HC Deb 26 February 1968 vol 759 cc1115-22 After the passing of this Act, public expenditure on grace and favour residences shall be reduced by 75 per cent. All tenants of such residences shall pay a full economic rent, subject to a rent rebate scheme to be approved by Parliament.—[Mr. William Hamilton.]

Brought up, and read the First time.

Mr. William Hamilton (Fife, West)

I beg to move, That the Clause he read a Second time.

This Bill is a Public Expenditure and Receipts Bill. Its purposes are to cut expenditure and to increase receipts. We have been told by international bankers, by the Tory Party, by the C.B.I. and others that we have got to cut, and cut drastically, public expenditure. The Prime Minister and other Ministers have said that there must be no sacred cows; that nothing is sacrosanct. We are also told that there will be complete fairness and equity, that as far as possible there will be equality of sacrifice.

The vogue word is selectivity—that is, you select your victims according to your prejudices. So far as I see, there is nothing selective in the Bill we have been discussing all day. No equality of sacrifice can be detected in any part of the Bill. The principle seems to be, the less you have the more you pay. This new Council is a modest little thing. It is a very tiny bit of a candle end, not much more than the cost of depriving a few thousand kids of their school milk.

It is extremely difficult to get information as to the precise origins and history of grace and favour residences as an institution. They have certainly existed for well over 200 years, having originated, I believe, as residences for members of the Court and the Royal retinue. I believe it is true that Dr. Samuel Johnson once wrote asking if he might be provided with one in 1776 and was refused.

On the accession of William IV in 1830 the Civil List was reduced by Parliament, and, among other things, the repair and maintenance of Royal Palaces and Gardens was transferred to the annual Parliamentary Votes. About 1877 the whole question of grace and favour residences was submitted to the Treasury and was the subject of a number of Treasury letters, and it was then decided to continue the existing practice; that is, that the Minister—the Minister of Works, as it then was—should be responsible for the repair and maintenance of the structure and services and for modernisation on change of occupation of these grace and favour residences. The internal maintenance is the responsibility of the residents themselves. I understand that they also pay rates and fire insurance and the cost of heating, lighting and water; but they pay no rent.

It is true that many of these residences are unsuitable and badly planned for modern requirements. But so are hundreds of thousands of the residences of all our constituents. Modernisation, we are told, is a difficult and expensive problem. So it is in Glasgow. So it is in all our urban areas.

I was told in answer to a Parliamentary Question that in the 10 years from 1951 to 1961 the total expenditure by the Minister of Works on those houses averaged about £24,000 a year. In the period 1952–62 the average cost of maintenance and improvements prior to occupation of the grace and favour residences in the Minister's charge was equal to about 1s. 6d per square foot per annum.

I give some examples of the expenditure incurred. At 10 Kensington Palace between 1954 and 1962 £13,628 was spent, including £4,428 in 1960 for redecoration and other services pending occupation by Princess Margaret. In 1964–65 £43,000 was spent on apartment 9 at Kensington Palace for the same reason. There was a lot of bomb damage there, I understand. In 1964–65 at Hampton Court Palace £1,000 was spent on apartment 2 on preparation for reoccupation and at apartment 10 £1,500 for the same reason. At apartment 35—one house—£8,000 was spent in modernisation for reoccupation. In 1965–66 at Hampton Court Palace the cost of reoccupation services at apartment 4 was £3,000 and at apartment 32A the cost was again £3,000. At St. James's Palace in the same year the reoccupation services at apartment 31B cost £8,000. Finally, apartment 1A at Kensington Palace has cost the taxpayer to date £73,000, to house one family.

12.45 a.m.

Mr. Lubbock

The list which the hon. Gentleman has given is most impressive. I remind him that the modernisation of No. 10 Downing Street cost £3 million.

Mr. Hamilton

I was Chairman of the Estimates Sub-Committee which had something to say about that. If the hon. Gentleman reads the Report, he will find what I thought about it.

The Minister of Public Building and Works, who is the right hon. Member for Bermondsey (Mr. Mellish), has 140 of these houses in his charge: 57 at Hampton Court, 43 at Windsor Castle, 16 at Kensington Palace, eight at Marlborough House Mews, nine at St. James's Palace, three at Buckingham Palace, one at Kew Palace and one at Hyde Park. These residences are entirely at the disposal of Her Majesty the Queen. They are granted to members of the Royal Family, to persons who have rendered special service to the Crown, and, at Hampton Court, to widows of men who have rendered special service to their country. I could give some examples. One was given to Sir Alan Lascelles, the Queen's former private secretary. At that time, he was a director of the Midland Bank. I do not think that he is now, but I took the trouble to look at the figures and I found that, in 1967, the Midland Bank had 25 directors, with total emoluments of £160,000. This was a fellow who was living rent free, at the taxpayers' expense.

