§ Order for Second Reading read.
§ Motion, made, and Question proposed, That the Bill be now read a Second time.
§ Mr. Speaker
May I say one word about the order of our proceedings. We shall come to the Instruction when we have dealt with the question of the Second Reading.
§ Mr. Julius Silverman (Birmingham, Aston)
Does that mean, Mr. Speaker, that you propose that there should be a separate debate on the Instruction?
§ Mr. Speaker
What will happen is that we shall just dispose of the question of whether the Bill be read a Second time or not. If the Second Reading is carried, I shall call upon the hon. Gentleman to move the Instruction.
§ 7.1 p.m.
§ Mr. Reginald Eyre (Birmingham, Hall Green)
Because of the circumstances at this time, I shall speak as briefly as possible in support of the Bill. Anyone who was in Birmingham during 1940 and 1941, which were years of severe trial, will know that one of the virtues which receives immediate recognition in the city is that of fairness. In my belief, the true native of Birmingham has an inherent desire that "fair do"s as he calls them, shall prevail.
That fundamenetal wish for fairness leads to an unwillingness to accept that people in genuine need should be divided into two groups and that one of the groups should be preferred while the other, equally deserving and equally in need, should be neglected. The Bill is intended to put right an unfairness of that nature. It has been championed from birth by Alderman Frank Griffin, the leader of 323 the Conservative controlling group on the city council, and I am happy to say that it has also won the support of Alderman Sir Frank Price, the leader of the Labour group on the city council.
When the principle of the Bill was first considered in the council chamber 141 members out of a total of 156 on the city council from all three parties voted in favour of the Bill, and no one was against it. Naturally, the Bill received wide publicity in Birmingham, and at a town meeting called specially for the purpose it was approved by 109 votes to eight. I understand that those who spoke against the Bill on that occasion indicated that their loyalty was to the Communist Party. Therefore, it can be said that the Bill has wide and general support in Birmingham, where it is appreciated that it can assist in dealing with a practical problem which is seen to exist now within the city.
The object of the Bill is to authorise the Birmingham Corporation to make payments out of the general rate fund to tenants of privately-owned dwellings similar in scale to the rent rebates which have been granted to municipal tenants for a number of years. By giving equality of treatment to both groups of tenants in this way, the Bill corrects an injustice and offers relief to some tenants genuinely in need.
The Bill provides for this to be done for private tenants in a way which precisely matches the fair and effective rent rebate scheme applying to municipal tenants. Clause 3 provides that tenants to whom the payments may be made are all tenants in occupation of dwelling houses in the city, and the definition of dwelling houses includes flats and parts of buildings used as separate dwellings. The first major exception is, of course, Corporation tenants, who already have the benefit of their own rent rebate scheme. The other major exclusion is of tenants of dwelling houses with a rateable value exceeding £110, which is approximately the upper limit of the rateable value of municipal tenants, so that privately-owned dwelling houses above that rateable value are excluded. That maintains the principle of parity between private and municipal houses.
Two other small groups are excluded—those with service tenancies and the 324 tenants of housing associations and societies. This is for technical reasons which would lead to administrative difficulties. It is also regretted that administrative complications prevent the extension of the scheme to owner-occupiers in poor financial circumstances.
The Corporation's present scheme assesses the gross income of the tenant and his wife and a net rent for the premises. A rebate is allowed equal to the amount of the net rent which exceeds one-ninth of the net income, though the rebates are gradually phased out if the tenant's income exceeds £15 where there are no children, or where the income is greater than £17 if there is one child, or greater than £18 where there are two or more children.
The calculation of payments to be made from the General Rate Fund under Clause 5 is required to be carried out in the same way as now applies to rebates to municipal tenants. Assistance is given only in respect of a fair and reasonable rent paid by a tenant for his accommodation. Where the rent has been fixed under national legislation—for example, by the rent officer in the case of unfurnished premises or the rent tribunal in the case of furnished premises—the rent so fixed will be used unless the actual rent is less. In other cases, a rent equal to the sum which would have been payable had the Corporation been landlords and fixed the rent in accordance with the current level of council house rents will be adopted if that is less than the actual rent paid.
It is believed that the scheme will be particularly useful for meeting cases of hardship existing at a level a little above that specified for help from the Ministry of Social Security. Cases within the Corporation's knowledge include hardship arising as a result of long periods of sickness. Sometimes the rebate is the only means by which a tenant in certain circumstances can be kept in his own home. The eviction of the family for rent arrears causes social disaster. The consequent expense of care of children, of temporary housing and welfare assistance in those cases falls heavily on the Corporation, and an effort to keep a roof over the family's heads in such cases is often a good investment for society as well as a very human act.
There are penalties in Clause 6 for mis-statement of cases.
325 With regard to the administration, it is thought that only 6 per cent. of those tenants qualified and entitled under the Bill will, take advantage of the scheme. The administration of the municipal tenants' estates has given the Corporation good experience, and its expectation is that the cost of the rent rebate scheme affecting private tenants under the Bill will be about £200,000 a year, equivalent to a ld. rate. Apparently the Id. rate now yields about £205,000 in the City of Birmingham.
It is thought in Birmingham that social justice and prudence well merit this expense to be borne by the General Rate Fund. It is believed that the Minister of Housing and Local Government will take a neutral position on the Bill. But all parties in Birmingham want it and I hope that the Minister will bear this in mind in the advice he gives to his hon. Friends. I ask my hon. Friends to give the Bill their support and I hope that it will have a successful passage.
§ 7.11 p.m.
§ Mr. Julius Silverman (Birmingham, Aston)
It is my intention and, as far as I know, that of my hon. Friends to support the Bill. Certainly my colleagues from Birmingham will support it. We will deal with the Instruction later on. As the hon. Member for Birmingham, Hall Green (Mr. Eyre) has said, the Bill has received the support of all parties in Birmingham and I believe that, in matters of this sort, it is for the citizens of Birmingham, through their elected representatives, to decide how they wish to spend their money. Some may argue that this should be a national matter but if Birmingham has so decided, then it should be allowed to do it.
There is no doubt that the Bill can have some very useful consequences for non-council tenants. At present, there is inequity between non-council and council tenants in that council tenants can get rebates and non-council tenants cannot. In that respect, the Bill puts the matter right. Indeed, it does more—it swings to the other extreme.
Although we support the Bill, we have certain reservations which must be expressed. This is an experiment, a private scheme. We shall have to see how it works, and a number of us have doubts about it. First, what effect will it have 326 upon rents generally, which is extremely important? Many housing experts believe that if, in a free and uncontrolled market, we give an additional subsidy to tenants to pay in rent, the consequence is a tendency to increase the level of rents, in that landlords can ask for more and there is more demand for their houses from people who otherwise could not afford them. It may be said that now we have rent regulation and control but I want to analyse the position in Birmingham.
