this. But in answer to the hon. Member for Dundee, West (Mr. Doig) I would say that in this matter we are looking at the Bill to make sure that it is workable, and that it will cover the situations which

    1473
    people see can arise. This is our object here as legislators.
    The Minister of State also said that there were different practices amongst local authorities for raising money, that there was no set pattern for raising money for building. I know that some of them have to borrow money while construction is proceeding. Therefore, if there is a large multi-storey building which will take two or three years to build, it may be that a large proportion of the money will have to be raised during the first year or 18 months. This is the situation which we are considering, because this is a new system of basic subsidy related to interest rates, and it is right to examine possibilities of this kind.
    The hon. Gentleman said that simplicity was one of the reasons for local authorities being in favour of sticking to the proposals in the Bill. This is an argument which we recognise. It is clearly an argument in favour of doing so, but we have to consider—and I should like to clarify this in case the hon. Member for Dundee, West and others have misunderstood what we are proposing—the situation in which a large building is going to take two and a half years to build. I know that some buildings have taken longer to complete than that, but I am using this as an example.
    If more than half the money were raised in the first year, in the year of completion when the subsidy was being worked out for the building, it would not be that year but the following year on which the subsidy would be based, the year in which less than half the money had been raised. If these two consecutive years had seen a considerable difference in interest rates, if the representative rate prescribed by the Secretary of State under the Bill in one year was considerably different from the other, it would have quite an effect on the local authority if it was the year in which it had not raised most of the money which was the one being taken into account. That is the simple point. As it is the aim of the Bill to relate directly the amount of subsidy that the local authority will receive to the interest rate in operation when the money was borrowed, it is relevant to make the point that this principle would not be carried out in the case that I have mentioned.
    1474
    At the moment interest rates are high, and nobody would expect them to go higher. Therefore, if there is a difference of the kind to which I have referred, we would all hope that the rate in the second year would be lower than the rate in the first. In that situation the local authority concerned would find itself receiving less subsidy than it would feel entitled to.
    Mr. Manuel: The hon. Member is usually very fair. Is not he missing the whole point? Under the Bill it will not matter whether interest rates rise or fall; a local authority will be taking on a commitment at 3 per cent. It will borrow as it needs money, and that is all it will be paying as an on-cost, by way of a local rate. It can plan five or 10 years ahead quite comfortably. There will be no greater on-cost, no matter how interest rates fluctuate.
    Mr. Campbell: Except for the fact that the hon. Member seems to have been hypnotised by one of his hon. Friend's figures—it happens to be 4 per cent. and not 3 per cent.—I agree. We have always accepted that local authorities will know that the amount of subsidy is pegged to an interest rate of 4 per cent. But hon. Members opposite keep talking about the size of the subsidy, and saying that it is twice as big as before. That is only because interest rates have been running at about 7 per cent.
    We are looking ahead and considering the building of large, multi-storey blocks of flats, started in one year and not being finished for another two and a half years. If the interest rates come down to 5 per cent. or 5½ per cent. it will matter to local authorities in which year the calculation is made, because it may mean their getting a subsidy considerably smaller than that to which they feel entitled.
    It is not a simple point, and it is well worth looking into. In Committee, and in his letter, the Minister made it clear that this could happen. We are grateful for having a chance of discussing the question now, and also for the fact that the hon. Member has spoken to us about it. We shall not press the Amendment, which my right hon. Friend made clear was a probing Amendment. Having had this discussion and given the Minister a chance to tell us the result of his talks with local authorities, I hope that if this

    1475
    situation arises in an acute way the Government will be sympathetic to the authority concerned.
    Dr. Dickson Mabon: We have now returned to the substance of the argument. As I said in Committee, and in my letter, it is a reasonable one, and we took it seriously in our discussions with local authority associations. The hon. Member for Edinburgh, South (Mr. Clark Hutchison) was disturbed at the fact that I did not name the diehard authorities in a different context. I do not change my view now. I have a reason for not doing so. I can say that I met the Convention of Royal Burghs and quite a number of provosts, bailies and councillors from large and small burghs; I met the Association of County Councils, including many distinguished convenors, and I met the Association of Counties of Cities, represented by councillors and officials from each city. It is therefore true to say that although I may not have met burgh representatives directly—hon. Members may be in closer communion with their burgh council officials than I am—I met the representatives of the cities. I have had very close contact with them, apart from meeting them regularly in other instances.
    I interrupted the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) because I know of no advice from Glasgow's elected members—including not only Socialists but Progressives—or from the officials of Glasgow, along the lines of the Amendment. Glasgow would not be advising us as they are if they did not feel they had a sound case. We must take their advice. The advice from the cities, from the Convention and the Association of County Councils, has always been the same. I know of no evidence to the contrary.
    When I interrupted the hon. Member for South Angus (Mr. Bruce-Gardyne) I was not seeking to embarrass him by asking him to divulge the names of authorities. It may be that Angus County Council takes the view suggested by the hon. Member, but if so it is in opposition to the view of other county councils, and Angus should have informed me of that fact. I like to have a consensus of opinion, especially on an
    1476
    administrative matter and a matter of preference based on people's experience.
    I do not want to make too heavy weather of this. I have given an assurance that we shall consult local authority associations again. I call them in aid very often, and I also advise the Secretary of State to change his view as a result of representations they make to us. It is a two-way traffic, and I want to keep it that way. I am obliged to hon. Members opposite for agreeing to withdraw the Amendment. We will consult the associations, but if nothing is done in another place it will be because they hold the view that we have put forward at present. I am glad that the debate has been conducted as it has, apart from some of the partisan remarks.
    Mr. Noble: I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Dr. Dickson Mabon: I beg to move Amendment No. 4, in page 3, line 43, to leave out from 'instrument' to the end of line 45 and to insert:
    'and such an order shall not be made unless a draft thereof has been laid before the Commons House of Parliament and has been approved by a resolution of that House'.
    Mr. Deputy Speaker: With this Amendment we can take Amendment No. 3, in page 3, line 42, leave out subsection (5) and insert:
    (5) No order made under this section shall have effect until a draft thereof has been approved by a resolution of the Commons House of Parliament.
    Dr. Mabon: Yes, Mr. Deputy Speaker. I am not against the principle of the Opposition Amendment, but in drafting terms the Government Amendment is better. If the right hon. Member for Argyll (Mr. Noble) will study the wording of the two Amendments he will see that whereas the Government Amendment provides that
    "such an order shall not be made",
    his Amendment refers to "no order made". I am advised that we cannot accept his Amendment because of its wording.
    During the discussion of the English Bill the Joint Parliamentary Secretary to the Ministry of Housing and Local Government was asked in various ways by various hon. Members to consider this

    1477
    question. We had discussed it earlier and I decided at the time to advise the Committee to leave the Clause as it stood. After further discussion of the English Bill, however, my hon. Friend the Joint Parliamentary Secretary asked if we would agree to this Amendment being made. On reflection, in view of what was said in Committee at the time, we agreed to put down an Amendment on Report, and this is it.
    The point was not formally raised in the Scottish Standing Committee, but it is right that if we make this adjustment in the English Bill we should have the same opportunity to debate a specified rate of interest, as did English Members in their Bill. Therefore, for equity, we thought it wise to have the Amendment.
    I hope that the hon. Member for Moray and Nairn (Mr. G. Campbell), who is seeking to achieve the same purpose, will agree that our Amendment is perhaps a little better drafted than his. If he can, I hope that he will join me in advising the House to incorporate Amendment No. 4 in the Bill.
    Mr. G. Campbell: We were very glad to see a Government Amendment similar to ours. I will not quarrel with the hon. Gentleman about drafting; he knows my views. The Government's drafting is, no doubt, expert. Both the Amendments would achieve the same objective and I would certainly advise the House to accept the Government's. It is important that the Bill should be amended in this respect, because the Secretary of State's decisions each year will govern the amount of basic subsidy received. It will be different every year unless interest rates stay exactly the same, which is unlikely.
    Only when the Secretary of State has prescribed the representative rates for different kinds of local authority under this Order will local authorities know how much money they will receive in basic subsidy. The subsidy is high now, and in future it will be lower, if interest rates fall. I agree with the hon. Member for Central Ayrshire (Mr. Manuel) that local authorities need the basic assurance that it is tied to the rate of interest, but they will not know what amounts they will receive for houses completed until this Order is made containing the Secretary of State's decisions on interest rates.
    We thought it essential for the House of Commons to consider the Order as it
    1478
    went through, as it will govern the size of subsidies each year.
    Amendment agreed to.

    Clause 4.—(SUBSIDIES FOR FLATS IN BLOCKS OF SIX OR MORE STOREYS.)
    Mr. MacArthur: I beg to move Amendment No. 5, in page 4, line 18, to leave out 'six' and to insert 'four'.
    Mr. G. Campbell: On a point of order. Would it be convenient to take with this Amendment, as both refer to the same matter, Amendment No. 6, in page 4, leave out line 22 and insert:
    'the following amount, that is to say—

    (a) if the block of flats has four storeys, ten pounds

    (b) if the block of flats has five storeys, sixteen pounds

    (c) if the block of flats has six or more storeys, thirty pounds'.

    Mr. Deputy Speaker: Certainly, if that is the wish of the House.
    Mr. MacArthurI think that it would be convenient to group the two together, since both relate to the same point.
    Clause 4 provides an additional subsidy for houses in blocks of flats which reach six storeys or more. I am sure that the House would agree that this additional subsidy is right in those cases. However, there is a discrepancy between the Scottish Bill and the English one, which also provides for a special subsidy for multi-storey buildings.
    There is, however, a major difference. In the English Bill, a special subsidy is payable for blocks of flats of four storeys, of five storeys or of six or more storeys, whereas the Scottish Bill restricts the additional subsidy to the last class. In other words, a Scottish block of four or five storeys receives no additional subsidy under the Bill.
    It is difficult to see the reason for the difference. Why should England and Wales receive favourable treatment in subsidies for multi-storey blocks? If there is an argument—as there must be—for justifying the additional subsidy for four or five-storey blocks in England and Wales, surely it should also apply if Scotland.
    I understand that, in the four major cities anyway, multi-storey building tends to be six storeys or more. Under the Bill as it stands, those local authorities would

    1479
    receive the additional subsidy of £30 proposed for the block of six storeys or more. But some other local authorities do not specialise in the very large multi-storey blocks. Some build to four or five storeys. It is unreasonable that they should be deterred from this desirable building by the absence of the additional subsidy which would be available to them if they built higher.
    It is not possible, for many reasons, for buildings always to be as high as the hon. Gentleman might like. Experience varies from place to place in Scotland, but it is the experience of Perth—a local authority which I am happy to name—that the cost of building five-storey blocks is substantially more than that for two storeys The cost of the former is about 5s. a square foot more than the cost of the latter. I recognise that this is not the universial experience in Scotland, but it is a specific instance which I would like the hon. Gentleman to bear in mind.
    This means that, since a three-apartment house contains about 800 square feet, the additional cost for a five-storey block would be about £200 per house, but, under the present form of Clause 4, no additional subsidy would be payable for the five-storey block. I suggest that there is a strong argument, therefore, for providing in Clause 4 for a special subsidy for the four and five-storey block on the same lines as the English proposal.
    The hon. Gentleman will see that the first Amendment, to leave out 'six' and to insert 'four', is a purely introductory adjustment and that the second Amendment, No. 6, sets out the actual rate of subsidy which we think should be paid in these cases. We have kept to the additional subsidy of £30 as proposed for a block of six or more storeys, but have introduced the two other grades—five-storey and four-storey subsidy—and we propose £16 for a five-storey block and £10 for a four-storey block.
    In the English proposal, the six or more storey block would receive an additional subsidy of £26, a five-storey block £14 and a four-storey block £8 The hon. Gentleman might ask why we have aimed for higher subsidy figures. The reason is that we have scaled these down from the £30 figure proposed for the block of six or more storeys and
    1480
    kept them in much the same relationship to each other as the scaled-down figures in the English Bill.
    Thus, if the £26 figure in the English Bill is taken as 100 per cent. the percentage for the five-storey block is 53·85 per cent., whereas we propose a proportion of 53·33 per cent., which seems reasonably close. The English Bill proposes, for a four-storey block, a subsidy of 30·77 per cent. of the maximum rate, whereas we propose a subsidy of 33·33 per cent. of the maximum rate in Scotland.
    The Minister will agree that we have tried to be as tidy as possible in this scaling-down exercise. We have kept to round figures, very much in line with the scaling-down done in the English Bill. I am not suggesting that we should simply follow the English pattern in this matter. However, this is a case where the English Measure shows an advantage which the Scottish Bill lacks and which should be incorporated in this Measure by means of the Amendment.
    Mr. John Rankin: I, too, hope that the Minister will give serious consideration to the Amendment. I am not seeking to make comparisons with any sum that may be devoted to a similar purpose in the English Measure. I am simply concerned with the proposals before the House.
    If there is no inducement to authorities to build four and five-storey blocks, we will be inviting them to go ahead all the time with the building of blocks of six or more storeys. They will be induced to get the £30 grant for this type of structure, since no grant will be available for the others.
    The Minister is aware of my concern in this matter and of the trend of my thoughts on this subject, since in our big towns—particularly those of the size of Glasgow—where space for building is becoming very scarce indeed, authorities are being forced to build upwards. We are already discovering that multi-storey blocks over a certain height create quite serious problems, particularly for families with children. I do not wish to embark on this issue in great detail because I would find myself out of order. Nevertheless, my hon. Friend will be aware of the sort of problems I have in mind.

    1481
    5.45 p.m.
    He may also be aware of a case in Glasgow where blocks of flats are to be built, not only six storeys high, but on a hill. The problems that arise from this sort of structure are extremely worrying. While we are aware of the need to solve the housing problem, particularly in our large conurbations, we should be careful about the positioning of high flats, particularly on high ground, for they have a tendency to shut out the sun too early from other people living in these areas and so cause a real danger to health.
    The location of multi-storey blocks can also create peculiar variations in the wind. This problem is now being experienced by people living in blocks of up to 12 storeys. In many cities people are living closely packed together and in these conditions the effects of sun and wind are of great importance. The wind sweeps away the dust and grime and the sun brings invigorating health. I do not wish to pursue this matter too far at this stage. Suffice it to say that the Bill, as drafted, will act as an inducement to authorities to build higher flats where such flats ought not to exist. The Amendment, if accepted. would, on the other hand, enable them to build blocks of four and five storeys and still obtain grants. The Minister knows the background to this issue, and I hope that he will give sympathetic consideration to the Amendment.
    Mr. Brewis: I support the Amendment which was so ably moved by my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur). It is general nowadays for local authorities, even in quite small towns, to build blocks of up to four storeys high. There is no doubt that as soon as one starts building higher than that one incurs greater expense, although higher buildings have the desirable effect of saving land. Perhaps, as the hon. Member for Glasgow, Govan (Mr. Rankin) said, blocks of six storeys are too high for the environment in which some buildings are constructed, and I agree that one must bear in mind the amenity and aesthetic aspects of the problem. I suggest that a lift should be provided in any building of more than three storeys. A great deal of effort is required to walk up four flights of stairs, particularly when accompanied by children. I should like to see a lift incorporated in any four-storey buildings in
    1482
    future. All this will add considerably to the expense, so I urge the Minister to accept the Amendment, and give an extra subsidy for buildings of four storeys and above.
    Dr. Dickson Mabon: I do not quarrel with the hon. Member for Perth and East Perthshire (Mr. MacArthur), even though this is a kind of "Oliver Twist" Amendment. He is asking for more on every count, but that is another matter. I want to treat the Amendment, as he did, on the lines of how it would affect certain parts of Scotland, particularly Perth and some of the more rural areas where one would not imagine that authorities would want to build six-storey structures. I do not believe that one of the reasons for authorities jumping from the building of three- four-, or five-storey buildings to providing six-storey buildings would be the larger subsidy, because they would still have to pay more, and the total cost would be greater even with the attractive subsidy of £30 for the six storeys.
    What is missing in this debate is a breakdown of Scottish construction costs, which are quite different from those in England. When the Scottish Housing Advisory Committee met last year to discuss costs, I was in the fortunate position of being able to produce—as far as I know, for the first time in Scottish Office history—breakdown costs provided by the private builders. We managed to work closely with our friends in England experienced in building in England and those in the Ministry of Housing in getting a comparison of English and Scottish local government housing costs, as well as a similar comparison in the private sector.
    Hon. Members will know from the publication in the last few days by the Cooperative Permanent Building Society of comparative house-building costs in the United Kingdom that Scottish building costs were about the same as or slightly below those in London and the South-East, whereas those for the rest of England were marginally lower, and in some cases substantially lower, than those in Scotland.
    One would suspect that something was seriously wrong, and it was the feeling of the Advisory Committee and of the private builders that more information should be made available, and a greater

    1483
    study made of this subject. It is in the light of the facts emerging from these studies that we have decided to give the large—indeed, the only—subsidy on multi-storey building at the six-storey level.
    Generally speaking, with both low-rise and high-rise, the large proportion of the difference, but not all of it, in construction costs between Scotland and England is taken up by the robust nature of building in Scotland. We have less jerrybuilding in Scotland. We have more need to build houses in such a way as to deal with climatic conditions that are not always reflected in the south. I would not for a moment dream of referring to the horizontal rain that is said to descend in my own constituency, but it is true that we have to take steps, particularly in industrialised and multi-storey buildings to make sure that there is a complete seal of a higher standard than one would expect in the south in the making of the building and the adjustment of the prefabricated sections. This has been dealt with by architects in the Department, in firms and in local authorities, so it is fair to make that point.
    The hon. Member for Perth and East Perthshire was kind enough earlier to send us a copy of the letter he had received from the City Chamberlain of Perth, and I do not disagree with the point made in that letter. What I think is not known throughout Scotland is that four- or five-storey tenements, which cost between £250 and £300 per house more to build than do two- or three-storey tenements, are not more expensive than other common types of house construction—for example, two-storey terrace houses.
    The sharp rise in building costs occurs in building structures of six or more storeys. The difference in the superstructure costs in buildings of six storeys or more and those of low rise houses is between £600 and £900 a house. In England, costs rise significantly as building height increases from four to six storeys, but in Scotland there is some increase in some types of construction but it is not an important factor until we reach six or more storeys.
    Mr. MacArthur: I am sure that the Minister will pay attention to my figures, based on actual experience, where the
    1484
    extra costs of building in five storeys was about £200 a house more than building in two storeys. I hope that he will take that into account.
    Dr. Mabon: Yes. I am not quarrelling at all with the Perth figures. They are perfectly in order and are supported by figures from elsewhere, but one has to take the complete and comprehensive view of the overall construction position. If one has to choose between an English-type subsidy structure—quite apart from the figures for the English type of four-, five-, or six-storey structure, and I do not quarrel with the ratios of 8-14-26 or 10-16-30—and a structure of six storeys, the advantage clearly lies in choosing six storeys in Scotland. The House, I know, can only take that statement from me on trust, but I assure hon. Members we have gone into this quite thoroughly. The pattern of building costs in Scotland is such that given that one can choose between a pattern for the higher subsidy for six storeys and the pattern for five storeys or four storeys, one would clearly take the six-storey option.
    The hon. Member is advising us to preserve the Scottish option at £30 and at the same time to introduce what we call the English pattern. That is why I call this an Oliver Twist Amendment. It asks for the best in England to suit English building and the best in Scotland to suit Scottish building—
    Mr. Edward M. Taylor: Before he leaves the question of differential costs, can the Minister say how comprehensive local authority cost figures are, and will there be any publication at all of the differences in costs? They are very interesting.
    Dr. Mabon: I knew that the moment I said that the House would have to take me on trust the hon. Member for Cathcart (Mr. Edward M. Taylor) would not do so. I do not blame him for that—he is perfectly entitled to be doubtful of anything I say. The Scottish Housing Advisory Committee has been studying this matter quite considerably. Unfortunately my present responsibilities do not allow me to sit in there, but I hope the Committee will be able to publish the results of a good deal of the work it has done and is doing on costs. This will depend to a large extent on the

    1485
    willingness of private builders, because they have provided a lot of information in confidence.
    We are pursuing the matter a stage further. We have in the Scottish Office a working party consisting of representatives of the private builders and of the Scottish Office. It meets once a month, and it reports back to Ministers roughly every quarter. With a full turn out of private builders I should like to see the working party embark on a real exercise to get the full facts.
    As I have said, the major part of the difference between Scottish and English costs lies in the robustness of the structure of Scottish housing compared with that of England. I do not say all the difference, but the major part—there are other things such as the method quantifying of costs and the higher minimum standards of the building regulations under the 1964 Act, but that is a matter between the private builders and ourselves. We put it at a certain figure, and they put it at a much higher figure.
    There are such things as the cost of land, the feudal system, conveyancing—all kinds of things are put as reasons for the costs in Scotland being marginally greater than in most parts of England, with the exception of the South-East. I would like to see the Scottish Housing Advisory Committee publish a lot of this information without, of course, identifying the firms concerned. I cannot promise that because it is not within my jurisdiction, but by the way it was going it looked as if it would reach that stage.
    6.0 p.m.
    I am sorry for that diversion. I turn to the point I made when I said that I hope the House will take me on trust when I say that construction costs in Scotland soar at the six-storey level. I take the point made by the hon. Member for Galloway (Mr. Brewis) about lifts. I wonder whether in Scotland we should look seriously at the question of providing lifts for elderly people in three-storey houses. If we supply lifts, however, the economics of building three-storey or four-storey houses become questionable. One has to consider the cost of putting in lifts for three-storey and four-storey houses.
    I respect the views of those in rural areas who do not want to see multi
    1486
    storey buildings, as my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) said, but the general tendency of all authorities is to have six-storey and higher buildings. It is all very well tailoring the subsidy provision to suit the preference of one or two areas, but we have to take into account the preference of the majority. The majority are clearly of the view that they should have this kind of house.
    Mr. Rankin: Surely my hon. Friend is not to encourage local authorities to build multi-storey flats even admitting the lack of ordinary building space?
    Dr. Mabon: Of course I shall not encourage them to build multi-storey flats in conflict with good planning and the environment. In the Housing Advisory Committee, having discharged our functions in regard to slum houses and the allocation of houses—the results of which will be published after Easter—we are embarking on a study of multi-storey houses. We can now make an assessment of what multi-storey living is like.
    This is one of the conflicts which Ministers find when meeting many local authorities. If one is urging them to build, one cannot disqualify them from building certain kinds of houses for which there is overwhelming demand, not only by councils but by prospective tenants.
    In one area, which it would be out of order to discuss in detail, there is a demand by both the council and the tenants for this type of housing. Who are we to quarrel with this? If this is what the customer wants, it is what the customer must get. No hon. Member would want us to dictate to local authorities on this matter.
    Mr. MacArthur: The hon. Gentleman has put his finger on one of the reasons why we advanced this group of Amendments. I accept that the majority of local authorities in Scotland are building houses of six storeys and more, but the hon. Member must also accept that a minority are building houses of five storeys and fewer. It is for those authorities that we need these Amendments to enable help to be given them by the Minister.
    Dr. Mabon: I accept that. The hon. Member will realise that there are a great many hardships in Opposition. They are

    1487
    not entirely sad and unhappy, but mostly there are. The English have a system and we have a system. The English system is to have a subsidy for four- five- and six-storey buildings. We have chosen a system of one subsidy for six-storey buildings. I am trying to justify this. Given that all I have said is true, I think the hon. Member would agree that the subsidy for six-storey buildings is a wiser policy for Scotland. We do not know what is in store in the structure of housing and planning which lies ahead. Perth is going through a very vigorous phase of house building. They are in contact with, and indeed lead, a consortium in Scotland, but habits may change. This policy may be true of Perth at present, but not in the future.
    The hon. Member is not giving us a choice of an English or a Scottish system but is proposing the best of both systems. I regret that the Government cannot accept that. The Government have the choice either of the English system or the one in the Bill. From the Scottish point of view there is a clear-cut case for a system which would give a subsidy larger than the English subsidy for the six-storey building but would not be fragmented for four storeys and five storeys, with a lower subsidy for six storeys. That would be bad business for Scotland and, therefore, we do not want to see any change.
    Mr. G. Campbell: My hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) has lucidly explained this group of Amendments and the difference in treatment of four-storey and five-storey buildings under the English Bill and the Scottish Bill.
    When we considered this Clause in Committee the English Bill had not been published and we had no opportunity to see what was proposed there. The Minister of State has done his best to make a case for keeping the Clause as it is in the Bill. He has explained that there is a £30 subsidy for six storeys, but that is a reduction. At present the subsidy is £40 for multi-storey buildings and it is being reduced to £30. Why it should be further reduced to £26, which is what the hon. Gentleman suggested we would have to accept if we had a subsidy for four-storey buildings and five-storey buildings, I cannot understand.
    Dr. Dickson Mabon: I thought that we had gone over that argument so often that we should not have to go over it again. In Clauses 2 and 3 we are taking a comprehensive view of the cost of building houses whether they are houses of two three, four or five storeys, quite apart from six-storey houses, which are also covered by Clauses 2 and 3. The hon. Member has to add to the unit subsidy which his Government sponsored the provisions in Clauses 2 and 3 and the aggregate raises the multi-storey subsidy to a considerable figure, almost twice.
    Mr. Campbell: The hon. Gentleman is talking in terms of interest at 7 per cent. In two or three years hence we hope that interest rates will not be so great. It is no use taking the subsidy calculated for this year because of the economic crisis. We hope that there will not be an economic crisis so long as the Labour Government are in office, but that apparently is what the hon. Gentleman is catering for.
    Dr. Dickson Mabon: We discussed this fully. The matter was raised by the hon. Member. Comparing the £40 which he mentioned and our £30, he says that it depends on the interest rate, but the interest rate had to fall below 5 per cent. and under the Government of which he was a member it did not drop below 5 per cent. for a decade.
    Mr. Campbell: It would have to be higher if we compare the drop from £40 to £30 and take that into account with the basic subsidy. It would be 5½ per cent. or more.
    The Minister of State spoke only of the basic subsidy for each individual year. The one thing that is certain is that it will be different every year. None of us knows how much it will be in the future. Having suggested reductions from £40 to £30, the hon. Gentleman made a very gallant attempt, with his reference to more robust building in Scotland, and so on. If it is £30 for six storeys and above, this is not a reason for not recognising four storeys and five storeys. We are not suggesting that the subsidy should be reduced for six storeys. We are suggesting that four storeys and five storeys should be recognised, as they are in the English Bill.

    1489
    The Minister of State has suggested two or three times that this is an Oliver Twist question, that we are asking for more. The main point about that was that it was a very reasonable request. I hope that the hon. Gentleman is not trying to emulate any of the Dickensian characters who kept refusing such requests. We consider that the Amendment does, as he said, achieve the advan-

    Division No. 274.]

    AYES

    [6.12 p.m.

    Abse, Leo

    Freeson, Reginald

    Mason, Roy

    Albu, Austen

    Galpern, Sir Myer

    Mayhew, Christopher

    Allaun, Frank (Salford, E.)

    Gardner, Tony

    Mellish, Robert

    Allen, Scholefield

    Garrett, W. E.

    Mendelson, J. J.

    Anderson, Donald

    Gregory, Arnold

    Millan, Bruce

    Ashley, Jack

    Grey, Charles (Durham)

    Miller, Dr. M. S.

    Atkins, Ronald (Preston, N.)

    Griffiths, David (Rother Valley)

    Milne, Edward (Blyth)

    Atkinson, Norman (Tottenham)

    Griffiths, Rt. Hn. James (Llanelly)

    Morgan, Elystan (Cardiganshire)

    Bacon, Rt. Hn. Alice

    Griffiths, Will (Exchange)

    Morris, Alfred (Wythenshawe)

    Bagier, Gordon A. T.

    Hamilton, James (Bothwell)

    Neal, Harold

    Barnett, Joel

    Hamling, William

    Noef-Baker,Rt.Hn.Philip(Derby,S.)

    Baxter, William

    Harper, Joseph

    Norwood, Christopher

    Bence, Cyril

    Harrison, Walter (Wakefield)

    Oakes, Gordon

    Bennett, James (G'gow, Bridgeton)

    Haseldine, Norman

    Ogden, Eric

    Bidwell, Sydney

    Hattersley, Roy

    O'Malley, Brian

    Binns, John

    Hazell, Bert

    Orme, Stanley

    Bishop, E. S.

    Heffer, Eric S.

    Oswald, Thomas

    Blackburn, F.

    Henig, Stanley

    Owen, Dr. David (Plymouth, S'tn)

    Blenkinsop, Arthur

    Herbison, Rt. Hn. Margaret

    Owen, Will (Morpeth)

    Booth, Albert

    Hobden, Dennis (Brighton, K'town)

    Padley, Walter

    Braddock, Mrs. E. M.

    Hooley, Frank

    Page, Derek (King's Lynn)

    Brown, Rt. Hn. George (Belper)

    Houghton, Rt. Hn. Douglas

    Paget, R. T.

    Brown,Bob(N'c'tle-upon-Tyne,W.)

    Howarth, Harry (Wellingborough)

    Palmer, Arthur

    Buchanan, Richard (G'gow, Sp'burn)

    Howarth, Robert (Bolton, E.)

    Pannell, Rt. Hn. Charles

    Butler, Mrs. Joyce (Wood Green)

    Howie, W.

    Park, Trevor

    Cant, R. B.

    Hoy, James

    Parker, John (Dagenham)

    Carmichael, Neil

    Hughes, Emrys (Ayrshire, S.)

    Parkyn, Brian (Bedford)

    Chapman, Donald

    Hughes, Hector (Aberdeen, N.)

    Pavitt, Laurence

    Coleman, Donald

    Hunter, Adam

    Pearson, Arthur (Pontypridd)

    Concannon, J. D.

    Hynd, John

    Pentland, Norman

    Conlan, Bernard

    Irvine, A. J. (Edge Hill)

    Perry, George H. (Nottingham, S.)

    Corbet, Mrs. Freda

    Jackson, Peter M. (High Peak)

    Price, Christopher (Perry Barr)

    Crawshaw, Richard

    Janner, Sir Barnett

    Price, Thomas (Westhoughton)

    Crossman, Rt. Hn. Richard

    Jeger, George (Goole)

    Probert, Arthur

    Dalyell, Tam

    Jenkins, Hugh (Putney)

    Randall, Harry

    Davies, Ednyfed Hudson (Conway)

    Jenkins, Rt. Hn. Roy (Stechford)

    Rankin, John

    Davies, Harold (Leek)

    Johnson, Carol (Lewisham, S.)

    Reynolds, G. W.

    Davies, Robert (Cambridge)

    Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)

    Rhodes, G. W.

    Davies, S. O. (Merthyr)

    Jones, J. ldwal (Wrexham)

    Richard, Ivor

    de Freitas, Rt. Hn. Sir Geoffrey

    Judd, Frank

    Robertson, Albert (Normanton)

    Dempsey, James

    Kelley, Richard

    Robertson, John (Paisley)

    Dewar, Donald

    Kenyon, Clifford

    Rodgers, William (Stockton)

    Diamond, Rt. Hn. John

    Kerr, Mrs. Anne (R'ter & Chatham)

    Rogers, George (Kensington, N.)

