HC Deb 23 July 1968 vol 769 cc256-60
7. Mr. Clegg

asked the Minister of Housing and Local Government whether he has accepted the recommendations in Command Paper No. 3604 concerning the rents of council houses.

Mr. Greenwood

The Government have already taken powers in the Prices and Incomes Act, 1968, to secure the limitation and phasing of rent increases, and to enable service of notice of increases without notice to quit, and we have commended to local authorities the recommendations of the National Board for Prices and Incomes concerning improved arrangements for dealing with complaints from tenants and for consultation with tenants' organisations. The Government will not reach any final conclusions on the other major recommendations of the Board until current consultations with the local authority associations are completed.

Mr. Clegg

Is the right hon. Gentleman giving careful consideration to the recommendation that council rents should ultimately be based on replacement cost?

Mr. Greenwood

That matter is one of the points dealt with by the National Board for Prices and Incomes, and it is one of the subjects of consultation with tile local authority associations.

Mr. Macdonald

Does not my right hon. Friend agree that the recommendations in the document merely tinker with the problem, and that the only effective way to reduce rents is to achieve a reduction in interest rates? What further plans has he in this connection?

Mr. Greenwood

The question of interest rates will be discussed later. In the case of new houses, we have done a great deal to reduce the interest paid by local authorities, but I have not at present any proposals for increasing the subsidy to the existing housing stock.

Sir G. Nabarro

In reference to the last supplementary question from behind the right hon. Gentleman, may I ask whether he is aware that this morning for the first time an advertisement by a building society has appeared offering 8½ per cent. for deposits, a record level in history?

Mr. Heffer

Is my right hon. Friend aware that certain local authorities, usually Conservative-controlled, have been interpreting the 7s. 6d. as an increase that they can put on every year? Will he make it perfectly clear to the House and the country that that is not the Government's intention? I hope that a circular along those lines will go out.

Mr. Greenwood

I am very grateful to my hon. Friend for making that point. The powers are limited in duration under the Act, but I have made it clear to local authorities that the 7s. 6d. is a ceiling and is not to be regarded as a norm. I am in correspondence with a large number of local authorities on this subject.

18. Sir G. Nabarro

asked the Minister of Housing and Local Government how many local authorities and representing how many council houses, have to date adopted his proposal of a 7s. 6d. per week increase in rents for each of three successive years; how much above the 3½ per cent. norm of prices and incomes policy this represents; and whether it is his policy that private landlords should now do the same, at 7s. 6d. per week increase per domestic hereditament, for each of three years, in the interests of equity.

Mr. Greenwood

I have not proposed any increase. On 3rd May I advised local authorities that I should not normally accept in any one year average increases in standard rents which exceed 7s. 6d. a week; and since then the 47 proposals I have received have all been within this limit. I have emphasised that this is an upper limit and not a norm. A private landlord is entitled to increase a regulated rent up to the fair rent subject to the phasing arrangements I have recently made.

Sir G. Nabarro

Will the right hon. Gentleman now apply himself to answering my Question? What relation is there between the 7s. 6d. per week for each of three consecutive years and the 3½ per cent. norm of the Government under the prices and incomes policy? Secondly, will he advise rent tribunals that private landlords, in equity, should be placed in the same position as councils as landlords?

Mr. Greenwood

In the Question on the Order Paper, the hon. Gentleman asked a number of points, one of which related to an increase which he alleged me to have recommended and which I had not recommended. So far as the relationship between the increase and the 3½ per cent. norm on prices and incomes is concerned, I do not think this is a parallel. I do not think that an increase in total income can be compared with an increase in one item of expenditure, however important that is. But I hope that the hon. Gentleman will remember that the Prices and Incomes Board recommended a maximum average increase and not a percentage. On the second point raised by the hon. Gentleman, perhaps he will study the guidance I have recently issued about the phasing of increases in the private sector.

Mr. Ogden

Will my right hon. Friend clarify his earlier statement that 7s. 6d. is the ceiling for any increase? Does it mean that this is a ceiling for average increases but that some increases might be allowed of up to 10s.? When will he be able to use some of the powers given to him in the Prices and Incomes Act, 1968?

Mr. Greenwood

I repeat that I have advised local authorities that I should not normally accept in any one year average increases in standard rents of more than 7s. 6d. per week. I have also said that I would not in normal circumstances accept individual increases of more than 10s. a week. There are later Questions on the Order Paper about my powers.

Mr. Bessell

Has the right hon. Gentleman any evidence of hardship being caused to council house tenants in consequence of these increases?

Mr. Greenwood

I think that any increases must cause some hardship and inconvenience. Our aim is to keep them to the minimum. That is what we are seeking to do through this legislation and the circular I have issued. If the hon. Gentleman has any experience of local authorities operating a rent policy which appears to inflict injustice, I would gladly look into such cases if he brings them to my attention.

Mr. Lipton

Is my right hon. Friend aware that the G.L.C., under Tory control, is going right through the 7s. 6d. ceiling by imposing substantial increases in ancillary charges upon council house tenants in G.L.C. flats?

Mr. Greenwood

Any increases of that kind must be limited to actual increases in costs. I would rather not become involved in discussion of individual cases. I hope my hon. Friend will bear in mind, however, that, as a result of my intervention, the G.L.C. has mitigated its proposed increases very considerably.

26. Mr. R. C. Mitchell

asked the Minister of Housing and Local Government how many local authorities have moderated rent increases, or proposed increases, since the issue of Circular 25/68.

Mr. Greenwood

Twenty-six local authorities have moderated increases of rent, actual or proposed which had been notified to the Ministry before Circular 25/68 was issued.

Mr. Mitchell

Is my right hon. Friend satisfied that the circular is having the desired effect?

Mr. Greenwood

I think that the circular is having an effect in two ways. First, it is tending to make local autho- rities now contemplating increases keep them within the limits. Secondly, it has had a profound effect in the case of these 26. In nine cases modifications to rent increases which would have come into effect after the circular are involved and in the other 17 rent reductions to mitigate rent increases which came into effect after the circular are involved, so I think that we are making useful progress.

Mr. Boyd-Carpenter

As the intervention of the Government in the affairs of freely elected local authorities will involve substantial rate increases, will not the Government compensate the ratepayers of these areas for the financial consequences of the Government's own intervention?

Mr. Greenwood

I have answered that question before. The answer is "No". We have suggested various other considerations which local authorities should take into account. Local authorities cannot be specifically protected against legislation, any more than can corporations or private individuals.