There are about 50,000 privately-rented dwellings in Birmingham which might come under the scheme. Of these—and these figures are bound to be something of a guess—about 16,000 are rent-controlled properties under the Rent Act, 1957. The Bill cannot put up the rents of these properties so long as the existing tenants remain in them because they have rigidly controlled rents. I have no fear for them. For the others, I would assume that, in view of the moderate nature of their rents, they will receive little benefit from the present scheme.
Apart from that, it is estimated that there are about 25,000 other rented properties coming under the £110 rateable value limit and which would come under the heading of regulation. The number of registered rents is 890, which means that only about 4 per cent. of the houses concerned have regulated rents. The rest some under regulation in that the landlord theoretically cannot put up the rent. But I am afraid that the consequence of this Bill, to some extent at any rate, by putting up demands and increasing the amount of rent a tenant can pay, will be that landlords will be able to take advantage of it.
Even with the 890, it is estimated that the general level of rent is about 2.2 gross value, and this surely means that, with rents which have been decided by the rent assessment committees in Birmingham, which have set the pattern of the rents generally at about three times the 1957 controlled rent—in my view, this means a very high rent indeed—scarcity value has not been excluded.
§ Mr. Harold Gurden (Birmingham, Selly Oak)
Has the hon. Gentleman included in these figures multi-occupied houses, flatlets and the like?
§ Mr. Silverman
There would be some flats in this. Self-contained flats would come under the old Rent Acts, although this Bill goes wider than that. But I am dealing with 25,000 dwellings which would come under the heading of regulation. These include a certain number of flats. Their assessment is substantially higher than that of houses but, on average, 2.2 is a fair average from the figures I have been given recently, and it is fair to say that these rents have increased three times since 1967 and that scarcity value has not been excluded.
I do not necessarily accept that rent regulation will stop a rapid increase in rents, and the position needs watching. The rent officers take a different view. Their decisions have been upset in many cases. The committees have increased the rents set by the officers in 90 cases and in nine cases have decreased them, which means that they have imposed a somewhat higher level. It would be out of order to discuss in detail the effects of the Rent Acts, however. But I do not take the pessimistic view that the whole of this rebate will go into the pockets of the landlords, although I am certain that some of it will go there and this point must be carefully watched. That is my first reservation.
There are one or two other matters of detail. The Bill is very wide. It deals with furnished dwellings and even with furnished rooms. Apparently, the basis upon which a valuation or assessment will be made in these cases is by deduction of the value of the furniture, together with garage and other matters, and by making an assessment on suitable Corporation property. I imagine that, as far as furnished rooms are concerned, the benefit to the tenant will be small in view of the assessed rent, which is what matters. Whatever their rent, the Corporation assessed rents are probably lower.
I do not know how the rent will be assessed. I presume that it may be done on the overall basis of council valuations which is 1.5 per cent. of G.V. It seems that in a large number of cases new individual assessments will be made. Where there is no separate rateable value this will be an additional burden for the staff, either of the housing department or another department. One point that I hope the Committee will consider is what 328 this burden would be and how it would be administered and whether staff will be available. If the whole of the 50,000 had to be assessed by inspection from the Birmingham Housing Department this would place a completely intolerable burden upon the staff.
I presume that in a large number of cases they will operate upon the 1.5 per cent. of G.V. basis. Even so, there would be a large number of dwellings which do not correspond to this. Another problem is the definitions in the Act of a separate dwelling. I notice that the question of having a joint kitchen does not exclude premises from being separate premises under the Bill. Members may know the case of Neale v Del Soto which is the major case on deciding what is and what is not a separate dwelling.
There the question of a joint kitchen was the major point in deciding what is a separate dwelling. What the position will be when this is eliminated, I do not know. I can see some legal headaches in the Town Clerk's department about a large number of dwellings, in deciding what is and what is not a separate dwelling.
My major reservation deals with the relationship between council tenants and non-council tenants. I will not develop this now, except to say that this Bill places another burden on council tenants who will be in the position of paying through the rates for non-council tenants, and through the rents for council tenants. I shall elaborate on this later. For the present, I support the Bill, notwithstanding my reservations, and hope that the House will give it a Second Reading and that the Committee will consider the various matters of detail which I have raised.
§ 7.23 p.m.
§ Mrs. Jill Knight (Birmingham, Edgbaston)
There are very many people in Birmingham who would like a council house or flat, but because they are in privately rented accommodation they might just as well cry for the moon. All of us who represent Birmingham constituencies get letters from people telling us that they are in a private house and saying, "Please can you do anything to get me into council accommodation?". In many cases the accommodation provided by the Birmingham Corporation is 329 infinitely superior to some of the privately rented accommodation.
As we all know, there is no hope of getting into a council house, maisonette or flat if a person is already in privately rented accommodation. One of the sad and unjust things about this is that the private accommodation rent is often decisively steeper than council rent. There is a double burden, because if these people were in council accommodation and were hard up they would be given some help, whereas they get no such help in privately rented accommodation.
The point of the hon. Member for Birmingham, Aston (Mr. Julius Silverman) about rents being put up by private landlords if the Bill were passed is interesting, but I am not sure that it is valid. In the first place, the Bill certainly has not emerged in a thoughtless and haphazard fashion from Birmingham Corporation. I am certain that the Corporation has studied every aspect very carefully. I am equally certain that such a possibility will not have escaped it. It has obviously weighed the matter up very carefully, and come to the conclusion that this is unlikely to happen or, even if it does, the obtaining of fairness for these people must override the point.
I suppose that the same point could be made about tenants in council accommodation who apply for supplementary pension. It has been possible for many people on assistance to get help with their rents if their income will not meet it, and one might as well use the same argument for the supplementary pension, that, if this were payable, the landlords would put the rents up. We should put that argument out of our minds. If we are to take any notice of it at all we can only do so at the expense of providing fairness to these people, as the Bill seeks to do.
§ 7.27 p.m.
§ Mr. A. H. Macdonald (Chislehurst)
I hope that the House will forgive a non-Birmingham Member for speaking in the debate. It is right that the elected representatives of Birmingham should be in the forefront of the debate, but I am sure that the hon. Member for Birmingham, Hall Green (Mr. Eyre) will agree that there is a principle involved which is of interest to hon. Members from other parts of the country. The local authority in my 330 own constituency does not make a rent rebate scheme out of the rates to anyone. From time to time the suggestion is made that it should make it to municipal tenants, and I can see the objections and difficulties that arise and the element of unfairness to which the hon. Gentleman alluded in his introductory speech.