    Dickens, James

    Kerr, Dr. David (W'worth, Central)

    Rose, Paul

    Dobson, Ray

    Kerr, Russell (Feltham)

    Ross, Rt. Hn. William

    Doig, Peter

    Lawson, George

    Rowland, Christopher (Meriden)

    Driberg, Tom

    Lee, John (Reading)

    Sheldon, Robert

    Dunn, James A.

    Lewis, Arthur (w. Ham, N.)

    Shinwell, Rt. Hn. E.

    Dunnett, Jack

    Lewis, Ron (Carlisle)

    Shore, Peter (Stepney)

    Dunwoody, Dr. John (F'th & C'b'e)

    Lipton, Marcus

    Short, Mrs. Renée(W.hampton,N.E.)

    Eadie, Alex

    Lomas, Kenneth

    Silkin, Rt. Hn. John (Deptford)

    Edwards, Rt. Hn. Ness (Caerphilly)

    Luard, Evan

    Silverman, Julius (Ashton)

    Edwards, Robert (Bilston)

    Lyon, Alexander W. (York)

    Silverman, Sydney (Nelson)

    Edwards, William (Merioneth)

    Lyons, Edward (Bradford, E.)

    Slater, Joseph

    Ellis, John

    Mabon, Dr. J. Dickson

    Small, William

    Ensor, David

    McBride, Neil

    Snow, Julian

    Evans, Albert (Islington, S.W.)

    McCann, John

    Spriggs, Leslie

    Evans, loan L.(Birm'h'm, Yardley)

    Macdonald, A. H.

    Steele,Thomas (Dunbartonshire,W.)

    Faulds, Andrew

    McGuire, Michael

    Symonds, J. B.

    Fernyhough, E.

    Mackenzie, Gregor (Rutherglen)

    Thornton, Ernest

    Fitch, Alan (Wigan)

    Mackie, John

    Tinn, James

    Fletcher, Raymond (Ilkeston)

    Mackintosh, John P.

    Urwin, T. W.

    Fletcher, Ted (Darlington)

    Maclennan. Robert

    Varley, Eric G.

    Floud, Bernard

    McNamara, J. Kevin

    Wainwright, Edwin (Dearne Valley)

    Foot, Michael (Ebbw Vale)

    MacPherson, Malcolm

    Walker, Harold (Doncaster)

    Ford, Ben

    Mahon, Peter (Preston, S.)

    Watkins, David (Consett)

    Forrester, John

    Manuel, Archie

    Watkins, Tudor (Brecon & Radnor)

    Fraser, John (Norwood)

    Mapp, Charles

    Wellbeloved, James

    tages of both the six-storey subsidy and four- and five-storey subsidies. Nothing that the hon. Gentleman said, although he made a good and rather long attempt, has changed our view on this.
    Question put, That "six" stand part of the Bill:—
    The House divided: Ayes 213, Noes 141.

    Whitaker, Ben

    Williams, Clifford (Abertillery)

    Wells, William (Walsall, N.)

    Winnick, David

    TELLERS FOR THE AYES:

    White, Mrs. Elrene

    Winterbottom, R. E.

    Mr. William Whitlock and

    Wilkins, W. A.

    Woodburn, Rt. Nn. A.

    Mr. Charles R. Morris.

    Williams, Alan Lee (Hornehurch)

    NOES

    Alison, Michael (Barkston Ash)

    Fortescue, Tim

    Miscampbell, Norman

    Astor, John

    Foster, Sir John

    Mitchell, David (Basingstoke)

    Baker, W. H. K.

    Fraser,Rt.Hn.Hugh(St'ttord & Stone)

    More, Jasper

    Balniel, Lord

    Gilmour, Ian (Norfolk, C.)

    Morrison, Charles (Devizes)

    Batsford, Brian

    Gilmour, Sir John (Fife, E.)

    Mott-Radclyffe, Sir Charles

    Beamish, Col. Sir Tufton

    Grant, Anthony

    Murton, Oscar

    Biffen, John

    Grant-Ferris, R.

    Nabarro, Sir Gerald

    Biggs-Davison, John

    Grimond, Rt. Hn. J.

    Neave, Airey

    Birch, Rt. Hn. Nigel

    Gurden, Harold

    Nicholls, Sir Harmar

    Black, Sir Cyril

    Hall, John (Wycombe)

    Noble, Rt. Hn. Michael

    Bossom, Sir Clive

    Hall-Davis, A. G. F.

    Osborn, John (Hallam)

    Boyd-Carpenter, Rt. Hn. John

    Hamilton, Marquess of (Fermanagh)

    Osborne, Sir Cyril (Louth)

    Boyle, Rt. Hn. Sir Edward

    Hamilton, Michael (Salisbury)

    Page, Graham (Crosby)

    Braine, Bernard

    Harris, Frederic (Croydon, N.W.)

    Pardoe, John

    Brewis, John

    Harrison, Col. Sir Harwood (Eye)

    Pearson, Sir Frank (Clitheroe)

    Brinton, Sir Tatton

    Heald, Rt. Hn. Sir Lionel

    Peel, John

    Brown, Sir Edward (Bath)

    Heseltine, Michael

    Pink, R. Bonner

    Bruce-Gardyne, J.

    Higgins, Terence L.

    Pounder, Rafton

    Buchanan-Smith,Alick(Angus,N&M)

    Hiley, Joseph

    Powell, Rt. Hn. J. Enoch

    Buck, Antony (Colchester)

    Hirst, Geoffrey

    Pym, Francis

    Bullus, Sir Eric

    Hogg, Rt. Hn. Quintin

    Roots, William

    Campbell, Gordon

    Holland, Philip

    Rossi, Hugh (Hornsey)

    Carlisle, Mark

    Hordern, Peter

    Shaw, Michael (Sc'b'gh & Whitby)

    Cary, Sir Robert

    Howell, David (Guildford)

    Sinclair, Sir George

    Channon, H. P. G.

    Hunt, John

    Smith, John

    Chichester-Clark, R.

    Irvine, Bryant Godman (Rye)

    Steel, David (Roxburgh)

    Clegg, Walter

    Jennings, J. C. (Burton)

    Stodart, Anthony

    Cooke, Robert

    Jopling, Michael

    Stoddart-Scott, Col. Sir M. (Ripon)

    Cordle, John

    Joseph, Rt. Hn. Sir Keith

    Taylor, Edward M. (G'gow,Cathcart)

    Corfield, F. V.

    Kershaw, Anthony

    Thorpe, Jeremy

    Costain, A. P.

    King, Evelyn (Dorset, S.)

    Tilney, John

    Craddock, Sir Beresford (Spelthorne)

    Kirk, Peter

    Turton, Rt. Hn. R. H.

    Crawley, Aidan

    Knight, Mrs. Jill

    Vaughan-Morgan, Rt. Hn. Sir John

    Crosthwaite-Eyre, Sir Oliver

    Lambton, Viscount

    Vickers, Dame Joan

    Crouch, David

    Legge-Bourke, Sir Harry

    Walker, Harold (Doncaster)

    Cunningham, Sir Knox

    Lloyd, Rt. Hn. Selwyn (Wirral)

    Walker, Peter (Worcester)

    Dalkeith, Earl of

    Longden, Gilbert

    Walters, Dennis

    Davidson,James(Aberdeenshire,W.)

    Loveys, W. H.

    Ward, Dame Irene

    d'Avigdor-Goldsmid, Sir Henry

    Lubbock, Eric

    Webster, David

    Dean, Paul (Somerset, N.)

    McAdden, Sir Stephen

    Whitelaw, Rt. Hn. William

    Deedes, Rt. Hn. W. F. (Ashford)

    MacArthur, Ian

    Wills, Sir Gerald (Bridgwater)

    Dodds-Parker, Douglas

    Mackenzie,Alasdair(Ross&Crom'ty)

    Wilson, Geoffrey (Truro)

    Doughty, Charles

    Maclean, Sir Fitzroy

    Winstanley, Dr. M. P.

    Elliot, Capt. Walter (Carshalton)

    Maginnis, John E.

    Wolrige-Gordon, Patrick

    Elliott,R.W.(N'c'tle-upon-Tyne,N.)

    Maude, Angus

    Wylie, N. R.

    Errington, Sir Eric

    Mawby, Ray

    Eyre, Reginald

    Maydon, Lt.-Cmdr. S. L. C.

    TELLERS FOR THE NOES:

    Fisher, Nigel

    Mills, Peter (Torrington)

    Mr. Hector Monro and

    Mr. Timothy Kitson.

    Clause 10.—(POWER TO ABOLISH OR REDUCE RATE OF EXCHEQUER CONTRIBUTIONS.)
    Dr. Dickson Mabon: I beg to move Amendment No. 7, in page 6, line 22, to leave out from 'may' to the end of line 26 and to insert:
    'by order direct that, while the order remains in force, such exchequer contributions as may be specified in the order—'.
    I suggest, Mr. Deputy Speaker, that it might be for the convenience of the House to discuss at the same time three further Amendments, Amendment No. 8, in page 6, line 32, to leave out from the beginning to 'as' in line 34 and to insert:
    'either as respects all approved houses, or the cost or sites thereof, or as respects
    1492
    approved houses of such description or in such area only, or the costs or sites thereof,'.
    Amendment No. 10, in page 7, line 11, at the end to insert:
    (4) Any power conferred by this section to make orders shall include a power, exercisable in the like manner and subject to the same conditions, to vary or revoke any such order.
    Amendment No. 11, in page 7, line 11, at the end to insert:
    (4) Any order under this section may be varied or revoked by a subsequent order under this section with respect to any period falling after the coming into force of that subsequent order.
    Mr. Deputy Speaker (Sir Eric Fletcher): If that is the wish of the House, so be it.
    Dr. Mabon: The three Government Amendments, Nos. 7, 8 and 10, would enable the Secretary of State to revoke or vary by order any reduction or abolition of subsidies effected by a previous Order. The House will recall that, when we discussed this matter in Committee, we saw that Clause 10 enabled the Secretary of State from time to time by Order to abolish or reduce subsidies payable under Part I. The Clause as drafted, however, leaves it that the Secretary of State, while he may make a subsequent Order reducing subsidies or abolishing them entirely, cannot make a further Order reversing the process, that is, restoring wholly or partly subsidies reduced or abolished by a previous Order.
    I was asked about this in Committee and I then said that, as far as I could see, if we left the Clause as it stood, we should have to introduce fresh legislation to revoke a Clause 10 Order, and I took refuge in the belief, which is historically accurate, that housing subsidy provisions generally tend to be replaced or revised quite frequently. However, since the Committee stage, we have had some discussion with our colleagues in the Ministry of Housing and Local Government—I understand that the English will be taking similar steps at their own appropriate time—and, as a consequence, we think it necessary to make an Amendment here.
    With respect, I think that our Amendment No. 10 is drawn in terms which make it statutorily more acceptable than the Opposition's Amendment No. 11. I hope, therefore, that the hon. Gentleman for Moray and Nairn (Mr. G. Campbell) will agree that it meets the same point but in somewhat more satisfactory form, and I commend the three Government Amendments to the House.
    Mr. G. Campbell: We are glad that the Government have put down their Amendment No. 10 similar to our Amendment No. 11, together with the Amendments connected with it. Again, I do not wish to keep to our drafting necessarily. I am glad that the Government have agreed that the change is necessary, and I am quite ready to accept Amendment No. 10.
    In Committee, I asked the Minister of State to tell us whether an Order abolishing or reducing subsidy under Clause 10 could be varied or revoked
    1494
    without further legislation, and the gist of his reply then was that further legislation would be necessary. This did not seem satisfactory, and we put down our Amendment No. 11. We are glad that the Government have accepted the point, and I therefore commend their Amendment No. 10 to the House.
    Amendment agreed to.
    Further Amendment made: No. 8, in page 6, line 32, leave out from beginning to 'as' in line 34 and insert:
    'either as respects all approved houses, or the cost or sites thereof, or as respects approved houses of such description or in such area only, or the costs or sites thereof,'.—[Dr. Dickson Mabon.]
    Mr. G. Campbell: I beg to move Amendment No. 9, in page 6, line 40, at the end to insert:
    'but it shall not apply to payments of subsidy which have been made before the day of the making of the order'.
    We are here still dealing with Clause 10, which gives the Secretary of State power to abolish or reduce any of the housing subsidies under the Bill. In Committee, we discussed the use of this power retrospectively, there being wording in the Clause to indicate that, in making an Order, the Secretary of State could put a date for its effect to start which was earlier than the date of the making of the Order. We have put down this Amendment to give the Government an opportunity to clarify the position. It is a complicated matter, and hon. Scottish Members on both sides have been worried or puzzled about it in previous legislation as well as in this Bill.
    In Committee, the Minister of State said:
    "Therefore, since the question of future payments is involved it means that if there is any retrospection it must be retrospection to payments that are in the future and not in the past or present. That is, they have not been paid. If that is the case, then it follows, surely. quite clearly, that I can give an absolute assurance that the Government would not be allowed, under this Clause, to touch past payments".—[OFFICIAL REPORT. Scottish Standing
    Committee, 29th November, 1966; c. 230.]
    That seemed a categorical assurance that, although there might be some payments of subsidy, perhaps from the past year or two, still to be made which might be affected retrospectively, in no case would a local authority have to pay back any element of subsidy which in cash or accounting had actually been paid. This

    1495
    is an important matter, and it is necessary to set doubts at rest not only today in the House but also for the benefit of many people who have found it puzzling to follow the wording on retrospection in earlier legislation as well as in the present Bill.
    There is no reason why the matter should not be made clear or why the hon. Gentleman's words clearly stated on that occasion in Committee should not be reflected in additional words in the Clause such as we now propose.
    Again, if our wording is in some way defective, we are ready to accept on a future occasion or in another place a Government Amendment to the same effect. The object is perfectly clear, to put into the Bill the effect of what the Minister of State said in Committee. This will prevent misunderstandings such as have arisen in the past.
    Dr. Dickson Mabon: I gather that the main burden of the hon. Gentleman's remarks is that we should make the matter clear, and welcome the opportunity to do so. There is no disagreement between us on the point of principle raised, but, in our view, the Amendment is unnecessary because the Clause as it stands does not give the Secretary of State any power to withdraw or cancel subsidies which have been paid. I will say a little more to justify that view.
    6.30 p.m.
    The hon. Member was kind enough to refer to our proceedings at col. 230 in Standing Committee. I invite the House to go a little further forward to col. 232, where the hon. Gentleman made his case—I am not disagreeing with him—and described what we would call the retrospective effect of an order. I have subsequently discussed this matter with him. He was talking about the following classes of houses. The first category is those which have been approved before the making of the order but which have not yet been completed and, therefore, have not yet qualified for subsidy. The second category is houses for which proposals have been received by the Secretary of State but not yet approved.
    That interpretation is not quite correct, because an important class of houses which has been left out of those two
    1496
    categories is houses which have been built under the Act at any time before the making of the order. The effect of the order on those houses is to reduce or abolish the rate of subsidy on them from the date specified in the order while leaving untouched the subsidy paid upon them in the past.
    By way of illustration, let us assume that the Bill receives Royal Assent on 15th March this year. By 15th March, 1977, we will have reached the end of a ten-year period. Suppose that on 31st December, 1979, which is more than two years after the end of the ten-year period from Royal Assent, an order is laid before Parliament. That order could provide, first, that all housing proposals received on or after 1st January, 1980, the day after the order is laid, should qualify for reduced subsidy. I refer to that in "shorthand" as the normal case.
    Secondly, the order could provide that subsidies which were being paid in respect of housing proposals received on or after 15th March, 1967, the date of Royal Assent, should become payable at the reduced level with effect from 1st January, 1980. That is the retrospective case.
    Having given those illustrations, I hope that the hon. Gentleman and all other hon. Members will recognise that there is no distinction in principle in what we are seeking to achieve between the Clause and the Amendment. The Amendment is unnecessary. The draftsmen tell me that in all legislation there is a strong presumption against importing retrospective effects which are not specifically set out. The Amendment would throw doubt on that presumption and, therefore, would be harmful, apart from being unnecessary, because we are not disagreed on the objects of the Clause.
    I hope that with that assurance, the hon. Member, who is aware of most of the case, will accept that his Amendment need not be pressed and that he and his hon. Friends can be assured that the Government's intention is the same as his.
    Mr. G. Campbell: I was glad to hear what the Minister of State has said. It has helped to clarify the position. I am sorry that we cannot write it into the Bill so that laymen who have to read the Bill, as opposed to learned lawyers, will be more easily guided about its meaning. In view, however, of what the hon.

    1497
    Gentleman has said, and as the position is clear and the retrospection is not as bad as many people thought, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Amendment made: No. 10, in page 7, line 11, at end insert:
    (4) Any power conferred by this section to make orders shall include a power, exercisable in the like manner and subject to the same conditions, to vary or revoke any such order.—[Dr. Dickson Mahon]

    Clause 11.—(POWER TO DISCONTINUE REDUCE OR TRANSFER CONTRIBUTIONS.)
    Dr. Dickson Mabon: I beg to move Amendment No. 12, in page 8, line 7, after '1965', to insert:
    'the Housing (Scotland) Act 1966'.
    I suggest that it might be for the convenience of the House, Mr. Speaker, if we discuss at the same time Amendments Nos. 13, 14, 16, 17, 18, 19 and 23.
    Mr. Speaker: I have no objection if the House has none.
    Mr. G. Campbell: I wonder whether Amendment No. 19 could be taken separately later, Mr. Speaker?
    Mr. Speaker Mr. Speaker indicated assent.
    Dr. Mahon: These Amendments are drafting consequentials of the Housing (Scotland) Act, 1966, which consolidates the general provisions of the Housing Acts and comes into force on 1st April. It is necessary to ensure that references to the Housing (Scotland) Act, 1950, are amended or extended where necessary to refer to the 1966 consolidation Act or to take account of changes in the 1950 Act because of the passing of the 1966 Act.
    Perhaps I may help hon. Members to appreciate the need for these Amendments by explaining that as a consequence of consolidation, the general provisions of the Housing Acts are contained in the 1966 Act while the 1950 Act now, in effect, contains purely financial provisions. For this reason, it is now necessary, for example, to provide that Clause 18, which is a general provision, should be read with the 1966 Act and not with the 1950 Act.
    1498
    That is the purpose of the Amendments and the reason for the variations contained within them. I do not understand the purpose which the hon. Member for Moray and Nairn (Mr. G. Campbell) wishes to raise on Amendment No. 19 and I have no doubt that he will want to raise it at the appropriate moment.
    Mr. G. Campbell: We knew that changes of this kind were necessary and we drew attention to them in Committee. Now that the Measure which is referred to is an Act, the Government have to make these various changes, to which we on this side have no objection.
    Amendment agreed to.

    Clause 17.—(INTERPRETATION OF PART I.)
    Amendment made: No. 13, in page 10, line 2, leave out:
    '80 of the Housing (Scotland) Act 1950'
    and insert:
    '153 of the Housing (Scotland) Act 1966'.—[Dr. Dickson Mabon.]

    Clause 18.—(RIGHT OF PARTIES TO CERTAIN AGREEMENTS SECURED ON, OR RELATED TO, UNFIT HOUSES TO APPLY TO SHERIFF FOR ADJUSTMENT OF THE AGREEMENTS.)
    Amendment made: No. 14, in page 10, line 20, leave out from that 'to applies' in line 22 and insert:
    'section 14(5), 19(3), 20(5) or 47(2) of the Housing (Scotland) Act 1966 (being provisions relating to the assessment of compensation for unfit and certain other houses)'.—[Dr. Dickson Mabon.]
    Dr. Dickson Mabon: I beg to move Amendment No. 15, in page 11, line 43, to leave out 'an adequate' and to insert 'a fair'.
    This Amendment meets a point raised in Standing Committee by my hon. Friend the Member for Dundee, West (Mr. Doig), who suggested that the word "adequate" in relation to the purchase price of property subject to an agreement to purchase by instalments might lead the sheriff to consider the price from the point of view of the seller only. The Government's intention in Clause 18(3)(b) has always been that the sheriff should have regard to whether the purchase price for the property was reasonable, bearing in mind all the circumstances of the case and not simply the return to the

    1499
    seller. The Amendment will remove any doubt by providing that the sheriff should consider how far the amount paid under an agreement to purchase by instalments represents a fair price for the purchase.
    Mr. G. Campbell: I am sorry that the hon. Member for Dundee, West (Mr. Doig), for whom the Minister has made the Amendment, is not present to appreciate it. Having examined the Amendment, however, and having heard the reasons which the hon. Gentleman has given, we on this side are ready to accept it.
    Amendment agreed to.
    Further Amendments made: No. 16, in page 12, line 25, leave out '13 of the Housing (Scotland) Act 1950' and insert:
    '18 of the Housing (Scotland) Act 1966'.
    No. 17: In page 12, line 30, at end insert:
    ,and subject as aforesaid expressions used in this section and in the Housing (Scotland) Act 1966 have the same meanings in this section as in that Act.—[Dr. Dickson Mahon.]

    Clause 21.—(GENERAL INTERPRETATION.)
    Amendment made: No. 18, in page 13, line 1, leave out 'section' and insert 'sections 18 and'.—[Dr. Dickson Mahon.]
    Dr. Dickson Mabon: I beg to move, Amendment No. 19, in page 13, line 4, at the end to insert:
    (2) Any reference in this Act to the Housing (Scotland) Act 1966, or to any provision thereof, shall include a reference to any enactment repealed by that Act or, as the case may be, to the corresponding provision of any such enactment.
    The Amendment is a legislative device to ensure that anything that is being done under the legislation consolidated still stands.
    Mr. G. Campbell: The wording of the Amendment seems to me to call for rather more explanation, although I do not want to detain the House on the matter. I realise that it is a legal point, but it seems strange that the Amendment should include reference to something that has been repealed. I had hoped that the Minister would be able to explain that point, but if it is a technical and legal matter I shall not take up the House's
    1500
    time, although we should be glad of an explanation.
    Dr. Mabon: It is a very technical point. If the hon. Gentleman looks at the consolidation Measure, which is quite something, and tries to work this out, he will sec that the intention is that anything which stands as a result of consolidation should still stand, because not all of the enactments are repealed. Sometimes it is only parts of enactments that are repealed. The hon. Gentleman will see that the Amendment is to preserve the position of the consolidation Act in as much as it does not refer to financial provisions which are still standing at the position of the Housing (Scotland) Act, 1950.
    I do not want to give illustrations because they are so complicated, and I would be embarking on a very stormy sea. I would prefer the hon. Gentleman to take my assurance that the Amendment is a device that is quite secure for ensuring that anything done under the consolidated legislation will stand. If he has doubts, I shall be happy to correspond with him and perhaps raise the matter with my right hon. Friend.
    Mr. G. Campbell: We shall have to take the hon. Gentleman's word on this. We were in favour of the consolidation Measure and pressed for it to come forward, and we were glad that it was enacted just before Christmas. My faith in the Scottish draftsmen is such that I am prepared to accept that explanation and hope that it covers the objective which we have on both sides of the House.
    Amendment agreed to.

  Schedule 2.—(ASCERTAINMENT OF ADDITIONAL SUBSIDIES FOR HOUSES PROVIDED BY LOCAL AUTHORITIES WITH SPECIAL DIFFICULTIES.)
  Dr. Dickson Mabon: I beg to move Amendment No. 20, in page 15, line 44, after 'deficit', to insert:
  (a) in the case of any house completed before the beginning of the financial year commencing in 1968.
  It might be for the convenience of the House if we discuss with it Amendments Nos. 21 and 27.
  Mr. Speaker: If the Opposition have no objection, so be it.
  Dr. Mahon: The Amendments are necessary to take account of the new rate support grant in the Local Government (Scotland) Act, 1966. Amendments Nos. 20 and 21 cover the point raised by the Opposition in the Standing Committee when their Amendments were explained by me to be premature inasmuch as we did not have the Royal Assent to the Local Government (Scotland) Act, 1966, and they were withdrawn on the general commitment that the appropriate Government Amendments would be put down at the correct stage. As the Government see it, this is the correct stage.
  Paragraph 2 of Schedule 2 at present provides that for the purposes of calculating Clause 5 supplementary subsidy any deficit brought out by the notional housing revenue account comparison required by paragraph 1 of the Schedule is to be reduced by the percentage of Exchequer equalisation grant applicable to the authority. The deduction is necessary to avoid a duplication of Exchequer assistance in respect of an authority's housing deficit.
  The Amendments are necessary to change paragraph 2 of Schedule 2 since Sections 1 and 2 of the Local Government (Scotland) Act, 1966 terminate Exchequer equalisation grant after the present financial year, 1966–67, and introduce a system of rate support grants to local authorities. The new grants include a resources element which will have functions similar to those of the present E.E.G. and it is, therefore, necessary to amend paragraph 2 of Schedule 2 to provide for the deduction of the appropriate amount of rate support grant.
  Paragraph 2 (a) of Schedule 2 will cover supplementary subsidy calculations for houses completed during or before the financial year 1967–68 when Exchequer equalisation grant payable in 1966–67 and the earlier years will be relevant and will need to be deducted.
  6.45 p.m.
  Amendment No. 27 provides for similar Amendments to the Housing (Scotland) Act, 1962. Rate support grants may also be relevant to subsidy calculations under that Act. The point arises only where houses approved under the 1962 Act are completed during the financial year 1968–69. That is, however, likely to occur in a few cases, particularly the
  1502
  larger multi-storey schemes, and provision must be made for deduction of the appropriate amount of rate support grant.
  The Opposition wanted us to make Amendments and I agreed that we should make them at the appropriate stage. I thought it would be wise to do it here on Report rather than leave a discussion which is very pertinent to us to another place.
  Amendment agreed to.
  Further Amendment made: No. 21, in page 16, line 3, after 'year' insert:
  ',and
  (b) in the case of any house completed on or after the first day of the financial year commencing in 1968, the same proportion as the amount of the resources element of the rate support grant payable to the local authority for the relevant financial year under the Local Government (Scotland) Act 1966 bears to the authority's relevant local expenditure as certified by the Secretary of State to have been estimated according to the latest estimate made before the end of the relevant financial year, as calculated for the purposes of Part II of Schedule 1 to that Act in accordance with the provisions of paragraphs 4 and 5 of the said Part 11.'.—[Dr. Dickson Mahon.]
  Dr. Dickson Mabon: I beg to move Amendment No. 22, in page 17, line 22, at the end to insert:
  8. Where, by reason of a change in the areas of local authorities, houses are transferred from one local authority to another local authority, the Secretary of State may, having regard to the gross annual values of the houses and the date and circumstances of their transfer, direct that such other method of calculation as he may consider appropriate shall be used for the purposes of this Part of this Schedule in lieu of the method of calculation specified in the two last foregoing paragraphs.
  We have already discussed the Amendment, Mr. Speaker.
  Amendment agreed to.

  Schedule 3.—(ENACTMENTS REPEALED (BEING ENACTMENTS REPLACED BY SECTION 11).)
  Amendment made: No. 23, in page 18, column 3, leave out lines 30 to 32 and insert 'Section 74'.—[Dr. Dickson Mahon.]

  Schedule 4.—(PROVISIONS AUTHORISING PAYMENT OF ANNUAL CONTRIBUTIONS.)
  Dr. Dickson Mabon: I beg to move Amendment No. 24, in page 20, line 6, after '105', to insert '110'.

  1503
  The Amendment makes a minor addition to the Schedule by inserting a reference to Section 110 of the Housing (Scotland) Act, 1950. It was pointed out to us by one of the new towns that we should make the Amendment to make it quite right as far as they are concerned.
  Schedule 4 lists statutory provisions under which Exchequer contributions are paid to recipient local authorities and Clause 11 empowers the Secretary of State to discontinue, reduce or transfer those contributions in certain circum-, stances, for example, where the subsidised house has been disposed of or transferred to another authority. Section 110 of the 1950 Act, which authorises contributions towards the losses incurred by new town development corporations carrying out improvement work, was repealed in 1959. Contributions under the Section are, however, still in payment and the Secretary of State should have power under Clause 11 to discontinue, reduce or transfer those contributions where appropriate.
  The Amendment, in fact, adjusts the position to suit the situation in the new towns.
  Amendment agreed to.

  Schedule 5.—(APPLICATION AND AMENDMENT OF ENACTMENTS.)
  Dr. Dickson Mabon: I beg to move Amendment No. 25, in page 22, to leave out lines 1 to 8 and insert:
  (2) The amendment made to Part I of the said Schedule 6 by virtue of paragraph 11 of Schedule 1 to the House Purchase and Housing Act 1959 shall cease to have effect, and accordingly the said paragraph 11, and paragraph 14 of the said Part 1, are hereby repealed.
  The Amendment corrects an error in drafting of paragraph 7(2) of the Fifth Schedule. The purpose of paragraph 7(2) is to pick up a slip in the House Purchase and Housing Act, 1959 which wrongly included within the statutory definition of "Exchequer contribution" contributions to local authorities in respect of standard improvement grants which they have paid to private persons. The paragraph as drafted goes beyond that intention because subparagraph (a) excepted Section 116 of the 1950 Act from the list of statutory provisions applying to standard grants. That exception is incorrect, since without Section 116
  1504
  there would be no authority for the Secretary of State to pay contributions to local authorities in respect of standard grants paid to private persons. The Amendment accordingly sets matters right by redrafting paragraph 7(2) in the correct form. I am very happy to help amend legislation of the previous Government.
  Mr. Noble: I thank the Minister of State for having observed, so long after the energetic drive he displayed on this side of the House, this error in the original legislation. I am glad that the Department has drawn it to his attention and that he has rectified it.
  Amendment agreed to.
  Dr. Dickson Mahon: I beg to move Amendment No. 26, in page 22, line 37, at end to add:
  14. In the said Act of 1962, in Schedule 1, after paragraph 3 there shall be inserted the following paragraph:—
  '3A. Where, by reason of a change in the areas of local authorities, houses are transferred from one local authority to another local authority, the Secretary of State may, having regard to the gross annual values of the houses and the date and circumstances of their transfer, direct that such other method of calculation as he may consider appropriate shall be used for the purposes of this Part of this Schedule in lieu of the method of calculation specified in the two last foregoing paragraphs.'.
  Earlier, I formally moved Amendment No. 22 because it could be taken together with Amendment No. 26 and they have been requested by the local authority associations. They cover the difficulties which could arise in calculating subsidy under Clause 5 and Schedule 2 where there has been a change of local government boundaries.
  Schedule 2 provides for machinery to decide an authority's eligibility for supplementary subsidy on the basis of various calculations of the authority's notional housing revenue account. One of these calculations, under paragraphs 6 and 7 of the Schedule is the ascertainment of the authority's total housing valuation for the relevant financial year. In the normal case, this is calculated by taking the average of the aggregate gross annual values of the authority's houses at the end of the relevant financial year—in paragraph 6(a)—and of the aggregate gross annual value of the authority's houses at the end of the financial year

  1505
  immediately preceding the relevant financial year—in paragraph 6(b).
  Boundary changes can, however, radically alter the geographical basis of an authority's housing revenue account at one or other of the relevant dates and the normal process of taking the average of the two aggregate figures might well quite artificially affect an authority's eligibility for supplementary subsidy. This point was raised in the course of recent discussions with the local authority associations, and this is the first opportunity we have had to take, as is reasonable, powers to deal with the situation.
  The Amendment accordingly provides that in such circumstances the Secretary of State may, having regard to the gross annual values of the houses and the date and circumstances of their transfer, direct that some other method of calculation may be used in order to ascertain the authority's total housing valuation for the purposes of Schedule 2.
  Mr. G. Campbell: We do not object to this Amendment, but I am glad that the hon. Gentleman indicated that Amendment No. 22 should be discussed with it because, when we reached Amendment No. 22 a few minutes ago, he said that it had already been discussed. It would have been appropriate if this Amendment had been taken with the earlier group. However, this course seems more correct. Amendment No. 22 obviously goes with Amendment No. 26 and Amendment No. 27 which follows. On the question of the transfer of houses, the Amendments appear to us to be acceptable.
  Amendment agreed to.
  Further Amendment made: No. 27. in page 22. line 37. at end add:
  15. In the said Act of 1962. in Schedule 2, in paragraph 2, after sub-paragraph (2) there shall be inserted the following subparagraph:—
  '(3) In the case of any house completed on or after the first day of the financial year commencing in 1968. the last foregoing sub-paragraph shall have effect as if for head (a) there were substituted the following head—

  "(a) 'the local authority's reduced deficit' means the deficit referred to, in relation to the local authority, in section 3(4)(a) of this Act less the amount which bears to that deficit the same proportion as the amount of the resources element of the rate support grant payable to the local authority for the relevant financial
  1506
  year under the Local Government (Scotland) Act 1966 bears to the authority's relevant local expenditure as certified by the Secretary of State to have been estimated according to the latest estimate made before the end of the relevant financial year, as calculated for the purposes of Part II of Schedule 1 to that Act in accordance with the provisions of paragraphs 4 and 5 of the said Part II."'—[Dr. Dickson Mabon.]