There was a piece in the Daily Express at the time: At Hampton Court Palace, the Queen is running a rather superior widows' home, choosing the tenants herself from widows of men who distinguished themselves in some form of service for the country. It then cites certain examples. There is a Post Office engineer who managed to get one of these houses by falling in love with and marrying Princess Margaret's maid.

I was so intrigued and excited by this marvellous instrument for awarding rent-free houses to those who had rendered valuable service to the nation that I wrote to Her Majesty on 14th July, 1964. I raised the matter with my constituency party and, with the permission of the people concerned, I gave to Her Majesty the Queen the names and addresses of two retired miners and their wives in my constituency. I pointed out that they had been 50 years in the pits. They had been in much greater danger than a lot of the military men who had got these houses. Both couples were living on their pension. Each of them seemed to me to have a cast-iron case for retirement with rent-free leisure. I was full of expectation when I received a letter from the Palace, dated 17th July—no delay in replying:

"Dear Mr. Hamilton,

"I am commanded by The Queen to thank you for your letter of 14th July on the subject of the allocation of Grace and Favour Houses.

Yours sincerely,

M. E. Adeane."

The Chairman

Order. It is not in order to bring a communication from or on behalf of the Monarch into the debate.

Mr. Hamilton

Thank you, Sir Eric. I make the point to emphasise that if this is to be the case, if these tenancies are to be given by Her Majesty on the ground of national service, then national service does not solely cover military service, and so long as the taxpayer is footing the Bill we have a right to make representations that they should be given to a much wider selection. Also the public ought to seek—and in the context of the Bill the Government ought to seek—to reimburse themselves of the expenditure that has been involved in maintaining and repairing these houses.

There is not much involved—an average of £24,000 a year. My new Clause says that we claw back three-quarters of that. We say to the owner that he pays the bill. There is a precedent for this. In 1931, when the economy measures were being taken, the Civil List was reduced at the Monarch's instigation. It is not an unreasonable request at this time that some contribution be made from the highest to the lowest.

It seems to be perfectly sound and reasonable. The principles on which the new Clause is based have been accepted by all, namely that all tenants of houses on which public money is spent should pay a rent. It is not a question of rent or no rent, but rent in some degree compatable with that person's income. This is the selectivity about which we are talking, the selectivity principle which I have incorporated in this new Clause. Moreover, it accepts the principle enunciated first by the Prime Minister that no cow shall be sacred in the saving of public expenditure. Those who are backing Britain should support this new Clause.

Mr. Emrys Hughes

I wish to support the new Clause moved by my hon. Friend the Member for Fife, West (Mr. William Hamilton) because the Prime Minister said that no Department of State should be exempt from scrutiny. As far as I can see, this Department of State does not seem to have been investigated at all. I believe that we are entitled, when the nation is in extreme financial difficulties, to go right to the top of the list of expenditures to see if some economy cannot be effected. For example, some economy could be made out of the £416,000 spent on the Royal Yacht "Britannia"—

The Chairman

Order. That does not arise on this new Clause.

Mr. Hughes

I know, nor does the question of the expenditure, which I am told is likely to rise to £500,000, on the investiture of the Prince of Wales. I suggest that if we are discussing economy cuts at all we should be prepared to carry this through to a rigorous and careful examination of all the departments of public expenditure of the State.

I know that my hon. Friend the Member for Fife, West, comes in for a good deal of criticism because he takes an unpopular line in this matter. When we hear him arguing for economic rents he is only pursuing to its logical conclusion the arguments that go on in every local authority in the country. I know that he is not popular when he persists as Chairman of the Estimates Committee in what I think is a very useful service to the Committee and the House, but I do not see why he should be attacked as though he had indulged in brawling in church. I am glad that he has raised this matter and I hope that even if the new Clause cannot be accepted the Treasury will be encouraged to pursue the exploration of these avenues of finance so that economies can be effected.

I remember that when the Civil List was under consideration in the House I moved several amendments, and if they had been carried there would have been a considerable reduction in public expenditure, and there would be less money for the Chancellor of the Exchequer to have to find. I do not see why the Labour Government should say, "Oh, do not touch that, because the Establishment will not like it". I do not see any reason at all why we should not apply the same scrutiny as my hon. Friend conducts with the Estimates Committee not only to grace and favour houses but to other avenues of expenditure.