Is it possible that we are just shifting the element of fairness just one step further? The Bill proposes that private and municipal tenants shall be dealt with on the same footing. I can see the fairness in that, but owner-occupiers, to whom the hon. Member referred briefly, will be in a worse position. He referred to the technical reason why nothing could be done, but I hoped that he could have said a little more.
The principle involved is naturally of great interest to all hon. Members and it is impossible for a London Member not to notice how the Greater London Council, faced with an identical situation, has adopted a directly opposite approach, namely to withdraw facilities from the municipal tenants. It would be out of order to dwell on this, but I wonder whether the Minister would care to venture any comment about the extension of the principle underlying the Bill to other parts of the country. Does he think it appropriate for other authorities to follow Birmingham's lead? Having read the Bill and listened to what the hon. Member has said, if I had been a member of Birmingham Council I, too, would have supported the Bill.
§ 7.30 p.m.
§ Mr. Graham Page (Crosby)
I want to intervene very briefly in favour of this Bill. First of all, it is worthy of comment that the House can pass so rapidly from a great national debate to a debate upon a local Bill. We see this daily when we have the half-hour Adjournment debate at the end of the day. This characteristic of the House has been highlighted today by the passage from the Budget debate to a debate on the Birmingham Bill.
My hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) had admirably and lucidly explained the contents of the Bill. The hon. Gentleman the Member for Birmingham, Aston (Mr. Julius Silverman) has assisted the House with a clear exposition of the facts as 331 they relate to Birmingham. The most important thing for the House to note is that on the two statutory occasions when the Bill came before the Birmingham City Council not one vote was cast against the promotion of the Bill. There is a substantial representation of at least two of the parties and a small representation of the third party on that Select Committee considering the Bill, and one might have expected to have a little difference of opinion. In addition to that, at the town's meeting the vote in favour of the Bill was 14 to 1, as I understand it, and no petitions have been presented against the Bill.
Locally, the Bill finds favour and the House will not throw out a Bill in those circumstances. There is no minority interest which the House ought to seek to protect; there is no great principle of general law which the Bill is threatening to breach and which the House ought to uphold. Rebates of rent to those in need are recognised as laudable, and if Birmingham feels it can extend those rebates from council tenants to private tenants then that too is laudable.
The fears of the hon. Gentleman the Member for Aston, about a general increase in rents as a result of this Bill are unfounded because of the admirable provisions in the Bill relating to rent regulations. I am sure those provisions will take care of the worries he had.
§ Mr. Julius Silverman
I am sure it will be borne in mind that, as far as the rents capable of coming under regulation are concerned, 96 per cent. of those are not at the present time registered rents and there is no provision in the Bill that the tenant must go to the rent officer to have his rent regulated.
§ Mr. Page
There is the assessment by the Corporation and the Corporation itself concerns itself with the question of the size of rents. The tenant can go to the rent officer to have his rent regulated. I would have thought that not only could the House accept the principle of the Bill, but it could accept there are all the safeguards in the Bill which one would expect to find in an experiment of this sort. I hope the Parliamentary Secretary will be able to give it his blessing from the Government Front Bench.
§ 7.34 p.m.
§ Mr. Christopher Price (Birmingham, Perry Barr)
I, too, would like to join the hon. Member for Birmingham, Aston (Mr. Julius Silverman) and other hon. Members who have given their general support to this Bill, but I sound a note of warning in two directions.
It has been said by the hon. Member for Birmingham, Hall Green (Mr. Eyre) and by the hon. Member for Birmingham, Edgbaston (Mrs. Knight) that this Bill corrects the inequity between private and municipal tenants. The true position is that the entire rent system is riddled with inequities of all sorts, both among private tenants and municipal tenants, and, if one goes further, among people who are buying their own houses or renting furnished rooms. I do not think one ought to herald this Bill as solving the problem once and for all. If it works well it may, roughly, correct an inequity, but there are many other inequities which still exist. Very great inequities exist between tenants of new municipal houses and old municipal houses, who pay very different levels of rent for not very different standards of accommodation. Inequities exist between controlled and non-controlled tenants—one could extend the list.
This is a rough and ready Measure rather than a Measure which can be expected to introduce any exact equity into the situation. It is in this spirit that we will be speaking when we come to the instruction later on. I would also emphasise that there is, I think, a very real danger of this Bill ending up, not this year or next year but, if the situation develops, for a considerable period of years, simply subsidising the private landlord.
I have never felt that housing is a suitable medium for the mechanism of the private market. Admittedly, we have private tenants, and I accept the fact that this Bill is an effort to deal with them, but I have never felt that private housing was desirable. If we are introducing a Bill which allows subsidies to go towards private tenants we have to be very much more careful and far more vigilant when this Bill comes through than we need to be when general housing subsidy bills go through in other circumstances.
If one inadvertently subsidises the landlord when the Corporation is the tenant 333 no great harm is done, because the money passes from the community nationally to the community locally. There have been great disputes about this in the past. The predecesors of the Ministers of Social Security and of Pensions were very chary at one time of allowing supplementary benefits for supplementary rents if a council practised what they at that time called "discrimination". In other words, if they tried to make people go to the Ministry of Social Security, and if they would not, then they were paid a rebate. At one time, it was felt councils should treat all their retired people, for instance, in exactly the same way. This is no longer the case. The Ministry of Social Security have no objection to subsidising Birmingham Corporation for some of their tenants in terms of supplementary benefits, but I think we have to have far greater vigilance if there is any danger of subsidising private landlords in this way. It is all very well saying that the Corporation's valuers, and the Corporation's Estates Department, have control. I agree the Bill does give them control. Of all the semi-learned professions, I have always thought the profession of valuation quite the most difficult to understand, thy: most vague, and the most liable to produce glaring anomalies in what is quite a small area.
I welcome the Bill as an attempt to produce equity between two classes of citizens in Birmingham. We would be wildly over-optimistic if we expected it to do any more than roughly correct the balance. There is a great deal more to consider when we come to the instruction later on.
§ 7.40 p.m.
§ Mr. Victor Yates (Birmingham, Ladywood)
Some of my hon. Friends may have fears which are not entirely justified. Speaking as the representative of a constituency with a large number of municipally and privately rented houses, I have always felt that it is unfair that a person living in a privately rented house should not have the same advantage as the person living in a municipally owned house. I have had numbers of people come to me asking about their rents and how they can get relief. People do not appeal for assistance usually unless it is really necessary, and they have to seek national assistance before they will come for benefit in this way.
334 Whereas later we may argue whether there are any fears in this connection, a scheme is vitally important for those who live in private houses. If we can get some assurances on this matter later on, the Bill has my support. There are many thousands of tenants in private houses who should be able to get some relief. On behalf of those people, I welcome the Bill.
§ 7.42 p.m.
§ Mr. Frank Allaun (Salford, East)
As will be apparent from my accent, I do not come from Birmingham, and I hope that I shall not be regarded as an intruder in this debate.