  6.53 p.m.
  Dr. Dickson Mabon: I beg to move, That the Bill be now read the Third time.
  We have now come to the final stages in this House of one of the most important Bills for Scotland in this Parliament. It is the foundation for the solution of Scotland's housing problem, which we described in our White Paper of November, 1965, and which includes many elements of which I will now emphasise only two.
  The first is the problem of slums, to which the recent Report of the Culling-worth Committee, the Sub-Committee of the Scottish Housing Advisory Committee, of which I have the honour to be Chairman, has again drawn attention and has confirmed the estimates we made in the White Paper. Our housing programme itself and the subsidies provided in the Bill must be more and more directed to the elimination of housing conditions which are, frankly, a disgrace for Scotland.
  Here, I refer not only to the financial provisions of Part I of the Bill but also to Clause 18. This is a very valuable provision which will protect those who have had to buy an unfit house at an excessive price as the only way of finding accommodation.
  The second problem I wish to emphasise is the provision of houses in support of the expansion of industry. Clause 15, which provides finance for the Scottish Special Housing Association, and Clause 8, which gives a special subsidy to local authorities for this purpose, are crucial in this respect. We must ensure that, in the centres of new industrial development, there is an adequate programme of house-building both to retain in Scotland and to attract back the skilled people we need.
  The Bill provides finance to enable the local authorities, the Scottish Special Housing Association and the new towns

  1507
  to expand their building programmes to meet this challenge. The local authorities are working hard on this and are making great efforts to increase their forward planning to ensure continuity. The basic advantage of the new method of calculating subsidy is the confidence that it gives local authorities in their planning. They know that the subsidy will take account of future changes in costs and rates of interest and that they will not suddenly be faced by increased rate burdens because of factors outside their control.
  Local authorities and other public agencies must, under present conditions, be the main providers of houses in Scotland and the Bill concentrates on them. But the Government also look to expansion in the private sector and are taking other steps to encourage this. It is worthy of comment at this stage that, as a result of what has been done so far under the Bill in view of its retrospective nature, we have had for the first time since 1960 the production of well over 2,000 houses—2,300—by the Scottish Special Housing Association as compared with an average over the last six years of about 1,600. This represents a good achievement by this excellent organisation in getting to this level and I hope that we shall be able to move steadily with it towards the 5,000 target in 1970. In respect of the new towns, again we are fortunate in seeing the highest output ever in Scotland, with a figure of over 3,800 houses, which is substantially more than anything achieved before.
  Of course, the bulk of Scotland houses are to be provided by the local authorities and we look to them to do everything possible to reach the figures that we know that they are capable of achieving, given that we get the right organisation and the right drive behind their efforts. My noble Friend is meeting the housing convenors this week. When I met them, I was very impressed by what they told me about what they thought they could do in the months between September and December last year. They promised that they would try to secure approvals of between 23,000 and 26,000 houses. In fact, although I thought that they would get their 23,000, they managed to get within 500 of the outside figure. This is a
  1508
  remarkable effort which I am sure the whole House will commend.
  Our discussions have shown that the basic principles of the Bill are not controversial. Both sides of the House agree that a great step forward is required to solve the housing problem and the financial assistance that the Bill provides is essential. We have had many valuable debates on a number of aspects of the Bill and have made many improvements. This is a Bill which we can pass with confidence and I commend it to the House.
  6.59 p.m.
  Mr. G. Campbell: The Bill, as the Government have pointed out many times, brings in a new system for basic subsidy in Scotland. This is, perhaps, its most important provision, and the first three Clauses govern it. But the clear point remains that the amount of the basic subsidy due to local authorities for new housing will vary from year to year and that the rate is to be decided by the Secretary of State himself in relation to the previous year's interest rates. It has been argued that this will be helpful to the local authorities because it will give them assurance for the future against rising interest rates and against high interest rates. Clearly there is advantage for the local authorities when interest rates are high, and certainly, in the last two years, when the rates have been continually high during the period of economic crisis, a basic subsidy related directly to interest rates is an advantage.
  The question which we want to ask—and I hope the Minister will be able to give me some attention because this is an important question—is, does the Minister expect this state of economic crisis to continue for the whole period of the Labour Government? He has been speaking as if there will always be interest rates of 6½ per cent., or 7 per cent., or even higher. I can assure him that the country, almost unanimously, hopes that interest rates will come down. That is what people in all walks of life and in all trades and professions are hoping. If interest rates come down, then there is uncertainty as to what will be the actual amounts payable in subsidy each year.
  To sum it up, local authorities have the advantage of the subsidy being pegged

  1509
  to 4 per cent. interest rate. That is quite understood, but in return for that they have the uncertainty about the amounts they will actually receive, depending upon how interest rates will vary or may vary in the future. Houses will qualify under the Bill for this new form of basic subsidy, in many cases where proposals were submitted on or after 1st January, 1965—that is, over two years ago. We have already discussed this retrospection. Most of those ought to have been completed, certainly if they are not multi-storey, during 1966, but the Government appear during that year to have lost touch entirely with the public authority housing programme. Indeed, they appeared to be completely at sea with the housing programme during 1966.
  In March, the Government, through the Labour Party's manifesto, categorically stated that at least 40,000 houses would be built in Scotland in 1966. The manifesto said that the Conservatives had a target of 40,000, and it went on to say,
  "We will beat it this year".
  We know the result. We know what, in fact, happened. The figure was just over 36,000. What happened to the other 4,000 houses? I hope that the Minister will tell us. We know, having seen last month the figures for the year, that the figure of 36,000 was considerably assisted by the private sector, which built about 200 more houses than in 1964. That is something which, in itself, is welcome, but the correct statement which the Labour Party should have made in its March manifesto less than a year ago should have been, "We will build about 36,000 houses and we will be considerably assisted in this by the private builders". That would have been a true statement, and a true prediction of what, in fact, happened. That is what should have been said. How could the Government have been so wide of the mark in March? Were they just hopefully guessing? Responsible Ministers do not usually allow such statements unless they are founded on some solid facts or information. If the Government were not simply hopefully guessing, then this was a misleading statement to the electorate. To put it bluntly, it was a swindle. Perhaps the hon. Gentleman will say that it was the economic crisis. But that economic crisis has been with us for two
  1510
  years. It was no good making this prediction in March if it was subject to the economic crisis continuing. If the hon. Gentleman says that the July measures affected that prediction, that statement, that pledge, in March, we know that the July measures were drastic for Scotland. But if that is put forward as the excuse, why was the Minister of State still so confident last November? On 1st November, in the Scottish Grand Committee, when I mentioned the statement concerning 40,000 houses, he intervened to say
  "The year has not finished".
  So, on 1st November, the Minister was still thinking in terms of 40,000 houses being built by the end of the year. Within two months of the end of the year he was out by 4,000. That is why we naturally doubt and wonder whether the Government know what is happening, or is likely to happen, with the building of new houses. Can we believe these statements, or the pledges, or the forecasts, on housing in Scotland which they put out? I hope that the hon. Gentleman will tell us something about this, because this is the first opportunity since those figures came out for the Government to explain why they were so hopelessly wrong with their predictions during the year.
  The Bill does away with the favourble differential, as we see it, in the basic subsidies in Scotland, because the basic subsidy amounts for houses, unless the hon. Gentleman can tell us something different, will be the same in England and Wales as they will be for Scotland.
  Previously the figures have been higher for Scotland. Where a house qualified for £32 subsidy in Scotland, it was £24 in England. Where it was £12 in Scotland, it was £8 in England. The system now adopted for Scotland on the one hand and England and Wales on the other means that this differential for basic subsidies disappears. I agree that a differential occurs in some of the special subsidies, but not in the basic subsidy.
  The Minister may explain that this is adopted for England as well as for Scotland because subsidies are now altogether higher, but again we revert to the point about interest rates. They are higher now because interest rates are at crisis rates and we hope that they will not continue at present levels.
  Regarding special subsidies, there are reductions under Clause 4 for multi-storey

  1511
  buildings, a point which we touched on during the Report stage, and, under Clause 9 for expensive sites. The Bill makes reductions in these two special subsidies.
  Dr. Dickson Mahon Dr. Dickson Mahon indicated dissent.
  Mr. Campbell: Reductions from £40 to £30 for multi-storey flats. The hon. Gentleman will talk again about adding to that the basic subsidy, but in certain cases the basic subsidy could be nought. I hope that the hon. Gentleman realises that these are reductions in the special subsidies.
  Time will show how the new basic subsidy system will work. I hope that the hon. Gentleman—I see him muttering there—will not again say that I am taking an Oliver Twist attitude. I pointed out earlier that the point about the Oliver Twist requests was that they were eminently reasonable. Time will show how the new basic subsidy system will work.
  It is our concern—and we are concerned about this—that despite all the pledges, the priorities, the forecasts made, and general ballyhoo which the Government have put out, they have done very little to help the housing situation in Scotland.
  7.10 p.m.
  Mr. Edward M. Taylor: What has been noticeable during the discussion of the Bill on Report has been the statesmanlike and reasonable way in which the Minister of State has answered our questions. He has adopted an air of lofty superiority and of genuine concern with Scotland and its housing problems. But we have to remember the background to the Bill, the background of the Government's existence, because they owed their shaky and miserable existence in the last Parliament to a series of disgraceful pledges—
  Mr. Speaker: Order. There is nothing about that shaky existence of the last Government in the Bill. This is a Third Reading.
  Mr. Taylor: I was at once coming to some of the provisions in the Bill, but we have to remember its background.
  The Minister of State said that we could see the reasons for the Bill's provisions and especially for some of the
  1512
  subsidies, in the success of the housing programme since the provisions of the Bill were announced. After deluding the electorate in 1964 and 1966, the Government must now be deluding themselves, because the figures for the period covered by the Bill show the very reverse.
  Surely by now we should have seen some indication of an improvement in the number of houses started, for instance, because of the subsidies for which the Bill provides. Local authorities know about them and these provisions are retrospective. Surely by this stage there should have been some indication that thing were improving. We all know that completions have failed to reach the figure of 1964 even yet. The Government may say in all fairness that this is for partly historical reasons and that many of the houses being completed were started before the subsidies were announced, but even so we ought to be seeing some signs by now. Instead, the number of houses under construction which were begun in 1966 totalled 36,000 compared with a figure of well over 42,000 in 1965. These are official figures from the Housing Return for Scotland and instead of an improvement, instead of the number of starts being increased, there is a fairly savage decline to 36,000.
  Dr. Dickson Mabon: I have difficulty following all this, but the hon. Gentleman must remember that about one-third of the houses in the present programme are multi-storey houses and that multi-storey houses cannot count in starts until at least nine months after the laying of the foundations. That is the difference between multi-storey and low-level houses.
  Mr. Taylor: I agree that that fact would be reflected, but is the hon. Gentleman arguing that there has been a dramatic increase in the number of multi-storey houses over the previous seven years? I hope that he will produce figures to substantiate that, because it is not my information. I am told that there has not been a very large percentage increase over the figures for the previous seven years.
  But what concerns me is the incidence of these figures. The Minister spoke of the achievements of the Scottish Special Housing Association this year, but those figures are even more alarming, because

  1513
  instead of 2,000 in 1965, we have only 1,000 in 1966. In the new towns, instead of 3,600, the figure was 3,100. Only the private sector appears to be showing any stability, and starts in the private sector are about the same.
  The Minister says that the Bill is the answer to the housing problems of Scotland, but all the indications in the number of starts and completions are that that is not the case. The Minister spoke of multi-storey building, but if what he says is correct, we should be seeing some sign of an improvement in the number of tenders approved and here also there is a reduction from 31,676 in 1965 to 30,704 in 1966.
  Dr. Dickson Mabon: 1965 was a record year for approvals. The comparison would be better stated by taking the number of approvals for 1964.
  Mr. Taylor: I will take not the figures for 1964, but those for 1963, the year before. [Interruption.] The figures are almost identical. Over a period of about five years there has been a variation of between 25,000 and 30,000.
  Dr. Dickson Mabon: The year 1964 is more pertinent to the argument inasmuch as we are building or completing houses which were approved in 1964, whereas those approved in 1963 have long since been built. The year 1963 was a bad year, as the hon. Member for Moray and Nairn (Mr. G. Campbell) will agree.
  Mr. Taylor: The figures vary between 25,000 and 30,000 over a period of five years. These are official Government figures which are available to everyone. I could give the figures for each year, but it would not be right to take up the time of the, House. I will say only that over the period of five years they were approximately 27,000, 30,000, 27,000, 31,000 and 30,000. Today we have the situation in which, according to the Minister's argument, there ought to be a dramatic improvement, and yet we are not seeing any signs of it.
  Certainly many of the provisions in the Bill will assist local authorities when interest rates are high, and we have had a very unfortunate experience of extremely high interest rates under the present Government. But that is not the answer to our questions, because there
  1514
  has been no apparent sign of an increase in the number of tenders approved and houses started.
  I do not in any way suggest that the Bill is useless or that it will give no assistance to anyone, but I counsel the Government, and especially the Minister of State, to remember that while in serious economic times the Bill will relieve the burden of local councils—and there is no question about that—even at times of high interest rates it will not be the whole answer and that local authorities could still be in serious difficulties. The number of completions is down by 4,000 and that of starts is down by 6,000. While the Bill may be of marginal advantage, Scotland's housing, problem needs far more drastic measures.
  While not wishing to be more controversial than necessary, I must say that if the Minister studies the Cullingworth Report, he will see the desperate need for a kind of military operation and the need for a dramatic increase in housing provision. He should not by any means think that the Bill will deal with the long-term problem. Local government in Scotland needs security in general spending and it also has to deal with the problem of the availability of land. If those two problems were tackled more seriously, that would make a much greater contribution to a solution of Scotland's appalling housing problem than the Bill will make.
  We certainly welcome the Bill's objectives and agree that it will bring relief to local authorities in certain circumstances, but it is not the answer which would be provided by sound economic policies pursued by a sound Government. Such policies would make a far greater contribution to a solution of an appalling problem. Although the Bill will provide relief in times of serious economic difficulty it will not provide the general boost which Scottish housing needs.
  7.18 p.m.
  Mr. Alasdair Mackenzie: This is a very important Bill and most hon. Members will agree that housing is one of our major problems. This is true even in the north of Scotland and it must be doubly true in the industrial belt where there is a much greater density of population. We hope that the Bill will be the means of speeding

  1515
  up a solution of housing problems in all parts of Scotland.
  A recent report clearly showed the very depressing housing conditions in some parts of Scotland. That report came as a shock to many of us. If it is as fruitful as we are promised, the Bill will go a long way to allaying the fears of many hon. Members.
  It is rather strange that in areas where depopulation at a steady rate is occurring there is still a housing problem. Many people want to live in the larger villages and the smaller burghs, and there is a constant demand for more houses. In discussing housebuilding it is import-'ant to stress how essential the private sector is, and I hope that this Bill will not be the means of reducing the number of private houses. In my part of the world more and more young people are very anxious to build their own house and this should be encouraged.
  Multi-storey building does not affect us. We do not want this type of building in the Highlands, or anything else that would spoil the beauty of the landscape. We hope that the Bill will be as good as the Minister of State promises and that it will be a means of arresting the depopulation which has been taking place for many years. The reason for this depopulation is often the lack of adequate housing, and, for that reason, I, on behalf of my party, give a very cordial welcome to the Bill, and hope that it will live up to the promises of the Minister of State.
  Mr. Eadie: I want to associate myself with the remarks of the hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) and to welcome this Bill. A welcome for the Bill is something of a change of climate, bearing in mind some of the remarks made by hon. Gentlemen opposite. I have not quite made up my mind about the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) but whenever we start to discuss housing, not only in the Chamber but in Committee, he dons the mantle of the prophet of gloom and doom. Some of his criticisms are perfectly valid but I hope that in making them he realises that he is indicting his own party.
  Mr. Edward M. Taylor: I appreciate what the hon. Gentleman has said about
  1516
  me and my remarks in Committee, but I was not a member of this Committee.
  Mr. Eadie: I was not meaning this Committee. We are all well aware of the gloomy remarks often made by the hon. Gentleman. He even makes them on television. My constituency welcomes this Bill. For the first time in history the local authority of the County of Midlothian is investing £15 million in housing. It is a housing programme unequalled in its history.
  When one considers this, one begins to realise what this will mean to the people living there. I know that some hon. Gentlemen are familiar with the area and the housing needs. I find it very difficult to understand the hon. Gentleman, because I have a long experience of housing matters as a member of a local authority. I can remember when the party opposite destroyed the three-tier subsidy in a Housing Bill before this House. I can remember that it provided, in the Bill, an incentive for local authorities to build smaller houses. I see some hon. Gentlemen here who reside in the Edinburgh area, and I can remember—
  Mr. Speaker: Order. A passing reference is in order, but the hon. Gentleman must relate his remarks to the Bill.
  Mr. Eadie: I did not mean to incur your wrath, Mr. Speaker. I was trying to point out, since some hon. Gentlemen opposite have been criticising the subsidy provisions of the Bill, that they are responsible for destroying the principle of the subsidy according to the cost of the house. In introducing this Bill my right hon. Friend has restored this principle, inasmuch as if the house is larger a bigger subsidy will be paid.
  I was drawing an analogy between what happened because of the disastrous policy of hon. Gentlemen opposite and our present scheme. With the introduction of the small subsidy—the removal of the principle reintroduced by this Bill—smaller houses were built with terrible consequences for Scotland. This is a legacy left to us by hon. Gentlemen opposite. I was a housing convenor in 1964, and when the Labour Government were elected we were looking around the country for plasterboard, of which there was a shortage because of the policies of hon. Gentlemen opposite. Thus the party opposite was responsible for delaying and

  1517
  retarding the 1964 house building programme. Hon. Gentlemen opposite cannot run away from this respons>C9'ibility.
  Mr. William Baxter: My hon. Friend will also recall that there was a considerable shortage of cement for two or three months, also retarding house building considerably.
  Mr. Eadie: I appreciate my hon. Friend adding strength to my argument.
  Mr. Brewis: Does the hon. Gentleman not admit that in spite of these shortages, rather more houses were built in that year than last year?
  Mr. Eadie: This showed great initiative and enterprise on the part of the Labour Government.
  I want to deal with that part of the Bill which extends the activities of the Scottish Special Housing Association. It was even agreed in Committee that the Association made a special contribution to house building in Scotland.
  Mr. Edward M. Taylor Mr. Edward M. Taylor indicated dissent.
  Mr. Eadie: The hon. Member for Cathcart disagrees, but he is always different from everyone else. This Bill provides not only for housing subsidies, but also for an acceleration of house building by the Association which will be of great help in my constituency. I warmly welcome the Bill and I hope that other hon. Members will speak very strongly in its favour.
  7.30 p.m.
  Mr. Brewis: The Bill is clearly designed to be a weapon in the Government's housing programme, and its provisions have been well known at any rate since the end of 1965. It is therefore sad to see that so far this Bill has not been reflected in the success which one would have liked to have seen on the ground. Some of the figures have been given by my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), but it is very disappointing to see that tenders in 1966, which amounted to 30,704, were down compared with the previous year, when the figure was 31,676. It is true that houses under construction are up fractionally on the previous year, but they are down in the fourth quarter compared with the second and third quarters, and,
  1518
  as has already been said, constructions begun last year are down considerably.
  I know that the Minister of State intervened during the speech of one of my hon. Friends to say that this did not include starts on multi-storey flats. This is perhaps a valid point, but it would apply equally to the figures which he has always said were not high in 1964. I have a suggestion to make about this. It is that in the housing return there is a table, No. 6, which analyses tenders by the size of houses, and I wonder whether it would be possible in that or in a similar table to state how many of them are multi-storey, and how many storeys there are in those houses?
  Dr. Dickson Mabon: We expect that the figure for the current month will be about 37 per cent. in respect of multi-storey constructions, which only reinforces what I said about these approvals. The figure for tenders approved in 1966–30,704—was higher than any figure before under the Conservatives. I take the hon. Gentleman's point that we should have a growing volume of houses under construction and approvals, but if he says that it is down in the fourth quarter, I must point out that the figure of 50,550 for the number of houses under construction is higher than anything achieved under the Conservatives. Unfortunately, with multi-storeys, it takes nine months before we put them on the schedule of starts because of the work on the foundations, and thereafter we get the bunching effect. It is this which gave the result in December which so shocked the Opposition.
  Mr. Brewis: I shall not bandy figures with the hon. Gentleman. In the fourth quarter the number of houses under construction was down on the previous two quarters.
  I welcome the way in which the basic rate of interest has been reduced to 4 per cent., but at the same time the Government have done very little to hold down the cost of house building. It seems to me that with one hand they are helping local authorities, but with the other, by putting on taxes such as the iniquitous Selective Employment Tax—
  Mr. Speaker: Order. That is right outside the Bill.
  Mr. Brewis: I bow to your Ruling, Mr. Speaker. I was merely making a

  1519
  passing reference to the fact that the cost of houses had gone up.
  My hon. Friend the Member for Moray and Nairn (Mr. G. Campbell) has already inquired what will happen if the country, under this Government, gets more prosperous and interest rates fall. The answer is that the subsidy may well disappear altogether, but I should like to dwell for a moment on the reverse, and perhaps more likely effect, and that is what will happen if the country gets less prosperous and interest rates tend to rise higher and higher? If this happens, the Bill will be a built-in incentive for local authorities to build more houses when things are tight nationally than when things are prosperous nationally. This might well be to the detriment of other local authority projects, or the repair of houses, which is very important, and it seems to me that the system of subsidy under this Bill might work very disadvantageously from a national point of view.
  I have one other question to ask because I was not on the Committee and therefore was not able to ask it then. I notice in Clause 7 that there is to be an extra subsidy for the use of stone and other architectural means to try to ensure that houses fit into their surroundings. What is the Secretary of State's policy on this? If rather special designs are submitted to him, there will be an extra subsidy for such houses, but if applications for ordinary houses come in, will the Secretary of State cut down on the cost of the houses and get local authorities to accept only those tenders which show the cheapest possible construction cost? I have heard it suggested that this will be the case. I do not think that it will be, but I would be grateful if the right hon. Gentleman would give us some idea of what his policy is on slightly more expensive but architecturally more worthwhile buildings.
  7.36 p.m.
  Mr. Doig: The hon. Member for Moray and Nairn (Mr. G. Campbell) has talked continually about the uncertainty of the amount of money which local authorities will receive by way of subsidy. I can only say that I wish I had had this uncertainty when I had to find money in my constituency to pay for housing and housing loans.
  1520
  What is this uncertainty to which the hon. Gentleman referred? It is in fact a stonewall certainty that for the first time they will know exactly what it is going to cost them. Surely this is what everyone wants, to keep on harping about uncertainty is sheer nonsense because, as I have said, for the first time there is a stonewall certainty. They know that the rate of interest will be 4 per cent., and no more, and I am sure that every treasurer in every local authority welcomes this "uncertainty".
  It has been said that the housing figure for 1966 was achieved by including more private houses. The fact is that there were only 317 of these houses, and I suggest to hon. Gentlemen opposite—and in particular to the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor)—that they should look at another column in this housing return, the one for conversions and improvements. if the hon. Member for Cathcart looks at the figure for 1966, and then at the figure for 1964 of which he is so proud, he will see that the number of houses becoming available on a modern estate totalled 2,800 more than those in 1964. If we include this figure, we see that more good modern houses became available for tenants in 1966 than in any previous year in the history of this country, including 1964. The hon. Gentleman ought to look at the whole of the Report and not merely select parts of it which suit him.
  The hon. Member for Cathcart also suggested that we should turn the housing programme into a military operation. Because now for the first time, there are to be fixed interest charges, my local authority has done just this. This year the number of houses completed will be more than double the number completed last year. The reason for this is the so-called uncertainty about how much subsidy the local authority will receive, and how much interest it will have to pay in interest charges. I have no doubt that many other local authorities will take similar action, and I am convinced that this year there will be another record in house completions.
  The provision for an increase in S.S.H.A. houses is welcome to local authorities. Apart from providing additional houses it will relieve local authorities of a liability. Every local authority to which I have spoken welcomes the Bill.
  7.40 p.m.
  Mr. Patrick Wolrige-Gordon: I agree with what the hon. Member for Dundee, West (Mr. Doig) said about the S.S.H.A. The provision concerning that Association is one of the most welcome in the Bill. I noticed that in his speech at the annual general meeting of the Scottish Council in December Lord Clydesmuir spoke of the importance that the Scottish Council attaches to the work of the S.S.H.A. and local authorities—and all those concerned in providing housing—for the economic development of different parts of the country. Anything which will encourage and develop that has my strongest support.
  If housing were just a matter of passing legislation the Government would already have housed the people of Scotland. If all that was needed to do the job was charm and ability to present an active impression, the Minister of State would deserve his promotion. But in March last year the Government were saying that they would build 40,000 houses in Scotland in 1966. Many Scottish people voted for them on that basis. They were quite right to do so, because that had been the programme of the Conservative Government. But what happened? The Government were elected and the housing programme slowed down.
  The Government now claim that the figures were a record all the same, and take great pride in them. Every year, as the normal progress goes on, they claim a record and are very proud of it. But that achievement is the result of Conservative planning and Socialist execution. When we have Conservative planning and Socialist execution the thing that suffers is Conservative planning. In this case the housing programme was reduced by about 4,000 houses—homes for at least 8,000 people—so this Government, in their friendly fashion, promoted the Minister most responsible and declared the whole business to have been a stupendous success.
  Whether this Measure will improve the position dramatically, I doubt. The Government are very proud of their generosity in allocating the vast amount of other people's money that they have collected in the last two years. It means that subsidies under the Bill will be the highest
  1522
  ever. No one can oppose that, especially in view of the tremendous burden placed on local authorities because of the Government's policy of high interest rates. I hope that we shall not see the serious drop in starts in 1967 that we saw in 1966. I share the concern expressed by my hon. Friend about the unfortunate response, in terms of the housing programme, that the Bill seems to have gained so far in Scotland. I hope that this situation will not continue, and that the new subsidy arrangements will not lead to great delays in administration, either among local authorities or in St. Andrew's House, causing, as has happened in the past, an increased charge on ratepayers and a non-payment of builders.
  Mr. Manuel: I do not want to stop the hon. Member for too long in his vigorous attack, but does he not agree that a Government in power for 13 years, as the Conservative Government were in power, would, if they had been really keen, have built up a motive power for the erection of houses and should have been producing them in enormous numbers, instead of which the tempo was reduced because of the impact of the financial burden placed upon local authorities. Some cut down their housing programmes, and some were not building at all. We had to reverse that trend. The Bill will enable us to go on to a greater success.
  Mr. Wolrige-Gordon: If that was the trend that the hon. Gentleman saw in the Conservative Party he was the only one who saw it. The Conservative programme of house building in Scotland was for 40,000 houses in 1966—a figure that has not been achieved by the present Government.
  Housing is a human problem and we are all united in our aim to solve it. The. fact that the Conservative Party is prepared to spend much more money in helping to solve the problem is indicated in the general acceptance that we have given to the Bill, in spite of our differences of opinion about its details.
  7.45 p.m.
  Earl of Dalkeith: During the debate the temperature has varied from time to time. Possibly the warmest moment came when my hon. Friend the Member for