I noticed that he left out Scotland. I should like to know what information he has about grace and favour houses or anything similar to them in the Palace of Holyrood. I understand that various people are accommodated there. I wish that my hon. Friend would carry his investigations north of the Border.

I am quite prepared to support this new Clause, hoping that the Chancellor of the Exchequer will not hesitate to prune unnecessary expenditure, whether it be in Holyrood or in Buckingham Palace, whether it be in the Royal Yacht "Britannia", or anywhere else. I hope it will be carried out in the spirit of economy, realising that this country is on the verge of bankruptcy, realising that we need all the money we can get, realising that we must save the £. realising that we have got to set an example to other nations of the world. Therefore, I think that the hon. Member for Fife, West has done a service to the Committee and I hope the Committee will carry the new Clause.

Mr. Diamond

I am grateful to both my hon. Friends the Member for Fife, West (Mr. William Hamilton) and the Member for South Ayrshire (Mr. Emrys Hughes) for their approach to matters of economy. Every Treasury Minister must welcome all the support he gets in that approach, and I am sure I shall find that same approach very valuable in many respects.

The new Clause deals with a limited amount of expenditure, as my hon. Friend the Member for Fife, West has pointed out, is, he says, on average £24,000. That may be quite right as an average figure. Last year the figure was apparently £26,000. So I am confirming, broadly, what the hon. Gentleman has said—

Mr. Mikardo

Could my right hon. Friend tell us—

Mr. Diamond

Just a moment—and this is the cost of maintaining the structure of these grace and favour residences and for their external repair.

Mr. Mikardo

I am obliged to my right hon. Friend for giving way. Could he convert that £26,000 into the equivalent of one-third pint bottles of milk?

1.0 a.m.

Mr. Diamond

Well, I am not very good at mental arithmetic on my feet, but the hon. Gentleman's point is taken.

What I am going to do is to explain, if the Committee will be good enough to bear with me, the circumstances affecting these properties. The first thing which, I am sure, the Committee fully realises is that grace and favour residences belong to the Crown and are at the disposal of the Sovereign. The arrangement which has been entered into between my right hon. Friend the Minister of Public Building and Works and the Palace provides only for the maintenance of the structure and for the external repairs. The tenants certainly do not pay rent, but they are responsible for the internal decorations, heating, lighting, insurance, and so on.

I have given confirmation of what my hon. Friend has said about the expenditure. There are, all told, some 135 such residences at present occupied. My hon. Friend the Member for Poplar (Mr. Mikardo) can easily work out how much it costs per residence in terms of public expenditure.

Mr. Mikardo

Too much.

Mr. Diamond

My hon. Friend says, "Too much." It is a matter which I am explaining and I do not think that the Committee would feel that this was a case where it wanted to press the new Clause.

I understand what my hon. Friend the Member for Fife, West called "selecting your victims according to your prejudices" as being his definition of what are good priorities. It may apply to all of us for aught I know. I hope that it does not. I hope that we all regard matters objectively, and the other causes which have been put forward are indeed objective. With this same approach, I should feel that the Committee would not wish to proceed with the new Clause.

Mr. Alison

Since the right hon. Gentleman has touched on the relatively insignificant figure, to which the hon. Member for Fife, West (Mr. William Hamilton) referred, of £24,000, can he elucidate a figure which has not been brought out but which is of comparative interest: that is, precisely what the Exchequer is saving in respect of the grants which it will not now pay to local education authorities for school milk?

Mr. Diamond

I see nothing about school milk in the new Clause.

Question put and negatived.

The Chairman

May I be informed whether a Division is required on Amendment No. 17?

Mr. Mikardo indicated dissent.

Schedule 1 agreed to.

The Chairman

Mr. Heffer. Mr. Booth. I am calling Amendment No. 65. I am not sure whether it is being moved.

Mr. Orme

No, Sir Eric. We are not moving those Amendments.

Schedules 2 and 3 agreed to.

Bill reported, with Amendments; as amended, considered.

Mr. Deputy Speaker (Sir Eric Fletcher)

Third reading?

Mr. Ernest Armstrong (Durham, North-West)

This day.

Motion made and Question, That the Proceedings of this day's sitting be suspended—[Mr. John Silkin]—put forthwith, pursuant to Order [12th December] (Sittings of the House), and agreed to.