There is the vestige of a national policy at stake. Just as Birmingham led the field, wrongly in my view, over the sale of council houses, it may be that it is leading the country in a wrong direction on this matter.
I share the strong suspicions which have been voiced, because there is a national clamour that rents must go up. It is not confined to property owners, because I find it even among the academics. The book by Miss Adela Nevitt deals with this theme at great length.
After decontrol, rents are tending to be trebled. It may be that this will be justified in future, if the Bill goes through, and will be extended by the argument that it will not matter if rents are trebled because the poorer tenant will receive a subsidy from the rates, as proposed in the Bill. In effect, the subsidy will not go to the tenant whose rent is increased, but to the landlord. I suspect that this will become of nationwide importance very shortly. Therefore, whilst I do not intend to intervene on this Bill, I urge my hon. Friends to notice the possible direction in which it may take us.
§ 7.44 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl)
I thought that I detected a slight divergence on matters of doctrine between my hon. Friend the Member for Salford, East (Mr. Frank Allaun) and my hon. Friend the Member for Birmingham, Ladywood (Mr. Victor Yates), who has a very long experience as an hon. Member representing a Birmingham constituency. He thinks that there is a problem here which it is 335 worth seeing if it can be tackled. My hon. Friend the Member for Salford, East, on the other hand, saw it as the thin end of a wedge to provide an excuse for putting up rents.
I would not quarrel that there is a problem here. I think that there is a gap in our policy for dealing with privately rented houses, though whether it should be dealt with by having a common subsidy for all types of houses, I am not clear. It is because I am not clear about it that I welcome this Bill, if it works.
I am not in a position to offer any comment on the figures which have been quoted. They are Birmingham's figures, and presumably Birmingham knows what it is talking about, though I cannot say that its estimated cost will turn out to be right.
I approach the matter from the point of view that here is a great city with the resources to carry out such an experiment. There are not many authorities who could lightly undertake such an exercise. I do not think that there is any likelihood of a stampede of local authorities to promote Private Bills of this sort.
§ Mr. Macdonald
I concede that point. However, though there may not be many, the G.L.C. is one. If Birmingham is right, as I think it is, the G.L.C. must be wrong.
§ Mr. MacColl
That is a problem on which, happily, I am not called upon to offer my comment—in this context, anyway.
If one accepts local democracy, the value here is that a local authority, with a substantial backing of opinion behind it from both parties and from the people as well, says that it has the resources and that it wants to go ahead with it to see how it works. In such circumstances, it would be silly of the Government to try and pick holes in it and make niggling detailed points of criticism.
The proper course is to let Birmingham go ahead, if it can get the support of the Select Committee and if it receives the go-ahead in the Council chamber. We associate Birmingham with the great pioneers of gas and water Socialism and of the municipal bank. Perhaps this proposal will form the trilogy and that Birmingham will lead the way to a new 336 approach which will provide very valuable information from which everyone can learn. Certainly I hope that it will be more successful than has been the sale of council houses.
§ Question put and agreed to.
§ Bill accordingly read a Second time and committed.
§ 7.46 p.m.
§ Mr. Julius Silverman
I beg to move,That it be an Instruction to the Committee on the Bill, to make the exercise of any authority to pay rent rebates to tenants of privately owned dwellings out of the General Rate Fund, conditional upon rebates to Birmingham Municipal Tenants being financed wholly out of the general rate fund, so as to ensure equity of treatment for both private and council tenants.The Bill establishes one principle at any rate, with which I agree entirely. If any rebate scheme or scheme of subsidy is to be applied to a section of the community, it should come not from just one section of the community but from the whole community. Rate rebates come from the whole community, partly the local authority and partly the Government, and the same should apply to every form of subsidy.
The principle does not apply at present in Birmingham to council tenants. Still less does it apply in other parts of the country where rent rebate schemes have been introduced which are financed wholly by council tenants. When one bears in mind that this is a sort of pilot scheme, it is of concern to other people in the country as well.
In Birmingham, when Labour was in control, a grant was made from the rates to meet the rebate scheme of £400,000 a year which, at that time, covered the cost of the scheme. During the past year, the cost of the rebate scheme has risen to more than £500,000. Next year, it is anticipated that it will rise to something like £650,000. The additional £250,000 will have to be found by other council tenants. This is wholly wrong in principle. Rebate schemes of this nature should be shared by the community as a whole. The consequence of the Bill will be that the council—
§ Mr. Silverman
No. I said that council tenants, as ratepayers, will have to share the cost of the scheme. This means that the council tenant, as a rate-paper, is paying for the cost of rebates to non-council tenants and is paying through his rent for the cost of rebates to other council tenants. This is grossly inequitable.
Council tenants already bear many burdens. I think the time has come for the Minister to reconsider the question of council rents. Unlike the owner-occupier, the council tenant is not buying his house for himself, but for the citizens as a whole. In Birmingham at the present time about £1¼ million is being paid out of the revenue housing account for debt redemption. That is an asset which accrues to the citizens as a whole. Existing council tenants are bearing all the capital costs for new houses, and there are thousands in the pipeline. It is inequitable that in addition council tenants should pay any costs of the rebate scheme. Any rebate scheme, as a matter of principle, ought to be for the citizens as a whole.
The hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) spoke about different levels of rent between private and council tenants. New council tenancies are by no means low. Tenancies of new houses being built today are in the region of £5 8s., and as much as £6. That is a rent burden which many people outside the range of this rebate scheme can only face with considerable difficulty.
§ Mrs. Knight
I agree with the hon. Gentleman that there certainly are such hereditaments, but would he not agree that these are in very much of a minority, and that the majority of rents, while not being particularly cheap, are not particularly very high? That is as the Birmingham Corporation would wish. I was not saying that rents were of necessity always cheap in council houses, but I think the hon. Gentleman will probably accept that the rents he has quoted are the exception rather than the rule.
§ Mr. Silverman
The hon. Lady is wrong. All new houses are being let at rents like that, and in the case of new tenancies of old houses the rents are put up when the tenants move in. I can assure the hon. Lady that this is so. This is not the exception. This is the general level of rents of new houses.
§ Mr. Arthur Lewis (West Ham, North)
If people are earning £65 a week, rents of £5 or £8 are not much. If they are earning between £10 and £15, £2 or £3 is a lot to pay in rent.
§ Mr. Silverman
If they are earning £15 they may come within the basis of the rebate scheme. But quite a number of people above the rebate scheme still find rents of this nature a very considerable burden. Therefore, to talk about the privileged council tenant today is somewhat of an anachronism—certainly in Birmingham. He ought not to bear this additional burden. The hon. Lady the Member for Edgbaston, will find that in all the new estates and in relet houses the rents are very high. Indeed, they are were being subsidised by the council in any way, one could not object to this, but he is not.