  1523
  Glasgow, Cathcart (Mr. Edward M. Taylor) succeeded in triggering off the hon. Member for Midlothian (Mr. Eadie), who gave us a fruity harangue at one point, including our shortcomings in the supply of plasterboard. Despite the fact that the Bill has been in embryo for some months, the Government cannot escape the fact that they have thrown the building industry into a state of confusion. There are now 8½ million surplus bricks in the brickyards. I am told that if these were placed end to end they would reach two and a half times round the world. These are not producing the extra houses. Whether it is a shortage of plasterboard or a surplus of bricks, the hon. Gentleman cannot seriously claim that the Government are producing houses faster. They are not continuing the rate of increase in house-building that we witnessed between 1963 and 1964. The momentum has been lost.
  To the extent that the Bill may encourage the faster production of more and better homes, I welcome it. The Minister of State told us how important it was from the point of view of attracting back to Scotland many of those who had left. Even more important is the production of houses, particularly for the young marrieds, so that they will be discouraged from wanting to leave Scotland. That is one of the basic reasons why the appalling exodus is taking place—to the extent of 90,000 in the last two years.
  The hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) referred to the erection of multi-storey blocks of buildings. I support him, in the hope that he will support me. I should be as loath to see multi-storey buildings going up in the Highlands as in the new town of Edinburgh, so perhaps we can get together on this.
  One of the great points in the Bill is its provision for dealing with the problem of interest rates. The hon. Member for Midlothian said that his constituency welcomed the Bill because it will provide for interest rates at a fixed level. But no one welcomes the fact that at the moment we are in a period of high interest rates. None of us has been able to discover what advantages to local authorities will arise when interest rates are lowered. What help will they get?
  1524
  There will not be much sign of generosity when and if that ever happens.
  Government spokesmen have placed too much emphasis on the generosity of the Bill. I am not sure whether this does not even amount to dishonest propaganda—
  Mr. Eadie: Would the noble Lord not agree that he is, to some extent, contradicting the speech of the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) who said that the Conservative Party welcomed these subsidies to ratepayers and local authorities?
  Earl of Dalkeith: That is not in line with what I have been saying, but is a red herring.
  Too much emphasis has been laid on "generosity" by the Government, but they are being generous only so long as interest rates are high. The Government are beating the daylights out of everybody in the country with the heavy stick of interest rates and all they are doing now is offering a "cushion" to those bodies building houses. But surely everyone would much prefer a sound Government with sound economic policies running the country, so that we could dispense with high interest rates and the need for the cushion. This is a serious point.
  I am distressed by the impression given by the Government spokesmen that we are to expect high interest rates for evermore. They have refused again and again to give us any indication of how local authorities will be better off if and when interest rates fall.
  To end on a more cheerful note, 1 congratulate the Government on their great success with housing during the last few months and on having produced such a marvellous climate. There has never before been such a long winter of uninterrupted progress in housing and it is pleasant to congratulate them on that.
  7.52 p.m.
  Mr. Alick Buchanan-Smith: I return to the Minister of State's point about housing costs, which is vitally important if house building in Scotland is to increase. Any local authority approaching the problem of building more houses will relate these subsidies to the cost of doing so. Far

  1525
  too often, we forget the relationship between the rate of subsidy and the cost of the house. The Minister of State admitted that the cost of new houses in Scotland is higher than in any other area of Great Britain, with the exception of London and the South-East.
  This must be considered, because it is bound to affect our housing programme. I am worried not only by the costs of houses but by the rate at which the costs are rising. Costs of houses are increasing faster in Scotland than in any other area in Britain, and this is very serious. Attention was drawn to this fact last week in the publication of the Cooperative Permanent Building Society's Report, to which the Minister of State referred, which stated that, although in the last five years the rate of increase in prices of new houses in Britain as a whole went up by 41 per cent. and in London and the South-East by 42 per cent., in Scotland they rose by 55 per cent.
  When we realise this relative disadvantage in Scotland, it will put our problems in perspective and help us to get our housing programme under way. It is a waste of time to talk about subsidies unless the Government are ready to tackle the rising costs of building. If we can stabilise these costs or help builders to bring them down, subsidies will be far more effective—
  Mr. Manuel: I agree with the hon. Gentleman that we should try to keep costs down. We have been trying to do this for a long time. I hope, however, that he appreciates that, no matter what the cost or the size of a house, there is no increase in the on-cost for the local authority or the rates, whereas under the legislation of his Government, the more costs went up, the more the local authorities had to pay. The bigger the house, the more they had to pay. The subsidy was static at roughly half what the Bill provides.
  Mr. Buchanan-Smith: I appreciate the hon. Gentleman's point, but it is a narrow one and we should take a wider view. If we allow the cost of houses in Scotland to go up faster than anywhere else, we shall price ourselves right out. If costs were stabilised or brought down, less overall resources would be needed, and resources would create more houses, which is what must concern us. My
  1526
  hon. Friends are right to dwell on this, because if the Bill does not create more houses, no legislation will answer the present problems in Scotland.
  I hope that the Secretary of State, with the Scottish Housing Advisory Committee, will consider costs. It is easy to say that more elaborate construction is necessary because of climate. We all accept this. As the Secretary of State told me in a Written Answer today, there is also the problem of complying with the new Building Regulations standards, I ask the right hon. Gentleman to review these Regulations regularly to make sure that they are reasonable.
  In my experience in local government and personal experience with housing, Regulations tend to be interpreted too rigidly. They should be interpreted flexibly. The Scottish Development Department deals with the relaxation of these Regulations in particular cases and, I believe, does very good work. There should be no unnecessary bureaucratic Regulations on the building industry, which tend to raise costs. This will be to the industry's detriment.
  Tenders are another serious matter. The number of tenders is falling and it has been said that there is also an increase in the number rejected by the Scottish Development Department. I hope that the right hon. Gentleman can clarify this. I have nothing to base it on, but there has been talk of this. If this is the case, it reduces the number of houses being built and I hope that there is good reason for it. We should not overlook the speed of the machinery in the Scottish Office for approving tenders. If the process takes too long, this can hold up the housing programme.
  It is also said that many grants to local authorities which have been approved for houses which have been completed are still not paid because local authorities have not completed certain formalities. This often means a delay in paying the contractors and, in some cases, a higher burden of capital and interest charges on money laid out by the local authority. I hope that the right hon. Gentleman can tell us whether this is the case. If so, it is another small factor which may be holding up our housing programme.
  The hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie)

  1527
  pointed out that while the Bill deals specifically with the question of subsidies to be paid to local authorities for housing, one must view this against the background of the housing programme as a whole. As the hon. Gentleman rightly said, one must also view it against the provision of houses by private builders and others in the private sector. We are aware of the desire of many people, particularly young married couples, to own their own homes. In some local authority areas they are unable to get their names on housing lists before they are married and, in those circumstances, they must find rented accommodation if they can. Often that cannot be done, so that the only alternative is to buy their own homes. If sufficient houses are not built for private purchase, more families are forced to live with in-laws or find rented accommodation.
  We should reflect that about 25 per cent. of our total stock of houses in Scotland is privately owned, as against 43 per cent. in England and 48 per cent. in Wales. These figures highlight the worse position that exists in the private sector in Scotland. Last year about 8,000 houses were built privately in Scotland, and that figure has been static for a number of years. Until we can properly harness the private sector of the house building industry and ensure that it is encouraged to build as many houses as possible, we shall not obtain a break-through and solve our housing problem. As my hon. Friends have pointed out, it is difficult for the private sector to make its full contribution when it is faced with all sorts of charges, including S.E.T.
  The Cullingworth Report referred to the question of improvement grants. In Scotland we have a great stock of older houses which are structurally very good and which need not be demolished. The outer shell of them is good and all that is required is money to bring them up to modern standards. I hope that the Secretary of State will indicate that he is reviewing the whole question of improvement grants for people with older houses, since the rate of grant has been static for a number of years.
  All hon. Members are aware of the need to increase the momentum of the housing drive in Scotland. As my hon. Friends have pointed out, we must view
  1528
  this need against the sombre background of falling starts and the reduced number of tenders. When my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) gave the figures, we were made aware how sensitive are hon. Gentlemen opposite on this matter. They kept intervening in an attempt to refute the figures. They cannot deny that the statistics are there in black and white and that their record does not stand up to close examination.
  Only this week the noble Lord the Joint Parliamentary Secretary responsible for housing reiterated that the target of 50,000 houses by 1970 still stands. Does the Secretary of State consider that that total will be achieved? The record of the Government in the last two years gives us reason to believe—even worse, makes the people of Scotland believe—that there is very little hope of our housing problem being solved.
  8.4 p.m.
  Mr. Noble: In opening the Third Reading debate the Minister of State said that he believed the Bill was an important one and described it as the foundation of the solution to Scotland's housing problem. When he used those words I thought that this was rather like the beginning of the building of a multi-storey block of flats. It seems to take such a long time before anything gets off the ground—nine months before one can start counting the storeys—rather like waiting for the arrival of a baby.
  On many occasions when we have debated housing, affecting England or Scotland, the discussion usually centres around the exact numbers of houses built, completed, tendered for or approved. Figures showing the achievement or otherwise of both parties are given. This is an obtuse type of argument, because if the numbers are up hon. Members say, "But they were smaller houses", while if they are down hon. Members say, "The weather was very bad that year". While a discussion of such figures is important within these four walls, what really matters is the number of houses actually built and ready to be occupied. That being so, anything we can do to help the Government of the day to achieve a quicker rate of completions—because nothing else counts—we will do. We will encourage them when

  1529
  They are successful and prod them on when they are not.
  The hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) gave the Bill a rather doubtful blessing when he said that he hoped that it would be as good as the Minister said he thought it would be. As one of my hon. Friends pointed out, the Minister's record in housing—for which he was directly responsible as a Parliamentary Secretary—has not been particularly good, so perhaps the hon. Member for Ross and Cromarty was extending a rather backhanded compliment.
  Mr. Manuel: It was his Highland way of complimenting the Minister.
  Mr. Noble: I suggest that it was his Highland way of saying that while he hoped something would happen he was not certain that it would happen.
  I do not quarrel with the remarks of my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), who often stirs up a good deal of animosity on the benches opposite. The hon. Member for Midlothian (Mr. Eadie) described him as a prophet of doom and gloom. [Interruption.] I do not know why hon. Gentlemen opposite are so touchy about this. After all, when one talks about prophets of doom and gloom one is entitled to think of the attitude of the present Secretary of State for Scotland for some years when he was in opposition.
  Certainly my hon. Friend the Member for Cathcart goes to a lot of trouble to study the figures. Even if figures are difficult to argue one way or the other, their presentation certainly stops Ministers from making airy-fairy remarks about everything going splendidly, and it brings them back to their main task of completing the required number of houses. As long as my hon. Friend does that—whether the Conservatives or Socialists are in power—Ministers will be kept up to the mark, and I applaud my hon. Friend for his action.
  Mr. Manuel: The big complaint of my hon. Friends—and I understand that this applies to some hon. Gentlemen opposite—is that the hon. Member for Cathcart does not study the figures. It is sometimes appalling to wonder, after he has said something, what he was getting at. It is all surface thinking on his part.
  Mr. Noble: My hon. Friend may be different in his manner of speaking compared with, say, the hon. Member for Ross and Cromarty. My hon. Friend does not have a Highland approach to these things. Instead, he adopts a machine gun approach—and if hon. Gentlemen opposite do not always get the point he is making straight away, we need not spend the time of the House explaining it to them.
  My hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) raised three important topics. Although they are not dealt with specifically in the Bill, they are important if we are to get the number of houses that we need and if we are to get them in the right way. It is not just a question of subsidies, although I agree that local authorities being tied to a 4 per cent. interest rate is important. Indeed, they would not have welcomed it if it had not been to their advantage. Nevertheless, costs are rising, and I trust that the Secretary of State will consider my hon. Friend's point about the length of time it takes to get approvals through. He made two or three very important points. He spoke of the help which the private house building sector could give to our total effort, of the improvement grant and other things.
  The hon. Member for Dundee, West (Mr. Doig) has left the Chamber, but I would suppose that the biggest single disincentive to private house building—and we may as well face this quite squarely in the House—is that local authorities, of one of which the hon. Gentleman was a very prominent member at the time, are apt, for reasons into which we need not now go, to keep their council house rents so low that it is quite impossible to encourage private builders to provide housing at anything like reasonable rents.
  The Secretary of State must not allow the various arguments advanced from time to time from both sides of the House about the difficulties of house building to blind him to the fact that in March he and his party said that they would build 40,000 houses. That statement was not based on something that we had done before or anything else. It was said in March by the right hon. Gentleman, with the full knowledge of the Department behind him. He knew that this was

  1531
  possible, and I am certain that he hoped to achieve it. I do not regard it as satisfactory, either to the House or to the country as a whole, to hear him—or, indeed, the Prime Minister, who tried to do it last Thursday—say that the result is better than some average that someone else got at a different time.
  That is not the point. The point is that in March, in the full knowledge of what was happening, with all the necessary information about bricks, plasterboard and the rest, the Secretary of State said, "We will build 40,000 houses." From the point of view of the weather we have since then had probably the best building period in history—wonderful weather. That being so, I very much hope that the right hon. Gentleman is looking very critically at the arrangements that were made by private builders, local authorities, whoever it might be—I do not care—to see why, in these perfect conditions, with everything set, with the knowledge available of the tremendous drive the Government intended to make in house building, with a substantial victory at the election, they failed by such a considerable amount to reach that target.
  The right hon. Gentleman must also ask himself something else that is highly relevant. Any Government, if they want to go particularly for one class of product, whether it be houses, roads or schools, can have remarkable achievements. The Secretary of State and his colleagues said that housing was their first priority, and we in Scotland saw that it was because school building was cut back, and so were roads, technical colleges and universities. There is not a big bridge being built in Scotland. That makes a difference, because a lot of steel is used in modern housing, and also in building a big bridge.
  This year the Government have had probably the best chance they ever will have—at least I hope so—of achieving, and even beating, their target, because there was very little competition from anything else. They cut down on office building. Everything during this year was concentrated on achieving what was in any case a fairly modest housing target. Yet they failed by so many thousands of houses to achieve it.
  1532
  It is not sufficient for the people of Scotland to be told by the Secretary of State that the Government did marginally better than someone else in other years in different conditions. He can make it as a political point if he wishes, but I hope that he will look very seriously at the reasons for that failure, with all the underlying advantages he had this year, and make quite certain that the houses are built more quickly and better in future.
  8.15 p.m.
  The Secretary of State for Scotland (Mr. William Ross): I had thought that I might find a certain amount of difficulty in answering some questions related to Third Reading—which is supposed to be related to what is in the Bill—because I have not myself been a member of the Committee. I do not think that I shall have very much difficulty there, having listened to practically the whole of this debate—and I apologise to the hon. Member for Moray and Nairn (Mr. G. Campbell) if I did not hear all his speech.
  The right hon. Member for Argyll (Mr. Noble) referred to my undistinguished past when I was on the other side of the House. He said that I was then a prophet of gloom and a prophet of doom. He came to the House in 1958, and I came into it in 1946. In 1953, 39,000 houses were built in Scotland. Year after year under a Tory Government, while hon. Members opposite were singularly silent, that figure went down—from 39,000 to 37,000 to 35,000 to 30,000, until in 1962 it reached 26,000. This is the expanding housing programme of which we hear.
  Interest rates were rising, and the subsidies were cut. I can remember the former Minister of State telling us not to worry; because interest rates were high in 1957 it did not mean that they would remain there. They never came down. What were hon. Gentlemen doing then? Where were they?
  Mr. Edward M. Taylor: At school.
  Mr. Ross: Then the hon. Gentleman did not learn very much. I want to say this about the hon. Gentleman. We hear many speeches from him on every conceivable subject. The figures fall from him like rain from a broken gutter—with

  1533
  just about as much political dirt. It is not the first time that he has had to apologise in this Chamber for quoting figures about which he has already been corrected. I suggest that if the hon. Gentleman wants to quote figures, let him quote them all. There are only two Tory Members left in Glasgow, and the hon. Gentleman is one of them. The other was in charge of housing in the Scottish Office from 1959 to 1962, and it was while he was there that we struck rock bottom. I do not know whether the hon. Member was speaking for his hon. Friend the Member for Glasgow, Hill-head (Mr. Galbraith), but let him be conscious of what he must live along with when he allies himself politically with his hon. Friend.
  Let us all remember that hon. Gentlemen opposite have never shown any great belief at all in local authority housing. On one occasion we heard council house dwellers called second-class citizens. At all stages of this Bill hon. Members opposite have refused to name a sum that they would have in subsidy for local authority houses.
  Let us remember what we are replacing by this Bill—a basic subsidy which in relation to local authorities was on a needs formula. If the local authority came down on the wrong side it got f12 a house, and it did not matter whether the house was of two apartments or five.
  How many local authority houses have been built in the constituency of the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith)? How many houses are at present under construction in the constituency of the hon. Member for Galloway (Mr. Brewis)? Do not let him come here and lecture us. Let him go to his local authority. The number is known—
  Mr. Brewis: A good many are being considered.
  Mr. Ross: And I am glad to see that a good many are being considered, but that is because we are now providing the finance. That is the reason.
  All this gloom about this Bill—that it will not do this or will not do that—is not borne out by the mood of the local authorities. The local authorities have all welcomed the Bill because, as my hon. Friend the Member for Dundee, West
  1534
  (Mr. Doig) said, they now have certainty. The one thing that has created a burden for them has been the weight of interest rates. Hon. Members opposite suddenly discovered this.
  If hon. Members opposite would like to take advantage of some of my recollections and studies they will find that it was discovered by the hon. Member for Hill-head, this old chestnut which we always drop like a hot potato. The English is not mine, nor the mixed metaphor, but his. He regarded it as having no effect on house building, but suddenly hon. Members opposite are concerned about it and local authorities are concerned about it. We are able to do something for them.
  I have always said that our target is 40,000 houses. I said that we hoped we would reach it last year. We did not, but have never given an estimate that we would. The hon. Member asked me in the summer, and I think I annoyed him very much by saying that it would be somewhere between 35,000 and 40,000. He said that we would not even get the 35,000.
  Mr. G. Campbell rose——
  Mr. Hector Monro Mr. Hector Monro(Dumfries)rose——
  Mr. Ross: I do not mind giving way to the hon. Member for Moray and Nairn (Mr. G. Campbell), but we have seen the hon. Member for Dumfries (Mr. Monro) in this debate only in the last few minutes. I shall be glad to give way if he rises, but rudeness is not something which should be granted a dividend.
  Mr. G. Campbell: I am interested to hear that, because the right hon. Gentleman has been very rude in the past. That is one of the things he has been very good at. As he did not hear the beginning of my speech and he was good enough to make an apology about that, may I point out that I was referring to Scottish Estimates and he on one side was saying, "We shall beat 40,000 this year."
  Mr. Ross: It was our hope to beat 40,000 this year. We built about 1,000 more than in the previous year. Our hopes were pinned on to an increase in private building which did not come off. A few weeks can make all the difference in the world in these things. Multi-storey flats can add to the total very

  1535
  quickly. The right hon. Gentleman should know that more than anyone else.
  Hon. Members opposite are always talking about the figures for 1964 as though they were in Government for the whole of that year. They know that the hest building completions figure for 1964 was in the last quarter, when we were the Government. This is true; it is a fact. If we are to be given "credit" for holding back, we should be given credit for speed in getting completions as well. When we took over the number of houses under construction was 47,043. Those that had been approved and were awaiting a start numbered 8,118, a total of just under 55,000. At the end of this year the total under construction was 50,550 approved and waiting to start there were 15,993, making a total of 66,543.
  That is the extent to which we have expanded the housing programme and the extent to which we should see in coming years a greater and greater number of houses being completed in Scotland instead of as in the miserable Tory years the numbers going down. Hon. Members opposite keep talking about 1964, but the number of houses completed in any year rightly depends on the number approved and in the programme. How many were approved in the last two quarters before hon. Members opposite left office? In the second and third quarters of 1964 approvals were among the lowest for a very long time. In no way could it be suggested that this was leading to an expansion in completions about 16 to 18 months thereafter. This is one of the things we have had to live with.
  When we take the number of tenders approved since we became the Government, we find that there were no two years in the last 10 years to compare with our two years of office. We have expanded the housing programme and, as hon. Members opposite have admitted, local authorities are not only beginning to approve far bigger programmes but are looking ahead for five years instead of living from hand to mouth. We have the advantage of knowing how hon. Members opposite hoped to achieve their delayed programme because we find that in 1963 it was 35,000 and that was on the basis of getting a greater number of private houses. To be honest, they
  1536
  should tell us whether they had any hope of getting money from the Treasury for the year in which we stepped in with an expanded local authority programme.
  There is a certain amount of infertility about these arguments. We should never forget what we are faced with in Scotland's need for houses. Some hon. Members have spoken about the Cullingworth Report as if it were something new which discovered that there were slums in Glasgow. If they look at the figures in the White Paper which was the prelude to this Bill they will find there numbers just as high, if not higher, for houses to be dealt with. Because of this we have been pressing local authorities to appreciate what depends on the success of our housing programme.
  Some suggestion has been made about the flow of tenders to the Department being held up. The flow of tenders in the last two months has substantially increased. They are rejected only if they are too high. The Opposition cannot have it both ways. They cannot say that the cost of houses is rising and what are we doing about it and at the same time say that we should not hold up tenders. I remember saying in the Second Reading debate that we had paid special attention to the cost of houses. We are meeting the point which has rightly been made by my hon. Friends the Members for Central Ayrshire (Mr. Manuel), Dundee, West and Midlothian (Mr. Eadie) that now the bigger the house, the bigger the cost, and the bigger the subsidy.
  We must ensure that the local authority pays true regard to economy in the cost of the house. This we are doing, but we are not doing it in a way which will hold up approvals. For many of the houses where there is either totally or partially industrialised building we have instituted an appraisal certificate so that a local authority which is considering any particular type of industrialised house knows exactly whether the house has already been appraised for cost by the Scottish Office. In that case, it goes through without any hold-up.
  I do not think that there is any disproportionate increase in the number of tenders which have been rejected. We may well ask them sometimes to renegotiate on a particular type of house —perhaps multi-storey construction. The

  1537
  price of such a construction may determine later prices, so we must watch carefully to ensure that the negotiations are right.
  The right hon. Member for Argyll seemed to think that the only things we had been building in Scotland were houses. I do not know where he gets that idea from.
  Mr. Noble: I did not say that.
  Mr. Ross: The right hon. Gentleman said that it was possible to concentrate on one thing only and that we have concentrated on houses to the detriment of other spheres, and that we should have done better. I think that I am fairly interpreting his argument. Has he seen how much industrialised building is going on in Scotland and has been going on there in the past two years? The amount under construction last year by the Scottish Industrial Estates Corporation was double what it was in 1964. There is much more industrial and factory building. The right hon. Gentleman was wrong in thinking that office building in Scotland had been stopped. It has not. The only place which is subject to licence is Edinburgh. I do not know whether the right hon. Gentleman appreciates the exact extent of the work which is still going on in hospital building and buildings for education as compared with other parts of the country. The Scottish building industry has had a go-ahead.
  Mr. W. Baxter: Have not the Opposition Front Bench and my right hon. Friend failed to realise that a considerable amount of the labour force which could be devoted to building houses, schools and hospitals has been used at the Polaris base in the Gareloch to the extent of almost the £45 million that that project has cost.?
  Mr. Ross: That is always a possibility, but it only proves my point that we have set the building industry a task to which we expect it to respond. Indeed, in some cases it has responded.
  The hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) spoke about high flats in the Highlands. I will watch this question, too. Meantime, I thank the hon. Gentleman for expressing his hopes for the Bill.
  My hon. Friend the Member for Midlothian spoke of the cost of the house
  1538
  and the subsidy. He also spoke about the S.S.H.A. I do not know whether my hon. Friend appreciates that those who have been in the House as long as I have can remember a time when it looked as though the Tory Government wouid wind up the Association and dispense with it. If my hon. Friend studies the extent to which the number of houses built by the Association declined, he will appreciate exactly how real our fears were at that time.
  The hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) also welcomed the Association, but talked about Conservative planning. That is one thing the Conservatives did not have. The only plans they had were to cut down on houses for at least ten years. They managed to fill the shop wirdow only in 1964. The clamp-down in cost of which the hon. Gentleman spoke is one of the matters confronting us.
  The hon. Member for Edinburgh, North (Earl of Dalkeith) spoke about the lost momentum. After he has listened to me, he will realise that there was no momentum to lose. It was a question of our getting things going and building up momentum. I thank the hon. Gentleman for the cheerful note on which he ended.
  The hon. Member for North Angus and Mearns spoke of bureaucratic regulations. He is a new Member. The right hon. Member for Argyll introduced them. The right hon. Gentleman will remember that he introduced them, because he had to take them back again when one of the Committees of the House told us that they were not properly laid.
  Mr. Buchanan-Smith: Will the right hon. Gentleman please not misrepresent what I said? I did not say that the regulations were bureaucratic. I asked that they should not be interpreted in a bureaucratic way, which is quite different.
  Mr. Ross: It is different, and if the hon. Gentleman had said it the first time I should have written it down, What 1 wrote down was "bureaucratic regulations". The hon. Gentleman may, perhaps, have elided the phrases together. I assure him that the regulations were drawn up by a working party which spent a long time on preparing them. They were introduced by his Government, they were operated by his Government, they have been operated by us. We certainly

  1539
  look to see whether there can be flexibility in their application. Regulations of a similar kind were later introduced by the English Ministries, and at that time we prided ourselves on being before them because our regulations were of advantage to people who were buying houses and to local authorities which were building houses.
  I am concerned about the cost of housing, of course. Undoubtedly, this has been a feature of Scotland not just over the past few years but for a long time. I drew attention to it when I was a member of the Opposition. Part of it is due to the fact that we require different standards of housing, and it tends to be much more expensive. The question of scarcity may come into it as well. If we had continued from 1953 to build 39,000 or 49,000 houses a year, had that expanding housing programme continued through the 1950s and the 1960s, there would now be less scarcity, and scarcity itself tends to drive up costs.
  The figures which were quoted related mainly to private building. They were building society figures. But what we want to achieve by the Bill is a greatly increased programme of public authority building, by the local authorities and the S.S.H.A., and we hope also to see, as a result of help given not under this Bill but under another Measure, conditions which will ensure that private building too, will meet Scotland's needs.
  Only by an all-out effort shall we be able to come near satisfying the people of Scotland that we are beginning to tackle the problem. My regret is that it has been too long since we had a Bill which measured up to the financial needs of those who have to do the building.
  Question put and agreed to.
  Bill accordingly read the Third time and passed.

  SCOTLAND (RATE SUPPORT GRANT)
  8.37 p.m.
  The Minister of State, Scottish Office (Dr. J. Dickson Mahon): I beg to move,
  That the Rate Support Grant (Scotland) Order 1967, dated 25th January, 1967, a copy of which was laid before this House on 1st February be approved.
  The House is asked to give approval to the Rate Support Grant (Scotland) Order, 1967. Accompanying the Order is the Report, House of Commons Paper No. 300, explaining the considerations leading to the provisions in the Order. With the permission of the House, as this is the first Order to be made under Section 3 of the Local Government (Scotland) Act, 1966, I think it right to recall how the new grant system works, and I shall comment on the various provisions of the Order as they come up in sequence and as the explanations are given in the House of Commons Paper.
  For the first time, the total amount of Exchequer assistanec towards local authority expenditure on revenue account, apart from housing subsidies, will be fixed for two years in advance and will be revised only if there are substantial unforeseen increases in the level of prices, costs or remuneration. The reason why the explanatory Paper is so much longer than that for England and Wales is that we have chosen in Scotland—that is, the Government, the local authorities and, as I understand it, the Opposition—all members of the Scottish Standing Committee have endorsed it—to accept that the main formula in the English Statute should be written into this Order and changed, if necessary, should we find that the Orders do not translate themselves into practice as is intended. This is why there is so much more explanation here.
  From the aggregate amount of Exchequer assistance so fixed, grants towards specific services such as police and civil defence are deducted and the remainder is distributed through the medium of the rate support grant. The Order fixes the total rate support grants for 1967–68 and 1968–69 at £149·79 million and £159·21 million, respectively. This compares with an estimated £139·9 million for the corresponding grants in the current year. In much of my later remarks I shall talk of the three years,

  1541
  meaning this year as the base year and the two years covered by the Order being the two succeeding years for purposes of the three-year comparison.
  The elements of the rate support grant as defined in the Act, in the Order and in the Explanatory Memorandum are the needs element, the resources element and the domestic element. The needs element is not dissimilar to the present general grant but covers a wider field of all local authority services except housing and trading services, such as public transport.
  The needs element will be payable to all county and town councils. The sums involved for the next two years are £110·2 million and £115·06 million. The resources element will, like the present equalisation grant, be paid to county and town councils whose rating resources are below a certain standard. The percentage of grant to each local authority's expenditure will vary from nil to over 80 per cent., as at present. The resources elements are fixed by the Order at £36·74 million for 1967–68 and £38·35 million for 1968–69.
  The third and novel element of the rate support grant is the domestic element, a new concept to implement yet further the Government's undertaking to moderate increases in householders' rates. The Order provides that rates on dwelling-houses in 1967–68 are to be 10d. in the £ lower than the rate payable by other categories of ratepayer; and that, in 1968–69, they are to be 1s. 8d. lower. The resulting loss of revenue is made good by the domestic element, fixed by the Order at £2·85 million for 1967–68 and £5·8 million for the following year.
  Turning now to the process by which the total amount of Exchequer assistance is arrived at, the Act requires the Secretary of State before determining the aggregate assistance and the amount of the specific grants to consult the local authority associations which appear to him to be concerned and to take three factors into account. These are the current level of prices, costs and remuneration along with any foreseeable variation in that level and with the latest available information about the current rate of expenditure; secondly, any probably fluctuation in the demand for services so far as this is attributable to circumstances prevailing in Scotland as a whole which are not under the control of local authori-
  1542
  ties; and, thirdly, the need for developing those services and the extent to which it is reasonable to do so having regard to general economic conditions.
  In accordance with this procedure, all counties and burghs were invited to submit figures of their actual expenditure in 1965–66 on the services giving rise to reckonable expenditure and estimates of the corresponding expenditure in 1966–67 and the two years of the grant period. These estimates were then scrutinised and discussed with representatives of the associations.
  As the Report explains, the actual expenditure for 1965–66, adjusted to the same price base as the other figures, was £237 million and the estimates for 1966/ 67 and the two following years were, respectively, £258 million, £273 million and £285 million. This represents an average increase of 6½ per cent. in each year of the three-year period at virtually constant prices. The continuing rise of public expenditure on that scale would be inconsistent with the Government's present economic policy. Indeed, we have enough comments from hon. Members opposite on the current rating burdens to know that they would not have accepted higher rating burdens, despite the higher Exchequer equalisation grants in the succeeding years, and we respect that.
  On detailed examination of the estimates, we found that the growth they allowed for was in some cases either greater than seemed likely in the light of past trends or greater than the probable rate of recruitment to the services concerned would allow. In others a lower rate of growth would result if nonessential capital projects were deferred. On these grounds we were able to arrive after the negotiations at figures of £264·3 million for 1967–68 and £276·2 million for 1968–69, bringing the average growth of expenditure over the three-year period down to 4½ per cent. per year.
  So much for the distinction between what was estimated by the local authorities and what the Government agreed with them was practical and sensible. From my own personal experience in meeting the authorities on this matter I can say that it is not true that we simply take a straight cut of what their estimates are. That would be far too crude. What is discussed across the table, first by

