Clause 2.—(AGGREGATE COST SUBSIDIES.) (Hansard, 21 February 1967)

§ Mr. Michael Noble (Argyll)
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.

§ 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 (South Angus)
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 (Midlothian)
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.

§ 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 (Edinburgh, North)
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 (Central Ayrshire)
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 (Paisley)
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 (Edinburgh, South)
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 (Dundee, West)
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 (Galloway)
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 (Perth and East Perthshire)
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.

§ 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.

§ 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.