The principle of the housing revenue account being self-supporting has been accepted for many years. It was instituted when there was a Labour council. Far from being self-supporting, the council is actually making a profit from council tenants, because, as I have mentioned, £l¼ million—which in three or four years will rise to about £2 million—is being taken out in debt redemption. In a commercial company debt redemption is put on the profit account as an asset.
Apart from the other burdens which I have mentioned, I say that to put this additional burden on the council tenant is inequitable.
The promoters of the Bill have pointed out, "Well, the council tenant is different. Apart from the question of any council subsidy, there is the question of massive Government subsidies." I agree. Under the housing subsidies legislation the council housing revenue account receives much more Government assistance than ever before. What do those subsidies do? They decrease the effective rate of interest at which councils let or rent to 4 per cent. The so-called subsidy that they get is no different from that which the owner-occupier gets by way of relief from tax on mortgage interest or by way of the mortgage option scheme which is coming into operation on 1st April. It is the same sort of principle. However, no one goes to the owner-occupier and says, "You are receiving massive Income 339 Tax relief, Therefore, you ought to contribute to the poorer sections of the owner-occupying community." It would be wrong in principle and silly. It is just as wrong regarding the council house tenant.
The council house tenant has been the Aunt Sally of politics by some types of Tory politicians for a long time, and this should end. The council tenant is not a highly subsidised and highly privileged person. There are people in council houses who are well off where there are several income earners in one family. But by and large there are many more people with modest incomes on council house estates, and, taking it all in all, the average level is not high.
§ Mr. Frank Allaun
Do I understand my hon. Friend to say that the great city of Birmingham pays no subsidy out of the rates to its council house tenants? If that is the case, it is unlike many other great cities which do make big contributions.
§ Mr. Silverman
It does not. It makes a contribution to the 1954 Act houses taken over by the Corporation for patching up and demolishing. It pays a contribution of £400,000 towards the rebate fund. It pays, I think, £100,000—I am speaking off the cuff—towards keeping the registration list, which is not the concern of existing tenants. Towards existing municipal houses it does not pay a single penny. This is the position now of a large number of other councils. Far from subsidising, they are actually making a profit.
I was dealing with the question of Government subsidies. In that respect the council tenant is in no different situation from the owner-occupier. I think that this subsidy could be justified on the basis that it is, after all, the Government which, as a matter of national policy, decide upon a rate of interest and if the Government make that rate of interest high then they have a right and an obligation—not merely a choice, in my view—by means of subsidies to assist, whether it be the owner-occupier or the council tenant, to occupy his house at a reasonable rate of interest. Therefore I am not in the least degree impressed by this argument about massive Government 340 subsidies. It is the same for the owner-ocupier and for the council tenant.
I think that in order to put this on an equitable basis this Instruction ought to be accepted by the House—that is to say, that in order that there should be equity as between the two types of tenant the principle should be accepted that, just as these non-council tenants receive their rebate wholly out of the community, so this should apply also to council tenants.
§ Mr. Eyre
I listened with great interest to the speech of the hon. Member for Birmingham, Aston (Mr. Julius Silverman). The last two lines of the Instruction which he and his hon. Friends have put on the Order Paper are the vitally important ones, including as they do the wordsso as to ensure equity of treatment for both private and council tenants.The implication of that wording is that equity of treatment is not applicable under the Bill's proposals. I reject this suggestion.
I will not suggest that we shall reach a state of absolutely perfect fairness, which is difficult to achieve in this world, but I suggest that we should right an injustice. I submit that detailed study of the situation will show that the proposals in the Bill come very near to equity and to that extent the Instruction put down by the hon. Member for Aston and his hon. Friends is rather misleading.
At present tenants of council houses pay rates and, of course, they can benefit under the present rent rebate scheme, which has been mentioned earlier. The tenants of private houses in Birmingham at this very moment also pay into the rate fund, but they cannot benefit under the rent rebate scheme. Indeed, they have paid into this fund for years. To that extent, the rate fund has benefited, and the rate fund has been used to subsidise municipal tenants. This has gone on, year after year, for many years. We are therefore righting an inequity by saying that now the tenant of the private house paying into the rate fund, if his needs justify it, shall be entitled to get this benefit.
§ Mr. Eyre
Yes, but it seemed to me necessary to go over this basic principle 341 because I think it is very relevant to the suggestion in the last lines of the Instruction—to ensure equity of treatment for both private and council tenants.It is my submission that we do that under the proposals.
In his speech the hon. Member raised a number of complicated matters which we cannot pursue in detail tonight, but I would like to say that there is no question of the Corporation's making a profit out of council tenants because, owing to the very heavy rise in interest rates, there is expected to be next year a deficit of about £1 million in the housing account, and this is a heavy responsibility which the city as a whole has to consider as well as the municipal tenants involved.
§ Mr. Christopher Price
Is it not in exactly these circumstances of placing even greater burdens in the future on the body of municipal ratepayers that the inequity which my hon. Friend mentioned, if this deficit is looming ahead, might grow far worse?
§ Mr. Eyre
We are confused by the hon. Member for Birmingham, Perry Barr (Mr. Christopher Price) when he talks about placing this burden upon the tenants of council houses. This is simply not an accurate statement. The burden is being placed upon the general body of ratepayers, which includes the tenants of private houses and municipal houses, owner-occupiers and all the ratepayers in the city. So it is wrong and misleading to assume that this burden is to be thrust only upon the municipal tenants. It would be inequitable if that were so, but it is not so.
Equity can be achieved under the present Bill because the same procedure will apply to both groups of tenants, and I would emphasise that the rebates and the calculations for rent are exactly the same for both groups. Looking at the respective numbers in the groups and considering the objections raised by the hon. Member for Aston, it is interesting that three times as many council tenants are paying less than half of that from which they can potentially benefit. If one looks at the number of council tenants and the number of private tenants—150,000 of the former as compared with 50,000 private tenants—one finds that the council ten 342 ants are paying in a sum which is less than half that from which they can benefit.
The sum from which they can potentially benefit is the £400,000 which is now available and which is used to benefit council tenants under the present rent rebate scheme. The total sum towards which they would have to make contributions should this Bill be successful and go through in its full form, is about £200,000, so three times the number of tenants are paying towards a fund which is less than half the total fund out of which they already receive benefit, and I would suggest that this is very close to equity.
Paragraph 3 of Ministry of Housing Circular 46/67 sets out and recommends very strongly the discretion which is due to a local authority in managing these matters. Having promoted a progressive Measure of this kind, surely Birmingham Corporation should be trusted to exercise its discretion with regard to this matter. Its record has been good in the past; it has been generous; it has provided this great fund, which has benefited council tenants. Surely it can be trusted to look at these problems, many of which will loom larger in the future and will need consideration on a city basis, and to show general consideration for people in poor circumstances—that is, to exercise its discretion in a proper way.