  1543
  officials, and by elected members and officials thereafter if the matter cannot be resolved, is the pace at which certain departments of local authorities should proceed.
  In responding to the debate later my right hon. Friend will, no doubt, willingly give examples in various activities where the Secretary of State wanted certain things done a little more quickly, the local authorities wanted certain other things done a little more quickly, and a compromise was arrived at in both circumstances. In other words, it is not a straight reduction throughout; it is a building up of some and a lowering of others. There are justifications for many of the attitudes taken up by the local authorities, and I will later indicate what I mean.
  It can therefore be seen that we have discussed the proposals with the local authority associations quite thoroughly and reached agreement on them, although in the case of roads and the miscellaneous environmental services, they made it clear that to hold expenditure within the revised figures would be difficult for them. I am very grateful, as is my right hon. Friend, for the co-operation of local authorities in carrying out the difficult negotiations and laborious estimating exercise, and for the realism they have shown in the discussions with us.
  Appendix A of the Report shows the distribution of reckonable expenditure between services which my right hon. Friend assumed in determining the aggregate amount of the rate support grants, but I must emphasise that the grant is a grant in general aid of the revenues of the authorities, and that the actual pattern of expenditure will be what they make it. The total of Exchequer assistance has been fixed at 62½ per cent. of the reckonable expenditure for 1967–68 and 63½ per cent. for 1968–69. This is an increase over the percentage under the former grant system of slightly over 1 per cent. for the first year and over 2 per cent. for the second, and accordingly, as is stated in paragraph 11 of the Report, we estimate that there is an increase of £3 million in the grants payable in respect of the first financial year of the grant period and of £7 million in respect of the second.
  1544
  I now turn to specific grants. The table at Appendix B shows the specific grants which are to be deducted from the aggregate of Exchequer assistance in order to arrive at the total of the rate support grants. The former specific grants for classified road maintenance and for school milk and meals do not figure in the list because those services will in future be assisted through the rate support grant. There is also an addition to the capital grants for highway improvements in respect of some work on principal roads which was formerly classed as maintenance. The list, however, includes the new grants for urban redevelopment, acquisition of public open space and derelict sites, all of which were welcomed in Committee and in the House when we discussed the Bill. The most important of these is the redevelopment grant, which extends the scope of direct assistance for comprehensive redevelopment, and the figure shown in Appendix B is about £280,000 more than the provision for the corresponding grant in this year's estimates.
  Now I turn to the formula for distributing the needs element. The needs element will include a special portion for roads to support road costs in so far as they are not met by the capital grants on principal road improvement schemes. The roads portion which, in 1967–68, will be of the order of £6 million will be distributed among counties and large burghs by reference to objective factors bearing on the incidence of road expenditure—for example, road mileage, population and area—and aimed at continuing, as far as possible, the pattern of redistribution of road grants in recent years. Details of the distribution formula are given in Schedule 1 of the Order.
  The balance of the needs element, amounting to some £104 million, will be distributed on similar lines to general grant, but the primary apportionment among education authorities—the counties and the cities—will be on an improved basis of weighted population which will include new weightings—for children under five, people over 65, numbers of school children and students. Schedule 2 sets out the formula in detail, as I promised would be the case during discussions on the Bill.
  From Table 1 on page 6 of the Order, it will be seen that, for the first time, we

  1545
  recognise the extra costs of secondary and special school pupils by giving them a special weighting. The amounts of the roads portion and of the balance of the needs element apportioned to a county will be sub-divided between the county council and the town councils within the county in the same way as the county requisition—by reference to the standard penny rate product, or the actual penny rate product in the few cases where this is higher.
  Now I turn to the distribution of the resources element. The resources element will, like the equalisation grant, be paid to counties and burghs whose rate resources per head of weighted population are below a certain standard—the standard penny rate product. The formula for calculating the weighted population is given in Schedule 3 of the Order and is the same as for equalisation grant.
  In calculating an authority's relevant local expenditure for grant, it will be assumed that council rents are up to a certain standard at the least. This standard, or notional rent, will, like the present adjustment of equalisation grant, be a prescribed percentage of the gross annual value of council houses.
  Under Schedule 4 of the Order, the percentage will be 95 per cent. for 1967–68 and 100 per cent. for 1968–69, or alternatively 100 per cent. and 105 per cent. respectively, less rent rebates awarded under a scheme approved by my right hon. Friend the Secretary of State for Scotland, which could be beneficial if rebates total more than 5 per cent. of gross annual values.
  I stress this point in view of some of the doubts among local authorities discussing this matter at the present time. The alternative to column 1 of the Schedule is column 2, and the alternative prescribed there is a 5 per cent. difference. I hope that the local authorities will pay attention to that matter. My right hon. Friend the Secretary of State does not approve all rent rebate schemes—only certain ones in certain circumstances, as the hon. Member for Moray and Nairn (Mr. G. Campbell) acknowledged earlier.
  This provision is no longer intended to protect the Exchequer against excessive claims for grant due to unnecessarily high housing deficits, as the aggregate amount of the resources element of rate
  1546
  support grant is fixed and will not be reduced.
  I need not add with what relief this has been greeted by local authorities. The effect of the 1963 Act and the irritation it caused have been removed by this change in a most beneficial way in that the authorities are able to look at the situation in the knowledge that, if they so adjust, the adjustment will not be to the benefit of the Exchequer and to no-one else in Scotland. I myself am surprised by how different a climate this has created not only among Labour-controlled local authorities but also among many Progressive and Independent-controlled local authorities which have taken the same view as some Labour councils. We have made quite a significant move forward in this respect, and it is due entirely to the efforts of my right hon. Friend that we have this provision. The provision will safeguard local authorities themselves by ensuring that an undue share of the resources element is not obtained by local authorities with rents below the prescribed standards laid down.
  Now I come to consultations on distribution formulae. These have been agreed with the local authority associations. It is inevitable under any grant based on a formula that some local authorities think that they have not done too well. All we can hope, being, as it were, the "honest broker" in the discussions, is that we have by this Order achieved the greatest good for the greatest number. We have done so with the active aid of the local authorities themselves, and I hope that we are a long way towards securing this goal.
  I am glad that we do not have the Rate Support Grant Order inflexible in statute, but that we are able not only to consider what has been suggested tonight and to hear all the criticism, but, later—because the working parties of the local authorities will continue in session while we are in office, and until we make the next rate support grant order—to profit by experience.
  Needless to say, the working formulae will be watched very carefully. If experience shows that changes are needed, there is power to make them in the next Rate Support Grant Order or, for that matter, an increase Order if one proves necessary, although it must be emphasised that an improvement in favour of one type of

  1547
  authority would mean a loss for others, and it is not easy to get agreement on a recasting of these formulae.
  In conclusion, the financial provisions of the Local Government (Scotland) Act, 1966 and this Order make a significant improvement in the financial relationship between central and local government. This is acknowledged both by the local authorities and ourselves after our experience in discussions with them during the winter. This is so because they involve for the first time the Government looking at local government needs as a whole and because, again for the first time, there is a guarantee that the proportion of local expenditure met by ratepayers will decrease. I commend the Order to the House.
  8.57 p.m.
  Mr. Gordon Campbell: As the hon. Gentleman said, this is the first rate support grant Order which has been submitted for Scotland. As we have recently passed the 1966 Scottish Local Government Act, the papers which are before us do not contain many surprises, because we have already considered the form of the new grant. First, it has a new name. It follows the procedures and it follows very closely the system of the former general grant. It is combined with the Exchequer equalisation grant and, as the hon. Gentleman said, it is even wider than the general grant because it takes in further subjects.
  I point out, in passing, how contrary is this action to what the Labour Party said when it was in opposition. When it opposed the general grant it said it would take education, isolate it again, and make it a specific grant. The Labour Party has completely changed its tune on this, but we are getting used to that.
  It has been given a new name, but the name is misleading. It is called "The Rate Support Grant," but the one thing which is clear is that what the grant will not do in 1967–68 is to give support to the rates. In Scotland they seem doomed to go up, to continue to rise by a substantial amount. I do not know whether the Secretary of State will be able to make any estimate, on either the calendar year 1967 or the grant period 1967–68, as to the probable rise in rates in Scotland. but it is pretty clear already that it will be substantial, unfortunately.
  1548
  The hon. Gentleman drew attention to the report of the Secretary of State which accompanies the grant Order. Again, this is similar to the general grant procedure. I draw attention to paragraph 11 of that Report in which it is estimated that £3 million more will be available to local government in Scotland under this procedure than would have been available under the previous procedure. The Minister of State mentioned that in his speech.
  However, the Government have not accepted the local authorities' estimates. It is clear that the local authorities put forward estimates for ₣273 million for the period and the Government have simply catered for £264 million, so £9 million have been lopped off because, as the Memorandum says, "of current economic conditions". If 62½ per cent., which is the percentage of that £9 million, were to be covered by grant as it should be, then there would be nearly £6 million more which local authorities could have expected. Therefore, instead of getting £3 million more, as the hon. Gentleman suggested, local authorities will be getting £3 million less.
  Dr. Dickson Mabon: Ridiculous.
  Mr. Campbell: The hon. Gentleman says that it is ridiculous, but I will quote from the bottom of page 4 of the Memorandum which explains why the Government have lopped off this £9 million. It says:
  "It is clear that over the two years ahead the rate of growth of the economy will fall short of that postulated in the National Plan and in this situation the growth of public expenditure must be restrained to prevent it pre-empting too large a share of the national product."
  Therefore, £9 million of the expenditure estimated by local authorities during this period is lopped off by the Government.
  Dr. Mabon: This is a very important matter of procedure. There never was an occasion when, having taken the estimates county by county and burgh by burgh and adding them up and rounding them off, the estimate was not readjusted, always downwards, by the Government, because each county cannot take a Scottish view of things. By the nature of things, this is so. There has not been an occasion since 1958 when the procedure has been otherwise. The hon.

  1549
  Gentleman had better get used to it, because it has been going on for some time. It represents not a reduction but an adjustment by the local authority. If the hon. Gentleman wants to cite specific examples of services, I am sure that my right hon. Friend will be very willing to reply and to point out that it is not a cut in certain cases, although, of course, in some it is, although it is only marginal in those.
  Mr. Campbell: The hon. Gentleman is doing his best to explain, but I have been looking at the statements which accompanied previous general grant orders and I have with me those for 1964 and 1962. Of course we studied those when this statement came out.
  We now have the new expression, "reckonable expenditure". On previous occasions, the Government were able to agree with local authorities what the figure would be. We did not have to issue any statements saying that because of the economic situation and the growth rate not being what was postulated, we would have to make a cut of this kind. However, apparently having agreed the expenditure which the local authorities could expect, the Government have decided to cut it because of the economic crisis. That is perfectly clear, and it is quite different from the statements accompanying the 1964 and 1962 figures when the estimated expenditure was determined by both the Government and the local authorities and the figures then reached. By producing this figure of £3 million, the Government are positively misleading the House.
  If a local authority finds or thinks that it must incur the full expenditure which it has estimated, it will have to obtain the extra from the ratepayers. This is why the ratepayers will find an additional burden, and the Minister of State more or less said this himself. He said that this grant was only a contribution by the Government, and he indicated that if a local authority had to spend more than was estimated the extra would not be covered by grant. That is why, although called a rate support grant, this grant, certainly in the coming year, will not give support to the rates.
  This is yet another attempted swindle being perpetrated by the Government. Let us examine the reasons for this and for the economic crisis which the hon. Gentleman mentioned. The National
  1550
  Plan has been referred to. On 10th November last, in answer to a Question, the First Secretary of State said of the National Plan that developments had invalidated many of the assumptions and figures in the Plan. This was not altogether surprising.
  What about what has been called the Scottish Plan? What about the White Paper on the Scottish Economy which came out in the January following the publication of the National Plan? We do not know whether the right hon. Gentleman still insists that the growth rate there is continuing as suggested. My own guess is that the growth rate, like that in the National Plan, has had to be abandoned for the moment.
  In plain English, this means that it is the Government's mishandling of the economy which has caused this savage cut in the local authorities' expenditure and in their estimates. What has happened to the promises of early relief to rate-papers and the larger part of teachers' salaries being transferred from the rates to the Exchequer? Do these words ring in the ears of members of the Front Bench opposite? They are taken from the 1964 Labour Party election manifesto.
  This Grant covers the expected remuneration of local government employees. We ask the Government: what about the pay award of 7 per cent. which many of these local government employees are awaiting? Have the estimates, even with the Government's reduction, included this award, and if so, for what period? Is it for the whole period starting in May, or for the period starting on 16th September, which would mean that the N.A.L.G.O. employees' salary award would be postponed for a further six months? On which basis have the Government worked out this grant?
  If there is further postponement we have had little explanation so far of the reason, and the employees' side in the negotiations has stated that the Department for Economic Affairs indicated that it would prefer a settlement of this claim on the English pattern. That was why, it was claimed, the Scottish negotiations had to follow the English.
  If this statement is correct, and we have no reason to doubt that the Department of Economic Affairs did indicate

  1551
  that it preferred that kind of settlement, then it was inevitable that the Scottish settlement would miss the date of 20th July. It appears that the English settlement was reached only a few days before that date and no one knew before then, when the statement was suddenly made by the Prime Minister, that this would be a watershed in pay awards.
  In this and other matters the Government have completely ignored the interests of Scotland. It is not the system of government that is wrong, it is the way in which it is being operated by the present incumbents. I hope that the Minister who is to reply will tell us, first whether the Scottish award will be put into effect on 16th March as it should be, or whether it will be postponed, and secondly whether this has been included in the calculations on this Order.
  Mr. Deputy Speaker (Sir Eric Fletcher): The first question does not arise on the Order. The second one does.
  Mr. Campbell: The reason I mention this is because the period covered by the Order begins in May and the dates in argument are between March and September. The question of when the award will be recognised and the extra 7 per cent. salary agreement would be covered by whether the Grant allowed for it. We want to know what is in the Government's mind about this, and we hope that in due course the Minister will be able to tell us.
  Dr. Dickson Mabon: The hon. Gentleman knows, because he has cross-examined me many times about this, that if there are any impending awards which are not taken account of in this Order they are dealt with and taken care of, unlike the position in England, by a grant increase Order, and if such an award becomes relevant it will be dealt with in this way.
  Just to get the matter clear about your Ruling, Mr. Deputy Speaker, this Order does not contain these elements of controversy. They would be contained in a grant increase Order.
  Mr. Ian MacArthur: On a point of order.
  Mr. Campbell: Perhaps my hon. Friend will allow me to deal with this first. This
  1552
  is of great interest, because when we have dealt with these general grant increase Orders, and no doubt in due course the rate support grant increase Orders which follow broadly the same principle, only unforeseeable extra expenditure is allowed. Anybody who thinks that the expenditure about which I am talking, this salary award, is something about which few people know, and is unforeseen, has not been reading the Scottish newspapers or listening to what people have been saying in Scotland.
  Mr. Deputy Speaker: Order. I think I was being addressed on a point of order by the Minister, and I think I had better explain what is in order and what is not in this matter.
  It is true that Section 2 of the Local Government (Scotland) Act requires the Secretary of State, in determining the aggregate of Exchequer grant, to take into consideration the current level of prices, costs, and remuneration. Therefore, it is in order to ask the Secretary of State the extent to which he observed this provision affecting the remuneration of teachers in making this Order, but it would not be in order in this debate to go into the question of the wage structure of local authorities, or the current grievances, if any, of the officers employed by them.
  Mr. J. Bruce-Gardyne: On a point of order, Mr. Deputy Speaker. We were given a clear understanding last Thursday—and this is in the memory of a large number of hon. Members—that it would be in order to discuss all aspects of this matter during this debate tonight.
  Mr. Deputy Speaker: On the contrary, no such assurance was given at any time.
  Mr. Edward M. Taylor: On a point of order, Mr. Deputy Speaker. I specifically put to the Leader of the House that it would be very unsatisfactory for us to have to dodge in and out of the rules of order to discuss this vital question. What you are saying, Mr. Deputy Speaker, and I accept it, is that we have been completely fooled. What you are saying, and again I accept it, is that we have to dodge in and out of the rules of order to discuss this matter.
  Mr. Deputy Speaker: There is no question of dodging in and out of the rules of order. With regard to the point

  1553
  made by the hon. Member for South Angus (Mr. Bruce-Gardyne), I have studied the exchanges with the Leader of the House at Question Time, and apart from the fact that he does not give directions about what is in order, no such assurance as was indicated was given by the Leader of the House at any time during that exchange of views.
  Mr. MacArthur: Further to that point of order. We on this side of the House appreciate the extraordinarily difficult position in which the Chair has been placed by the Leader of the House. Having said that, Mr. Deputy Speaker, and I am sure you appreciate that I am not trying to challenge your Ruling, may I ask by what means you can extend the customary protection which you and Mr. Speaker provide for back bench Members? As you know, last Thursday a number of my hon. Friends and I asked the Leader of the House when the Secretary of State for Scotland would make a statement to the House about the problems arising from the situation with regard to local government officers in Scotland. The Leader of the House, in many of his replies, gave us a clear indication that we could raise this matter today.
  Mr. Deputy Speaker: I have studied this. The passage to which the hon. Member was referring occurs in c. 818. All that the Leader of the House said on that occasion—when it had been suggested by the hon. Member for South Angus that the Secretary of State for Scotland was ashamed to make a statement on this matter—was:
  "Scottish matters are being discussed next week—I believe on Tuesday."
  That was quite correct. No assurance was given that this matter would be in order on any one of the various Scottish matters that arise today. It falls to the Chair to decide, on each Scottish item of business, what is in order and what is not.
  Mr. MacArthur: With respect, Mr. Deputy Speaker, it is not only in c. 818. I agree that that is exactly as you have quoted it. But further indications were given by the Leader of the House to this effect. I asked him in c. 821 if he was
  "aware that the Scottish business to which he referred for next Tuesday is not a suitable vehicle to discuss a matter of this kind"
  1554
  and in reply the Leader of the House said:
  "There is on Tuesday a whole day's business which is Scottish, and I would have thought that it was not beyond the wit of Scots to find a way of referring to this subject on one of these occasions."
  Earlier this evening we were debating housing, and it would have been an abuse of the House to try to raise a local government issue then. Not one of my hon. Friends made that attempt. In view of what the Leader of the House told us—and it was a clear indication of his interpretation of the situation—we are trying to raise the matter now.
  I appreciate that you must be guided by the normal rules of order and not by guidance which the Leader of the House chooses to give hon. Members in an attempt to choke off criticism of the Government. But the Leader of the House did not stop there. [Interruption.] I appreciate that hon. and right hon. Members opposite do not like this. With great respect, Mr. Deputy Speaker, I am asking for hon. Members on this side of the House to be protected by you from being given misleading advice by the Leader of the House. Later on, in c. 822, my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) raised this very point, asking whether the Leader of the House was advising hon. Members on this side to dodge in and out of the rules of order in order to raise this matter. The Leader of the House replied:
  "I said that the whole of Tuesday was to be devoted to Scottish business.… All I said was that I thought it unlikely that this question could not be raised in the course of that period."—[OFFICIAL REPORT, 16th February, 1967; Vol. 741, c. 818–22.]
  With the greatest respect, that wac misleading to hon. Members on this side of the House. We have deliberately behaved properly in waiting till now to raise this issue. Now you understandably rule us out of order. We have been put into an impossible position by the Leader of the House and it is only right that we should make our protests to you.
  Mr. Deputy Speaker: Hon. Members have made their protests. I have studied the answers given by the Leader of the House. All that he did was to suggest that it migh have ben possible, on one or other items of Scottish business, to make

  1555
  reference to this matter. Incidental refer-has already been made to it. I have considered this matter already, as has Mr. Speaker. The rules of order are quite clear. It would be out of order in this debate to discuss in any detail the alleged grievance of local government officers in Scotland.
  Mr. Alick Buchanan-Smith: On a point of order. This is a matter which many of my constituents have represented to me most urgently. Does your Ruling mean that in what the Leader of the House said last week he was deliberately misleading hon. Members on this side of the House who seek to represent the interests of their constituents?
  Mr. Deputy-Speaker: The hon. Member cannot, on a point of order, suggest that the Leader of the House has deliberately misled the House. What the Leader of the House did was to express an opinion of what might or might not be in order on some item of Scottish business. I have ruled on what is in order on this item and it is not in in order on this item to ventilate the alleged grievances of Scottish local government officers.
  Mr. Thomas Steele: Further to that point of order. Is it not the case that the Opposition have a number of days on which they decide what should be discussed? If they are so anxious about this, why do they not use some of their time?
  Mr. Deputy-Speaker: That is a matter for the Leader of the House on a business Question on any Thursday.
  Dr. Dickson Mabon: Further to that point of order. Is it, then, quite out of order to refer to any meeting tomorrow between the Secretary of State and hon. Members opposite or any meetings on Thursday on this matter? Is that also out of order? Are we on the Government side precluded from referring to that as well?
  Mr. Deputy Speaker: It is out of order for any hon. Member. The rules apply equally to both sides of the House.
  Mr. Campbell: I protest at the way the Leader of the House dismissed today as simply Scottish business, as though
  1556
  we would be able to discuss this subject. Second, Mr. Deputy Speaker ruled that the details of the salary structure cannot be discussed but that the general questions which I put to the Secretary of State are in order. I will make it clear what questions I have put.
  They related to how the estimates of remuneration in preparing this Order and the sum which it covers were reached. That, as Mr. Deputy Speaker said, is clearly in order and we look forward to hearing from the Secretary of State or the Minister of State in due course whether the element—I see the Minister of State rather happily pointing to the Secretary of State as being the Minister who will reply.
  It is very much part of the rate support grant Order that that element of it which is remuneration should be explained to the House and we should know to what extent this covers increases which are expected in salaries and, therefore, whether an increase is accepted from the beginning of the period or from 16th September. I will not go further into that or the question of the salary structure or the present grievances, in accordance with the Ruling, but I have no doubt that some of my hon. Friends, if they catch your eye, Mr. Speaker, will wish to raise the points which your predecessor in the Chair said were in order on this subject.
  I had just left this point and was going on to another quite different point when the hon. Gentleman raised this question. The different point was one which he mentioned at the end of his speech, on notional rent. At last we are being told how the gap in the 1966 Act is to he filled. This was a question mark while the 1966 Act was going through the House. We kept asking about the gap about notional rent—
  Mr. Speaker: Order. I hope that the hon. Gentleman will help me. Are we taking both together? If not, the subject of notional rent arises on the second one.
  Mr. Campbell: Yes, Mr. Speaker, but, with respect, it is in the rate support grant as well as the Exchequer equalisation grant, as the Minister of State explained. It is in Schedule 4, and, on page 2, the last paragraph is headed "Notional rent income"——
  Mr. Speaker: Order. I am not trying to prevent the hon. Gentleman from raising a point, but notional rent comes on the second Order.
  Mr. Campbell: It is one of the peculiarities of Scottish grants that notional rent comes up both on this grant and on the Exchequer equalisation grant——
  Mr. Speaker: The hon. Gentleman is correct.
  Mr. Campbell: Thank you, Mr. Speaker.
  The hon. Gentleman explained what the Government were now doing in producing Schedule 4, which tells us what the notional rent will be in the light of the recently passed 1966 Act in terms of percentage of gross annual value. When we asked earlier whether or not it would be connected with the gross annual value, we got no answer. Now we have the answer. Is it a new Labour Government formula? No. It is exactly repeating the previous part of the 1963 Act. The whole of this portion of the Order is, word for word, taken from Section 3(3) of the 1963 Act, the only difference being that a new table is included.
  Dr. Dickson Mabon Dr. Dickson Mabon indicated dissent.
  Mr. Campbell: It is no good the hon. Gentleman shaking his head in dissent. I have been through these provisions carefully to make sure that I have got the position right. We also have the same option for local authorities with rent rebate schemes and, when reading his brief, the hon. Gentleman explained this and proved that it is exactly the same system.
  Dr. Dickson Mabon: That is not so.
  Mr. Campbell: The only difference is that under the previous system the money came from the Treasury and, if it was not granted to a local authority because its rents were too low, it remained with the Treasury and was lost to Scotland. That, I understood, was the hon. Gentleman's argument, whereas now there is a lump sum which is the resources element or equivalent to the Exchequer equalisation grant; and nothing will be lost if a local authority does not get the money. This is a complicated matter, but it works both ways. Under the previous system, if more local authorities in Scotland were
  1558
  eligible for the Exchequer equalisation grant, they could draw it.
  Dr. Dickson Mabon Dr. Dickson Mabon indicated dissent.
  Mr. Campbell: It is no good the hon. Gentleman disagreeing with what I am saying. The Government are saying, in bringing forward this Order, that the amount of the resources element has been calculated on what the Exchequer equalisation grant would have been if it had been carried forward into the coming year and the year after that. That is how they have arrived at the element of the Exchequer equalisation grant. This makes very little difference to the formula, and the system which the Government have adopted is, more or less complete, the same as the system as in the 1963 Act.
  Mr. Ross Mr. Ross indicated dissent.
  Mr. Campbell: I urge the Secretary of State to refresh his memory by reading the proceedings in Committee on what was then the 1963 Bill. He will see that, before that Measure was passed, he vigorously opposed the then Clause 3 and voted against it.
  Mr. Speaker: Order. The spectacle of the 1963 Act being introduced in its entirety in this discussion frightens me. I trust that the hon. Member will restrict his remarks to the Order.
  Mr. Campbell: I can sum it up by saying that the present Secretary of State opposed the words which finally appeared in the 1963 Act and which now appear in this Order. He said at that time that the provision was purely punitive.
  Mr. Ross: If the hon. Gentleman will look a little more closely into what I said on that occasion, he will see that I stated that the money should remain in Scotland instead of going back to the Treasury. That is the big difference between what was done then and what we are doing now. In this case none of the money will go back to the Treasury.
  Mr. Campbell: That is what the right hon. Gentleman has been saying, but does not he see that there is really very little difference between the two schemes? Because of your Ruling, Mr. Speaker, I will not pursue this matter. Certainly my hon. Friends do not object to this scheme. We understand that the notional

  1559
  rent should now be expressed again in terms of a percentage of the gross annual value, the system which we introduced in the 1963 Act against the vigorous criticism and opposition of hon. and right hon. Gentlemen opposite.
  9.30 p.m.
  Mr. William Baxter: A few days ago I had the opportunity to discuss with members and officials of the Stirlingshire County Council the application of the grant to the county, and some dissatisfaction was expressed about the distribution to the county council under this new method. I would like my right hon. Friend to inform me of the proportion of grant paid, say, in 1966–67, as against that indicated for the years 1967–68 and 1968–69. These gentlemen in Stirling were expecting to ask the three Stirlingshire Members of Parliament to meet a deputation to protest against the amount of grant that was to be received under the new scheme introduced by the Government.
  They are naturally very much concerned about this point, as are many of the ratepayers of Stirlingshire. The increased valuations of property that have taken place over the last 12 months or so—increases, sometimes, of as much as 150 per cent. but with a rough average for the whole county of probably between 60 per cent. and 70 per cent.—have not been reflected in any substantial reduction in the county rate, which has only been reduced from about 24s. 6d. to 22s. odd. This presupposes that the amount of money that the Stirlingshire County Council is to get under the new formula is very much less than it has ever had before. The rate reduction of about 2s. in the £ represents only about 10 per cent., while the valuations have gone up, as I say, by 60 per cent. or 70 per cent. all over.
  I should like my right hon. Friend to give some clear indication of the full amount of grant that the county council received under the old scheme and what it will receive under the present set-up. There is no doubt that the proof of the pudding is in the eating, and the present indication seems to be that the grants to my county will be very much lower.
  Another matter of great concern to local administrators has been to try to
  1560
  get rid of grant by the end of the financial year and, in particular, grant appertaining to road works. One found that a grant was made to a local authority for road improvements, but if by chance the local authority was not able to use the full amount of the grant by the end of the financial year. it was lost to the authority.
  One often found in Scotland a considerable amount of wastage of money caused by councils trying to utilise their grant before the end of the financial year. One very often found men working day and night on very minor improvement schemes that were not absolutely necessary, because under the set-up then existing they were not able to carry forward much more important schemes to the following year. I would like some form of award that would enable important schemes to be carried through in full to the next financial year, without the local authority losing its grant.
  It is very difficult for Members of Parliament, members of local authorities, and even officials, to follow the basis whereby the Government give grants. It is a mystery how this works out. Notwithstanding the papers which are placed before us, there is not a clear indication of how this is done percentage-wise. This is a very wrong method of continuing our work.
  Under the old equalisation grant it was almost impossible to tell what grants a local authority was likely to get. It is time that we put our house in order and showed clearly to local authorities the amount of grant they can reasonably expect to get. The idea of holding something up one's sleeve to help them at the end of the year is not sound business. I should like to see a more simplified method of giving grants to local authorities.
  Mr. Speaker: Order. We cannot change the method in this debate. That must come at another time.
  Mr. Baxter: I appreciate that, Mr. Speaker, but I think the method laid down under the present scheme, notwithstanding the fact that it is a new method of approach called rate support grant for Scotland, is not as it should be. I counsel my right hon. Friends to look at the matter again because it is

  1561
  extremely important to local authorities in Scotland.
  We had a Ruling from the Chair on the question of N.A.L.G.O. I accept the Ruling as proper and fair, but if perchance the Government agree to the N.A.L.G.O. award—and the Under-Secretary says that the special grant will be given to local authorities over and above the grants in this document before us—this will at least help the local authority—
  Mr. Speaker: Order. Whether it will or not is outwith the purpose of this debate.
  Mr. Baxter: It may be, but——
  Mr. Speaker: Order. It is not a question that it may be; it is.
  Mr. Baxter: Is it within the ambit of this debate to ask whether or not, if this award is paid by the local authority, it is contained in the money as stipulated under this Order? If it is contained in the money stipulated under this Order, some other method will have to be found to pay the local authority the expenditure which it will incur in paying the N.A.L.G.O. award.
  Mr. Speaker: It is the other method which will have to be debated on some other occasion, but not this one.
  Mr. Baxter: I accept that Ruling, but I contend that if it is included in the grants under this rate support grant and this formula, and if perchance certain awards or obligations of the local authority, be they one or another, are not included, that may put the finances of the local authority into difficulties, to say the least. I ask whether or not that particular award is included in the money stipulated in this formula which has been introduced by the Government. If it is not included in that formula, some method will have to be found to help the local authorities.
  Mr. Speaker: Let me try to help the hon. Member. A method may have to be found, but that will have to be debated on some other occasion, not tonight.
  Dr. Dickson Mabon: I wonder if I can help my hon. Friend. I answered this question before. He is right in suggesting that if other developments occur we
  1562
  shall use the grant increase mechanism. Mr. Speaker has said that this particular matter is out of order. It is perfectly right that within the terms of the Order, penny for penny we have subscribed.
  Mr. Baxter: I appreciate the point, but it puts hon. Members into a difficulty for the simple reason that very important decisions are likely to be taken.
  Mr. Speaker: Order. May 1 say to the hon. Member and to any other hon. Member who wishes to intervene on these lines that I appreciate the difficulty of the hon. Member and anyone who wishes to raise under this Order something which is not in order, but that is a difficulty which Parliament has had to endure for many years.
  Mr. Baxter: Thank you, Sir. It seems that it is out of order to raise such an important matter that may put in jeopardy a local authority's finances. However, I will not pursue the matter, other than to repeat that I would like to know clearly and concisely what is the exact amount of the grant which was paid to Stirling County Council last year and how much will be paid this year.
  9.40 p.m.
  Mr. W. H. K. Baker: The two points on which I want to touch concern the resources element and the roads portion of the needs element. It is said, I think quite truly, that constant dripping wears away a stone. On the other hand, the parable of the importunate widow has some relevance to what I want to say.
  The only ways of comparing the effects of the Order on local authorities are to compare it like with like—that is, with the effects of the old method of support—or with neighbouring areas which are in a similar way affected. The figures I have for my county show that under the new formula for the roads portion of the needs element the county will be in deficit on similar expenditure in 1964 by £19,500. This is a very serious reduction on what has gone before. It does not take account of any emergency work which may have to be done. This point was covered on the Report stage of the Local Government (Scotland) Bill. I had a great deal of correspondence with the Minister of State on this point.

