LIMITS OF UNRESTRICTED INCREASES (Hansard, 26 November 1969)

§ Mr. chataway
Clause 2 sets the limits for average increases and maximum increases for each local authority. It is this part of the Bill which pre-eminently perpetuates a situation in which subsidies are paid alike to those who need them and those who do not. This is the Clause which principally will perpetuate a situation in which people are worse 554 off will be subsidising those who are better off than they are. This is the feature of the Bill to which we object most strongly.
It was suggested earlier by the hon. Member for Tottenham (Mr. Atkinson) that we on this side would be happier with the Bill if a higher limit were set. This is not the case. We believe that local authorities should have the freedom to determine their own rents. As we understand it, that is the policy of the Government. They believe that in the long term local authorities should have this freedom restored to them.
Perhaps hon. Gentlemen opposite will consider one or two of the consequences of the Clause. It was admitted by the Minister of State, Scottish Office, earlier 555 that there are a number or alternatives if a local authority does not want to put up rents. He said that in his view they were bad alternatives. A local authority could either defer repairs or else cut down on new housing. He said that although they were bad alternatives, perhaps they were not so bad as to be ruled out in all cases.

§ Mr. Chataway
I apologise if the Minister of State did not say that. That was the implication of his remarks as I understood them.
The undoubted effect of the Government's policy is to deter new council building. We are so used to the Government so often achieving the opposite from what they intend, but in a case such as this, if local authorities see the burden increasing on the ratepayer as a result of Government policy, they must be deterred from new council building. I hope that in view of the figures from the Ministry of Public Building and Works yesterday, showing that the value of public sector housing orders fell back by 26 per cent. during the first nine months of this year, the Government will have second thoughts about their policy.
9.45 p.m.
When The Times states that a joint N.E.D.C. report forecasts that the value of output in public housing, calculated on constant prices, will fall by 4½ per cent. in 1969, by a further 1 per cent. in both 1970 and 1971 and by a full 6 per cent. in 1972, hon. Members opposite should stop and think about the consequences of the policy they are pursuing; and realise that unless local authorities are allowed so to increase rents as to contain the burden upon the ratepayer some fall in new housing is bound to result.
Without wishing to detain the Committee, I wish to make a further point relating specifically to the Greater London Council, since that body has been mentioned by a number of hon. Members. Some local authorities will be able to achieve a perfectly satisfactory state of affairs within modest increases in rent —their predecessors over the years will, perhaps, have pursued a rent policy fair both to tenant and ratepayer. This is has not been the situation in London.
556 In 1964, the district auditor had to draw the attention of the L.C.C. to the fact that its rents ought from time to time to be related to rents in the private sector, and chided the L.C.C. for failing to review its rents at regular intervals. That is the background against which the G.L.C. has had to operate. In that situation, it is facing an undesirable restriction to an average rent increase of 7s. 6d., and a maximum of 10s., as the Clause lays down.
In an article in Housing last September, Mr. Macey, the G.L.C. Director of Housing, who has served both parties with considerable distinction, drew attention to the particularly undesirable limitation imposed by this 10s. maximum. He said: … with a maximum of 10s. the gap here between the average and the maximum is too narrow and must be a handicap to the practical aplication of increases over the whole range of sizes of dwellings and types of dwellings owned by local authorities. It would be much more practical to say that the average of 7s. 6d. should be set against a maximum of 12s. 6d. That example of an authoritative view shows the kind of distortions and anomalies that are produced by a Clause of this kind. I therefore hope that the Committee will recognise that we on this side view the terms of the Clause with the gravest misgivings.

§ Mr. Freeson
The hon. Member for Chichester (Mr. Chataway) made a number of observations about the position of the housing programme and its prospects, but he must know that the Bill relates to the rents of existing properties and therefore has no relationship —[Interruption.]—It might be helpful if hon. Members were to listen to points before commenting on them—to the housing programmes as such, nationally, because he knows, as I know, that they are not subject to the figures written into the Bill.
I will go further. No evidence has been brought to show that it has been the policy operated so far under the Prices and Incomes Act, and now proposed under the Bill, that has caused any slow down in the whole housing programme in the public sector. Other financial difficulties have been quoted in discussion and in public, but not this difficulty, although there has been a general objection to the restraints that have been imposed.
557 These restraints have been imposed in this Bill as part of the general economic position, not just on the basis of considering the position of local authorities and their housing estates as such. It is not only in this part of the economy that we have sought to apply restraints of one kind or another in prices and incomes policy. To single out this part as one which should not be treated as other fields of policy are treated would be grossly unfair bearing in mind the important part which rent levels plays in the economy of the country.
I resist the temptation to make a comment on the cut-back by local authorities in their housing programmes. The hon. Member showed himself a little too sensitive in coming too quickly on too many occasions to the defence of his party on this score. We hope to have discussions with the authority with which he is connected and others to see if we can get over difficulties in this matter. I hope that the time will come very soon when public authorities such as that with which he has been associated for many years and other local authorities will step up their housing programmes as is the wish of the Government. There is no ceiling to priority areas in this country.
Turning to the kind of level we have set in this Bill, I repeat what I said in discussion of the earlier Amendment. On the basis of our experience in the operation of the current Prices and Incomes Act, the vast majority of authorities have operated satisfactorily their rent policy in the terms and spirit of that Act. On the basis of the kind of figures we have had as to the number of authorities which have had rent increases varying from 2s. 6d. to 5s. or 7s. 6d. over the past period when we have operated under the Act, we have no grounds for believing that the kind of voluntary agreement negotiated with the local authority association';—I accept the exclusion of the G.L.C.— will not be operated in the spirit in which it was established and in which it is incorporated in this Measure.
I am increasingly mystified as to why hon. Members opposite continue to persist in undue criticism of a policy which has been pursued with reluctance, as all concerned with prices and incomes levels do show reluctance, but nevertheless they have agreed to such a policy in negotia- 558 tions. That was the agreement and I should have hoped that this Committee would operate it.