The hon. Member for Aston has made his point. I understand the difficulties to which he referred, especially with regard to the future, but it is unnecessary to put a Committee which later will deal with the Bill into a straitjacket by introducing an Instruction of this kind. Let it hear the evidence. We are trying to deal in rather a quick form with complicated evidence about what is precise equity in this matter. It is generally accepted that we are making a move towards equity. We are balanced on a fine argument.
In these circumstances, I suggest that it would be wrong for us to impose on the Committee an Instruction limiting it in the exercise of the very functions for which it is appointed. Who will want to serve on a Committee which will be limited in its discretion when dealing with a matter of this kind? I suggest that the members of the Committee should be able to hear the evidence, which may be of 343 a technical kind, raise issues with the Corporation's officers, and then decide the matter.
I remind the House that there is this payment of £400,000 into the rent rebate scheme which is available to municipal tenants. It is interesting to note that an extra £105,000 is provided out of the fund by way of subsidies from the Exchequer. This makes a total of £505,000 which is used to help municipal house tenants in Birmingham if they are in poor circumstances.
§ Mr. Julius Silverman
It will be £650,000 next year, and the amount is increasing with the number of houses built, and with the number of applications for rent rebates.
§ Mr. Eyre
That is so, but the burden is also increasing because of the interest rates to which I referred. This is a looming problem which the Corporation will have to solve from year to year.
Surely it is right to trust Birmingham Corporation to exercise its discretion properly. In the past, of the £400,000 used for the payment of subsidies from the General Rate Fund, only £105,000 has been taken out of the housing subsidies allocated by the Government. That is as good and responsible a decision as anyone could ask for. In fact, the £105,000 diverted to this purpose was only 3 per cent. of the total sum of £3,275,000 received from the Government by way of housing subsidies.
The hon. Member for Aston is right in saying that the total of housing subsidies has to meet a considerable number of growing burdens. My argument is that the record of the past entitles us to say, "Do not put a mandatory Instrument on the Committee which is to consider the Bill. Do not hamper the discretion of the local authority". If one views the facts fairly, one sees that the Corporation has a good record, and is therefore entitled to be trusted. The principle which I hope the Minister will support is set out in the Ministry's circular asking that the discretion of local authorities should be encouraged.
In those circumstances, I suggest that there is a finely balanced argument on equity. There are many factors, of which we have not taken full cognisance 344 tonight, which need to be examined in detail. I suggest that this is a matter for reference to the Committee. I hope, therefore, that the hon. Member for Aston will favourably consider the idea of withdrawing the Instruction and allowing the Bill to go to the Committee for full and detailed consideration.
§ 8.14 p.m.
§ Mr. Christopher Price
I hope that hon. Members will support this Instruction. I agree very much with what has been said about it being an awkward device to have to use, but, as I understand it, in a Private Bill of this kind it is the only means by which we can insist on a principle which we regard as important.
The principle can be briefly stated to be that if relief from high rents is to be given, the job of paying the money for that relief should be supported by everybody in the community. This principle is accepted in the option mortgage scheme under which taxpayers support the scheme over the country as a whole. It has been almost entirely accepted by the ratepayers in Birmingham that there is a need to support the rent rebate scheme when rents are high. We feel that the introduction of this Bill is a new factor which makes it even more important that the principle that the relief from paying high rents should be supported by the community as a whole should be insisted upon.
I do not like any of these rent rebate schemes, or differential rent schemes, or option mortgage schemes. I think that housing should bear a cost, and that it should be the Government's job to make sure, through minimum wage regulations, and so on, that everybody can pay his rent or buy his house with his head held high, and full dignity. But if we are to have a scheme of this kind, and clearly the country has accepted that principle because the cost of housing has reached the point at which certain lower paid workers and those on pensions cannot afford to pay the market rate, we should make sure that the subsidy comes from the community as a whole.
§ Mr. Eyre
As I see it, the crunch of the matter is that the £105,000 which is at present paid out of the housing revenue account is used for the rent rebate scheme. Is the hon. Gentleman 345 suggesting that it should not be transferred and, therefore, that the whole burden of the rent rebate scheme for council tenants should be borne by the general rate fund? In view of the alarming liabilities, is the hon. Gentleman wise in forcing this issue now? Would not it be wiser not to push this but to rely on the general good will of the council in respect of the future much larger sums?
§ Mr. Price
I take the point that there could be an argument that the £105,000 technically comes out of the housing revenue account. One could argue about the source of that money before it got into the housing revenue account. I do not know how the Birmingham City Treasurer approaches this, but I have met many city treasurers who are able to hide £105,000, or slide it from one account into another with the greatest of ease. In terms of technical accounting, I do not think that it would be very difficult to accept the principle which we are trying to put forward, that the rebate should be paid wholly out of the rates. I support some of the points of my hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman), first about the fact that all housing is subsidised in one way or another. Municipal housing receives a considerable subsidy from the national Exchequer for building on expensive sites or perhaps building high blocks. This depends on many factors, but in spite of these subsidies I agree that the council tenants still bear a wide range of costs which other tenants do not.
As housing schemes cease to be based on normal road grids, there can be nice arguments about lighting, paths, and grass verges and about whether they should be paid for by the housing account or some other account. But all too often it is the municipal tenant who is landed with the costs, which, for the private tenant or house owner, would be borne by the general ratepayer. If, in addition, the municipal tenant has to contribute to subsidising not only the poorer municipal tenants but also those private tenants as well, this introduces an inequity. Our Instruction would achieve the equity which I am sure everyone wants, and would improve the Bill considerably.
It is easy to say that council houses are subsidised and others are not, but all 346 housing is subsidised—whether by rent control of private housing, which is a subsidy, although not in money terms, or by improvement grants to bring private housing up to standard. Another example is relief on interest on mortgage payments. There are many such examples. As my hon. Friend said, the owner-occupier benefits considerably from tax relief according to how he is buying his house, and this is analogous to the subsidy to the council house tenant, who not only does not get this relief but must bear many burdens which people in other kinds of housing do not. Although my remarks on Second Reading still apply, and this is a rough and ready expedient, the Instruction would improve matters, and I hope that hon. Members will support it.
§ 8.23 p.m.
§ Mrs. Knight
I could not follow the argument of the hon. Member for Birmingham, Perry Barr (Mr. Christopher Price), particularly in his reference—he was not specific—to the many things for which council tenants have to pay and which private tenants get from the rates. He made a tentative suggestion about grass plots, but this argument does not stand up, because there is a great deal of such greensward in the part of Birmingham which I represent and the tenants of the block concerned pay for it. These things do not come out of the General Rate Fund. Green areas which are part of a plan do not come out of rates but from the pockets of those who are often paying high rents for their property.