  1563
  In view of this gross reduction, the effect on my county will be considerable. The resources element brings up the old question of the relationship of burghal population to that of the landward area. I make no apology for returning to this question. Of a total population for the county of Banff in 1964 of 44,500, no less than 60 per cent. was resident in burghs. Of the 11 burghs in the county, no fewer than seven have a population of less than 2,000. According to the formula, two-thirds of the two-thirds of the burghal population of the county are residents in small burghs which are truly rural areas. They vary in size from 749 to a maximum of 1,510.
  In the whole county there will be an increase in grant of £36,000 under this element. I referred to a comparison with similar areas.
  The two counties of Kincardine and Banff will both have a relief of about 4d. in the £ on the rates under this Order. In the past, the Secretary of State and the Minister of State have agreed with me that Banffshire has been badly off, and relatively badly off compared with other counties of Scotland. I repeat that, under the Order, Banffshire and Kincardine, which are very similar counties, will benefit to the tune of about 4d. in the £ on the rates. It is evident, therefore, that Banffshire will, relatively, be no better off than under the old system, and it is to this that I once again draw attention.
  In a recent letter to me, the Minister of State was kind enough to say that he would make representations to the working party of local authorities to ask that they amend the formula to the benefit of Banffshire.
  Mr. Speaker: Order. We cannot discuss amendment of the formula under this Order.
  Mr. Baker: I bow to your Ruling, Mr. Speaker. The hon. Gentleman further said that, in view of my representations, he would look at the position again. Unfortunately, there is no alleviation, and, as I have pointed out, the county is relatively as badly off as before.
  The needs element other than for roads is to be distributed very much on the
  1564
  same basis as the existing general grant—the proportion of population to mileage of road and the ratio of landward to total population of the entire area. I welcome that, in addition to the old weighting system, there are two elements now included, for children under five and under 15 and for people over 65. In my opinion, this accounts largely for the increase of £36,000 which the whole county, both landward and burghal, will receive. All it does is again to emphasise the relatively bad position in which Banffshire finds itself under this Order, as under previous arrangements. I only hope that, when we have a later Order, the Secretary of State will have been able to bring some justice into the position for Banffshire. Banffshire, of course, is not alone in this. I hope that he will, if necessary, use the powers which he possesses under the Act to correct the matter before long.
  9.48 p.m.
  Mr. J. Bruce-Gardyne: The Order is described as a rate support grant Order. In the words of the manufacturers of lingerie, support is usually equated with uplift. There is not much unlift about this Order. I would rather call it down-pull, in view of the calculations so clearly spelt out in paragraphs 9 and 10 of the explanatory Report.
  One or two of the points made in those paragraphs are significant. In the first place, we are told in paragraph 9:
  "It is clear that over the two years ahead the rate of growth of the economy will fall short of that postulated in the National Plan".
  That is one of the most massive understatements we have seen in any Report from the Secretary of State.
  Mr. Speaker: Order. Will the hon. Gentleman help me? To what part of the Order is he relating his remarks?
  Mr. Bruce-Gardyne: I am relating my remarks, Sir, to the Report from the Secretary of State, paragraph 9, in explanation of the rate support grant.
  It is interesting that this belated admission is now made. Only last weekend in Dundee, the Secretary of State announced that the Scottish Plan was to go ahead on schedule. Now we discover that that statement was sheer unadulterated rubbish and is admitted to be such by the Government themselves. The

  1565
  result of this, as again the Report points out, is that
  "the growth of public expenditure must be restrained to prevent it pre-empting too large a share of the national product."
  I only say in passing that I hope that the Secretary of State has passed on that advice to the Chancellor of the Exchequer, because he seems to be in need of it.
  We now come to the result that the estimates submitted by the local authorities, as set out in paragraph 8 of the Report, have been pared down by £9 million in the first year and by rather more than £9 million in the second year. The pared-down figure is given as the "reckonable expenditure", as if by so describing it it can somehow be assumed that one can keep it within those limits. Of course, one does nothing of the kind. By calling it reckonable, one does not reduce the spending but merely exonerates the Government from responsibility for underwriting it. This is a shabby and sordid manoeuvre. To try to say that as a result of the Order local authorities get an extra £3 million in 1967–68 and an extra £7 million in 1968–69 is to make a nonsense of the English language.
  I wish also to refer to the adjustments which have been made
  "for increases in pay and prices which have since taken effect or can be foreseen and quantified".
  a phrase which is used twice in the Report. The N.A.L.G.O. pay rise could have been foreseen and quantified. What is more, because there was a clear obligation on the local authorities to meet this pay rise on 16th March—
  Mr. Speaker: Order. The hon. Member may not have been in the House when my predecessor in the Chair ruled that he cannot discuss the N.A.L.G.O. pay rise on this Order.
  Mr. Bruce-Gardyne: Indeed, I heard Mr. Deputy Speaker's Ruling, which, of course, I accept. My point, Mr. Speaker, is that in the Report from the Secretary of State which accompanies the Order, it is twice stipulated that the Order is to cover
  "increases in pay and prices which have since taken effect"—
  1566
  that is, since 30th June, 1966—
  "or can be foreseen and quantified."
  Mr. Speaker: Order. I heard the hon. Member when he said that the first time.
  Mr. Bruce-Gardyne: In a case such as this, Mr. Speaker, where a wage award not only can be foreseen and quantified but is a specific obligation on the local authority as employers, surely it is brought within the compass of this statement concerning wage and price increases which can be foreseen and quantified within the purpose of the Order.
  Mr. Speaker: Apparently it had not been foreseen and quantified in the Order. The hon. Member must talk about the Order.
  Mr. Bruce-Gardyne: Of course, 1 accept your Ruling, Mr. Speaker. The point which still arises and to which we need an answer is what happens in the case of local authorities such as Rothesay which have already announced that they are meeting this wage increase and therefore, presumably, in their calculations have foreseen and quantified this increase?
  Mr. Speaker: Order. Whether or not they have foreseen or quantified the award about which the hon. Member is worried, we are discussing the amount in the Order. The hon. Member can speak for or against the amount in the Order. He cannot amend it in any way.
  Mr. G. Campbell: Before you came, Mr. Speaker, when this point was raised by the Minister of State as I was speaking, Mr. Deputy Speaker ruled that I could ask, as I had already done, whether the amount in the period included part or all of the award.
  Mr. Speaker: The hon. Member for South Angus (Mr. Bruce-Gardyne) may ask questions, but he was not asking a question just then.
  Mr. Bruce-Gardyne: Then I will ask the specific question, Mr. Speaker, whether provision is made under the Order for the increase that Rothesay has undertaken to grant. We are entitled to an answer to that from the Secretary of State.
  If I heard the Minister of State aright when he introduced the Order, he said

  1567
  that one of the factors which had led the Government to scale down what they like to call the "reckonable expenditure" of local authorities from the estimates originally submitted was that the local authorities were allowing for a rate of recruitment to their services which was greater than was probable. I take it that that remark also was made against the background of the N.A.L.G.O. claim, which the Government have ordered them to reject, because clearly the rate of recruitment will be highly unsatisfactory in that situation.
  Mr. Speaker: Order. The last thing that I would do would be to comment on any hon. Gentleman's arguments, but they must be in order. Whether the rate of recruitment is effective or not, the hon. Gentleman must come back to the Order.
  Mr. Bruce-Gardyne: I shall not pursue that matter further. I just wanted to question whether that was what the Minister of State referred to when introducing the Order.
  The main point with which we are left is that to some extent the Order is a fraud and a swindle because it does not provide an increase; the effect will be not to support the rates but to increase the burden by eliminating certain sections of expenditure which the Government choose to call "not reckonable".
  9.57 p.m.
  Mr. Alick Buchanan-Smith: I want to raise two short specific points about the Secretary of State's Report on the rate support grant, and the first concerns education. Paragraph 13 of the Report states:
  "Development of the education service, including the school meals and milk services, will lead to a steady increase in expenditure."
  That increase is shown in Appendix A on page 10. Is the increase in the school meals and milk services related to an increase in the number of pupils attending schools, and therefore availing themselves of the service, or do the Government envisage a change in the rate of support given for those services? My question relates to the discussion which is now going on in the country on the future of those services.
  My second point concerns the police, who are dealt with in paragraph 15 of
  1568
  the Report. Expenditure on the police is also given in Appendix A. The increased money for the police is based on an increase of recruitment and in the size of the police force in Scotland. That must be viewed against the report in Scottish newspapers last weekend that there might be a "dilution"—which I think was the term used—in qualifications of people entering the police. Perhaps the right hon. Gentleman could comment on that.
  Mr. Speaker: I think that that would go a bit wide of the Order.
  9.59 p.m.
  Mr. James Davidson: In general, we in the Liberal Party welcome the Order and the new system of support. It will be fairer to the local authorities and give them greater responsibility. They can decide how to distribute the grant to some extent themselves and will not be tied hand and foot as to how it should be distributed.
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That the Proceedings on the Motion relating to Local Government may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Fitch.]
  Question again proposed.
  Mr. Davidson: I think that the Minister of State will agree that this will involve local government officers in extra work and it is a pity that this should occur at a time when there has been a decision which goes against local government officers, and more particularly at a time when there is a shortage of them. In Aberdeenshire, there is a shortage of local government officers in certain categories, notably of architects, surveyors and engineers, all of whom are affected by the Order. I hope that the hon. Gentleman will bear this in mind.
  The Order is a move in the right direction towards greater local control over local affairs. But I have certain reservations, particularly about distribution of the roads portion and the determination of weighted population. I have been doing some arithmetic during the debate and I see that Aberdeenshire falls under the 15 per cent. category both in Table 4 and Table 3, and I would be interested

  1569
  to know—although it may be unfair to ask the hon. Gentleman without notice—exactly how Aberdeenshire will come out of this. Will it be better or worse off?
  As far as the roads portion of the needs element is concerned, whereas it is based on the mileage of classified roads and the population, I believe that the type of countryside is also of great importance. In Aberdeenshire, for example, there are many small farms and back roads which, unfortunately, do not get on the statutory list and therefore the county is not responsible for keeping them up. Nevertheless, they are a burden on the population and a county such as Aberdeenshire, with many small farms, will suffer in the distribution of the roads portion of the needs element. I believe that other counties are in the same position.
  In the determination of weighted population, I think that the distribution of population is important. I understand that this is taken account of in Table 4. But not entirely in that the landward areas, which presumably include villages and areas of countryside with many small farms and a large population not even in villages, will be rather worse off in this respect.
  We welcome this new type of grant and hope that, when the present economic situation has been resolved, as we hope that it will be, the counties will find themselves better off. Certainly I think the Order will apportion the grant more justly and fairly.
  10.4 p.m.
  Mr. Edward M. Taylor: Earlier today, I suggested that the Minister of State had been successful in creating a new form of statistics under which figures could indicate certain things in different directions. With this Order and the speech that the hon. Gentleman made in introducing it, we are creating a new language, because the whole basis of his speech was that this was a means of controlling or restraining increases in local government spending. But that is not really what is being done. Instead, we are having a slashing of Government aid, and there has been no indication as to precisely how the spending of local authorities will be reduced.
  The Government are doing something similar to what people do in evening newspapers when issuing a notice to say
  1570
  that, from a certain date, certain people will not be responsible for the debts of others. What is indicated there is that the local authorities estimated, after their own pruning, that a certain amount would be required in 1967–68. They decided that this figure would be about £273 million. It appears that what the Government have done, as we can see in paragraph 10 of the Order, is not to say that they dispute the figure, or that this money will not be spent, but simply to say that they are not prepared to take that sum into account, and that the sum which they will consider is £264 million.
  While I would certainly wholeheartedly support any meaningful attempt to reduce the level of local government spending, and thereby the burden on ratepayers, this Order is not the way to do it. All that it means is that an extra and very substantial burden will be placed on ratepayers of our cities and counties, because it is clear beyond any shadow of doubt that all the endeavours of the Secretary of State for Scotland, the Minister of State, and other Ministers for Scotland, to encourage local authorities to restrain their spending—encouragement simply by issuing circulars, making statements, or making Orders of this sort—have not been successful.
  I would certainly support a meaningful and tough policy to cut local government spending, but this Order simply says only that the Government will underwrite part of the inevitable expenditure of local authorities. This is not the answer.
  My first question is how much of this difference between £264 million and £273 million is attributable to increases in local government spending as a result of increases imposed by the Government through taxation or through nationalised industries. We are entitled to know just how much of this money can be saved by local authorities and how much of it is unavoidable.
  The second question, which has been asked by several hon. Members, is how the formula contained in the Order will affect their own local authorities. I was concerned to hear when this matter was being discussed earlier that Glasgow might lose about £1,500,000 in equalisation grant under its new name. I know that these figures change and that no final estimate will have been reached, but I wonder whether at this stage it is

  1571
  possible to give even a broad indication of what difference there will be in the total grant available for Glasgow under this new system compared with what was received previously.
  My third question relates to notional rents, mentioned by my hon. Friend the Member for Moray and Nairn (Mr. G. Campbell). The Government have given an indication of what they regard as notional rent and they have shown us in the formula how they seek to apply it. I should like from the Government an indication of whether this is to be accepted as the basis for the rental policy which they are themselves pursuing through the Scottish Special Housing Association. There is considerable concern in my own constituency because, while the Government are giving a general indication that 90 per cent. of gross annual value would be acceptable as being both fair and reasonable, side by side with that there are S.S.H.A. houses, directly controlled by the Government, for which new rents are being introduced this year, a year of severe restraint, which will be equivalent to 120 per cent. of gross annual value. What is the Government's policy?
  Finally, I would like an indication of the Government's policy on rates. In the Order there are several figures based on the reckonable expenditure which the Government are prepared to accept. We appreciate that the majority of this money will almost certainly be in respect of salaries, wages, and payments of that sort.
  To assist us to appreciate whether this amount is adequate, we would have to know whether all the adjustments in salaries and wages paid by local authorities were accepted as reckonable expenditure. We appreciate that adjustments take place day by day and month by month and that there are local variations and national agreements, but we would like to know within this figure what is the deadline for agreement on new salaries which the Government have taken into account in deciding the reckonable expenditure of local authorities.
  If we are to appreciate whether the sum is adequate, we shall want to know what is the date on which wage agreements, if applicable, will be taken into account for reckonable expenditure purposes. I am thinking in particular of
  1572
  an increase which was agreed on 13th September, 1966, and which could have come into effect on 16th September, but which was postponed for six months because of the Government's freeze policy. This agreement referred to local government officers. Would it be included and, if not, what date would be taken into account? Can the Government give us even a general indication of whether within the global sum wage fluctuations are taken into account, local wage fluctuations as well as national agreements?
  The position is far from clear and I hope that the Secretary of State will be able to clarify it to the extent that it can be clarified. If the right hon. Gentleman feels restrained by the rules of order from dealing with these matters fully, I hope that he will seek your permission, Mr. Speaker, to take an early opportunity, perhaps tomorrow morning, to clarify matters with which he cannot deal tonight.
  Mr. Speaker: I hope that the hon. Gentleman will not lead the Secretary of State into temptation.
  10.12 p.m.
  The Secretary of State for Scotland (Mr. William Ross): In many ways I am sorry that our hopes for the kind of debate which we could have had have been somewhat frustrated, because I am anxious to meet the wishes of the House on all matters, as you know, Mr. Speaker. [Laughter.] Hon. Members should appreciate that people make statements when they have something to say in addition to statements which they have already made.
  The hon. Member for Moray and Nairn (Mr. G. Campbell) spoke of the Order in somewhat scathing tones and said that we were not doing nearly enough. This must be a rather difficult kind of debate for hon. Members opposite, because we are dealing with local expenditures and local expenditures mean rates and when rates go up, hon. Members opposite shout their heads off. Implicit in many of their arguments tonight has been the suggestion that we have not taken into account a higher expenditure than that which we accepted after discussion with the local authorities. It has been said that we should have encouraged local authorities to spend more money, £9 million more. But if local authorities spend £9 million

  1573
  more and if we grant 60 per cent. of that, that still leaves another £3 million to be met by Scottish ratepayers. Hon. Members opposite should make up their minds. They should have been congratulating the Government on their realism and on meeting the wishes of hon. Members opposite.
  The hon. Member for Moray and Nairn, among others, implied that hitherto Governments and Government officials had always accepted whatever local authorities suggested that they would spend. The hon. Gentleman should know as well as I do what the previous Act said. We took it into account and we are doing it in this Order—what can be foreseen and agreed as a level of expansion in relation to particular circumstances. We had experience of the old Act as well as this one, and I am sure that the hon. Gentleman appreciates that while it may be that we have done it in another way, we have used exactly the same kind of procedure, of reaching a figure acceptable from the point of view of the country's economic circumstances. Never at any time has any Government accepted figures without examination and without a certain measure of haggling.
  Once again we come to this misleading screen of dust thrown up by hon. Gentlemen. The hon. Gentleman also spoke, as though there was something strangely Victorian about the notional rent gap. Not only in speeches that I have made but in the speech of my hon. Friend the joint Under-Secretary the Member for Glasgow, Craigton (Mr. Milan), it was pointed out that the great weakness of what was being done was that a claw-back from Scottish local authorities in respect of what was construed as rents that were far too low went to the Treasury and was not retained within the general fund for distribution within Scotland.
  This is the big difference between that and this formula. One never knows how this will work out in any year. One fixed a sum in previous years in relation to the E.E.G. and back it went to the Treasury. This time it will remain for distribution among Scottish local authorities.
  Mr. G. Campbell: What I was pointing out was that in the previous debates the line of the right hon. Gentleman was that this was a punitive measure, punishing
  1574
  local authorities for not bringing their rents up to a reasonable level. That is what he was saying then. Now he is introducing this point, but it was not what he was complaining about then.
  Mr. Ross: The hon. Gentleman has the evidence in front of him. I can tell him that that was not the reason that it was taken up on that occasion by myself or my hon. Friend. The other point was what would be the effect on particular local authorities in respect of certain funds which might turn out unexpectedly badly, and whether any change could be made. The advantage of the procedure that we have here is that there is the power to make an Order. In the previous Bill all the formulae were in the Bill, and in order to make any change, new legislation was necessary. Here we have the power to change the formulae, year by year if necessary, if they turn out unexpectedly badly for a certain authority, to the extent of being unfair.
  The question of roads was raised by the right hon. Member for East Stirling-shire (Mr. Woodburn), and the hon. Members for Banff (Mr. Baker) and Aberdeen, West (Mr. James Davidson). We are adopting a different procedure here. The choice of objective factors in the formula and the relative weight given to each were aimed at continuing, as far as practicable, the pattern of distribution of grant to local highway authorities in recent years. The factors chosen for this purpose, mileage of all classified roads, including principal roads, mileage of principal roads—and I know the point in relation to principal roads, that we have properly to define which are principal roads and which are not, and we are working this out with the local authorities—population, adjusted in the ease of counties to favour low, sparse populations at the expense of large populations, and area, all bear directly or indirectly on the incidence of expenditure on roads. The Local Government Finance Working Party accepted the formula as the best that could be devised in the circumstances.
  Grant distributed under the Roads formula will replace specific grants at present available for the maintenance of all classified roads and for major improvements to non-principal roads. I am sorry that I do not have the figure of what Stirling-shire got last year in the last grant period.
  Mr. W. Baxter: Will my right hon. Friend agree to look into this question and let me have the figures because I am concerned about the position in the county?
  Mr. Ross: I have asked for the figures, and I shall pass them on to my hon. Friend. Outstanding grants for major improvements to non-principal roads will be paid until the original commitments have been discharged. Many of the specific grants which have been promised to local authorities in respect of schemes which are not completed will continue, and thus, even though some local authorities might seem to be badly affected, it will not be disastrous at the start because it will be masked by the carry-over from the previous year.
  The present distribution of maintenance grants depends on so many specialised factors that no objective formula could fail to produce appreciable swings between certain authorities, and indeed at different periods for the same authorities. In any case the effects of the formula will be modified right through by the outstanding amounts carried over.
  The position will, of course, be watched, and if it proves to be totally unsatisfactory, I give the pledge that we shall take action. But we have to be careful that we do not rush into making an exception which may be perfectly justifiable on its own, with the result that we change a formula which is otherwise satisfactory.
  I think that it was the hon. Member for Banff who asked what would happen if additional expenditure were incurred because of a severe frost. The Secretary of State, apart from this Order, has power to deal with that under the Development and Road Improvement Fund Act of 1909. He can provide specific grants for remedial works of this sort, but it would be impossible to make an estimate in advance of the extent to which, within this Order, over the next two years or so we were going to require this kind of money.
  Mr. Baker: I quoted the amount of deficit which will be felt in the County of Banff, namely, £19,000 in the ensuing year. The point which I was trying to make—obviously I did not make it successfully—was that the difference
  1576
  arises from comparing the figures for 1964, which was a very mild year, with the figures for the normal winters which we get in that part of the world.
  Mr. Ross: I do not know whether the hon. Gentleman was present earlier on when I was being congratulated by the hon. Member for Edinburgh, North (Earl of Dalkeith) on the mildness of the weather that I managed to produce this winter. I shall not make any definite promises because to do so would not be within the terms of this Order, but I shall do my best.
  Mr. MacArthur: My hon. Friend has raised a most important point for some of the central Highlands constituencies. Is what the right hon. Gentleman said to be regarded as an assurance that in the event of a very harsh winter he will, under the terms of the 1909 Act, step in to help those local authorities faced with very heavy and sudden expenditure?
  Mr. Ross: It was the 1909 Act. I am saying that to meet this the Secretary of State already has power, and he has had it since 1909. That is all that I am saying.
  Mr. MacArthur: It is not enough.
  Mr. Ross: I know that the hon. Member would like an awful lot more. I am glad that the hon. Member for Aberdeenshire, West welcomed the new procedures. They represent a considerable advance. The hon. Member for Glasgow. Cathcart (Mr. Edward M. Taylor), with his usual facility for dealing with figures, called this a slashing of Government aid How we can manage to increase Government aid by £10 million and have it called a slashing is something that only "Batman" from Cathcart can possibly understand. The fact that we are increasing the extent to which the Government meet the expenditure of local authorities from 61 per cent. to 63 per cent., and are carrying out the pledge that we gave in the second year of a further 1 per cent. increase, is an indication that the hon. Member has not looked objectively at the figures.
  Mr. Edward M. Taylor rose——
  Mr. Ross: I am sorry. I never will be able to persuade the hon. Member that he may have got his figures wrong.

  1577
  I have dealt with the question of notional rents. The extent to which Glasgow is affected will depend entirely on what happens to Glasgow rents during the two-years' period for which the Order is current.
  The question has also been raised of the extent to which we have taken into account certain salary increases which are now being talked about. The facts of the matter were given by my hon. Friend, but I will repeat them. Salary increases which are known both in quantity and time are met within the Order. If they are not known they obviously cannot be met. When they are known, both in relation to amount and time, they will be dealt with under another increase Order.
  I was also asked about the increase in school milk figures. This relates to an estimated increase in the school population, and also to a likely increase in the uptake of school meals.
  I was asked whether I could indicate what a certain authority would receive in respect of roads. I cannot, because the calculations still have to be worked out with the local authorities. Only when they have been shall we be able to see what they are. I have no reason to expect that Stirlingshire's share will be lower than it is at present.
  I am sorry about the complaints of the hon. Member for Banff. He tried hard to get us to agree on special treatment for small burghs by construing
  1578
  them according to the rural formula. My hon. Friend put this point to the working party. The hon. Member for Banff must accept that the working party—consisting of local authorities—did not think that Banff had a very good case. We could not see our way to make this change. Rates per household in Banff compare very favourably, in term of burden, with rates all over Scotland. We cannot make a change like this for one area without making it for others, so throwing the whole thing out of gear. The one important thing about the formula is that they have been agreed by local authorities on the understanding that if there is any general unfairness we can make the change.
  I believe that this system will, on the whole, work well. Considering what we have done about recoverable expenditure, I suggest that the Government are being generous indeed and are showing themselves to be appreciative of the difficulties of local authorities in a sphere in which they can never please everybody. I say that because local authorities are being pressed all the time to increase the services which they provide—but when they do that some people always complain about the increased rates which result.
  Question put, and agreed to.
  Resolved,
  That the Rate Support Grant (Scotland) Order, 1967, dated 25th January, 1967, a copy of which was laid before this House on 1st February, be approved.

  SCOTLAND (EXCHEQUER EQUALISATION GRANT)
  10.30 p.m.
  The Minister of State, Scottish Office (Dr. J. Dickson Mabon): I beg to move,
  That the Exchequer Equalisation Grant (Notional Rent Income) (Scotland) Order 1967, dated 4th January 1967, a copy of which was laid before this House on 18th January, be approved.
  I will explain why the Order has come to be made, and what it does. Under Section 3 of the Local Government (Financial Provisions) (Scotland) Act, 1963, the Exchequer equalisation grants payable to authorities with council house rents below a certain standard are reduced. The standard for this purpose is 95 per cent. of the aggregate gross annual values of the houses—described in Section 3 as "notional rent income"—but the Secretary of State is empowered to alter this percentage in a year when a general revaluation takes place, as in 1966–67.
  Before I go on to justify this procedure, I should, perhaps, mention that there seems to be a misunderstanding about this, arising from our previous discussion. The 1963 Act was quite relentless in its application, for it was designed to protect the Exchequer rather than influence rents in Scotland. I understand that birth was given to that Act as a result of criticisms expressed by the Public Accounts Committee. The trouble with the Measure was that it did not take account of the circumstances, for if rents were raised, then deductions were made—a sensible arrangement—but if rents were not raised, the deductions were still made.
  There has been a misunderstanding about this on the part of some hon. Gentlemen opposite, and I trust that the hon. Member for Moray and Nairn (Mr. G. Campbell) will not fall into the error of believing that some deductions would not have been made. What I am saying in moving this Order should be considered against this background, and if hon. Members ask me specific questions about areas in Scotland I should be able to answer them, since I have come armed with the necessary figures to demonstrate the effect of these provisions on the various areas.
  1580
  The three figures mentioned in the original Act are 85 per cent., 90 per cent. and 95 per cent., but the 95 per cent. related to the last financial year of the old valuation; that is, the 1961 valuation. This year, 1966–67, being the year of the new valuation, is the first occasion on which we could introduce this Order.
  Revaluation in Scotland has increased gross annual values and, therefore, the notional rent which 95 per cent. represents. As part of the prices and incomes standstill last July, however, local authorities were asked to freeze rents; and more recently, in the present period of severe restraint, they have been advised to increase rents only where this is unavoidable. Recognising that local authorities were thus inhibited from taking action after July to avoid the statutory reduction of grant, the Secretary of State proposes in this Order that the standard for the current financial year should be reduced to 90 per cent. of the new gross annual values.
  As an alternative to the 95 per cent. standard, the 1963 Act permits local authorities to have their grant calculated on 100 per cent. of the gross annual values of council houses, less rent rebates awarded under a scheme approved by the Secretary of State, which could be beneficial if rebates total more than 5 per cent. of gross annual values. The Order reduces the 100 per cent. to 95 per cent., as a corollary of the main proposal, and this is paralleled by columns one and two of Schedule 4 of the previous Order, which we were discussing along similar lines. To that extent, and only to that extent, can we say that we have borrowed this pattern from the 1963 Act. But it is essential to look at it against the background of the wider issue. No authorities have as yet applied to have their grant so calculated for the current year.
  The Order will help all authorities with rents under 95 per cent. of the new gross annual values, and aggregate deductions from equalisation grant for the current year will be reduced from £1,250,000 to £970,000. In other words, it was the intention of the previous Government in this revaluation year that £1,250,000 should be taken away in respect of equalisation grants of local authorities on the assumption that the local authorities

  1581
  would have reached 95 per cent. of gross annual values or, with the adjustment I mentioned earlier, 100 per cent. in respect of approved rent rebates. This was the assumption of the previous Government. I shall not debate it, but it was the assumption which we now seek to amend.
  The Secretary of State, therefore, is here, so to speak, not witnessing £1,250,000 being taken away from local authorities but is reducing that deduction, which is automatic, to £970,000, a saving of £280,000 to the local authorities. When a revised grant calculation is made in the next few months, on more up-to-date information—which is still being processed—it is likely that the reductions under Section 3 will be smaller still. I can say at the moment, without the processing having been done, that the number of authorities whose grants are provisionally being reduced this year will fall from 170 to 154. I hope that, with the processing and the more up-to-date information which we shall have, the number may be reduced to a little over 100. The number of authorities which have postponed rent increases previously planned as a result of the prices and incomes policy—I am bound to be asked this—is 110.
  This is the only mechanism we have to hand to make this adjustment. There is no other way of helping local authorities to meet their difficulties occasioned by the prices and incomes standstill. I must say here, on behalf of my right hon. Friend, that we are remarkably impressed by the immense good sense and loyalty shown by local authorities in response to the Government's appeal not to raise rents in the first period of the standstill and to be very circumspect in their consideration during the second period of severe restraint, in which we now are.
  I must be frank with the House. In our discussions with the local authorities, a difference of view has arisen, though I say at once that the difference of view is occasioned not so much by the position regarding rents as by an earlier meeting I had with the associations in June. In June, before the standstill came in, the associations asked to meet the Minister responsible to the Secretary of State for this matter, and at that meeting they
  1582
  argued that we should make such an Order. This was long before the rent standstill came in, with its consequences for the local authorities.
  I responded to the authorities' case by using what I regard as two quite reasonable arguments. The first was that, in as early as March—indeed, for that matter, in February—since they were privy to their own figures earlier than we were enlightened about the figures for Scotland as a whole, as we had to collect them from everyone, the local authorities could have made a case for this sort of Order—on grounds other than the prices standstill, of course—but they did not do so. Hon. Members who take an interest in local government affairs in Scotland will recall that, at the conference of the Institute of Municipal Treasurers and Accountants in Arbroath in March, 1966, I had occasion to point out—I did it quite deliberately, and the Institute knew that I was doing it deliberately—that we did not, in a revaluation year, want an increase in rate burdens of the order of those experienced in 1961–62, namely 19 per cent.
  One point I made was that they were entitled to discuss this at some appropriate time between then and the time when we would bring in this Order. The second point I made was that, whatever the level was, it was bound to affect the figures chosen for the rate support grant Order, which we have just discussed, which would be coming forward consequent on the passing of the Local Government (Scotland) Act, 1966. So they accepted this for the moment. I do not say they accepted it completely, but they accepted that they would press no more for that and, as we all know, in Parliament the matter was not raised.
  But it was raised, quite rightly, later on when the standstill began to have its effect. The Association of County Councils, the Counties of Cities Association and the Convention of Royal Burghs were informed of the proposed terms of the Order before it was made. Supported by the Cities and the Convention, the County Councils' Association expressed disappointment with the limited concession on notional rent, that is the reduction only to 90 per cent. of gross annual values, and pointed out that it would not prevent some local authorities

  1583
  suffering a loss of grant as a result of the standstill. They argued that the standard under the Order should have been such that local authorities which had fixed rents at 95 per cent. of the old gross annual values before revaluation should not suffer any loss.
  The Association was very good about this, and I pay due credit to them for the immense pains they took in preparing their case. I have the whole submission they made to Ministers here with me. We examined this very closely, but as I said to them on behalf of the Secretary of State, we could not accept their argument because the three authorities in the memorandum who had intended to reach 95 per cent. but were prevented by the standstill from doing so, in fact by their own table, did not suffer deduction of Exchequer equalisation grant.
  I may say for the interests of the hon. Member for Dumfries (Mr. Hector Monro) that his own county was taken as an example, and so were Arbroath and Dunfermline. But these three examples which the Association sought to argue their case upon were three examples where no deduction of E.E.G. had occurred.
  The remaining authorities did not intend to go up to 95 per cent. in 1966–67, and consequently they cannot blame the deductions on the standstill. My own authority, Greenock, would not have been able to avoid a deduction because they had not raised their rents, whether or not the standstill had intervened. They had intended to do so, but they had not planned this in time. I may say we have been a victim of the 1963 Act on four occasions now. I am very glad that this is the last matter we shall have to raise on the 1963 Act, and we can now go on to a better relationship with the local authorities in regard to these Orders.
  The effect of the Order we are discussing tonight is to prevent the deduction rising as it would otherwise have done. I may say, though, that Clydebank, Hamilton and Kilmarnock, which had not proposed to raise rents in any case, do benefit by this Order. But the losses of grant by some authorities were not due to them observing the rents standstill but to their reluctance to raise rents to 95 per cent. In fact what we will be
  1584
  doing now will be keeping the figure for the current year at 90 per cent., taking it up to 95 per cent. in the next year and 100 per cent in the year thereafter.
  I commend the Order to the House.
  10.44 p.m.
  Mr. Gordon Campbell: I will not reopen the whole question of the 1963 debate, but the hon. Gentleman mentioned the Public Accounts Committee in passing, and I would merely say that my recollection is that it was the present Prime Minister who was Chairman of it at the time.
  This Order attempts to compensate local authorities, as I understand it, for two things. Firstly, the recent revaluation, and secondly, the fact that 110 of them so far have acceded to the Government's request not to raise rents during the standstill, commonly known as the freeze. The effect of the Order appears simply to be to reduce by 5 per cent. the notional rent in terms of gross annual value for 1967. Our doubt is whether this will compensate all local authorities which intended to increase rents. Looking at some of the revaluations, it appears that the average increase is about 20 per cent. Some local authority gross annual values seem also to have gone up into percentages in the thirties.
  I am sure that hon. Members on both sides wonder whether a mere 5 per cent. will compensate for this considerable percentage increase in gross annual value as a result of revaluation. In addition to that, there are the local authorities which intended to put up their rents—the result of which would have been that they probably would not suffer Exchequer equalisation grant deduction or that their vulnerability to deduction would be lessened—and which were then asked not to do so, and they acceded to the Government's request.
  I put Questions to the Secretary of State about this on 18th January but his Answers made the position little clearer. I recognise that within the scope of Parliamentary Answers, which in that case had to be written, it may not have been possible to explain it. I will not, however, take up further time with it tonight. If the Minister of State cannot answer the point tonight, we will pursue it and hope that he will be able to provide us with further information later.