§ Mr. Lubbock
The hon. Member for Chichester (Mr. Chataway) quoted an article by Mr. Macey. I did not read it, but I was interested in the comment because of the implication which lay behind it. If the hon. Member was saying thai in his opinion the average incomes of 7s. 6d. more properly related to a maximum of 12s. 6d. he was accepting the principle behind the Bill. If he was arguing the relationship between the average and the maximum I am surprised that he did not put down an Amendment to change 7s. 6d. to 12s. 6d.
If Mr. Macey's article made an adequate case for a higher maximum in relation to the average, I do not see now one could put this forward in an article unless one accepted the basis of the principle of the Bill. Mr. Macey's employers have frustrated the prices and incomes policy in the rent sector. But for that we would not be discussing this Amendment, but would be spending time on other matters.

§ Mr. Chataway
The article makes it clear that Mr. Macey, in common with most directors of housing, believes it to be entirely wrong for the Government to take away the freedom of local authorities in this sphere. He makes the point that with an average of 7s. 6d. it would be more logical to have a higher maximum.

§ Mr. Lubbock
Then why did not the hon. Gentleman table an Amendment to that effect? He could easily have done so.

§ Mr. Chataway
We did. It was not called.

Hon. Members
Withdraw.

§ Mr. Lubbock
In that case, why does not the hon. Gentleman argue, in the main debate on the Clause, the merits of the case for a higher maximum? He could have done that. There is nothing to stop him from putting forward arguments of that nature in the main debate.

§ The Deputy Chairman (Mr. Harry Gourlay)
The hon. Gentleman would have been out of order if he had argued that case.

§ Mr. Lubbock
With respect, the hon. Gentleman was discussing some remarks 559 of Mr. Macey, Director of Housing of the G.L.C., to the effect that a 12s. 6d. increase was more appropriate than the 10s. increase provided for in the Bill. If you allowed a discussion on that matter, Mr. Gourlay, I do not see why the hon. Gentleman could not have gone into the merits of the argument. However, this is not essential criticism I make of the hon. Gentleman.
It is a little unfair of the hon. Gentleman to drag a chief officer of housing into a debate in Parliament and quote the views of officers who are not able to make themselves heard personally in Parliament. However, I leave that matter aside. My criticism is not directed to that point.
I am merely saying that the hon. Gentleman and his friends on the G.L.C. have done Britain a great disservice by provoking a confrontation between local authorities and the central Government which should never have occurred. Most local authorities have been perfectly willing to co-operate in applying the prices and incomes policy, as has everybody else. We may not like it, but we can see its necessity. Boards of big companies and members of trade unions have done their best to co-operate in keeping prices down to sensible levels. The hon. Gentleman and his friends make a series of propositions to the effect that, if a house is painted, the rent can be increased by more than 7s. 6d.—they do not say to what level.
The whole of the arguments advanced by hon. Gentlemen this evening have been directed to the proposition that rents should increase by much more than the amount prescribed in the Bill. Hon. Gentlemen should be honest and say what they mean. They want the rents of local authority and private tenants to go sky high. We know what hon. Gentlemen mean. Local authority tenants know what they mean. They advocate a policy which would mean in many cases a doubling of rents.
This is what the hon. Gentlemen and his friends are after, both on the G.L.C. and on other local authorities. I hope that local authority tenants who read the report of these debates will see the truth behind the hon. Gentleman's remarks.

§ Mr. Arthur Lewis (West Ham, North)
I apologise for the fact that I have not attended the debate till now. I have been in my constituency discussing a serious problem connected with the Bill. The Minister may not like my referring to it, but over 18 months ago the Ronan Point disaster occurred. We still have not had from the Ministry any satisfactory resolving of the issue of the payment of compensation to local authorities—

§ The Deputy Chairman
Order. This is not the Second Reading debate. This is the debate on the Question, That the Clause stand part of the Bill. It is not connected with Ronan Point.

§ Mr. Arthur Lewis
I agree. If you will allow me a few moments, Mr. Gourlay, I want to refer to subsections (4) and (5), which are relevant to this question.

§ The Deputy Chairman
There is no subsection (5) in the Clause.

§ Mr. Lewis
We are debating the Question, That Clause 1 stand part of the Bill, are we not?

§ The Deputy Chairman
No, we are debating Clause 2.