The hon. Gentleman advanced no other arguments and I can think of none, though I should be delighted if he could suggest any now—
§ Mr. Christopher Price
I did not give a list for fear of wearying the House, but one more example is that, in the many high flats in the hon. Lady's constituency, the lift shafts are totally analogous to ordinary roads outside houses and would otherwise be paid for out of the general rate fund. That is an additional cost burden to the municipal tenants. I was objecting to other burdens being imposed after this is being put on by the Bill.
§ Mrs. Knight
But tenants of privately-owned high blocks similarly pay rents which include the cost of the lifts. It is 347 not valid to suggest that the private tenant gets off better in this particular. I am sure that the Birmingham Corporation does not wish, by being fair to the private tenant, to be unfair to council tenants. I would not support it if it were. This is not in the Corporation's mind and I am sure that it has gone into the matter carefully—
§ Mr. Macdonald
I do not want to impute motives, but when the hon. Lady says that the Corporation is not being unfair, would she consider the fact that, while that £105,000 exists, the prosperous municipal tenant is contributing twice to the subsidy of the less prosperous, once as a ratepayer and once as a council tenant, whereas, under the Bill, there will be only one subsidy by the ratepayer to the private tenant? That £105,000 appears to us to introduce an element of unfairness.
§ Mrs. Knight
The private tenant is similarly paying into the rate fund. On certain occasions figures have been given, but I would like to round them up to provide the background to this discussion. For 1967–68 the rent rebate scheme for municipal tenants will cost £505,000, of which, I understand, £400,000 will come out of the General Rate Fund. It has been suggested that very little comes out of this fund for this purpose, but we see that the lions' share comes from it and that only the residue comes from the housing revenue account, which is, after all credited annually with the housing subsidies which the Corporation receives from the Exchequer.
As costs go up—as they have done and as they are bound to continue to do—there is no doubt that the Exchequer subsidy is also bound to rise. In the current year the Exchequer subsidy is well over £3 million; and while I am sure that the hon. Member for Birmingham, Aston (Mr. Julius Silverman) did not intend to mislead the House, he suggested that a profit was being made on council house rents when, in fact, that is not the case. I am sure that he was not accurately informed about the latest figures. Far from making a profit, there will be a loss of probably £1 million.
§ Mr. Julius Silverman
My figures were based on forecasted and projected figures. In the past, any anticipated deficit was 348 put on the tenants and the deficit was made good. Apart from that, the deficit did not take into account the fact that the Council was accumulating between £1 and £2 million by debt redemption.
§ Mrs. Knight
That does not alter the fact that the hon. Gentleman said earlier that a profit was being made out of council house rents by Birmingham Corporation.
§ Mrs. Knight
We have been told authoritatively that, far from there being a profit, there is a loss of about £1 million. That is being accumulated now. Either there is a profit or a loss. My information is that there is a loss. If the hon. Gentleman has other information which suggests that there is a profit, I am ready to hear it.
§ Mrs. Knight
If, by brilliant accounting, the hon. Gentleman can change a deficit into a profit, many people will be delighted to gain from his advice.
The crux of this matter is the Exchequer subsidy and this must be borne in mind because it stands to the benefit of the council house tenants as a whole. I am told that the Corporation has tried to maintain a fair balance between ratepayers and municipal tenants and that, from the point of view of the rate rebate scheme, the Corporation feels, I suggest with some justification, that the £400,000 met out of the General Rate Fund is a fair proportion of the general cost to place on ratepayers, particularly having regard to the amount of subsidy enjoyed by municipal tenants as a whole.
I understand that the Corporation has made careful inquiries into this matter and has looked closely at Circular 46/47 issued on 29th June, 1967, by the Ministry of Housing and Local Government. That circular referred to the general subject of rent rebate schemes, reiterated the Government's view, as expressed in the White Paper on the Housing Programme for 1965–70, and added:…subsidies should not be used wholly or even mainly to keep general rent levels low. Help for those who most need it can be given only if the subsidies are in large part used to provide rebates for tenants whose means are small".349 In appropriating merely 3 per cent. of the housing subsidies in 1967–68 towards the cost of its rent rebate scheme, and meeting the rest of the cost out of the general rate fund, the Corporation feels that it is being fair to the municipal tenant.
The more one looks at the Birmingham Corporation's case for the Bill and the way in which the Corporation has investigated the matter, the more one must concede that it has been extremely careful in being fair to this new section and that it is not in any way being unfair to the old section. I gather that the Corporation feels rather strongly that helping a needy section of the community which at the moment in respect of rent liability receives no assistance, is quite another matter from accepting a fetter on the discretion which Parliament provided in the 1967 Act.
What Birmingham Corporation says and what this Instruction seeks to deny is that the Corporation tenant is already receiving a fair amount from the general rate fund as well as through housing subsidy. The private tenant is receiving nothing at all. This should be at least balanced fairly. In order to allow what we decided earlier to allow, the Instruction would be a quite unnecessary fetter and would not produce the result which hon. Members supporting the Instruction have sought to bring about. One is bound to say that the argument for the Instruction falls to the ground when we consider the weight of the subsidy and the importance of it to council house tenants.
§ 8.36 p.m.
§ Mr. MacColl
There are one or two points on which I should like to try to help the House. Most of the debate has been on two matters which I would not regard as being within my competence in an argument about the housing finances of the city of Birmingham. Having said on Second Reading that these are very much matters for local authorities to settle for themselves, I would not want to comment on them. We have never said that it was wrong for a local authority to make a rate contribution towards the housing revenue account. It depends on the level of rents and conditions in the area. All we have said is that there should be a reasonable 350 balance between the interest of the ratepayer and the tenant.
It is a matter for debate, and my hon. Friends and hon. Members opposite from Birmingham constituencies are entitled to deploy their argument without my joining in the discussion. But what has been said has some implications for the Government's general housing policy with regard to subsidies and rent. On that there are one or two things I wish to say. My hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) thought that the time had come when the Government should take a thorough look at the whole field of rent policy. That is what we have begun to do with the submission to the Prices and Incomes Board of a number of council rents illustrating certain problems thrown up by the present situation. For some the solutions are difficult and some are probably more easy to justify than others. We have put them to the Board as a dispassionate body and asked for its opinion.
§ Mr. Julius Silverman
I was not dealing with the reference to the Prices and Incomes Board but with the whole structure of book-keeping on housing revenue accounts.