  1585
  Can the hon. Gentleman state whether any local authority which acceded to the Government's request not to increase rents as it proposed to do will suffer by losing some of the Exchequer equalisation grant which otherwise it would have received? If the hon. Gentleman cannot give the answer tonight, the effect may be that the Order does not compensate entirely all the local authorities which have, as the hon. Gentleman said, cooperated with the Government over the standstill on rents.
  Sir John Gilmour rose——
  10.47 p.m.
  Mr. James Davidson: The point of the Order is to compensate for revaluation and for the freeze, but at first glance it appears that it might raise the proportion of rent which is subsidised by the Treasury. I understand, however, that it will not have this effect.
  I would like to take this opportunity to make a few remarks about the relation of subsidy and council house rents. This is a very sore subject. The owner-occupier is inclined to regard the council house tenant as being unfairly subsidised, whereas the council house tenant regards the owner-occupier as a man of means who can easily afford to buy his own house. The term "rent" is very loosely used.
  I understand that the local standard rent, which is a fixed proportion of gross annual value, varies widely from 75 to 100 per cent., although the percentages mentioned in the Order are on a much narrower basis. The Order appears to raise the Exchequer equalisation grant and, therefore, raises the proportion of rent that will be subsidised from central sources.
  We should turn our faces towards a much more realistic rent attitude. Local authorities should possibly take this opportunity to consider charging rents based on 100 per cent. of gross annual value with rebates for those who cannot afford them. In other words, the subsidy should he for the needy family and not for the dwelling. There is a great injustice when the ratepayer has to subsidise the council tenant, who may well be better off than himself.
  1586
  That is a frequent occurrence in a rural area, where a high proportion of the population live in small, often rather mean dwellings with a relatively high rating valuation and indirectly are subsidising people better off than themselves living in council houses. That may not be true in urban areas, but it is true in many rural areas. A realistic rent does not mean a true economic rent, which I believe would be nearly 10 per cent. of the cost price of a dwelling, but a major item in it is the interest paid to the Government. Will the Minister clarify whether that means that the intention is that a higher proportion of the rent paid will now be subsidised from central sources?
  10.51 p.m.
  Dr. Dickson Mabon: I hesitated to rise because I thought that the hon. Member for Fife, East (Sir J. Gilmour) was going to make a comment.
  I cannot answer the hon. Member for Aberdeenshire, West (Mr. James Davidson) off the cuff. The intention of the Order is not to do any more than to strike a balance between the taxpayers' interests and fairness to local authorities which have responded to the Government's pleas that during the period of standstill and severe restraint there should be restraint on rents and that they should not raise them unnecessarily. Almost all froze rents between the appeal of 20th July and 31st December. I shall examine the matter and perhaps discuss it with the hon. Gentleman.
  The consequences of the previous Order are perhaps more interesting, since they will affect the next two financial years. There is an entirely different climate of opinion, but I cannot give the exact ratio of balance.
  I am afraid that the hon. Member for Moray and Nairn (Mr. G. Campbell) will have to pursue me on his request for an assurance that all the 110 authorities who responded so nobly to the Government's plea will be helped by the Order and that none will suffer. I hope that all will be covered when we refine the calculations which we are now doing. I hinted that the 170 affected would be reduced to something over 100.
  Some of the authorities doing nothing, like Clydebank and Kilmarnock, are helped by the Order. Not everyone who

  1587
  has been helping the Government is helped by the Order at present, and not everyone who did nothing about it is without aid. Even if they have not been helpful, authorities are getting aid. I am sorry, but this is the only instrument we have.
  The essential point is to strike a balance between the taxpayers, who are to be protected, and the local authorities which played fair by us. The hon. Gentleman should pursue us on this, because until we know the final calculation on Exchequer equalisation grant for this year—he knows from his experience that that will take us several months in the first instance, and probably some time into next year—we shall not know whether we have been fair to all those who have been loyal to us, which I would like to happen. We are trying to achieve that in the Order, and are doing the best we can in the circumstances.
  Mr. G. Campbell: The question is whether 5 per cent. is enough in a revaluation year to cover the rent. We shall certainly pursue it.
  Question put and agreed to.
  Resolved,
  That the Exchequer Equalisation Grant (Notional Rent Income) (Scotland) Order 1967. dated 4th January, 1967. a copy of which was laid before this House on 18th January, be approved.

  REMUNERATION OF TEACHERS (SCOTLAND) BILL
  Order for Second Reading read.
  Motion made, and Question put (pursuant to Standing Order No. 62 (Public Bills relating exclusively to Scotland)), That the Bill be committed to the Scottish Standing Committee.—[Mr. Millan.]
  Question agreed to.
  Bill (deemed to have been read a Second time) committed to the Scottish Standing Committee.

  REMUNERATION OF TEACHERS (SCOTLAND) [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any act of the present Session to make new provision for determining the remuneration of teachers in Scotland, it is expedient to authorise the payment out of moneys provided by Parliament of—

  (a) any increase attributable to that Act in the sums payable out of moneys so provided under any enactment relating to local government in Scotland;

  (b) any increase attributable to that Act in the sums payable out of moneys so provided under any other enactment in respect of administrative expenses incurred by the Secretary of State;

  (c) any expenses of the Minister of Labour in pursuance of any provisions of the said Act of the present Session relating to arbitration.—[Mr. Millan.]

  PRICES AND INCOMES (PRINTING INDUSTRY)
  10.55 p.m.
  Mr. Terence L. Higgins: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Temporary Restrictions on Pay Increases (No. 3) Order 1966 (S.I., 1966, No. 1630), dated 30th December 1966, a copy of which was laid before this House on 30th December, be annulled.
  This Order, made under Section 28 of the Prices and Incomes Act, 1966, is another Order in a succession which we have debated and each of which raises an important point of principle as well as dealing with individual cases. The point of principle which is foremost in this Order is that, effectively, the result of the Government's policy on prices and incomes is to lead to a situation in which employers who have previously negotiated a wage agreement with their employees are obliged to break that agreement. That is the first important principle with which we are concerned in this Order and the basic approach of the Opposition was spelt out by my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) in the debate on 13th December which was concerned with the newspaper industry. I do not want to elaborate what he said then except to stress that we think it totally wrong that the law of contract should be jeopardised in the way it has been by Government policy.
  This Order not only raises that point of principle but also the point of principle as to whether or not the Government should protect those who break their contracts as a result of the Government's policy. This point was made during the Committee stage of the Act. I recall the occasion vividly. It began the debate on new Clause 12 at 8.45 a.m. one day after we had been sitting since 10.30 a.m. the previous day.
  The point which arose in that debate was that, if an employer was to be forced to break his contract, it was right and proper that the Government should protect him from the consequences of that unfortunate act. This was the point foreseen in that debate in the Committee stage and which is now illustrated by this Order.
  1590
  There is some illusion in the country that the Government are in some sense being tough with the unions, or that the Prime Minister is. We want to be clear that what the Government are, in fact, doing is interfering piecemeal with the whole basis of collective bargaining rather than carrying out the long run reforms in the law which are necessary if we are to bring that process of collective bargaining up to date within a reasonable framework.
  The Order should surely bring home to the Government once again the fact that the policy of compulsion cannot be fair or equitable. While the general deflationary measures they have taken may effectively restrain prices and incomes to some extent, none the less the policy they are pursuing by putting down individual orders on individual firms or individual workers cannot, I am sure, possibly be fair.
  When we debated a recent Order on 30th January, the Under-Secretary of State for the Home Department suggested that there was some comprehensive principle in the Government's policy and that this meant that in some sense the freeze policy was fair. But that is complete nonsense. Large sectors of the economy are completely avoiding the freeze and to suggest that this kind of discriminatory order is justified on the basis of this Government's policy is comprehensive is, as I say, a complete nonsense.
  I want to outline the background of the case we have before us. In July, 1965, the Society of British Printing Ink Manufacturers negotiated a three year national wage agreement with the Society of Graphical and Allied Trades— known as S.O.G.A.T.—and this included a cost of living clause for annual adjustments at 1st January each year according to what the index of retail prices was the previous October, which normally be the latest month for which figures were available. A situation arose last year whereby, as a result of the increase which had taken place in the cost of living, an extra eight shillings on the weekly rate for adult men was due to be paid on the 1st January, 1966, and a rate of six shillings for women and four shillings for juveniles. This arrangement covered, under the Society of British Printing Ink Manufacturers, about 39 firms, and about 2,000

  1591
  workers. This agreement is somewhat larger than some of the earlier ones that we have discussed on previous Orders.
  In addition to this, there was the British Printing Ink Company, which is not a member of the Society, but which had a similar agreement with S.O.G.A.T. The Government, in introducing its freeze, made it clear that the operative date of pay increases, under the cost of living sliding scale agreement, which were originally due to be paid in the first 6 months of 1967, should be deferred for six months. As a result, the particular agreement which we are considering was nullified by the Government and the pay increase was put back.
  I will not go into the question of whether or not one approves of cost of living clauses in wage agreements. That is a separate question. The important thing is that an agreement had been made, which was clearly undertaken by both sides. It was freely entered into and, as a result of the Government's policy, the agreement was not carried out. The Society of British Printing Ink Manufacturers tried to agree with S.O.G.A.T. that they should defer this increase on a voluntary basis. Although they tried this, the union refused to agree to such a voluntary agreement and, consequently, the Secretary of State made the Order under Section 28, which we are now discussing.
  The effect of this Order is to make it illegal for the employees in question to have been paid on the date when they might reasonably have expected to have been paid. If the employers were to infringe such an agreement, then, of course, severe penalties are imposed under the Prices and Incomes Act.
  The situation which then developed is somewhat surprising. The Forrest Printing Ink Company employees, in particular, demanded that, despite the Order, the increase should be paid, or if it was not paid to them that it should be paid to some other body such as OXFAM, or it should be paid in the form of an incentive bonus. When they did this, it appeared that they were clearly in conflict with the Order. But they proposed to introduce, and did introduce, various restrictions on actual operation within the company by whom they were em-
  1592
  ployed. It is reasonably clear that the purpose of this was to bring pressure on the company to carry out its original agreement.
  My point here is, what were the Government prepared to do in this circumstance, because clearly the company itself was put in a very difficult position? If it conformed with the Government's policy, it would run into these impossible restrictions on work, as a result of which its own viability would be jeopardised. What happened was that the workers did employ a number of restrictive practices of this kind, as a result of which the company decided that it had no option but to give them notice of dismissal. It did this on 17th January. Apparently, at the same time it notified the Ministry of Labour that this was so, but instead of the Minister of Labour taking some rapid and positive action to prevent the company from suffering from implementing the Government's own policy, I gather that nothing further happened until the 23rd January. Eventually the employees left and were transferred, as members of S.O.G.A.T., from employment by the Forrest Printing Company to other work on night shift in a quite different firm.
  Effectively, what was happening was that the labour of the workers concerned was withdrawn from the firm by whom they were employed and pressure was being put on the company, through no fault of its own. There was not a strike and there was not a lock-out, but conditions were made impossible for the firm. Yet the Government took no action to protect the firm from suffering from the implementation of the Government's policy. That is the crux of the case which we are making tonight.
  This naturally brings into question the whole idea of the sanctity of contract. I understand that as a result of this case there have been discussions between S.O.G.A.T. and other firms raising the whole issue of whether the contract itself is affected by Government policy. I hope that we shall be clearly told by the Parliamentary Secretary whether the impact of the Order is to bring into question the whole of the working arrangements which were embodied in the contracts of employment.
  I would also like the Parliamentary Secretary to say what the position in

  1593
  law is. Is a new contract needed? It would clearly be impossible to negotiate it in the present circumstances, but if that is so, does that mean that there is likely to be a complete breakdown in the industrial relations in this industry, because industrial relations in individual firms are clearly being jeopardised? Individual firms affected by the results of the Government's policy also have their competitive positions seriously affected.
  I hope that as a result of this debate my hon. Friends will join with me in voting against the Order, which is part and parcel of the Government's compulsory prices and incomes policy, which is not comprehensive and which singles out individuals, individual firms and individual workers. This example shows quite clearly that the Government are not prepared to protect firms which comply with Government policy from the consequences of doing so. It ought to be opposed.
  11.8 p.m.
  The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Roy Hattersley): I hope the House will forgive me if, like the hon. Member for Worthing (Mr. Higgins), in the short time which I intend to allow myself, I take hon. Members through some of the chronological facts which have surrounded the Order. For it is not possible fully to understand the nature of the troubles in the printing industry—troubles which we do not minimise, for we do not pretend that the industry is as tranquil as we would choose—without going through the chronological events in rather more detail than the hon. Gentleman gave himself time to do.
  The agreement whose application we are debating is the agreement of July 1965. The hon. Gentleman was right to say that the increase at issue is the cost-of-living increase which would have been paid on 1st January this year. But between the two events there was a fact of some substance which would certainly have been marked if we had been debating other Orders on other principles. These men received a substantial increase in 1966, a few days before the announcement of 20th July would have made it impossible. This is a point which would have been made with some force if we had been debating other Orders. On
  1594
  other occasions we have been told that a particularly mitigating factor has been that some of the wage demands against which Orders have been made have been in respect of men who had not had increases for many months.
  The hon. Gentleman said that every Order raised a different question of principle; he might have said that the attack on every Order produces a different form of tactic. We ought to put on record points which have been recorded on previous occasions. A few days before the stand-still a substantial, 4½ per cent., increase on the basic wage was awarded to the union.
  The hon. Gentleman is right to say that immediately before the 8s. cost of living increase was turned down the Government advised the members of the Manufacturers' Society that this would be a clear breach of the incomes policy, at para. 32 of the White Paper, Cmd. 3150. He is also correct in saying that the Manufacturers' Society accepted that this would be a clear breach and began to negotiate what it hoped would be a voluntary postponement with S.O.G.A.T. It is equally right to say that it failed in its endeavours.
  It is important to understand that from that moment that the Manufacturers' Society decided to consult the Government and to consider the best way to implement what it freely acknowledged to be Government policy, it asked if it was appropriate to apply for a Section 30 Order, and was advised by the Government that this was essentially a matter for the Society. But that whether it chose to postpone the increase in that way or any other way, irrespective of that decision, a payment of the increase would clearly be in contravention of the Government's prices and incomes policy.
  Properly, in my view, the manufacturers chose to talk again to the union and the Ministry of Labour—the first example of the intervention by the Ministry, which has been constant and assiduous. The T.U.C. in the form of its General Secretary was asked to speak to the union and ask for a postponement on a voluntary basis. The sort of advice given to the General Secretary of the T.U.C. by S.O.G.A.T. was that on no consideration would the union agree to a voluntary postponement, and that for its part the cost of living increase payable

  1595
  on 1st January must be paid and no other alternative could be accepted.
  As a result of the clear decision by the union to press for the increase, on 15th December last the Manufacturers' Society Council recommended that its members should pay the increase from 1st January. It recommended this for two reasons. First, the Council had no confidence that if it gave advice that the increase should not be paid, all of its members would conform with that advice. It had some hope that a majority would but it felt that a few would choose to ignore the advice. It pointed out that the printing industry in general, and the printing ink industry in particular, is especially vulnerable to industrial action, and that goods and orders, once lost, can never be recouped. Therefore it understood that some of its members would feel reluctant, indeed incapable, of applying any form of voluntary restraint without some sort of Government backing.
  Because of that on 30th December, a Section 28 Order was made, coming into operation on the next day, limiting the remuneration to the average level paid in the industry during the previous three months. As the House will know the Order covered parties to the national agreement, the house agreement, between the British Printing Ink Company and S.O.G.A.T., and as the Order says, "expressly or by implication", other unions, other firms which paid rates similar to or corresponding with the going rate.
  Mr. Higgins: Does it also cover other forms of bonus?
  Mr. Hattersley: Yes, it covers other forms of bonus, because it clearly specifies that the remuneration is limited to the level of the previous three months, and this is an all-embracing net, which would catch any increase, irrespective of how it was paid.
  The hon. Gentleman said that the disturbance of the industry in general and the printing ink industry in particular was the result of general Government policy. It is almost invariably the case that even those unions which have expressed publicly, volubly and consistently their disagreement with the Government's incomes policy, and particularly with Part
  1596
  IV of the Act, nevertheless feel it their duty to comply with the Orders, once they are made. We have no reason to believe that S.O.G.A.T. would have chosen to behave any differently to that. Indeed the General Secretary of S.O.G.A.T. made exactly this point. I must make it clear on his behalf that he and his union have said that they are in fundamental disagreement with Part IV of the Prices and Incomes Act. Notwithstanding that, it is the policy of that union as it is the policy of other unions to co-operate with, or not act against, an Order once it has been made.
  This information was passed on by the General Secretary to his members in printing ink firms throughout Great Britain. This Order was, by and large, accepted and that advice, by and large, was taken. There were only two or three firms which chose to take some sort of action or other and which chose to be critical of the union's position and critical of the Government's decision to insist that the cost of living bonus was not paid. In part it was because these firms, which are in one or two geographical areas—the southeast of England and London—feel that they had some extenuating circumstances to make them particularly aggrieved at what the Government had, in their opinion, done.
  Johnston Cumbers of Stratford, East submitted an application for a wage increase under the criteria which allow increases because of productivity agreements. It was turned down because, by the Government's standards, it was not a genuine productivity increase. This made the workers feel additionally aggrieved at the Government's policy. Louleaux and Bolton of Harlow submitted a similar claim that they were entitled to miss the period of severe restraint. Once again the Government could not agree and in consequence they felt that they had particular cause to complain about the Government's action.
  The most important of these firms is Forrest Printing to which the hon. Member for Worthing (Mr. Higgins) referred and to which the hon. Lady the Member for Finchley (Mrs. Thatcher) referred when a previous Order was discussed in the House three weeks ago. She said that as a result of Government policy this firm had gone out of business. As I understand it, the hon. Member is not

  1597
  saying that tonight. He is saying that the firm is in some difficulty but not that they have gone out of business altogether.
  The firm of Forrest Printing had difficulties not encountered by other firms in the industry before this Order came in. The difficulties it suffered were as much the result of its decision to cut down on regular overtime as the outcome of the Prices and Incomes Act and the Order.
  On 4th January, that company abandoned its previous work schedule. As a general rule it offered substantial amounts of overtime to all its work people. From 4th January, regular Saturday morning overtime was abandoned and it is the opinion of the company, the union and the General Secretary of the union, Mr. Briginshaw, that the disadvantages, inconveniences and embarrassments which afflict that firm are as much attributable to the reduction of overtime, reduction in demand, reduction in activity and short-time working as to the Order. I do not deny for a moment that some of the reductions are a result of Government economic policy in other fields. The Government have never suggested that the 20th July measures were not likely to cause contractions in various parts of the economy.
  Sir Harmar Nicholls: Surely the Parliamentary Secretary will realise how unfair he has been. It is clear that this flows from Government policy. To suggest it flows from the employers' misdemeanours is not fair.
  Mr. Hattersley: I do not know how the hon. Member can be so far away from what I have been saying. I admitted clearly and frankly that there was a reduction in demand in the printing ink industry, which affected this firm which supplies ink to glossy and expensive magazines. This may well be the result of the Government's decisions announced on or immediately after 20th July. As I understand the speech of the hon. Member for Worthing, he is saying that it is a result of the Order that the firm is facing a problem. I am insisting that in the opinion of the firm, the trade union and those more objective viewers who have studied this case, much of the trouble at Forrest Printing does not stem from the Part IV Order but from a general reduction in demand.
  Mr. Higgins: Would the hon. Gentleman not agree that effectively the union took action which was designed to bring pressure to bear on the firm and that the workers were certainly reallocated to another task? Yet despite this, the Government did nothing which would confirm the view which they had put forward previously, that anyone deliberately trying to bring pressure on employers, standing up against the freeze, should have action taken against them.
  Mr. Hattersley: It is by no means certain—indeed, the balance of evidence suggests the opposite—that the action taken by the employees of this company was directed against the freeze, as he describes it. I certainly reject the point that from this time the Ministry of Labour took no action whatsoever. The Ministry was in constant touch with the union and with the T.U.C. There were at least four meetings in which the Ministry of Labour participated and which the Ministry suggested should take place. There were at least four meetings that would not have taken place had it not been for suggestions and pressure by the Ministry.
  The hon. Gentleman is clearly wrong to suggest that during this time when the negotiated agreement was possible, when it was likely or conceivable that the men would return to work of their own free will, when it was possible that harmony might be restored voluntarily to the industry, the Government should have been taking the powers under Sections 22 and 16 of the Prices and Incomes Act. The hon. Gentleman should not sidestep these issues. I forgive him for saying that we should not pass judgment on the principle of the cost of living increases, but I find it difficulty to forgive his implied suggestion that the Government should have taken stronger action. The logic of his suggestion is that we should have taken the powers contained in the Act. On other occasions when this matter has been debated we have been challenged on whether those powers should ever be invoked. We have been told that if that course were adopted it would be tragic and terrible. The threat of some sort of legal sanctions being held over the heads of the trade unions has been regarded as an appalling draconian

  1599
  measure. Now the hon. Gentleman complains that we have not brought those powers into effect as quickly as we should.
  In a few moments I shall have left the House only five minutes in which it is allowed to continue this debate, but may I still refer to one point of substance raised by the hon. Gentleman. He ask what was the position of those employees in those firms who felt that their contracts no longer existed. The case is not altogether clear, and we are presented with the ludicrous position of two economists arguing against each other on points of law. As I am advised, there is no reason to believe that automatically the original contract is void because one increment is not to be paid. Even if that were the case, even if a court of law were to decide that the basic contract was no' longer operative, irrespective of the cost of living bonus, the position of the employees is totally secure. The legal doctrine of quantum meruit makes it absolutely certain.
  Mr. Quintin Hogg: Hear, hear.
  Mr. Hattersley: I am grateful for the right hon. Gentleman's approval. I am certain that any court of law would award the men the sort of remuneration that they were receiving in the previous job before the Order was made. Their level of remuneration would be certain to remain what it was before 31st January. In the inconceivable event of the company contesting the right to receive that level of remuneration, any court of law acting under the dictum of quantum meruit would award remuneration at the same level.
  In fact this is a classic case where a few men, geographically separated from the rest of their industry, have chosen to pursue a wage increase with more vigour and with more determination than their industry in general. By and large, the printing ink industry and its members were prepared to accept voluntarily a postponement of the cost of living increase, but a few men in the South-East, in a certain part of London and just outside the capital, wanted to insist on an increase immediately. This was the sort of case Part IV of the Prices and Incomes Act envisaged, a case in which a general agreement to
  1600
  postpone might be undermined by a percentage of workers refusing to put it into operation. For that reason I am sure the Government were right to make the Order, and my hon. and right hon. Friends will resist this Prayer this evening.
  11.26 p.m.
  Mr. John Biffen: I want to protest against the attitude of the Joint Parliamentary Secretary. I can perfectly well appreciate that he was very anxious to entertain the House with the brief prepared for him by the Ministry of Labour, but he might have had the courtesy to have waited to hear further back bench contributions before winding up.
  Mr. Hattersley rose——
  Mr. Biffen: No, I am staying on my feet now. I am on my feet because there are one or two questions I should like to put which arise out of paragraphs (a) and (b) of the Schedule to the Order.
  The Order talks about the Society of British Ink Manufacturers. I should like to know how many companies which are ink manufacturers are in fact members of the Society to which this Order applies. We already know from my hon. Friend the Member for Worthing (Mr. Higgins) that one company, the British Printing Ink Co., Ltd., is not a member, and there may be others. Anyone interested in the supposed comprehensiveness of this case must be most interested to know how many ink manufacturers are included in the Society.
  Secondly, one would like to know how many employees who, possibly in the traditions of this industry, receive cost of living bonuses, are covered by the designation in the two paragraphs in the Schedule to which I have referred.
  Again, one would be interested to know how many of the companies which are members of the British Printing Ink Manufacturers Society are themselves close companies, and which, to the extent they benefit by the freezing of these wages, will subsequently be obliged under the provisions of the Finance Act, 1965, to increase the distribution of dividends by a certain amount relative to the increase in profits which they obtained by pegging somebody's wages.
  These are all reasonable points which arise from the schedule to the Order.

  1601
  They are, I suspect, of widespread interest not merely to critics of Government policy on this side of the Chamber. When the Joint Parliamentary Secretary says the House will be allowed five minutes to discuss this, I think he underestimates the growing resentment against these kind of Orders which come to the House at this time of night. I think that this short time may have to be enough this evening, but I think that when we come to discuss the limb fitters, whose case comes next, and other cases, the atmosphere will be a little less charitable.
  Finally, I should like to ask the hon. Gentleman how he thinks these new Orders in some way or another manage to control the general level of incomes movement in the economy, and how they contribute to the general level of stability, as the Government say they do. Do the Government really know this? After all, only today there is a Written Answer to a Question asking the Minister of Labour
  "what is the total number of wage earners who have received increases in income during the period of severe restraint; what is the average expected increase in rates and earnings of the workers affected; and what are the corresponding figures for those in receipt of salaries."
  To which the Minister of Labour replied:

  Division No. 275.]

  AYES

  [11.30 p.m.

  Alison, Michael (Barkston Ash)

  Gilmour, Sir John (Fife, E.)

  Murton, Oscar

  Astor John

  Grant, Anthony

  Neave, Airey

  Baker, W. H. K.

  Gurden, Harold

  Nicholls, Sir Harmar

  Balniel, Lord

  Hall, John (Wycombe)

  Noble, Rt. Hn. Michael

  Batsford, Brian

  Hall-Davis, A. G. F.

  Page, Graham (Crosby)

  Beamish, Col. Sir Tufton

  Harrison, Col. Sir Harwood (Eye)

  Pearson, Sir Frank (Clitheroe)

  Biffen, John

  Heseltine, Michael

  Peel, John

  Biggs-Davison, John

  Higgins, Terence L.

  Pink, R. Bonner

  Birch, Rt. Hn. Nigel

  Hogg, Rt. Hn. Quintin

  Pounder, Rafton

  Black, Sir Cyril

  Holland, Philip

  Powell, Rt. Hn. J. Enoch

  Body, Richard

  Hordern, Peter

  Pym, Francis

  Brinton, Sir Tatton

  Howell, David (Guildford)

  Rossi, Hugh (Hornsey)

  Brown, Sir Edward (Bath)

  Hunt, John

  Russell, Sir Ronald

  Bruce-Gardyne, J.

  Hutchison, Michael Clark

  Shaw, Michael (Sc'b'gh & Whitby)

  Buchanan-Smith, Alick(Angus,N&M)

  Johnston, Russell (Inverness)

  Sinclair, Sir George

  Campbell, Gordon

  Jopling, Michael

  Smith, John

  Carlisle, Mark

  Kershaw, Anthony

  Steel, David (Roxburgh)

  Chichester-Clark, R.

  Kimball, Marcus

  Stodart, Anthony

  Clegg, Walter

  King, Evelyn (Dorset, S.)

  Stoddart-Scott, Col. Sir M. (Ripon)

  Cooke, Robert

  Kirk, Peter

  Taylor,Edward M.(G'gow,Cathcart)

  Corfield, F. V.

  Kitson, Timothy

  Turton, Rt. Hn. R. H.

  Costain, A. P.

  Lambton, Viscount

  Vaughan-Morgan, Rt. Hn. Sir John

  Crosthwaite-Eyre, Sir Oliver

  Langford-Holt, Sir John

  Wainwright, Richard (Colne Valley)

  Crouch, David

  Loveys, W. H.

  Webster, David

  Dalkeith, Earl of

  MacArthur, Ian

  Whitelaw, Rt. Hn. William

  Dean, Paul (Somerset, N.)

  Mackenzie,Alasdair(Ross&Cromty)

  Wilson, Geoffrey (Truro)

  Deedes, Rt. Hn. W. F. (Ashford)

  Magginis, John E.

  Winstanley, Dr. M. P.

  Dodds-Parker, Douglas

  Maydon, Lt.-Cmdr. S. L. C.

  Wolrige-Gordon, Patrick

  Doughty, Charles

  Mills, Peter (Torrington)

  Wylie, N. R.

  Elliott, R.W.(N'c'tle-upon-Tyne,N.)

  Miscampbell, Norman

  Fortescue, Tim

  More, Jasper

  TELLERS FOR THE AYES:

  Foster, Sir John

  Morrison, Charles (Devizes)

  Mr. Eyre and Mr. Monro.

  "I regret this information is not available."—[OFFICIAL REPORT, 20th February, 1967; Vol. 741, c. 196.]
  It is upon such evidence as this that the whole confidence trick is perpetrated.
  Mr. Hattersley: By leave of the House, I will answer the two points the hon. Gentleman has raised, reminding him that when the House debated the last Order of this kind hon. Members opposite were parties to an arrangement by which the Government were not given time to put their case. It is not easy therefore, for hon. Members opposite to complain this evening, even though they have not had as much time for the debate as they would have liked.
  As to how many firms are in the Manufacturer's Society, the hon. Member for Worthing (Mr. Higgins) and I both gave the figure: 39. I was also asked how many firms, federated or not, are covered by the Order? I believe—I am sure—I made it clear that the Schedule says that "expressly or by implication" all firms in the printing ink industry, whether federated or not are covered by the Order.
  It being half-past Eleven o'clock, Mr. DEPUTY SPEAKER put the Question pursuant to Standing Order No. 100 (Statutory Instruments. &c. (procedure)):—
  The House divided: Ayes 93, Noes 137.

  NOES

  Abse, Leo

  Hale, Leslie (Oldham, W.)

  Oswald, Thomas

  Albu, Austen

  Hamilton, James (Bothwell)

  Owen, Dr. David (Plymouth, S'tn)

  Anderson, Donald

  Harper, Joseph

  Owen, Will (Morpeth)

  Armstrong Ernest

  Haseldine, Norman

  Paget, R. T.

  Ashley, Jack

  Hattorsley, Roy

  Palmer, Arthur

  Bagier, Gordon A. T.

  Henig, Stanley

  Parkyn, Brian (Bedford)

  Baxter William

  Herbison, Rt. Hn. Margaret

  Pavitt, Laurence

  Bence, Cyril

  Hobden, Dennis (Brighton, K'town)

  Pentland, Norman

  Benn, Rt. Hn. Anthony Wedgwood

  Hooley, Frank

  Price, Christopher (Perry Barr)

  Bennett, James (G'gow, Bridgeton)

  Howarth, Robert (Bolton, E.)

  Probert, Arthur

  Bishop, E. S.

  Howell, Denis (Small Heath)

  Randall, Harry

  Blackburn, F.

  Howie, W.

  Reynolds, G. W.

  Blenkinsop, Arthur

  Hoy, James

  Rhodes, Geoffrey

  Buchanan, Richard (G'gow, Sp'burn)

  Hughes, Roy (Newport)

  Richard, Ivor

  Butler, Mrs. Joyce (Wood Green)

  Hunter, Adam

  Robertson, John (Paisley)

  Cant, R. B.

  Hynd, John

  Rodgers, William (Stockton)

  Carmichael Neil

  Jenkins, Hugh (Putney)

  Rogers, George (Kensington, N.)

  Chapman, Donald

  Johnson, Carol (Lewisham, S.)

  Rose, Paul

  Coleman, Donald

  Jones, J. Idwal (Wrexham)

  Ross, Rt. Hn. William

  Concannon, J. D.

  Judd, Frank

  Rowland, Christopher (Meriden)

  Conlan, Bernard

  Kelley, Richard

  Sheldon, Robert

  Crawshaw, Richard

  Kenyon, Clifford

  Shore, Peter (Stepney)

  Davies, Ednyfed Hudson (Conway)

  Kerr, Dr. David (W'worth, Central)

  Silkin, Rt. Hn. John (Deptford)

  Davies, Robert (Cambridge)

  Lawson, George

  Slater, Joseph

  de Freitas, Rt. Hn. Sir Geoffrey

  Lewis, Ron (Carlisle)

  Small, William

  Dewar, Donald

  Lomas, Kenneth

  Spriggs, Leslie

  Diamond, Rt. Hn. John

  Lyons, Edward (Bradford, E.)

  Steele, Thomas (Dunbartonshire, W.)

  Dobson, Ray

  Mabon, Dr. J. Dickson

  Taverne, Dick

  Doig, Peter

  McCann, John

  Thornton, Ernest

  Dunn, James A.

  McGuire, Michael

  Tinn, James

  Dunnett, Jack

  Mackenzie, Gregor (Rutherglen)

  Urwin, T. W.

  Dunwoody, Dr. John (F'th & C'b'e)

  Mackie, John

  Wainwright, Edwin (Dearne Valley)

  Eadie, Alex

  Mackintosh, John P.

  Watkins, David (Consett)

  Edwards, Robert (Bilston)

  maclennan, Robert

  Watkins, Tudor (Brecon & Radnor)

  Edwards, William (Merioneth)

  Macpherson, Malcolm

  Wellbeloved, James

  Ensor, David

  Mahon, Peter (Preston, S.)

  Wells, William (Walsall, N.)

  Faulds, Andrew

  Manuel, Archie

  Whitaker, Ben

  Fitch, Alan (Wigan)

  Mapp, Charles

  Whitlock, William

  Fletcher, Raymond (Ilkeston)

  Milian, Bruce

  Williams, Alan Lee (Hornchurch)

  Fletcher,

  Ted (Darlington)

  Milne, Edward (Blyth)

  Williams,

  Clifford

  (Abertillery)

  Ford, Ben

  Morgan, Elystan (Cardiganshire)

  Winnick, David

  Forrester, John

  Morris, Alfred (Wythenshawe)

  Wlnterbottom, R. E.

  Freeson, Reginald

  Morris, Charles R. (Openshaw)

  Woodburn, Rt. Hn. A.

  Galpern, Sir Myer

  Noel-Baker,Rt.Hn,Philip(Derby,S.)

  Gardner, Tony

  Oakes, Gordon

  TELLERS FOR THE NOES:

  Garrett, W. E.

  Ogden, Eric

  Mr. McBride and Mr. Walter Harrison.

  Grey, Charles (Durham)

  O'Malley, Brian

  LOCAL GOVERNMENT BOUNDARIES (GLOUCESTER)
  11.40 p.m.
  Mr. Anthony Kershaw: I beg to move,
  That the Gloucester Order 1966 (S.I., 1966, No. 1535), dated 6th December, 1966, a copy of which was laid before this House on 15th December, be withdrawn.
  I am grateful to the Leader of the House for having found time, according to tradition, for a Prayer which has been crowded out by the press of business. The time ran out on what should have been a Prayer last week, as it was not reached during a morning sitting, and the Leader of the House has found time for a debate on this Motion tonight, which, as it is exempted business, could go on till a very late hour. But I hope not to delay the House very long in putting before them the case for the withdrawal of the Gloucester Order.
  1604
  In this matter, I appear as an advocate. There are very many residents in the areas affected who wish to have their case put to this House. It is, of course, true that the usual public inquiries have taken place about this Order, and decisions have been made, but this is the last opportunity on which it will be possible for the argument to be deployed against the Order, and the residents do not wish this opportunity to be denied to them.
  It so happens that I am the only Member of Parliament who, from a geographical point of view, is able to do so, because the other local Members of Parliament in the area affected happen to be Ministers of the Crown. I see in his place the right hon. Gentleman the Chief Secretary to the Treasury, the hon. Member for Gloucester (Mr. Diamond), who is a good constituency Member, and well known to be, and who is here to hear this debate, and the hon. Gentleman

  1605
  the Member for Gloucestershire, West (Mr. Loughlin), who is also a Minister and, therefore, is not able by tradition to deploy the case on this Order.
  It is therefore a fact that I find myself in the position of being the only advocate who can speak for the residents in the areas affected.
  This Order incorporates parts of the Gloucester rural district into the city of Gloucester, and, in particular, affects the parish of Upton St. Leonards in my constituency, Hucciecote in the Gloucester constituency, and the parish of Longlevens in the Forest of Dean.
  From my constituents in Upton, from the Hucclecote Residents and Ratepayers Association and from the Parish Council of Longlevens, I have had the most earnest request to deploy their case. They have given me representations asking that I should present to this House their wishes not to be absorbed into the city of Gloucester and giving their reasons why they believe this would be a bad thing.
  Firstly, I would ask the Minister—for whose attendance I am grateful, and I bear in mind also that his Department has had a Minister sitting on that Bench for two mornings already during our morning sessions, as I have been—to make clear what is the real purpose of the proposal.
  If it is to obtain the integration of the areas which have a community of interest, then there is, of course, a case for considering all the surrounding area of Gloucester and not merely the areas which Gloucester City has actually claimed, which is what is being done. If, however, the point of all these changes is to preserve Gloucester City against the danger of losing its status as a borough, I would say, first, that this is a wrong basis on which to base a change. Secondly, I would say that no one—at least no one concerned in these changes in Gloucester—questions the preservation of the borough status of Gloucester. No one suggests that Gloucester, as it is, is too small, or in some way too inefficient, to continue. The Minister himself, in paragraph 12 of his conclusions, finds that Gloucester is in fact an efficient organisation. I would be very sad, as, I am certain, would be a very large number of others, if so ancient a borough
  1606
  as Gloucester were to lose its status. Contrariwise, there has been no suggestion that any other of the councils concerned is inefficient and should for that reason be altered.
  We have, therefore, the situation that there is no special evil or inconvenience to be cured and that there is, as far as I know, no active desire on the part of any large numbers of people for changes to be made but that there is a substantial body of opinion—as the Minister admitted in his letter to me of 8th June last year, overwhelming opinion—in the areas directly concerned that the changes should not take place. All this, moreover, is against the temporary background of unsuitability for piecemeal changes in view of the impending Royal Commission on Local Government, which will again throw all these issues into the melting pot.
  I refer first in detail to the case of the rural district council of Gloucester, the effect on which was described by the Report of the Local Government Commission for England, presented to the Minister in January, 1963, as serious. On the basis of 1964 figures, the rural district council would lose about 16,000 of its population and about £470,000 of its rateable value, representing a loss of about 25 per cent. in both cases. It is not contended, and I do not contend, that the rural district as it would remain after these changes are made would be nonviable. Even as reduced, it would have a 36,000 population and a substantial rateable value and it would still be larger than the majority of rural districts.
  The objection of the rural district council is that the reduction of its area was assumed by the Local Government Commission to be one of the matters which the Gloucester County review, which was then in progress, would take into consideration. It referred, indeed, to the possibility of "substantial recasting of boundaries". In the event the county review was cancelled, and it cannot, therefore, now be assumed that the Commission, exercising a choice in what is obviously a matter of fine balance, would have come to the same conclusion.
  The Minister has had correspondence with the rural district council and myself about the matter in which that point was put. The Minister justified the adherence to his original decision by

  1607
  noting that the Commission had only referred to the possibility of a substantial recasting of boundaries, by which, I understand, he implied that before weight could be given to such a point, the Commission would have had to entertain a greater degree of certainty.
  I wonder whether the Minister is wholly satisfied with that argument. He knows that the Commission was referring to a review body over which it had no influence and which had not yet begun its work. It would surely have been wholly improper for the Commission to have made public any assumptions about how the county review would be conducted or the conclusions to which it might come. Indeed, in referring to it even as it did, the Commission was saying that it was virtually certain that changes would be made, and this must clearly have influenced the Commission substantially.
  I suggest that the rural district council is entitled to think it unreasonable of the Minister to discount this alteration of circumstance. I suggest that if the Minister's decision had to be based upon legal rather than administrative procedures, he would in such a case hold his hand.
  As regards rates, I understand from paragraph 39 of the Order—which, the Minister will agree, is rather complicated—that the rates charged to the ratepayers of the rural district council and in other areas affected who transferred to the city will rise by 6d. in the £plus any rise this year in the city rates. Nobody likes rates at any time, still less a rise in them, and still less a rise at the present time of freeze.
  I now turn to the case for Upton St. Leonards, which is in my constituency. Only a small part of the parish is affected, but those who are affected have made their views very well known to me. I believe that the decision about Upton St. Leonards should not go unchallenged for the very good reason that it is based on the new motorway being the new boundary. The Minister said in his conclusions:
  "Extended in this way, the city would be contained firmly by two major physical features—the river Severn on the west and the motorway on the east."
  A motorway looks a splendid boundary on a map if one is looking at it in
  1608
  Whitehall, but it is in fact a very unsatisfactory boundary because it tries to go through a countryside without disturbing it. Every footpath, bridle path, road or cart track is taken over or under it, and everything is done to insulate it from the area through which it passes. That is part of the charm of driving on a motorway, and part of the charm in living near one is that one is not cut off from the other side. The motorway and the local countryside live in different worlds.
  The old type of highway such as the A38 is very different. The A38 is a notorious highway which passes through my constituency between Gloucester and Bristol. My hon. Friend the Member for Gloucestershire, South (Mr. Corfield) knows very well that it is notorious and dangerous as it also goes through his constituency. One risks life and limb to try to cross it, and there is every inducement to stay on one side and not cross if one does not have to do so. But there is no difficulty in crossing a motorway, and that should be borne in mind not only in the present case but in others.
  Another consideration here is that the Order may well come into force before the motorway exists, and it will be rather a puzzle to find the boundary, because it will be a notional line on the map. At one time the division between my constituency and that of the Chief Secretary to the Treasury in the Matson area was a stream. That was fine when one could see the stream, but it was put underground in a sewer, and no one knew where it was. I found myself canvassing the right hon. Gentleman's constituents and wasting my shoe leather. I am glad to say that that matter has now been put right; he has the whole of Matson, and he is welcome to it.
  I believe that a motorway should not be considered a satisfactory boundary for parish and other purposes, and that brings me to the case of Hucclecote. The proposed motorway will also be the boundary which will cause a large part of the parish to become part of the city of Gloucester. Hucclecote is at present a community of about 6,000 people. It is substantially developed, with its own factories and shops, and is separated from Gloucester by a green belt and also now by a new by-pass which is a substantial physical barrier.

  1609
  It will not provide any solution to the problem of finding residential land for Gloucester as it is already closely built up. In any case, the city council requires space, I understand, for only about 9,000 more people by 1981 and has within the city's boundaries room for 4,000 of these. Only some 300 acres are required to house the remainder, although the areas to be transferred to the city amount to some 2.900 acres.
  Those who live in Hucclecote believe that the temporary conditions due to the closing down of the Gloucester Aircraft Company during the time when the Local Government Commission was making its inquiries may have influenced the Commission to think that the majority of those living in Hucclecote worked in Gloucester and that Hucclecote was merely a dormitory area. That is not so today and these buildings, which are once again in use, employ a very large number of the residents of Hucclecote.
  The Minister will also, I know, bear in mind that the motorway boundary will cut the parish in two, leaving some 400 Hucclecote residents outside the boundary. I have already said why I regard a motorway as an unsatisfactory boundary, and certainly the Minister will not disagree that, if it is at all possible, a parish should not be split except for the most pressing reasons. Of course, both Upton St. Leonards and Hucclecote are to be split in this way.
  One factor which may not have been considered by the Commission is that Hucclecote, I am informed, lies over a slight watershed from Gloucester and if it is to be brought on to the sewage system of the city very expensive works will be necessary to overcome the height problem for a sewage system which, at that side of the city, is already seriously overloaded.
  Of one important factor the Minister stands in no doubt. Hucclecote has a strong local patriotism. It feels itself to be an entity. A vigorous committee called the Residents' and Ratepayers' Association wishes to fight these proposals. It polled the local people, and a very large majority expressed opposition to the proposals. Altogether, 92 per cent. of the residents responded to a circular letter and 84 per cent. voted
  1610
  against the proposals. They are quite satisfied with their local administration.
  Drawing upon my local press the other day, I saw that the Chief Secretary to the Treasury, in a quiz in which he took part, said that he was in favour of local option. So we have no doubt that, if the right hon. Gentleman were free to speak his mind, he would be saying that local option in this regard should take place. That is to say, this would be the case if the press report
  was right. I applaud him for his opinion.
  It would also be wrong not to admit that some of the parishes affected do not feel a certain misgiving about the change in administration. They recall certain episodes in the administration of the city to do with the housing fund not long ago—now happily quite satisfactorily disposed of. But they remember them. I am bound to say also that the recent granting of planning permission by the city council to build a speedway track and a lorry park next door to a projected new hospital has aroused considerable local anxiety and astonishment.
  Be that as it may, no one has suggested that any improvement in administration would result from these proposals. Certainly the city will acquire more rateable value that the county council will lose, but what problems for Gloucester that will solve no one has said. It is not even apparent that there are any problems for Gloucester. Certain it is, however, that my constituents will pay more rates and they find that they are quite happy as they are. The parishes of Upton St. Leonards, Hucclecote and Longlevens will all see their unity to some extent broken and their administration therefore made more difficult. In a few years' time all will be done again according to new proposals, and I cannot help thinking that the Local Government Commission made these proposals merely because they were proposals. They justify their existence in proposing something. In Gloucestershire many will think these proposals are unnecessary, vexatious and expensive, and I ask the Minister even now to think again.
  I appreciate his difficulty. In a way, it is a very difficult decision for him to take. He inherited this problem from

  1611
  a colleague, and he will be naturally reluctant to alter a Ministerial decision without very good reason, especially as the original decision was not his.
  It is a finely-balanced judgment, I agree, and it therefore gives him little opportunity to single out powerful reasons. The very paucity of reasons makes it the more difficult to reject the decision which has already been made. Time, trouble and expense have already been incurred, debates have already been arranged and failed to come off, and now we have finally arrived at this late hour. The Juggernaut has been put in motion. But that is what Ministers are for, to stop unnecessary and unwanted legislation. I beleve that a large number of people will be disappointed if this Order goes through. I do not believe that many people will rejoice if it does. I therefore ask the Minister if he will look at this again.
  12.2 a.m.
  Mr. F. V. Corfield: I had been reminding myself, before I came into the House, of the evidence which the Ministry of Housing and Local Government has been putting to the Royal Commission on Local Government. I do not know whether the presence of the former Parliamentary Secretary to the Ministry of Land and Natural Resources, now absorbed by the Ministry of Housing and Local Government, indicates at long last the closing of the gap between the policies which tend to be followed by different Departments in this Government. I find it very difficult to reconcile the terms of this Order with the views on local government reorganisation which have been expressed to the Royal Commission by the Ministry which is responsible for this Order.
  I do not want it to be thought for one moment that I hold any brief for the views expressed in the evidence. They seem to me to be the product of a wholly urban mind, wholly unaware of either the character or the needs of rural areas. However that may be, the suggestion that there should be some 40 major local authority areas based on the city regions would appear from a mere glance of the map to make it almost inconceivable that the City of Gloucester is likely to be the
  1612
  centre of such a city region. I have studied the Ministry's views on second-tier authorities, woolly as those views are. To some extent I welcome a degree of indefiniteness because I think it implies at long last the recognition that local government should not be regarded as something of a uniform structure to he placed right across the country irrespective of the very marked differences in characteristics and population trends, and so on, of different parts of the country.
  However that may be, there is absolutely no indication in the second part of this evidence that Gloucester City is at all likely to be a suitable second-tier authority in the view of the Ministry of Housing and Local Government, any more than it is likely to be the centre of a top-tier authority. In those circumstances, it seems quite extraordinary that we should be faced with an Order which quite clearly does not follow the views of the Ministry which is promoting it, and at the same time follows the recommendations made under the 1958 Act which the Government have done everything to scrap.
  I would have thought that in these circumstances this was a wholly premature operation until we know the shape which local government of the future is likely to take. Although it does not follow that the Royal Commission on Local Government is in any way bound to produce an outline in any way in conformity with the evidence produced by the Ministry of Housing and Local Government, I am bound to say that it is not my experience that Government Departments responsible for these matters are likely to accept recommendations of a Royal Commission which go a long way in the opposite direction.
  Therefore, we have the right to assume that the Government's policy in this matter is as set out in the evidence submitted to the Royal Commission. If we take that evidence at all seriously, it seems that the Order and all the ramifications and disruptions which arise from these transfers are not only premature, but in many ways wholly unnecessary and possibly positively harmful.
  My hon. Friend referred to the planning side. In its evidence, the Ministry of Housing based a good deal of its argument for the 40 city regions, a prospect which horrifies me, on the need to have

  1613
  wide areas for town and country planning. I do not want to be particularly unkind to the City of Gloucester, but I know of no ancient city which has lost so much of its charm, very largely as a result of the planning since the war, as has Gloucester, and I know most of the ancient country towns and cities of this country. There are only two things worth looking at in Gloucester—the Cathedral itself and the New Inn, which is a very old building. I have the greatest possible sympathy with my hon. Friend's constituents if this is the pattern of planning into which they are being forced.
  I strongly support my hon. Friend's plea that the Order is premature and almost certainly directly contrary to the views of the Ministry which has promoted it. I do not know whether the hon. Gentleman who is to reply to the debate still sticks to the title of Parliamentary Secretary to the Ministry of Land and Natural Resources, but, if he does, I ask him to branch out and show his independence and accept the Motion and allow us to go back to the status quo until we know exactly what is to happen about local government.
  Knowing the amount of time which Royal Commissions take inevitably, the Labour Party may well not be the party to implement these recommendations, but let us see what they are before we go on tinkering and causing unnecessary disruption to the efficiency of local government and the peace of mind of the people concerned.
  12.8 a.m.
  The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Arthur Skeffington): I am sure that the House is very glad that we have peen able to find a little time to discuss this important Order, even though the 40 days for discussing a Prayer have elapsed. Changes of the kind which the Order makes are of considerable concern to local inhabitants and local administrators. Like the hon. Member for Gloucestershire, South (Mr. Corfield), I have taken part in many of these inquiries and sometimes one has had to speak for the acquiring authority and sometimes for the losing authority, but one has appreciated that these changes arouse strong and genuine feelings. I am sure that the constituents
  1614
  of the hon. Member for Stroud (Mr. Kershaw) and those of the hon. Member for Gloucestershire, South, can be very glad that those two hon. Members have taken this last belated opportunity to talk about the Order. They put their case so persuasively that I only wish that I could say at once that I recommend the House to accept the Motion, but I cannot do so out of sympathy with them, or on account of their arguments.
  The hon. Member for Stroud asked what were the real reasons for the Order. I have to base my case in this respect upon the decision letter of 7th October, 1965, which my right hon. Friend the previous Minister sent. That, with minor modifications, is based on the very detailed report and proposals for the South Western General Review Area, in which it will be seen that, from paragraph 59 onwards the Commission summarised, under the heading the "Balance of Advantage", the reasons for suggesting these additions to the ancient city of Gloucester.
  My right hon. Friend the present Minister and my right hon. Friend the previous Minister both considered this report and the subsequent inquiry by the inspector, and the consultations which have taken place since, including a deputation brought by the mover of the Motion on one occasion. All of these have been considered at great length.
  It is frightening to consider the length of time which any proposed change takes. When one realises that the Corn-mission began this review in 1959, and that we are now on the last stage in February 1967, it can be seen that it poses very serious problems as to whether we can afford to continue at such a leisurely pace, when changes are desirable. I am not arguing whether changes are desirable, but this is a very long process and at this late stage I am sure that the hon. Gentleman the Member for Stroud is not as optimistic as he sounded at one point of his speech.
  Broadly speaking, we take the view summarised in the Commission's report in paragraph 64:
  "…. in considering our draft proposals and in reconsidering the whole question after the conference, we began as we always do in cases of this kind, by seeing what extension could properly be granted to the county

  1615
  borough in the light of the regulations. It was only after this that we turned to consider whether the city as extended should remain a county borough."
  The report goes on to speak about the city being a more effective unit of local government, and that is broadly the view which the Government are bound to take. The hon. Gentleman raised the question of the consequences to rural district councils. He said, as the Commission's report said, that the effect would be serious.
  The report said:
  "There is substance in these arguments—"
  about the loss of population and loss of rateable value—
  "but even as reduced, the rural district would have a population of 33,600 and a rateable value of £477,000. Both population and rateable value are likely to continue to grow. If anything like the present pattern of rural districts is to be retained, it is difficult to say that such a rural district is weak; of the 415 rural districts in England, 354 at present have smaller populations than this.…"
  They also have smaller rateable values than this. This may not be a model for the future, but one could not say that the Commission came to the conclusion that the rural district council would be unable to maintain an effective system of government of the proportion of area remaining to it.
  Mr. Graham Page: The hon. Gentleman did not go on to read the next sentence, which was the point that my hon. Friend was making, that in any case there is the possibility of a substantial recasting of county districts at the county review. Perhaps he will deal with the point?
  Mr. Skeffington: Certainly. In this connection I would say that the Commission was not making its proposals conditional upon any review, but upon the merits of the case before it. I rest my case in answer to the general proposition on the fact that there are 354 other councils which can subsist under the present scheme with small populations and smaller rateable values.
  The hon. Member raised the question of rates, and he properly said that those who were going into the inner area would not want to pay higher rates. The position, as he rightly summarised it from paragraph 39, is this. As I understand
  1616
  it, the city rate at the present time is 14s. in the £d. Whereas the rural district rate, which varies slightly from area to area according to the local parish precept, is just over 11s. If the recommendations of the city of Gloucester Finance Committee are accepted, the general rate will be frozen at an increase of 6d. This is the effect of Article 39. In fact it will not be 6d. because of the contribution under the Local Government Act of last year, which is in this case, I understand, 5d., and the poundage is therefore likely to be I ls. ld. for the next 12 months. I hope that that will be a reassurance to the hon. Member's constituents.
  The hon. Member raised the special point of Upton St. Leonards and the boundary formed by the motorway. The hon. Member thought that this was an undesirable boundary. One always has the argument of what is an effective and useful boundary, and it is possible for local authorities to mark boundaries in various ways. They have done so for hundreds of years, long before the roads came. I have had a lot of experience of boundaries, and one of the most effective is a motorway.
  An ex-Member of this House, A. P. Herbert, wrote an interesting article about the extension of the Cromwell Road, in which he said:
  "We are preparing to commit incest on our side because we cannot get to our neighbours on the other side."
  I understand that the hon. Member's constituents do not like this division, and had it possible to include the whole of the parish this would have been desirable. In view of future developments, this seemed to be the best boundary.
  I know that there are deep feelings amongst the inhabitants of the village of Hucclecote. Of course, there is a great deal of local patriotism, and I would not want to denigrate it or claim that it was artificial. But the Commission, having had these views strongly put to them both by letters from individuals and at the public inquiry, came to the view expressed in paragraph 58:
  "Further consideration has confirmed this view and has also confirmed us in thinking that Hucclecote is not a typical village but is much more a city suburb with some industry within it."
  The inspector went on to say that going out of the city it would be difficult for

  1617
  the ordinary person to know when he was leaving the city and coming into the village. If one gets what is almost a continually built up urban area, it is difficult for administrative purposes to treat it separately. My right hon. Friend looked at this very carefully, but he did not feel justified in departing at this stage from the Commission's recommendations or the decision letter.
  I understand the hon. Member's concern about past administration. There were certain failures revealed in the administration of the City of Gloucester in 1964. I am sure that he knows that vigorous steps have been taken. The town clerk retired on the grounds of ill-health and new officers have been appointed and a special investigation by outside experts has been made into the financial arrangements. The Minister has looked into the matter carefully and feels that the city will be competent under the present administration to organise the larger area which is going to pass to it.
  With regard to the remarks of the bon. Member for Gloucestershire, South, I must make it clear that the printed evidence of the Ministry of Housing and Local Government is the Department's evidence. It is certainly not the Minister's evidence; still less is it the Government's evidence. The Government reserve the full right, on receipt of the recommendations of the Royal Commission, to make up their mind completely on the Royal Commission's Report, and are in no way bound by the evidence submitted by the Department. The evidence is divided into two parts, and the purpose is, first, to give a history and to point out some of the defects as they are seen by the Department, and then to make proposals. These proposals are worthy of study and are of great interest, hut they certainly do not bind the Government. I give that personal assurance to the hon. Gentleman.
  I listened attentively to the pleas that have been made so reasonably and persuasively—
  Mr. Graham Page: Before the hon. Gentleman leaves that point, may I say that it seems to me to be rather extraordinary doctrine that information, even though it may be only information and not the expression of opinion, put forward by the Ministry is not treated as a
  1618
  statement by the Minister. Surely the Minister is responsible for what his servants do and should take responsibility. If in the face of later evidence he changes his mind, that is another matter, but when the information is put forward by his officials, surely that is the Minister's opinion?
  Mr. Skeffington: The position is this. All the relevant Departments have been asked by the Royal Commission to give evidence of the working of the present system and possible alternative proposals for the future. That is what the Minister has done. He takes responsibility for the statements put out by his Department. But this does not bind him. As to policy in the future, this will be determined in the light of the recommendations of the Royal Commission, and it would be wrong for the impression to get abroad that because the Department suggested some alternatives that would be the future policy of the Government. The Government must be absolutely free to decide future policy in the light of the Royal Commission and in the light of other factors which are brought to their notice.
  Let me sum up by saying that the Government take the view which was expressed in the Local Government Commission's Report, that an enlarged Gloucester City will make a strong, effective local organisation able to give a high standard of service both for the urban areas and the growing areas on the fringe of the city. It is true that already many of those in the areas which it is proposed shall be incorporated in the city look to the city for many of the services. The museums, the art college, grammar schools and colleges of higher education draw many of their pupils from the surrounding area.
  The Inspector's Report found that populations varying from 30 per cent. to over 50 per cent. had lived or already worked in the city. The Commission takes the view, which the Minister now shares, that, extended in the way proposed in this Order, Gloucester, together with the growing outer suburbs, will become a free-standing city under the control of a single administration. It will be contained on the east by the new road pattern and the new motorway, and on the west by the River Severn. I hope

  1619
  that at this stage, whatever our feelings may be about the past, we shall welcome the new proposals and hope that the new administration in Gloucester will have every success on behalf of its inhabitants.
  Question put and negatived.

  ADJOURNMENT
  Resolved,
  That this House do now adjourn.—[Mr. Charles R. Morris. ]
  Adjourned accordingly at twenty-five minutes past Twelve o'clock.