§ Mr. MacColl
On the structure of housing revenue accounts, a working party is nearing the end of its discussions. The present Minister of Public Building and Works mentioned this when the Housing Subsidies Bill was going through the House. How successful the working party will be in finding a solution to all these problems I do not know, but it is fair to say that we are trying to see how far we can go in improving the position. It may be that it will be difficult to do more than to leave it to particular housing authorities to adjust the housing revenue account and anomalies in it by rate contributions. They have that power and that may appear to be the best solution. I do not know and cannot say until we get the report.
I do not think there is any confusion about what our policy has been on the relation of rent and subsidies. This was laid down in the 1965 White Paper laid before the House by my right hon. Friend now the Lord President of the Council. Subsequently, it became the basis of the Housing Subsidies Bill. It was very much 351 in the discussions in Committee on that Bill and provided the major feature of our policy.
My hon. Friend the Member for Aston said—and this is a view he can take although I do not altogether agree with him—that all we were providing in our present subsidies was a subsidy to meet increases in interest. That is the general subsidy, but we are also making special subsidies for expensive sites and for multi-storey flats. The general subsidy also reflects the increase in the value of land. As the value of land goes up the subsidy goes up, too. I feel that our subsidies are large and flexible. Our general policy is that local authorities ought to fix, not an extortionate or profiteering rent, but a fair standard rent on what they consider to be the value of the houses. Then, in particular cases where those rents are above the means people can afford, the subsidy should be used, by rebates, to help people unable to meet the rents. That is the policy we have generally adopted and it remains our policy.
§ Mr. Julius Silverman
Would my hon. Friend propose to deal similarly with owner-occupiers, suggesting that where they get tax relief or mortgage option a portion of that should be used only for the neediest of owner-occupiers?
§ Mr. MacColl
Insofar as an owner-occupier receives tax relief there are criticisms of it as a means test in reverse in that the richer a man is the more subsidy he gets. It is because of our recognition of that principle that we introduced the option mortgage scheme in order to provide the same kind of benefit for people of modest means. It is true that my hon. Friend, in his astuteness, can say that there is no kind of means test on that, but in effect there is, because it is only where a person comes below the standard rate of Income Tax that it will be worth while to opt into the scheme. Thus, there is not the wide difference that my hon. Friend might have thought.
That remains our general attitude on rent and subsidies. I merely wished to put that to the House when it is considering the particular case of Birmingham. I would tell my hon. Friends that it seems to me that this Instruction is an extremely rigid one. My hon. Friend 352 the Member for Birmingham, Perry Bar (Mr. Christopher Price) said it is very difficult to draft something that is not rigid. I quite accept that, and if my hon. Friend should do as he often does, and move in Standing Committee an amendment to a Bill saying, "I know this is not perfect but it is up to you to make it perfect," that is a perfectly reasonable argument for a private Member to adopt. I hope I may not be caught seeking to pick holes in drafting in order to escape the substance; but I understand this is a decision to be taken by the House which in its very form will be absolutely mandatory on the Committee and will shut out from the Committee all consideration within this Instruction.
§ Mr. Julius Silverman
I can assure my hon. Friend that we had a long consultation with the Private Bill Office on this, and this is the only way in which it is possible to deal with an Amendment on a Private Bill. I do not like it but unfortunately it was the only way open to us.
§ Mr. MacColl
I am in no way questioning that. I am merely putting to the House the implications. The Instruction seems a very strict mandate to the Committee, in very absolute terms, because the phrase used is "wholly out of the General Rate Fund". Therefore it is not a question of the pros and cons of a rate contribution of so much, which we discussed in our very interesting debate just now. One of my hon. Friends mentioned rate rebates, where 75 per cent. comes from the Exchequer and 25 per cent. from the rates. I understand that the Instruction says that the whole of rent rebates must come from the rates. That seems a very great interference with a local authority's discretion.
I am sure my hon. Friends will not be offended if I tell them that they should consider whether they run the danger of the Motion's being misinterpreted. It would be a bad thing if the House gave the impression that it warmly welcomed the Second Reading of a Bill, with no disagreement about it, and then immediately issued an Instruction to the Committee which in effect said, "We shall so tie the hands of the City Council that it is almost certain that it will not be able to work the Bill." I know my hon. Friends far too well to think that this 353 would be intentional. It is for the House to decide, but I wonder if that would be a very wise procedure.
§ 8.47 p.m.
§ Mr. Graham Page
The House is very grateful to the Joint Parliamentary Secretary to the Ministry of Housing and Local Government for his assistance on the general points arising from this local Bill. I wish only to remind the House again that the Bill is a local matter which has been fully accepted by the City Council and by the town meeting, without their choosing to insert anything in the nature of the Instruction. This is a matter of the housing finance of the Corporation, and if the House accepted the Instruction we should be saying that we do not trust the city of Birmingham to run its own housing finance, to run its own housing revenue account.
As I understand it, the hon. Member for Birmingham, Aston (Mr. Julius Silverman) does not object to rent rebates by local authorities to private tenants. He does not object to rebates being paid from the general rates, but he wishes to use the Bill to reform the law relating to financing of rebates to council tenants, when what we are dealing with is the question of rebates to private tenants. He wishes to use it to the extent of saying that unless the law he reformed in the way suggested in the Instruction the admirable reform for private tenants in need will be denied.
That is a rather dog-in-the-manger attitude. If the Instruction were accepted, the result would be, as the Joint Parliamentary Secretary said, that the Bill would be unworkable. I cannot see how the Birmingham Corporation could work it if its hands were tied in that way. I do not think that the hon. Gentleman and his supporters have a strong case.
The fund from which council tenant rebates come is supported by subsidy; if 354 it goes into deficit, it is supported by the general rates. Like my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) I could not understand the argument that council tenants always have to pay something more. The complications of that argument, and the further discussions about the figures involved here, seemed to prove that we ought to leave this to the management of the City Corporation. As my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) said, leave it to the Committee which will consider the Bill. The hon. Member for Birmingham, Aston said that this was the only way in which this could be done. It is true that it is the only way in which he can bring this to the Floor of the House, but it is not the only way in which an Amendment can be made to the Bill.
If a case is proved for the Amendment as set out in the Instruction, then the Committee can make the Amendment in the proper place, considering the whole matter in detail. If it feels that the Birmingham City Corporation ought to have its hands tied in this way, because of the figures relating to its housing finance, because of the figures relating to the housing revenue account, then the Committee must make the Amendment and we will consider it when it comes back to the House. It is surely right for us on Second Reading not to bind the hands of the Committee, or eventually the Birmingham City Corporation.
§ Mr. Julius Silverman
I am anxious not to disturb the happy consensus between the two Front Benches. We who have spoken in favour of this Instruction have made our point and do not intend to press this to a Division. We hope that the people of Birmingham will take note of the point, and I therefore beg to ask leave to withdraw the Motion.
§ Motion, by leave, withdrawn.